BENNINGTON — Parties involved in legal disputes focused on the former Bennington Center for the Arts are moving toward a formal mediation process, which could lead to the property being offered for sale.
Like other former Southern Vermont College real estate, the arts center and theater off West Road was entered last year into the college’s Chapter 7 liquidation process in U.S. Bankruptcy Court-Vermont District.
However, suits previously filed in Bennington Superior Court Civil Division remained pending, and those and other issues have since been incorporated into the Bankruptcy Court case involving the former college.
According to an order from Judge Colleen Brown recently posted in the bankruptcy case, the parties in the disputes stated in early February that they wanted to use mediation to resolve outstanding issues. On Feb. 25, they jointly asked the court to approve a stay pending the parties’ efforts to resolve the disputes through mediation.
In her order, the judge said that, “As of that date, the parties had not yet selected a mediator. The court granted that request and added a provision that it would appoint the mediator if the parties did not file a statement of selection of mediator by noon on March 5.”
The parties involved in the disputes include Bruce Laumeister and Elizabeth Small, founders of the arts center, which they donated to SVC in late 2017. The financially struggling private college closed in May 2019 amid mounting debt.
After the closure, the couple sued the college, seeking to annul their gift of the center.
Also filing suit around the time of the college closure was major SVC supporter Frederic Poses, who had put up $2 million as security in 2011 when the college took a loan for major campus construction projects and upgrades. SVC Funding, LLC, is a party. The entity was associated with trustees who put up a reported $910,000 in early 2019 to ensure SVC made it to its final graduation in May.
College real estate was involved as collateral for the latter two parties.
And Raymond Obuchowski, the court-appointed Chapter 7 bankruptcy trustee representing the college estate, is a party in his role as trustee.
The arts center is the final remaining former SVC property to be liquidated. The campus was sold for $4.65 million during an auction process before the bankruptcy court in December to Southwestern Vermont Health Care.
The former college admissions building, the Gate House on Monument Avenue, was sold at the same time to Kenneth Milman and Bridget Elder for $320,000.
In advance of a Bankruptcy Court order allowing a sale, the arts center property on 5.8 acres currently is listed online by TPW Real Estate, of Manchester, and Keen-Summit Capital Partners.
In her March 5 order, Judge Brown wrote that, “Since resolution of the issues raised in these proceedings may have impact on parties beyond this bankruptcy case and impact the local community, the court finds that time is of the essence. Therefore, in the interest of justice, and to expedite resolution of the disputes in these adversary proceedings and administration of the Chapter 7 estate, the court has determined it is appropriate for it to appoint a mediator.”
Brown said she has “selected a mediator who has extensive bankruptcy and mediation expertise and experience, and who will not charge any fees for his services: Hon. Peter Cary, U.S. Bankruptcy Judge for the District of Maine.”
Brown ordered that by March 11 the parties “set up a schedule for initiating mediation, benchmarks for filing periodic reports in this court, and a projected date for concluding mediation. The parties shall file a proposed schedule for moving forward with these adversary proceedings (that incorporates the mediator’s availability and projections for completing the mediation) by March 22.”
Obuchowski said Tuesday that Judge Cary is a “respected and independent mediator.”
He said he is hopeful the issues involved can be resolved over the next four to eight weeks.