Briarcrest opponents of sale to Lakemont Cooperative seek to intervene

LACONIA — A majority of the unit owners at Briarcrest Estates yesterday petitioned the Belknap County Superior Court to intervene in pending litigation in an effort to forestall the sale of the manufactured housing park to the Lakemont Cooperative Inc., which was formed by a minority of tenants of the park.

Attorney Philip McLaughlin, representing at least 175 of the 240 residents of the park, claims that the state statute governing such transactions fails to anticipate that a majority of tenants will prefer commercial to cooperative ownership and to provide them with a role in affecting the sale of the property. Nevertheless, they have a "direct and apparent interest" in both the transaction and litigation, namely "their desire not to be forced to assume for themselves or their successors, through an involuntary process, debt associated with the proposed acquisition of Briarcrest Estates by Lakemont Cooperative, Inc."

In July Mark and Ruth Mooney, the owners of the park, accepted an offer from Hometown America Corporation of Chicago to purchase the park for $10 million. In accord with a state law entitling park tenants to make a counteroffer and requiring park owners to bargain in good faith, a group of residents, with encouragement and assistance from ROC-NH, a program of the New Hampshire Community Loan Fund, incorporated as the Lakemont Cooperative and matched the $10 million offer.

In response, the Mooneys asked the Belknap County Superior Court to approve the sale of the park to Hometown America. Attorney John Giere, representing the Mooneys, claimed that approving the transaction would be in keeping with the statute, which is is intended to safeguard the best interests of tenants, most of whom oppose cooperative ownership of the park.

The Lakemont Cooperative, represented by Attorney Robert Shepherd of Nashua, asked the court to dismiss the Mooneys' petition. Shepherd told the court that as the owners of the park the Mooneys were in no position to represent the interests of its residents. Shepherd reminded the court that the statute does not prescribe that the cooperative include a specific number or percentage of tenants to make an offer and pursue the transaction. By refusing to sign the purchase and sale agreement, he charged, the Mooneys have wrongfully refused to consider the cooperative's offer and failed to negotiate in good faith, exposing themselves to penalties amounting to $10,000 or 10 percent of the sale price whichever is greater.

In seeking a role for the majority, McLaughlin told the court that "the legislation (RSA 205-A:21) . . . did not contemplate that the Community Loan Fund, or any affiliate, such as ROC-NH, would organize a tenants' organization that represented the will of a distinct minority." At the same time, he noted that nothing in the statute "prohibits Briarcrest tenants from intervening in the present action" or bars the Mooneys from weighing the opposition of a majority of tenants to cooperative ownership when fulfilling their duty to bargain in good faith.

McLaughlin asked the court to conclude that the Mooneys "may, as they discharge their statutory duty to bargain in good faith, take into account, that good faith extends to consideration beyond the will of the minority (whether in an association or not) and should consider the will and the reasons for the opposition of the majority."

McLaughlin filed a petition bearing the signatures of both the 11 original complainants and their supporters from 131 households in the park with the court. Together they represent 59 percent of the 241 sites in the park.

Meanwhile, the Mooneys and the cooperative are at odds about how the litigation should proceed. So far attorneys representing the two parties have failed to reach agreement. Those representing the Mooneys, believe that the issue is a matter of law that can be resolved based on the pleadings and documents before the court, while Shepherd prefers a more traditional approach, including discovery through interrogatories and depositions and perhaps a trial.