Contreras Firm Goes Bankrupt
Contreras Brothers Development Corp., whose minority-group owners are among San Diego’s most prominent and politically connected businessmen, has closed its doors and filed for liquidation bankruptcy.
The business is one of a number of corporations owned by Salvador and Gilbert Contreras, whose rise to local influence has become almost legend in San Diego’s Latino community.
The development corporation, a home remodeling business based in Lemon Grove, petitioned for Chapter 7 bankruptcy liquidation last Wednesday and listed $151,752 in debts, according to documents filed in federal bankruptcy court. Its assests were listed at $169,800.
Attempts to reach the Contrerases Tuesday were unsuccessful. The brothers’ phones at several of their businesses have been disconnected, and calls to Gilbert Contreras’ residence went unanswered.
The development corporation at one time employed 50 people. Steven Berkowitz, the attorney retained by the Contrerases for filing the bankruptcy proceedings, said the company “just ran out of money” and that some home remodeling projects were left unfinished.
“It could have been for a number of reasons,” Berkowitz said. He said he was hired only for the purpose of filing liquidation papers on the development corporation and could not speculate on the brothers’ other financial interests.
A separate, involuntary Chapter 7 petition--filed by creditors in August, 1987, against Contreras Brothers Construction Co.--is pending, according to Michael T. O’Halloran, the creditors’ attorney.
Chapter 7 bankruptcy differs from Chapter 11, which allows owners of a business time--and a temporary buffer from creditors--to reorganize their debts and continue to do business. Those who file under Chapter 7 of the federal bankruptcy code intend to liquidate their business and pay creditors only as much as the sale of their assets will allow.
The Contreras business dealings have involved a considerable amount of government contracts, including rehabilitation projects for the San Diego Housing Commission. Several years ago, the Contrerases were part owners of San Diego’s Channel 69. They also owned an interest in a San Diego Toyota dealership until last year.
The brothers, who were born into poverty in Barrio Logan, worked in construction and eventually formed their own firm. Salvador Contreras is listed in documents as president of the development corporation, and Gilbert as vice president.
Gilbert Contreras once served on a bank board and for a time was president of the San Diego Certified Development Corp., which awarded loans to small firms for the federal Small Business Administration.
The Contrerases are also well known for volunteer work and donations to local Latino organizations, such as the Chicano Federation and Alba 80, a nonprofit group that gives thousands of dollars in scholarships to college-bound Latino students.
Jess Haro, chairman of the board of directors of the Chicano Federation, an activist group, said Tuesday that the Contrerases’ financial troubles were a surprise to many people.
“I think most people think that they’ll bounce back,” Haro said. “I don’t think (their problems) detract from the regard people have for them. No one has anything to gain by them having hard times.”
Many in the community are sympathetic, Haro said.
