New River Marina auction results thrown outPosted on
Judge John K. Olson this week nullified the results of the July 17 bankruptcy auction of New River Marina in Fort Lauderdale in U.S. Bankruptcy Court, Southern District of Florida.
Olson said the auction was clearly a disaster.
When the auction hammer came down, it was clear that the marina was bought by Allied Richard Bertram Marine Group, said Alex Nichols, principal of 84 Marina LLC. Then everyone went upstairs (to discuss the objection to procedure in the auction).
84 Marina LLC is the primary secured creditor that pushed for the bankruptcy auction in an effort to recoup his $13.3 million investment owed by New River Marina. The marina filed a motion to nullify the results of the auction and requested a continuance, which Judge Olson granted Monday.
The next status hearing is July 29.
This provides New River Marina with the opportunity to find new financing or a buyer by Aug. 15. If it does not succeed in finding a new investor, the property will be in foreclosure and Nichols will own the marina. Nichols, however, told Soundings Trade Only he is not interested in getting the marina. Nichols previously owned Crows Nest Marina in Oceanside New York, but he is now retired and said he does not want the hassle.
I just want to get what is owed to me, as a businessman who made a loan in the proper way, Nichols said. A bank would have thrown in the towel a year ago, but I am not a bank and cannot afford to write things off. There is no monetary benefit to me other than to get what is owed to me. I am fighting this and want the court system to be fair to everyone.
This could happen to someone else (not being paid for a loan made in good faith) and I do not want this to happen to someone else six months from now, he added. This is a feast for lawyers and by the time it is done, there may be nothing left for the unsecured creditors.
The confusion surrounding the July 17 auction erupted over a new, unqualified bidder who behaved erratically during the auction and was vetted as a bidder about an hour prior to the scheduled auction, which was contrary to the auction rules, according to attorneys.
Frankly, we were stunned with what happened on Thursday, said Mindy A. Mora, attorney with Bilzin, Sumberg, Baena, Price and Axlerod, LLP. Mora is counsel for the official committee of unsecured creditors.
The new bidder had a boat at the (New River Marina) property, Mora said. This unwitting bidder or backup bidder had a mechanics lien against his boat and thought he was bidding on an auction for his boat. Instead, he wound up participating in an auction for the bankrupt marina and was upset and outspoken afterwards, according to all attorneys at the hearing. The marina argued the unwitting bidder was the sole cause of the auction irregularities.
At the end of the auction, the bidder had manic behavior, Mora said. In my 26 years of practice I have never seen anything like this before.
Thomas M. Messana, of Messana, Weinstein & Stern, P.A., representing 84 Marina LLC, stated in his motion for a settlement that a potential bankruptcy crime may have been perpetrated with the sale of the marina at auction.
At the start of, and throughout, the attempted auction, the identity and number of qualified bidders or the current highest bidder was not announced One bidder was not a bona fide bidder, was not qualified and appears to have been utilized as a mechanism to increase the bidding without any intention to close upon the bid. It appears that this bidder was not even aware of the position he had unwittingly taken or been placed. (He) claims to not have intended to submit any bid at all, according to Messanas motion, which was filed in court.
We had a bidder qualified who should have never been qualified, said Michael Goldberg of Akerman Senterfitt, counsel for Transworld Marine (Allied Richard Bertram Marine Group). He did not hand in a financial affidavit and had no cashiers check until 1:45 p.m. (to enter the auction).
Berger Singerman, P.A., attorneys for New River Marina, in their emergency motion for adjournment of the sale, said the unwitting bidder began to act erratically during the bidding process and his conduct only worsened at the conclusion of the auction. (He) refused designation as the backup bidder and demanded the immediate refund of his deposit, claiming he had not bid for the debtors property and to be released of the obligation to close.
All bidders deposits of $250,000 were refunded as a result of the botched auction, which was videotaped. Attorneys for Auction Company of America objected to playing the videos at Mondays hearing on the grounds of its authenticity and for the purpose of throwing someone under the bus.
I dont think anyone is being thrown under the bus today, Judge Olson said, adding that he would love to see the video after claims of the auction were thoroughly fleshed out.
Goldberg indicated he did not believe the attorneys for the marina or the unsecured creditors committee were involved in anything criminal.
Judge Olson agreed. The principals of the debtor (Mary and Bob Wickman of New River Marina) are not responsible for this problem
no one is pointing fingers at impropriety by the debtor or the committee.
Goldberg said his client was now compromised, as it is now public knowledge that his bid for the property was $13.4 million. My client does not know if he would bid in another auction.
Arthur Spector of Berger Singerman said a second try at an auction is not good. Wed be happy to discuss (the offer to purchase the marina) with Mr. Goldbergs client (Transworld/Allied). We know he wants to buy it. Granted, we know the number.
Lisa Hoogerwerf Knapp