Shade Trees & Evergreens, bankruptcy

The entrance to Shade Trees & Evergreens at 11101 Liberty Road, just west of Libertytown. The event venue shut down because the business did not have building, occupancy, electric or plumbing permits. It later filed for bankruptcy.

Lawsuits against a venue over canceled weddings are on hold because the company has filed for bankruptcy.

Shade Trees & Evergreens, near Libertytown, filed for Chapter 7 bankruptcy on July 27, court records show.

Under Chapter 7 bankruptcy, a business liquidates its assets and pays back creditors out of those funds. That differs from Chapter 11 bankruptcy, which is a reorganization of a business that intends to continue operations and pay back creditors over time.

At least eight suits were filed claiming that the business owed couples lost deposits and fees after their weddings were canceled, according to the bankruptcy filing.

The events could not go on as planned after Frederick County officials determined that the venue was not properly permitted and had violated zoning regulations, officials said in a May 3 letter.

Frederick resident Colleen Elizabeth Boyenton was scheduled to have a hearing in Frederick County District Court on Friday on her suit against Shade Trees & Evergreens, but it was postponed due to the bankruptcy filing.

Boyenton’s complaint alleges that Shade Trees & Evergreens deposited a $2,250 payment from her, and it was not returned after the wedding was canceled.

She found out six days before her May 13 wedding that the venue could not host it, she said.

“I’m honestly still baffled that the owners have so little consideration for the hundred brides they took money from,” she said. “Shade Trees knew this was coming one day.”

With the help of her caterer, Boyenton found another venue that was available to host her wedding at the same time and day. It matched Shade Tree & Evergreens’ price, but because she has not received any money back from the original venue, she said it was like she paid twice.

“Honesty, I really just want my money back. Or at least an apology from them,” she said.

Filing for Chapter 7 bankruptcy automatically puts any attempts to collect from a company on hold. So, generally, complainants cannot collect from a business if the bankruptcy is granted.

An attorney for Christopher Corey and Kaitlin Keating, one couple seeking reimbursement, indicated they would try to sue the owners of Shade Trees because the owners as individuals are not protected by the bankruptcy stay.

The total liabilities of Shade Trees & Evergreens come to nearly $257,800, the bankruptcy filing shows. The property assets of the business total $42,476.

A trustee will hold a meeting with creditors on Sept. 26 in Hagerstown to identify assets and liabilities of Shade Trees & Evergreens. The trustee will determine what net proceeds, if any, the creditors are due after liquidating assets.

Secured creditors such as banks would be first to collect any funds they are owed, then priority unsecured creditors such as taxing authorities and unpaid employees would be next in line. If there are any remaining assets, they would be split among unsecured creditors like the couples bringing forth the lawsuits.

In low-asset cases, the trustee may determine that there is nothing that the company could distribute to the creditors.

Attorneys representing the business in bankruptcy court did not return calls for comment Friday, and no one answered a call to the Shade Trees & Evergreens phone number. Scott Hartinger, an attorney for the Shade Trees & Evergreens event planner, Natasha Termohlen, declined to comment on the case because he was not authorized to do so.

Representatives for Shade Trees have not commented publicly since an initial May 6 story in The Frederick News-Post.

Follow Kelsi Loos on Twitter: @KelsiLoos.

(36) comments

mwtinfred

To highlight the stupidity of blaming Jan Gardner for this - let's see what else we can #blameJan for. I was speeding and got a ticket - #blameJan that she didn't get me out of it. My child forgot his HW and got a 0 on it - #blameJan that she didn't make sure he got the credit he deserves.

DickD

"An attorney for Christopher Corey and Kaitlin Keating, one couple seeking reimbursement, indicated they would try to sue the owners of Shade Trees because the owners as individuals are not protected by the bankruptcy stay." The owners may not be protected by the company bankruptcy but they are not normally liable for a company debt. It is one of the reasons you incorporate.

There are exceptions:
If you cosign as an individual on a business loan, you are as equally responsible as the corporation or LLC to pay it back.

If a creditor requires you as an individual to provide some sort of collateral before approving the loan. .

If a LLC was a shell created only to provide liability protection for its owners or the company was practically inseparable from or an alter ego of its owners courts may allow piercing the corporate veil.

KellyAlzan

Incorporating or forming an LLC is not a guarantee that you can't be personally held liable. When we incorporated that was made clear to me

DickD

Isn't that what I said?

KellyAlzan

Not sure. I said it in a couple sentences. Look at the book you wrote.

DickD

Because there is more than one exception and it is not a "blanket right", which you imply in your simple answer.

FrederickFan

"Representatives of Shade Trees have not commented publicly since an initial May 6 story in the FNP." What about Kirby Delauter? He was representing Shade Tree in his numerous public comments about how the County was taking advantage of Shade Tree, when Shade Tree failed to get any permits, and chose to violate zoning. What does Councilman Delauter have to say now? I'd like to hear him explain to all the brides why they aren't getting their money back. I'd like to hear him explain to everyone who attended an event in one of their buildings, why their personal safety was put at risk in unpermitted structures. I'd like to hear him explain to the landlord why they put up buildings on the land without notifying the owner of the land.

public-redux

I was just thinking that # is going to blame Gardner for this bankruptcy. He will double down as part of his businessmansplaination.

b1sellers

He doesn't care - he only cares about people that give him something. The regular person means nothing to him. It's obvious in the way he votes and in the comments he makes.

Mmadono

I think you're both right. His Facebook posts pretty much confirms that he thinks Jan is to blame. Why would any business ever go to Kirby with their problems? All of them ultimately end up worse than they were.
Not to mention, the guy still doesn't understand the difference between his job, and what the executive branch does.

m21701m

Couldn't have happened to a nicer group of people... Karma is a..... Isn't it? You all treated your renters like crap. Your rude emails and attitude towards my wife and I, and family before our wedding there says everything about you. I'm just glad I'm laughing the loudest now!!

thevoiceoffrederick

they didn't have proper permits for structures on property, ok, tear them down, bring to code, whatever it takes, move on. Why did the county shut down the whole property? They could have brought in large tents and portable restroom facilities and allowed to continue, no different then events in baker park or along Carroll creek or any other city, county or state park. There is something else here that stinks and its not the business. I have feeling this will continue to other small business's in the area and I have a suspension who may have instigated this whole thing.

Jleftwich

It seems you are not aware of the entire story - namely that Shade Trees & Evergreens was in violation of the zoning ordinance. There are several articles on this, here's one from May, 2016: http://www.fredericknewspost.com/news/economy_and_business/lack-of-temporary-permits-puts-venue-s-wedding-schedule-in/article_55b76b59-1cf6-5df1-873f-589a43002292.html.

This is likely why the "whole property" was shut down. That the owners also did not have permits for, well, nearly everything on their property. You cannot have permanent structures on your property without proper permitting - that's the way it works.

A couple of council members (Shreve and Delauter) seem to think it's okay for a business to have operated without proper permits. If you're running a business and have no permits, that's inviting trouble, regardless whether they've had no problems for how ever long (10 years?) they been in business. That's called complacency and bad things result from being complacent.

thevoiceoffrederick

totally aware, they will have a suit against the county, cant shut down an open space or they better start shutting down all these farms that allow events to happen on agricultural land. The buildings were in violation, you can shut down the buildings cant shut down land

phydeaux994

They didn't shut down the land?? Whatever you mean by that. They shut down their event operation because they were breaking the law. The County offered to issue temporary permits while they brought the buildings up to code but they declined to do that. They could still operate in any other business that didn't violate the zoning ordinances for the property.

Jleftwich

Also, the county offered to work with Shade Trees & Evergreens, by applying for a temporary permit while issues were addressed (and bringing in temporary structures like tents, portable toilets, etc.) - but the owners failed to follow through.

thevoiceoffrederick

after they initially shut down the property

b1sellers

Is that you Kirby?

Hayduke2

Sure sounds like Kirby or one of his buds....

KellyAlzan

No. Not after.

You really should review the facts

FrederickFan

Haven't you read any of the previous articles on this topic in the FNP?

The County gave the business plenty of time to come in and resolve the situation. No one showed up from the business. It was then revealed that their landlord, the person who actually owns the land, had no idea the buildings were there! He was making plans to tear them down. This problem is 100% on the business. They broke every rule that can possibly be broken when putting up a building, and now their customers are paying for it, literally.

Do some research next time before you post rubbish.

armillary

"I have feeling" and "I have a suspension." Sorry, not interested in your medical history. Just follow the laws and if you're good at business, you'll have the same chance at success as anyone else. It's when you cut corners, ignore the law and cheat people you get yourself in trouble.

thevoiceoffrederick

ah tolerance, I make a spelling mistake and you think its a "medical" issue, nice to see your a civil adult

KellyAlzan

It's "you're" not "your"

Bug difference

FrederickFan

[thumbup]

Hayduke2

Voice of Frederick - really?

public-redux

Sure sounds like the company didn't use an escrow account for deposits for services not yet performed. Probably used deposits to pay current bills.

BlueDawn666

That is what was thinking as to why they are filing Chapter 7...they have no money to pay back the deposits, they are probably operating something like a Ponzi type scheme, probably have been operating like this for long time, probably why they decided to host weddings.

public-redux

Technically not a ponzi* scheme. More of a rob Peter to pay Paul scheme.

* Book recommendation: "Ponzi's Scheme: The True Story of a Financial Legend" by Mitchell Zukoff. It is at C. Burr Artz.

BlueDawn666

I am well aware of what a Ponzi scheme is:

a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.....but thanks for the book recommendation, doubt I will read it.

The people putting down the deposits are investors, they are investing in a wedding, they were expecting in return for their money an actual wedding. They believed by investing their money with Shady Tree they would get a return in their investment, which would be an actual wedding because of the weddings Shady Tree had held before, the investors had seen pictures of previous weddings and had heard of previous weddings Shady Tree, they had no reason to think that they would not receive what they had invested in . When the deposits dried up Shady Tree could no longer honor the investments that had been made because no new deposits were being made..that is a Ponzi scheme....these people were defrauded of their money by Shady Tree...

a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.

Defrauded means this: illegally obtain money from (someone) by deception.shady Tree knew that they had illegally obtained money from their investors in weddings.

So no Public this was Ponzi scheme...

armillary

BlueDawn666, getting married is a gamble, but I digress. My real point is, contracting for a wedding venue is not an investment, it's just procuring a service. People don't expect anything more from a wedding venue than what they paid for. I agree with public-redux.

public-redux

Blue, if the first few customers were expecting to get five or six weddings out of their initial investment, then you might have a point about it being a Ponzi scheme. I haven't seen that detail reported, however.

So what do you like to read?

DickD

"Rob Peter to pay Paul."

b1sellers

Isn't that illegal?

Cowell

Sad day for everyone involved. I suspect a deeper review of the financials may show mismanagement of funds.

b1sellers

I agree. And the people who are most likely never getting their deposits back are the ones who lose.

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