Thursday, February 28, 2008

Scotia For Sale

Posted By on Thu, Feb 28, 2008 at 6:25 PM

scotia.jpg


Sharp-eyed Blogthing reader "Lou" -- who wins instant promotion to our MVP Reader Team -- noticed yesterday that nine commercial properties in downtown Scotia have been listed for sale on the Humboldt County Multiple Listing Service . (No direct links, unfortunately. Search for Scotia properties.) The buildings in question include the Pacific Lumber HQ, the town museum, the commercial center housing Hoby's Market and other small businesses, the Post Office and the Winema Theatre, among others. They're listed at a combined total of $11.5 million.


How can this be, given that the company is in bankruptcy and the properties in question have all been borrowed against? After listening in on the bankruptcy court conference call this morning (more about which anon), our first thought was that the sale of the property was some sort of hare-brained quick money scheme. Pacific Lumber is out of cash. They've got 24 million board feet of timber in the year, but no one to sell it to. They've got a total of $1.5 million in the bank. They're going to be seeking additional loans just to get through the next five weeks.


So, are they sneaking some properties out the back door just to stay afloat? Not at all, said Pacific Lumber spokesperson Heather Muller today. In fact, she said, the sale of the properties has been underway for some time.


"My understanding is that we filed a Town Plan with the court approximately eight months ago that anticipated the sale of commercial buildings in Scotia," she said. "A few have recently have appeared on the MLS due only to the efforts of the agents engaged to sell them."

Muller added that any sale of property would have to be approved by the bankruptcy court, and that nearly all proceeds would go to the creditor who held liens against it -- in this case, Marathon Capital Group.

Then why proceed with the sale at all? Muller said that it was her understanding that the sale was part of the company's fiduciary duty to Marathon its estate. The company owes Marathon money; it's trying to pay it. A bit odd considering that Marathon has proposed its own plan for the future of the company, which would presumably include the properties in question. But as of right now, everything appears to be above board.

The Scotia commercial properties were listed through Pacific Partners/Coldwell Banker . Listing agent Dave Wells didn't return a call seeking comment.

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