10/10/09 (FLA):
Expert Gets Auctioneer Off The Hook
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The auctioneer wasn't at fault for a chaotic auction that failed to sell a bankrupt Fort Lauderdale marina last year, a federal judge has ruled, following the testimony of an expert witness.
But exactly why the auction did go awry and what will happen to the New River Marina remain in doubt.
The July 2008 auction of the marina, on State Road 84, descended into chaos within seconds of beginning. Nobody told bidders there was a minimum price for the property. Two participants protested how the auction was being conducted, questioning the legitimacy of a mystery bidder. The winning bid was later withdrawn and the auction called off.
The winning bidder and the bankruptcy trustee then asked for sanctions against auctioneer Jim Gall, of Miami-based Auction Co. of America.
In a Sept. 30 ruling, U.S. Bankruptcy Judge John K. Olson concluded ``that the failure of the auction was not the result of misconduct or breach of duty by the auctioneer.''
Gall said he felt vindicated.
"We were made to be the scapegoat, and it's taken me all these months to clear my name," he said.
The judge cited an expert witness who testified that ``Gall conducted the auction in a professional manner, consistent with accepted open outcry auction procedures, and that he saw no failures on Gall's part.''
The judge also suggested that the auction might have gone better had the attorneys involved in it met with Gall beforehand to go over the details. Gall asked for such a meeting through the real estate firm handling the property, but no meeting ever took place. Olson's ruling doesn't explain why not.
Olson said it was the debtor's job to announce the minimum bid, and ``the auctioneer cannot be blamed for the failure of the debtor.''
The high bidder, Transworld Marine Co., said it was out $68,000 in legal fees and other expenses because of the botched auction. The company complained to Olson and asked for sanctions against Gall. The bankruptcy trustee joined in the request.
Olson held a four-hour hearing in February to hear evidence.
Meanwhile, the mortgage-holder in the case, 84 Marina, has since taken title to the property. The company's owner, retired businessman Alex Nichols of Fort Lauderdale, said he is frustrated with the outcome and unsure of his next step.
© X-Pro 2009
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