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Archive for Wednesday, September 1, 2010

Company offers to buy Hutchinson cemetery

September 1, 2010

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— One of the largest owners of cemeteries in the United States has made an offer to buy a Kansas cemetery and funeral home that has been under receivership since its owner embezzled hundreds of thousands of dollars.

StoneMor Partners LLP, based in Levittown, Pa., has offered $665,000 to buy Fairlawn Burial Park and Heritage Funeral Home in Hutchinson.

The properties’ former owner, Sharon McDonough, was sentenced in August to nearly five years in prison and ordered to pay $600,000 in restitution after pleading no contest to charges she embezzled from two trust funds at Fairlawn.

On Monday, a receiver who has been put in charge of managing the funeral home and cemetery filed a motion in Reno County Court asking that the proposal be approved. A hearing on the motion was scheduled for Friday.

StoneMor operates 293 cemeteries and 60 funeral homes in 26 states, including one in Wichita, The Hutchinson News reported.

Under its proposal, sale proceeds would first be applied to the cemetery’s permanent maintenance and merchandise trust funds. When McDonough was arrested, the shortfall was estimated at $800,000, but the proposed agreement requires StoneMor to post a security bond for only $262,000, “representing the trust shortfalls as of the closing of the sale.”

The receiver, attorney Edward Nazar of Wichita, previously applied sums forfeited by McDonough to the shortfall.

Cash from the sale will also be used to pay outstanding operating expenses, including the receiver’s fees, Internal Revenue Service liens for unpaid withholding taxes, unpaid property taxes and a loan on the funeral home.

The receiver filed a second motion Monday that the court set an auction to allow others to bid for the purchase.

Under the proposal, any other bid would have to exceed $831,500. If a superior bid is offered, the receiver would conduct an auction on Oct. 1 in Reno County Court.

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