Hermitage developers to be reorganized after filing for bankruptcy
Attorneys representing parties involved in a foreclosure case for townhouse Units A/B, C, D/E and F at Powderhorn Lane in Wilmington said as much Thursday during a status conference in Windham Superior Court Civil Division.
"I would have to say that looking at the docket for the bankruptcy matter, that with Chapter 11, there is supposed to be a plan of reorganization that has yet to be filed," said Marcus Webb, a lawyer who represents California-based Patch of Land Lending LLC in a foreclosure case against Lizandra LLC.
Lizandra and its principal Frank Cotrona Jr. of Wallingford, Conn., allegedly owe about $1.5 million on an approximately $2 million loan and mortgage they stopped paying to Patch of Land Lending LLC. Reorganization is "an attempt to extend the life of a company facing bankruptcy through special arrangements and restructuring in order to minimize the possibility of past situations reoccurring," according to investopedia.com.
Powderhorn is on lower Haystack Mountain, where the Hermitage Club ran a members-only ski resort until Berkshire Bank foreclosed that and a number of the company's other properties in February. A court-appointed receiver is preserving the value of the resort, base lodge, golf course and four inns until the matter is resolved.
The Powderhorn "residences are built with a level of craftsmanship that is the hallmark of an upscale alpine home," according to hermitageclub.com, where units developed by Lizandra are advertised. "Ski-in/ski-out access lets you take full advantage of our powder-coated slopes. After a thrilling day carving corduroy, ski home and unwind in luxurious comfort."
The court has ordered stays in foreclosure cases involving Powderhorn units against Lizandra brought by Stormfield Capital Funding I LLC and TVC Funding I, LLC.
"The court is informed that Lizandra LLC has filed a bankruptcy petition," Judge Robert Gerety Jr. wrote in a Dec. 27 order for TVC v. Lizandra. "Accordingly, the proceedings are stayed only as to Lizandra LLC until further out of court. The remaining parties are directed to inform the court in the event relief from stay is granted in the bankruptcy court."
The judge is considering a stay in the Patch of Land case, which Webb called "appropriate."
Attorneys representing other parties also did not object. They included lawyers for two Powderhorn associations, which could have an interest if there are any delinquent fees; Mark and Jamie Bushmann, who have a deed involved in the foreclosure; Citizens Bank, which provided the Bushmanns a $780,000 mortgage; John and Rebecca Larkin, who have a settlement agreement related to the property; Divito Renovations LLC, which has a $29,112 lien on the property; and Hunter Excavation Inc., which has an approximately $30,615 lien on the property.
Attorney John Stasny, who represented Lizandra and Cotrona, told the court he did not know the progress of the bankruptcy. He has filed a separate lawsuit on behalf of his clients alleging that local attorneys Bob Fisher and Lance Shader "wreaked havoc" with Hermitage founder Jim Barnes on their business operations and goodwill when they engaged in legal malpractice, breach of contract and intentional interference when conducting several real estate transactions at Powderhorn Village.
Fisher served as counsel for Barnes and Cotrona in a purchase and sale transaction in March 2014, according to the complaint in which Stasny said Fisher had wanted both parties to sign a document waiving any conflict of interest. But Cotrona claims he never gave his consent. He alleges money was wired to the Hermitage for a property more than four years ago but he never received the deed then Barnes made excuses for the delay in conveying property while concealing the failing financial condition of Hermitage companies — something Cotrona says Fisher must have known about.
Fisher represented Lizandra, and Shader represented buyers in sales for Powderhorn units last year, according to the complaint in which Stasny said the two lawyers had not referenced existing mortgages before deeds were conveyed and when Cotrona called attention to the issue "neither attorney addressed the mortgages in the closing of the transactions."
Reach staff writer Chris Mays at email@example.com, at @CMaysBR on Twitter and 802-254-2311, ext. 273.
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