Ossipee – November 30, 2009 – A bankruptcy court judge has given Westward Shores Campground and Marina a 90-day reprieve from the foreclosure auction its lenders have been seeking since June. The court order stays a motion that was filed by the lenders to be relieved of the “automatic delay” in the auction that was triggered when owners Charlie Smith and Anthony Aversa filed for bankruptcy protection in July.
The judge’s ruling permits the owners to continue working on a financial reorganization of the ailing business until February 1 – with several stipulations. Monthly payments of $39,134 must be made to the lender to cover accruing interest on the debt, and another $8,450 must be paid monthly to an escrow account to cover real estate taxes.
In September, the Florida-based lenders asked the court for permission to proceed with the auction, saying Smith and Aversa had failed to pay interest on the debt or properly maintain escrow funds to cover property and casualty insurance.
The lenders also claimed the owners lacked sufficient working capital for recurring expenses, did not have a viable reorganization plan in progress and were running behind budget in collecting deposits for the 2010 camping season.
Condo Plan Preparation
In a separate ruling, the court approved a request by the owners to hire local attorney Richard Sager of Sager Law PLLC to pursue approvals by DES and the State Attorney General to convert the campground’s campsites to condo units, which the owners say is the “highest and best use” of the property.
DES turned down the owners’ condo plan on April 29 but said it would reconsider the application subject to a number of conditions, including payment of a $150 fee for each site to be converted.
DES also noted that “condominium documents” and a shoreland permit were missing from the application, and it asked for more information on why the “campground’s infrastructure” (including the gate house and bathroom buildings) was not part of the conversion.
A majority of campers returning for the season learned of the proposed conversion in a May 12 email that explained the condo plan and stated a June 1 deadline for making a refundable down payment. The offer was rescinded in an email sent to campers on May 21, citing delays in obtaining required permits and in preparing the purchase and sales agreements. Days later, the lender foreclosed on the 227-acre property and set a July 10 date for a public auction.