By Terrence McCoy
By Allie Conti
By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
Graham claims his troubles with the Bar are the product of a vendetta by Patricia Etkin, the Pirate's Point investor and former Bar prosecutor. In turning in his license Graham admitted to no wrongdoing. He called the Bar proceedings against him "onerous, and fractious of his emotional and financial condition" and "unnecessarily draining upon his health and resources," noting that he had recently undergone open-heart surgery.
Last spring Glenn Wright, Jr., one of the former owners of MMI, went to a judge in Broward County and asked that the state court issue an emergency order appointing a receiver to take over management of the marina lease. Among other things, Wright alleged that Graham was using a swirl of shell companies including YS Marketing, MMI, BP Fuel Inc., Marine Food Services, Pirate's Point, Ltd., and BP Limited Partnership to hide an embezzlement scheme and avoid paying investors and business partners like himself. Though Wright no longer owned MMI, he had a continuing interest in the operation. Court documents show that when he sold the company to Graham's wife, he was to remain as a consultant and also to share future revenues from the marina.
"The appointment of a receiver without notice [to MMI] is necessary to terminate the continuing and ongoing wrongful diversion and misappropriation of the income, revenues, monies, capital, and assets," Wright now warned. "If notice of the application [for receivership] is given, defendants are likely to abscond with, convert, secrete, conceal, dissipate, or divert the money, assets, income and revenues generated by the marina."
On June 14, 1996, an attorney named Harry Ward was appointed receiver by state court Judge John A. Miller. Six weeks later the court appointed Graham's son co-receiver with Ward. The two men began an escalating feud. Soon Ward complained to the court that Gregory Graham stubbornly refused to endorse routine checks to suppliers required to run the marina; Gregory Graham, a vice president of MMI, claimed that Ward refused to sign his paychecks, locked him out of the marina offices, and was wrecking the marina operation with the help of a hired consultant named James Dugan.
"Mr. Dugan has no experience related to marina operations [and] is just a friend of Mr. Ward," Graham claimed. "He regularly acts as a driver for Mr. Ward, who does not or cannot drive an automobile. Mr. Dugan has charged his meals and alcoholic drinks to the Debtor. In fact, he has charged the Debtor's restaurant for six-packs of beer, which he takes to his home or office."
Ward and Dugan had another view of things. Ward says he walked into a financial mess and did his best to correct it by repairing the fuel pumps to allow for accurate billing, fixing leaky water pipes and a broken ice machine that wasted $1000 per month, providing for the sale of live bait, and cutting back on entertainment expenses and "money-losing promotions" at the marina restaurant.
Ward estimated the leased portion of the marina was losing anywhere from $25,000 to $50,000 per year by not using proper cash registers and credit card processors, and he said he thought the restaurant had lost as much as $66,000 in 1995 alone. He noted several potential liabilities: the absence of skid slips in bathrooms and the continuing lack of a permanent certificate of occupancy at the boat barn. The latter was due to the fact that MMI hadn't finished installing the emergency fire sprinkler system and therefore couldn't get the building approved by county fire inspectors.
But Ward didn't keep his job for long. Six weeks later, on August 30, MMI filed for voluntary bankruptcy protection in federal court. By declaring bankruptcy, MMI put a sudden stop to the demands of dozens of unpaid creditors. Bankruptcy also prohibits Dade County from evicting Graham without the approval of a federal judge and stops Ocean Bank from foreclosing on its $1.5 million leasehold mortgage and taking control of the property or assigning the lease to another marina operator. Ironically, the original lease between the county and MMI states that declaration of bankruptcy is grounds for automatic termination of the lease.
To Wright, the former MMI owner, the bankruptcy filing was nothing more than a facile legal maneuver on Graham's part. "The filing of the bankruptcy was an effort to subrogate the rights of Mr. Ward, the state-appointed receiver." (Gregory Graham had by then "resigned his position in frustration," according to court pleadings. Seventy-two days after the case went federal, Harry Ward was replaced by a federal trustee.)
On March 3 MMI filed a disclosure statement and a business reorganization plan, two documents purporting to show how it would get back on its feet. The main feature of the plan? Borrow more money. MMI proposed to increase its Ocean Bank debt to $1.83 million, partly to pay its lawyers $130,000 and to finally install a $59,000 fire sprinkler pump.
MMI also spent a few paragraphs explaining how it got in trouble in the first place. Its failures were the fault of everything from Hurricane Andrew to Commissioner Larry Hawkins to construction delays to bureaucratic stonewalling to market vagaries -- in short, everything but its own business practices.