--- schema_version: "secwatch.filing_event.v1" accession: "0001493152-23-045017" form_type: "8-K" ticker: null cik: "0001784567" company_name: "Harbor Custom Development, Inc." filed_at: "2023-12-15T23:59:59+00:00" generated_at: "2026-06-07T12:00:22.077882+00:00" event_type: "other_material" sentiment: "negative" materiality_score: 0.95 calibrated_materiality_score: 0.95 confidence: "high" source: SEC EDGAR --- # Harbor Custom Development files Chapter 11; Nasdaq to delist securities Dec 21 ## Summary - Chapter 11 filed Dec 11 in W.D. Wash.; company to operate as debtor-in-possession to market lots/homes and pursue wind-down. - Nasdaq suspends trading of HCDI, HCDIP, HCDIW, HCDIZ on Dec 21; company will not appeal delisting determination. - Bankruptcy triggers acceleration of ~$125M debt: Sound Capital $60.1M, Marquee $31.3M, others $33.5M; default rates up to 24%. - Interim CEO Jeff Habersetzer: Chapter 11 provides 'breathing-room' to sell assets for creditor benefit. ## SEC filing metadata - accession: 0001493152-23-045017 - form_type: 8-K - cik: 0001784567 - company_name: Harbor Custom Development, Inc. - filed_at: 2023-12-15T23:59:59+00:00 - event_type: other_material - sentiment: negative - materiality_score: 0.95 - calibrated_materiality_score: 0.95 - confidence: high - sec_items: 1.03, 2.04, 3.01, 8.01, 9.01 - EDGAR index: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - EDGAR primary document: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/form8-k.htm ## Machine-readable alternates - HTML: https://secwatch.observer/filing/0001493152-23-045017 - JSON: https://secwatch.observer/filing/0001493152-23-045017.json - Plain text: https://secwatch.observer/filing/0001493152-23-045017.txt ## Key facts - Debt Financings Harbor Custom Development, Inc. reported a default on loan of $60,108,866.51 with Sound Capital Loans, LLC; Sound Capital Construction Fund, LLC; Sound Equity High Income Debt Fund, LLC at annualized default interest rate of approximately 24% or interest rate allowed b maturing due and payable immediately upon bankruptcy filing. - Instrument: loan - Principal: $60,108,866.51 - Counterparty: Sound Capital Loans, LLC; Sound Capital Construction Fund, LLC; Sound Equity High Income Debt Fund, LLC - Rate: annualized default interest rate of approximately 24% or interest rate allowed b - Maturity: due and payable immediately upon bankruptcy filing - Event: default source text: The filing of the Bankruptcy Petition constitutes an event of default under the Company’s outstanding indebtedness for borrowed money, including (collectively, the “ Outstanding Indebtedness ”): ● Loan Agreements with related lenders known as “Sound Capital,” specifically, Sound Capital Loans, LLC; Sound Capital Construction Fund, LLC; and Sound Equity High Income Debt Fund, LLC, dated various dates, in the principal amount in the aggregate of $60,108,866.51 plus accrued interest thereon, including interest at the lesser of (a) annualized default interest rate of approximately 24% or (b) interest rate allowed by law since default thereon evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - Debt Financings Harbor Custom Development, Inc. reported a default on loan of $3,500,000.00 with 222, Limited Liability Company; Cynthia A. Blair; Michael A. Raquiza; William Chunyk at interest at a rate equal to 4% greater than the current rate of 10% since defaul maturing due and payable immediately upon bankruptcy filing. - Instrument: loan - Principal: $3,500,000.00 - Counterparty: 222, Limited Liability Company; Cynthia A. Blair; Michael A. Raquiza; William Chunyk - Rate: interest at a rate equal to 4% greater than the current rate of 10% since defaul - Maturity: due and payable immediately upon bankruptcy filing - Event: default source text: ● the Loan Agreement with 222, Limited Liability Company; Cynthia A. Blair; Michael A. Raquiza; and William Chunyk, dated September 19, 2022, in the principal amount of $3,500,000.00 plus accrued interest thereon, including interest at a rate equal to 4% greater than the current rate of 10% since default thereon evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - Debt Financings Harbor Custom Development, Inc. reported a default on loan of $31,289,325.00 with Mandalay Income Fund, I, LP; Oakhurst Income Fund II, LP; Oakhurst Opportunity Lending Fund I, L.P. at annual default interest rate at 13.55%, 13.625%, 15.75%, or 16.00% depending on maturing due and payable immediately upon bankruptcy filing. - Instrument: loan - Principal: $31,289,325.00 - Counterparty: Mandalay Income Fund, I, LP; Oakhurst Income Fund II, LP; Oakhurst Opportunity Lending Fund I, L.P. - Rate: annual default interest rate at 13.55%, 13.625%, 15.75%, or 16.00% depending on - Maturity: due and payable immediately upon bankruptcy filing - Event: default source text: ● Loan Agreements with related lenders known as “Marquee,” specifically Mandalay Income Fund, I, LP; Oakhurst Income Fund II, LP; and Oakhurst Opportunity Lending Fund I, L.P., dated various dates, in the principal amount in the aggregate of $31,289,325.00 plus accrued interest thereon, including an annual default interest rate at 13.55%, 13.625%, 15.75% ,or 16.00% depending on the loan agreement or the maximum interest rate allowed by law since default thereon evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - Debt Financings Harbor Custom Development, Inc. reported a default on loan of $14,178,673.86 with BankUnited, N.A. at default rate from December 4, 2023, which rate floats at the contract rate plus maturing due and payable immediately upon bankruptcy filing. - Instrument: loan - Principal: $14,178,673.86 - Counterparty: BankUnited, N.A. - Rate: default rate from December 4, 2023, which rate floats at the contract rate plus - Maturity: due and payable immediately upon bankruptcy filing - Event: default source text: ● the Loan Agreement with BankUnited, N.A., dated March 7, 2022 and the Amendment to the Loan Agreement, dated February 22, 2023, in the principal amount of $14,178,673.86 (according to BankUnited, N.A.) plus accrued interest thereon, including interest at the default rate from December 4, 2023, which rate floats at the contract rate plus 3%, until the debt is paid in full evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - Debt Financings Harbor Custom Development, Inc. reported a default on loan of $8,000,000 with Fratelli’s LLC at default interest rate of 18% maturing due and payable immediately upon bankruptcy filing. - Instrument: loan - Principal: $8,000,000 - Counterparty: Fratelli’s LLC - Rate: default interest rate of 18% - Maturity: due and payable immediately upon bankruptcy filing - Event: default source text: ● the Loan Agreement with Fratelli’s LLC, dated May 25, 2022, in the principal amount of $8,000,000 plus accrued interest thereon, including interest at the default interest rate of 18% since November 30, 2023 evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - Debt Financings Harbor Custom Development, Inc. reported a default on loan of $5,300,000.00 with Benaroya Holdings, L.L.C. at default interest at the rate of 18% per annum maturing due and payable immediately upon bankruptcy filing. - Instrument: loan - Principal: $5,300,000.00 - Counterparty: Benaroya Holdings, L.L.C. - Rate: default interest at the rate of 18% per annum - Maturity: due and payable immediately upon bankruptcy filing - Event: default source text: ● the Loan Agreement with Benaroya Holdings, L.L.C., dated January 30, 2023 and the Amendment to the Loan Agreement, dated May 5, 2023, in the principal amount of $5,300,000.00 plus accrued interest thereon, including default interest at the rate of 18% per annum since default thereon evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - Debt Financings Harbor Custom Development, Inc. reported a default on loan of $2,500,000.00 with North Carolina Empowering Kids & Communities Foundation, Inc. at interest at a rate equal to 4% greater than the current rate of 10% since defaul maturing due and payable immediately upon bankruptcy filing. - Instrument: loan - Principal: $2,500,000.00 - Counterparty: North Carolina Empowering Kids & Communities Foundation, Inc. - Rate: interest at a rate equal to 4% greater than the current rate of 10% since defaul - Maturity: due and payable immediately upon bankruptcy filing - Event: default source text: ● the Loan Agreement with North Carolina Empowering Kids & Communities Foundation, Inc., dated November 1, 2022, in the principal amount of $2,500,000.00 plus accrued interest thereon, including interest at a rate equal to 4% greater than the current rate of 10% since default thereon evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - Distress & Bankruptcy Harbor Custom Development, Inc. entered chapter 11 in United States Bankruptcy Court for the Western District of Washington (petition 2023-12-11). - Proceeding: chapter 11 - Court: United States Bankruptcy Court for the Western District of Washington - Petition: 2023-12-11 source text: On December 11, 2023 (the “ Petition Date ”), Harbor Custom Development, Inc. (the “ Company ”) and certain of its wholly owned subsidiaries (collectively with the Company, the “ Debtor ”), filed a voluntary petition (the “ Bankruptcy Petition ”) for reorganization under Chapter 11 of the United States Bankruptcy Code (the “ Bankruptcy Code ”) in the United States Bankruptcy Court for the Western District of Washington (such court, the “ Bankruptcy Court ” and such case, the “ Case ”). evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm - Listing & Compliance Notices Harbor Custom Development, Inc. received a nasdaq delisting notice notice regarding other (rules 5101, 5110(b), IM-5101-1, 5605). - Exchange: nasdaq - Notice: delisting notice - Rules: 5101, 5110(b), IM-5101-1, 5605 source text: December 12, 2023, the Company received written notice from The Nasdaq Stock Market LLC (“Nasdaq”) indicating that, following Nasdaq’s review of the Company’s press release related to the Bankruptcy Petition and other publicly available information, and in accordance with Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq has determined that the Company’s securities will be delisted from The Nasdaq Stock Market. Trading of the Company’s common stock (HCDI), preferred stock (HCDIP), and two classes of warrants (HCDIW and HCDIZ) will be suspended at the opening of trading on December 21, 2023 and evidence_url: https://www.sec.gov/Archives/edgar/data/1784567/000149315223045017/0001493152-23-045017-index.htm This AI-assisted summary is a reading aid. Review the linked SEC EDGAR filing before relying on any specific claim.