News

Foreclosure sale of funeral home left a big surplus

By Bill Moss, Published: September 8, 2022

A foreclosure sale that resulted inthe $2 million purchase of the Thos. Shepherd & Son Funeral Directors property left a surplus of $1.2 million sitting in an account held by the Henderson County Clerk of Superior Court.

How and when that surplus is distributed is spelled out in state law and guided by the clerk of court. The process could take a while.
“If there are surplus funds, there’s no statute of limitations … no law foreclosing someone’s ability to file an action to claim surplus funds,” said Clerk of Court J. Tyler Ray, who is an attorney. “If such a thing is filed then the statutory procedures of course would have to be followed and I’ll have to hear the case and decide who the parties are who are entitled to surplus funds and at what amounts.”
So far just one claim has been filed seeking payment from the $1,193,554 balance and that one wouldn’t make much of a dent. Debra S. Harpe, an attorney from Mooresville, filed a claim for $36,333 on behalf of Matthews International, a Pennsylvania company that makes bronze memorials. Harpe also reported that a thorough title search found a lien for $18,575 from Hairfield Vault Companies of Morganton but no outstanding deeds of trust, no outstanding taxes and no outstanding judgments other than her client’s.
Melody Shepherd, the widow of Thomas R. “Tom” Shepherd, the third generation owner of the funeral business, has been unwilling to speak on the record about any efforts she might be making to recover the surplus. The balance remained after the foreclosure sale proceeds paid off a $793,358 second mortgage Melody and Tom Shepherd had taken on the Church Street property.
Nor has Michael Edney, who is listed in court records as the attorney for Thos. Shepherd & Son Inc., responded to the Lightning’s messages seeking comment. Harpe, the Mooresville attorney, said in a court feeling that she received no response when she served Edney with a copy of her client’s claim at his downtown Hendersonville law office in March.
The money would not go to Melody Shepherd until claims are resolved, Ray said.
“In cases where distributing the surplus funds is really just purely a ministerial kind of thing, we would go ahead and distribute surplus funds to whoever owned the property,” Ray said. “But in cases where there might be more than one claimant or where there’s any question about who’s entitled to surplus funds, we will not do that and someone will have to file an action to claim the surplus. I’m not yet sure what the situation is going to be with these funds because it hasn’t been brought to my attention yet as the ex officio judge of probate.”
An assistant clerk of superior court, Joshua Santiago, is handling the case in the meantime.
Ray and his office have to ensure that any potential claimants have an opportunity to be heard.
“The court has to use best efforts to make sure that anyone who might be entitled to the proceeds, anyone who might have an interest in them, be summoned and added as parties to that case,” he said. “The surplus funds statute requires that.”
One other factor that could delay any payment from the surplus would be a bankruptcy filing. The Lightning’s check of U.S. Bankruptcy Court records turned up no bankruptcy filing by Melody Shepherd or the corporation.
“If there’s a notice of bankruptcy, a lot of times that will stay these proceedings because the bankruptcy court might have an interest in those surplus funds and so then we sort of have to follow along with the bankruptcy case before we can finish these proceedings here,” Ray said.
In any case, the Special Proceedings case no. 182 in Henderson County Superior Court would seem to represent an attractive quarry. Even assuming
that the claims from the bronze memorial and vault companies are deemed to be valid, that leaves a balance of $1,138,647.