The Block Island Times

Island Home owner files for bankruptcy

No license to operate
By Judy Tierney | Jan 21, 2012

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.

Comments (5)
Posted by: Bruce Winters | Jan 24, 2012 18:00

I hope that the Town does something about this situation.  I've seen a ton of remodeling done on this property and hope that all of it meets fire code and that the health and safety of people staying at the b&b is not jeopardized.  When they first started, they did a great job.  Over the years, the greed took over and they were out for the dollar.  The Vermont place went under.  Now they are running this place down and ruining people's vacation and experience at the island.  Greed got the better of them.

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Posted by: David M Hull | Jan 26, 2012 10:56

In the interests of equal time for the other side of the picture...  Speaking as someone who has been visiting the Island Home regularly for about a decade, I can say that I have never felt that my health and safety, or that of my family, were even slightly threatened during a stay there.  Dina Chieffo has always been warm and welcoming, far beyond just friendly.  She works extremely hard, serves one of the best breakfasts on the Island, and is without a doubt the most gracious hostess I've ever been welcomed anywhere by.  Her husband David appears to be having trouble with the Home's finances, and the allegations are flying... Whatever the truth behind them, it has never affected the quality of the service we've received at the Inn, we've always felt 100% at home.  Although we could have gone anywhere, my wife and I spent our honeymoon at the Island Home, that gives you some idea what we think of the place.  It's closing will be a sad loss for us, and for Block Island.

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Posted by: Bruce Winters | Jan 26, 2012 11:51

It troubles me greatly when people run a business and are not properly inspected and licensed.  The Island Home charges top rates and there should be no issue with regular inspections.  I too have stayed at the B&B a few times.  I was no more impressed than at other places.  However, the charm of Block Island is going back to a simpler time.  The Chieffo's do not invoke trust, confidence and warmth of a bygone era or of now.  The facts are out there, numerous lawsuits against them, the issue with the rental car, not paying bills, not being properly inspected.  The whole thing makes one think twice and the legitimacy of the business.   What protection exists for the freshly married couple or the family that puts a deposit on this place.  They are still active taking reservations and should not be according to Block Island regulation.  What if they go under by summer?  What happens to the deposit that the family left?  Maybe I believe in honesty and integrity.  This is more than some small financial problems.  This appears to be a scam and the only concern they have is to get themselves out at any cost and no concern for anyone else.  Check the legal records and let the facts speak for themselves.

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Posted by: Sally Wright | Jan 26, 2012 12:49

What utter nonsense.  Have you ever stayed at the Island Home?  I stay there every year, usually twice a year.  Not only have the Chieffos been perfect, hardworking, gracious hosts, but all the guests I have encountered over the years have not only been happy and satisfied, but come back year after year to embrace the warm, friendly and hospitable atmosphere of not only Block Island, but the Island Home. On another point,  does the community of merchants on Block Island realize how much income the Chieffos have generated throughout  the island due to the way they have been running their lovely, and mostly full-to-capacity Inn over the years?  The closing of the Island Home will be a sad event not only for those of use who so love the time we spend there, but for summer economy of the island as a whole.


Sally Wright

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Posted by: Bruce Winters | Jan 26, 2012 14:22

Do your searches and let the facts speak for themselves.  $113K+ of judgements against them.  Many bills unpaid.  There should be some protection for those that do business with them.  I would be concerned no matter how nice they appear.  When a person does business with them, they should be aware of the grave financial issues.  I would be scared to book a room knowing that the is no protection to me if the Inn closes.   I commend the Times for the great story that they published about what is happening.  The facts should not be hidden.   Also read posts on the previous articles and you will get a more balanced view of what is really happening.

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