MOREHEAD CITY — The company that operated Harborview Towers, a waterfront, high-rise senior living center that closed Aug. 30, has filed for bankruptcy protection.
Harborview Enterprises LLC filed Chapter 7 bankruptcy Monday in Carteret County Superior Civil Court, effectively halting at least a dozen civil suits against the company alleging breach of contract and seeking to recover deposits paid, which range from about $90,000 for a studio apartment to more than $220,000 for two-bedroom apartments.
Chapter 7 of the U.S. Bankruptcy Code provides for liquidation or the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.
Attorneys Jane Gordon and Wesley Collins represent several Harborview Towers residents who had filed the civil complaints against the company. The attorneys went before Judge John Nobles Monday for a hearing on motions for summary judgment. Ms. Gordon and Mr. Collins told the judge that due to the bankruptcy filing, they could no longer pursue their clients’ cases.
The residents, under the terms of their occupancy agreements at the 50-unit facility at 812 Shepard St., were owed 80 percent of their deposits within two years after vacating their units for any reason. Harborview Enterprises LLC representatives had previously said the company was unable to pay the refunds due to its financial circumstances. In July, those representatives told the roughly two dozen tower residents to move out by Aug. 30 because the financial situation forced closure.
All residents moved out, except 102-year-old Constance Browne, who was recently relocated to Carolina House to get needed nursing care. But she’s still hanging on to her Harborview apartment where most of her belongings remain.
On Friday, Ms. Browne called the situation “difficult” and she remains uncertain as to how long her residency at Harborview will be allowed to continue. But she isn’t angry.
“I don’t care to be angry, but I think it’s so unfair,” she said in an interview at Carolina House. “It seems so much more evident to me that they want to grab the most money from everyone else, even to the point of ignoring their previous promises, ignoring what they owe to others.”
The shareholders of the company are members of the Jernigan family – heirs of the founder Doris Jernigan. Her son, J. Ron Jernigan, is the company president.
Mr. Jernigan told the News-Times in August that his family is “devastated” about the situation, which he said was caused not by mismanagement, as some residents have claimed, but by the housing market crash of 2008.
He said when the home market bottomed out, fewer and fewer were able to sell their homes and move into the facility. Although the census kept going down at the facility, overhead costs remained.
“We ran out of money,” Mr. Jernigan said at the time.
Following complaints from residents, the Consumer Protection Division of the state attorney general’s office opened an investigation in August. The Consumer Protection Division is a civil, not a criminal investigative authority.
Former resident Clarence “Slim” Hensley said he wasn’t optimistic the attorney general’s investigation would result in a happy ending for those losing their deposits.
“I don’t see any hope for any money coming out of this mess. The building is not saleable,” he said Thursday.
Ms. Browne’s son Doug Browne said he doubts whether the bankruptcy trustees handling the case will allow continued occupancy, but his attorney has not backed off earlier advice to stay put.
“We haven’t received a definitive answer on that yet,” Mr. Browne said.
News-Times staff writer Mike Shutak contributed to this report.
Contact Mark Hibbs at 252-726-7081, ext. 229; email firstname.lastname@example.org; or follow on Twitter @markhibbs.