Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 18, 1994 TAG: 9402180221
SECTION: VIRGINIA PAGE: B-1 EDITION: NEW RIVER VALLEY
SOURCE: ADRIENNE PETTY STAFF WRITER
DATELINE: ROCKY MOUNT LENGTH: Medium
"What happens if I die now?" he asked Eric Ferguson, the cemetery's court-appointed receiver, during a U.S. Bankruptcy Court hearing Thursday night.
"Your family members will be able to pick out a space for you," Ferguson said.
More than 500 creditors of the cemetery packed the Franklin County High School auditorium to hear about attempts to make the cemetery financially viable, and to be assured that the plots or services they purchased would be provided.
Shirley Jamison, a Boones Mill lawyer, said several of her clients have contracts for lots but have not received assignments.
"How do we know there has not been an oversell of lots?" she asked Ferguson.
Ferguson assured creditors that the cemetery has enough space to fulfill its commitments.
"To the best of my ability, I would say as long as we are successful in the bankruptcy proceedings, none of this is at risk," he said.
He admitted that as many as 700 spaces have not been assigned, but the Franklin County Circuit Court did not grant him the authority to assign plots.
He will seek such authority during the bankruptcy proceedings.
Ferguson filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code last month.
Under Chapter 11, businesses can continue operations while they sort out their assets and liabilities.
During the hearing, Ferguson and his attorney, Joe Bounds of Roanoke, laid out their plans for restoring the cemetery to solid financial standing, which could take a minimum of nine months to complete.
They will propose to file suits to recover money from the financial institutions that accepted discounted notes from the cemetery's past owners. The money they hope to recover would be used to whittle down their liabilities.
After making the cemetery viable, they probably would try to sell it, Bounds said. With the cemetery's current financial state, though, this is not an option.
Under oath, Ferguson answered a series of questions that recounted the three-year struggle to make the cemetery solvent.
In May 1991, Franklin County Commissioner of Revenue Ben Pinckard turned up a $700,000 shortfall in trust accounts while reviewing sales contracts for more than 9,000 cemetery plots.
Under state law, previous owners of the cemetery should have set aside 10 percent of all revenue from plot sales to provide for maintenance, and 40 percent of other sales revenue to ensure that the cemetery had enough money for vaults and grave markers bought in advance.
Franklin Memorial Park, on U.S. 220 between Boones Mill and Rocky Mount, is one of the county's largest perpetual-care cemeteries.
Ferguson said that since he was appointed to manage the cemetery, he has built the trust accounts back up to about $220,000. He has not touched funds in those accounts since he was appointed.
The cemetery has more than 4,500 creditors, the most ever in a bankruptcy petition filed in the Western District of Virginia office of the federal bankruptcy court, the court clerk said.
James Cosby, senior bankruptcy analyst for the Office of the U.S. Trustee, told creditors that the office will consider setting up a seven-member committee of creditors.
Another hearing will be scheduled for late March.
Memo: shorter version ran in the Metro edition.