Judge Gives Harbor More Time to File a Bankruptcy Plan

An offer by a handful of Ventura Harbor businesses to buy the land they now lease has delayed federal bankruptcy proceedings until late October.

The offer was accompanied by $22 million in new claims by the businesses against the debt-plagued harbor.

U.S. Bankruptcy Court Judge Robin Riblet on Thursday granted the port and its creditors an additional 3 1/2 months to craft a plan for the district to pare down its multimillion-dollar debt.

Negotiations have been stagnant since the last court hearing in April.

Port officials and their anxious creditors have barely even talked, attorneys said, and have made little headway toward resolving the nearly 4-year-old case.

Riblet scolded attorneys on both sides as they attempted to blame each other for the lack of progress.

“We’re not ever going to have successful resolution of this case unless the parties work together and stop pointing fingers at each other,” Riblet said in her Santa Barbara courtroom.

The port will have until Oct. 1 to file an amended debt-adjustment plan with the court, with a hearing scheduled for Oct. 27, the earliest date Riblet’s clogged docket could handle.

Jay Michaelson, attorney for the port’s largest creditor, Ventura Group Ventures, argued against such a long delay.

He complained that port officials ignored a seven-page debt-reduction proposal his clients mailed off five days after the April hearing. “If there is a period of time given here, I would sincerely hope it would be used more wisely than the last three months,” Michaelson said.

The bankruptcy came after Michaelson’s clients in 1991 won a $15.7-million breach-of-contract court judgment when the port district pulled out of a development project.

Riblet granted the delay Thursday to allow the port to factor into its debt-reduction plan a proposal by five of the port’s largest long-term leaseholders--the Harbortown Marina Resort, two marinas, a time-share condominium and a fueling dock.

The business owners, who have filed an additional $22 million in claims in the case, have proposed buying for $12 million the land under their businesses. If accepted, all of the new claims would be dropped, said their attorney, John A. Lapinski of Los Angeles.

While port officials doubted the validity of some of those claims, they said they welcomed the proposal. The claims say the harbor is not being maintained well enough, Lapinski said.

“The port district is willing to consider any feasible method of resolving this case,” said the port’s attorney, David S. Kupetz of Los Angeles.

The problem, he said, is that Ventura Group Ventures has insisted that the port sell all or most of its income-producing property to pay off the debt. With 90% of the port’s operating income coming from leases, fees and product sales on those lands, the port would be unable to stay afloat and operate the harbor, he said.

“That’s been the core of the difficulty since Day One,” said port General Manager Ed Wohlenberg.

The port and city, he said, are looking to satisfy creditors without selling off the bulk of public lands into private hands.

“Our basic interest is that the public still has access to the port facilities,” Ventura City Atty. Bob Boehm said.

The Ventura Port District filed for Chapter 9 bankruptcy protection on Aug. 20, 1993. The district owes $4 million to the California Department of Boating and Waterways for four loans issued since 1968, and $18 million to other creditors.