Kay Jefferies knew her father for more than 60 years, and his signature for nearly as long. She watched him sign her grade school report cards and, as a postmaster and church treasurer, a number of organization documents. When her father lost his sight, she placed her finger on documents to indicate where he should put his pen.
To Jefferies, the signature of Frayser Francis White II—the Virginia Oil Company founder, who died in January at age 84—is “very distinctive…definitely legible…a signature he was very proud of.”
HMC Holdings purchased this 17-acre parcel in Northern Albemarle in 2008 for roughly $2.7 million, but forged Certificates of Partial Satisfaction to bring in more investors in the property.
On Thursday, December 8, an Albemarle County judge determined that White never signed a Certificate of Partial Satisfaction for a deed of trust on 17 acres of light-industrial land. Neither did William Stratton nor representatives from Bluegill LLC, which combined with White for another $1.45 million in liens on the property.
Rather, Circuit Court Judge Cheryl Higgins ruled that all signatures were forgeries to benefit —and perhaps conducted by—HMC Holdings, a limited liability company whose sole employee is Albemarle resident Michael Harding, brother of Albemarle County Sheriff Chip Harding.
“The court thought the differences in the signatures were astounding,” said Higgins.
Michael Derdeyn, a lawyer representing Jefferies’ interest in the property, made Harding’s testimony in federal bankruptcy court a critical part of his case. In a Section 341 meeting, held to convene creditors who share interests in a debtor’s assets, Harding testified not only that the signature did not belong to White, but that it was forged.
“Is it your understanding based on all the information available to you that that Certificate of Partial Satisfaction was forged?” asked United States Trustee attorney Margaret Garber. To which Harding replied, “Yes.”
After reviewing Harding’s Section 341 testimony, Judge Higgins pointed out that several Certificates of Partial Satisfaction were forged on the same days. Witnesses close to White testified that Harding allegedly claimed responsibility for White’s signature—which appeared in the documents, misspelled and out of order, as “Frances Frayser White II.” Higgins asked, “Who else would benefit from forging these particular documents?”
With the forged documents nullified, Higgins ruled that a number of competing liens on the property remain valid. The 17-acre property formerly housed the Badger Industrial building, and is located north of the Rivanna River on Route 29N. HMC Holdings subdivided the parcel and obtained a special use permit to use an existing building as an auto garage. Liens on the property, assessed at $1.8 million, now total more than $5 million. Harding filed for bankruptcy and lists more than $8 million in liabilities.
While the assets at stake were considerable, at least one attorney in the room considered the proceeding an unnecessary cost for all parties involved. Steven Biss, a lawyer representing lienholder Simeon Investments LLC, told the court, “We didn’t learn a single piece of information that we didn’t know coming into this trial.”
For Biss, the Section 341 transcripts proved beyond any reasonable doubt that the Certificates of Partial Satisfaction were forged. However, an attorney representing Baugh LLC, which hoped to open an auto garage on the HMC Holdings property, said his client had a “presumption of primary lien” on the parcel, and had a right to the trial to clarify his client’s position.
All told, more than one dozen attorneys represented interests in the case. “I imagine, based on the expertise of the lawyers in this court room…that the combined billing rate is massive,” said Biss.
Judge Higgins seemed to agree.
“Where is the line between ‘having the right’ and ‘needlessly increasing the cost of litigation’?” asked Higgins. She set a December 19 control date for the parties to reconvene, and the lawyers turned their attention to the next issue: Whose lien comes first?
*The headline of this story was changed to reflect a more accurate representation of the facts communicated in the article. While Circuit Court Judge Cheryl Higgins did rule that HMC Holdings, a limited liability company owned by Michael Harding, submitted real estate documents with forged signatures, the judge did not rule that Harding had authored the forged signatures or that HMC had knowledge that the signatures were forged prior to filing the documents.