Goodstein details downfall

Summerville homebuilder Arnold Goodstein remembers the exact moment that he grasped the severity of the Charleston area's real estate market slowdown.

It happened in 2007 during a routine meeting for his company, Summerville Homes, when a sales rep said the regional homebuilder had sold three homes the prior month.

"The company had 3,000 lots and 30 subdivisions. I looked at him and said, 'What do you mean we only sold three homes?' " Goodstein said at a court hearing Friday afternoon. "When (the real estate market) died, it died -- like Wile E. Coyote going off a cliff."

Unable to keep up with payments on loans he personally guaranteed, Goodstein filed for personal bankruptcy last month. The former state senator, who also served as state highway commissioner and has a stretch of Interstate 26 named after him, owes about $63 million, largely to banks that lent him money to buy land for developments throughout the Charleston area, according to court filings.

More recently, he asked a judge to convert his bankruptcy case from a Chapter 11 reorganization, which would give him a chance to propose a pay-back plan, to a Chapter 7 liquidation case, a telling move for a businessman who's been described as aggressive and optimistic.

"I'm 66 years old," he said after the hearing. "It's time to put this behind me."

John T. Stack of the U.S. Trustee's Office and representatives from parties that he owes money to used the court session to ask Goodstein questions about his personal property and business decisions.

Goodstein said he put his profits from the once-lucrative housing market back into the homebuilding company after sales dropped, cutting off the company's usual stream of income. He said he had very little savings when he approached lenders for help as the market worsened.

"The banks weren't doing anything," he said. "They had their own problems. ... Most of them were paralyzed."

Goodstein's listed debts do not include dozens of lawsuits filed by subcontractors against Summerville Homes, which stopped operating in 2008.

Goodstein also said he has not transferred any major assets to family members during the past three years. "I did just the opposite," he said, elaborating that he got money from family land to continue paying for the real estate operations.

Court records estimated that Goodstein's current assets are worth about $2.9 million. Most of that money comes from interest Goodstein owns in a Dorchester County industrial park and a business venture called Coastal Commercial Center Inc.

Goodstein serves as a lawyer for the Charleston County Aviation Authority and also practices law on his own, earning $19,583.33 per month, according to court filings.

A lengthy bankruptcy court filing gives an exhaustive description of his personal property -- silver flatware, two antique clocks, his grandfather's ring -- and their value.

The 19-room Victorian home in Summerville where he lives, once owned by Elizabeth Arden cosmetic company founder Florence Nightingale Lewis, is owned by his wife, Circuit Court Judge Diane Goodstein, according to Dorchester County tax records.

Diane Goodstein also makes mortgage payments on a multimillion home that she purchased at the height of the boom in Myrtle Beach's swanky Grande Dunes neighborhood, Arnold Goodstein told the court.

Goodstein gave up his private airplane, a 2005 Cirrus SR22, to a bank in 2008, which sold it for $167,000.

Reach Katy Stech at 937-5549 or kstech@postandcourier.com.