CHARLESTON, W.Va. — The trustee for a bankrupt mall that the state paid almost a million dollars for rental property it wasn’t actually using is asking the former owner to account for a range of financial transactions, including rent.
Trustee Robert L Johns filed the request last week in U.S. Bankruptcy Court in the Northern District of West Virginia.
The property, Middletown Mall in Fairmont, has been subject to an investigation by the state Auditor’s Office, which revealed state government was paying a combined total of $30,907.34 a month for use of multiple properties at Middletown Mall.
The state vacated DHHR offices at the mall May 31, 2015, but the state continued to pay until this past February. That added up to $989,034.88.
State officials contended the Real Estate Division sent a cancellation letter, but the copy they were able to produce was unsigned and undated.
Pin Oak Properties, a Morgantown company led by Dietrich S. Fansler, had been the owner of the mall.
Pin Oak filed for Chapter 11 bankruptcy in June 2017. DHHR and the Real Estate Division were not listed as creditors, although the state Tax Department was.
This past May 8, as part of the bankruptcy, Middletown Mall was sold to General Acquisitions LLC for $13.7 million.
It has not been clear how the state might be able to recoup the lease money.
The trustee in bankruptcy court now wants more information about Pin Oak’s finances.
Pin Oak and Dietrich Fansler have been asked to provide a variety of documents by August 10.
The first item on the list is all documents relating to the payment of rent by tenants on or after June 1, 2017, the date of the bankruptcy filing. The trustee also wants all documents relating to rent payments before that date, as well.
The trustee also wants all documents relating to cash transactions.
And the scope expands a bit to include, “all documents relating to payment of funds from the pre-petition rent or other debtor funds to or for the benefit of members of the family of Fansler, including his wife, his children, his wife’s children or any person married to his or his wife’s children, other than for salaries for which the debtor deducted withholding.”
That same language about Fansler’s family is used for any payment of funds from the post-bankruptcy petition rent.
And more: “All documents relating to the payment of funds from Pin Oak for the personal benefit of Fansler, his wife, his children, his wife’s children or any person married to his or his wife’s children.”
The company is also supposed to turn over documents from any transactions that would have benefited Dream Mountain Ranch LLC, which has Fansler as its top officer.
Fansler is also supposed to provide documentation of any of the rent money that was used to buy equipment, machinery or assets belonging to anyone besides himself.
And Pin Oak is supposed to turn over any documents “relating to any bank account held by Fansler or by Fansler and any other person from January 1, 2013, to present.”
Pin Oak also would have to turn over any bank statements, deposits and canceled checks.
If Pin Oak can’t provide some documents, it’s supposed to provide a full explanation. It’s also supposed to keep looking.
Pin Oak is supposed to provide all drafts of documents, as well as all non-identical copies.
“If you are unable to locate any document requested, state all efforts that have been made to locate it, and identify any individual you believe is likely to possess any information regarding the present location of the document,” the trustee wrote.
The bankruptcy trustee, Robert Johns, submitted a proposed order requiring the production of the documents.
If approved, it would also require Fansler himself to appear on August 21 at the Jackson Kelly law offices in Morgantown to answer questions under oath.