Aspen bookstore price lowered by $1 million
The listing price for Explore Booksellers in Aspen has dropped by $1 million as the bank that holds the note on the building ramps up efforts to collect from its owner, Sam Wyly.
The asking price was lowered to $5.5 million last week, said Karen Setterfield, the listing agent for the Main Street property. It was originally listed for $6.5 million in June.
The reduced price comes as Alabama-based Compass Bank and Wyly are engaged in a debt-collection dispute as part of Wyly’s Chapter 11 bankruptcy case in Dallas.
Compass claims it is owed $4.4 million, $3.5 million of which is the principal amount on a $3.96 million loan that was used to buy the bookstore. The rest of the amount comes from unpaid interest and attorneys’ fees.
Wyly is protected by the bankruptcy proceedings, but Compass is arguing that it should be an exception to the rule. In a Nov. 7 filing, Compass said Wyly wants to transfer more than $12 million from accounts at the bank, which already has frozen $5.2 million of that.
Compass says that if the court doesn’t grant its motion, it asks to retain the $5.2 million that it has frozen.
In doing so, Wyly could get a fair price on the store rather than rushing to sell it to help satisfy the debt.
“Given the unique nature of the bookstore, an expedited sale may not be in the interest of (Wyly’s creditors),” Compass’ motion says.
If Wyly sells Explore, he will “reap the upside of any lucrative deal, and suffer the downside of any deficiency following a short sale,” according to the motion.
Compass also said that Wyly’s attorney has admitted that the bookstore produces “minimal revenues to fund payments to Compass.”
On Friday, lawyers for Wyly filed an objection to Compass’ motion, asking the court to give the Texan more time to sort out his debts with the bankruptcy court.
“(Wyly) is in the process of selling the bookstore,” the objection says. “The net funds to be collected from the sale of the bookstore will be used to pay amounts due to Compass, with any excess funds to be available to make payments pursuant to a plan or reorganization.”
Allowing Compass to pursue its debt would “diminish (Wyly’s) estate to the detriment of all the other creditors,” the motion says.
Wyly’s bankruptcy came Oct. 19 after a New York judge ruled in September that he and his brother Charles’ estate must pay up to $400 million to the Securities and Exchange Commission for hiding stock holdings in offshore accounts. Sam Wyly’s bankruptcy says he owes $198 million to the SEC.
“In addition to writing and publishing, (Wyly) is the owner of one of America’s great independent book stores, Explore Booksellers in Aspen, Colorado; he purchased the building in 2008 (actually 2007) in order to save it from demolition and development into condominiums, and he leases it to an entity that is owned by his wife and that conducts the book-selling business,” the bankruptcy says.
Compass, in its Nov. 7 motion, said, “However admirable (Wyly’s) preservationist intentions, continuing to accrue additional costs to maintain the existing loan with Compass without obtaining any return on (Wyly’s) invested capital does not appear to make any sound financial sense for a Chapter 11 debtor.”
Setterfield said interest has grown in the building, which is 4,922 square feet and sits on 6,000 square feet of land. The bookshops’ inventory is not included in the asking price, because the value of the books and merchandise fluctuates, Setterfield said.
“We’re very optimistic that the bookstore will be sold and it will remain a bookstore,” Setterfield said.
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The money will go to fund a series of programs — officially called Bold Housing Moves — designed to chip away at the local housing issue.