The Clinton Herald, Clinton, Iowa

Clinton

August 9, 2013

Miller Ridge up for sale

Apt. complex to be sold through sheriff's sale

CLINTON — Clinton apartment complex Miller Ridge will be sold through a sheriff’s sale in order for a Wisconsin bank to recoup more than $3.88 million it is owed in unpaid mortgages.

Clinton County District Court Judge Mark Lawson this week signed a foreclosure decree in favor of Wisconsin-based Layton State Bank, ordering the property at 2604 N. Fourth St. to be foreclosed and sold through a Clinton County Sheriff’s sale.

According to the court documents, Miller Ridge, LLC. and Joseph Miller, owners of the apartment complex, owe Layton State Bank $3.33 million in unpaid mortgages, $353,110 in interest, $180,619 in late charges, $13,500 in attorney fees, and $516 for service and filing fees and title searches.

A representative of Layton State Bank and the bank’s attorney were not available to comment on what the foreclosure means for Miller Ridge tenants. Property Manager Shannon Cook declined to comment about the pending sale, except to say “the tenants have nothing to worry about.”  

Under the Protecting Tenants at Foreclosure Act, which Congress passed in 2009, tenants must be given 90 days notice before any eviction, and tenants with valid leases who pay rent regularly must be allowed to stay in their apartments until the end of the lease, with some exceptions.  

According to Clinton County Sheriff’s staff, the sheriff’s sale would occur in two months at the earliest due to notification requirements.

Layton State Bank originally filed suit against Miller Ridge, Joseph Miller and the other lien holders last August.  

According to the lawsuit, in late November 2007, Miller Ridge LLC executed a promissory note with a principal sum of $3.1 million at an interest rate of 7.750 percent per year, with the entire principal and interest due and payable on Nov. 19, 2010. In November 2008, the bank and Miller Ridge entered into a change of terms agreement, which extended by three months the one-year interest-only payments provided in the November 2007 promissory note. Another mortgage recorded in May 2009 also is part of the foreclosure decree.

The lawsuit alleges that Miller Ridge has failed to pay the note and interest and has failed to pay taxes and special assessments on the property as well.

Miller Ridge LLC also owes money to the city of Clinton, Guardian Credit Union, Aaron Jesse Malone, Dale Bott Trucking and the U.S. government, which are regarded as junior lien holders. They will receive payments in order of priority only if there is money remaining once Layton State Bank is paid the $3.88 million.  

The complex owner owes the city more than $350,000 in unpaid sewer bills and inspection fees, which were placed as special assessment liens against the property, and $453,903 in unpaid property taxes.

The city might never see any payment on the special assessments after the sheriff’s sale is conducted as the city is listed as last on the priority list of junior lien holders.

Further, according to City Administrator Jessica Kinser, the city will have to write off an unknown amount of unpaid utility bills because Miller filed Chapter 11 bankruptcy in the Eastern District of Wisconsin on August 2012, 12 days after the foreclosure suit was filed in Clinton County.  

In his bankruptcy filing, Miller stated he had between 100 and 199 creditors, with the top 20 being owed amounts ranging from $3 million to $20,000.

Because Layton State Bank sought a foreclosure without redemption and it wasn’t contested, a sheriff’s deed will be issued immediately to the purchaser at the sheriff’s sale, the decree states.

Layton State Bank was awarded receivership in October after it filed court documents alleging numerous fire and building code violations and collected rents that weren’t applied to the property’s debt.  

The receivership put Layton State Bank in charge of collecting rents. The bank then put DCP Property Management in charge of the property.  

The court will retain jurisdiction over the case until Layton State Bank is discharged from its receivership and to disburse any surplus funds.

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