register for email updates
Graves, Rogers on hook for $1.5M after sale of ‘Meth 6’ motel
By JIM WALLS
CALHOUN, Ga., Sept. 5, 2012 — The notorious “Meth 6” motel here has sold in foreclosure for pennies on the dollar, potentially clearing the way for lenders to pursue two Georgia lawmakers for a $1.5 million debt.
The lawmakers, state Senate Majority Leader Chip Rogers and U.S. Rep. Tom Graves, may have thought they were done with the old Oglethorpe Inn in 2009. That’s when they sold the motel to John Edens, a former associate of Rogers in the sports-handicapping industry, who jokingly dubbed the property the “Methamphetamine 6.”
Both men later claimed the new owner assumed responsibility for paying back the $2.25 million they borrowed to buy and renovate it.
Bartow County Bank didn’t see it that way, suing Rogers and Graves in 2010 for defaulting on the loan. Hamilton State Bank, which took over the bank’s operations after regulators closed it, pursued the debt until the suit was settled out of court in August 2011.
In June, Hamilton State Bank sold the Oglethorpe at a foreclosure auction for $370,000 — or just 24 percent of the $1.55 million that Rogers and Graves paid for the motel.
The more recent sales price represents the property’s true market value, Gordon County Superior Court Judge Shepherd Howell declared in an Aug. 16 order. The order contains boilerplate language that allows Hamilton, as holder of the debt, to “pursue a deficiency judgment” against Tich Properties, Rogers and Graves.
Rogers and Graves still owed $1.88 million at the time of the foreclosure, Hamilton said in court papers. Deduct the sale price, and we’re talking $1.51 million in debt.
A lawyer for the bank said Tuesday he did not know whether the bank plans to seek a deficiency judgment. The judge’s order, though, protects the bank’s interest should it choose to do so under Section 44-14-161 of Georgia foreclosure law:
(a) When any real estate is sold on foreclosure, without legal process, and under powers contained in security deeds, mortgages, or other lien contracts and at the sale the real estate does not bring the amount of the debt secured by the deed, mortgage, or contract, no action may be taken to obtain a deficiency judgment unless the person instituting the foreclosure proceedings shall, within 30 days after the sale, report the sale to the judge of the superior court of the county in which the land is located for confirmation and approval and shall obtain an order of confirmation and approval thereon.
(b) The court shall require evidence to show the true market value of the property sold under the powers and shall not confirm the sale unless it is satisfied that the property so sold brought its true market value on such foreclosure sale.
Rogers’ offices did not respond to a request for comment. Graves, in a prepared statement released this morning, said:
“This confirmation action was merely a formality and a necessary procedural step to finalize the bank’s ownership of the collateral. This is common practice in Georgia. There are no new claims, and there are no new disputes or disagreements with the bank because, more than a year ago, all parties involved agreed to a positive solution on this matter which resolved the dispute. I was then, and am today, pleased that a solution was reached to the satisfaction of all parties involved.”