September 25, 2007
LANSING - Attorney General Mike Cox today announced that court-appointed
conservator Mark J. Zausmer has reached an agreement to sell the 28 cemeteries
that were allegedly raided by Clayton Smart.
"Today's purchase of the cemeteries is a big step in resolving a very difficult
problem," said Cox. "I want to thank Mark Zausmer and Keith Cooley [Director of
Department of Labor and Economic Growth] for their hard work and
diligence."
Mr. Zausmer has filed a petition with the Ingham County Circuit Court
seeking approval to sell the cemeteries for $32 million to the Detroit Memorial
Group. The sale price includes $21.9 million to replenish funds that were
missing from certain trust accounts at the 28 cemeteries when the State assumed
control last December. The transaction will transfer ownership to an experienced
cemetery operator and third generation cemetery professional, David Shipper, of
Ewing, New Jersey. Mr. Shipper currently owns 12 cemeteries in Indiana and two
cemeteries in New York and will form Detroit Memorial Group to acquire and
operate the 28 Michigan cemeteries. He is the past president of the
International Cemetery and Funeral Home Association and former vice-chairman of
the New Jersey Cemetery Board. The deal is expected to close on November 1,
2007.
Director Cooley stated, "I am confident that the new owner will operate the
cemeteries in accordance with the cemetery regulations of this State. The public
can be assured that the Cemetery Commissioner and the Department made every
effort to select the best possible person to operate these cemeteries."
On December 18, 2006, based upon action taken by Cox on behalf of Cemetery
Commissioner Andrew Metcalf, the State assumed control of the cemeteries amid
allegations that the owner, Clayton Smart of Okmulgee, Oklahoma, had embezzled
cemetery trust funds. The Attorney General subsequently charged Smart with 39
felony counts in connection with the alleged embezzlement. Mr. Smart is
currently in jail in Tennessee ? where he faces similar charges relative to
cemeteries and funeral homes he owns in that state ? pending extradition to
stand trial on the Michigan charges.
Mr. Zausmer commented that, "I am confident that the new ownership team has a
vision and plan to successfully operate the cemeteries."
An intensive search to identify a buyer for the 28 cemeteries was conducted,
with Mr. Shipper and Detroit Memorial Group emerging as the successful bidder.
Under the agreement, Detroit Memorial Group will deposit $21.9 million into
merchandise trust accounts for the 28 cemeteries, bringing the cemeteries into
compliance with the funding requirements of the Michigan Cemetery Regulation Act
which protects consumers who pre-purchase cemetery merchandise and services.
Detroit Memorial Group has committed to fulfilling all contractual obligations
to consumers in accordance with all applicable laws of the State of Michigan.
The remaining $10.1 million of the $32 million purchase price will go into
cemetery operating accounts to be used to complete mausoleum construction
projects, make repairs to cemetery buildings and roadways, upgrade cemetery
equipment, and to meet other operating obligations.
"Recovery of the trust funds has been a high priority from the outset and this
transaction will ensure that consumers are fully protected for any merchandise
purchases, including mausoleums, that were made at the cemeteries" Cox
continued.
A hearing on the petition to approve the sale is scheduled for September 28,
2007 before the Honorable James Giddings in the Ingham County Circuit Court.
- 30 -