The Lexington Blue roofing lawsuit ended in a default judgment of more than $8.5 million against the collapsed Kentucky contractor, along with a permanent ban on the company and its affiliates doing business in the state. Fayette Circuit Judge Diane Minnifield entered the judgment on February 2, 2026, and set the restitution amount at $8,544,360.31 at a damages hearing eleven days later. The catch for homeowners who paid the company and never got a roof: collecting on that judgment runs through bankruptcy court, and there is very little left to collect.
What the Attorney General Alleged
Kentucky Attorney General Russell Coleman sued Lexington Blue, owner Bradly Pagel Jr., chief operations officer Alex Southwell, and a network of affiliated entities on May 30, 2025, in Fayette Circuit Court (Case No. 25-CI-02230). The complaint accused the company of violating the Kentucky Consumer Protection Act and Kentucky’s roofing-contractor statute through a pattern of deceptive practices.
According to the state, in 2024 alone Lexington Blue took in roughly $4.8 million in payments on more than 300 projects, most of which were never completed. Individual deposits ran from a few thousand dollars to tens of thousands. The complaint also alleged that:
- Sales representatives were trained to peel back or crease shingles during “free inspections” so insurers would approve larger repair claims.
- Employees were directed to post fake positive reviews online using fabricated accounts.
- Under an internal program called “Project 485,” workers returned to prior customers’ homes on the pretense of a new inspection and pressured them to pay additional deposits.
- Pagel funneled customer money through shell companies including Lean Dad Development LLC, Wide Awake Consulting LLC, and The GroundzKeeper LLC, using them to cover personal expenses and disguise assets.
The state sought a permanent injunction, full restitution, disgorgement of unlawful proceeds, and civil penalties of up to $2,000 per violation, or $10,000 per violation involving consumers 60 or older.
The Judgment and Permanent Ban
Neither Lexington Blue nor Pagel filed a defense. Judge Minnifield entered default judgment on February 2, 2026, finding that the company and its affiliated entities had violated Kentucky’s consumer protection laws. At the February 13 damages hearing, she set restitution at $8,544,360.31, an amount that covers payments to harmed consumers, disgorgement, civil penalties, and litigation costs.
The order also permanently bars Lexington Blue and all of its affiliates from operating any business in Kentucky. By the time judgment was entered, more than 332 consumers had filed complaints with the Attorney General’s office.
The court had moved quickly at the outset of the case. On June 2, 2025, Judge Minnifield granted a temporary restraining order that shut the company down, prohibited any transfer or liquidation of assets, and froze corporate and personal bank accounts belonging to Pagel and Southwell.
Why Homeowners May Not Recover Their Money
A judgment is not a payment. The Attorney General’s office has acknowledged that “actual enforcement must take place through the bankruptcy court,” and the numbers there are grim.
Lexington Blue filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Eastern District of Kentucky on June 16, 2025 (Case No. 25-50863), listing more than $3.2 million in debts against less than $50,000 in assets. The company’s attorney told the court there were “no assets, no materials and no staff.” At least 263 homeowners in Kentucky and Ohio were listed as creditors for deposits on unfinished work. On August 21, 2025, U.S. Bankruptcy Judge Gregory R. Schaaf converted the case to a Chapter 7 liquidation after the company’s own lawyer conceded the reorganization plan had “no chance of succeeding.” The court acknowledged creditors would likely receive “pennies on the dollar.” Trustee Lori A. Schlarman was appointed to recover what she could.
Pagel and his wife, Courtney Pagel, filed personal Chapter 7 bankruptcy in Tennessee in November 2025, reporting more than $2.3 million in debts and less than $175,000 in assets, including two Ford F-150 trucks, $18,000 in Bitcoin, and roughly $45,000 in retirement accounts. As of early 2026, only about $60,000 to $70,000 remained frozen in Pagel accounts. Both bankruptcy cases remain active.
What Affected Homeowners Can Do
If you paid Lexington Blue for work that was never finished, the practical steps are narrow but worth taking.
File a consumer complaint with the Kentucky Attorney General’s Office of Consumer Protection if you have not already. Your complaint becomes part of the record the office uses to pursue restitution and, if your payment was documented there, part of the pool the court’s restitution order was calculated to cover.
File a proof of claim in the bankruptcy cases. Because the company’s Chapter 7 and the Pagels’ personal Chapter 7 are separate proceedings, homeowners with claims against both may need to file in both. Any distribution to unsecured creditors, including customers who lost deposits, will come out of those cases, not directly from the state court judgment.
A separate potential class action was filed on April 29, 2025, in Jefferson Circuit Court by Adam and Yanett Cecil of Louisville, who alleged they paid over $8,000 in November 2024 for work never performed. The proposed class covers homeowners who contracted with Lexington Blue on or after May 1, 2020, and received neither services nor refunds, and asserts breach of contract, unjust enrichment, and Kentucky Consumer Protection Act claims. The company’s bankruptcy filing paused further action in that case.
Brad Pagel
Pagel founded Lexington Blue around a decade before it collapsed. He had a prior Kentucky conviction for misdemeanor harassment on March 29, 2024, following an October 2023 arrest, and was sentenced to time served plus court costs. Former employees described the company’s internal culture as cult-like, built on intimidation, mandatory “acts of service,” and pressure to use psychedelic drugs. Sales representatives worked on 10 percent commission with no benefits, and ex-staff said commission checks frequently bounced.
By May 2025, according to the Lexington Herald-Leader, Pagel had “disappeared.” He resurfaced through the Tennessee bankruptcy filing, listing a P.O. Box in Destin, Florida. He has denied the fraud allegations, blaming the company’s failure on insolvency, staff sabotage, and high-interest merchant cash advance loans.
Criminal Charges
The Attorney General’s case and the bankruptcies are civil matters. Lexington police referred several fraud cases from late 2024 and early 2025 to the Attorney General’s Consumer Protection Section, the National Insurance Crime Bureau, and the Kentucky Department of Insurance. No criminal charges against Pagel or other company principals had been announced as of the most recent reporting.