Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, July 12, 1990 TAG: 9007120093
SECTION: BUSINESS PAGE: C5 EDITION: METRO
SOURCE: SANDRA BROWN KELLY and DAVID M. POOLE STAFF WRITERS
DATELINE: LENGTH: Medium
The property, known as the Holyfield tract, is owned by Smith Mountain Lake Resort Hotel Inc. The hotel group has failed to satisfy a $300,000 loan that was due Dec. 31 to Sentry Federal Savings Bank of Norfolk.
David A. "Red" Dean, who recently filed a $6 million personal bankruptcy suit, is a principal in the hotel group.
Sentry is a second lender on the property. The First National Bank of Rocky Mount has a superceding $680,000 mortgage that was assumed by the hotel group when it bought the land in July 1988.
A group of more than 20 investors claims a third lien against the property for more than $2 million.
Cheryl Crawford, paralegal with Heilig, McKenry, Fraim and Lollar, a Norfolk law firm representing Sentry, said foreclosure proceedings were begun so the property still could be sold quickly if the pending sale falls through.
Smith Mountain Lake Resort Hotel Inc. was formed two years ago to build a hotel and conference center near Hales Ford Bridge. The first stage of the project was to be a 57-room hotel financed by selling individual rooms to investors.
Some of the third-lien holders were investors in that first phase.
At a meeting of Dean's creditors last month, bankruptcy trustee Roy Creasy said that the third deed of trust against the hotel property may be in doubt, but he urged all of those claiming debt against the property to agree to a sale of the land. The land has been under contract to developer Lynda Morran of Boones Mill.
Joe Roberts, a Wise County lawyer who represents the third-lien holders, said the sale to Morran still is a possibility and that the foreclosure sale likely can be avoided.
Another Dean project, Smith Mountain Fishing Villas Inc., was acquired last week by the Bank of Floyd, which had forced the sale because payments on $800,000 in loans had not been satisfied.
A contract to sell the land to Grand Virginia Properties Inc., Morran's company, was signed in December 1989. Grand Virginia has filed a lawsuit seeking $268,641, claiming that Smith Mountain Lake Resort Hotel Inc. breached a contract. The suit also asked that the third deed of trust, which was filed in January, be ruled invalid because it was filed while Grand Virginia's contract to purchase the land was in effect.
Morran could not be reached for comment Tuesday. Her attorney, T.J. Hall, refused to discuss the property.
by CNB