I have learned some details of the Pleasant Pond Mill LLC bankruptcy filing. First, it is a Chapter 7 bankruptcy which means the company and its assets will be liquidated by the Bankruptcy Court. Pleasant Pond Mill LLC [PPM] is being represented by a Portland attorney that specializes in bankruptcies. PPM will not emerge from this bankruptcy as a reorganized company; this is the beginning of the end of Pleasant Pond Mill LLC. Rest assured that while this action will wipe out PPM’s debt and dispose of its property, the bankruptcy will have no effect on the Clary Lake Water Level Order [WLO] which is and will remain in force, if not actually enforced, until the pending appeal in Superior Court is finished. Likewise, that litigation will not be affected by this bankruptcy because PPM and Paul Kelley are no longer parties to that appeal. Remember: the WLO runs with the land, not the owner; the new owner of the Clary Lake dam, whomever that is, will be subject to the WLO.
According to the filing, PPM’s assets consist of “.13 acres land located and stacked granite and laid fieldsatone structure at 105 Mills Road, Whitefield Maine; subject to easement for building owner, Aquafortis Assocs“[sic] and also “one inoperable computer.” The filing does not give a value of these assets nor is there anything in the filing specifically stating that this “stacked granite and laid fieldsatone structure” is in fact the Clary Lake dam responsible for impounding Clary Lake and is subject to a Maine Department of Environmental Protection Water Level Order. Not to worry, I’m sure the bankruptcy trustee will figure all this out soon enough.
There is one secured creditor, Medius L3C with a claim on the property of $115,000.00 (which I assume is the fully amortized value of the original Enos mortgage). The filing lists 3 other creditors that are owed money. The one owed the most is Preti Flaherty with $335,000.00 owed (legal services) followed by American Express with $14,400.00 owed (Credit card purchases) and finally, the Town of Whitefield with a paltry (in comparison) sum of $335.00 owed, presumably for unpaid property taxes (shouldn’t property taxes be a secured debt?). There are also a number of unsecured, nonpriority creditors listed in the filing but with no amounts owed being associated with them. I assume over the course of the bankruptcy proceeding some of these other creditors may come forward with claims of amounts owed them but for now, the total amount owed by PPM to all parties according to this filing is $349,735.00 against total assets of $0. Not what I’d call a solvent company.
While we now know the particulars of the initial bankruptcy filing, there are still a lot of unanswered questions, and I’ve learned nothing about the circumstances that precipitated Mr. Kelley into taking this very final and precipitous action- an action for which there really is no turning back. Kelley’s property is now in the hands of the bankruptcy court and trustee to deal with as they see fit. It is hard to imagine why Mr. Kelley would willingly put himself in this position, and it is equally hard to imagine both why Mr. Kelley would even think of running up a $335,000 legal bill, and why Preti Flaherty would do it in the first place. None of this makes sense. On the other hand, from the bankruptcy filing it is finally perfectly clear just how untenable Mr. Kelley’s situation has become. Maybe no other explanation is necessary.
So stay tuned. Rest assured that I will be keeping a close eye on developments and will post periodic updates here as appropriate. It will be interesting to see how this plays out.