News

Hamlin digs hole 'deeper and deeper,' resident says

By Bill Moss, Published: April 17, 2016

Carriage Park developer Dale Hamlin blocked the sale of his property on the courthouse steps last week with the filing of a Chapter 11 bankruptcy petition on the eve of the sale.

Through his attorney, Trade Elkins of Hendersonville, Hamlin vowed to restructure his debt, resume the sale of lots in the final phases of the development and get back on his feet.
Counting a mortgage and claims of contractors, vendors and others, Hamlin owes nearly $20 million, according to court documents and the bankruptcy filing. Elkins filed the bankruptcy on Thursday afternoon, the day before a foreclosure sale on the courthouse steps that would have removed Hamlin from the picture.
In court filings, Arendale sought the appointment of a receiver to take control of the property from Hamlin and asked for the foreclosure for nonpayment of a $9.7 million loan. The court granted both motions.
Carriage Park had taken earnest money from prospective buyers “for lots and properties on which it has no intention of or is incapable of selling,” Arendale said, adding that Hamlin had in some cases taken deposits from different purchasers for the same lot. It accused Hamlin of “fraudulently soliciting deposits from prospective purchasers and … alienating and angering” potential buyers and hurting the value of the development.

‘It is our intention to pay all our creditors’

In an interview last week, Elkins said Arendale had “waived” the repayment because it was collecting money from lot sales. With the economy improving, the attorney asserted, is now moving to seize the property and capture the proceeds from the sales itself. Elkins said he did not have a figure for how much Arendale had received from lot sales.
“We dispute the allegations that are contained in the filing by Arendale that is in the state courts presently, specifically any allegation that Carriage Park retained any down payments that were made for any lot purchases,” Elkins said. “Without getting into the details, the bottom line is that the agreements that were entered into were option contracts with respect to purchases, where they were essentially purchasing the right to buy the land in the future. They were not escrow deposits as has been alleged.”
Arendale’s attorney, Chad Sharkey of Raleigh, said a judge’s decision appointing a receiver and the decision by the clerk of court to order the foreclosure speak for themselves. Elkins’s assertions on behalf of his clients are matters that a bankruptcy judge will now have to sort out, Sharkey added.
Hamlin’s financial troubles do not affect the individual homeowners or the improved common areas, which are owned by the homeowners association.
Responding to allegations by Arendale and others contained in court documents and reported by the Hendersonville Lightning, Elkins made these points:
• “All environmental requests were complied with,” he said, responding to Arendale’s claims that Hamlin had jeopardized the marketability of the land by failing to fix erosion problems. “There wasn’t any kind of environmental concern that needed to be addressed.”
• As for Arendale’s $13 million claim, “There’s an ongoing dispute between Carriage Park and Arendale, the lender, as to the calculation of the payoff on the loan and also there’s some fussing over what we believe are onerous terms regarding repayment of the debt,” he said. “Essentially, it’s left Carriage Park unable to retain enough money through lot sales to function as a business given the fact that 90-95 percent of every sale was being forced to pay the lender back, which is much in excess of the standards in that type of lending.” Sharkey responded: “The agreement is what the parties agreed to.”
• Elkins said that Hamlin intends to pay both court-ordered claims and bills that he owes contractors, engineers, attorneys, marketing companies, vendors and other creditors. “We can’t sell a lot and use those proceeds to pay the judgment holder unless Arendale approves, because they have the first rights to the money so to speak. … Hence, the bankruptcy will allow us to file a plan that will allow Carriage Park to sell these lots, use the proceeds from the sale to pay a chunk to Arendale and have some money left over to disburse to other creditors as well. It will give us more flexibility.”
“It is our intention to pay all of their creditors, both Arendale and the unsecured creditors in full,” he said. “We have a large number of lots that remain in inventory, some of which already have been built out in terms of utility lines and roadways, and an additional number of lots that are still raw land. While we’ve done engineering and planning haven’t have the actual infrastructure put in yet. We have spoken to a number of different lenders and have lined up financing to provide an infusion of cash to support operations and paydowns of the loan. … We look forward to reorganizing the structure of the indebtedness and getting folks paid.”
Whether Hamlin can move forward with the reorganization his attorney is now a question for the bankruptcy court.
“The debtors filed bankruptcy so everything is kind of stayed now waiting for the bankruptcy court,” Sharkey said. “That is all going to have to be decided in the bankruptcy court. It kind of just puts anything on hold.”
Asked whether Hamlin’s plan sounded realistic, Sharkey said, “That’s something they’ll have to show in the bankruptcy court I guess.”

‘He just keeps digging’

About a dozen people congregated outside the Grove Street courthouse on Friday morning at 11:30 a.m., the scheduled time of the foreclosure sale. They included Carriage Park residents, creditors and others eager to see whether Hamlin would be forced to pay or would lose the property to the lender.
“I’m a victim,” said Claude Sykes, who lives in Saluda. Hamlin signed a “confession of judgment,” filed last Oct. 26, admitting that he owed Sykes and his wife, Susan, $6,000. “I made an earnest deposit and he did not return it,” Sykes said. “I had intended to build in Carriage Park. I thank the Lord that he guided me away from that place. I hope I get my money back, and a whole lot of other people.”
Harry Owen, a retired police officer from New York, has lived in Carriage Park for two years. He showed up because he was “sympathetic to everybody that got the wrong end of the stick.”
“It’s just so frustrating,” he said of Hamlin and ongoing delays that have kept Carriage Park residents waiting for new owners. “Years ago I was told when you get to the bottom of the hole, stop digging, and he just keeps digging. He does it at the last minute. I’d like to see somebody proactive do what Dale was supposed to do. We have friends who live on a street that’s unpaved.”