Lead Paint Lawsuits Lead to Bankruptcy for Baltimore Landlord
A Baltimore landlord that owes several million dollars due to lead paint lawsuits has filed for Chapter 11 bankruptcy protection.
City Homes Inc., which rents more than 300 apartments in the city, is also facing more lead-related litigation that has already been filed. Bankruptcy not only prevents creditors from collecting unpaid bills, including legal judgments, but also shields companies from ongoing and future litigation.
“As a result of the 70 pending lead paint lawsuits and the many more anticipated, the company must stabilize their affairs and consider all options going forward,” City Homes President Barry Mankowitz said in court documents.
The largest single judgment against the landlord was a $2.5 million verdict awarded to two siblings in November 2009. Their mother moved to a City Homes townhouse after finding out one of the children was exposed to lead in a previous rental unit; she said City Homes assured her the home was safe.
Exposure to lead paint can cause permanent damage to the brain and nervous system, including behavior and learning problems. Young children are most susceptible.
In 2011, the Maryland Court of Appeals – the state’s highest court – struck down a cap on landlords’ liability in lead-exposure litigation.
The company reported assets of less than $1 million and debts of $1 million to $10 million in its bankruptcy petition, which was filed in the U.S. Bankruptcy Court in Baltimore.