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The long-embattled Southern Memorial Gardens cemetery may have new owners by the end of July, assuming there are no objections to the sale or there are no better or higher offers for the purchase of the property.

According to a notice of sale filed with the U.S. Bankruptcy Court for the District of Maryland on June 13, Southern Memorial Association Inc. has entered into an asset purchase agreement for the purchase of the personal and real property of Southern Memorial Gardens, located on Ward Road in Dunkirk, with the cemetery’s trustee, Gary A. Rosen.

Repeated phone calls and emails from The Calvert Recorder to Rosen have not been returned, and attorney Steven Greenfeld could not be reached as of time of press.

“The Trustee believes that the sale of the assets of the Debtor is in the best interest of all creditors and will provide for the ongoing operation of the cemetery in a professional and responsible manner,” the notice of sale states. “Moreover, the State of Maryland Office of Cemetery Oversight has approved the purchase by the Purchaser, whose officers currently own and operate other cemeteries in Maryland which are permitted and in good standing with that Office.”

A meeting is scheduled for Thursday at 11 a.m. at the cemetery to discuss the pending sale to Southern Memorial Association Inc. with all concerned parties, according to several emails from Calvert County community members with vested interests in the cemetery. Also according to those emails, Rosen, a representative from the state and the attorney for Southern Memorial Association Inc., will be present for the meeting.

In 2009, Larry Deffenbaugh, the former owner of Southern Memorial Gardens, was convicted of defrauding 551 people out of funeral and memorial items. According to previous reports, Deffenbaugh embezzled funds that were supposed to be used for specific items, including caskets, by using cheaper merchandise and keeping the extra money. Court records show that the alleged thefts and embezzlement occurred between 2005 and 2006 before the business was sold to Daniel and George Martin, owners of Badtec Inc. in 2005.

In July 2011, Badtec Inc., the existing owners of the 30-acre cemetery, was banned from continuing services at the cemetery after violating a cease and desist order issued by the Maryland Department of Labor, Licensing and Regulation Office of Cemetery Oversight, which accused George and Daniel Martin of operating without a valid license because they were reportedly struggling financially.

The cemetery was foreclosed about the same time and the Martins filed for bankruptcy in December 2011.

The notice of sale states that Badtec Inc. currently has three default loans from lender Manufacturers Traders Trust Co. As part of the sale agreement, Southern Memorial Association “has purchased from the Lender those notes and succeeded to the rights of the judgments under those notes, as well as the deeds of trust on the Real Property,” the notice states.

Because Southern Memorial Association Inc. purchased Badtec’s loans, the company will acquire the real property located at the cemetery. In addition to the 30.61-acre property, the company is also acquiring “all equipment consisting of any motor vehicles, furniture, computers, and furnishings located” at the cemetery “along with the inventory, including all caskets, urns, vaults, monuments and other inventory.”

SMA will also acquire “the intangible assets” of the cemetery, “including the name Southern Memorial Gardens and all goodwill associated with that name and the business.”

Southern Memorial Association will assume and provide “all liabilities and obligations arising under the terms of paid-in-full burial contracts,” the sale notice states. This includes all customers listed as having paid-in-full contracts, customers whose files maintained by the cemetery contain contracts or other evidence that their obligations are paid in full and customers who can prove “to the reasonable satisfaction” of SMA that their obligations are paid in full, the notice explains.

In addition, SMA will allow customers with pre-need burial contracts that are not paid in full to enter into new contracts with SMA, and will give those customers “a dollar for dollar credit” for the previously paid amounts by those customers who can prove “to the reasonable satisfaction” of SMA that they have made partial payments.

Southern Memorial Association will also pay the “estate sum” of $25,000, which will be applied to trustee fees and outstanding property taxes.

The notice of sale states that any party who objects to the cemetery’s sale must do so in writing and file it with the Clerk of the Court, United States Bankruptcy Court for the District of Maryland, 6500 Cherrywood Lane, Greenbelt, MD 20770 with a copy served to Rosen. An additional copy should be sent to U.S. Trustee, 6305 Ivy Lane, Suite 600, Greenbelt, MD 20770. All objections must be filed and served within 21 days of the day the notice was filed.

Any parties wishing to submit higher or better offers for the purchase of the cemetery should submit offers in writing to Rosen by mail and fax with copies filed with the bankruptcy court prior to the close of business July 8.

Rosen can be contacted at 301-251-0202, ext. 14, by mail at 1 Church St., Suite 802, Rockville, MD 20850, or online at grosen@covad.net.

According to the notice, a hearing to consider any objections and any higher or better offers for the purchase of the property is scheduled for Monday, July 22, at 11 a.m. in Courtroom 3-E, U.S. Court House, 6500 Cherry Lane, Greenbelt. In the event that no “timely” objections are filed or higher or better offers submitted, the hearing will not be held and Rosen may proceed to finalize the sale, the notice states.

ascott@somdnews.com