Richard E. Lambert Ltd. filed for Chapter 7 bankruptcy April 5 in U.S. Bankruptcy Court, listing 32 creditors in two states whom the company says it can't pay. (See theepitaph.com for a complete list.) That total doesn't include Lambert's insurer – Insurance Company of the West – who would have to pay as much as $2 million in a potential claim against the contractor's bond.

Lambert owes the creditors more than $450,000; he's also on the hook for more than $50,000 in sales taxes to the state Department of Revenue.

Lambert lists personal property, valued at $112,922, as his only asset. He also says in the bankruptcy filing that his business income totaled $20,474 in 2008 and $31,238 in 2009.

Chapter 7, Title 11 of the U.S. Bankruptcy Code provides for liquidation or the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors, according to the "bankruptcy basics" section of the federal courts' Web site.

TUSD's complaints with Lambert's work reached a head last November when members of the district filed suit against the Tucson-based contractor, contending he failed to fix a "punch list" of problems that included faulty door locks, leaky windows and underground plumbing issues. The suit seeks $69,570 in damages from Lambert and his insurer. These damages, the district says, are what the district has paid in order to fix the damaged items.

According to David Fifer, the deputy county attorney handling the lawsuit for the Cochise County Attorney's Office, the bankruptcy filing delays any action to collect from Lambert. That doesn't mean Fifer will put the brakes on his lawsuit.

"NO WAY will I drop this," Fifer wrote in an April 8 e-mail exchange with The Epitaph. "I will be asking the Bankruptcy Court for permission to continue the lawsuit to get a Judgment – then I would try to collect from the Surety (Insurance Company of the West), who is a co-defendant."

On May 24 Lambert must attend a meeting with a bankruptcy trustee and any creditors who wish to attend. Dubbed a 341 hearing, the meeting enables the trustees and creditors to ask Lambert questions, which he must answer under oath.