Lynden-based real estate firm Homestead Northwest owes more than four times as much as the company has in assets, recently filed court documents show.
Homestead Northwest has liabilities of approximately $13.5 million owed to investors, $11.9 million of which are not secured by real property, court documents show. The company owns about $3 million in Whatcom County real estate, mostly at the Scholten Shores development on West Bartlett Road off the Guide Meridian.
The documents were filed on February 1 in the Western Washington bankruptcy court in Seattle as part of the company’s declaration of Chapter 7 bankruptcy. The filings detail how much money investors across the county have sunk into Homestead Northwest’s real estate ventures.
Several Lynden-based construction companies invested with the company and are not likely to get their money back as the investments were not secured by real property, according to court documents. Homestead Northwest owes $629,000 to investors with Blaine or Birch Bay addresses.
In addition to real estate investment claims, the bankruptcy filings show Homestead Northwest owes about $131,000 in a civil suit judgment filed in Whatcom County Superior Court. Judge Steven Mura ruled in favor of Jane Regier of Lynden, who brought the case against Homestead Northwest in 2009.
In 2006, Jane Regier and her son, Ken, loaned Homestead Northwest $105,000 for real estate development. Homestead Northwest agreed to pay the amount back in full by March 6, 2008.
The payback deadline was eventually extended to March 6, 2010, but Homestead Northwest failed to repay the loan. After Regier sent two letters to the company requesting payment, Homestead Northwest repaid $2,000 on the loan in July 2010.
The court awarded Regier the principal as well as attorney and legal fees.
Regier was just one of hundreds of investors countywide that Homestead Northwest has failed to repay. In March of last year, investigators with the securities division of the Washington State Department of Financial Institutions alleged company president Jim Wynstra sold 1,341 unregistered real estate investments from 1989 to 2009, totaling approximately $121 million. In April 2009, according to case investigators, Homestead Northwest stopped paying back most investors, leaving about 350 clients with an estimated $65 million in outstanding investments in the Homestead companies.
Homestead Northwest formerly owned a number of properties in Birch Bay, including CJ’s Beach House and the Birch Bay Waterslides. CJ’s Beach House closed in September after the property was put into receivership, and the Birch Bay Waterslides was sold in September to developers from British Columbia.