Boston Yacht Haven, the snakebitten $11.7 million marina in Boston’s North End that dodged foreclosure in April, may soon be heading to the auction block after the marina’s lender and the United States Trustee’s office filed a petition that would force the property into liquidation.
Yesterday the U.S. Trustee and Northern Bank & Trust, holder of the Commercial Wharf property’s $10.1 million mortgage, asked a federal judge to convert the marina’s April Chapter 11 bankruptcy case to Chapter 7. A hearing on the motion is set for next Tuesday. If the judge agrees, it would take Yacht Haven off the track for reorganization, and push it towards a speedy liquidation.
The U.S. Trustee’s office is concerned that Yacht Haven, which hasn’t set up a debtor-in-possession account to pay its bills while in bankruptcy, lacks the internal controls that would prevent the marina’s owner, Yovette Mumford, from making use of the marina’s cash revenues. The absence of a debtor-in-possession agreement is highly unusual for a business that’s now been in bankruptcy for nearly six weeks.
At a recent meeting at the U.S. Trustee’s office, Mumford’s lawyer said Yacht Haven had received permission from Northern Bank to run payroll on the marina’s frozen Northern Bank checking account. The bank’s attorney maintained that no such agreement was ever in place.
The marina’s manager told the U.S. Trustee that Mumford instructed him to run payroll on the account.
With sweeping views of Boston’s skyline and harbor, the Yacht Haven site is considered one of the best on the waterfront. A number of would-be bidders swarmed to the foreclosure auction in April, and a handful sat in on the creditors’ meeting with the U.S. Trustee last week.
Mumford, who acquired the property from Modern Continental in 2005, had plans to redevelop the property into condominiums or a luxury boutique hotel. Battles with fiscal solvency and with the marina’s Commercial Wharf neighbors put an end to those designs.
Mumford, the former sister-in-law of Massachusetts Congressman Edward Markey, is currently on house arrest. She recently finished serving a stretch in Framingham state prison on felony fraud charges. Mumford’s record also shows a felony conviction for defrauding the Big Dig. Her most recent conviction stemmed from an incident in which she passed a forged a letter from her probation officer to Northern Bank. The letter purported to prove that Mumford’s first conviction had never happened. She passed it to the bank after her Big Dig fraud was detailed in the Boston Globe.
