Photo | Courtesy Roberts Brothers
The Bama Bayou development has sat vacant and incomplete across the Intracoastal Canal from The Wharf since bankruptcy proceedings in 2009.
Is the long-running lawsuit surrounding the failed Bama Bayou resort on the north bank of the Intracoastal Waterway about to be concluded?
Earlier this month a Texas company, Presidium, expressed an interest in the site, has been looking it over and is working on a tax incentive agreement with the city of Orange Beach should it somehow be able to buy it. But it’s still not officially for sale.
Holding up that sale is the $20.4 million question. Or a $50 million question. It all depends on a judge’s ruling after a hearing in July.
“It’s not going to get bought until we reach a certain point in the litigation, which we hope will be shortly, by which I mean before Labor Day,” Bama Bayou attorney Samuel McKerall said. “I hope.”
Each side has asked for a summary judgment to settle the case with the hearing set for July. McKerall represents original Bama Bayou owners and investors and Marine Park. Southeast Property Holdings represents the remnants of Visions Bank. A source for Southeast’s legal team who requested anonymity said the firm would have no comment on pending litigation.
“That was designed to bring the case to a head,” McKerall said. “Our motion to the judge is since she set the foreclosures aside, you’ve essentially turned the clock back to March 29, 2009, and we don’t owe any interest from that day forward and we don’t owe any attorney fees from that day forward. And we don’t owe any litigation expense from that day forward. That’s about $20 million worth of stuff, maybe more.
“The bank’s position is that’s B.S., they owe the money, $50 million, make them pay. And they have very good lawyers. I like to think so do we.”
The long saga that started on Jan. 15, 2009, when the former Visions Bank sued to foreclose on more than $20 million in loans by Bama Bayou, Marine Park and more than 20 guarantors or investors in the project.
A lot has happened between then and a ruling in October 2017 that set the case “back to square one,” McKerall said.
Setting the case back to the beginning was Mobile County Circuit Court Judge Sarah Hicks Stewart’s ruling saying the lowball bid at the foreclosure sale was just that, too low. The loan amount was $20.4 million, and Visions bought back the property for about half that.
“The Court hereby sets aside the foreclosure sale and declares the foreclosure deeds null, void and of no force and effect,” the last line of the three-page ruling reads.
“We fought that for a long time, one of the lawyers that’s no longer in the case and thus smarter than me, suggested to the judge, why don’t you have a mini-hearing on whether or not the price is too low,” McKerall said. “Just that and nothing else, to see if that’s viable or not.”
The ruling contained the necessary language, McKerall said, to effectively put the property back into the hands of Bama Bayou, Marine Park and the group of guarantors. County tax maps don’t yet reflect the change, saying Southeast Property Holdings is still the owner.
“She entered an order that Visions Bank had indeed bid too low, so low that it was shockingly low,” McKerall said. “The phrase she used was ‘it shocks the conscience of the court.’ It’s a term of art and you have to use that or she can’t set it aside. That’s the standard. She had to find that the price was so low it was shocking to the conscience of the court.”