Marina to be sold
at bankruptcy auction on Oct. 12
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 its still tentative, said Walro, who filed the petition
July 23. He said final authorization to hold the sale could occur within
After the auction, the sale transaction must also be approved by the
court, a procedure that Walro termed a technicality.
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. Im 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. Its 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.
Its hard to say what will happen; its 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
Weve 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, Peoples 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 Peoples Trust
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 citys second loan
Whoever ends up owning the marina, that project is still important
to downtown Madison. Ive 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 its usually
the second or third owner who makes money on these deals, and thats
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 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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