Baltimore Travel Plaza will go up for auction Feb. 26, as financial troubles continue to close in on the ill-fated combination of hotel, truck stop, nightclub and dinner theater in East Baltimore.
Maryland National Bank advertised the property for auction Sunday, 12 days after a U.S. Bankruptcy Court judge dismissed the Chapter 11 bankruptcy action of Baltimore Travel Plaza L.P., the plaza's owner, ending the court's supervision of the partnership's affairs and freeing creditors to enforce claims that had been stayed by the filing.
A Chapter 11 filing is designed to protect a company from creditors' actions while it reorganizes under court supervision.
Controlled at one time by Towson developer Lawrence R. Rachuba, Baltimore Travel Plaza was forced into bankruptcy court in 1990 by DeChiaro L.P., a partnership led by Mr. Rachuba's sister-in-law, Carol Scheffenacker. The partnership is named for Ralph DeChiaro, Mr. Rachuba's father-in-law, who was a major real estate developer and is Ms. Scheffenacker's father.
The Travel Plaza, a hotly anticipated project, opened in 1987 but has never done as well as a similar venture led by Mr. Rachuba and his partner Garth Davis in Jessup. Mr. Davis also was a general partner in the Baltimore plaza.
The Baltimore property includes a 400-seat dinner theater, a 400-seat nightclub, a 200-seat restaurant, a 175-room Quality Inn hotel with banquet and meeting facilities, two Roy Rogers restaurants and a Greyhound bus station.
The partnership led by Mr. Rachuba put the Baltimore plaza up for auction in 1989, but the partnership rescinded the offer because the top bid was $12 million, far below the $20 million it had suggested as a minimum bid.
A corporation headed by Ms. Scheffenacker and her sister, Roberta Hucek, is now general partner of Baltimore Travel Plaza L.P.
Gerald R. Walsh, an attorney in a related case, said the property has little chance of commanding even the price of the mortgage.
The mortgage was estimated at $9.76 million in a bankruptcy filing last year and now stands at more than $11 million, said Edward J. Levin, a Piper & Marbury attorney representing Maryland National Bank, which holds the mortgage.
"It's doubtful that the auction will bring enough to pay the mortgage plus accrued interest, fees and expenses," said Mr. Walsh, an attorney for DeChiaro L.P.
If the auction does not pay off the mortgage, it could complicate an already messy court fight in Towson between the DeChiaro family and Maryland National Bank.
The DeChiaro family trust, which owns DeChiaro L.P., is trying to get a Baltimore County Circuit Court judge to invalidate loan guarantees that pledged trust assets as security for Travel Plaza debts.
In a suit against Maryland National Bank, the trust claims that the guarantees amount to self-dealing by Maryland National and Mr. Rachuba. Circuit Judge John F. Fader II has enjoined Maryland National from seizing any trust assets.
Mr. Levin and Jeffrey Herschman, another Piper & Marbury attorney representing Maryland National in the Baltimore County suit, declined to say whether the bank would try to enforce the loan guarantees if the auction fell short.
Last year, the Baltimore Travel Plaza partnership's attorneys said the partnership's assets were $21,963,567, including about $18.7 million in land and improvements at the plaza, at O'Donnell Street and Interstate 95. Liabilities were estimated at $15.8 million.
The biggest creditors were Maryland National and First National Bank of Maryland, with combined debts of about $13.8 million.
Mr. Rachuba and his wife have filed for personal bankruptcy court protection under Chapter 11, as has Mr. Davis.