Full-timer: Kluge working while filing bankruptcy

Patricia Kluge may have literally put everything she owned into trying to save the winery she created. After months of foreclosures on her businesses and homes, the now Trump-employed vintner and husband Bill Moses have sought bankruptcy protection.

On June 15, the couple filed a Chapter 7 petition seeking relief from creditors including Farm Credit, Bank of America, and Sonabank, which had collectively lent them around $66 million, most of which was poured into expanding and then keeping afloat the Kluge Estate Winery and Vineyard.

Also last week, a foreclosure notice appeared for yet another Kluge asset, Fuel Co., the downtown gourmet gas station that's been shuttered since 2007.

On June 9, Kluge and Moses withdrew a lawsuit against Farm Credit in which they claim the bank violated federal law at multiple turns. The decision to drop the suit gives more flexibility to their bankruptcy trustee, according to their Middleburg-based lawyer Ed McMahon.

"The real story," says Moses, "is that in February 2009, to save the winery, Patricia gave [Farm Credit] a lien with all her assets. We didn't think the recession would be as deep."

In April, Farm Credit, which had lent $35 million, split up Kluge Estate Winery into five tracts and garnered at auction a relatively paltry $7.3 million, with the bulk of the place going to Kluge's pal, Donald Trump, for $6.21 million. According to Moses, Trump had offered far more for the property before it was divided.

With the sale of the farm equipment, Farm Credit gathered about $11 million, says Farm Credit attorney Bill Shmidheiser, who denies that the bank has done anything wrong or even imprudent.

Located on the prime corner of East Market and 9th Street SE, the Fuel Co. site is assessed at $1,134,600. Farm Credit expects it to sell for between $500,000 and $1 million, says Shmidheiser.

Empty and available for four years, the property had a buyer willing to put up $650,000, according Moses.

"The bank insisted we spend money for the sale," complains Moses. "Our take is, since they've taken everything else, we're not spending more money for them to get the proceeds.

'We hope the bank makes more than $650,000," Moses continues. "Given their track record on foreclosures, we wish them luck."

A June 11 auction of draperies from Albemarle House, the mammoth mansion Kluge used to inhabit, and other items left over from last summer's glamorous Sotheby's auction actually did exceed expectations, bringing in $148,000.

Some of the David Easton-designed draperies went to Inn at Little Washington owner/chef Patrick O'Connell, says a release from auctioneer Potomack Company. One drawing room drapery set– this one yellow-silk fringed, swagged, paneled, and jaboted– sold for a hefty $16,450, purchased by Palm Beach designer Cedric Dupont. A matching set brought $10,500.

After more than a year of foreclosures that saw the very house in which the couple lives sold at auction in May, Patricia Kluge is working full time, running her old winery, now called the Eric Trump Wine Manufacturing LLC.

"We're relieved," Moses says of the bankruptcy filing. "It's an opportunity to put this behind us. We're disappointed it came to this."