February 17, 2020
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Society

In terms of ease of effort, destruction trumps creation by a wide margin.

This relative ease of destruction over creation means that we must be extra careful not to allow minor problems and short-term interests to destroy the foundations of long-term vitality, especially now, when so many businesses and lives are under siege.

I am party to a case pending appeal at the Bankruptcy Appellate Panel for the First Circuit in Boston that illustrates how our “me first” culture can trigger destructive chain reactions and damage what’s precious to society. The case involves a lender’s right to execute a foreclosure auction of my Ocean Wood Campground near Acadia National Park as quickly as legally possible.

Due to the almost total absence of local credit occasioned by the financial crisis, we had been unable to repay the loan on its due date of December 4. We needed additional time to execute more complicated international financing, which we had been working on for months. This, and the fact that many interests besides our own would be hurt if the foreclosure sale took place, caused us to file for Chapter 11 bankruptcy protection in Bangor on March 2.

Chapter 11 exists because we recognize in our complex society that conflict between diverse interests is inevitable, and that individual rights must sometimes be tempered in order to resolve competing claims. Its main tool, which has been used to save countless businesses, is an automatic stay of execution, which prevents precipitous action by freezing all relevant activity to allow time to resolve conflict. The protection we sought is exactly that contemplated by the authors of Chapter 11 law.

On March 3, however, the court immediately lifted the automatic stay citing the “irreparable harm” that would be visited upon the lender if the auction didn’t happen that particular day. The auction then took place, during which the vast bulk of the property was sold to the lender himself. We believe that the opportunity to con-sider other interests or solutions was thus abridged. Our Boston appeal contests the Maine court’s ruling.

Here are some reasons why society should care about the outcome in this case:

Rated one of the top four in Maine, Ocean Wood Campground is unique. It has long been a haven for thousands where “simple grace” adorns “the most peaceful campground that I have ever seen.” Ocean Wood is also critical to the local economy, where hundreds of thousands of dollars spent by the campers each season may well provide the margin of survival for small business.

But there is another reason society should worry about this case: The property is critical to a promising indigenous-driven project to reverse the pattern of rain forest destruction in the Darien Rainforest of Panama. The project, which affects the future of 18,000 Embera natives, has been hailed by many as courageous and vision-ary, but business credit has not been available in Panama where the natives have no financial track record and where banks are deeply suspicious of their capacity to succeed. It has therefore been financed in the U.S. using Ocean Wood as collateral.

The court’s action places this important initiative in jeopardy because if it is upheld, the lender will walk with the financial base of the project, at least $4 million of our equity. As a consequence, the natives will most likely be forced to cancel a tour of Europe aboard their hand-built sailing yacht Pajaro Jai, where they planned to present their innovative solutions and develop markets for new non-destructive rainforest products.

Whether we agree that the destruction of hundreds of thousands of square miles of rainforest affects global climate, we can certainly agree that the elimination of these ecosystems is not desirable in the long run for anyone, and that someone (perhaps ourselves?) should do something about it.

I am dismayed by the trajectory of this case. The “irreparable harm” inflicted on the lender by a few weeks delay apparently outweighs the “irreparable harm” done to the rest of us? But how could the court know about that? The very purpose of the stay was to allow time for such considerations to be heard.

The lender certainly has the right to be repaid and to pursue his legal remedies, but there are others here who have rights too, and Chapter 11 is supposed to protect them. The stay is the shock absorber that gives reason a chance against precipitous action and is one of those essential details upon which the nation’s greatness de-pends.

I’m going to have a tough time explaining all this to the Embera at their Congreso Regional in the rain forest later this month.

I suppose I could just say “destruction is easy,” but they already know all about that.

James A. Brunton Jr. is the former owner of Ocean Wood Campground in Gouldsboro and president of the Pajaro Jai Foundation (www.pajarojai.org).


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