Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, August 7, 1993 TAG: 9308070201
SECTION: VIRGINIA PAGE: C-2 EDITION: METRO
SOURCE: MARK MORRISON STAFF WRITER
DATELINE: LENGTH: Medium
But a court-appointed trustee says that a buyer is interested in the eatery and that it may be sold within the next few weeks.
W. Alan Smith Jr., a Lynchburg lawyer, said Friday that he expects an offer on the Station next week. It could take several more weeks after that before a deal would be finalized by the court.
The buyer is in the Roanoke-Lynchburg market, Smith said.
However, selling the restaurant would not entirely end the troubles of its principal owners. Nor does it mean that some 300 limited investors - most of them from Bedford - will get their money back.
"They're at the end of the line," Smith said.
A Texas investment company, Wamco III Ltd., has first claim on any money made from selling the restaurant or its equipment.
Wamco took over a loan from Investors Savings Bank. The remaining balance on that loan totals about $125,000. Smith said a "substantial portion" of that amount would be covered by the restaurant's sale.
A second loan, from Dominion Bank, taken by the Station's owners, David Herrick and Michael Macomson, would not be paid off.
The unpaid balance of this second loan is $61,000 and Dominion Bank has filed a lawsuit against Herrick and Macomson that would collect the amount from their personal assets, rather than from the restaurant's.
The Station also owes more than $130,000 in unpaid state and federal withholding taxes.
Court records estimate the value of the equipment and furnishings for the restaurant at $220,000. But Smith said the actual resale value is less.
Herrick and Macomson opened the Station in 1989. The restaurant, located on Bedford Avenue, formerly was the Bedford train station operated by Norfolk and Western Railway. Norfolk Southern Corp. still owns the building.
More than $500,000 was spent initially to convert the former passenger station into an eatery.
Much of that money was raised through an unusual limited partnership agreement with Bedford residents and other local investors.
The arrangement was similar to buying stock in the restaurant. A share cost $500 and about 300 shareholders reportedly bought into the restaurant.
Herrick and Macomson had promoted the limited partnerships as a way to finance the restaurant's renovation without having to go to a bank for financing. It was supposed to give the restaurant a ready base of customers with a vested interest in its success.
Smith said the shareholders are unlikely to recoup any of their money now because the bank loans, back taxes and any other unpaid operating expenses would be settled first.
The Station filed for a Chapter 11 reorganization last fall, but remained open until this week. Its status was converted to Chapter 7 bankruptcy on July 30.
Herrick is a stockbroker in Bedford. Macomson owns a restaurant that was converted from an old train depot in Hickory, N.C. He also formerly operated Docksiders restaurant at Smith Mountain Lake before it closed last October, facing liens of more than $25,000 in unpaid state taxes.
by CNB