Generations later, family fights to keep 18th-century Chester County farm

Since 1703, at least one member of the Mendenhall family has lived on the same patch of land in Chester County, near Chadds Ford.

But now Frank Mendenhall, the eighth-generation owner who tools around on a faded old tractor, is in danger of losing what remains of the 200 acres an ancestor bought from William Penn's agents. Mendenhall owes lenders $1.76 million.

The debt came from the construction in 2007 of a stable with room for 24 horses and an expansive indoor riding arena. It's called "the airplane hangar" by neighbors because it jolts the eyes and blocks views along a country road lined with elegant farming estates set back at the end of long lanes.

Mendenhall's hold on Springdale Farm, the oldest continuously operating farm in Pennsylvania, has weakened. He and his wife, Patricia, filed for bankruptcy protection in Philadelphia on Nov. 30 to escape the immediate grasp of Stonebridge Bank, the lender with the first claim on the property.

The reprieve on the 88-acre farm - where the white, hulking riding shed sits up a gentle hill from older farm buildings that are now dilapidated - appears to be only temporary.

The Mendenhalls have no bankruptcy attorney, and the U.S. trustee overseeing their Chapter 11 bankruptcy filed a motion last month to have the petition either dismissed or converted into a Chapter 7 liquidation, citing a lack of progress toward reorganization.

Frank Mendenhall, who is about 70, agreed to an interview in early January, but he canceled the appointment and has since maintained that he is "too busy."

Carol Ann Mueller, senior vice president and counsel at Stonebridge Bank, based in West Chester and one of the region's most troubled banks, declined to comment on the Mendenhall loans, which are among the millions that still clog the banking system.

Stonebridge and the Mendenhalls are small players in the financial world. But if the nation's financial wreck of 2007 and 2008 can be compared to a derailed train, the engines in front - such as JPMorgan Chase & Co. - have already been set back on the track and are gaining speed, while cars at the rear, carrying the Mendenhalls and their biggest lender, Stonebridge Bank, are still derailed down an embankment.

Given that neither the Mendenhalls nor the bank will discuss the case, it is difficult to patch together how the family, which has two daughters, ended up in such an agonizing financial position.

But a picture emerges from Bankruptcy Court documents. It pits a Mendenhall daughter and son-in-law against a customer who gained the trust of her parents. Additional information came from interviews with neighbors and a 2004 Inquirer article about the Mendenhalls.

The first Mendenhalls arrived with Penn from England in 1682. They first settled in what is now Concord Township, Delaware County. One of the Mendenhalls, Joseph, who was Frank's great-great-great-great-great-grandfather, later bought land in Pennsbury Township.

Dairy operations ceased in 1949, and Mendenhall, who has spent his entire life on the farm, except when he was in the Marines, was quoted in the 2004 article as saying that farm income came from growing hay and stabling horses.

Two years later, the Mendenhalls embarked on the ambitious expansion, which upset neighbors.

"We had about a 25-mile view. They put the riding arena right in front of our view," said Marie Kunkle, who lives on a lot that used to be part of Springdale Farm.

To pay for the construction, the Mendenhalls borrowed $710,500 from Stonebridge in June 2007, $660,000 from Aston-based CFP Associates L.L.C. in May 2008, and an additional $50,000 from Stonebridge in October 2008. Delinquent payments of principal and interest, plus fees, have boosted those claims to $1.76 million, according to the Mendenhall bankruptcy petition.

In December 2007, the Mendenhalls received $900,000 from Pennsbury Township to preserve 54 acres as open space. Also in 2007, with the real estate market swooning, the Mendenhalls planned a six-lot subdivision, presumably so the proceeds could pay off the construction loans, but none of those lots has sold.

The stable was scheduled for completion in late 2007, according to information received by Sharon Vinton, who paid a $150 deposit to keep her horse there. She did not get a stall. "When I'd show up, there was nobody there. It was like it was abandoned," said Vinton, who was attracted by the location, with its access to riding trails. Her deposit was not returned.

One day last month, there were seven horse trailers, five cars, and two pickups in the parking lot, indicating some recent activity.

Last year, the Mendenhall saga took a stranger turn, when Colin McKie, who says he is a management expert with the Caledonian Management Group in Wilmington, entered the picture after his wife started boarding her horse at Springdale.

McKie, a native Scotsman who lives in Wilmington, won the confidence of the Mendenhalls, receiving power of attorney from them, and started negotiating with Stonebridge while agreeing Oct. 29 to buy the entire Mendenhall property for $3 million through Caledonian Investments USA.

That deal, which was supposed to close in December, required the Mendenhalls to agree by 5 p.m. Nov. 30 to an extension of a forbearance agreement with Stonebridge. Without the extension, Stonebridge said it would take possession of five building lots on which it held a deed-in-lieu of foreclosure.

Eighty minutes before the deadline, the Mendenhalls' bankruptcy was entered electronically in court.

In subsequent filings, accusations flew between Megan Mendenhall and her husband, Steven Eichinger, and McKie.

The married couple, who had managed the horse business, filed a motion Dec. 15 to stop McKie's involvement, alleging that her parents had "become unduly influenced by a stranger, Colin McKie, who is actively attempting to hide and bilk the debtors' assets for his own profit."

McKie shot back a day later that he had found "what appeared to be significant gaps and missing funds from the time that Steven was managing the business."

None of the three appeared at the most recent bankruptcy hearing, on Jan. 4. Frank and Patricia Mendenhall were there with an Exton lawyer, Pietro A. Barbieri, who joked with the Mendenhalls about how $23 for parking was going to go on the bill.

But Barbieri never officially entered his appearance.

Stonebridge said last week that it supported the conversion of the bankruptcy into a Chapter 7 liquidation, rather than a dismissal, because that would protect the lenders.

The next court date is Feb. 15.