Matt Sowash, founder of Holy Ground Tiny Homes, looks on during a civil trial in Arapahoe County District Court on Monday, April 22, 2024. (BusinessDen file)
Holy Ground Tiny Homes, a bankrupt Englewood builder that owes $6 million to 190 former customers and described as “a ruse” by a judge, is closed.
The company notified a bankruptcy court in Denver on Aug. 6 that it would move from a Chapter 11 bankruptcy case to a Chapter 7 one, liquidating its assets and dividing them among creditors. The move comes six weeks after Holy Ground’s CEO blamed a theft judgment for its demise, and several weeks after Holy Ground failed to pay out the first round of repayments to customers.
“Due to unforeseen circumstances, the debtors are unable to make up for the delay in payment,” the lawyers explain.
As BusinessDen first reported in 2022Holy Ground, then a Christian non-profit organization, convinced nearly 200 customers to make full or partial down payments for tiny houses, delayed the construction of those houses by months or years, and Refund refused the deposits. Some of the Holy Ground victims, who live scattered across the country, have lost all their savings.
Holy ground has filed for bankruptcy A few months later, the investigation was found that spent company money on a Las Vegas vacation and dozens of vehicles. The company then promised to reorganize and pay customers back 25 percent of its quarterly profits for five years starting in July.
Jamie Buechler, a bankruptcy attorney who represents some of Holy Ground’s clients, said she was “shocked” when a judge approved that reorganization plan in February.
“Plans like this are often referred to as ‘trust plans,'” she said of Holy Ground’s reorganization. “What I mean is that they depend on future revenues and future earnings, as well as the good faith of those in charge to run the business for the benefit of creditors.”
In April, a former customer who sued Holy Ground CEO Matt Sowash charged with stealing their $24,000 deposit was awarded about $84,000 after Judge Don Toussaint in Centennial found that “Holy Ground, or at least its purported purpose of building tiny homes, is a ruse.”
Then Sowash and his attorney, Brian DeBauche, claimed in an affidavit filed in June that he was unable to pay Daniels because Holy Ground was going out of business.
“All creditors were waiting for the July deadline to begin payments, assuming the company continued to operate,” they said in their June 27 affidavit. “It appears that this is not possible.”
Sowash and DeBauche blamed the press for Holy Ground’s problems, claiming Coverage of Sowash’s trial In April, “it went nationwide” and then “orders for tiny houses were stopped.”
“Ms. Daniels may now be a victim of her own success,” they wrote in their affidavit.
Although Sowash stated under penalty of perjury that the affidavit was true, a few days later he denied that Holy Ground was closing in an email to BusinessDen.
“We are not closing. We are not liquidating. We are downsizing to smaller facilities,” he wrote.
Sowash did not respond this week to requests for comment about Holy Ground and what the closure means for the nearly 200 people who gave his company money for a home they never saw.
In a promotional video for Holy Ground Tiny Homes, Matt Sowash stands on the patio of a 14-foot-tall home. (YouTube)
“At this point, I don’t really expect to get anything back from them because I don’t think Matt Sowash has anything,” said Dacota Huzzen, a real estate agent in California.
In 2021 and 2022, Huzzen paid about $20,000 as a down payment to Holy Ground because it was cheaper than its competitors and seemed professional. Huzzen said she was stalled by Sowash and others at Holy Ground and faced changing timelines for completion.
“The long and short of it is that they took $20,000 from me, went bankrupt, I had to hire a bankruptcy lawyer and never got my money back, nor did I get a small house back,” she said in an interview.
“My bankruptcy lawyer said I might get a couple thousand dollars out of the $20,000 I had invested — maybe,” she said. “He didn’t sugarcoat anything, so I kind of wrote it off and moved on. If I get something, I’ll say, ‘Oh, wow, that’s a great surprise.'”
Huzzen and others owed money by Holy Ground have until Sept. 3 to object to the closure and liquidation plans. Earlier this year, customers who had lost their deposits voted in favor of the reorganization plan. Buechler said that was because they still had hope.
“This business wouldn’t last long. So I think most of the creditors took the plunge and said, ‘Hey, we’re going to get something, so let’s see what they can do,'” the bankruptcy attorney said. “Because there aren’t many assets that can be sold and distributed.”
