Ossipee – September 12, 2009 — Two months after the owners of Westward Shores Campground successfully blocked a foreclosure auction by declaring bankruptcy, the lenders in the case have filed a motion for relief, essentially asking the court to allow it to proceed with the sale.
The motion, filed on behalf of the lenders by Manchester law firm Nixon Peabody LLP, asserts a secured claim on the property of $8,927,720 against a liquidation value of approximately $6,000,000. Additional liens on the business total $224,440 primarily for unpaid federal and local taxes.
On July 9 the bankruptcy court applied an automatic stay against the planned foreclosure sale of the property after the owners, Charlie Smith and Anthony Aversa, filed for Chapter 11 bankruptcy.
As “cause” for relief from the automatic stay, the lenders state that the debtors do not have any equity in the property and have failed to pay interest on their secured indebtedness, adding that escrow funds for property and casualty insurance are causing the lender to “suffer a diminution in the value of its collateral.”
The document further states the debtors have told the court “they have neither working capital available nor a Plan of Reorganization in progress,” noting that the collection of deposits for seasonal sites and boat slips was running $43,000 behind budget as of August 15, “evidencing a serious deterioration in their customer base.”
A hearing on the motion is scheduled for October 6.