Pinnacle Homes, a high-end builder in Santa Rosa for two decades, has shut down after two banks reclaimed properties for debts exceeding $5 million.

Richard Dowd, the company's co-founder and vice president, and his wife, Pamela, have filed for personal bankruptcy protection.

Pinnacle is the latest real estate developer to fold following a five-year downturn in construction that has sent housing starts to historic lows.

Pinnacle's owners, Dowd and president Craig Lawson, are "two of the finest people in the world of construction, so it makes me especially sad to see this happen," said Keith Woods, chief executive officer at North Coast Builders Exchange, a Santa Rosa trade group.

Dowd was inducted by the builders exchange into its Construction Hall of Fame in 2002, serves as chairman of the Santa Rosa Board of Public Utilities and sits on the board of AltaPacific Bank. Lawson is past president of the Home Builders Association and serves as chairman of the city Board of Community Services.

The company's demise shows "this can happen to anybody," Woods said. "It means nobody's immune during these tough economic times."

Founded in 1993, Pinnacle targeted the market for homes priced from $500,000 to $3.5 million, building projects in Sonoma, Napa, Marin and Mendocino counties. Its luxury home projects include Quarry Pointe, El Dorado Estates, Pinnacle Heights and Stoneridge.

But the recession brought construction screeching to a halt. Last year, builders pulled permits to construct 276 single-family homes across Sonoma County, the lowest number on records going back almost a quarter century.

In February, Pinnacle Homes sought to reorganize, filing bankruptcy for two limited partnerships that owed about $4 million to Westamerica Bank. The partnerships held home sites in Sebastopol and near Ukiah.

The bankruptcy cases were dismissed in April after the bank's attorneys sought permission to foreclose on the properties. Westamerica has taken back both properties, Lawson said.

Exchange Bank has taken back two properties in Petaluma owned by two other Pinnacle partnerships that defaulted on $1.3million in loans, according to public records.

Exchange Bank filed default notices last winter against Lawson's and Dowd's homes for $1.25 million owed on a line of revolving credit.

The company attempted to sit down with its lenders more than a year ago and work out a restructuring plan, Lawson said.

"The bank's position to not negotiate forced our hand," Lawson said. "It's tragic we have to close our doors."

Dowd was traveling and could not be reached for comment. His bankruptcy attorney, Michael Fallon, declined comment.

An Exchange Bank official declined comment on the status of its line of credit with Dowd and Lawson.

The Dowds' bankruptcy filing lists both Exchange Bank and Westamerica Bank among the couple's eight creditors.

The Dowds' assets and liabilities both were characterized as between $1 million and $10 million.