Townsend not liable for payment of line of credit
Judge Kevin Miller ruled in December that Frank Townsend, former owner of Petersburg Shipwrights was not liable for payment to his ex-wife Barbara S. Sinclair for a line of credit that was taken out for her commercial fishing business and for their joint travel. The couple was married in 2008, according to court testimony.
Sinclair’s small claims case against Townsend was heard on Dec. 5, 2011.
In a written order the court stated, “Neither party will recover from the other. I find that Mr. Townsend promised to help Ms. Sinclair pay the line of credit debt out of the net proceeds from the sale of his business. However, I also find that Mr. Townsend did not breach that promise as he was left with no “net proceeds” from the sale of his business.
Sinclair told the court that throughout the marriage the Shipwright business was declining and bankruptcy was possible.
Following the couple’s divorce, nothing about payment of the line of credit was put in writing. Sinclair told the court it was a verbal agreement and that she agreed to pay the debt, with help from Townsend after he sold the shipyard.
Townsend stated to the court that the Shipwrights was listed for sale at $1.5 million and sold for $1.35 million and his share of the proceeds came to $82,000 after paying the previous owner and his wife their share.
Townsend owned 20% of the shares of the company at the time of the sale according to court testimony. He told the court that after the sale, $316,000 or so was left for the three parties to share.
Townsend told the court, “Theoretically I was a 51% owner, but I hadn’t paid for all of the shares.”
When asked by the court if he had any cash left over from the sale (of the Shipwrights), Townsend replied, “I have $5,000 to $6,000 but I owe $5,800 to the environmental company for the cleanup,” of the yard.
Townsend concluded his testimony by telling the court, “I believed when my debts were paid, I’d have about $30,000, and it didn’t happen that way. I had every intention of helping her.”