Sears filed for bankruptcy on Wednesday to avoid a Sheriff's Department sale that was scheduled for Thursday as part of foreclosure proceedings by Chase Bank. Because of bankruptcy rules, the property could not be sold after Sears filed for Chapter 13 protection.
“I filed for the sole purpose of saving my business and having my employees keep their jobs,” Sears explained. “I am not in need of bankruptcy. I have a stellar credit score.”
To see the official legal case filing, click the Related File below the story.
In early July, Chase Bank officials posted a Notice of Foreclosure on the door of the restaurant, 14977 Cleveland St. in Spring Lake Township. The document announced a loan default and a public auction for the property at the Ottawa County Courthouse.
The original date for the foreclosure sale was Aug. 9. Chase Bank extended that three weeks to Aug. 30, according to Sears.
Chase officials said in a statement in July that they were willing to work with Sears.
“The firm has been working with the customer for many months and will continue to work towards an amicable solution,” a Chase spokeswoman wrote in an e-mail. “It's always the firm's intention to do what is best for the customer.”
Sears and his Grand Haven-based attorney, Paul Winter, both said the restaurant owner has continued to make his payments to Chase Bank. They said the most recent payment was made Aug. 22.
According to Winter, the bank considered the loan in default because it was in the name of Sears' mother, Gwendolyn A. Victor. She died in December 2011.
Winter said the mortgage contained a clause that death constitutes default.
“Our goal all along has been to refinance or come to some different agreement with the bank,” Winter said. “We understand there's a loan against the property that needs to be paid. That will have to be done. Fred has been working on that. He's been paying the note all along.”
Chase Bank officials did not respond to the Tribune's request for comment on Thursday, but did say the foreclosure sale had been “postponed.”
Sears filed for Chapter 13 through a Grand Rapids bankruptcy attorney, Steven Bylenga.
“The bank was notified of the bankruptcy,” Winter said. “They adjourned the sale. As a result of Fred filing for bankruptcy, it stayed the (foreclosure) proceedings.”
Sears said he has told many of his customers about the bankruptcy filing.
Spring Lake Township resident Lon Varaljai drank a beer at Vic's bar Thursday night. He said he fully supported the restaurant owner.
“It's ridiculous what the bank is doing,” Varaljai said. “In these times, with people struggling to keep businesses going, to put a place like this out of business would be insane. It would be an injustice to the community.”
“I think it's totally wrong,” another customer, Spring Lake resident Mark Malloy, said of the foreclosure proceedings. “Vic's is an icon in the area. For big banks, it's all about the money. Small businesses like this get the crap kicked out of them. ... This is our place.”
Becky Keeler of Fruitport, who was also patronizing Vic's bar on Thursday, said she could empathize with Sears.
“I know what he's going through,” she said. “I filed Chapter 13 and Chapter 7. Been there, done that. If that bank can't finance him, what is their problem? He's just trying to hold on to what he's got.”
Sears — who said he hopes to obtain other financing for the business — said filing bankruptcy affords him options, including time.
Chapter 13 protections can last up to five years, according to Winter.
Sears said he plans to continue to make his monthly payments to Chase, just as he did before the bankruptcy.
“I'm not a lawyer. I'm not an educated man,” Sears said. “I just believe in right and wrong. I'm not looking to gain anything. I'm looking to keep what I've got.”