The Blue Willow Inn Restaurant will sell all the property surrounding the restaurant, including the historic mansion, as part of its bankruptcy plan, according to federal documents and restaurant management.
The Social Circle restaurant and inn company, which went into Chapter 11 bankruptcy in 2010, got a federal bankruptcy judge’s approval on Wednesday to sell 7.1 acres on North Cherokee Road that includes the restaurant and gift shop building and the retail center, to Donald Poss, a farmer from Good Hope in Walton County, for $930,000.
According to the agreement, filed Nov. 4, the Blue Willow Inn Restaurant, Inc. will lease the mansion to continue operating the restaurant and gift shop.
“The property was sold and the restaurant itself will be rented,” said Patsy Joiner, an assistant to owner Billie Van Dyke. “We still own Blue Willow, Inc., the restaurant, but the property was sold.”
Specifically, the sale included three separate but adjacent plots on North Cherokee Road — one 2.4-acre plot that includes the historic mansion where the restaurant operates, a .86-acre plot next to it and 3.84 acres behind those two where the Van Dykes built a retail center and a Christian-themed museum.
The sale has not closed yet, Joiner said. The judge on Wednesday approved the sale as part of Blue Willow’s plan to exit bankruptcy, which was filed in August and modified this winter. “Our attorney tells us we’re about three steps closer” to emerging from bankruptcy, Joiner said.
Once the sale is closed, all the proceeds are to go to Wells Fargo to pay towards debts the Blue Willow owes, though that will not cover the total amount owed the bank, according to the agreement. Several public creditors are in line behind Wells Fargo, including the Georgia Department of Community Affairs and the Georgia Cities Foundation.
According to federal court documents, another person, who was not named, offered $750,000 for the properties, but that offer was turned down in favor of Poss’ higher bid.
The Walton County Tax Assessor’s Office listed the estimated appraised value of the three properties at $1.95 million.
Blue Willow initially will rent the mansion space for its restaurant and gift shop for $6,000 per month, 40 percent reduction on the amount the company currently is paying Wells Fargo. “Reducing this monthly expense will allow (Blue Willow) to make the scheduled payments in the (bankruptcy exit) plan,” the agreement stated.
Poss will be responsible for paying the commission and closing costs to King Industrial Realty, Inc., of Atlanta, the real estate broker involved in the deal.
The retail and museum space, called Blue Willow Village, is the principle reason the company filed for bankruptcy in July 2010. Louis Van Dyke, who passed away in November 2010, tried to expand on the Willow’s name by building the Blue Willow Village behind the inn. However, the economy collapsed just as the village was set to open in 2008 and several would-be tenants backed out of the investment.
The Van Dyke family opened the Blue Willow in 1991 and immediately earned recognition and a national following for its traditional home cooking Southern fare.