Conch House wins round

Conch House wins round

Owners on target with expansion plans

By KATI BEXLEY
kati.bexley@staugustine.com
Publication Date: 12/02/08


Conch House owners won their case in federal bankruptcy court against a New York bank that wanted the business shut down and its assets sold off.

But this isn't the last time Conch House owners will step into a courthouse, Conch House attorney Jason Burnett said Monday. They'll be back in the U.S. Bankruptcy Court for the Middle District of Florida, in Jacksonville, in January to show a judge the owners' plan to pay off their debts and get the property out of bankruptcy.

David Ponce, Conch House owner, has already said he plans to expand on the site with a hotel and condominiums as well as sell some of the property's boat slips along Salt Run. The Conch House already has a restaurant and marina.

Intervest National Bank of New York requested the Conch House case be converted from Chapter 11 Bankruptcy to Chapter 7, which would have allowed the bank to close the business and sell off the assets.

Intervest's attorney John MacDonald, of Akerman Senterfitt in Jacksonville, presented his case to Federal Judge Jerry Funk on Nov. 17. Funk made no decision then and asked that the hearing be moved to Dec. 1, when he had more time to hear the Conch House's side.

Late last week, Funk denied Intervest's motion and canceled Monday's hearing.

MacDonald spent about half an hour presenting Intervest's case in the November hearing. He said Conch House owners owe hundreds of thousands in property taxes from 2007 and 2008, and the owners could not show they could pull themselves out of bankruptcy.

Funk "did not find merit" in these arguments, according to court documents. He said Conch House filed for bankruptcy Aug. 8, 2007, and property taxes were incurred on Jan. 1, 2007. Therefore, the Conch House is allowed more time to pay off the taxes under bankruptcy rules. And they are not overdue on their 2008 property taxes.

Funk also said Intervest did not show evidence that the Conch House won't be able to climb out of bankruptcy, according to court documents.

Ponce said the ruling made his Thanksgiving.

"It was definitely a nice gift," he said. "It gave us something to be thankful for."

MacDonald, Intervest's attorney, was not able to be reached for comment late Monday.

Conch House owners filed for bankruptcy after their deal with investors they sold the company to fell through. Conch House attorneys believe the bank wants the current owners gone because they're countersuing Intervest.

They say the bank gave Thomas Coghill, an investor who bought the Conch House, a $17 million loan while he was awaiting trial for fraud.

Intervest claims it had no knowledge of his criminal background, according to court documents.

The Ponce family claims that the investors negotiated the $17 million loan to buy the property and covered the rest of the $27 million price tag by allowing the Ponces to be a part of the investor group. The idea was that the Ponces would eventually be bought out of the deal.

Instead, the $17 million loan was closed without the family's knowledge, according to the countersuit.


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