What’s the Big Deal, Anyway (Part 2)

Published: 2025-07-22


The plaintiff in 6:25-ap-06005, Matthew W. Cheney, is not just another creditor. He is the Acting United States Trustee, a federal official from the Department of Justice. His job is to be the “watchdog of the bankruptcy system,” and his office only intervenes in cases involving significant suspected fraud, dishonesty, or abuse of the system.

This is the government itself suing to deny the Boones’ bankruptcy discharge. It is the most serious challenge a debtor can face.

The Key Clauses in Play

In July 2022, Appomattox County executed a Lease and Purchase Option Agreement with ACA.

  1. The Purchase Option (Section 23): Grants ACA (Appomattox Christian Academy) the right to buy the property.
  2. The Sales Price (Section 24): Sets the price at a $250,000.
  3. The Right of First Refusal (Section 29): This is the crucial clause. It states that if ACA gets a “bona fide written offer” from a third party that it intends to accept, it must first offer the property to the County under the same terms.

How the Bankruptcy Trustee Uses These Clauses

The Bankruptcy Trustee (Katz) will step into the shoes of “ACA” and use these clauses for the bankruptcy estate’s benefit: maximizing money for the creditors. Here is the most likely path forward:

Step 1: The Trustee Seizes the Option
The Trustee gets a court order declaring that ACA is Mr. Boone’s alter ego and that the entire Lease and Purchase Option Agreement now belongs to the bankruptcy estate. The Trustee is now, for all legal purposes, “ACA.”

Step 2: The Trustee Markets the Property, Ignoring the $250k Price
The Trustee will not simply exercise the option for $250,000. That doesn’t maximize value. Instead, he will market the right to purchase the property or the property itself to outside bidders (developers, investors, etc.). He will solicit “bona fide written offers.”

Step 3: The Trustee Receives an Offer
A developer, seeing the 16 acres and the building, makes a formal, written offer to the Trustee to purchase the property for $750,000. The Trustee, in his duty to the creditors, “intends to accept” this offer.

Step 4: The Trustee Triggers the Right of First Refusal (ROFR)
As required by Section 29, the Trustee now turns to Appomattox County and provides them with a copy of the $750,000 offer. He notifies them that they have 15 business days to exercise their Right of First Refusal.

Step 5: The County’s Terrible Choice
The County is now caught in a trap of its own making:

  • Option A: Let the Property Go. The County can do nothing. The Trustee will then sell the property to the developer for $750,000. The developer will pay the County the original $250,000. The $500,000 profit goes to the bankruptcy estate to be paid to Mr. Boone’s creditors. The County loses control of the property forever.
  • Option B: Exercise the ROFR. The County decides it must save the property. To do so, it must match the $750,000 offer. The transaction would look like this: The County pays the Trustee/Estate $750,000. The Trustee then pays the County back the $250,000 purchase price. The net result is that the County has to pay $500,000 out of taxpayer funds just to keep a property it already owns.

Why This is a Disaster for the County

The Board of Supervisors, likely thinking they were helping a local non-profit, gave away an incredibly valuable right. They essentially gave ACA a lottery ticket, the ability to buy a valuable asset for a fraction of its utility value to the community, and that lottery ticket is about to be cashed in by a federal Trustee.

But, surely, the contract protects the county right? Read Part 3.

Something Must Be Done About Appomattox County

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