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Rivercrest Marina

Rivercrest Marina to be sold
at bankruptcy auction on Oct. 12

By Don Ward
Editor

MADISON, Ind. (August 2002) – Madison, Ind., businesswoman Trish Hereford may be nearing the end of what has become a four-year struggle to develop a marina and condominium project on the Ohio River in downtown Madison.
An absolute bankruptcy auction sale date of 10 a.m. Saturday, Oct. 12, has been tentatively set, pending final authorization by the U.S. bankruptcy court in New Albany, Ind., according to the court-appointed trustee and Madison attorney Michael Walro. RE/MAX Group Auctioneers’ Jim Bramblett of Elizabethtown, Ky., has been selected to handle the sale. The company auctioned the property the first time in 1998 when Hereford bought the old Madison Marina.
“The auction and auctioneer still must be authorized by the court, so it’s still tentative,” said Walro, who filed the petition July 23. He said final authorization to hold the sale could occur within two weeks.
After the auction, the sale transaction must also be approved by the court, a procedure that Walro termed a “technicality.”

Rivercrest Marina

Walro received notice July 22 that the “stipulation” had been approved by the court to hold an auction. The stipulation is an agreement by all secure creditors, who in this case wanted a sale to liquidate the assets in the bankruptcy.
No minimum bid will likely be set, Walro said, since it is an absolute auction, meaning the property must be sold.
Hereford said the auction is welcome news for the next investor to take over the project and see it to fruition. “I’m thrilled that some developer has the opportunity to come in and purchase the property and truly finish my idea of Rivercrest,” Hereford said. “Certainly, I have mixed emotions. It’s been a part of my life since 1998 and has affected my life since 1998. But the dream cannot be dismissed and will be realized, if not by me then by another developer.”
If the auction price does not cover all her debts, then the money will come from the eventual sale of her other properties. If the sale price does cover her debts, she will retain some or all of her properties. Either way, Hereford says she will probably sell her properties and move out of the area after the auction.
“It’s hard to say what will happen; it’s been a long battle,” she said.
Bramblett said he plans an aggressive marketing campaign to include 6,800 direct mail pieces going to marina and harbor owners. Ads will be placed in national marine magazines and the Wall Street Journal. The backup bidders on the property during the first auction also have been contacted, he said
“We’ve sold a lot of marina properties and are very familiar with the marine business,” Bramblett said.
The stipulation agreement also turned the management of the property over to Walro until the sale. He is now in charge of all financial matters pertaining to the property and paying its one employee, Donna Lizenby, and tenant Ron Gassert, who manages the boat storage rentals and operates the Dock Store and Diamond G Marine Rentals.
Hereford started in 1999 soon after purchasing the property in fall 1998. Together with two partners, Gary Richeson and her son, Jamie Visker, she built 11 condominiums and a marina basin that included 125 permanent boat slips and 33 temporary slips. Two condos have been sold. They had originally been priced at $239,000 and up. The developers had received zoning approval to eventually build 33 condo units.
In April 2001, her lender, People’s Trust Co., called in her $4.7 million loan after she was late making a monthly payment. That set off a chain of events, beginning with Hereford filing a countersuit in Jefferson County Superior Court and a civil lawsuit against People’s Trust Co.
Hereford soon filed for Chapter 11 bankruptcy for Rivercrest Marina. The bankruptcy petition included her Best Western of Madison and Nex-Dor Lounge, both located on Clifty Drive on the Madison hilltop. Hereford had also borrowed $280,000 from the City of Madison through its Small Business Associa-tion-sponsored Revolving Loan Fund. The city has a second mortgage on the marina as collateral for the first $80,000 loan. Hereford used her Clean Machine Car Wash on Clifty Drive as collateral for the second $200,000 loan.
Madison Mayor Al Huntington said the city may never see the $80,000 but believed the car wash would ensure that the city’s second loan was secure.
“Whoever ends up owning the marina, that project is still important to downtown Madison. I’ve told people that if it costs us $80,000 to have that kind of facility in town, then it will be a good investment in the longterm,” Huntington said.
“The experts in the real estate business tell us it’s usually the second or third owner who makes money on these deals, and that’s a shame, because Trish has put her heart and soul into this project, not to mention the huge financial risk.”
Last winter, Hereford listed the condos and marina with a Realtor with an asking price of $6.5 million. She said she was close to a deal to sell the property to two Louisville businessmen. But the deal never happened and on May 3 the bankruptcy was converted from Chapter 11 to Chapter 7.
Chapter 11 allows a business to reorganize under court supervision and continue operating to try and repay its debts. Chapter 7 requires a business to liquidate to repay its debts.
Hereford also filed for individual Chapter 11 bankruptcy on April 25. This was a non-business-consumer bankruptcy. It listed her assets at $4.5 million and liabilities at $3.1 million. The individual bankruptcy listed many of the same creditors from the Chapter 11 bankrupticies for Best Western of Madison and the Nex-Dor Lounge.

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