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Cape Cod Legend - The Sandpiper Beach Inn in
 Harwichport, MA Declares Bankruptcy

By Susan Milton, Cape Cod Times, Hyannis, Mass.McClatchy-Tribune Regional News

May 22, 2010 -- HARWICH PORT -- The Sandpiper Beach Inn was locked up tight Sunday when Mary McHugh arrived, but she found a door open at her favorite beach-front cottage.

The Chatham, N.J., author noticed the unmade beds, the missing flat-screen television and absent shower-head. There was no running water. Then a police officer showed up to deliver the bad news that has shocked vacationers and wedding parties all week and left thousands of dollars of deposits in limbo.

At a time when most summer businesses are glad to open and get some cash flow, the inn's owners have declared bankruptcy. As the sign out front says, the motel is closed for the season.

"Here I am stranded," McHugh said Thursday, still wearing a Sandpiper Beach Inn sweatshirt, a memento from her 25 years of visits to the inn through three different owners. The author of humorous books such as "How Not to Become a Little Old Lady" had charged her a $548 deposit to stay at the Sandpiper, then had to pay another $1,000 to stay five days at the nearby Winstead Inn and Beach Resort, among the motels trying to help the Sandpiper's customers.

Also among those inconvenienced customers are Lew Gordon and Paul Kress, partners for 28 years, who checked out their new wedding tent Thursday on Nantucket Sound at the Winstead, just a few feet to the west of the Sandpiper property.

They were among seven wedding couples who had booked the 19-room Sandpiper Beach Inn this year for their dream beach wedding, according to Winstead general manager Samantha Jones.

"We learned about (the motel closure) 10 days before the wedding," Gordon said. "The inn's attorney said things didn't work out the way they expected and I should look for another place. I hope our guests can get their deposits back through their credit card companies."

The couple from Miami and West Dennis had even called a month ago to check their reservations after hearing about the inn's potential bankruptcy. The inn's lawyer said all issues had been worked out, Gordon said.

But partnership conflicts led to the April 29 bankruptcy filing by Michael Powers and Joseph Campanini, according to documents in U.S. Bankruptcy Court in Boston. The men control 50 percent of the inn, and the rest is owned by Equity Holdings Inc., which is managed by William Gerald Webb.

By filing for bankruptcy, Powers and Campanini originally sought to block an April 30 foreclosure sale scheduled by S-Bank, formerly the South Shore Cooperative Bank. The bank holds the inn's 2007 mortgage for $2.4 million and a $380,000 construction loan.

Powers and Campanini initially filed for Chapter 11 bankruptcy, expecting to use the inn's income to pay all creditors over the next six months, according to court documents. They also expected to find an investor to buy out Webb to eliminate their partnership conflicts.

Webb had other plans, according to statements Powers and Campanini made in court filings. With the bank's support, Webb wasn't making mortgage payments so he could buy the inn at a foreclosure sale and eliminate the joint venture.

Webb did not reply to calls for comment yesterday at his Michigan home and work address.

Last week, Powers and Campanini decided to go out of business through a Chapter 7 bankruptcy. Pointing to nearly $4 million in mortgages and liens on the 1-acre property, S-Bank has asked the court to allow an immediate foreclosure sale on July 23.

"They filed a Chapter 7. Obviously, the property's going to be foreclosed on," attorney Michael Goldstein, representing Powers and Campanini's company, said yesterday. "At this time, my client is not going to be making any comments to the press."

The inn owes $47,000 in state taxes, $28,000 in Harwich real estate taxes and water bills, and more than $25,000 to lawyers, septic contractors, beach groomers, linen services, landscapers and utilities, according to court documents.

After days of scrambling, Lew Gordon and Paul Kress are still getting married today on the beach. The Winstead owners opened up their second inn in Harwich center a week early for the wedding guests. The grooms are paying $100 to all other inn guests for the inconvenience of sharing space with a wedding party, and Chapin's, a Dennis caterer, is chipping in a $100 gift certificate to each guest for its restaurant.

"It's working out wonderfully," Gordon said, adding he is not thinking about the wedding's new price tag.

Other shocked couples are still desperately searching for a new place to wed with the help of caterers and other vendors.

Daniel Bartolini and Ashley Beecy, both of Manhattan, N.Y., are shifting gears after planning a Sept. 25 wedding for 150 people at the Sandpiper, where 40 to 50 guests were scheduled to stay.

"I'm heading to the Cape (today) to do my search in person," Bartolini said Thursday night. "I'm doing a lot of Internet research and getting helped by vendors and their contacts."

Bartolini said he has tried in vain to reach Sandpiper manager Peter Campanini, Joseph's son, but the manager has not replied to e-mail messages and his cellphone is disconnected. James Cahill and Erinn Gallagher of South Boston are also looking for a new place to hold their June 26 wedding, which had been planned for the Sandpiper beach, according to friend Erin Murphy of Medford.

"This was supposed to be the best days of their lives so far," she said, "and now they have to worry about this."

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To see more of the Cape Cod Times, or to subscribe to the newspaper, go to http://www.capecodonline.com.

Copyright (c) 2010, Cape Cod Times, Hyannis, Mass.

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