Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 11, 1995 TAG: 9503130058
SECTION: BUSINESS PAGE: A4 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
DATELINE: LENGTH: Medium
The questions were raised in connection with the filing by Woodhill Corp. of Roanoke, which is seeking protection from creditors during reorganization. That petition was filed March 3 in U.S. Bankruptcy Court in Roanoke.
Woodhill's assets and liabilities both were estimated at more than $1 million.
Thursday, Judge H. Clyde Pearson filed with the papers in the case a letter written by William W. Terry III, a Roanoke lawyer representing one of Woodhill's creditors, Branch & Associates Inc.
Branch, a Roanoke contracting firm, won a $237,298 judgment against Steele's CSS Partnership company in December. That suit involved renovation of First Campbell Square, a downtown Roanoke office building, which Steele used to own.
A Woodhill lawyer, Andrew Goldstein, said Terry's letter is "rife with inaccuracies and misstatements." The bankruptcy case, he said, was filed in accordance with court rules.
Terry said Steele owns 75 percent of the farm and his son, Roger Steele, owns the remaining 25 percent. Goldstein said those percentages are correct or nearly correct.
Lynn Brae Farms changed its name to Woodhill Corp. effective March 6, three days after the new company filed for bankruptcy, according to Terry.
Goldstein said the dates are right or approximately right, but he said Lynn Brae had petitioned the State Corporation Commission for the name change prior to the filing.
Terry said financial schedules that usually are part of a bankruptcy petition were not filed in this case and the notice to creditors failed to reveal the Woodhill connection with Lynn Brae Farms. Under rules of the court, those schedules are due within 15 days after the initial filing or, in this case, by March 18.
"The effect of failing to disclose the true name of the debtor on the day of filing or even the fact that Woodhill Corp. was formerly known as Lynn Brae Farms Inc. is misleading to the public and to the debtor's creditors," Terry said.
He also criticized use of the law office of the registered agent in Roanoke as Woodhill's address. Terry said all of Steele's interests are in Roanoke County and Botetourt County.
Terry's letter said Steele conveyed property in Roanoke County that was scheduled to be foreclosed, along with substantial real property in Botetourt County, to Lynn Brae Farms on March 2, the day prior to the bankruptcy filing.
Goldstein said in a telephone interview the conveyance was subject to all liens on the land and "there was no equity in the property." People who held liens on the property were notified of the conveyance, he said, and no other creditors were affected.
The property, on Buck Mountain Road, was to be auctioned in a foreclosure sale March 10, but the auction was blocked by the filing of the bankruptcy. The property was being foreclosed because it was collateral for a $100,000 loan that was in default to General Financial Services of Wichita, Kan.
The original loan was with CorEast Bank, which was taken over by the Resolution Trust Corp., said Richmond attorney Randolph C. Robertson, who represents General Financial.
The land in question was once owned by Old Heritage Corp., the company Steele and a partner set up to develop Hunting Hills residential community.
Steele developed Tanglewood and Crossroads malls and several apartment complexes in the Roanoke Valley. He is president of BioConversion Technologies, which has developed a method of disposing of medical waste.
Staff writer Sandra Brown Kelly contributed to this story.
by CNB