Spencer's hotel goes to sheriff's sale today
By Russ Oechslin, Journal Correspondent | Posted: Wednesday, February 28, 2007
SPENCER, Iowa -- Nobody involved is commenting about the legal situation involving today's sheriff's sale of The Hotel. Not the owner, the former owners, or representative of the bank that forced the sale.
And nobody predicts how the sale might end.
Steve Bear bought the hotel from Sylvia Shine and her partner, Caroline Toebes, seven years ago.
The foreclosure auction follows more than a year of legal wrangling involving Bear, Toebes, Shine, Shine's husband, Toby Shine, the family's Shine Bros. Corp., Northwest Federal Savings Bank and Ohio Casualty Insurance.
Shine Bros. had guaranteed a note to Northwest Federal on behalf of Sylvia Shine and her partner.
When the bank sought to foreclose on its mortgage in 2005, Bear, who bought the hotel -- including its restaurant and bar in 2000 -- but subsequently fell behind in his payments, countersued and also filed suit against the Ohio insurance company when it threatened to cancel the business' insurance.
The suit against the insurance company was dismissed in July.
Judgment against Bear for $283,639.79 was issued last November, with interest of more than $50 per day due from May 26, 2006. Today, the total to clear the case is in excess of $297,000.
Bank filed in 2005
The Northwest Federal foreclosure action was filed against Bear's business Oct. 17, 2005. The Shines, Shine Bros. Corp. and Carolyn Toebes were named as codefendants.
While Bear admitted missing payments, his filing noted an agreement to modify payments and that Northwest Federal refused to accept payment. The response also claims an imperfected security agreement and adds that the plaintiff "did not provide the defendant with a notice of right to cure the default as required ..."
The response cites a "breach of fiduciary responsibility" as causing damages to Bear and also alleges "bad faith."
Calling transfer of stock between the Shines, Toebes and Bear "fraudulent," Bear's response to the bank's action said "Northwest colluded, conspired, assisted and/or entered into a common scheme with Sylvia Shine, Carolyn Toebes and Toby Shine to conceal evidence from the officers of The Hotel (Corp.) of the fraudulent transfer."
It explained that at least one stock certificate was "manufactured, and represents false and fictitious shares since these shares ... were pledged as collateral and in the possession of Northwest Federal."
Duo did wallpaper
Sylvia Shine said she has not been in The Hotel since Bear took over.
Shine said that in 1986 she and Toebes wallpapered each guest room twice, as once they finished the first time, the city stopped providing steam heat and individual heating and air-conditioning units had to be added to each room.
The Hotel was successful under their management, she added, because it had support of the business community.
"Local business owners saw to it that their traveling sales reps gave us a chance. We made them a deal that if they were uncomfortable for any reason, the room was on us. And we never had one person complain," Shine noted. "The downtown business people wanted to see us succeed and they were extremely supportive. We were very grateful for their support as we couldn't have done it without them."
Shine said she and her partner, who is expected to fly in from her Florida home for today's sale, got along well because they had different interests in the business.
"Caroline wanted to make sure everyone had a quality experience. And she handled the bookkeeping, while I worked with the kitchen to make new recipes. We didn't step on each other's toes at all," Shine said.
The sale is to be held on the steps of the Clay County Courthouse, but may be moved inside in case of inclement weather.
And nobody predicts how the sale might end.
Steve Bear bought the hotel from Sylvia Shine and her partner, Caroline Toebes, seven years ago.
The foreclosure auction follows more than a year of legal wrangling involving Bear, Toebes, Shine, Shine's husband, Toby Shine, the family's Shine Bros. Corp., Northwest Federal Savings Bank and Ohio Casualty Insurance.
Shine Bros. had guaranteed a note to Northwest Federal on behalf of Sylvia Shine and her partner.
When the bank sought to foreclose on its mortgage in 2005, Bear, who bought the hotel -- including its restaurant and bar in 2000 -- but subsequently fell behind in his payments, countersued and also filed suit against the Ohio insurance company when it threatened to cancel the business' insurance.
The suit against the insurance company was dismissed in July.
Judgment against Bear for $283,639.79 was issued last November, with interest of more than $50 per day due from May 26, 2006. Today, the total to clear the case is in excess of $297,000.
Bank filed in 2005
The Northwest Federal foreclosure action was filed against Bear's business Oct. 17, 2005. The Shines, Shine Bros. Corp. and Carolyn Toebes were named as codefendants.
While Bear admitted missing payments, his filing noted an agreement to modify payments and that Northwest Federal refused to accept payment. The response also claims an imperfected security agreement and adds that the plaintiff "did not provide the defendant with a notice of right to cure the default as required ..."
The response cites a "breach of fiduciary responsibility" as causing damages to Bear and also alleges "bad faith."
Calling transfer of stock between the Shines, Toebes and Bear "fraudulent," Bear's response to the bank's action said "Northwest colluded, conspired, assisted and/or entered into a common scheme with Sylvia Shine, Carolyn Toebes and Toby Shine to conceal evidence from the officers of The Hotel (Corp.) of the fraudulent transfer."
It explained that at least one stock certificate was "manufactured, and represents false and fictitious shares since these shares ... were pledged as collateral and in the possession of Northwest Federal."
Duo did wallpaper
Sylvia Shine said she has not been in The Hotel since Bear took over.
Shine said that in 1986 she and Toebes wallpapered each guest room twice, as once they finished the first time, the city stopped providing steam heat and individual heating and air-conditioning units had to be added to each room.
The Hotel was successful under their management, she added, because it had support of the business community.
"Local business owners saw to it that their traveling sales reps gave us a chance. We made them a deal that if they were uncomfortable for any reason, the room was on us. And we never had one person complain," Shine noted. "The downtown business people wanted to see us succeed and they were extremely supportive. We were very grateful for their support as we couldn't have done it without them."
Shine said she and her partner, who is expected to fly in from her Florida home for today's sale, got along well because they had different interests in the business.
"Caroline wanted to make sure everyone had a quality experience. And she handled the bookkeeping, while I worked with the kitchen to make new recipes. We didn't step on each other's toes at all," Shine said.
The sale is to be held on the steps of the Clay County Courthouse, but may be moved inside in case of inclement weather.
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