Harborlights theater goes on the auction block Foreclosure sale comes amid dispute

The plot may read like a TV movie, but it's really a dinner theater story.

It's about the Harborlights Dinner Theater in Fells Point, which is scheduled to go up for foreclosure auction today amid a dispute between its current and past owners.


The infighting over the theater reads like the infighting over Hollywood studios in a Jackie Collins script -- just with fewer zeroes.

The Fells Point theater has been dark since last year. But in court, the show could go on for a while.


Here's the treatment: The current owners, a group led by Louis TC B. Chitty, opened the dinner theater in 1985. Two years later, they sold the theater's parent company, Limestone Musical Dinner Playhouse Inc., to a group led by Baltimore attorney Hyman K. Cohen, the largest shareholder in the group, and Scott Black.

But the business struggled. The Chitty group took back the corporation's stock last year after the Cohen-Black group failed to pay a $350,000 note that the original owners granted to finance the company's sale.

But when the Chitty group got the company back, the title to the building -- its principal asset -- wasn't in quite the same shape.

While the Cohen-Black group owned the theater, both Mr. Cohen and his wife and Mr. Black lent the company money and took mortgages on the building as collateral.

The Chitty group's collateral for the $350,000 note was the stock in the corporation, not a mortgage interest in the building. It didn't convert its note into a lien on the building until 1991, and that lien meant they were only third in line for any proceeds from the building.

Mr. Chitty is angry that Mr. Cohen effectively put himself first in line for any money generated by the theater's sale.

Mr. Cohen contends, however, that "It was probably a bankrupt business when we took control of it."

The building itself, at the corner of South Broadway and Eastern Avenue, has had a long history as a movie theater, Polish social hall, nightclub and dinner theater, Mr. Cohen said. It opened as a dinner theater in 1985.


Mr. Chitty said he plans to buy the building at today's auction. The first $50,000 of whatever he bids would go to the Cohens, who took out a home equity loan to lend the theater money, said Mr. Cohen.

Mr. Chitty said that there were so many liens against the building there was likely to be little competition at the auction.

(In addition to the two mortgages from the Cohens and Mr. Black, and the $350,000 note from the Chitty group, which has been converted to a mortgage, the Internal Revenue Service has filed liens against the company totalling about $59,000. There is also a back utility bill that Mr. Chitty estimated was between $10,000 and $15,000.)

"You name it, the corporation owes them," he said. "No one is going to bid on it with everything [so many debts] against it."

Mr. Cohen, for his part, is bracing for more legal action by Mr. Chitty and his partners after the auction, which the Chitty group unsuccessfully sought a court order to stop.

"There will still be litigation pending after Tuesday," Mr. Cohen said last week. "We started out as friends."