May
06

Failed Myrtle Beach Development Bought by Bank

By
Lender buys up Bahama Island
Sale price falls short of what’s owed to bank

By David Wren – The Sun News

The bank that loaned money to developers of the failed Bahama Island condominium resort bought the project’s property for $8 million during a foreclosure auction here Monday.

The sale price is less than the amount Bahama Island developers Ship Ahoy Marina LLC owed to lender National Bank of South Carolina.

That means there probably will be nothing left over to repay investors who lost $5.4 million in deposits on Bahama Island units that never were built.

An Horry County judge is scheduled to decide as early as next month whether depositors will get any money raised in Monday’s foreclosure sale.

S.C. real estate law appears to give the bank first priority for repayment because its loan predates all of the condo contracts.

The only investors who might get their money are those who paid about $640,000 in deposits for boat slips at a marina that had been planned for the project. That’s because the boat slip contracts were signed before NBSC loaned money to Ship Ahoy.

Bahama Island’s developers were supposed to keep buyers’ deposits in an escrow account.

Instead, they used the money to pay themselves, for travel and for other personal and business expenses unrelated to the condo project.

The misspent money has sparked an ongoing federal criminal investigation.

Jarrod Ownbey, a lawyer who represents Bahama Island depositors, said he was disappointed in Monday’s sale price.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ENTIRE ARTICLE HERE:
http://www.myrtlebeachonline.com/business/story/440396.html
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