Two offer to buy Spartans' headquarters
MANCHESTER – The Spartans Drum & Bugle Corps has two prospective buyers for its Nashua headquarters, and the bank holding the mortgage might settle for less than it’s owed, lawyers in the bankruptcy case said Thursday.
During a hearing before Bankruptcy Court Judge Michael Deasy, both sides agreed to keep working together in hope of avoiding foreclosure of the property at 73 E. Hollis St., Nashua.
Spartans Director Peter LaFlamme did not attend the hearing, and his lawyer, Eleanor Dahar, sent her brother, attorney William Dahar, in her place. They had sought to have the hearing continued, but the two sides were unable to agree on a time.
Deasy made a date for them: Feb. 25. By then, Deasy said, the two sides either should have an agreement to sell the building and settle the debt or be prepared for a hearing on the bank’s request to foreclose.
The Spartans have two signed letters of intent from two different prospective buyers, each offering roughly $780,000 for the property, Dahar said.
The Spartans owe the Bank of New England roughly $850,000 on the mortgage for the building, but the bank might be willing to settle the debt for $780,000, the bank’s lawyer, Mark Kanakis said at the hearing.
The sticking point, Kanakis said, is LaFlamme’s request to keep $70,000 to $80,000 from the sale as seed money to try to keep the Spartans organization alive. The bank wasn’t inclined to give up that money, Kanakis said.
The Spartans bought the building in 2005, with a mortgage of more than $1 million, after leasing it for years. The property is now assessed by the city at $936,500 but has long been exempt from city property taxes, so the mortgage is the only debt, Dahar said.
“Other than the fact that you’re not getting any money, what’s the problem then?” Deasy asked Kanakis.
The bank is concerned that the building’s value will continue to slip, Kanakis said. The building is empty, which is seldom good for structures, though so far as either side knows, it remains insured.
An appraiser hired by the bank estimated that the building is worth just over $1 million, Kanakis said, but the bank believes that estimate is unrealistic.
Deasy noted that letters of intent, without a deposit or binding agreement, are worth little more than the paper, but he encouraged the two sides to keep talking, noting that foreclosures hurt the whole community, including the bank.
“Every time you do any other foreclosure, everyone’s property becomes worth a little less,” Deasy said.
The Spartans had tried to sell the building before filing for bankruptcy in November, but the offers they got were even lower, below $700,000, Kanakis said.
LaFlamme has said that the economic downturn brought the decades-old organization to ruin, but several members of the group’s board of directors have questioned his management, and one, LaFlamme’s nephew, Paul LaFlamme Jr., has hired a lawyer to keep an eye on the bankruptcy process.
In addition to the Drum & Bugle Corps, in which youths paid to participate, the Spartans also formerly ran a lucrative bingo game and a charter bus service, but those operations also have shut down.
Paul LaFlamme Jr. and some other directors argue that Peter LaFlamme should not be allowed to continue running the organization, charging that there is a great deal of money apparently missing, attorney Leonard Deming, of Nashua, said previously.
The state attorney general’s office also had appointed a receiver to take over the group and review its finances but withdrew from the case after the Spartans went into bankruptcy.