prevent foreclosure
Conch House in bank foreclosure, lawsuit filed
by Christian Conte
After owning the Conch House Marina Resort for more than 60 years, members
of the David M. Ponce Jr. family were ready to move on to other projects. So
when Thomas E. Coghill Jr. agreed to buy the site and some adjacent vacant land
for $27 million in October 2005, David M. Ponce Jr. considered it the perfect
opportunity.
prevent
foreclosure The Conch House Marina Resort includes a 200-wet-slip marina, a
17-room motel, a restaurant and a dockside lounge
"He seemed to be a go-getter," Ponce said. "He seemed to ask
all the right questions and say all the right things."
A
bank has foreclosed on the Conch House Marina Resort in St. Augustine. How to
prevent foreclosure ?
The Ponce family sold the local landmark in December 2005, lending Coghill
and other buyers some of the purchase price as part of the transaction,
according to documents.
Now the family is trying to prevent foreclosure, claiming its loan to the
buyers was not repaid and that a bank is improperly foreclosing upon the family,
according to a lawsuit filed against the bank that loaned Coghill and others
money to buy the site at 57 Comares Ave., St. Augustine.
When the family agreed to sell the property to Conch House Builders LLC, it
did not know that the U.S. Attorney's Office in the Western District of Virginia
had indicted Coghill in November 2004 on six counts of fraud relating to his
Virginia-based homebuilding business, Ponce said. Coghill was released from
federal custody on a bond in December 2004 and allowed to return to Florida and
help his family build two homes with the condition that he refrain from entering
into any new financial responsibilities, according to court documents.
Coghill pleaded guilty to one count of bank fraud and one count of wire fraud
in August 2005. Ponce said the family was not aware of the plea when it was
negotiating with Coghill.
Between his indictment and the beginning of what was originally a 33-month
prison sentence in May 2006, public records and other documents indicate that
Coghill was involved in several real estate investments in Northeast Florida,
including the acquisition of the Conch House.
Coghill denied a request for comment through a prison official for a previous
story. Prison officials did not respond to requests for an interview relating to
the Ponce family's recent filings.
The foreclosure deal
The Ponce family entered into an agreement to sell the Conch House, which
includes a 200-wet-slip marina, a 17-room motel, a restaurant and a dockside
lounge, along with some adjoining property, to Conch House Builders LLC in
October 2005, the claim states. The Riverfront Developement (sic) Revocable
Trust, an entity Coghill created in September 2005, was an original member of
Conch House Builders, according to its original operating agreement.
On Dec. 21, 2005, Conch House Builders LLC closed on a six-month, $17.5
million loan from Intervest National Bank, about 70 percent of the purchase
price of the property.
To cover the rest of the price, the Ponce family agreed to merge the assets
of the Ponce Family Limited Partnership into Conch House Builders LLC in return
for $10 million, plus interest, Ponce said. The agreement also entitled the
Ponce family to an interest in all properties owned by Coghill personally and
through his trust, in the event of a default of the $10 million repayment,
according to the lawsuit. Ponce became the managing member of the merged Conch
House Builders LLC.
As part of the merger agreement, investors in the original Conch House
Builders LLC were to buy back interest from the Ponce family, ultimately
removing them as owners, Ponce said. The family never received that compensation
and in addition is still owed $10 million from the sale, he said.
Coghill managed the Conch House for a short time, after the Intervest loan
closed and before he began his prison sentence, Ponce said. After Coghill left,
Ponce said he resumed managing the business, which employs about 200 workers, so
it would not close.
The Ponce family claim states, in part, "Plaintiff Intervest National
Bank assisted Thomas E. Coghill Jr., a convicted felon (bank fraud) in
perpetuating a fraud upon the Ponce family."
Further, it states, "The Plaintiff either knew, or should have known of
the criminal background of Thomas E. Coghill Jr. at the time a loan request was
submitted to Intervest and at the time of the funding of the loan."
The 25-page lawsuit, which includes the Ponce family's answers and
affirmative defenses to Intervest's attempt to foreclose on the property, was
filed July 17 in the 7th Judicial Circuit Court in St. Johns County.
Intervest National, based in New York City, is a full-service commercial bank
with a Florida division that includes six branches in Pinellas County, in the
Tampa Bay area. The bank is a wholly owned subsidiary of New York-based
Intervest Bancshares Corp. (NASDAQ: IBCA).
Intervest attorney Joshua Magidson, from the Clearwater law firm Macfarland,
Ferguson & McMullen, declined to comment about the case. During a July 18
hearing, he said Intervest did not interact with Coghill and that the claim
submitted by the Ponce family's attorney had no merit.
"There's nothing in this complaint, there's nothing anywhere that says
what the bank did," Magidson said. "What the bank did was loan them
$17.5 million. It's easy to smear the bank and say, 'Oh, a crook took my money.'
"What meat do they have on these affirmative defenses? They have
nothing."
prevent Foreclosure Cross-claim
In a cross-claim filed July 17, the Ponce family is suing Robert Graubard,
who signed documents as managing member of Conch House Builders LLC after the
merger and as a guarantor of the $17.5 million loan, and Charles Kelly Smith,
who also signed as a guarantor of that loan.
Graubard said he and Smith planned to file defenses and counter-claims
against the Ponce family. Smith did not return phone calls seeking comment.
"We are taking appropriate legal actions," Graubard said. "We
will defend the suit against these unfounded charges and we will set the
appropriate counter-claims against the Ponces."
Graubard said he has documents that show the family's claim is not valid. As
of press time, Graubard said he had not been served the lawsuit.
Also as of press time, Judge Michael Traynor had not ruled on whether to set
a trial date.
cconte@bizjournals.com | 265-2227
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