Editors Note: Ed DeMuzzio’s loan to the property owners was about $110,000 with another $140,000 in accrued interest built up over time. DeMuzzio’s company was responsible for the track’s first website, but that site has been revamped multiple times since then and DeMuzzio has had nothing to do with the support, design or development of the track website for numerous years.
NEW LONDON – The approval of the foreclosure auction sale of the Waterford Speedbowl will likely face another hurdle in court before potential new owner Bruce Bemer can close on the property.
Creditor Ed DeMuzzio told RaceDayCT on Monday morning that he will likely file an appeal of the court’s decision Friday to approve the Oct. 18 auction sale.
Superior court judge Emmet Cosgrove filed a memorandum of decision Friday in which he denied objections to the sale filed by DeMuzzio and approved the sale.
On Nov. 3 in New London Superior Court, Cosgrove heard the objections to the sale filed by DeMuzzio and his company CCI Inc.
DeMuzzio has 20 days from Friday to file an appeal of the approval of sale. DeMuzzio said Monday that he planned to meet with his attorney later in the day to discuss plans going forward. The case was originally scheduled to be on the docket Monday in New London Superior Court but was removed from the schedule.
“We already know that we’re going to file an appeal, but I don’t know how long the period is that I have to file the appeal,” DeMuzzio said. “… Nobody is making any effort to try to help out here so I’ve got to what I’ve got to do.”
DeMuzzio is at risk of losing $250,000, which includes about $110,000 invested in the property and about $140,000 in accrued interest.
“It’s a lot of money,” DeMuzzio said. “If it was fifty grand I would have said ‘That’s the way it goes’ but it’s not 50 grand and it’s just totally unfair. If we could get all the players that are involved to kick in a little bit, if I could just get half, some reasonable amount, I would be more than happy. I don’t need to get all my money back, I just want it to be fair.”
Bemer was the high bidder – at $1.75 million – in the foreclosure auction that took place on Oct. 18. The Glastonbury businessman has said he intends to continue to run the property as a racing facility.
There was just over $2 million owed on the property by owner Terry Eames at the time of the auction. The property had recently been valued at about $3 million and was being advertised on the market for sale with an asking price of $3.3 million prior to the auction.
In his objection, DeMuzzio alleged that there was collusion between creditors Rocco Arbitell, Peter Borelli, Theodore Parker and Shawn Parker to keep the bidding price low for the auction. DeMuzzio also argued that the property should have been better marketed to attract a higher bid in favor of creditors to realize returns on their debts.
Cosgrove offered the court’s reasoning for denying both objections in his memorandum of decision filed Friday.
“I would hope that he doesn’t appeal,” Arbitell’s attorney William McCoy said Monday morning. “I think it was pretty clear that the auction was probably as good as it’s going to get and it’s unlikely that a second auction would result in anything better.”
DeMuzzio said he is frustrated that he has been portrayed as a villain for holding up the sale.
“People are thinking I’m the bad guy here and that kind of bothers me,” DeMuzzio said.
“If the money wasn’t so much that I was losing, I wouldn’t be in this situation. I put this money in a long time ago to keep the track open and I’m hearing about people saying they want to boycott this or that and I’m thinking, ‘Wait a second, if it hadn’t been for this money I put in the place might have closed down eight years ago.’
“Part of the money that is owed to me is for the [electronic scoring system] they’re still using at the track. I did their website 10 years ago. Part of the money that I’m owed is for the website that’s still being used. I’ve lost money before on other things that I’ve done, but this is a lot of money.”
In July 2007, Arbitell, a Southbury businessman and local racing supporter, along with his business associate Borrelli, stepped in to offer Eames and his ownership group, 1080 Hartford Road LLC, financing to avoid a foreclosure action being taken then by former mortgage holder Washington Mutual Bank. The deal with Arbitell was announced a day before the track’s auction date for a foreclosure in 2007.
In May 2008 Arbitell brought his own foreclosure action against the ownership group after former track operator Jerry Robinson failed to pay the Speedbowl’s property taxes.
Facing another pending foreclosure auction, Eames and 1080 Hartford Road LLC filed for Chapter 11 bankruptcy protection in October 2009. A debt reorganization plan was accepted by bankruptcy court in January 2012 and the ownership cleared bankruptcy not long after that.
In March 2013, Arbitell and the rest of the creditors involved in the bankruptcy moved to have foreclosure action retaken against the Speedbowl ownership, which led to the Oct. 18 auction.
DeMuzzio made a high risk investment and got burned. Now, he’s just being a jerk. You gambled and lost, man. Get over it.
DeMuzzio doesn’t like that he appears to be a bad guy? I don’t think you’re a bad guy, just a bit foolish. You keep spending money foolishly and you expect a different result? You gambled on a bad risk with Eames who consistently showed his poor decision-making regarding the Speedbowl finances. Even I know that you don’t gamble what you can’t live without. Blocking the approval with an appeal will only make lawyers wealthier. Don’t continue to be the fool.
If this guy has success in getting his money back, every schmoe that T.E. scammed out of a $1000 will be lined up at the courthouse with their hands out. This thing is going to be tied up for long time and hopefully Bemer doesn’t lose interest….
I know he lost a decent amount of money, but to say there wasn’t enough advertisement on the auction date was ridiculous, wall street journal, racing publications, realistate web sites and publications. Sorry you lost money, but maybe you should’ve bid
It’s a shame DeMuzzio lost all of that money. It would seem more fair that the creditors get an amount back based on a percentage of the amount owed. But, unfortunately, it doesnt work that way.
How do you give someone 250k 8 or 10 yrs ago and collect nothing back in that time frame? How??? He should be suing Terry for the money. Not too mention if he had received some of the money he lent back we’d be hearing how 50k is a lot of money and if he could justget half back he’d be happy. I’m sorry you lost money dude i really am but you lent it with what would appear to be no intention of repaying it.
Right now you are the villian because you are holding up progress. Right now the new owner should be getting repairs done and setting up sponsors for next year but he can’t because of you. So yes in everyone’s eyes you are the villain. I for one will not boycott your business but if you can’t see that everyone is ready to move forward with the exception of you, than that’s two assumptions you’ve made in 10yts. Like the song says.. don’t go away mad just go away. Good luck getting your money back but the racers haven’t got paid so I’m sure you will not either.
Millions are lost every day due to bankruptcy. It is the responsibility of the investor to choose wisely who and what he invests in. The only way the decision could/would be overturned is if there was an error made by the presiding judge. Highly unlikely at best. It’s time to move on.
Thanks for getting Ed’s explanation. I can appreciate that it is a large some of money and that the facility could have closed if he didn’t lend the money when he did and that some of the equipment is still in use today. I would think that all creditors would get a percentage of the final sale dollars back to them based on what dollar value is owed to them and not some get the bulk of it and some don’t get any. I’m not sure if I would risk another auction because it may bring less money than the first. We will see…
If I were him, I wouldn’t be taking credit for that website! it’s awful.
This guys gripe should be with terry himself, not mr bemer who made a purchase legaliy at a public auction. Terry is the one that accrued all these debts. Id really like to knoq where all this money went because it sure didnt all go towards upgrades and none of it was paid back. The place runs 3 nites a week, really no payments were possible?
You bet money on a 60-year-old racetrack. Impossible to tell me DeMuzzio didn’t know there was a chance he would get burned.
With Brian on that one
“You spin me right round, baby
Right round like a record, baby
Right round, round, round.”
Hey Shawn, Who is paying the bills now? The last time I drove past there the sign was still lit along with another light or two at the ticket booth. CL&P doesn’t give away their power.
Silent partner ? can anyone say IRS !! hello ? i hope it was on the up an up , remember this is a cash business . watch out for that can of worms maybe? I would not be surprised a bit in today’s business world Sounds like a lot of shady deals to me good luck.
Everyone keeps saying the guy got burnt on a bad investment…. This guy Loaned money, just like a Bank. Its a LOAN. If it was a risky investment like all you guys keep saying, he wouldn’t have been able to put a lien on the property. The Sale of the Property was this guys collateral. I don’t blame him at all. If you loaned a corporation $250k would you just walk away from a chance to get any of it back???? Just call yourself stupid and walk away???? No you would fight to get anything you could back. Also folks I’m quite sure that he isn’t the last lien on the property either. So He might not be the last one to appeal.
So stop calling it a bad investment. I cant put a lien on Merrill lynch if my Mutual fund goes down.
If Someone Is allowed to lien a property, its because money is OWED to them. Don’t Be Mad at this guy for trying to get his money back. The Speedbowl had a good run. It may be a track again, but not next season. Suck it up and start thinking of a new place to race.
Maybe Bruce will put his pizza on the menu . Sorry dude . I lost money in my annuity years ago oh well I knew the risk . Suck it up ! What about those people who lost in Enron ? They lost there entire retirement fund . You gamble you lose . So sad to bad !
You play with fire and you get burned !
“Also folks I’m quite sure that he isn’t the last lien on the property either.”
Well, while it is true regarding it being a loan, I’ve got to believe he knew there was a risk in recovering any of the loan, or even some of it, by his place on the list of creditors / previous liens already on the property.
He’s not the first lien, correct? Or the second. Third? Fourth? I think you start playing with fire at that point.
Having said that, yes, he has a right to pursue any and all legal avenues to recoup anything he possibly can.
If Bemer said “here – here’s 100K, take it or leave it, so we can get this deal closed.” Pretty sure he is taking it.
Not that Bemer has to offer it by any means, but maybe that’s where this is really headed.
An appeal puts the 2015 season at risk and, maybe, 2016. This is what DiMuzzio is trying to leverage.
He took 3d position on the property for his money, was a party to the process (including the motions re: advertising), and could have bid at the auction to protect his interest, but didn’t. NOW he complains?!
He made a bad investment and wants everyone else to bail him out. Your note is still good. You have only lost your ability to take the real property. Chase Terry Eames, Mr. DiMuzzio! It was NOT the rest of us who put you in bed with him.
God what a mess! I don’t blame anybody for trying to get paid back but come on 10 years? I believe this thing will get resolved and there will be something happening at the bowl next year.
Shawn does the truth hurt?
Matthew,
Instead of using a fake email address maybe use a real one and you’ll get an explanation as to why I’m not approving comments that are just filled with made up assumptions about people and this situation.
Seems to be a lot of confusion over the distinction between an investor and a creditor. It sounds like pizza man is the latter. You buy stock and the company tanks. You are an investor and SOL. You are entitled to zilch. You lend someone money and they promise to pay it back plus interest, you are a creditor and as such you have legal remedies under the law to pursue getting your money back. You are under no obligation to bid on the collateral that is securing your loan in order to recover your money. In fact its probably the dumbest thing you could do since the collateral is selling at less than its value when you loaned the money and you are literally guaranteeing yourself that you’ll only get back a portion of what you loaned out. In our zeal as race fans to see a 2015 season happen it seems many are looking for someone to blame. Everyone involved here in the bidding and appeal process is working within their legal rights. To unwind this mess it has to work its way through the courts and it could well mean there is no 2015 season or at least a shorter one. Mr Bemer is a smart man. He bought a piece of property for about 50% of what it is worth if I got my numbers right, and it is costing him nothing to sit back and watch this get slugged out in court . He doesn’t pay a dime until he has clear title. But by then it may be too late to make adequate preparations for 2015. Frankly at this point it doesn’t matter who did what to whom over the last 8 years to get to this point. So blame who ever you want for past sins. Its a pointless exercise and doesn’t resolve this situation. Let the courts resolve it and let’s hope there is .still a race track when it’s all over and racing in 2015. Eight years ago when the first signs of financial trouble became apparent this track could probably have been sold for 4 – 5 times more than what it just drew at auction. If that were the case it would be another strip mall today. I consider it good fortune that the property’s only real value today is to continue as a race track and that was borne out by what it fetched at auction and the fact that only two parties even considered bidding. Hopefully the court comes to the same conclusion when all is said and done and the green flag waives again at Waterford.
If you loan money on property and your not 1st or 2nd on the mortage. The only way to protect your interest is buy it at the foreclosure auction,then resell it. All other liens go away other than IRS. This man is throwing good money for bad by pursuing this
It would be great if a knowledgeable attorney could provide an approximate timeline for the appeal. Is there any chance of a quick (end of December 2014?) decision with respect to the appeal? I assume a new judge will hear the appeal??
Bottom line… I hope & pray that whatever the Judge agrees, Waterford Speedbowl remains a race track. It would be a sad day for all of us who have been either a fan or competitor at “The Bowl” to see it fall by the wayside, and join the list of tracks gone-by (Riverside Park; Danbury; Plainville, etc.).
Like I said, the 2015 season is at risk and 2016, perhaps…if things got really out of control 2017 could be impacted. I am not an appellate lawyer, but have friends who are and have spent a fair part of my life reading appellate decisions. I am not aware of any circumstances that could get this case pushed forward on the appellate calendar.
The only thing that gets this resolved by year-end would be for someone to buy out Mr. DiMuzzio by year-end. Via these pages, he has said that he would take 50 cents on the dollar, about $125K, which makes the reason he did not bid $1.8M to the $1.75M to see if Mr. Bemer would go to $1.85M, which would have got Mr. DiMuzzio 40 cents on the dollar of his accrued debt and 90 cents on the dollar of his original debt. Rather than do that, he chose to stay silent, knowing he was in 3d position and going to get nothing.
Correct Reid.
Demuzzio did not have to bid BUT he had 250k at risk at that auction. Why would he not show up to the auction? Not to bid but to show the others he was there and maybe motivate them to bid up again. The only concern the two main players had was there money. If he was there he probably could have asked them to go up to try to recoup some of his money. I’d be willing to bet it would have sold at any price short of 2mil. Besides the fact that all these creditors seemingly were okay with not receiving any or little payments on there money over the course of 8- 10 years.
Im still dumbfounded that the only person who is waking away with out any ramifications is Terry. Demuzzio should be suing Terry for the money lost seeing as how he made no effort to pay this guy back. In spite of that I think if Mr bermer wants to moveforward quickly he will settle with him out of court.
1st mortgage holder is an Ace, all others behind him gets trumped and are at risk in a situation like this. When a business or individual goes under or they declare bankruptcy, subordinate lien holders lose UNLESS they can make a bid that’s higher than the 1st lien holder (that’s Rocky) or in this case at auction, Mr. Bemer who was a new bidder. Mr. DeMuzzio had every opportunity to protect his investment by buying the place at auction with a bid higher than Mr. Bemer. His choice not to bid was his and resulted in his losing 100% of what he invested.
The scoring system that Mr. DeMuzzio claims he helped purchase actually was fried via a lightening strike back while the track was being operated by Mr. Robinson. I know the current scoring system was a replacement system purchased by Terry and which I helped Terry procure the year he took the track back.
It sucks to lose on the track and in this case, in business for Mr. DeMuzzio. Only person who can win now is his attorney taking more money from him on an appeal effort. Mr. Bemer will have this cloud pass or bond it out quickly so that it’s a non-issue and so that it quickly falls into the Race Day CT archives.