CAMDEN, Maine — A U.S. District Court judge has appointed a receiver to take over management of some high-profile former MBNA properties, including the Knox Mill complex downtown and the Ducktrap Retreat in Lincolnville.
Magistrate Judge John Rich signed the order March 31 that puts Gray & Associates LLC of Baltimore, Md., legally in charge of the properties owned by Maine Investment Properties of Baltimore and several limited liability companies in Camden.
The action is a response to an emergency motion filed March 19 by an attorney for PNC Bank of Pittsburgh, Pa. That bank holds a large mortgage — including $14.7 million in unpaid principal — on the properties. According to the bank, Maine Investment Properties and the limited liability companies are in default of the mortgage.
In 2005, Maine Investment Properties purchased from credit card lender MBNA several properties in Rockland, Camden, Belfast and Northport that were assessed at $50 million.
Company partners Walter Skayhan and Steve Geppi converted part of the sprawling former textile mill in Camden into 30 luxury condos. The company also donated one property, the Camden Area Christian Food Pantry on Mount Battie Street, to that charitable organization in 2007.
Two and a half years ago, firm vice president Brett Cohen called the Knox Mill complex “a true success story” in an interview with the Bangor Daily News.
Efforts to reach officials from Maine Investment Properties on Wednesday were unsuccessful, but some tenants of the Knox Mill complex said they are wondering how the change will affect them.
“We’re in flux, of course,” said Dean Jorgenson, a book buyer at the Owl & Turtle Bookshop on Washington Street. “I would think [the receiver] would want any money they could get with rentals.”
Jorgenson said that within the last six months, tenants at the complex have had problems with getting adequate heat and property maintenance, but had not had any communication from Maine Investment Properties. He and other tenants have been following local media to stay apprised of the legal situation.
Judge Rich’s order authorizes Gray & Associates to “direct and take immediate possession and full control of the Receivership Property” and prohibits Knox Mill Properties LLC and the Knox Mill East Owners Association from possessing, controlling or deriving income from the property.
Gray & Associates LLC is an asset management company that has “directed the disposition of well in excess of $15 billion in assets,” according to its Web site.
Judge Rich ordered Maine Investment Properties and the limited liability companies to cooperate with PNC Bank and Gray & Associates and also to turn over to the receiver all keys, leases, tenant contact names and telephone numbers, security deposits and an inventory list, among other requirements.
Gray & Associates will negotiate a monthly management fee with PNC Bank, which the court will need to approve. The management firm will be paid from the income from the receivership property initially, according to the judge’s order.
In return, the Maryland firm must compile a list of all the personal property involved and submit it to the court for inspection within a month of obtaining possession. The firm also must prepare a financial report once a month starting on April 20 which will include an income and expense statement, balance sheet and a cash flow analysis, and create a proposed operating budget for the receivership properties within one month of taking possession.
All that information will be subject to PNC’s approval, Rich wrote in his order.