Sold: Final piece of Burlington College
Source: Burlington Free Press
Joel Banner Baird , Free Press Staff Writer | Updated 4:38 p.m. ET July 13, 2017
Wednesdays auction took all of five minutes.
A single bid and a single bidder finalized the foreclosure of defunct Burlington Colleges vacant building on Wednesday.
Peoples United Bank took ownership of the North Avenue property for $3.1 million.
Thats about $650,000 less than the college has in debts, according to a May ruling by Vermont Superior Court Judge Robert A. Mello.
Read more: http://www.burlingtonfreepress.com/story/news/2017/07/12/sold-final-piece-burlington-college/467386001/
Lots more at the link.
Gothmog
(145,168 posts)The amount of the loss for the bank can now be quantified. When a federally insured financial institution suffers a real financial loss due to fraudulent or misleading statements, then there will be an investigation. Here there were representations made about the amount of committed donations that were not accurate and the loan went into default shortly after being made. These are not good facts.
George II
(67,782 posts)Thanks George.
Gothmog
(145,168 posts)I am not sure who is bearing the loss on these bonds
VermontKevin
(1,473 posts)"As early as 2010 the flaws in Burlington Colleges proposal were visible. It was clear that the Diocese was not selling the property at near fair market value and the loan to Burlington College by the Diocese to pay for the land placed additional financial risk on church resources. This, among other weaknesses in the overall proposal, caused me to vote no and to make sure my vote was clearly recorded, as such recordings were not the norm for VEHBFA board votes.
http://www.sevendaysvt.com/...
Even at the time, Burlington College's application raised red flags with two VEHBFA board members, Agency of Human Services policy adviser Charly Dickerson and then-tax commissioner Tom Pelham. According to minutes from the meeting, Dickerson voted nay "out of concerns for Burlington College's financial strength and its ability to repay the debt."
Pelham recalls the deal as a "fire sale" that wasn't good for the college, the diocese or the city only good for the bank, which he figured would eventually acquire the property, assessed at nearly $20 million.
"I've done a lot of public sector-development. I know what a good project looks like, and this one just didn't have it," says Pelham, who asked for an unusual recorded vote on the matter. "In retrospect, I was on the money.""
https://vtdigger.org/2015/12/23/catholic-church-nailed-in-loan-settlement-with-burlington-college/
NurseJackie
(42,862 posts)NastyRiffraff
(12,448 posts)Interesting observation.
VermontKevin
(1,473 posts)bank default.
The private settlement with the Catholic Church would have to be examined, to determine the true amount of loss to the FDIC.
Responding to a litany of problems identified in Burlington College's 2012 audit, Plunkett described her first year at the helm as "one of the most challenging in Burlington College's recent history." The college had agreed to pay Sanders roughly $200,000 over two years, Plunkett explained in a letter to the auditors, which depleted resources that would have been used to hire a new CFO. A number of people cycled through the business office, and bookkeeping suffered as a result. Staff departures adversely affected other departments too, and, Plunkett's letter continued, "Due to these transitions and staffing changes, there was little success with fundraising or enrollment growth during the year."
https://www.sevendaysvt.com/vermont/pass-or-fail-what-happens-if-burlington-college-drops-out/Content?oid=2420094
murielm99
(30,736 posts)karynnj
(59,503 posts)Or how much it is.
SunSeeker
(51,550 posts)Whether or not the buyer of the property at the bk auction then goes on to sell it for a profit does not change that fact. That profit will not go to paying down the college's debt.
karynnj
(59,503 posts)Presumably they will sell it to Farrel, the developer who bought the bigger piece.
The college is left with the $650,000 debt. The bank was not the sole entity that was owed money by the college. I think it had the first claim on money. There is no information in the article on what the balancestors of the loan was before the sale.
Not to mention, Sanders was out 6 years ago and thus had no control over the finances of the college in that period.
VermontKevin
(1,473 posts)The school reached a private settlement with the Catholic Church. It did not settle with the bank.
Demsrule86
(68,556 posts)you are subject to a federal charge. The key things will be 1. were the alumni pledges reported accurately, 2. was their any coercion of the bank to approve the loan from anyone.
SunSeeker
(51,550 posts)Killed by loan fraud--for land it did not even need.
FraDon
(518 posts)IMHO, a free, fair and thorough investigation would find that this is a property crime: criminal collusion between the Sellers, the Catholic 'owners' of new college property, and the developer of the prime lakefront property split from what would become the College's portion. Sanders (then President) and the Board of Burlington were played - in a most familiar manner.
SunSeeker
(51,550 posts)Jane has not even suggested she got played. Got a link?