Purchase Agreement Invalidated by Secretive Manipulation

Other articles presented here document the many statutes violated by the Grassdale sale and the inability of FDRPC to provide legal title to the purchaser. This article addresses an additional set of three important flaws which should invalidate the Grassdale Purchase Agreement.

A “Swiss Cheese” Draft Purchase Agreement

Another FOIA response revealed that the contract document was never finalized and remains incomplete. A total of 29 exhibits and due diligence documents are either missing or incomplete lacking signatures, dates, and other information. Only one document supporting this agreement is appropriately signed and dated.

These documents were missing/incomplete when Jeff Randol sighed the contract on December 30, 2019. They remained missing/incomplete when provided as a FOIA response two years later. There is no indication that any of them have ever been completed. That’s a lot of holes in this “Swiss Cheese” contract.

This is the Real Estate Purchase Agreement which was provided as a FOIA response in December 2021. Jeff Randol signed this contract two years earlier in December 2019.

Following is a review of what was missing from the draft contract which Jeff Randol signed. The following six exhibits are missing:

B    Approved Site Plan
B-1 Final Approved Site Plan
C    Personality
D    Permits
F    Utility Contracts
I     Assignment of Contracts

These missing exhibits are referenced in the text of the Agreement and focus on critical issues. They represent 40% of the 15 total exhibits. Even the exhibits are missing exhibits. The three exhibits listed below are all missing “Exhibit A Legal Description.”

Exhibit K Form of Mortgage
Exhibit L Assignment of Rents
Exhibit M Form of Collateral Assignment

Exhibit G also references three exhibits “AA”, “BB” and “CC” which are also missing.

Combining the six missing exhibits with the additional six missing exhibits to exhibits provides a total of twelve missing exhibits. All these missing exhibits are labelled “To Be Attached.” This terminology would only be used in an incomplete draft.

Below is a list of seven exhibits which are included in the Agreement, but are unsigned and undated. (Exhibit A has no signature page) Many of these exhibits are missing other information:

Exhibit G is the Bill of Sale, Assignment and Assumption. This exhibit is unsigned and undated.

Exhibit H is the Certification of Non-Foreign Status. This exhibit is unsigned, undated, with blanks for missing content.

Exhibit J is the Purchase Money Promissory Note. This exhibit is unsigned and undated, and the term is blank.

Exhibit K is the Personal Money Mortgage and Security Agreement. This Agreement is unsigned and undated. 7(b) is “Omitted.”

Exhibit L is the Assignment of Rents. This exhibit is unsigned, undated, and is not notarized.

Exhibit M is the Form of Collateral Assignment. This exhibit is unsigned, undated, and is not notarized.

Exhibit N is the Guaranty and Suretyship Agreement. This exhibit is unsigned and undated.

Only one of the 15 contract exhibits was signed and dated. This was Exhibit E—the DNREC/SIRS Agreement. This was an internal FDRPC document which Jeff Randol signed in 2016. As an internal document, this was the only exhibit which didn’t require a signature from Todd Burbage representing the purchaser group. Todd Burbage signed none of the exhibits in the draft contract.

This contract is also missing virtually all of the due diligence documents. There are 11 due diligence documents listed in Schedule I at the end of the Agreement. Only one of these documents is included and ten of them are missing.

The cover letter from FDRPC Counsel stated, “FDRPC does not have a record of the actual due diligence documents which were provided to Blue Water, and further notes that many of the items/documents listed…either are not in FDRPC’s possession or do not exist.”

This letter is ambiguous regarding whether the documents were provided and then lost, or whether they existed at all. In any case, the absence of these documents indicates an extremely casual attitude toward due diligence. The letter only mentions due diligence documents “provided to Blue Water.”  Apparently, there were no due diligence documents provided to FDRPC.

The summary of missing or incomplete documents is listed below and totals 29 missing and incomplete documents:

Six missing exhibits
Another six missing exhibits to other exhibits
Seven exhibits unsigned and undated with several missing other information
Ten missing due diligence documents

Agreement Was Not Approved by the FDRPC Board

The Real Estate Purchase Agreement for the Grassdale sale was “expressly contingent upon the approval and consent” of the FDRPC Board as stated below: 

“Section 9.15 Approval of Board of Directors  This Agreement is expressly contingent upon the approval and consent of the Board of Directors of the Seller.”

A FOIA response from FDRPC Counsel stated that the contract was approved at the Board meeting on December 3, 2019. However, the minutes of that meeting reveal that a majority of the board refused to approve the contract raising five issues which they wanted addressed.

Below is a screenshot of the December 3 meeting minutes.

This motion made by Mr. Baylor was to “conditionally approve the draft agreement subject to five points…” Passage of this motion indicates that a majority of the board members were unwilling to approve the draft contract.

The Grassdale sale was seller-financed with the Fort Corporation extending a $2.6 million loan to Todd Burbage and the purchasing group. The board members’ most prominent issue was a request for Burbage’s financials and tax records to ensure that he “remains financially able to back the note”.

Jeff Randol, former FDRPC Executive Director, signed the contract on December 30, 2019, less than a month after the December 3rd meeting. There were no additional board meetings in December, and the board didn’t meet again until February. There was no further discussion of the Grassdale contract at subsequent board meetings.

The FOIA response from FDRPC Counsel identified only the December 3rd meeting as providing contract approval. Dave Baylor is Delaware City Manager and a member of the FDRPC board.  Mr. Baylor made the key motion on December 3rd  not to approve the contract until the five points were addressed. Mr. Baylor has stated that there was no follow-up by FDRPC staff and no subsequent board approval of the Grassdale contract.

FDRPC Contracted with Anonymous LLCs

In combination, the original Real Estate Purchase Agreement, three amendments, and the Indemnification Agreement list four LLCs:

Rig Acquisitions LLC—a Delaware limited liability company
Blue DuPont DE LLC—a Delaware limited liability company
Sun Assignment LLC—a Michigan limited liability company
Sun Fort DuPont RV LLC—a Michigan limited liability company

Neither Delaware nor Michigan require LLCs to identify their owners. The links above provide the public information for these companies (no link was available for Rig Acquisitions). Sun Assignment LLC lists Sun Communities as the “Controlling Company”. There is no ownership identified for the other three companies.

The most important LLC from FDRPC’s perspective is Sun Fort DuPont RV LLC which now owns Grassdale. This company is completely anonymous. There is no mention of Todd Burbage or Bluewater in any of these listings. Executing agreements on behalf of Sun Fort DuPont RV LLC, Mr. Burbage signs as “Manager” not as owner.

An email from Brenda Wise, Director of Policy and Communications with the Delaware Office of Management and Budget, provided two reasons “why an anonymous bidder/proposing firm would not be acceptable for a State contract.”

If the bidder or proposer tried to remain anonymous, they would most likely be found as not responsible as the state would have no way of evaluating the bidder or proposer without full disclosure. In 29 Del. C. §§ 6923, 6924, and 6962 there are specific evaluation criterion to determine whether a bidder is “responsible”.

Additionally, state contracts are public information and would contain the name of the parties to the agreement.