Island Home owner files for bankruptcyNo license to operate
A January 5 foreclosure auction for the Island Home inn was called off when owner David Chieffo filed for reorganization under Chapter 13 of the bankruptcy code.
Chapter 13 is designed to allow debtors to submit a repayment plan to creditors.
Chieffo, 48, has a pattern of bad debt, having been named as defendant in nine civil cases in Rhode Island and Connecticut courts since 2007, all for taking money, goods or services and failing to pay for them in full, if at all. The Times has found court judgements against him of $113,000.
And now, local officials are worried that Chieffo is taking money for summer reservations without a rooming license for the inn, and warn prospective clients to book elsewhere.
Rhode Island attorney Diana Pearson learned of the Chapter 13 filing on January 6. Chieffo was due in Rhode Island Superior Court that morning to arrange repayment to her client Timothy McNally, for whom she had already won a judgment of $24,160. When Chieffo did not show, Pearson had a body attachment issued to bring him in. Chieffo claimed he had gotten the time of the appearance wrong and it was rescheduled for that afternoon. Later that day, Pearson was informed by a call from the court clerk that Chieffo had filed for Chapter 13. The court appearance and body attachment were cancelled, and Pearson’s client, along with any other loan holders, must now wait yet again for repayment.
When contacted by the Block Island Times, Chieffo confirmed that he did file for Chapter 13, but, he said, “everything is in the hands of the accountants and attorneys now.” He refused to elaborate any further.
Attorney Pearson commented in an email message to the Times that the bankruptcy filing might help them retrieve their losses. “Presuming he still has quite a bit of equity in the real estate on Block Island, this may allow him to refinance in order to pay off debts,” she wrote, adding, “Or it could allow him an opportunity to continue on his past practices.”
According to Block Island’s Minimum Housing Inspector Don Thimble, fire code deficiencies at the Island Home may keep the inn closed this season unless they are corrected by Memorial Day. Thimble has been informed by the Rhode Island Fire Marshall’s office that the front and rear buildings need local fire alarms and that fire rated doors must be installed in the inn.
Thimble also said that Chieffo has not obtained a license from the town to operate the Island Home in two years.
Since the Island Home is not licensed to accommodate guests this spring and summer, the Chamber of Commerce is recommending to callers that they not book there. Director Kathy Szabo reports, however, that the Chamber has received a call from someone who already has booked directly through Chieffo and is now concerned.
As to whether or not he is taking calls from prospective inn guests, Chieffo reiterated to the Block Island Times that he couldn’t comment.