WHITEFIELD — A little more than 12 hours after the members of the Clary Lake Association voted overwhelmingly Wednesday evening to buy the Clary Lake dam, fundraising letters were in the mail to prospective donors.

Association members hope to raise $80,000 to buy the dam from the owner’s bankruptcy estate, free and clear of any encumbrances, including a mortgage and any private agreements that might restrict them from fixing and operating the dam, if the bankruptcy court approves. They plan to raise $10,000 more to pay for legal fees and temporary repairs to the dam structure.

By doing so, they would be able to end a long-running and complicated dispute about lowered lake levels that prompted lakefront property owners to seek the help of the state Department of Environmental Protection. The lowered water levels have meant that lake access has been limited and about 40 acres of wetland have been eliminated.

By Friday, the association had reached more than 12 percent of its goal, having raised $11,200. An anonymous donor has offered to match what association members, property owners not in the association and anyone wishing to support the project contribute either by contacting the board or through the association’s fundraiser on its Facebook page.

George Fergusson, secretary of the Clary Lake Association board, said in all 112 votes were cast at the special meeting held at the Sheepscot General Store. Of that total, only two opposed buying the dam.

“There were a lot of questions, but no concerns,” Fergusson said. “They wanted information.”

The association’s board is hoping to raise the money it needs by the middle of May.

The dam, which impounds the lake that straddles the Whitefield-Jefferson town line in northern Lincoln County, has been owned by Pleasant Pond Mill LLC. A little over a year ago, Paul Kelley, manager of the LLC, filed for bankruptcy under Chapter 7 of the bankruptcy code.

At the time, the LLC owed $350,000 in legal fees, credit card bills and back taxes; and it owed $115,000 to Medius L3C, the company that had foreclosed on the dam more than a year before.

A Chapter 7 bankruptcy requires the limited liability company’s assets to be sold off and the proceeds used to pay off creditors.

The Whitefield Board of Selectmen has waived foreclosure for unpaid taxes on the dam for several years. In January, the outstanding taxes were paid on the dam property and the lien against it was discharged, according to documents on file at the Lincoln County Register of Deeds and Whitefield Town Clerk Aaron Miller. That clears any claim to the dam by the town, which is a secured creditor and would be paid in the event of a sale.

Kelley also has filed for bankruptcy protection for himself, citing debts that include hundreds of thousands of dollars in legal fees, an expected financial penalty from the Department of Environmental Protection and expected damages from a lawsuit filed by Clary Lake property owners Robert Rubin and Cheryl Ayer against Kelley and Pleasant Pond Mills and AquaFortis Associates LLC and its manager, Richard Smith, seeking damages from the harm they say has been done to their property by the lowered lake level.

AquaFortis Associates owns a small building that sits atop the dam, as well as the water mill property that is directly across Route 218 from the dam in North Whitefield.

If the association is successful in buying the dam free and clear, it still will be subject to the conditions listed in the water level order that the DEP issued in 2014, following a petition from property owners around the lake.

Kelley had contended that the dam had been breached by Tropical Storm Irene in 2011, and fixing the dam could damage property owned by AquaFortis Associates.

The water level order spells out how the dam must be operated and requires that a water level management plan, including a maintenance and repair plan for the dam, be completed.

The transaction also is subject to DEP approval.

The dam’s new owners would not be subject to the 2015 notice of violation the DEP issued to Kelley and his LLC and Smith and his LLC for failing to meet the conditions of the water level order, said Kathy Howatt, hydropower coordinator at the DEP.

Jessica Lowell — 621-5632

[email protected]

Twitter: @JLowellKJ

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