Sold: Final piece of Burlington College

[George II]

Source: Burlington Free Press

Joel Banner Baird , Free Press Staff Writer | Updated 4:38 p.m. ET July 13, 2017

Wednesday’s auction took all of five minutes.

A single bid — and a single bidder — finalized the foreclosure of defunct Burlington College’s vacant building on Wednesday.

People’s United Bank took ownership of the North Avenue property for $3.1 million.

That’s about $650,000 less than the college has in debts, according to a May ruling by Vermont Superior Court Judge Robert A. Mello.

Read more: http://www.burlingtonfreepress.com/story/news/2017/07/12/sold-final-piece-burlington-college/467386001/

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Lots more at the link.

[Me.]

1. Sad

[Gothmog]

2. A federally insured financial institution lost money due to potentially false statements

The amount of the loss for the bank can now be quantified. When a federally insured financial institution suffers a real financial loss due to fraudulent or misleading statements, then there will be an investigation. Here there were representations made about the amount of committed donations that were not accurate and the loan went into default shortly after being made. These are not good facts.

[George II]

3. And to think that the loss was coincidentally in the $600,000 range

[sheshe2]

4. Oh wow!

Thanks George.

[Gothmog]

6. There were some bonds that the Peoples bank bought

I am not sure who is bearing the loss on these bonds

[VermontKevin]

14. The bonds were state issued. A dissenting member of the bond agency had this to say:

"As early as 2010 the flaws in Burlington College’s proposal were visible. It was clear that the Diocese was not selling the property at near fair market value and the loan to Burlington College by the Diocese to pay for the land placed additional financial risk on church resources. This, among other weaknesses in the overall proposal, caused me to vote no and to make sure my vote was clearly recorded, as such recordings were not the norm for VEHBFA board votes.

http://www.sevendaysvt.com/...

“Even at the time, Burlington College's application raised red flags with two VEHBFA board members, Agency of Human Services policy adviser Charly Dickerson and then-tax commissioner Tom Pelham. According to minutes from the meeting, Dickerson voted nay "out of concerns for Burlington College's financial strength and its ability to repay the debt."
“Pelham recalls the deal as a "fire sale" that wasn't good for the college, the diocese or the city — only good for the bank, which he figured would eventually acquire the property, assessed at nearly $20 million.”
"I've done a lot of public sector-development. I know what a good project looks like, and this one just didn't have it," says Pelham, who asked for an unusual recorded vote on the matter. "In retrospect, I was on the money.""


https://vtdigger.org/2015/12/23/catholic-church-nailed-in-loan-settlement-with-burlington-college/

[NurseJackie]

11. That's very interesting. (The whole thing is just a big tragedy.)

[NastyRiffraff]

13. Well well well

Interesting observation.

[VermontKevin]

16. There is an interesting wrinkle. The Archdiocese loan went into default, triggering the

bank default.

The private settlement with the Catholic Church would have to be examined, to determine the true amount of loss to the FDIC.

Responding to a litany of problems identified in Burlington College's 2012 audit, Plunkett described her first year at the helm as "one of the most challenging in Burlington College's recent history." The college had agreed to pay Sanders roughly $200,000 over two years, Plunkett explained in a letter to the auditors, which depleted resources that would have been used to hire a new CFO. A number of people cycled through the business office, and bookkeeping suffered as a result. Staff departures adversely affected other departments too, and, Plunkett's letter continued, "Due to these transitions and staffing changes, there was little success with fundraising or enrollment growth during the year."

https://www.sevendaysvt.com/vermont/pass-or-fail-what-happens-if-burlington-college-drops-out/Content?oid=2420094

[murielm99]

5. Thanks for posting. n/t

[karynnj]

7. Until the bank sells the property, you can not estimate if there is a losd

Or how much it is.

[SunSeeker]

9. Huh? The property was sold, for $650k less than owed, as the article says.

Whether or not the buyer of the property at the bk auction then goes on to sell it for a profit does not change that fact. That profit will not go to paying down the college's debt.

[karynnj]

12. The bank holding the loan bought it

Presumably they will sell it to Farrel, the developer who bought the bigger piece.

The college is left with the $650,000 debt. The bank was not the sole entity that was owed money by the college. I think it had the first claim on money. There is no information in the article on what the balancestors of the loan was before the sale.

Not to mention, Sanders was out 6 years ago and thus had no control over the finances of the college in that period.

[VermontKevin]

15. The Archdiocese loan went into default, thus defaulting the bank loan.

The school reached a private settlement with the Catholic Church. It did not settle with the bank.

[Demsrule86]

17. Her actions led to the failure...if you falsify mortgage documents (not saying Jane Sanders did),

you are subject to a federal charge. The key things will be 1. were the alumni pledges reported accurately, 2. was their any coercion of the bank to approve the loan from anyone.

[SunSeeker]

8. A tragic, needless end for a small college.

Killed by loan fraud--for land it did not even need.

[FraDon]

10. I lived in Burlington during these years, and

IMHO, a free, fair and thorough investigation would find that this is a property crime: criminal collusion between the Sellers, the Catholic 'owners' of new college property, and the developer of the prime lakefront property split from what would become the College's portion. Sanders (then President) and the Board of Burlington were played - in a most familiar manner.

[SunSeeker]

18. Are you suggesting they talked Jane into misstating donations to the college?

Jane has not even suggested she got played. Got a link?