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Davie County Property Tied To Owner Of Bankrupt Tobacco Companies

The auction of six Davie County properties associated with the owner of three bankrupt tobacco manufacturers yielded nearly $1.3 million, according to a legal filing Monday.

The auction took place June 23. The sale of the properties requires the approval of William Stock, the U.S. Bankruptcy Court judge assigned to the case involving Calvin Phelps, the owner of Renegade Holdings Inc., Alternative Brands Inc. and Renegade Tobacco Co. Phelps' wife, Lisa Yamaoka Phelps, was listed on two of the properties.

The largest block of property, about 311 acres, was sold for slightly more than $1.12 million. Webster Swicegood was listed as the agent for the bidder for the properties — 228.48 acres off East U.S. 64, 66.49 acres at 3737 S. N.C. 801 and 15.99 acres at S. N.C. 801.

Before the auction, the properties were valued at a combined $1.26 million by Davie County tax records.

A 27.83-acre site at Allen Road was sold to Justin M. Carter for $160,000. The property had a tax value of $343,790.

Two adjoining properties of 1.62 acres and .73 acre were sold to James E. Ruddock for $76,000. The properties had a tax value of $150,940.

None of the apparent buyers could be reached for comment on their plans. Each buyer had to deposit at least 20 percent of their bid amount with Iron Horse.

John Northen of Northen Blue LLP of Chapel Hill, an attorney for the manufacturers, said the results were within the expectations of the bankruptcy trustee, Peter Tourtellot.

Both Stocks and Iron Horse Auction Co. had said an auction was most likely to maximize the sale proceeds compared with separate foreclosure sales.

Gene Tarr, the bankruptcy examiner for the manufacturers, filed a lawsuit in September against the Phelpses and 13 limited-liability companies that Phelps owns or controls.

The suit alleges that Phelps made a fraudulent transfer of $8.1 million in assets from the three companies and used it to help buy the six parcels of land, as well as Chinqua Penn Plantation, two corporate jets, cigar-manufacturing equipment and a 2008 Maserati Quattroporte. Tarr requested the sale of the properties April 22.

NewBridge Bancorp is the lien holder for the parcels that comprised 228.48 acres, 27.83 acres, 1.62 acres and 0.727 acres. Bank of the Carolinas Bancorp is the lien holder for the 66.49-acre and 15.99-acre sites.

Dan Robertson, the general counsel for Bank of the Carolinas, said the bank received full payment of its lien interests on the two properties. NewBridge declined to comment.

The three manufacturers filed for Chapter 11 bankruptcy protection on Jan. 29, 2009, and exited bankruptcy June 1, 2010.

They were put back into bankruptcy July 19, 2010, when Stocks vacated the reorganization plan, in part because of a criminal investigation of Phelps and the companies regarding what authorities called "unlawful trafficking of cigarettes."

Iron Horse would receive $40,830 in commissions. The manufacturers also paid $12,500 of the cost of advertising the auction.




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