St. Mary's County Commissioner Raley Named as Co-Defendant in Federal Bankruptcy Case
By Guy Leonard, County
HOLLYWOOD, Md. (Oct. 9, 2008)—A lawsuit filed in federal bankruptcy court for nearly a year now by the current owners of Raleys Town and Country grocery store in Ridge alleges that the previous owners, including County Commissioner Daniel H. Raley, did not disclose all the financial problems inherent in the business before they sold it in late 2004.
The suit also names Teresa Ann Raley, Margaret Raley, Raymond Raley, and Bruce Raley as co-defendants.
Donald Tennyson, along with his wife Betty Tennyson, filed the suit in federal bankruptcy court in January, he said. Tennyson is now seeking $3.4 million in damages, he said, because the previous owners alleged misrepresentations of the business profitability caused the Tennysons substantial losses once they took over the store.
Were trying to get the place sold and move on with the lawsuit from there, Tennyson told The County Times. Our intention was
to keep a grocery store in the community and make a decent living.
We had no idea the business was this bad.
The Tennysons, who continue to run the business while looking for a new buyer, filed for bankruptcy in October of 2007 after realizing that they could not make sufficient profit to pay off about $1.8 million in mortgage payments owed to the Raley family.
Tennysons filing for Chapter 11 bankruptcy resulted in the delay of a planned auction of what has long been the only community grocery store in the southern end of St. Mary's County.
According to the lawsuit filed in U.S. District Court in Greenbelt, Tennyson alleges that he received only three years of financial statements before buying the business from the Raleys as opposed to the five years he had requested.
Tennyson compiled a cash flow estimate, the lawsuit stated, that indicated there was a shortage of income in the store resulting in a loss of about $90,000 a year.
Tennyson goes on to allege in the lawsuit that he was advised
that the business was more profitable than it appeared on paper and that the money was there or words to that effect.
The Raleys in attendance [at an October 2004 meeting] communicated that the extra monies to which reference was being made (and which was necessary to provide any anticipated measure of profit) were not reflected by the tax returns, that had ostensibly been filed by the Raleys on behalf of the corporation, the suit continued to allege. Further the Tennysons were advised by the Raleys in attendance that the profit and loss statements that had been provided to the Tennysons likewise did not reflect the extra cash.
Calls to both Daniel Raley and Christopher Longmore, the attorney for the Raley family in the case were not returned as of press time Tuesday.
While the federal case against the Raleys has yet to go forward, local courts have already decided in favor of the Raley family prior to the Tennysons filing bankruptcy.
The 2007 court case, tried locally, showed that the Raleys were awarded a judgment of $1.5 million from the bankruptcy proceedings.
Tennyson said that he has a possible buyer lined up to purchase the property. County liquor board documents show that Tennyson is ready to transfer the business liquor licence, but he could not be sure if the potential buyer would continue operating a grocery store there in Ridge.
Itll be an economic decision for him, Tennyson said. If this store goes away it will be missed. That leaves the community without a [local] grocery store.