San Juan Home Builder Falls Victim to Recession : Bankruptcy: The large company, which has built hundreds of condos and houses in San Clemente and Laguna Niguel, plans to liquidate.

In what appears to be the first collapse of a sizable Orange County residential builder during the recession, Bird Development Corp. of San Juan Capistrano has filed for Chapter 7 bankruptcy liquidation.

A number of small custom home builders have sought bankruptcy protection in the past year, but none are as large as Bird, which has built several hundred condominiums, townhouses and detached single-family homes in San Clemente and Laguna Niguel since 1985.

In 1986, the company ranked 85th in sales volume of 173 Southern California residential builders who responded to The Times annual builders survey. The company was not listed in subsequent years, however.

The bankruptcy petition, filed Friday in U.S. Bankruptcy Court in Santa Ana, does not list the company’s assets or liabilities and offers no explanation for the company’s financial difficulties.

There is at least one lawsuit against the company, seeking repair of the drainage system in a hillside development in San Clemente. But Marvin Mayer, the attorney handling the suit, filed in Superior Court in Santa Ana, said it does not involve huge sums of money. “You could buy back the whole tract for $3 million or so, so it can’t be that,” he said.

Neither B.J. Bird, president of Bird Development, nor the company’s attorney could be reached for comment Tuesday.

The phone at Bird’s offices in San Juan Capistrano was answered Tuesday as “Westmark Communities” by a receptionist who said Bird was “on holiday for the next two weeks.”

She said Bird Development had moved and refused to comment on the relationship between Bird and Westmark.

The two companies apparently are related, however.

They share offices and, in 1987, the city of San Clemente rejected a bid by Bird Development/Westmark Communities to build 84 homes under the city’s annual construction allotment program.

Major creditors listed in the bankruptcy petition included Glenfed Development Corp., which has been a joint venture partner in many of Bird’s developments, and several Security Pacific Corp. financial units, including Security Pacific Credit Corp. and Security Pacific Business Finance.

Also listed as creditors were the Forster Ranch Master Homeowner Assn. in San Clemente and nearly 300 homeowners in various Bird and Westmark developments.

Mayer, the Orange attorney representing the Forster Ranch Master Homeowners Assn., said he believes most of the homeowners listed as creditors in the bankruptcy filing were included only because their homes are still covered by various warranties. “I don’t think there are a lot of current claims, though,” he said.

Mayer said Bird was recently part of a group of developers who settled a suit by the homeowners’ association involving payment to complete the landscaping work in the planned community’s common areas.

A 1988 faulty-construction claim by homeowners in a condominium development that Bird built in San Clemente is still active, but most of the homeowners have dropped out of the suit, Mayer said.