Losing Life Riverside

Part I - Black Tuesday


It should be no revelation to those that knew us and our situation that we were struggling to make a go of it at The Riverside; we were struggling hard. I didn’t move by myself to an apartment in Mississippi for the view. Our timing flat sucked in purchasing a business that had no record of profit, in a real estate market that, arguably with maybe an idiot, is the worst real estate market since real estate markets were valued. Like my grammar and my luck, our timing couldn’t have sucked more worser.

But ‘woe is me’ aside, we did everything we could to keep the place afloat. Thank God for Ergon. And Thank God for the fine folks at Grand County Bank, who promised to work with us in re-doing our loan to make the monthly nut more affordable. In October of 2009, when we were struggling to keep current with our payments, the bank sent us an angel who promised us that if we got current on our 1st mortgage and paid up another short term loan they’d given us, our loan would be refinanced, allowing us a reduced monthly payment where we could keep our mortgage current with only my job revenue. This sweet-faced, seemingly innocent Bank VP – she could be mistaken for an ex-nun – looked us in the eye and promised us a sanctuary from the impending financial doom, provided we did our part in getting current. Our part included depleting both Julie’s and my retirement accounts, which we gladly did in an effort to satisfy the bank and pave the way for a new financial future. Even better news, as in early December, our ex-nun bank angel brought a savior to The Riverside, a savior who was brought in from the outside to help us with our situation. Julie made them coffee, showed them around the hotel, and bid them off with the feeling that our fate was in the hands of these caring, helpful souls. There was a light at the end of the financial abyss, provided we kept up our end of the obligation.

As promised, and with much effort and at the expense of vendors and creditors, we paid the bank every owed cent by years’ end; a gut-wrenching process, but what a feeling of relief when the bill was paid.

During this process, in early November I received an email from our realtor, which brought news to which I was uncertain of its affect regarding our situation – Grand County Bank had been issued a “Cease and Desist Order” from the feds. A modicum of research – Wikipedia, I think – told me that this is what the feds do before they barge into your bank unannounced and seize it at 4:30 PM on a Friday afternoon; a not-so-gentle last warning to ‘get your financial shit together’, or you’ll quickly have no financial shit to get together. This wasn’t a surprise to me, as I’d weekly seen numerous foreclosures on $600,000 weekend getaway homes, crumbling Grand County businesses and a major financial sinkhole in a 36-hole golf course/fly-fishing resort, on the banks of the Colorado River, that went totally tits-up 1/3rd of the way through the development process – all on the balance sheets of Grand County Bank.

All of a sudden it dawned on me that Grand County Bank giving us a loan might not have been the vote of confidence I was looking for in higher financial powers having an educated insight into the potential success or failure of our dream. Throughout the process of our buying The Riverside, Julie would ask me “I wish we could get a sign as to whether or not we’re doing the right thing.” I would answer, “The banks will give us that sign. If we can’t make this work, they’ll have smart people that will blow my numbers out of the sky and we won’t get a loan.” I naively relied on the bank, knowing every last one of our intimate financial details and relying upon my ‘worst-case-scenario’ 5-year pro-formas, to tell me whether or not we had a viable business venture. What a fool I was.

January came and went without news from our sweet angel from the bank regarding our refinancing. At the end of the month, I sent her a brief email saying “waiting to hear from you re our refinancing. Don’t want to get another month behind…” February came and went, with no news from the bank. I was worried, but I knew that our angel was working behind the scenes to make our path easier. But now I was coming up to being two months behind on the mortgage.

Tuesday, March 2nd, the Grand County Bank savior sent me an email. “Mr. Paradise, you are two months behind on your mortgage. Make payment immediately or we will begin foreclosure proceedings.” Wow! I’d never met or spoken with him, but Julie said he was a nice guy who said he wanted to work with us; this email was a little chilly. I called our new friend and explained that I’d held off making payments as I was waiting to hear from the bank regarding my promised refinance. If need be, I could make the January payment immediately, and the February payment by March 15th.

This is where the story turns. This is when I realized there was more at play than us being late with the mortgage. Billy the Banker told me how it was going to be:

“Mr. Paradise, first and foremost, you need to take that money and hire legal counsel. Regardless of whether or not you get current, we are going to declare you in default. You have a clause in your loan that states if there is a material change in the ownership, management or operation of the business, and you living in Mississippi with plans to close the hotel April 1st certainly qualifies as a material change in the operation of the business, the bank can declare the loan in default. We are going to exercise that right.”

“But what about our refinancing? All we want to do is hang on to the place until we can sell it.”

“Mr. Paradise, the Cease & Desist order that we are operating under doesn’t allow us to refinance your loan.”

“Wait a minute!!! Betty Banker promised us that if we got current, we would get refinanced, and you’ve been under the Cease & Desist since early November. Did she just flat lie to us to get every last penny we had before you called the loan?? She knew we couldn’t refinance yet she strung us along until we drained our retirement accounts and handed them over to you??? She seemed so sincere. How could anyone be that evil and not be doing life somewhere?”

“Mr. Paradise, that’s past history. I’m only concerned with the here and now.” (That is a direct quote.)

It was at this point that the disdain and vitriol that I usually reserve for the legal profession was now borne by those in the banking profession – particularly these lying Grand County bastards. In fact, I now needed to embrace the legal profession, as it was my only course for being able to deal with this den of thieves.

To be continued…..