12 February 2020: Kelley Bankruptcy Wrapping Up

Once the Clary Lake Association purchased the dam from Paul Kelley’s bankruptcy estate back in October 2018, I pretty much stopped paying attention to what was going on in those court proceedings. I have over the months however continued to receive various court filings, all interesting after a fashion, but some more interesting than others. Nonetheless I haven’t seen fit to share any of them with our readers, but today I received the Trustee’s Final Report which details how the $80,000 we paid for the dam was spent, and it’s worth sharing.

To cut to the chase, after the court paid off the Medius L3C mortgage ($32,500) and the lawyers and the trustee’s fees and expenses ($40,925.15) there really wasn’t much left over to pay to the only unsecured creditor with an allowed claim, namely Preti Flaherty, the law firm that has since early 2012 represented Pleasant Pond Mill LLC and Aquafortis Associates LLC. Preti Flaherty was their counsel for 2 years during the petition process and subsequently for an additional 4 years in their appeal of the Clary Lake Water Level Order. Preti Flaherty submitted a claim to the bankruptcy court of $494,186.14. It looks like all they’re going to get is the remaining balance of $6,574.85 which by my calculations amounts to about 1.3 cents on the dollar. Doh! The glass-half-full way to look at it is Preti Flaherty wouldn’t be receiving anything if we hadn’t bought the dam 🙂

If anyone is interested in reading the Trustee’s Final Report, here it is:

NOTICE OF TRUSTEE’S FINAL REPORT 2-12-2020

If you’re scratching your head over why Preti Flaherty let Kelley and Smith run up an unpaid bill of nearly a half a million dollars without getting paid, well you’re not alone. This remains and unsolved mystery of the Clary Lake water level crisis.

I for one am more than happy to close the door on this ugly chapter of Clary Lake history.

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