Feb. 12--MEADVILLE -- Crawford County Court of Common Pleas has cleared the way for the historic Riverside Inn in Cambridge Springs to revert back to its previous owners -- Michael and Marie Halliday -- after new ownership defaulted on a $1.8 million loan.
In a ruling late Tuesday afternoon, Judge John Spataro denied a motion by Brenda S. Evans of Edinboro, Riverside Inn Real Estate LLC and Riverside Inn & Dinner Theatre LLC to strike down a writ of possession filed by Michael and Marie Halliday. Ownership of the inn returns to the Hallidays with Spataro's ruling.
But what now may happen with events already booked for 2014 remains unclear at this point, Michael Halliday said late Tuesday afternoon.
Last fall, the Hallidays filed suit in county court against Evans and the two companies she controls seeking immediate possession of the Riverside property and money after Evans defaulted on a $1.8 million loan the Hallidays financed.
Evans filed a motion to have the writ of possession stricken, claiming she wasn't properly notified.
In his ruling, Spataro found there was evidence of certificates of mailing of the suit to both Evans and her attorney, John Swick, as required, as well as a notice of judgment against Evans mailed by the Crawford County Prothonotary's Office. The Prothonotary's Office handles civil matters. Spataro's ruling, issued after the courthouse had closed Tuesday, will be filed this morning.
On Feb. 6, 2010, the Hallidays signed a sales agreement with Evans and Evans' then-business partner Kenneth D. Falkenhagen and the two limited liability companies to sell the Riverside Inn, all its contents and the 7.25-acre property for $1.8 million. Falkenhagen became no longer involved in the business in 2012.
In the suit the Hallidays filed in county court in October 2013, they claim they are owed $1,784,884.05 as of Sept. 30, 2013, plus 8 percent annual interest since that date.
But that's not the only money Riverside Inn & Dinner Theatre LLC may owe, according to courthouse records.
More than $295,000 in federal and state tax liens have been filed against Riverside Inn & Dinner Theatre LLC, according to records at the Crawford County Prothonotary's Office. There is $184,513.97 owed in federal taxes dating back to 2010, while $112,408.98 is owed to the state in employment taxes and unemployment compensation dating back to 2012.
There also is $35,635.36 owed in back real estate taxes, interest and penalties for 2012 and 2013, according to records with the Crawford County Treasurer's Office.
With Spataro's ruling, the Hallidays may take immediate possession of the Riverside Inn property, which currently is closed for the winter. The inn closes after New Year's Day and doesn't reopen until early April.
"I'm so happy," Michael Halliday said of the ruling when contacted by the Tribune on Tuesday. "It settles a lot of questions."
However, Halliday admits it doesn't settle what happens to those 2014 bookings made.
"We don't have that money," Halliday said of the previous bookings made for 2014.
"Do we give credit for what's already been paid, or do we say 'No, sorry,'" Halliday asked. "I don't know what to do. I've been awake at night thinking about this. We're going to have bills to pay like the taxes."
Halliday said he and his wife will find a management team to run the Riverside Inn. They had sold it more than four years ago because they wanted to retire from the business.
"We're not youngsters," said Halliday, who has been a lawyer practicing law in Crawford County for almost 60 years.
Prior to the ruling, John Swick, Evans' attorney, said he had hoped to reach an amicable settlement with Halliday. Attempts to reach Swick Tuesday night for comment in the wake of the ruling were unsuccessful.
Evans declined comment Tuesday when informed of Spataro's ruling.
Juanita Hampton, executive director of the Crawford County Convention and Visitors Bureau, said if the Riverside Inn closed, the effect "could be massive" on the county's tourism industry.
The inn, with its dinner theater, events and conventions, can attract more than 200 tour buses in a season, Hampton said. With an average of 40 per bus, that's 8,000 visitors to the inn from just tour buses.
"It's going to be challenging," Hampton said of the Hallidays renewing the inn's vitality. "It's such a treasure."
Did you know?
The Riverside Inn of Cambridge Springs dates from 1884 and is listed on the National Register of Historic Places. It flourished in the late 1800s and early 1900s as a mineral water resort in the Cambridge Springs area. It was one of the largest of dozens of hotels in the Cambridge Spring area that sprang up during that era.
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