2008-06-05 / Front Page

Dutch Harbor escapes court-ordered auction

Last-minute financing keeps boat yard afloat
By Sam Bari and Jeff McDonough

Last-minute financing has saved Dutch Harbor Boat Yard from the court-ordered auction that had been scheduled for Wednesday, June 4.

In a court order issued June 2, Justice Michael Silverstein of the Rhode Island Superior Court dismissed the proceedings against the defendant, DHBY LLC, after finding that "there was no need for further notification to any other creditor or party."

A new company has been formed, according to the court documents.

"Dutch Harbor Partners, LLC, a Rhode Island limited liability company, has transferred by wire good funds in the amount of $1,434,262.46 to the client settlement account . . . as payment of the purchase price for the notes made payable to Bank Rhode Island by the debtor," the judge said in the court order.

The court stipulated that the defendant and the Dutch Harbor Partners "honor mooring contracts entered into by the defendant for the benefit of the customers."

Town Administrator Bruce Keiser said the settlement is good news for the community. He said that he was pleased that the Patersons were able to find financing and hoped that it would bring stability to the boat yard.

Barbara Paterson of the Dutch Harbor Boat Yard could not be reached Wednesday morning for comments.

Last week, the Town Council unanimously decided not to participate in the Dutch Harbor Marina bidding process at a special May 30 meeting held to decide the town's position on the financiallytroubled facility.

Town Administrator Keiser had the support of the council to bid on the boat yard and marina and turn it into a not-for-profit, self-supporting sailing center "if at all possible," Keiser said.

However, after discussion and advice from Town Solicitor Peter Ruggiero, the council decided that although it was a good idea, there wasn't enough time to put together a bid proposal and arrange financing for a project of that magnitude.

Keiser asked if there was any way the town could submit a letter of intent expressing the town's interest in the property, but Ruggiero said that "a letter would not do it." Without a firm bid accompanied by hard cash, the creditor would more than likely not consider the offer, Ruggiero added.

"We have an interest, but we are not one of the "parties" in this process," Ruggiero said. "This is a private transaction."

Councilman Bill Kelly agreed, saying, "To purchase a business like this takes a lot of thought and planning. Unfortunately, we don't have the luxury of time." The cutoff time for the bidding was June 2, and the court will make a decision June 4 to award the bid.

Besides unreasonable time constraints, several citizens attending the meeting expressed concerns about the use of the facility changing.

Ken Newman, who lives in an adjacent property, expressed concerns about parking if the mooring field expanded and activities increased. "Parking on busy days is a problem now," Newman said. "If activities increase, it can only get worse," he added.

Mary Meagher, chairwoman of the Fort Getty Committee, said that plans for a sailing center were already being considered in the Fort Getty master plan. She felt that Ft. Getty presented a better situation for establishing a sailing center and school.

Paterson was not present at the meeting. Paterson told the council on May 27 that she had obtained the needed financing for the boat yard.

Return to top