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Thatched Cottage bankruptcy trustee seeks contempt order against town

The fate of the once-bustling Thatched Cottage, seen

The fate of the once-bustling Thatched Cottage, seen here on Jan. 12, 2016, is now in bankruptcy court . Photo Credit: Ed Betz

The bankruptcy trustee for the shuttered Thatched Cottage event hall has asked a federal judge to find the Town of Huntington and some of its employees in contempt for failing to comply with a court order to testify and produce documents.

The Wednesday filing is part of trustee R. Kenneth Barnard’s effort to determine if the town interfered with the sale of the once-popular Centerport venue by condemning it four days before the highest bidder in a bankruptcy sale was to close on his purchase of the property. The deal fell through.

“We’re making every effort to determine the accurate facts surrounding the action taken by the town in the days preceding the sale [closing], and the town seems to be resisting,” Wantagh-based Barnard said Thursday.

Huntington officials have said they had to condemn the building after former owner Ralph Colamussi provided engineering reports that concluded the cottage was dangerous and structurally unsound.

“The Town does not believe that it did anything improper and is prepared to defend itself vigorously against any claims brought by the Trustee,” Lee J. Mendelson, a Garden City-based attorney representing Huntington in the case, said in an email on Friday.

U.S. Bankruptcy Judge Robert E. Grossman had issued an order March 15 calling for the town to produce the people and documents Barnard is seeking.

Barnard wants the court to compel testimony from town officials including Joseph F. Cline, the director of the Department of Public Safety; Richard Vaccio, senior building inspector; former director of Public Safety Kenneth Lindahl; and Janet Rinker, co-head of the Division of Code Enforcement.

Rinker is Colamussi’s sister and an employee of the town’s Department of Public Safety.

The latest actions in the case stem from a legal notice Barnard served the town last February, which reserved the trustee’s right to sue the town and seek damages for interfering with the sale. Barnard has sought documents and testimony from town officials as he weighs whether to pursue such a case against the town.

Court records show that should he sue the town, Barnard would seek $4.65 million in damages — the amount of the original high bid for the property.

Hicksville-based Suzan Tina Properties was the original high bidder at the Sept. 24, 2014, auction. The company lost its $651,000 deposit when the deal fell apart. Yama Raj, executive director of Suzan Tina, has said the condemnation was a significant factor in the decision to not close the sale.

On Jan. 2, 2015, the bankruptcy trustee transferred the cottage’s title to Bethpage Federal Credit Union as part of a complex bankruptcy transaction.

Mendelson filed a motion last Tuesday asking the court to rescind the March 15 order or stop the subpoenas requiring town officials to testify and produce documents.

Mendelson said in an email that issues other than the town’s condemnation contributed to the original bidder’s decision to back out of the sale, and that the town has already given documents to the trustee.

Mendelson also argued that the people and documents Barnard is seeking should be part of the discovery process after the trustee files a complaint, not before.

A hearing on the case is to be held Tuesday in U.S. Bankruptcy Court in Central Islip.


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