Thursday, March 8, 2018

Squireses Put H Street Building Up for Sale

Posted By on Thu, Mar 8, 2018 at 7:23 AM

click to enlarge The Squireses' 833 H St. property, which has since been boarded up by the city, is up for sale. - FILE
  • File
  • The Squireses' 833 H St. property, which has since been boarded up by the city, is up for sale.
Interested in buying a fixer upper as an income property? This new listing for an apartment building in Eureka might just fit the bill: “Fourteen units that are mostly in poor condition currently, but owner will refurbish with new electrical, plumbing, and paint.”

The asking price is $875,000. But there’s just one catch, well, actually, more than one. The Spanish-style complex at 833 H St. is owned by Floyd and Betty Squires — one of 34 properties currently entangled in the couple’s bankruptcy case.

It should also be noted that the city of Eureka shuttered the entire structure back in January, citing a threat to public safety due to “extremely hazardous electrical and other violations at the property.”

“Despite multiple notices and extensions, work on the property has been sporadic at best, and ceased altogether, with partial work performed on only three of the fourteen units,” a city release stated.

Still interested? Well, the clock is ticking because a federal bankruptcy court judge has placed an April 2 sale deadline on all of the couple’s real estate — among other requirements — over the complaints of the Squireses’ attorney.

In addition, U.S. Bankruptcy Judge William Lafferty has said that any employment of a listing agent will need to be reviewed at the same time as a proposed sale and notifications of a pending purchase must be sent to the Squireses’ creditors.

“We’ve got one property where we are anticipating an overbid,” the couple’s attorney David Chandler told the judge at a March 1 hearing, although he did not specify if it was 833 H St., “and that’s pretty hard to put together on all those conditions but I’ll try.”

Lafferty’s response was pointed, noting that April 2 was the anticipated conclusion of a two-day hearing (the first day is March 26) — with witnesses — on whether to appoint a trustee to oversee the Squireses’ estate during bankruptcy proceedings.

“I’m not going to do anything that’s going to tie another party’s hands,” Lafferty responded. “I don’t think I can responsibly do it. So, if that means we’re not going to have any sale we’re not going to have any sales.”

The city of Eureka made the request on the grounds the couple has “committed acts constituting fraud, dishonesty, incompetence and gross mismanagement.”
According to court documents, one of the city’s witnesses is prepared to testify about 833 H St. and “Floyd Squires’ demand for (the) destruction of (a) report stating that all electrical work needed to be replaced at the property.”

Noting the seven-year-long legal battle between the Squireses and the city, which has sought to wrest 26 of the couple’s Eureka properties from their control due to health and safety concerns, Lafferty said he was trying to do what was best for all involved.

“Let me express, with enormous respect for all of you, what I think I’m doing here,” he said of restrictions on potentials real estate deals. “Ordinarily this is the kind of thing that parties can agree to. … It’s difficult for you to do so here for reasons that I thoroughly understand, and this is not a critique of anyone.

“This is a very high charged case,” the judge continued. “We’re going to have a very difficult and complex hearing on the motion to appoint a trustee, so I’m in the position of trying to dictate something that I think is not going to screw up the rest of the process.”

Simultaneous to the city’s motion, Lafferty will also be considering a request by the Office of the U.S. Trustee — which basically acts as a watchdog agency in bankruptcy cases — to either dismiss the couple’s Chapter 11 case or convert it over to Chapter 7 based on claims of “gross mismanagement of the estate.”

A dismissal would strip the Squireses of protection from the creditors, while a conversion to Chapter 7 would likely lead to the sale of their properties to pay off the couple’s estimated debt of $2.6 million, rather than a restructuring of their debt.

Meanwhile, court documents filed by the Squireses’ attorney indicates other properties might also be poised for sale, including the lot where the Blue Heron Lodge once stood on Broadway and the so-called “Heroin Hilton” on Third Street, which were also condemned by the city.

None of those, so far at least, appear to be listed on local real estate websites.
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Kimberly Wear

Bio:
Kimberly Wear is the assistant editor of the North Coast Journal.

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