Thursday, November 7, 2002

Cape property manager files for bankruptcy

Published in the Current

Joseph H. Gallant III of South Portland filed for bankruptcy protection Oct. 10, shortly before Cape Elizabeth police started getting complaints about bad checks and missing payments from his companies.

Gallant owns Higgins Beach Property Management and Silver Sands Properties, both rental property management firms based at 299 Ocean House Road in Cape Elizabeth.

Cape police are investigating the complaints, which include a woman from Pittsburgh, Pa., who complained Oct. 15 that she had not received her security deposit back after renting a property this summer and an Oct. 17 report from a resident of the Surf Road area that a property management company had “failed to pay them their income from rental property. ”

A Portsmouth, R.I., resident told police Oct. 19 that she had received a bad check from the company. On Oct. 22, a Jacksonville, Fla., resident told Cape police he had received a bad check as well.

“We’re still waiting for more complaints,” said Capt. Brent Sinclair. He said the department has sent two cases to the district attorney’s office for review and has four more that it will send as more documentation becomes available.

Sinclair said Detective Paul Fenton was scheduled to meet with the district attorney next week to discuss the case.

According to records filed with the U.S. Bankruptcy Court in Portland, Gallant asked for protection under Chapter 13, which allows people to keep property and instead undertake a repayment plan over three to five years.

Creditors’ claims in the court totaled more than $30,000 as of Nov. 4, including $18,900 claimed by six owners of seven rental properties in Higgins Beach; $9,965 to a resident of Cape Elizabeth for a rental home on Surfside Road; $1,808 to a Portland law firm for legal services from October 2001 to October 2002; $346 to Central Maine Power for unpaid electrical bills; and $297 to an office supply firm in Pennsylvania for checks and envelopes for mailing checks.

Other claimants, without dollar amounts, included General Motors Acceptance Corporation, which finances vehicle purchases, and a member of a law firm based in Saco and Portland.

Gallant’s lawyer, James Molleur, said he has asked the court for permission to auction off a piece of property Gallant owns in Higgins Beach. The proceeds from the sale, expected to occur in mid-December, should enable Gallant to pay all of his creditors in full, Molleur said.

That process may take until the middle of next year, Molleur said, because of the nature of the court’s processing of bankruptcy cases. He said Gallant filed for protection to eliminate “stressful” calls from creditors.

Molleur said he has heard from several creditors since the filing, all of whom “have been very nice,” and are “pleased that they’re going to be paid.”

One creditor, Cynthia Walsh, of Austin, Texas, who filed documents with the court indicating Gallant owes her $4,445, said she had not heard of a payment plan. As someone who was born and raised in Maine, as was her husband, she said, “I was really surprised that something like this would happen in Maine.”

She said she would have been willing to work with Gallant had he called and indicated he was having money problems, but “we were really shocked” to have a large check from Gallant come back from the bank with insufficient funds.

Walsh said she and the people she knows who rented their property through Gallant have owned their properties “for years and years” and are keeping them as future retirement homes.

Gallant did not return multiple phone calls and pager messages from the Current.