Citizens First Bank Of Bowling Green Seeks Court Appointed Receiver Over The Property Of Rick And Tori Kelly, And Mariah's Restaurant.
Citizens First moves for receivership
By JUSTIN STORY
A judge is being asked to decide whether to appoint a receiver to take possession of Mariah’s restaurant and other businesses involved in a foreclosure lawsuit.
Citizens First Bank filed the motion for receivership Aug. 31, seeking to have someone authorized to take possession of and control over the property and business operations of Mariah Moore House LLC, Bowman-Kelley Total Office Systems Inc., Sunbelt Management Inc. and Rick’s Cafe LLC, properties that were put up by Rick and Tori Kelley as collateral to secure loans obtained from the bank.
Citizens First has claimed in court filings that the Kelleys owe $1,508,693.89 on three loans the bank issued to them between 2008 and 2010.
Two of the loans were secured by mortgages taken out on property that includes Mariah’s and the Pushin Building, a former department store at 400-404 E. Main Ave. that now houses several small businesses.
The other loan, for $200,000, was issued last year and secured by three commercial pledge agreements of 500 shares of stock in Bowman-Kelley Total Office Systems, 375 shares of Sunbelt Management stock and the Kelley’s membership interest in Mariah Moore House LLC and Rick’s Cafe LLC.
Citizens First states in court documents that the Kelleys have defaulted on the loans, leading to the bank to initiate a lawsuit seeking the money it claims to be owed, as well as enforcement of the liens on the mortgaged properties through a judicial sale.
The motion for receivership does not specify who the bank would seek to have appointed to oversee the properties, though Citizens First requested in the original complaint filed in May that the Warren County Master Commissioner or some other court-approved entity be appointed to manage and protect the properties and business operations.
The case is being presided over in Warren Circuit Court by Special Judge Janet Crocker, who was appointed after both Warren Circuit Court judges recused themselves. A court date has not been set to consider the motion.
Receivership is a legal option in which a court appoints a receiver to preserve properties subject to a lawsuit. The revenues generated by the business operations on the properties subject to receivership may be used in any way the receiver wants, including to pay down debts.
Citizens First, represented by attorney Scott Bachert of Bowling Green, argues in its motion that the Kelleys have defaulted on the loans by failing to make payments.
As support for its argument, the bank contends that the Kelleys are not paying federal taxes owed for the businesses, owe $13,166.11 in county taxes for 2010 on Mariah’s and the Pushin Building and have had state and federal tax liens placed on the properties.
Citizens First also alleges that Sunbelt Management, doing business as Mariah’s, has diverted $278,373.70 this year to other business ventures owned by the Kelleys. Of that amount, $11,800 was written over to Tommy Kelley, Rick’s brother.
The bank also claims that Kelley pledged furniture, fixtures and equipment to secure a personal loan in 2009 from Hancock Bank and Trust when the furniture was being depreciated by Sunbelt.
Bachert did not return requests for comment.
The Kelleys, represented by Louisville attorney Andrew Stosberg, intend to object to the bank’s motion, arguing that receivership generally is an extraordinary remedy of last resort and that Citizens First has not demonstrated that the properties are in imminent danger of being lost or removed from the court’s jurisdiction.
In the document stating the objection obtained by the Daily News, Stosberg argues that Hancock Bank and Trust is not a party to the case and that the furniture involved in the loan was owned by the Kelleys and pledged as collateral in 2004 for a loan obtained from Integra Bank. Five years later, Hancock funded a loan to pay off Integra.
Stosberg argues that Sunbelt is a tenant of the Mariah’s property and is responsible for replacing equipment that fails and making improvements to the property, so that some fixtures are owned by the Kelleys and some owned by Sunbelt.
Further, the transfer of funds from Sunbelt to other interests were a proper distribution of rental income. Based on a lease between Sunbelt and its landlord, Mariah Moore House, the Kelleys receive $30,000 per month in rental income from Sunbelt, and the money is distributed to affiliated companies at their discretion.
The $11,800 diverted to Tommy Kelley was a partial repayment on a $37,500 loan from him to the company, Stosberg claims.
The objection also notes that the amount of delinquent federal taxes is under appeal, the state tax liens cited by the bank were released several months ago and the county taxes are supposed to be paid by another company, AERL LC, through which the Kelleys set up an escrow fund.
Stosberg argues that AERL has taken rental income and applied it toward paying down a loan it extended to the Kelleys rather than placing the money in the escrow account to cover county taxes.
The objection recommends the court consider less harsh remedies and raises the possibility that receivership could disrupt operations at Mariah’s and other businesses that would result in harm to the properties as collateral.
Stosberg deferred comment to Rick Kelley.
By JUSTIN STORY
A judge is being asked to decide whether to appoint a receiver to take possession of Mariah’s restaurant and other businesses involved in a foreclosure lawsuit.
Citizens First Bank filed the motion for receivership Aug. 31, seeking to have someone authorized to take possession of and control over the property and business operations of Mariah Moore House LLC, Bowman-Kelley Total Office Systems Inc., Sunbelt Management Inc. and Rick’s Cafe LLC, properties that were put up by Rick and Tori Kelley as collateral to secure loans obtained from the bank.
Citizens First has claimed in court filings that the Kelleys owe $1,508,693.89 on three loans the bank issued to them between 2008 and 2010.
Two of the loans were secured by mortgages taken out on property that includes Mariah’s and the Pushin Building, a former department store at 400-404 E. Main Ave. that now houses several small businesses.
The other loan, for $200,000, was issued last year and secured by three commercial pledge agreements of 500 shares of stock in Bowman-Kelley Total Office Systems, 375 shares of Sunbelt Management stock and the Kelley’s membership interest in Mariah Moore House LLC and Rick’s Cafe LLC.
Citizens First states in court documents that the Kelleys have defaulted on the loans, leading to the bank to initiate a lawsuit seeking the money it claims to be owed, as well as enforcement of the liens on the mortgaged properties through a judicial sale.
The motion for receivership does not specify who the bank would seek to have appointed to oversee the properties, though Citizens First requested in the original complaint filed in May that the Warren County Master Commissioner or some other court-approved entity be appointed to manage and protect the properties and business operations.
The case is being presided over in Warren Circuit Court by Special Judge Janet Crocker, who was appointed after both Warren Circuit Court judges recused themselves. A court date has not been set to consider the motion.
Receivership is a legal option in which a court appoints a receiver to preserve properties subject to a lawsuit. The revenues generated by the business operations on the properties subject to receivership may be used in any way the receiver wants, including to pay down debts.
Citizens First, represented by attorney Scott Bachert of Bowling Green, argues in its motion that the Kelleys have defaulted on the loans by failing to make payments.
As support for its argument, the bank contends that the Kelleys are not paying federal taxes owed for the businesses, owe $13,166.11 in county taxes for 2010 on Mariah’s and the Pushin Building and have had state and federal tax liens placed on the properties.
Citizens First also alleges that Sunbelt Management, doing business as Mariah’s, has diverted $278,373.70 this year to other business ventures owned by the Kelleys. Of that amount, $11,800 was written over to Tommy Kelley, Rick’s brother.
The bank also claims that Kelley pledged furniture, fixtures and equipment to secure a personal loan in 2009 from Hancock Bank and Trust when the furniture was being depreciated by Sunbelt.
Bachert did not return requests for comment.
The Kelleys, represented by Louisville attorney Andrew Stosberg, intend to object to the bank’s motion, arguing that receivership generally is an extraordinary remedy of last resort and that Citizens First has not demonstrated that the properties are in imminent danger of being lost or removed from the court’s jurisdiction.
In the document stating the objection obtained by the Daily News, Stosberg argues that Hancock Bank and Trust is not a party to the case and that the furniture involved in the loan was owned by the Kelleys and pledged as collateral in 2004 for a loan obtained from Integra Bank. Five years later, Hancock funded a loan to pay off Integra.
Stosberg argues that Sunbelt is a tenant of the Mariah’s property and is responsible for replacing equipment that fails and making improvements to the property, so that some fixtures are owned by the Kelleys and some owned by Sunbelt.
Further, the transfer of funds from Sunbelt to other interests were a proper distribution of rental income. Based on a lease between Sunbelt and its landlord, Mariah Moore House, the Kelleys receive $30,000 per month in rental income from Sunbelt, and the money is distributed to affiliated companies at their discretion.
The $11,800 diverted to Tommy Kelley was a partial repayment on a $37,500 loan from him to the company, Stosberg claims.
The objection also notes that the amount of delinquent federal taxes is under appeal, the state tax liens cited by the bank were released several months ago and the county taxes are supposed to be paid by another company, AERL LC, through which the Kelleys set up an escrow fund.
Stosberg argues that AERL has taken rental income and applied it toward paying down a loan it extended to the Kelleys rather than placing the money in the escrow account to cover county taxes.
The objection recommends the court consider less harsh remedies and raises the possibility that receivership could disrupt operations at Mariah’s and other businesses that would result in harm to the properties as collateral.
Stosberg deferred comment to Rick Kelley.
Labels: General information
posted by KYJurisDoctor at 1:26 PM
0 Comments:
Post a Comment
<< Home