He played by the book; Indiana's largest homebuilder liquidates: the tale of a failed Florida S&L, a DuPont heir and Jonathan Livingston seagull.

• Author: Johnson, J. Douglas
• Position: Tom Rush, Jonathan Homes of Indianapolis - Cover Story

He Played by the Book

Bad things happen to good people. Nobody knows that better than Tom Rush. He had to stop taking new orders a month ago and is liquidating his business.

This sounds like the sad story of a lot of good people around the country, but Rush's situation is different. He was a success. He was the founder and president of Jonathan Homes of Indianapolis, the biggest homebuilder in Indiana for the past three years. He put up 374 houses and had sales of more than $40 million in 1990. His profit was $2.4 million. Then in January--Zap! Eight hundred miles away in Orlando, Fla., the rug got pulled and Jonathan Homes toppled.

It was a no-fault failure. Everybody in the Jonathan shop was doing everything right when disaster struck. The story is worth a replay because there are some lessons here that could apply to any company.

Go back a few years. In 1986, the late Al Savill, an Indianapolis investor who once was part-owner of the Pittsburgh Penguins hockey team, had deals going in Orlando. One was Catalina Homes Inc. Savill had bought a 51 percent interest in the builder back in 1981. Another of his investments was the American Pioneer Savings Bank of Orlando, of which he was a board member.

Savill sold Catalina to the bank and the firm was a winner. This whetted American Pioneer's appetite for more homebuilding properties. Savill knew the Indianapolis market and thought it was the place to expand. He told Richard W. Swann, chairman of the board of American Pioneer, about The Jonathan Group Inc. It would be easier, they reasoned, to pick up a growing company with a great reputation, rather than to start putting a newcomer together from scratch.

They checked the company out as an acquisition candidate. Both men were impressed. Naturally, they nodded approvingly over the healthy financial records, but they were equally attracted by the winning spirit of the Indianapolis corporation and its owner.

History told them that Tom Rush christened his firm nearly two decades ago in Lafayette. Rush and his partners gathered one night in 1974. On the agenda was, "What'll we name the company?" A few ideas were doodled on yellow pads. None grabbed anybody. Then Tom looked down into his open briefcase and saw the title of a popular book he was reading.

There in the night sky was the highflying, chalky shadow of Jonathan Livingston Seagull. Jonathan was persevering, different from others in the "Flock" and determined to have his own identity. That was the image Rush and his partners wanted to create. In homebuilding terms their adopted mission was: "Take a selection of basic plans for homes and offer buyers a variety of customized features." Individuality...