Safe Haven files for bankruptcy

Georgetown shelter’s assets to be liquidated
Safe Haven Animal Sanctuary has filed Chapter 7 bankruptcy with the U.S. Bankruptcy Court District of Delaware. The filing will allow the former shelter's assets to be liquidated. BY FILE
January 29, 2014

Safe Haven Animal Sanctuary, the controversial Georgetown no-kill animal shelter, has filed for Chapter 7 bankruptcy.

Property from Safe Haven was to have gone to sheriff’s sale Jan. 29 but the sale was cancelled when the shelter filed in the U.S. Bankruptcy Court of Delaware Jan. 28.

Court documents show no schedule for how the bankruptcy will proceed, but a meeting of creditors is scheduled for 1 p.m., Wednesday, March 1, in Wilmington. The meeting was originally scheduled Wednesday, Feb. 19,  but has been moved back due to a change in trustee.

Safe Haven has 127 listed creditors, ranging from dog kennels to the Internal Revenue Service, private citizens and, full disclosure, the Cape Gazette.

Safe Haven’s 990 tax forms filed with the Internal Revenue Service for 2012 show a nonprofit that burned through money in its final year of existence. According to the forms, Safe Haven’s cash on hand went from $254,000 at the beginning of 2012 to $13,000 by the end of the year. Safe Haven’s revenue was $642,000 against $1.1 million in expenses, a $471,000 loss.

Georgetown bankruptcy attorney Gerry Gray said a Chapter 7 bankruptcy is a liquidation of the business and its assets. He said typically, a business would first file for Chapter 11 bankruptcy, which gives the business time to reorganize.

When a business files Chapter 7, Gray said, the business is handing its assets over to a trustee, who will try to sell whatever it can.

First in line to be paid back are any secured creditors, primarily mortgage holders and anyone who has a lien on Safe Haven assets, he said. After that, tax liabilities get satisfied next, Gray said. General unsecured creditors, such as the Cape Gazette, are among the last to be paid, he said.

The original trustee in the Safe Haven case was Jeoffrey Burtsch, but Burtsch was quickly taken off the case; his office said he was removed due to a conflict of interest. The case was reassigned to George Miller of Philadelphia.

There are five Chapter 7 panel trustees in Delaware, appointed by the U.S. Trustees Office in Philadelphia. Each case is randomly assigned to one of the five trustees, Gray said. Three of the trustees are attorneys and two are CPAs, he said.

The attorney listed on the filing representing Safe Haven, Mark Collins of Wilmington, could not be reached for comment. His office staff said the attorneys involved were not allowed to talk to the media.

Overall, the shelter had $5 million in assets and $3.5 million in liabilities. Safe Haven’s most valuable assets are the land, building and equipment, valued at $4.7 million after depreciation. The Georgetown shelter on Shingle Point Road was built using a $2.7 million loan from the U.S. Department of Agriculture, guaranteed by County Bank.

Safe Haven closed its doors Nov. 14, but not before 19 dogs were euthanized at the shelter, which until that time had practiced a no-kill philosophy.