The Glasgow Courier - Serving Proudly As The Voice Of Valley County Since 1913

By Bonnie Davidson
The Courier 

Dismissed: St. Marie Bankruptcy Case


It’s been a tumultuous road for development at St. Marie. A decision made by a judge late last week could make an impact for St. Marie Development Corporation of MT.

U.S Bankruptcy Judge Ralph B. Kirscher ruled Thursday, June 5, that the filing for bankruptcy would be dismissed for various reasons. The Valley County Commissioners last month discussed trying to have a Chapter 7 bankruptcy filed, versus a Chapter 11 that some property owners wanted – but all of it was dismissed.

An argument issued in the order was a requirement of insurance on property. The court document from U.S. Bankruptcy Court, District of Montana, stated that property owner Patrick Kelly, the largest shareholder, said he recently received an email from an insurance agent to insure the property for $15,000, with $4,000 due immediately at the court hearing that took place toward the end of May.

The court gave him a time limit to obtain insurance but said that no evidence of insurance was provided.

The document also stated that the debtor had a 14-day time period to respond to requests before the case was dismissed, and that no response was given.

“As the record stands, and as argued by counsel for the United States Treasurer, this bankruptcy estate is administratively insolvent,” the document stated. “... Handing a trustee property that is not insured, and potentially uninsurable, is fatal.”

The document finally stated that a Chapter 7 or Chapter 11 bankruptcy would not be in the best interests of the creditors and the estate.

A Chapter 7 would have meant a faster process to liquidate the listed assets, which could have benefited the county because of back taxes owed to the county on St. Marie properties. A Chapter 11 would have given the debtors time to present and follow a recovery plan.

But the case was dismissed, along with the motion to waive insurance requirement that was filed in March. The debtor’s motion to amend will expire on Friday, June 13.

Kelly told The Courier that it was in everyone’s best interest to allow a Chapter 11.

“It would have protected the county and everyone else and give a chance to do a quiet title,” he said.

He also said that those who objected at the May 20 hearing were only the county commissioners and that all the other creditors favored a Chapter 11.

Kelly said that the filing would have allowed for more time to reorganize and rebuild.

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