446 Stanwood was the historic home of the Chi Tetarton chapter of Phi Sigma Kappa from 1961 to 2010. The founding brothers created Chi Tetarton Phi Sigma Kappa Housing Corporation to own and operate the property. Housing Corp. was controlled by the chapter and its alumni. The mortgage was quickly repaid, and the property went without a mortgage for nearly 40 years.
In 2005, title to the property secretly was deeded to Droopy Corporation, which was controlled by a small group of Chi Tet alumni from the early 90’s. Droopy operated with a similar sounding fictitious name as its predecessor – Housing Corporation. This allowed Droopy to move foward without anybody (outside of the small group) to know of its existence. Droopy’s “leaders” then encumbered the property with a $90,000 mortgage, which went unauthorized and unannounced, and the funds were used in 2006 for a major renovation to the Stanwood house.
In 2007, the directors of Droopy surrendered control of it, and the property, to individuals who also were involved with Phi Sigma Kappa Properties (PSKP), an affiliate of the PSK National organization. Again, this action was unauthorized and announced. The men from PSKP then announced that PSKP had acquired the property. However, county records show that title to the property continued to be held by Droopy, the de facto successor to and constructive trustee to Housing Corp.
PSKP’s acquisition announcement appears to have been a willful misrepresentation of fact. It appears that the new Droopy officers/directors were self-dealing. They concealed Droopy (and their roles within) as trustee of Chi Tetarton’s signature asset, and falsely claimed that the property had been acquired by PSKP, the other organization that they represented.
PSKP dramatically increased the rent to the chapter, well above market, so much so that in 2010, the chapter was forced to find housing elsewhere.
Later in 2010, Droopy (controlled by the men from PSKP) sold 446 Stanwood, at the time that Michigan real estate values were at rock bottom. The property sold for $109,900, which repaid the $90,000 loan. Once again, the transaction went unannounced. PSKP apparently pocketed the sales proceeds, perhaps as a claimed set off against some unspecified debt.
There has been no accounting or disclosure provided for:
- the creation of the purported debt
- the proceeds of sale
- the process to authorize such payment/notice to stakeholders.
This blog seeks to document and explain the loss of the chapter’s signature asset, and its significant accumulated value.