MindStream Academy is more than two years behind on mortgage payments and must move out of its Bluffton location, according to court documents.
The property's owner can foreclose on the boarding school for overweight teenagers, Circuit Court Judge Marvin Dukes ruled Nov. 13.
MindStream founder and CEO Ray Travaglione and two corporations he owns have fought foreclosure in the 14th Judicial Circuit Court for nearly a year and could appeal Dukes' decision.
Court documents outline a complicated financial relationship between property owner Calvary Training Center and Travaglione, who has two businesses at the address at 11 Grassey Lane. In addition to MindStream, Travaglione once ran the Tulifinny Recovery Management Center for Women, a program to treat teenage girls struggling with drug abuse and eating disorders.
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Attempts last week to reach Travaglione and his attorney, Tara Nauful of Charleston, for comment were unsuccessful.
According to court documents, Travaglione and his two corporations have not paid the property's mortgage payments to Calvary since February 2011.
In 2009, Tulifinny LLC purchased the 43-acre campus for $4.25 million from Calvary, which had used it as an equestrian center. Tulifinny and Calvary agreed $250,000 would be paid upfront, and an additional $250,000 would be paid by December 2009. The remaining $3.75 million of the purchase price would be financed with a mortgage between them.
However, the Tulifinny operation closed in late 2010, and MindStream Academy moved into the location. Shortly after, Travaglione and Calvary renegotiated the terms of the mortgage, including returning ownership of the property to Calvary.
Neither of Travaglione's corporations has paid on the mortgage since March 2011, according to court documents. Calvary moved to foreclose on the property and filed its lawsuit in December 2012.
It's not clear whether MindStream is leaving the property or intends to appeal Dukes' decision.
Meanwhile, MindStream and Travaglione also face a lawsuit from David and Maggie Roche, who loaned Travaglione $250,000 in June 2011. That loan was never paid back, and the couple filed suit in Circuit Court last month for the value of the loan and interest -- worth more than $400,000 -- and for punitive damages, according to court documents.
There are other claims in the Calvary case, including fraud, according to attorney Kelly Jolley of the McNair Law Firm on Hilton Head Island, which is representing Calvary. She said neither she nor her clients would comment further on the case.
Additional claims of trespassing are pending against MindStream and its partner on the property, Heroes on Horseback, a nonprofit equine therapy organization, Jolley said.
Following Dukes' decision, Heroes on Horseback decided it would leave the location, according to the program's director, Bob Lee.
"Evidently there were some financial payment defaults. As a result, we were sort of caught in between the two," Lee said. "We've learned that in the last couple of weeks it looked like the original owners were going to take back the property."
Heroes on Horseback has used the location for four years and was initially invited to the property to partner with the Tulifinny center, Lee said. In exchange for free rent, the Heroes program worked with women staying at the center, he said. Heroes continued the same partnership with MindStream.
For now, the organization is putting many of its possessions in storage, and a neighboring stable owned by Lawton Stables has offered to keep the program's four horses, Lee said. It is still looking for a long-term home, he added.
"Whether or not we're going to be able to find a MindStream-type opportunity, I don't know," Lee said. "That was a phenomenal collaboration between the two of us."
Follow reporter Zach Murdock at twitter.com/IPBG_Zach.
School district, MindStream could team up to help overweight students, Sept. 19, 2013
Residents object to development plans at Tulifinny, Sept. 23, 2010