Albemarle development attracts forgery claims, court actions

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Sixteen acres of light-industrial land in northern Albemarle, assessed at roughly $1.8 million, is currently the subject of more than $6 million in contested liens shared among limited liability companies, individuals, and mortgage companies.

The land is owned by HMC Holdings, a company managed by local real estate agent Michael Harding, whose company faces allegations of forging documents and who recently filed for bankruptcy with roughly $8.4 million in liabilities.

Calls to attorneys representing lienholders were not returned by press time, and property owner Michael Harding kept his comments brief. However, court documents offer a history of the property, formerly the site of a fire extinguisher manufacturing company and located near the northern slopes of the North Fork of the Rivanna River.

HMC Holdings’ contested 16 acres is home to the former Badger Industrial site, the white warehouse buildings with dark roofs. While HMC hopes to put an auto garage on the site, there are multiple liens on the property that total more than $6 million.

They also suggest a narrative of investment gone south during the 2008 financial crisis.

According to court documents, that was the year Vision Mortgage issued a $2.7 million promissory note to HMC Holdings, which paid roughly that amount to purchase the former Badger Industrial lot. In September 2010, the parcel was subdivided; later, it received special use permits to allow reuse of an existing building as an auto garage. However, according to a report by the Albemarle Planning Commission, HMC Holdings requested a special use permit to fill in sections of the Rivanna floodplain to “accommodate a new 40,000-square-foot warehouse, associated parking and necessary stormwater management facilities.” Staff stated that such an action would raise flood levels and disturb critical slopes, and they recommended denying the application.

In response to a lawsuit filed by Harding, Kerry Hall, whose family owns Hall’s Auto Body on Northside Drive, claimed that she loaned HMC Holdings $300,000. Hall alleged that her father opted not to make a loan to HMC Holdings, but she opted to loan the money in exchange for a lien on four acres of land. The lien was secondary to a company called Baugh LLC, which planned to open an auto garage on the western portion of the property facing 29N.

According to Hall’s counterclaim, HMC Holdings defaulted in November. Hall filed a Deed in Lieu of Foreclosure, which could potentially move the property to her control—and, in essence, give a family with a nearby auto garage ownership of a future garage site. However, HMC Holdings filed a civil lawsuit for $1.7 million in December, and claimed that Harding did not receive adequate opportunities to cure default or prevent foreclosure. Hall’s actions, alleged the lawsuit, would prevent competition with her family’s auto garage.
And then things got complicated.

In a second complaint filed in Albemarle County Circuit Court, Kay Jeffries claims possession of a $500,000 promissory note that HMC Holdings secured through the same 16-acre parcel that contains the potential garage site. Jeffries’ complaint asserts that her lien is the “first position” lien of six, held by various people and companies. Jeffries is executrix of the estate of Frayser Francis White, II, who founded the Virginia Oil Company and built the Fork Union Drive-In; the $500,000 note was issued by White.

The allegedly forged documents are multiple Certificates of Partial Satisfaction for liens on HMC’s property. Hypothetically, a lienholder that checked property titles might base a decision to loan money on whether previous liens have been satisfied in part or in whole.
Reached by phone, Harding told C-VILLE that he doubts the matter will reach the courts.
“The way it looks now, all of these matters will be resolved long before then,” said Harding. He added that the disputed property “is under contract to two different parties to be sold, and that is moving forward quickly and will resolve any and all issues.”

Harding faces no criminal charges. Asked about the forgery characterizations, Harding said it was a matter of “people blowing smoke,” and said that was resolved, as well.

However, Harding filed for bankruptcy in the U.S. Court for the Western District of Virginia in April. According to documents filed by one Virginia-based LLC, a meeting of creditors included acknowledgement by Harding that some certificates of partial satisfaction “were forgeries.” The next hearing in the matter is slated for bankruptcy court on November 21, and Jeffries’ civil case against Harding and HMC Holdings is currently slated for December 8.

 

 

 

 

 

 

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