Daily Progress, Jacksonville, TX

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September 27, 2012

Fate of historic building, restaurant remains in limbo

JACKSONVILLE —

The location of Sadler's Restaurant and fate of the iconic Landmark Building, one of the oldest buildings in Jacksonville, remains in limbo after an order was issued by the United States Bankruptcy Court Eastern District of Texas in Tyler on Monday.

Judge Bill Parker granted a motion put forth by Archive Management as part of its bankruptcy proceedings.

 Monday's decision puts the historic building temporarily back into the hands of the company, which sold the building to Lon Morris College in 2010 to be part of its hospitality administration program. Court documents state in exchange, Archive Management waives any claims it has against the college and its officiates.

“The court is of the opinion that the relief requested is in the best interest of Lon Morris, its estate, and its creditors and equity security holders,” the document states.

Jim Echols, who represented Archive Management with Saunders, Schmidt and Echols P.C. in Tyler, said the company was in the midst of the foreclosure process on the building when the college filed for Chapter 11 bankruptcy, protecting them from creditors.

Echols said while the building was in the bankruptcy proceedings, LMC could have devised a way to pay Archive Management back as part of its restructuring efforts.

“Once Lon Morris agreed it was not necessary to use that building as part of its reorganization efforts, the court agreed to ... allow Archive Management to proceed with the foreclosure process,” he said.

Echols said Archive Management would have to go through the entire foreclosure process again, ending with an open bid on the property. To get the building back, the company would bid on the building as any other individual, but they can bid money that is already owed to them.

“There are several of hundreds of thousands of dollars owed to Archive,” Echols said. “They would bid credit(s) already owed to them.”

Echols said in his experience, the creditor is the successful bidder in foreclosure sales.

Becky Bailey, president of Archive Management, said she is unsure of exactly what proceedings lie ahead.

“They couldn’t service the debt and it was included in the bankruptcy,” she said. “We are going to get the property back. What we plan to do once we get the property, we don't have any specific plans.”

The Landmark is listed on the National Register of Historic Places, and was the first federal building in Cherokee County. It was built in 1933 and now has 20,000 square feet of space. It served as the town's post office for decades before its transformation into the Landmark Hotel before its acquisition by LMC.

It is currently the home of Sadler's Restaurant.

“Sadler's is moving and I'm in discussion on the building,” Sadler's owner Rob Gowin said.

Gowin said he plans to move the restaurant and DJ's College Avenue Smoke House to the old building on 100 South Bonner St., which has also gone through many transformations, from a jail, to Jacksonville's police department to a probation office and tax collection building.

“The original part of that structure is a 1930s facility, like the post office,” Gowin said when he purchased the building in October of 2011. “The whole concept of culinary tourism and the novelty of being able to sit in the old jail cell and have food is pretty intriguing.”

Renovations have already begun to the old jail.

Calls were not returned by Hugh M. Ray III, attorney for LMC and Dawn Ragan, chief restructuring officer for Bridgepoint Consulting by press time.

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