LaFavre’s tree farm business files for bankruptcy

Company owns Wedge Nursery

Staff

Published Friday, October 3, 2008

Commercial developer Scott LaFavre’s company Eagle’s Rest Tree Farms declared bankruptcy in September in U.S. Bankruptcy Court in St. Paul.

Eagle’s Rest Tree Farms, a limited liability corporation, owns tree nurseries in Freeborn County and Rice County. The company is based at 2880 50th St. W. in Webster. LaFavre lives in Lakeville. With his company, LaFavre purchased the 89-acre Wedge Tree Nursery from the local Wedge family in 2005 on a contract for deed.

Brad Wedge declined to comment.

A message left on Scott LaFavre’s cell phone went unreturned.

In 2006, the Tribune reported LaFavre purchased the property for $552,000. LaFavre doesn’t have to pay the balance until 2016, the documents state. Until then, he makes semiannual payments to the Wedges.

LaFavre filed Sept. 22. His Eagle’s Rest Tree Farms also owns 76 acres on the north end of Albert Lea near where County Road 20 and Plaza Road meet. He bought that land in 2005 from Dale and Patricia Peters for $304,000. LaFavre recently attempted to sell the land at an auction but, at $5,150 an acre, people wonder whether he will make enough money to overcome the mortgage debt.

According to the Freeborn County Recorder’s Office, there are three mortgages on that tract: Minneapolis-based Crown Bank for $245,000 on Oct. 28, 2005, James Rowland of Lakeville for $225,000 on June 27, 2007, and Albert Lea’s Cafourek & Associates for $50,000 on July 25, 2008.

Do the math. The 76-acre property has $520,000 of debt, but it sold for about $391,400, not enough to cover the debt. If LaFavre and the buyer struck a deal, it has not been filed yet at the county courthouse.

The bankruptcy filed was under Chapter 12, which was set up 1986 for family farmers. It is streamlined and less expensive than other types of bankruptcy, such as Chapter 11, which is tailored for corporate reorganization. Chapter 12 is tailored to people with seasonal incomes and allows repayment of debt no more than five years. The debt cannot exceed $3.45 million.

LaFavre’s bankruptcy papers have check boxes. His lawyer, David C. McLaughlin of Fluegel, Helseth & McLaughlin in Ortonville, checked that Eagle’s Rest Tree Farms has 1-49 creditors, checked that it has $500,001-$10 million in estimated assets and checked that it has $1 million-$10 million in estimated liabilities.

LaFavre’s brother Adam LaFavre also has a claim pending on Eagle’s Rest Tree Farms. It was filed in Freeborn County District Court in December 2007.

Eagle’s Rest Tree Farms is not Scott LaFavre’s company that owns the Eagle’s Rest, a largely undeveloped 100-acre residential development on the northwest side of Albert Lea. Before April 2006, it was the century-old Albert Lea Golf Club. That land is in the possession of American Bank of St. Paul. The bank bought it in December at a public auction from LaFavre’s company called Eagle’s Rest Development, also a limited liability corporation. The auction took place after LaFavre’s company failed to make necessary mortgage payments, resulting in foreclosure. The land sold for $1,031,522. He has up to a year to redeem the property from the bank.

That land has liens against it — $341,190 from Rud Excavating of Webster, $19,084 from Albert Lea surveyors Jones, Haugh & Smith, and $195,000 from Minneapolis-based Delinear Concepts, which Minnesota Secretary of State’s Office records say is an inactive corporation.

Delinear Concepts sought security by claiming mortgage status in Freeborn County District County in August 2007, but that status was not granted.

LaFavre and his wife, Shari, graduated from Albert Lea High School in 1981. In April 2006, LaFavre said he grew up impoverished in Albert Lea and could never have dreamt of being a member of the Albert Lea Golf Club. He said he was excited about the prospect of giving something back to the community.

After the destruction of Albert Lea Golf Club in 2007, another was planned. Wedgewood Cove, which borders Pickerel Lake, is presently is being constructed. LaFavre also owns Lakeville-based Equity Holdings, which the Secretary of State’s Office also says is inactive.

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