Bankruptcy Postpones Foreclosure Auction Of Condemned Waterfront Property

On the eve of a foreclosure auction for the waterfront properties at 14 and 16 Sheep Pond Road, a bankruptcy filing by the limited liability company that purchased the eroding lots two years ago has postponed the auction.

Early Sunday morning, the property owner - 14 16 Sheeps Pond LLC - filed for Chap. 11 bankruptcy at the United States Bankruptcy Court for the District of Massachusetts. The limited liability company is registered to Brett Fodiman, the president of Slacktide, a Boston-based private equity and real estate development firm. Since Fodiman's LLC had purchased the properties for $3.9 million in April 2022, Slacktide had been marketing them as short-term rentals for $16,000 per week.

The bankruptcy filing thwarted a foreclosure auction pursued by Clinton Savings Bank, a central Massachusetts lender, which granted a $2.9 million mortgage to Fodiman's LLC for the property shortly before the sale. The auction had been scheduled for today at noon.

The last-minute machinations came as workers scrambled over the weekend to move the house at 16 Sheep Pond Road back from the eroding coastal bank, which was left with a portion of the deck hanging over the edge. That situation had prompted the town of Nantucket's Health Department to condemn the home, declaring an "environmental emergency due to the severe erosion" and that the dwelling was unfit for human habitation." 

"The Debtor filed this case to stop a foreclosure scheduled by Clinton Savings Bank," according to a document filed by Fodiman with the bankruptcy filing. "Given the value of the Property, the Debtor believes it will be able to propose a plan of reorganization that satisfies all creditors in full."

According to court records, there are two secured creditors in the bankruptcy filing - Clinton Savings Bank, for a claim of $3.14 million, and Martin Bourke Painting Inc., for $35,698. There were also three unsecured creditors that are well-known around Nantucket: Emeritus Development ($41,866), Bracken Engineering ($17,585), and Blackwell Associates ($2,480).

While the fair market value of the two properties is listed in the bankruptcy filing as $5.1 million (according to Zillow), "The Debtor believes the value is higher."

According to attorney Dave Madoff, who is representing Fodiman in the bankruptcy case, "Slacktide did not file the bankruptcy. The property is owned by 14 16 Sheeps Pond LLC, which is the entity that filed the Chapter 11."

Even so, it appears that Slacktide is facing numerous challenges. The company's main office number is "temporarily unavailable," and Slacktide is facing numerous lawsuits and small claims in Nantucket District Court and Nantucket Superior Court from other island businesses in the trades over contractual disputes in which Slacktide allegedly failed to pay monies owed.

Property records show the two properties on Sheep Pond Road sold in November 2020 for $1.3 million amid the COVID-19 pandemic. Less than two years later, the limited liability company registered to Fodiman purchased 14 and 16 Sheep Pond Road for $3.9 million in April 2022.