Category Archives: PPM Bankruptcy

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. Continue reading

28 September 2018: Bankruptcy Judge Approves FREE and CLEAR Sale of Dam!

YES!At a short hearing held today at 10 AM in Bangor at the U.S. Bankruptcy Court, Judge Michael Fagone granted the Trustee’s motion to sale the Clary Lake dam to the Clary Lake Association free and clear of the restrictive covenants under sections 363(F)(5) of the U.S. Bankruptcy code. Gone too is the Medius mortgage under 363(F)(2). Further, the Judge granted the Clary Lake Association Good Faith Protections provided by section 363(M) of the U.S. Bankruptcy code. The Judge declined to allow the immediate sale of the property so we will have to wait to take title to the Clary Lake dam in 14 days at the expiration of the appeal period. Should AQF or Richard Smith (or anyone else) decide to appeal today’s ruling, 14 days from today our attorney will simply file a motion to dismiss and <POOF> the appeal will disappear, thanks to the 363(M) Good Faith Protections. Continue reading

12 July 2018: Final Sale Motion Hearing Scheduled

The Judge in the Paul A. Kelley Jr. Bankruptcy case has issued an Order and Schedule for oral arguments on the a Final Sale Motion on July 27th, 2018 at 10:00 AM. The hearing will be at the U.S. Bankruptcy Court, 537 Congress Street in Portland Maine. The Order is only 4 pages long and is remarkably easy reading as Court Orders go, and I highly recommend everyone read it through so you’ll have an idea of the issues the court is grappling with. The Order both summarizes the actions taken to date starting with the May 22nd filing of the Motion to Sell up to last week’s July 5th evidentiary hearing, and then lays out 8 questions that the Judge wants the parties to address in their oral arguments before the court. Continue reading

05 July 2018: No Sale Today, Bankruptcy Case Continued

I had hope to be able to tell everyone today that the U.S. Bankruptcy Court had approved the sale of the Clary Lake dam to the Clary Lake Association, but that announcement is going to have to be postponed for a few weeks. Thanks to objections raised by Richard Smith and Paul Kelley, today’s hearing which should have resulted in a quick decision approving the sale instead turned into a day-long evidentiary hearing with numerous parties taking the stand and testifying, and being cross examined. Court started at 9 AM and finally adjourned at 4:30 PM. A hearing for oral arguments will scheduled sometime the week after next (the week of July 16th) at a time and place to be announced. While there is little question whether the judge will eventually approve the sale to the CLA, there are questions regarding the restrictive covenants which need to be answered. Smith’s and AQF’s objections to the sale and to the scraping of the covenants provided a considerable diversion today, but ultimately I have no doubt that we’ll end up owning the dam. Patience people. We’ve been waiting 7 years for this. A few more weeks won’t hurt.

I wanted to get something posted as soon as possible because I know there are lots of people anxiously awaiting word after today’s hearing. I’ll provide additional details about today’s hearing at a later date and will post an audio transcript of today’s hearing when it becomes available.

June 7, 2018 Bankruptcy Court Hearing Audio

At the U.S. Bankruptcy Court hearing held yesterday afternoon in Portland, Judge Michael A. Fagone denied the Trustee’s Motion for Substantive Consolidation but approved the bid procedures and scheduled dates for the auction and the Sale Motion hearing. Sale Objections and competing bids are due by NOON on June 28, 2018. The auction will be held on June 28, 2018 at 2:00 pm at the Portland offices of Drummond Woodsum. The Sale Motion hearing will be held July 5, 2018 at 9:00 AM at the Bankruptcy Courtroom at 537 Congress Street.

Having the motion for substantive consolidation denied was not a setback to our plans to buy the dam. There are other, less extreme means to accomplish the same thing as substantive consolidation. The hearing was fascinating and covered a lot of ground. Here is an audio recording of the proceedings. It lasted almost 2 hours:

Besides the Trustee, the lawyers, and the legal assistants, the hearing was attended by Paul Kelley (with counsel) and Richard Smith (representing himself). The Judge has allowed Smith’s Objection to stand despite being filed late, but has not decided whether Aquafortis Associates LLC will require counsel or if it can represent itself. Butch Duncan was also at the hearing.

25 May 2018: Motion to Sell Filed in Bankruptcy Court

And we’re off! On May 22nd after weeks of preparation, Bankruptcy Trustee Jeffrey T. Piampiano, Esq. has finally filed with the United States Bankruptcy Court a Motion to Sell the Clary Lake dam to the Clary Lake Association. The Trustee also filed at the same time a “Notice of Sale and Invitation to Bid Motion” and a “Motion for Substantive Consolidation” (more about this later). A hearing has been scheduled for June 7th at 2:00 PM at the United States Bankruptcy Court at 537 Congress Street in Portland Maine to consider the proposed bid procedures and act on the Motion for Substantive Consolidation. Objections to the motions must be filed by June 5th. A hearing date for the Sale Motion proper will be set at the June 7th hearing for sometime later in June, presumably also in Portland, though that remains to be seen. All of these hearings are open to the public should you want to attend. I’ll post the Sale Motion hearing date, time, and place as soon as it has been scheduled. Assuming the Judge approves the Sale Motion, we should own the Clary Lake dam before the end of June 🙂 Continue reading

10 November 2017: Foreclosure Papers filed on Kelley’s Camden Home

If Kelley’s filing for personal bankruptcy protection came as a surprise the other day, I was shocked to discover during a routine check of the Knox County Registry of Deeds that his home is in the process of being foreclosed: ARVEST Central Mortgage Company of Arkansas, the current owner of the mortgage on Paul Kelley’s home at 171 Molyneaux Road in Camden, has initiated foreclosure proceedings in Knox County District Court. The company filed their original Complaint for Foreclosure with the Court back in August and an amended Complaint on September 25th, and recorded a notice in the Knox County Registry of Deeds on November 2nd, just one day after Kelley filed for chapter 7 bankruptcy:

I’m somewhat at a loss as to what to say about this latest development. Granted, he hasn’t lost his house yet, but by the time it reaches this stage of the game, foreclosure is almost guaranteed. I have always only wanted Kelley to fix the dam and comply with the Clary Lake Water Level Order, or transfer the dam to the Clary Lake Association and let us take care of it. Whatever. I didn’t expect Paul Kelley to lose his house in the process and while I am sorry it has come to this, I guess I’m not surprised, and I’m not going to lose any sleep over it: he has brought this on himself. His relentless, single-minded pursuit of a spiteful, futile vendetta against Clary Lake has only succeeded in creating a shambles of his life. Somehow I don’t think Paul Kelley expected things to turn out this way; the only thing that surprises me is how he ever thought it could turn out any other way.

Stay tuned.

07 November 2017: Paul A. Kelley Jr. Files for Chapter 7 Bankruptcy

Paul A. Kelley Jr., principal of the now-defunct Pleasant Pond Mill LLC and presumed owner of the Clary Lake dam has filed for Chapter 7 Bankruptcy. This bankruptcy filing is not to be confused with the Pleasant Pond Mill LLC chapter 7 bankruptcy filing last spring. Now Kelley is filing for personal bankruptcy and as such, it’s a real eye-opener: it lists total assets of $283,953.00 (most of which is his house and property in Camden) vs. total secured and unsecured liabilities of $2,097,379.00 (that’s two million, ninety seven thousand, three hundred and seventy nine dollars) of debt including $494,186.00 of money owed to Preti Flaherty which is separate from the $335,000.00 that PPM owes to Preti Flaherty. This brings total legal fees for Kelley and PPM to $829,176.00. Woof.

Things are pretty bleak on the income side of things too with Mr. Kelley (who claims his job is landlord) claiming a monthly income of only $1500 to cover $3,731.00 of monthly expenses. Oh my. He lists 18 creditors (people/entities he owes money to) including DEP, Arthur Enos, Equinox Collection Services, Ford Motor Credit, Medius L3C, and Richard L. Smith. Without further adieu:

The first Meeting of Creditors is going to be November 28, 2017 at 10:00 AM at the Augusta Armory. The bankruptcy trustee is Jeffrey T. Piampiano.

Stay tuned 🙂

10 May 2017 Lincoln County News: Despite Bankruptcy, Clary Lake Dam Situation ‘Status Quo’

Lincoln County News staff writer Abigail Adams attended the May 1st bankruptcy meeting of creditors and has written an article about it appearing in this week’s Lincoln County News. It’s a good, factual article but like the recent article in the Central Maine Papers, it incorrectly states that “Medius L3C foreclosed on the dam and held an auction for it in January 2016.” It would be more accurate to say that Medius L3C tried to foreclose on the dam, but failed. Had the foreclosure been successful, someone other than Pleasant Pond Mill would own the property now.

This confusion over foreclosure does nothing to detract from an otherwise accurate and well written article, and I am grateful that the Lincoln County News and the Central Maine Papers are helping keep this slow-motion train wreck in the news:

Despite Bankruptcy, Clary Lake Dam Situation ‘Status Quo’

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10 April 2017 Central Maine Papers: Whitefield Dam Owner Files For Bankruptcy Protection

A new Central Maine Papers article by KJ staff writer Jessica Lowell appeared on-line last night and will be in today’s print edition. It is about Pleasant Pond Mill LLC’s [PPM] mind-boggling decision to file for bankruptcy, it also contains the necessary background to acquaint the reader with the basic facts of the story if they’re coming into this mess cold. The article contains a few mistakes (alternative facts?) which however do nothing to detract from it’s otherwise accurate and fair reporting. You have to admit, after 5+ years, our story has gotten pretty hard to follow. This is the first newspaper article about Clary Lake in over a year, and in my opinion it is overdue (shift-click to open link in a new tab):

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