To halt foreclosure, former Grand Soleil partner files for bankruptcy

Published 12:00 am Saturday, February 28, 2009

NATCHEZ —Grand Soleil partner Charles Cato filed for bankruptcy to stop foreclosure proceedings Friday morning.

However, he was unaware that Britton & Koontz bank and Grand Soleil had reached an agreement, and there would be no foreclosure.

Cato’s attorney Jay Verona said in July, Cato sold his partnership back to the Grand Soleil, LLC, and is now owed money.

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“They agreed to pay him certain amounts of money over a period of time,” Verona said.

To assure he got his money, Cato filed a lien against the property.

“That secured the money that he is owed,” Verona said.

When Britton & Koontz issued Grand Soleil foreclosure notice in which a three parcels of land could have been sold, Cato could have lost his money, his attorney said.

In order to stop any foreclosure proceedings, Cato filed for involuntary bankruptcy.

“We were concerned,” Verona. “We were not sure that the LLC was going to take appropriate action.”

Filing for involuntary bankruptcy would have forestalled any foreclosure proceedings, Verona said.

“When we couldn’t get confirmation that they had canceled the sale, we filed involuntary to stop the sale and preserve the assets,” he said.

However, Britton & Koontz and Grand Soleil reached an agreement late Thursday afternoon, and the foreclosure proceedings were nullified.

Verona said he still plans to go forward with the bankruptcy.

“I think the bankruptcy is in the interest of all the creditors, not just my client,” he said.

The bankruptcy was filed in Tampa, Fla.

According to petition, $43.5 million is owed.