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Last year, Highland managed to snag a coveted spot on Inc. magazine’s list of America’s 500 fastest growing private companies. Ranked 293rd, Highland Homes reported 38 employees and revenue of $16.5 million in 2006, compared with $1.7 million in 2003.

But the high-flying status concealed the company’s growing inability to pay contractors and suppliers. In 2007, the number of liens and contract suits began to mount.

“We provided good work, and we expected to get paid for it,” said Steven Cohen, the lawyer for Thermal Concepts Inc., a St. Louis company suing Highland Homes for payment for fireplaces, shower doors and insulation.

Also going to court this year is Marble Decor of Union. Angela Wieda, head of the family-owned company, said the Highland Home partners have become scarce.

“They acted as if they were going to pay us, then all of a sudden we couldn’t get through to them any longer,” Wieda said.

Marble Decor and a companion firm, Classic Enclosures, filed a lien to collect $2,944 in shelving and vanity tops installed nearly a year ago at a Highland Homes project in Dogtown.

The builder’s most ambitious project was Highland Park in St. Peters. When construction began early last year, Highland Homes said the $38 million project of 245 condos and town houses would be Missouri’s largest “green” development.

At the time, Cavanagh boasted that going green — the use of recyclable building materials and incorporation of many energy efficiencies — would become a growing part of the St. Louis residential market.

Construction halted this summer with the seven buildings of attached houses largely unfinished. Last month, the city of St. Peters paid to have open ground-floor doors and windows boarded up, and it will send Highland Homes the $6,500 bill.

Roger Stewart, the city’s building commissioner, said he attended a meeting Monday of the project’s bankers and Cavanagh. The banks want to get control of the project to either complete the buildings or demolish them, Stewart said.

The city is condemning three structures because their building permits expired. Condemnation of the remaining buildings may proceed next month, when their permits expire, Stewart said.

But Shallenberger doesn’t want to give up. He said some banks remain cooperative, and he is hopeful of finding a new Highland Park investor.

“We’re working to complete the project,” he said. “If we can’t, Plan B is to figure out how to make people whole. We’re not throwing in the towel.”

Kathy Meitz, a saleswoman for Wieda’s companies, said she was glad their bids for work on Highland Park were unsuccessful.

“The bad thing of it is, John Cavanagh used to be a friend of mine,” said Meitz, explaining that the two worked together at another builder in the 1990s.

She agrees “the economy is horrible right now,” but she is critical of overextended builders who stop paying their bills.

“When they start getting in trouble they should stop building and start paying their bills,” Meitz said. “They buy property and arbitrarily don’t pay their subs and leave them holding the bag.”

An unhappy Highland Homes customer is Ryan Sanders, who two years ago paid $290,000 for a condo in an eight-unit project in University City. The builder installed Brazilian hardwood floors and other high-end products, “but the people who did the work didn’t know what they were doing,” said Sanders, 32, a banker.

He said the condo association took out a $35,000 loan to replace a leaky roof and make other repairs. As a result, residents’ monthly condo fee shot up to $400 from Highland Homes’ initial estimate of $185, he added.

“It was an absolute mess,” Sanders said.

Meanwhile, Shallenberger said he is trying to pick up the pieces.

He moved out of his Ladue home last year when it was foreclosed, according to neighbors. From there, he moved to what he said was a $1.8 million house in Olivette.

When that property was foreclosed, he moved again to a smaller place that he rents.

“If you had a son who wanted to go into business these days, I’d tell him to avoid the real estate business,” Shallenberger said. “This is a very difficult market. This is one that couldn’t have been predicted.”

On eBay, Shallenberger has sold dozens of jerseys and other items autographed by professional athletes.

“I am a (depressed) homebuilder…in the worst economy in YEARS…I have some great unopened items from my building years that I will be selling … and I will be selling my personal collection of autographed EVERYTHING collecting since the 1970’s,” according to his eBay bio.

Shallenberger said the move to a smaller rental home required him to get rid of a lot of stuff. In addition to putting his sports memorabilia on eBay, he has sold album covers autographed by the artists and copies of vintage Playboy magazines.

“If I’d had a window into the future three or four years ago, I would’ve put some money away,” Shallenberger said. “Instead, we put everything in the company.”