Elkins estate buyer agrees to bankruptcy dismissal

The Land Conservancy of Elkins Park, which fell on hard times after buying the landmark Elkins estate in Montgomery County, has agreed to have a federal judge dismiss its bankruptcy case.

In a Sept. 28 filing, the conservancy said it was withdrawing its earlier objections to such an action, and on Wednesday, U.S. Bankruptcy Judge Eric L. Frank signed the motion.

The Dominican Congregation of St. Catherine de Ricci had pushed for dismissal of the bankruptcy case to clear the way for the ejection of the conservancy and its founder, David Dobson, from the property.

In 2009, the sisters sold the 42-acre estate, with two Gilded Age mansions, to the conservancy for $8.5 million. The congregation itself financed the deal, extending a $6.9 million mortgage to the conservancy.

The next year, amid disputes over repairs and interest levels, the conservancy missed payments, prompting the sisters to take back the deed to the property.

The same day the congregation recorded the deed in Montgomery County, the conservancy filed for protection from its creditors under Chapter 11 of the federal bankruptcy code.

Dobson founded and still runs the 30-year-old nonprofit Food for All, a provider of low-income housing. He established the Land Conservancy specifically to purchase the Elkins estate. Until late August, he was renting out the mansions for events, including retreats and weddings.

As holder of the deed, the congregation has gone to Montgomery County Court to try to eject the conservancy from the property. That matter is pending.

"The dismissal of the bankruptcy case eliminates a legal venue from our dispute with the Land Conservancy," which is "trespassing," said Sister Anne Lythgoe, president of the congregation.

The conservancy, in its most recent bankruptcy filing, said it was "content on proceeding in its fight with the congregation in state court."

On Thursday, its attorney, Edmond M. George, issued a statement saying the conservancy had "consented to dismissal . . . in the hope that it would facilitate a setting within which the parties could attempt to reach a non-litigation resolution to the issues between them. . . ."

According to a financial statement filed with Bankruptcy Court, the conservancy had cash on hand of $111,065.80. To keep it operating for the last two years, Food for All has been advancing funds totaling $3.9 million.

At the time of the bankruptcy filing in 2009, the largest unsecured creditors were Cheltenham Township and the School District of Cheltenham Township, which were owed more than $338,000 in taxes.