Founders lenders eyeing personal assets,
but not Berry Hill estate
By MARY EVA CASSADA
Special to The News & Record
Berry Hill Hotel Associates says it is moving forward in collecting on
the $3 million owner-financing loan in default by Founders College
– but that it’s unlikely the antebellum plantation will fall back into
its own hands.
Chris Russell, one of the partners in Berry Hill Hotel Associates,
which formerly owned the property before selling it to Founders College
in April 2007, said his partners are in a second-lien position, in line
behind a first mortgage made by a separate, private lender. So the
Maryland-based partners’ foreclosing on the Berry Hill resort is
Instead, “We … look to collect through her personal property,” said
Russell, speaking of Founders College Chairman and CEO Tamara Fuller,
who personally secured Founders’ loan with $4.1 million in her Maryland
rental property, jewelry and art, according to court papers. Assets
listed in a court filing included, as of March 2007, a half-million
dollar personal residence in Maryland, $120,000 of art, almost $200,000
in checking accounts and a hedge fund, a 401(k) fund of nearly a
half-million dollars and $200,000 in jewelry – plus $7.4 million in
rental properties owned by her Symphony Homes. (Papers showed $5.3
million in liabilities which brought down the net worth to $4.1
Fuller consistently has been mum to this newspaper about the situation
at Founders/Berry Hill, but she told The Gazette-Virginian in
Wednesday’s edition that “[T]he loan has been overpaid on our part so
we have paid them more money than they are actually owed. … The reason
they are claiming default has nothing to do with the payment of the
loan. It has everything to do with a difference we have in process that
we are working out with them.”
“I don’t feel she has made accurate statements,” said Russell in
response to Fuller.
Russell said he and his partners’ next step is filing liens against
Fuller’s assets put up as security on the loan.
Berry Hill Associates got a confessed judgment against Founders in the
fall. According to filings in Montgomery County. Maryland, the loan
terms called for Fuller to file highly detailed financial statements –
both personal and business – every month, which Fuller never did.
Russell his partners also complained that Fuller did not deliver
certificates for 12,152 shares in Maryland’s Howard Bank (on whose
board she formerly sat), as required by the loan agreement.
Fuller did, however, pre-pay six months of interest at 16 percent,
Russell said the high interest rate reflected the perceived risk and
his partners’ second-lien position.
And once in default, the loan rate shot up to 24 percent. The principal
is due in full this coming spring.
“I’m not worried about our being able to collect,” said Russell.
Fuller burst onto the local scene more than a year ago with plans to
establish a unique for-profit liberal-arts college on the grounds of
the upscale Berry Hill resort (with hotel rooms, restaurant, pool and
spa behind the historic Berry Hill mansion), operating both businesses
concurrently. The college opened this past fall and is now in its
second semester, with five students.
Monday’s News & Record story on Founders and Berry Hill should have
stated that Marriott and Benchmark managed the property for owner Berry
Hill Hotel Associates.