A northeast Wichita landlord has filed for bankruptcy reorganization, dragged down by the economy and high tenant turnover.
Jon Schupbach's Schupbach Investments filed for Chapter 11 bankruptcy protection Monday in U.S. Bankruptcy Court in Wichita, listing $4.65 million in assets and almost $5.3 million in liabilities.
Schupbach said his residential portfolio includes about 200 housing units on about 160 properties, including single- and multi-family. That's too many, he said, to remain economically viable in a downturn.
"The difficult decision was to reorganize, which will allow us to shed the problematic properties and keep the properties that will sustain us for the future and make us able to provide a good, clean habitable house for the community," he said.
Schupbach said he intends to retain about 100 properties, with about 110 housing units, after completing the bankruptcy.
"The problem really lies in the economy," he said. "Banks aren't lending like they were in the past, which affects the wholesale side of our business and rehabilitating those homes.
"We're in a market that's very tough — high management, high turnover, in the northeast part of Wichita. We deal all the time with theft, vandalism, midnight moves. There's a lot of loss involved."
The company's largest creditors are area banks.
Rose Hill State Bank holds the largest notes at $2.67 million. Bank of Commerce & Trust in Wellington is owed $756,901, and Community Bank of Wichita is owed $552,472.
Schupbach said he has tried to divest his company of some properties.
"With the banks and the lending environment we're in, we can't sell to other investors because the banks aren't lending to them," he said. "The loan to value numbers are way up, and the values of the homes have changed dramatically. It's left us without the margins to operate."