Bankruptcy Dismissal Means a Foreclosed Bank Owned Resort

by Peter Vernon on Bankruptcy

There is a big possibility that the bankruptcy case involving the $100-million golf and residential property located in southeast of Yakima, Washington would be dismissed, unless something changes in the coming months.

In the event that the bankruptcy case would be dismissed, the wine-themed destination development of Vineyards Resort would become a foreclosed bank owned property.

Attorney Ford Elsaesser, who represented the Vineyard Property LLC which plans the development of the property into a wine-themed destination, said during a court hearing that backers of the company have not yet develop a reorganization plan that will lead to the development of the project that will satisfy a Milwaukee, Wisconsin-based hedge fund company which is the major creditor of Vineyards Resort.

At the hearing, Elsaesser told Judge Frank Kurtz that an order dismissing the bankruptcy case of Vineyards Resort will take effect on September 4.

However, Elsaesser said that there are some events that would make the dismissal of the bankruptcy case not on anyone’s interest. In case a dismissal will not happen, Kurtz has scheduled the hearing for a possible dismissal on September 9.

Stark Onshore Master Holding, the Vineyards Resort creditor, has sought the dismissal of the bankruptcy case. If the company’s request would be granted, it is free to pursue with its planned foreclosure on Vineyards Resort.

Stark Onshore Master has been trying to collect on the almost $12.9 million loan taken out by Vineyard Property in 2006. According to the company, its interest in the 500-acre Vineyards Resort is in jeopardy, adding that property developers have no ability to finish the project.

Stark Onshore Master has sought judgment against five loan guarantors before the Yakima County Superior Court. The loan guarantors include Ellensburg-based Gary Scott, Yakima builder Craig Schultz, Colorado resort development firm owners Daniel Fitchett and Rich Barnes and Montana resident Lee Burrington.

Developers of Vineyards Resort plan to construct a golf and residential development project featuring over 500 houses, a hotel retail center and a golf course.

In a separate news, Vineyards Resort has settled with Dincom Inc. which it hired in 2008 to help it obtain financing.

According to court records, Vineyards Resort is seeking a refund of $3.2 million from initial buyers of lots in the development project as fee in the event that Dincom obtain about $80 million to finish the first phase of the project.

The absence of any funding forced Vineyards Resort to file for bankruptcy because of its failure to pay loans taken out from Stark Onshore Master.