GONZALES — United Community Bank moved Wednesday to take possession of 29 acres of the financially troubled Oak Lane Memorial Park cemetery in Prairieville and is looking to resell the property after the bank posted the sole and winning bid for the property at a sheriff’s sale.
The bank, which holds $3.3 million in loans that were defaulted on by the cemetery, bid $2.4 million for the property, more than twice the appraised price. The bank does not pay that figure, however, since it holds the debts owed, sheriff’s officials said. The bank only pays the costs related to the legally mandated sale intended to settle those debts.
The sheriff’s sale comes as the bank loans were foreclosed on and the Louisiana Cemetery Board is investigating how Oak Lane officials handled money for the graveyard that lies along La. 73 in Ascension Parish.
Board officials have found clients were paying fees for perpetual care of cemetery plots, but trust accounts to hold the perpetual care money were not fully funded, according to court filings. Also, people were paying for new grave construction but the work was not finished.
Cemetery Board Director Lucy McCann and Assistant Attorney General Ryan Seidemann, who represents the board, were present for the sale Wednesday at the parish Courthouse Annex in Gonzales but declined comment.
The 29 acres have not been developed as a cemetery and include fields, a barn, a house and other buildings.
Bank attorney David Cohn, who was at the sale with bank officials, said afterward that the bank will not hold a buyer to the land’s existing use, but the land could remain a cemetery.
“I can see interest there, but I can also see a residential developer coming in there in a very prime and choice location, trying to put something together there,” Cohn said.
The land is near some of Ascension’s more upscale developments, including the live oak-lined Seven Oaks subdivision along La. 73.
Cohn said the bank will try to recoup the remaining unpaid loan principal and interest from the Oak Lane Memorial Park LLC and its owners, George Bonfanti, of Prairieville, and Joseph P. Arisco and Katherine K. Fackrell, of Tyler, Texas.
The land was owned by National Information Services Inc., a Baton Rouge company that bought the cemetery from Oak Lane in April.
But Oak Lane held the bank loan that was guaranteed by Bonfanti, Arisco and Fackrell. Bonfanti retains a cemetery management contract with NIS, court filings say.
The owner of NIS, Lawrence R. Dodd, did not return a message for comment Wednesday. Neither did Bonfanti.
Bonfanti has said the cemetery ran into financial trouble, in part due to construction on La. 73, but had started paying into the underfunded trust accounts.
In May, the Cemetery Board suspended Oak Lane’s ability to sell new “pre-need” lots until the trust accounts were fully funded. The order took effect July 31. Earlier this month, the board also received a court order to force Oak Lane to turn over its financial records.
The sheriff’s sale did not involve the remaining few acres of existing graves and unused plots formally dedicated as cemetery land. Cemetery dedication, which releases land from loan obligations, means the land cannot be seized or sold for debt.
Still, one Oak Lane customer, Karen Sue Giles, has filed suit alleging a small piece of land that was part of the sale Wednesday should have been dedicated because she paid Oak Lane for it.
In a separate 2013 breach of contract suit against the bank Bonfanti has claimed that the bank refused to settle on the fees that would have allowed him to complete cemetery dedications and acted in bad faith to ultimately shut Oak Lane down.
But a state district judge found in favor of the bank.
Cohn said there was no written agreement on the fees, and with Oak Lane in default for about a year, considerations from the bank became “much fewer and much further between.”
“So the bank did everything it could to work with him to try and let him work out of this. He just couldn’t or wouldn’t do it,” Cohn said.
The Giles suit, which names Oak Lane, NIS and the bank as defendants, is pending in the 23rd Judicial District.
Follow David J. Mitchell on Twitter, @NewsieDave.