A partnership controlled by Prince George's County developer and racetrack owner Mark R. Vogel filed for protection from its creditors in U.S. Bankruptcy Court yesterday morning, 40 minutes before the group's principal piece of property was scheduled for a foreclosure sale.
The filing, coming two weeks after Vogel was charged with cocaine possession in Virginia, is the most pronounced indication thus far of mounting financial troubles for the developer, whose holdings stretch from central Virginia to the Maryland coast and include two harness-racing tracks, Rosecroft Raceway in Oxon Hill and Delmarva Downs in Ocean City, Md.
The Chapter 11 filing by Leeland Road Associates Limited Partnership halted the foreclosure sale on 872 acres of the Villages of Belmont, a 1,200-acre parcel of undeveloped land planned for luxury homes in eastern Prince George's County. The property went into foreclosure after the partnership missed a semiannual interest payment of $219,000 in August.
Vogel was arrested on Sept. 13 in Great Falls. Four grams of cocaine, worth $400, were found in Vogel's car by Drug Enforcement Administration agents who had followed him from the District, according to sources.
Fairfax Commonwealth's Attorney Robert F. Horan Jr., who has complained about a lack of communication from federal authorities regarding the case, said yesterday that an assistant U.S. attorney told him that he would receive a case report sometime this week.
Plato Cacheris, Vogel's attorney, has said his client intends to plead not guilty.
Law enforcement sources have said a circle of developers in Maryland and Northern Virginia is under investigation for involvement in drugs and separately for possible corruption involving land transactions and zoning decisions.
Ira C. Wolpert, a lawyer representing Vogel and Leeland Road Associates in the bankruptcy case, said the partnership intends to file a proposal within 120 days to repay creditors in full. Papers filed in Bankruptcy Court show Leeland Road Associates owes $11.5 million in secured loans and about $9 million in unsecured debt, including $7 million invested by Vogel.
The acreage near Route 301 north of Upper Marlboro has been considered prime land for development and has escalated rapidly in price. However, brokers say Prince George's County has been affected by a national softening in the real estate industry that could make the property difficult or slow to sell.
Vogel is the general partner in Leeland Road Associates. Among the limited partners is Steven M. Glazer, a lawyer with Melrod, Redman & Gartlan who has represented Vogel in several matters.
Melrod, Redman & Gartlan is among the secured creditors of Leeland Road Associates, having filed a $1 million lien against the property, which sources say represents unpaid legal fees. The law firm also is owed more than $53,000 in unsecured claims, according to the bankruptcy papers.
The firm of O'Malley, Miles and Harrell, also a creditor of Leeland Road Associates, according to the bankruptcy papers, decided yesterday to stop representing Vogel, said John McDonough, a partner. McDonough said members of the firm met with Vogel and "agreed that the firm would no longer represent Mark Vogel's companies or the track."
Vogel owes the firm a "not insignificant" amount of money for its representation of his companies, Rosecroft Raceway and Delmarva Downs, McDonough said.
"With his growing financial problems, it was getting impossible for us to effectively represent him," McDonough said.
Last week, Vogel, who has a monopoly on harness racing in Maryland, offered to step aside from the management of Rosecroft Raceway to satisfy concerns of racing commissioners who questioned Vogel's withdrawal of $2 million in track proceeds to support unrelated ventures.
The Jefferson Bank recently filed a judgment against Vogel for defaulting on a $724,446 loan, and the IRS has filed a $600,000 lien against him and his wife for unpaid taxes.
Staff writer Veronica Jennings contributed to this report.