Sussex County Delaware

Nanticoke Homes
Files for Bankruptcy

Nanticoke Homes ...

A.G. May File Criminal
Charges Against Company

Nanticoke Homes Inc., once one of the largest modular home builders in the country and one of Sussex County's largest employers, filed for Chapter 11 bankruptcy protection on Friday, March 1, 2002, as hundreds of consumers and contractors met with the Delaware Attorney General.

The closing of Nanticoke on Feb. 13 not only cost the remaining 100 workers their jobs, it also left dozens of home buyers with unfinished homes and contractors and creditors with unpaid bills.

Delaware Attorney General M. Jane Brady told 200 desperate contractors, home buyers and former employees at the Greenwood fire hall on Friday that her office will consider filing criminal charges against the company headed by president John M. Mervine Jr.

Brady said in addition to investigating allegations of passing worthless checks and theft by false pretense, her office will also investigate allegations that money from employee health insurance funds was diverted to other uses. She said the investigation will take several weeks.

"It's a potential criminal matter," Brady told the crowd. "There are people in this room who trusted John Mervine who hate his guts now. This is not an industry that's doing poorly. This was a company that was doing poorly in an industry that's doing well."

Brady said her office has received more than 100 complaints from home buyers and dozens of other complaints from vendors and contractors.

She said her office is helping consumers and contractors explore their legal and financial options but advised audience members that they may need to hire private counsel.

Nanticoke's bankruptcy attorney, Stephen W. Spence of Wilmington, said the company will cooperate with Brady's office.

Spence asked the bankruptcy court for more time to better determine the company's financial situation. The company's bankruptcy petition, citing "severe financial difficulty" as the reason for the filing, listed assets and liabilities between $10 million and $50 million.

The petition lists more than 900 creditors with the Mercantile-Safe Deposit and Baltimore Trust Co. the largest secured creditor at $10 million.

Spence said the company is looking to sell off assets to help pay its debts. Included in those assets are Nanticoke's manufacturing facility and real estate holdings.

Sussex County, meanwhile, has filed 41 liens against the company's Sussex County properties in Superior Court for $73,000 in past due property taxes from 2000 and 2001.

Founded in 1971, Nanticoke has built nearly 20,000 homes in the Mid-Atlantic region. including first homes for many Sussex Countians. It had sales of $70 million as recently as 1999.

Consumer questions can be directed to the Delaware Attorney General's office at 1-800-220-5424 or or the law firm of Phillips, Goldman & Spence at or 1200 N. Broom St., Wilmington, DE 19806.

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