News Feature

Stonington
Originally published in Island Ad-Vantages, September 6, 2012
Bank forces Live Lobster to auction off Lobster Web
Auction set for Sept. 26

by Jessica Brophy

Lobster Web, the troubled lobster pound property at 97 Settlement Road in Oceanville last operated under the parent company Live Lobster, will be auctioned off on September 26, according to real estate auction company Tranzon LLC.

The auction is termed “lender-ordered,” meaning a financial institution is requiring the sale to liquidate the asset and pay back debt.

The property, according to the information available online from Tranzon, is about 2.5 acres with 1,439 feet of shore frontage. The main wharf is 2,550 square feet. The fuel capacity is roughly 1,500 gallons each of diesel and gasoline, and a 5,000 gallon aboveground diesel storage tank. Two buildings with more than 15,000 square feet include a holding tank of more than 5,000 square feet.

According to the town’s tax assessment, the property’s tax valuation is $963,100, including the buildings. The 2012 tax bill, due August 31, is $13,069. The 2012 taxes are calculated at 75 percent of fair market value.

Live Lobster experienced its first round of financial problems in November and December of 2011. Checks written to fishermen bounced. In late March of this year, TD Bank froze the assets of Live Lobster, and in April, TD Bank sued Live Lobster for breach of contract and asked for $3.4 million plus legal fees and interest.

According to public court documents, TD Bank extended a line of credit of $4 million to Live Lobster in June of 2008. Live Lobster agreed to a promissory note payable on demand to the bank, meaning TD Bank could request payment at any time. In the lawsuit, TD Bank said that Live Lobster is in default of the loan agreement because “it failed to make payments when due.”

Live Lobster’s other Maine holdings are also due to be auctioned off. The company’s other holdings include a Prospect Harbor seafood processing plant and a Phippsburg lobster pound.

An inspection/walk-through of the site will take place on Tuesday, September 11, from 1:30 to 2:30 p.m. The auction will take place on site on September 26 at 3 p.m.

No one at Live Lobster’s Chelsea, Mass. headquarters could be reached for this story.