Crime Blotter
How One Roofer’s $700K Legal Reckoning Ballooned to $5 Million
It seemed bleak last November for a Minnesota contractor until it got worse
In a follow-up to a story RC first brought to you last November, the troubles facing Oberg Roofing and Remodeling went from dire to ‘on fire’ after several new lawsuits were filed, increasing the company’s arrearage from $700,000 to nearly $5 million.
— Image courtesy of Instagram
Last fall, Roofing Contractor reported on a troubling case involving Oberg Roofing and Remodeling, a Minnesota-based contractor firm facing multiple lawsuits from homeowners, a supplier and a fellow contractor.
Oberg Roofing’s principals, Caleb Oberg and Chad Whitcher, abruptly shuttered the business, leaving clients with unfinished projects and their company with roughly $700,000 in arrears. Oberg subsequently filed personal bankruptcy.
What started as unfortunate has ballooned into something far more muddled.
It Was Bad. It Got Worse
Court records reveal that multiple new lawsuits against Oberg Roofing offer a clearer picture of the central Minnesota company's mounting financial troubles, dramatically skyrocketing the sought amount of restitution.
The now-defunct contractor faces 19 lawsuits filed between October 2024 and mid-January, amounting to a minimum of $4.93 million.
Most of the claimed damages are associated with the firm's former headquarters in downtown St. Cloud, a city of roughly 69,000, located in the state's center, about 65 miles northeast of Minneapolis.
According to the St. Cloud Times, Oberg Roofing’s lender, Magnifi Financial Credit Union, is seeking foreclosure.
Last month, Magnifi Financial initiated legal action against the company, claiming Oberg is indebted to the tune of $3.59 million across five loans, which financed the company’s building, trucks, three cargo vans and several trailers.
According to court records, the largest single arrearage was for a loan used to purchase the company’s former building, accounting for $2.96 million. Minnesota Department of Revenue records indicate Oberg bought the 22,000-square-foot property for roughly $845,000. Magnifi’s lawsuit says it plans to reclaim the downtown building and other properties owned by Oberg or Whitche in St. Joseph, Avon, Sauk Rapids, and St. Cloud.
No One Left Untouched
Wisconsin-based American Builders and Contractors Supply Co. is suing Oberg Roofing for damages. Image courtesy of YelpCourt records show roofing distributers big and small are seeking payments from Oberg totaling nearly $2 million for projects affecting at least 76 roofing customers.
Trent Cotney, Roofing Contractor’s Legal Insights columnist, said Oberg Roofing’s undoing was an age-old dilemma in commerce: cash flow.
“Insurance contractors must manage cash flow effectively,” Cotney, Adams and Reese LLP's Construction Practice group chair, said. “Often, [contractors] face financial strain leading to difficult decisions; adopting a noncontingent insurance model could enable direct recovery from homeowners if the insurance company fails to pay.”
Last month, Oberg told the St. Cloud Times that the business's financial struggles "are the most difficult thing [he's] ever experienced."
Despite receiving down payments, Oberg added he couldn't work on customers' properties because the state revoked his contractor’s license last November. That, and what he described as “sales department staffing challenges,” contributed to the company’s ultimate financial downfall.
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Bryan Gottlieb is the online editor at Engineering News-Record (ENR).
Gottlieb is a five-time Society of Professional Journalists Excellence in Journalism award winner with more than a decade of experience covering business, construction, and community issues. He has worked at Adweek, managed a community newsroom in Santa Monica, Calif., and reported on finance, law, and real estate for the San Diego Daily Transcript. He later served as editor-in-chief of the Detroit Metro Times and was managing editor at Roofing Contractor, where he helped shape national industry coverage.
Gottlieb covers breaking news, large-scale infrastructure projects, new products and business.
email gottliebb@enr.com | office: (248) 786-1591
