, Newburyport, MA

October 8, 2013

Bankruptcy filing stymies effort to take home


---- — SALISBURY — On the last day the court gave her to pay about $251,000 in back taxes or face losing her North End property, Gracemarie Tomaselli filed for bankruptcy, putting at least a temporary hold on the town’s ability to take the property.

According to a Sept. 30 letter sent to town treasurer Christine Caron by Tomaselli’s attorney Kevin Lawless, Tomaselli filed a voluntary petition under Chapter 7 of the federal Title 11 bankruptcy code with Massachusetts’ U.S. Bankruptcy Court.

“Pursuant to 11 U.S.C, 362, an automatic stay is now in effect,” Lawless wrote, “and accordingly all judicial proceedings and any attempt to collect a debt, obtain a judgement or take any action whatsoever against Ms. Tomaselli must now cease.”

The bankruptcy filing comes after an order issued by state Land Court Judge Gordon H. Piper on Aug. 2, giving Gracemarie and her sister Joyce Tomaselli until Sept. 30 to pay $250,889 in back property taxes, sewer charges, interest and legal fees or lose their properties at 113-115 North End Blvd. to the town.

Also on Sept. 30, Lawless sent a “Suggestion of Bankruptcy” to the state Land Court, serving notice that Tomaselli filed for protection under the federal bankruptcy code, putting the automatic stay on all judicial proceedings in the case.

The dispute between the town and the Tomaselli sisters goes back to 1991, after they purchased their property and established a restaurant there. The issue is a long-standing complaint by the Tomasellis who claim they never knew about the sewer betterment and other sewer fees on the property. The issue has led to the tax dispute and a number of unsuccessful lawsuits they filed against the town, including a current suit in Boston federal court.

After years-worth of unpaid local fees, in 2006 town officials filed with the state’s Land Court to take the property for non-payment of taxes, sewer-related charges and accrued interest.

In January, after the filing and resolutions of a number of motions and counter-motions over the years, Judge Piper ruled on the town’s motion for summary judgment, resolving all claims in favor of the town. He also directed the town to file a motion so the court could determine the amount the Tomasellis would need to pay to redeem the property, preventing the town from taking it for tax title.

The sisters filed a motion to reconsider, as well as an opposition and motion to strike and request for another hearing, but Piper denied them all. However, the judge did lower the legal fees the Tomasellis must pay the town. He cut $6,700 from the $44,000 the town requested in legal fees.

After analyzing the figures town officials presented in February, on Aug. 2 Piper allowed the town’s motion for summary judgment, approving the amount of $250,889 in back taxes, sewer and interest charges and legal fees. The court ordered the Tomasellis to pay up by Sept. 30.

“ ... if they do not timely redeem by making that payment by that date, judgment will enter upon the request of the town, forever barring the defendants’ rights of redemption,” Piper wrote.

All of that appears moot at this point, due to the bankruptcy filing, which offers at least temporary relief to debtors through its automatic stay provision. The stay immediately stops creditors from collecting on debts owed, garnishing wages, etc., until a court-appointed bankruptcy trustee determines how to proceed after analyzing the financial situation and meeting with creditors and the debtor.

In Chapter 7 bankruptcy, that can include liquidation of debtors assets, although certain assets can be exempted.

From filing to conclusion, the bankruptcy process can take months to resolve.