Since Edgartown attorney Benjamin Hall Jr. filed a personal bankruptcy action last month, the move has caused reverberations in some unexpected places. Mr. Hall’s family has interests alone and through trusts in dozens of real estate holdings on the Island.
Once a petition is filed in U.S. Bankruptcy Court, the court orders an automatic stay that not only puts a hold on any collection of debt by creditors, but also on any legal proceedings involving the debtor.
The filing added a wrinkle to a proposal this week before Edgartown town meeting to acquire the so-called Mini-Park, which is owned by the Hall family. And a discrimination lawsuit involving the Martha’s Vineyard Airport Commission has also been affected because Mr. Hall, as a former commissioner, was named as an individual defendant.
“I feel badly that these situations come up,” Mr. Hall said in a telephone interview Thursday, comparing bankruptcy to the rising waters of a flood. “The water gets in places you would never, never anticipate, and affects you in ways you can’t anticipate. All of a sudden you’re bailing.”
Mr. Hall filed with the bankruptcy court on March 18, seeking to reorganize his debts under Chapter 11 of the U.S. Bankruptcy Code. Under Chapter 11, a debtor can reorganize debts and arrange repayment, often at a reduced amount. In most cases, creditors must approve the reorganization plan. Also in most cases, the debtor remains in control of the assets, and operates any businesses under the supervision of the court.
According to court documents filed on behalf of Mr. Hall, he has an interest in personal property valued at $26.3 million, including shares in more than a dozen corporations and real estate trusts controlled by him, his brother Brian Hall, his father Benjamin (Buzzy) Hall, and other members of the Hall family.
Mr. Hall said he does not expect the reorganization plan to result in any discharge of debt.
“That’s not what I’m seeking at all,” Mr. Hall said. “Everybody is going to get paid a hundred cents on the dollar. There is certainly enough money on an ongoing basis to pay all the obligations that I have.”
Meanwhile, the bankruptcy filing has stopped all proceedings in a lawsuit filed by former airport employee Beth Tessmer alleging workplace discrimination.
Ms. Tessmer named the airport commission, and individual commissioners including Mr. Hall, among the defendants in the lawsuit. Mr. Hall was a member of the airport commission at the time the discrimination was alleged, but was not reappointed to the commission when his term expired in 2014.
A hearing is scheduled in Dukes County superior court later this month to sort out how the bankruptcy proceedings affect that case. The parties are attempting to reach a mediated settlement to end the lawsuit.
The bankruptcy filing also surfaced on Tuesday in an article asking Edgartown town meeting voters to buy or take by eminent domain the Alfred and Marjorie Hall Park on Main street, more commonly known as the Mini-Park. The article was amended on the floor of town meeting by the selectmen, making it dependent on resolution of the bankruptcy case.
The immediate issue became moot when voters overwhelmingly rejected the warrant article. It is unclear, however, how the bankruptcy might affect negotiations on a new lease. The town has leased the park from the Hall family since 1979, and the latest five year lease expires this year.
Mr. Hall said he submitted a new lease proposal to the town in December, and is awaiting a response from the conservation commission. He said there will be no interruption of the use of the park, and is confident that lease terms will eventually be worked out.
Mr. Hall and his family also are in the process of signing agreements to lease two of their movie theatres to an Edgartown hotelier for the next 20 years. Mark Snider plans to refurbish and reopen the theatres this summer. The bankrupcty filing is not expected to affect the theatre project.
In the bankruptcy filing, Mr. Hall reported monthly income of $33,156, most of which comes from real estate interests. He lists monthly expenses of $21,387.
According to the documents, Mr. Hall owes a total of $2.3 million to 36 creditors. The largest portion, $1.1 million, is debt owed to the Martha’s Vineyard Savings Bank, secured by several properties, including his West Tisbury home. The bank has begun foreclosure proceedings on the home and other properties controlled by Mr. Hall.
The next largest debt is $994,000 in unsecured debt owed to family trusts and corporations. Records show Mr. Hall borrowed a total of $994,000 against his family’s business and real estate holdings dating back to 1991.
Also listed is personal credit card debt of $138,772, and $11,081 owed in federal, state, and local taxes.
Under court procedures, Mr. Hall has 120 days from the original filing to present a debt reorganization plan.
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