GOULDSBORO, Maine — A federal appeals panel in Boston has denied a request from the former owner of a local campground to issue a stay on a foreclosure action on the 148-acre oceanfront property.
An appeal by J.A. Brunton Inc., parent company of Ocean Wood Campground, of a federal judge’s denial of its bankruptcy bid still is pending, however, according to attorneys involved in the dispute.
J.A. Brunton Inc. filed for bankruptcy in Bangor last month in an attempt to fend off attempts by Schoodic Point LLC to foreclose on the campground and an adjacent 2-acre working waterfront property in Bunker’s Harbor.
Schoodic Point LLC claims that J.A. Brunton Inc. owes it more than $7 million in loans that went into default in December.
The bankruptcy bid failed, however, when Judge Louis Kornreich ruled that J.A. Brunton could not file for bankruptcy because its properties were not insured, which is required under federal bankruptcy laws. That decision was appealed to the federal appeals court in Boston.
Schoodic Point LLC held a foreclosure auction on the two Gouldsboro properties on March 3, despite a request by the campground owner to halt the action. No one offered the minimum bid of $5.5 million for the campground, prompting Schoodic Point LLC to take direct ownership of the property.
Dana Rice, a local lobster dealer who has been leasing the Bunker’s Harbor wharf from J.A. Brunton owner Jim Brunton, had the winning bid of $345,000 on the 2-acre wharf property, which includes a dilapidated lobster pound.
John McVeigh, attorney for Schoodic Point, indicated Tuesday in an e-mail that the March 20 ruling by the 1st U.S. Circuit Court of Appeals in Boston means that his client can continue to handle the properties in accordance with the March 3 auction.
“The ruling states, as a matter of Maine law, Brunton’s entities have lost all their interests in the real properties by completion of the foreclosure process, and there is no possible cure for that,” McVeigh wrote.
Brunton’s attorney, David Johnson of Portland, in an e-mail Tuesday agreed that the appellate panel ruling allows Schoodic Point to proceed with administering the properties it foreclosed upon. Johnson said the appeal of the bankruptcy denial is likely to go forward but did not comment on how the panel ruling affects the like-lihood that his client will regain ownership of the Gouldsboro properties.
Attempts this week to contact Johnson by phone were unsuccessful.
The fate of the campground property has been a topic of interest in part because, under Brunton’s ownership, a firm that is proposing to build a resort on 3,300 acres of adjacent land had a right of first refusal on the campground.
The resort proposal from Winter Harbor Properties has been controversial. Some area residents have said it would provide a needed economic boost to the Schoodic Peninsula, while others have said it would harm the peninsula’s relatively undeveloped character and affect the abutting Schoodic section of Acadia National Park.
Schoodic Point’s foreclosure on Brunton’s properties, if it is not overturned, is expected to negate Winter Harbor Properties’ option on the campground, attorneys have said.