Judge Postpones Grossinger's Auction
February 5, 1999
NEW YORK--How many Catskill resorts can be auctioned in one week? Apparently, two is too many.
Yesterday's long-awaited bankruptcy auction of Grossinger's resort was halted before it got under way, when a judge ruled that potential bidders had not been properly notified of scheduling changes.
The auction had been moved from Tuesday to avoid conflict with the auction of The Concord Resort in a White Plains courtroom.
But word of the change had not been sent to all 137 people who had expressed interest in Grossinger's, the resort on Route 52 in Liberty.
So the five would-be bidders present were told by Judge Arthur J. Gonzalez to return on Feb. 4 for another try.
"I am hard pressed to let this sale go through this afternoon," said Gonzalez. He also said he may take the property out of the hands of the Min family and appoint a trustee.
He chided the Mins for failing to comply with a court order to make tax payments, and he ordered that their attorney send amended auction notices to all 137 potential bidders today. A hearing on whether a trustee is appointed will be held Monday at 11 a.m.
"I want a fiduciary in place that I have confidence in," the judge said. After the hearing, the Mins declined comment. Those in court yesterday to bid included:
- Hospitality Worldwide Services, an international seller of hotel lighting and supplies, headed by Robert Berman of Fallsburg, who also developed Davos, a vacation home community in Sullivan County. He also co-owns the Monticello Raceway. The Mins owe HWS about $3.5 million.
- David Flaum, a Rochester real estate developer, who had offered to buy The Concord in 1997, but later withdrew.
- Liberty Lending of Scarsdale, a secured creditor owed about $600,000.
- Grossinger Associate, LP, a company represented by New York City lawyer Joseph S. Rosenthal.
- The identity of a fifth bidder, who made the required $600,000 deposit, could not be learned yesterday.
Two mortgage holders who were fourth and fifth in line to be paid from proceeds from the sale, had asked Gonzales to halt the auction, believing that more bidders will be attracted and perhaps boost the price.
"If the auction were held today, my client's interests would be wiped out," said Harlan M. Lazarus, representing Hanvit America, a lender owed about $800,000. The company is the former Korea Commercial Bank.
Sullivan County is a secured creditor owed about $800,000 in back taxes, County Attorney Ira Cohen said he was appalled by the failure of the Mins' attorney and marketing company to get proper notice to bidders. "I've never seen such ineptitude on the part of debtors," he said.