ROCKLAND, Maine — A longtime Rockland contracting business is working to recover after filing for bankruptcy earlier this year.
An attorney for the company said Ferraiolo Construction Inc. continues to operate and he expects the company to have a successful future.
The expected turnaround comes after 19 properties and numerous pieces of construction equipment owned by the company or its principals were auctioned off last month, netting more than $5 million, according to attorney George Marcus. Most of the properties sold are in the midcoast area.
The company and its principals, however, retain several commercial properties in Rockland, including on Main Street and Burrows Street. Marcus said 279 Main St. would become the company’s office with the sale of the Gordon Drive property.
Marcus said that the Bank of Maine and his client have reached an agreement to settle the lawsuit the bank filed in March. That settlement hinges on the bankruptcy court’s acceptance of a reorganization plan that spells out how much money creditors will be paid.
In the meantime, the court has allowed the company to continue operating.
“I anticipate a successful future for the company,” Marcus said.
A telephone call to the bank’s attorney has not been returned. The attorney for the trustee overseeing the bankruptcy case referred questions to Marcus.
Maine Superior Court Judge Jeffrey Hjelm signed an order last month in Knox County Superior Court to put the Bank of Maine lawsuit on hold until Sept. 16 to allow the Ferraiolos to reorganize their business. Both the bank and the Ferraiolos had been in support of the stay.
In March, Hjelm approved the imposition of a $1 million attachment against Ferraiolo family members who run the Rockland contracting business, ruling that the bank was more likely than not to receive a judgment of at least $1 million against Vincent Ferraiolo, his wife, Filomena, their sons Frank and John Ferraiolo, and the company.
The Bank of Maine claimed the Ferraiolos had been improperly diverting money from the firm after the bank loaned it $10 million in June 2011. The diversions allegedly included the transfer of $1.3 million outside the country to pay for construction of a villa in Cervinara, Italy. In February, the bank declared that the Ferraiolos were in default of the loan. After the bank began collection action, the family members, as shareholders of Ferraiolo Construction, Ferraiolo Corp. and Ferraiolo Pre-Cast, merged the companies into another corporation — Ferraiolo Construction Inc. — and filed bankruptcy on March 13 in U.S. Bankruptcy Court.
The bank withdrew the attachment in May after negotiations with the company’s representatives.
The properties that were auctioned in June by Keenan Auction Co. were concrete manufacturing plants in Topsham, Whitefield, Waldo and Farmingdale, a former plant in Damariscotta, a warehouse and 6 acres at 28-30 Gordon Drive in the Rockland Industrial Park, a fifth of an acre at 261 Pleasant St. in Rockland where the Ferraiolo business offices had been located, 11 acres on Route 1 in Rockport adjacent to the Village at Rockport, 16 acres of undeveloped land on Thomas Street in Camden that had previously been approved for a nine-lot residential subdivision, 26 acres with a former gravel pit on Route 17 in Washington, 31 acres with a former gravel pit on Old Augusta Road in Warren, 16 acres with a former gravel pit on East Sennebec Road in Appleton, two gravel pits in Liberty with 285 acres, a former maintenance facility in Gardiner with 321 acres, 163 acres of undeveloped land in Woolwich and 78 acres of undeveloped land in Windsor.
Stefan Keenan of Keenan Auction Co. said that the parcels largely went to Maine parties. The construction equipment, however, drew winning bids from companies in Saudi Arabia, Vietnam and South Africa as well as firms in Florida and Texas.
“It was a diverse crowd,” Keenan said of the auction, which included online bidding.
Kennan said he could not divulge the identities of the bidders or their bids but said that the information on land transactions would be public once the sales were made final. A check of the Knox County Registry of Deeds showed Tuesday that none of the sales in Knox had yet been completed.
Rockland Assessor Dennis Reed said the sales will likely not affect the overall real estate market and will not affect tax assessments on properties since they are considered distress sales.
Ferraiolo employs 45 people, according to earlier court filings by the company. Its May payroll was $117,000. The company performs road construction and commercial construction site work, sale of asphalt and concrete products and related businesses.
There are 29 claims filed in the bankruptcy court by people owed money by the Ferraiolo company, with those claims totaling $420,880. The largest company owed money by Ferraiolo is Dragon Products for $259,284.
The percentage that each creditor will receive of what they are owed differs and the final percentage has yet to be determined, Marcus said.
The attorney said two hearings will be held this summer on the proposed reorganization plan and he expects approval later this summer.