Les Coffey, owner of the Peerless Mill in Rossville, speaks about how he has recently requested a permit to demolish the 85-year old mill.Staff Photo by Dan Henry
The owner of the Peerless Mill in Rossville may have hit a legal roadblock in his plan to level the mill and open a scrap yard.
Les Coffey, who has owned the mill since 2007, said he was ordered to stop tearing down the mill Tuesday when RDC, the company that sold him the mill and still holds the note on the property, was granted an emergency injunction.
An attorney representing RDC said the security note does not allow Coffey to tear down the mill without the company's consent. The attorney said he was not authorized to comment officially but that RDC had not given consent for demolition.
Coffey said he and RDC had a verbal agreement that the land alone was worth more than he owed, so RDC didn't care about the building.
The deed and security note for the property specifically requires Coffey's company, Peerless Self Storage LLC, to "maintain the premises in good condition and repair."
"No part of the premises shall be materially altered without the prior written consent of grantee," the deed states.
Tom Minor IV, of the law firm Minor Bell and Neal in Dalton, Ga., who is not involved in the Peerless case, said such language is common in real estate deals and probably is included in 99 percent of commercial deeds.
"That is pretty standard," said Minor, who has been practicing real estate law since 1983.
He said lenders don't want property destroyed because it would make it tougher for them to recoup losses if the owner defaults.
Coffey said the stop-work order extended until 9 a.m. this morning, when he is scheduled to meet with officials from RDC.
On Monday, Coffey, who bought the Peerless mill in 2007, was granted a permit from the city of Rossville to tear down the 105-year-old structure. He said he plans to sell the bricks, beams and metal from the 27-acre property to salvage companies, bringing in as much as $6.5 million.
When Peerless Self Storage filed for bankruptcy in December 2008, Coffey owed RDC almost $1.1 million, records show.
In the bankruptcy filings, creditors including Tennessee American Water and EPB also listed $18,514 worth of other debts for Peerless.
In a news release Monday, Coffey cited his responsibilities to creditors as the reason for his decision to tear down the mill.
"We must for the benefit of the creditors of Peerless Self Storage and the shareholders change our direction of business," he wrote.
And the demands from those creditors have stacked up -- Coffey and Peerless Self Storage have filed for bankruptcy at least once each since 2005.
In a 2008 personal bankruptcy, Coffey owed nearly $2.3 million to 15 creditors, including a $900,000 claim by the IRS, $600,000 in alimony to his former wife, $515,000 to Washington Mutual Mortgage and $151,000 to RDC for city taxes, documents show.
Coffey is named on a 2005 bankruptcy filing, owing more than $220,000 to Talbot State Bank in Fayetteville, Ga., and Phil Brownrigg of Clarkesville, Ga., among others. The name, address and Social Security number listed in the case match Coffey's, but he denied Tuesday that he had filed for bankruptcy at any time other than 2008.
The Peerless bankruptcy case still is pending, but Coffey's 2008 personal case was dismissed on Sept. 30, 2009, when the judge decided he "does not have the ability to reorganize and that further administration of this case under either chapter 11 or chapter 7 [bankruptcy codes] is not in the interest of creditors."
He was ordered to repay the bills.
Court records indicate the 2005 case was closed in 2006, though Coffey still was repaying thousands of dollars a month at the time he bought the mill.
Staff writer Carey O'Neil contributed to this story.
Andy began working at the Times Free Press in July 2008 as a general assignment reporter before focusing on Northwest Georgia and Georgia politics in May of 2009. Before coming to the Times Free Press, Andy worked for the Anniston Star, the Rome News Tribune and the Campus Carrier at Berry College, where he graduated with a communications degree in 2006. He is pursuing a master’s degree in business administration at the University of Tennessee ...
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