One of North County's largest home builders, Carlsbad-based Barratt American, filed for bankruptcy protection from creditors last week as it struggled to survive one of the worst local housing downturns in history.

If Barratt American were to fail completely, it could cause a painful ripple through several local businesses. Of its top 20 creditors listed in a Chapter 11 bankruptcy filing, 11 were based in San Diego or Riverside counties and were owed $10.9 million.

The home builder suffered in part from poor timing. In North County alone, Barratt put at least four projects up for sale just as a housing bubble burst.

Combined, the projects were slated to sell 155 housing units. So far, about 40 homes have sold, said Russ Valone, president of MarketPointe Realty Advisors, a San Diego research firm.

All four of the projects are unfinished, some with empty land and others with half-built houses wrapped in plastic.

The company also has two partly sold projects in French Valley, near Murrieta.

Michael Pattinson, the company's president, said Barratt was forced into bankruptcy after its lender, Bank of America, canceled a line of credit. He said the two companies had worked together for 27 years.

Bank of America has seized all four North County projects in foreclosure.

"What upsets me is that a company that I was loyal to was not loyal to me," Pattinson said. "But we're big boys. We know what goes on in this world, and what goes around comes around. I've got my boxing gloves on, and I'm up for the fight. I've lost Round One, but there's 14 more rounds to go."

Messages left with a Bank of America spokeswoman were not immediately returned.

Pattinson has crisscrossed the country, telling legislators about the pain builders are feeling because of "bad banks." He was also a player in forming the Building Industry Coalition for Economic Recovery, a group that says irresponsible lending has stifled a recovery for the housing market.

But Dan Schaldach, owner of D&S Construction in Escondido, said he sees it differently. His company has been framing houses for Barratt for years, he said.

"I think he (Pattinson) has been blaming other people for their mismanagement," Schaldach said. "They had a pretty high lifestyle, and it caught up with them."

Schaldach said his unpaid bills with Barratt, totaling about $750,000, has put a strain on his company. A housing downturn that began in 2006 has wiped out 60 percent of Schaldach's business, he said.

Since then, home prices have tumbled more than 30 percent, and new home sales were down as much as 50 percent.

And beyond the unpaid bills, Schaldach said he has spent about $40,000 in legal fees in the form of filing liens and other legal action in an attempt to ensure repayment.

What happens to the four unfinished Barratt projects in North County was unknown Monday. During a Chapter 11 bankruptcy, a company attempts to restructure its debt and emerge as a viable business.

Essentially, the builder hopes to be able to clear some debt by selling projects but retain enough assets to emerge as a viable business.

One of Barratt's largest projects was not included in the Chapter 11 filing. However, the 1,400-unit project, known as Fanita Ranch in Santee, might be in trouble as a foreclosure filing was issued in October.

Over the next year, the company plans to control costs and build only houses that have a confirmed buyer, such as rebuilding homes lost to the October 2007 fires, according to a company statement.

And the company plans to return to building new houses to put up for sale in 2010.

Barratt might have to draw down its projects, focusing only on 10 to 20-unit "in-fill" projects, but it will not collapse, said Nathan Moeder, a principal for The London Group, a real estate consultancy firm in San Diego.

"Are they going to be able to come back? Yes," Moeder said. "It's just a question of what sort of company they emerge as."

Contact staff writer Zach Fox at (760) 740-5412 or zfox@nctimes.com. Read his blog, "On the Realside," at bizblogs.nctimes.com.