Bankruptcy filing halts foreclosure

PHOTOGRAPHER: James Schlett

The owner of the former Guilford Mills South Plant in Cobleskill filed for Chapter 11 reorganization Monday — two days before a deadline to pay $1.3 million in delinquent taxes or lose the properties to a Schoharie County foreclosure action.

Attempting to prevent the county from seizing the 485,000-square-foot former fabric mill, Cobleskill Business Park, LLC has sought the protection of a bankruptcy court judge in Albany. The filing comes as CBP’s new property manager, the Pinnacle Realty Group, says it is close to securing new tenants for the lace mill that closed in 2001.

“I heard they might [file for Chapter 11]. I’m disappointed they went through with it,” said county Treasurer William Cherry.

The county Board of Supervisors in June directed Cherry to initiate a foreclosure action in a bid to collect four years worth of taxes from CBP. The business is based in Westminster, Mass. and its sole member is Philip Rahaim Sr.

In a statement filed with the court, Rahaim said he is in the process of obtaining new financing or leasing and believes he will be able to pay the back taxes in full. But Rahaim said he could not do so by the Wednesday deadline. He acquired the vacant industrial property in 2003.

CBP cited $5.95 million in assets and $1.98 million in debts. The filing prevents the county from seizing the property, which consists of two buildings on a 39-acre parcel on Mineral Springs Road.

Michael Tersigni, who is marketing the property for Pinnacle, said CBP also believes the former mill’s assessment is too high. He said the property’s assessed value dates back to when Guilford was operating and employing over 500 workers.

“How can you set up a payment plan for something you don’t believe is fair and equitable?” Tersigni said.

Cherry said he knew of no other CBP legal challenges against the former mill’s assessment. He said the property’s assessment has been reduced over the years.