Trolley's owner, entrepreneur, president of First National Bank in Springfield and reality TV star Aaron Buerge filed for Chapter 7 liquidation bankruptcy Feb. 11.
Buerge said in a phone interview today his decision to file for bankruptcy primarily stemmed from ongoing complications with a lawsuit involving Kansas City-based Prime Lending II, which purchased the $3.6 million note for Buerge's Trolley's entities from the Federal Deposit Insurance Corp. when Buerge's former lender Columbian Bank failed in August 2008.
Buerge said he offered the FDIC $2.25 million to purchase the notes, but it instead chose to auction them off. The notes were purchased for $1.8 million by Prime Lending II, which then gave him two weeks to pay the $3.6 million note amount.
Buerge said a lawsuit was filed after he couldn't pay the full amount, and he was forced to file for Chapter 11 bankruptcy protection on the Trolley's entities.
"I have spent almost two and a half years fighting these individuals in court, while making payments on the notes," he said via e-mail. "I made multiple offers in an attempt to settle the debt, but the investors rejected those offers.
"It was my sense that the investors assumed that since my family was in banking, we could pay the $3.6 million in cash."
Buerge has set up a
Web site with a statement explaining his position concerning the lawsuit.
Buerge said he has spent approximately $50,000 in attorney fees each year since the lawsuit began.
With the Chapter 7 bankruptcy filing, the assets related to the loan - including Trolley's LLC, Trolley's Overland Park LLC and Trolley's Real Estate Holdings LLC - will become property of Prime Lending II, Buerge said.
Ryan MacDonald, manager for the Springfield Trolley's restaurant, said he will likely be assuming full ownership of the restaurant.
"The restaurant's not going anywhere," he said, noting he is in talks with Prime Lending II and would have more concrete details in about a week. "I'll be assuming all the management responsibilities as soon as my negotiations work out."
Eric Johnson, partner with Spencer Fane Britt & Browne LLP, who represented Prime Lending II in the case, could not be reached for comment late this afternoon.
Buerge has more than 100 creditors, $2.3 million in total assets and $9.3 million in total liabilities, according to the
bankruptcy filing from the U.S. Bankruptcy Court in the District of Kansas.
In the filing's statement of monthly net income, Buerge's average monthly income was listed as $17,216.20, with average monthly expenses of $17,215.27, leading to an average monthly net income of 93 cents.
Buerge maintains that the bankruptcy wasn't filed due to individual money troubles.
"This is not the result of my personal financial distress, so I will continue making payments on my other business debts," he said. "I regret that the actions I took could not have been avoided.
"However, it was a decision I had to make so my family and I could move forward."
Buerge said he still owns Chestnut Corners and AGB LLC, a real estate holding company.
He noted that First National Bank of Springfield and his position as president of the bank are not affected by the bankruptcy filing or the lawsuit.
In July, Mountain Grove-based First Home Savings Bank foreclosed the Vandivort Center, 305 E. Walnut St., which Buerge purchased from Jim Shirato in July 2006, according to
Springfield Business Journal archives.
Buerge appeared on the second season of ABC's "The Bachelor," appeared on the Jay Leno show and was in an episode of the TV show "Less Than Perfect," all in 2002, according to the
Internet Movie Database.
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