Once again the West Baltimore catering facility, the Palladium, is scheduled to be auctioned by its lender, John Hanson Savings Bank.
But Robert B. Scarlett, the attorney representing the Palladium's owner, said he was hopeful that the facility will not be auctioned as scheduled next month. In fact, he said negotiations are under way to sell the hall to a private group and perhaps end the two year battle to keep it off the auction block.
"We are trying to refinance in which Butler will remain involved," Scarlett said. "I'm highly optimistic that everything will work out. We are in the final 10 yards before completing the deal."
Scarlett would not disclose the identity of the interested buyers of the 30,000-square-foot facility, constructed to somewhat resemble a castle.
The Palladium, one of the few black-owned catering facilities, in the city, has been in financial trouble ever since it opened in August 1986
Butler filed for Chapter 11 protection for the Palladium in 1989. A year later the failure to produce a reorganization plan as required by the Federal Bankruptcy Act resulted in the bankruptcy being dismissed.
To keep creditors from taking the facility, Butler filed for personal bankruptcy last July.
The auction of the Palladium is scheduled for May 3 and would be conducted by A.J. Billig & Co. This is at least the third time the facility at 2900 Liberty Heights Ave. has been scheduled to be auctioned.
However, each time owner Edward R. Butler has come up with the past-due mortgage payments minutes before the bidding was to begin. The first time the facility was up for auction, in 1989, Butler came up with $30,000 in interest on a loan of $1.4 million. The second time Butler gave the thrift $148,000.
Bowen P. Weisheit Jr., attorney for John Hanson, said Butler is a few months behind on his mortgage payments and in violation of an order approved last December. That order, despite Butler's bankruptcy, allows the bank to proceed with a foreclosure if he fell behind in payments.
Weisheit said Butler's trouble with his loan is not unusual in the current real estate market. "His loan delinquency is not terribly out of line. It's a problem for us . . . but few in the real estate community are not experiencing troubles with their loans."