Nashua Telegraph
Dec 6 2009
Bankruptcy halts local developer
By TOM WEST Correspondent and ASHLEY SMITH Staff Writer
NASHUA – Well-known local developer Vatche Manoukian is among hundreds
of people throughout the country affected by two Meredith financial
firms forced into bankruptcy by the state.
Manoukian had reached an agreement with Financial Resources and CL&M
to borrow $3.2 million to begin construction of a 20-lot subdivision
on Tinker Road in Nashua, according to his lawyer, Andrew Prolman.
The project had already been approved by the city, and all legal
documents for a construction loan had been finalized, Prolman said,
before both firms shut down Nov. 9 and stopped paying their bills.
`They said they needed time to fund the loan and delayed us for two
days. Then they closed,” Prolman said.
State banking Commissioner Peter Hildreth and two investors filed an
involuntary petition on Nov. 20 to force the Meredith companies, which
are affiliated, into bankruptcy.
Financial Resources and CL&M allegedly ran a Ponzi scheme that bilked
investors out of up to $100 million over a period of several years.
Ponzi schemes typically use money from new investors to pay off
earlier investors rather than use the money for which it was
solicited.
Attorney Jim Donchess, who represents the state-appointed lawyer
trying to track down the investments, said in court Thursday that
Financial Resources principal Scott Farah and CL&M President Donald
Dodge collected from $18 million to $20 million in the weeks before
they closed. Neither has been charged with any crime, but they’re at
the center of an FBI and state investigation.
Manoukian, who has faced financial trouble of his own of late, has
filed a lawsuit against Farah seeking to rescind a promissory note
between the two parties, Prolman said.
Prolman said the firms solicited millions from investors for
everything from inventions to corporate startups. While Manoukain
wasn’t a victim of a Ponzi scheme, Prolman said, the firm reneged on a
promise to fund the construction loan, so now the Tinker Road
development site is sitting idle.
`My client is stuck until he can get rid of that mortgage and then try
to find other financing,” Prolman said.
It’s unclear if other Nashua developers were affected by the sudden
closure of Financial Resources and its affiliate. One of the region’s
most prominent developers, John Stabile, said in an interview Friday
that he hasn’t heard of any.
`I don’t know if there’s anyone else in Nashua that was involved,’ Stabile said.
Manoukian owns property throughout the state and has several other
development projects in the works, including subdivisions in
Litchfield and Laconia. Some people who have invested in his projects
are worried about their money.
Terry Burns, of Daytona Beach, Fla., said he invested in a condominium
project called Southfield Village that Manoukian was building in
Peterborough.
Burns said he has received interest checks for his investment, but
hasn’t been notified by Manoukian about the status of the development
and whether it has been finished or remains under construction.
A Peterborough town official said Friday that a handful of condos have
been built on the site, but that construction stopped around 2007 when
the real-estate market went into decline.
Manoukian, one of the region’s most active local developers, is deeply
in debt. He owes the city $100,000 or more in back property taxes and
at least four of his commercial and residential properties have gone
into foreclosure this year.
The main office for his two most prominent companies, Mile High Real
Estate and Bayridge Real Estate Development, was scheduled for sale at
a bank auction Thursday, but the auction was postponed at the last
minute.
The developer has faced dozens of lawsuits in the last few years,
mostly over unpaid debts. He and his fiancee, Linda Haytayan, are
being sued in U.S. District Court by a Florida investor who claims the
couple misappropriated more than $1 million in funds intended for New
Hampshire development projects.
Manoukian specializes in single-family home and condominium
developments, but he’s perhaps best known for shelling out $1 million
in 2006 for the landmark St. Francis Xavier Church in Nashua’s French
Hill neighborhood, with plans to donate the building to his faith, the
Armenian Orthodox Church. That deal was also shrouded in controversy.
Scott Schoenig, an investor who lives in New Jersey, claims Manoukian
stopped making his loan payments after about one year and then
arranged a `short sale’ of the property without his permission.
Schoenig said he had no choice but to accept a sale of the property
for less than Manoukian owed, fearing he would never see any money
otherwise.
The deal was also financed through Financial Resources. Interviewed
Friday, Schoenig said he told the company about his loss, but it
didn’t stop them from loaning to Manoukian.
Schoenig, who didn’t have any money invested with Financial Resources
when the company shut down, equated the operation to predatory lending
for commercial projects. The loans came with high interest rates and
fees, and Farah, the company president, structured the deals in
unusual ways, he said.
`I knew he was doing very questionable deals,’ Schoenig said
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From: Emil Lazarian | Ararat NewsPress