Baybutt foreclosure sales canceled; bank files lawsuit against company
By JACQUELINE PALOCHKO
THE KEENE SENTINEL | February 02,2013
Michael Moore / THE KEENE SENTINEL
Baybutt Construction Corp. headquarters are shown on Avon Street in Keene, N.H.
KEENE, N.H. — Three foreclosure auctions scheduled for Friday for properties with ties to Baybutt Construction have been canceled.
Meanwhile, TD Bank has filed suit against the Keene-based company, putting a lien, or attachment, of $1.1 million on the property of Baybutt Construction, company President Frederick L. Baybutt and the Baybutt-affiliated Granite Gorge LLC and Island Bay Investments LLC because Baybutt owes the bank more than $1 million.
TD Bank also says Baybutt’s bank account is overdrawn by more than $326,000.
TD Bank says it filed the attachments because it believed Baybutt would not be able to repay a $750,000 loan to the bank by the time it was due, which was Thursday, according to documents filed last week in Cheshire County Superior Court. The bank also said that Baybutt and its affiliates had “made promises ... of payment of this indebtedness.”
Further, the bank says, “Recently and unexpectedly (TD Bank) has learned that Baybutt Construction Corporation has closed its doors and is going out of business.”
The bank said it believed in November that the company would have money coming in from a bonded job, but learned that the opposite is happening, and the company is actually defending itself against a bonding company, the court documents say. It also learned that multiple suits are pending against Baybutt, alleging the company failed to pay its subcontractors on at least two projects.
Calls to Baybutt’s headquarters on Avon Street go to voicemail, and the building is locked. Emails sent to Baybutt officials bounce back.
Baybutt’s Keene headquarters at 25 Avon St., another building at 41 Avon St., and the Granite Gorge Ski Area on Route 9 in Roxbury were to be auctioned Friday, but the sale was canceled Wednesday, said attorney Joseph W. Worthen of Boston. Worthen, who represents Massachusetts-based Interstate Electrical Services Corp., which holds the mortgage to the properties, declined to give reasons why the sales were canceled.
The planned foreclosure sales stemmed from a mortgage in which the three properties were used as collateral.
Interstate Electrical Services Corp., one of the major electrical construction and supply companies in New England, was the lender in the mortgage taken out in October for $89,789.11, according to documents at the Cheshire County Registry of Deeds. The mortgage was signed by Frederick Baybutt, who is also manager of Granite Gorge LLC and Island Bay Investments LLC. Island Bay Investments owns 25 and 41 Avon St., according to documents at the registry of deeds.
An Interstate Electrical representative said Wednesday that the “matter had been resolved” and declined to give further details.
It is unclear how or whether the TD Bank suit is related to the cancellation of the sales.
The recent TD Bank suit against Baybutt Construction, Frederick Baybutt, Granite Gorge LLC, Island Bay Investments LLC and Concord-based attorney Frank Spinella says it’s owed $1,087,000.
TD Bank claims Baybutt Construction did not pay back a $750,000 loan, plus interest and late fees, according to court documents. In October, Baybutt signed an extension agreement, saying the loan would be fully paid by Thursday. The bank also claims Baybutt’s checking account was overdrawn by $326,113.83 because checks were issued to third parties, court documents state.
Attempts to reach TD Bank’s attorney, Daniel C. Proctor, were unsuccessful.
Baybutt can file an objection by March 5.
Baybutt Construction, for many years a prominent figure among the region’s builders, has been facing heat lately from subcontractors in Keene and Vermont saying they have not been paid for projects.
So far, there are 12 subcontractors who claim they have not been paid by Baybutt for work done on the new Keene fire station, which opened in fall 2012, said Steven Horton, who was hired by the city to act as the project manager. A handful of subcontractors have filed lawsuits.
Horton said because the project’s bonding company started an investigation into the claims, he could not say how much money in total the subcontractors are owed.
The settlements take time, Horton said, and those with claims to the most money owed will be first priority.
In Rockingham, Vt., town officials terminated their contract with Baybutt Construction on a $2.9 million renovation project at the Rockingham Free Public Library in Bellows Falls after numerous subcontractors said they had not been paid by Baybutt. Baybutt completed about 40 percent of the project, and town officials have hired Engelberth Construction Inc., which has an office in Keene, to finish some work.
Town officials also found that Baybutt did not secure a required performance and payment bond on the project even though the town paid $21,000 for the bond. The bond ensures a project will be completed, and subcontractors will be paid the money they’re due for their work.
Rockingham Municipal Manager Timothy Cullenen said Thursday officials have not heard anything from Baybutt. Cullenen also said the town is not responsible for paying subcontractors for work previously done on the library, since it already paid Baybutt for its work.
Joel Letourneau, owner of Joel Letourneau Drywall LLC in Surry, said he plans on filing suit against the town of Rockingham for failing to make sure the construction company had a bond before doing work. Letourneau says he has not been paid for any work his company did on the library.
The state of Vermont also terminated its contract with Baybutt for the $2.6 million renovation of the state office building in Brattleboro. And last month, Antrim officials ended a contract with Baybutt Construction to build a new police station.
Baybutt Construction has been doing work in New England since 1964.