Minor buys his own farm at foreclosure auction
In the bitter cold outside the Albemarle County Courthouse Monday, January 4, Internet tycoon and half-built hotel owner Halsey Minor, through his attorneys (David Pettit and Michael Derdeyn of Feil, Pettit & Williams), appears on his way to coughing up some cold, hard cash to avoid losing his 205-acre estate, Fox Ridge Farm.
As the highest bidder at his own foreclosure auction, attended by about two dozen people despite the cold, Minor had to put down $75,000 of the $1.39 million he bid to settle a loan secured against the property earlier this year and avoid losing his farm. The loan came from a limited liability company fronted by Virginia National Bank founding president Mark Giles, who attended the auction and made several bids himself, driving up the $1.1 million opening bid announced by trustee Nancy Schlichting, of Lenhart Obenshain, the law firm handling the foreclosure for Giles and company.
There was one other bidder who went as high as $1.35 million, and as the second highest bidder, will have first dibs on the property, which would mean taking over the $6.7 million first mortgage loan from First Republic Bank, should Minor fail to make good on the balance owed to Giles and company.
According to the trustees, the balance of the payoff amount to Giles, including fees, unpaid real estate taxes, and a five percent cut to Lenhart Obenshain, is $1.155 million, which means Minor ended up paying $235,000 more–roughly 22 percent–than he originally owed on the second loan. However, that's not as bad as it sounds because any payment Minor makes over what's owed to Giles and company goes to the owner of the property–Minor himself. So, in reality, Minor actually paid around $115,000 more than he owed. Confused? You're not alone. That's because its pretty unusual, according to a spokesperson at Lenhart Obenshain, for a property owner who has been foreclosed on to buy back his own property at auction.
As local real estate developer Richard Spurzem points out, the event on the courthouse steps was more of a high stakes poker game than a real auction.
Sprurzem says the fact that Giles bid meant he had the means to purchase the property and felt it was worth the roughly $8 million it went for. But Spurzem remains curious as to why Giles didn’t continue bidding. As he points out, Giles would have really got the property for only $6.7 million, as any bid money against the second loan would have gone back to him as the holder of the loan. Of course, Minor, too, could have easily kept challenging any bid, for as we've mentioned already, anything more than the amount owed to Giles and company would have come back to him as the owner of the property. Giles or Minor did not respond to questions about their motives by press time.
So what the heck was this whole exercise about?
“Minor probably thought these guys weren’t going to foreclose because they didn’t want to buy the first mortgage,” says Spurzem, adding that maybe Minor figured he could buy back his property for considerably less than he owned on it at auction. “But he should have realized that when it was foreclosed on it meant Giles had the money, and was willing to buy the farm.”
Still, Spurzem agrees with Minor when he told the Hook that Fox Ridge Farm had as much chance of being sold “as I do appearing on the cover of the Hook with a halo and wings.”
“It was all part of a game,” says Spurzem. “Halsey’s game.”
Of course, Minor has alleged that the foreclosure was part of a game being played by Giles and his “friend and golfing buddy” Lee Danielson, the developer of Minor’s stalled Landmark hotel project, whom Minor has re-filed a lawsuit against. But that’s a rationale Danielson has called preposterous.
--major update 4:00pm January 5
–minor edits at 10:14am January 4
–original headline: "Minor holds on to Fox Ridge Farm"
–update 4:00pm Jan