Bank: Kingsbury property sale plan 'pie in the sky'
An attorney for TD Bank objected Thursday to hiring a real estate agent to sell the land and building of the bankrupt Kingsbury Corp. in Keene, saying it was a "pie in the sky" approach that wouldn't fetch enough money do more than cover the bank's own and other liens on the property, let alone pay off unsecured creditors.But Nicole Horberg Decter, an attorney for United Auto Workers representing the 60 former Kingsbury workers, favored retaining the firm, in the hope that a sale could raise enough money to pay some $350,000 in health benefits and vacation pay.The bankrupt estate of the machine tool company already sold off the equipment and other moveable assets to Optimation Technology for $3.1 million at the end of last month. Out of that sale, the workers received about three weeks back pay. However, some 20 Kingsbury workers are still working on that equipment on location, as the estate finishes up some back projects (and even one new major one, according to the estate's attorney, Robert J. Keach.)Once that work is completed, Optimation plans to move the equipment to its facility in Rochester, N.Y., though it will lease some office space in the Keene area for about six engineers who will work under an Optimation subsidiary that will bear the Kingsbury name.Optimation did not buy the land and the building, and Kingsbury asked the bankruptcy court to hire GA Keen Realty, a national firm specializing in distressed sales, to market it.How much the property will sell for is anybody guess, but Keach offered an appraisal of about $5 million, which would be enough to pay everybody off, including the workers, he said.The proposed agreement would give GA Keen year to do market the property and a $40,000 carveout, to cover expenses. But the firm would want that money as long as it finds a buyer, even if the price isn't to TD Bank's liking.But that was much more time and money than TD Bank bargained for -- and more than the debtor has on hand -- said the bank's attorney, Mark F. Weaver.Weaver questioned the appraisal, saying it was based on out-of-date or inappropriate sales, and did not account for $3.2 million in liens on the property. That's when he used phrases like "waste of time" and "pie in the sky."The property is like "day-old bread," he said. No one is going to be standing in line to buy it, he said. And as the estate spent up to a year trying to sell it, the property would continue to deteriorate and the taxes would continue to accrue.Weaver repeatedly threatened to ask for a relief from stay, meaning that the bank would simply be allowed to foreclose on the property and sell it itself.But if the bank did so it might ending up spending more money to sell it in a foreclosure action and get less money than if it went along with the bankruptcy process and agreed to pay the $40,000 fee, argued Keach. And the bank could always object to any sale that was offered, he said.In any case, while the bank remains in the process, it would have to pay the real estate fees like anyone else.The real estate firm attorney's - teleconferenced into the courtroom - said that the firm didn't intend to take a year. It would know in three months or so if it could sell it, though the attorney admitted, "this isn't like the Empire State Building. It will be difficult to market it."Deasy seemed inclined to let the real estate firm have its carveout, though he wanted to make it clear that the court had the right to approve any expenses. -- BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW