Mulford Construction Co. - Chapter 11 Case Summary

Business Description

Mulford Construction Co., Inc. (the "Company" or the "Debtor") is a heavy civil construction firm providing construction services for both residential and commercial projects in the mid-Atlantic region of the United States, with a significant presence in Maryland.

• The Company has been in business since 1976 and is currently in its fiftieth year of operations. Kurt M. Fowler serves as the Company's Chief Executive Officer and sole equity holder.

The core of the Company's business involves site preparation and management for significant construction projects. The Company also provides services related to the installation of utilities; piping for water, sewer, and storm drains; roadwork; commercial landscaping; and related site clearing and grading.

The Company reported revenue of approximately $58.4 million in 2024, which declined to approximately $56.4 million in 2025.

As of the Petition Date, the Company employs approximately 135 full-time employees, including administrative, management, and manual labor staff.

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Operations Overview

The Company operates in the heavy civil construction sector across the mid-Atlantic United States. Its employees perform a variety of functions critical to the preservation of value and the administration of the Debtor's estate, spanning administrative, management, and manual labor roles.

Workforce and Payroll

• The last prepetition payroll, made on March 27, 2026, totaled $192,693.16. The next payroll, payable on April 3, 2026 and covering the week ending March 27, 2026, is estimated at approximately $220,309.07, comprising wages and salaries of $203,212.74, employer-related taxes of $15,145.50, and employer-paid benefits of $1,950.83.

Utility Services

• The Company requires utility services — including internet, telephone, gas, electric, information technology, and related services — to conduct its general business operations. The Company pays its utility providers on a monthly basis, with average monthly costs over the last six months of approximately $24,500.

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Prepetition Obligations

The Company does not have any traditional secured bank debt. Its prepetition obligations are summarized below:

Merchant Cash Advances

• Over the past year, the Company entered into several financing agreements with various lenders pursuant to Merchant Cash Advance Agreements (the "MCAs").
  • The Debtor, through its counsel and financial advisors, is in the process of evaluating each of the MCAs to determine where they properly fit within the capital structure and will address any debt obligations that may exist thereunder as the bankruptcy case moves forward.

Trade and Vendor Debt

• The Company has significant debt obligations to vendors and suppliers related to its various construction projects, estimated at approximately $8 million to $10 million.
  • The Debtor is continuing to work with its proposed financial advisors to complete its bankruptcy schedules and statement of financial affairs, and this estimate may be adjusted following that analysis.

Insider Loans

• Over the past year, CEO Kurt M. Fowler has personally lent the Company funds to keep operations going.

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Events Leading to Bankruptcy

Smith Home Farm Project Losses

In 2024, the Company was working on a significant residential development project known as "Smith Home Farm." Due to certain improper activities of other parties to the project that were not within the Company's control, the project was foreclosed upon and ceased to move forward. The Company was left with approximately $3 million in unpaid invoices.

• Despite obtaining a judgment in the Company's favor in the amount of approximately $2.7 million in July 2025, the Company has received little payment on that judgment.
• The loss of the Smith Home Farm project had a significantly negative impact on the Company's revenue while simultaneously causing it to accrue a significant amount of expenses related to the project.

Weather Disruptions

Exacerbating the Company's financial difficulties, the weather over the past winter caused significant disruption to many of its remaining construction projects, limiting the Company's ability to complete work and resulting in a further reduction in cash flow.

Merchant Cash Advance Burden

In an effort to bridge the resulting revenue gap, the Company entered into multiple MCAs with various lenders over the past year. However, these facilities carried extremely high effective interest rates and aggressive repayment terms that compounded the Company's liquidity crisis.

• The effective result of the MCA agreements was that nearly 40% of the Company's revenues were being withdrawn from its accounts on a daily basis, making it impossible for the Company to continue operations without the relief afforded by Chapter 11.

Chapter 11 Filing and Go-Forward Strategy

On March 27, 2026, the Company filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Maryland. A significant goal of the filing is to address the myriad issues concerning the MCAs as part of an overall restructuring of the Company's balance sheet.

• The Company has a significant amount of future revenue under contract with existing construction projects, which it views as a significant asset of the estate. A primary purpose of the bankruptcy is to provide the Company with a runway to realize the revenue from those projects while providing creditors an opportunity for a distribution on prepetition debt through a plan of reorganization.
  • The Company has noted that the only way to realize on this future revenue is for the Debtor to remain in business as a going concern.
• Additionally, as part of its restructuring, the Company has not ruled out seeking additional capital or pursuing a potential sale of some or all of its assets during the bankruptcy case if doing so is feasible and beneficial to the estate and creditors.