FOR IMMEDIATE RELEASE
Contact: Olha Rybakoff, Deputy Attorney General
Director, Consumer Protection Division
Phone: (302) 577-8513
Date: May 16, 2002
NANTICOKE HOMES INVESTIGATION INTENSIFIES
Attorney General's Office files Civil Investigative Demand
(Wilmington, DE): Attorney General Brady today announced that the investigation into the closing of Nanticoke Homes, Inc. has progressed to the next stage. Brady stated, "We continue to look carefully at the facts to address the concerns of the public, consumers, vendors and employees. We will continue to keep the public updated and encourage any victims to come forward." Nanticoke Homes, Inc., a builder of modular homes, declared bankruptcy on March 1st. Complaints by former employees, consumers and subcontractors of Nanticoke Homes, Inc. have been filed with the Consumer Protection Unit of the Attorney General's Office. The Attorney General's Office has retained an expert financial investigator to assist with the complex fiscal review that it has undertaken.
The Consumer Protection Unit will also use a Civil Investigative Demand as a tool in its investigation. The Civil Investigative Demand filed today in Superior Court and signed by Judge Richard R. Cooch, requests specific information from Nanticoke Homes Inc., Merchantile-Safe Deposit and Trust Co. and KMR Management. Merchantile-Safe Deposit and Trust Co. is the major creditor of Nanticoke Homes, Inc. and KMR Management is a corporate management firm put in place in late 2000 by Merchantile-Safe Deposit and Trust Co. to run Nanticoke's business affairs.
In the Investigative Demand filed today, the Consumer Protection Unit of the Attorney General's Office has requested documents, correspondence and financial records in connection with its investigation of possible violations of Delaware laws.
The Attorney General's Office has received and reviewed 30 complaints from former Nanticoke Homes, Inc. employees who allege that their health insurance benefits, pension benefits and/or worker's compensation benefits were not maintained by the company despite payments through payroll deductions by the employees.
The Consumer Protection Unit has also reviewed 47 complaints from subcontractors of Nanticoke Homes, Inc. alleging non-payment of bills presented by subcontractors and suppliers.
Further, 107 complaints from consumers have been reviewed by the Attorney General's Office to date. Consumers allege that Nanticoke Homes, Inc. did not complete homes that were under contract or did not return deposit checks for new homes that were to be built. Consumers, former employees and subcontractors who wish to file a complaint with the Attorney General's Consumer Protection Unit may do so by calling (800) 220-5424 (within Delaware) or (302) 577-8600 (outside of Delaware). All persons affected by Nanticoke's bankruptcy should also separately file a claim in the United States Bankruptcy Court for the District of Delaware. A Proof of Claim form for the Nanticoke bankruptcy may be obtained on-line through the Attorney General's web site at attorneygeneral.delaware.gov by clicking on the Consumer Protection Information button.
A copy of the Civil Investigative Demand is available from the Prothonotary's Office at the Herrmann Courthouse in Wilmington.