Marina sold at bankruptcy auction
buys marina, Ford buys condos;
both eager to re-sell
MADISON, Ind. (November 2002) A four-hour federal
bankruptcy auction held Oct. 12 signaled the beginning of a new chapter
for the beleaguered Rivercrest Marina in downtown Madison.
The U.S. Bankruptcy Court-ordered absolute auction forced the sale of
Patricia Herefords 3-year-old marina, nine condominiums, a 10-acre
parcel of riverfront land and a boat storage barn, plus office furniture,
small boats and miscellaneous items.
at the Oct. 12 auction
The 15.5-acre marina itself was the first item auctioned,
and Ed Bowman, representing Peoples Trust Co., now known as MainSource
Bank, won the bid at $470,000.The marina included 96 boat slips, including
36 covered, a ships store, fuel dock, launch ramp and transient
dockage for boats up to 750 feet.
Madison businessman Dean Ford bid as high as $460,000 before bowing
out. Ford did, however, outbid a group of others who tried to purchase
individual condo units, which overlook the marina. There are 11 condos
in all, but two had been sold prior to the bankruptcy filing. The remaining
condos had been listed on the market at $249,000 each, and two penthouse
condos offered at $349,000 each, according to RE/MAX broker Jim Pruett,
who had the listing.
Successful bidders were required to pay 15 percent down at time of sale,
plus a 10 percent buyers premium. The balance was due within 30
Just three days after the auction, Hereford told the bankruptcy court
in New Albany, Ind., that she planned to file a protest requesting that
the judge not approve the auction. But within two weeks of the auction,
the bankruptcy court judge approved the auction, allowing the high bidders
to take possession of their property.
Hereford developed the project with former partners Jamie Visker and
Garry Richeson, who live near Indianapolis. But their lender, Peoples
Trust Co., in April 2001 foreclosed on Hereford after she missed a payment
on her $4.7 million loan. Hereford later countersued the bank, but the
foreclosure resulted in last months bankruptcy auction as the
first step to liquidate her assets to repay the loan. Her lawsuit against
the bank is still pending.
The bankruptcy auction, meanwhile, generated $1.6 million, which was
not enough to cover her debts. The entire property had been previously
listed at $6.5 million on the open market.
At a bankruptcy court hearing held Oct. 15, Hereford signed over to
the bank her Best Western Motel and Nex-Dor Restaurant and Lounge, both
located on Clifty Drive on the Madison hilltop. She was given 10 days
to prepare her personal bankruptcy to determine the value of her equity,
which will eventually be divided among her creditors.
The bank took possession of the two hilltop properties on Oct. 25. Bank
officials say they want to keep the motel and restaurant open so they
will retain their value. They planned to hire someone to manage the
properties until they can be sold.
Hereford also owns a home in Madison and the Clean Machine Car Wash
on Clifty Drive. Hereford used the car wash as collateral in obtaining
a $200,000 Small Business Administration loan from the city of Madison
to develop the marina. The fate of her home and car wash, both used
as collateral in her personal bankruptcy, are yet to be determined.
The legal wrangling in court followed a dramatic morning of bidding
by a handful of people among the more than 200 who turned out to watch
the auction. RE/MAX Group Auctioneers of Elizabethtown, Ky., handled
the auction. Many boaters who moor their boats at the marina attended,
along with bankers, Realtors, business people and spectators
from throughout the area.
After selling the marina, auctioneer Jim Bramblett established bids
on each of the nine condos. He then began soliciting a second round
of bids on groups of condos or the entire lot. Ford emerged as the only
bidder for all nine condos, while individual bidders were given the
opportunity to raise their bids to keep the auction going.
Those bidding against Ford for the condos were Herbert Miller of Greenfield,
Ind.; Matthew Wingham of Fort Wayne, Ind.; Elizabeth J. Griffith of
New Albany; Bob Hughes of Madison; and Joseph Kirchdorfer of Bonita
In the end, Ford, who started his bidding at $867,500, eventually won
the bid at $930,500. Afterward, Ford said he planned to privately resell
all but two of the condos.
Larry Spann, who owns LMS Contracting in Madison, bought a 10-acre tract
of riverfront land for $150,000. The parcel has been built up above
the flood plain with the dirt that Spanns company dug to create
the marina basin at a cost of more than $1 million.
Spann, who had owned the very same parcel in the mid-1970s, said he
planned to use the land as a barge loading facility. He said some equipment
still remained along the riverfront where he had operated such a business
L.D. Honeycutt, a marina owner from Bloomington, Ind., was the high
bidder for a 3.5-acre parcel of land that included the eastern half
of the old Madison Marina storage barn. He paid $64,000. Honeycutt,
who had purchased another building at the 1200 W. Second St. marina
site at a previous bankruptcy auction, also bought the 15-ton boat travel
Marc Gray, owner of Cruisin Auto in Madison, bought the far west
end of the storage barn for $48,000. He plans to store cars and other
items there. Gray also tried to buy the eastern half of the barn, but
lost the bid to Honeycutt.
The furniture at the Rivercrest sales office sold for $4,700. Several
small boats, including the portable waste pump, also were sold.
MainSource Bank officials say they bought the marina because they felt
the bidding was too low. They already have interested parties inquiring
about purchasing the marina at a higher price.
MainSource Financial Group Inc. is based in Greensburg, Ind. The company
has reported assets of $1.2 billion through four subsidiaries, according
to filings with the Securities and Exchange Commission. The company
operates 42 offices in 18 Indiana counties and seven offices in three
Illinois counties. Locally, it has two bank branches in Madison, one
in Hanover and one in Vevay.
Hereford attended the auction with her fiance, Nick Turner, and sister,
Jackie Thacker, who resides in Florida. Following the auction, Hereford
said, I just hope whoever buys the marina will finish or expand
on the dream.
Hereford said she was displeased with the timing of the auction in the
fall instead of the spring because it made the property less attractive
to a potential buyer. Now were going into winter, and were
looking at auctioning a property that has little or no income until
next spring, she said.
Bank officials agreed that a spring auction would have been more desirable
but that repeated court filings by Herefords lawyers postponed
the sale date.
In addition to a virtual whos who of Madison, the
auction attracted several boaters from Madison and surrounding areas.
Bruce Brandt of Madison has kept his boat at the marina since it opened.
He said he has been pleased with the conditions and service at Rivercrest,
adding, I dont expect things to change much with the new
owners. At least, I hope not, because I enjoy it down here a lot.
Boaters Mike and Tammy Gadlage drove up from Louisville to watch the
auction, but arrived after nearly everything had been sold. Gadlage
owns Harrods Creek Marine Supply in Prospect, Ky., and says he just
wanted to see who bought Rivercrest. We just want it to stay open
because its a perfect place for us boaters to come in to refuel
and have a place to stay, he said.
Ron Gassert, who manages the Rivercrest Dock Store and rents wave runners
and pontoon boats through his Diamond G Marine business there, said
he was optimistic about his future. After talking with the new marina
owners, he said, Im pretty happy right now. I think I still
have a job.
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