UPDATE: Showroom sale OK'ed
A U.S. Bankruptcy Court judge in Greensboro indicated his approval for the sale of the Hamilton Square showroom to Capital Bank, the main noteholder on the property.
The judge considered the sale, made during an auction Tuesday in downtown High Point at the property, during a hearing Thursday at the U.S. Bankruptcy Court for the Middle District of North Carolina.
The main noteholder for the Hamilton Square furniture showroom building bought it at a bankruptcy auction Tuesday for $1.4 million, a quarter of the assessed value of $5.7 million for the downtown property.
Capital Bank, which inherited the loan on Hamilton Square when it merged late last year with Winston-Salem-based Community Bank & Trust, purchased the 115,000-square-foot showroom after a half-hour auction in the lobby of the building. About a dozen or so bidders and interested onlookers gathered at 101 S. Hamilton St. for the auction stemming from a liquidation bankruptcy proceeding.
Wayne Reece, a representative with Capital Bank, said the bank intends to maintain Hamilton Square as a High Point Market showroom. Bank officials hope to find a private buyer if the U.S. Bankruptcy Court for the Middle District of North Carolina approves the purchase, said Ashley Rusher, an attorney for Capital Bank.
A Bankruptcy Court judge could take up the pending sale during a hearing Thursday in Greensboro.
In situations with bankruptcy or foreclosure sales, a bank or financial institution might buy a property on which it has a primary loan because, at minimum, it can recoup costs, said Mike McCully, associate professor of economics at High Point University.
“Also, the longer this drags on, the longer the loan isn’t being paid. And you have accumulated interest,” McCully said.
If a bank buys a property on which it has a loan, then can find a buyer, “they can free up money from a nonperforming loan for a productive use,” McCully said.
The ownership fate of Hamilton Square has been in flux for nearly a year after the bank sought a foreclosure because of delinquent loan payments.
A foreclosure sale was supposed to have taken place last spring, then was pushed back to last summer. But the foreclosure sale didn’t happen because the local owner, McDonald Capital Properties Alpha, filed for Chapter 7 bankruptcy.
Hamilton Square, which opened in 1986, has continued to operate as a furniture market trade showroom during the proceedings.
About a dozen or so people gathered in the lobby of Hamilton Square Tuesday for the sale that began at 11:10 a.m.
“Let’s have an auction,” proclaimed Mark Rogers, who led the sale for Rogers Realty & Auction Co. Inc. based in Mount Airy.
Rogers tried to entice the bidders to start at $5 million, but the first offer came in at $500,000.
In the classic staccato-style auctioneer voice, Rogers kept calling out and recording bids until the amount reached $1.4 million. During the auction, representatives of bidders called on cell phones to their clients and discussed whether to bid at all or up their offer.
Rogers told The High Point Enterprise that there’s no upset bid period provision in the bankruptcy auction, meaning the sale would stand if approved by the court.
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