Richmond Hill Inn foreclosure, fire inspection, tax records

Five months before a devastating March 19 fire destroyed the Richmond Hill Inn’s historic mansion, legal battles had been heating up between the current and former owners of the property. The fire was intentionally set, according to investigators.

William Gray bought the property in 2005 for $10.4 million from owners Albert and Marge Michel of Greensboro. The Michels bought the property in the mid 1980s from the Preservation Society of Asheville and brought the property back to life. Over the years the original structure, built in 1889 as a private home for ambassador and congressman Richmond Pearson, had fallen into disrepair.

But Gray fell behind on an owner-financed $8.8 million deed of trust with the Michels, who initiated foreclosure proceedings. A notice filed in Buncombe County District Court on Oct. 29, 2008, stated that Gray still owed $6.9 million.

The day before the foreclosure hearing notice — Oct. 28, 2008 — Gray filed his own civil lawsuit against the Michels. Gray alleged fraud in the suit, stating that the Michels hadn’t disclosed the fact that the plumbing system for the mansion and guest cottages had been experiencing hundreds of leaks. The problems with the polybutylene pipes that comprise the plumbing system were discovered in 2006, according to Gray’s lawsuit. The defendants denied the allegations. Click here to read Gray’s original complaint.

In a separate foreclosure proceeding, county officials were seeking to recoup $64,000 in unpaid property taxes for 2008, according to Buncombe County Tax Director Gary Roberts. Click here to see the tax documents.

On March 16, three days before the blaze, another notice was filed in court announcing that the Richmond Hill Inn property would be sold on the steps of the Buncombe County Courthouse to the highest bidder. The date of the sale was set for 10 a.m. on April 16. Click here to read the foreclosure petition; click here to read the order allowing foreclosure sale; and click here to read the notice of the sale of the Richmond Hill Inn on the courthouse steps.

Click here to read the report of the last inspection of the Richmond Hill Inn property by the Asheville fire marshal’s office.

Click here to read the company’s federal bankruptcy filing, and click here to read a companion filing here listing the top 20 creditors.


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