Chester Hardware bankruptcy sale in the works Business could have new owners by year's end

By Shawn Cunningham
© 2026 Telegraph Publishing LLC

If all goes to plan, according to bankruptcy trustee Raymond Obuchowski, the Chester Hardware store that declared Chapter 7 bankruptcy and closed in July could be under new ownership by early December.

On Friday, Obuchowski and trustee Paul Levine filed notice of a motion asking the  U.S. Bankruptcy Court for Vermont to approve a sale of the store and its real estate as well as the contents and records to Adam and Jaimie Rawson of Londonderry for $587,200. The Rawsons own hardware stores in Londonderry and Bondville.

The bankruptcy involves two limited liability companies registered by Demi Keitel of Grafton as the sole owner. Chester Hardware & Mercantile LLC is the actual business, while Opossum Kingdom LLC owns the building and leases it to the store.

Under Chapter 7, the business stops operating and its assets are sold to repay as much of the company’s debts as possible to creditors, including unsecured creditors who have the lowest priority in the process. Secured creditors are generally banks and other lenders. To set aside money for the unsecured creditors, the secured creditors must agree to a “carve-out” from the proceeds of the sale.

In this case the carve-out is expected to be about 13.8 percent (about $81,000) to be divided up among the unsecured creditors. While it won’t make them whole for money owed to them, it will lessen the sting. Former store owners Julie and Bob Pollard are among the unsecured creditors, with a loan to the Keitel of $165,000.

The secured debt is held by 22nd State Bank of Mobile, Ala., along with the U.S. Small Business Administration, which indicates that the SBA may have guaranteed the loan. With that SBA guarantee, the Alabama bank may have just wanted to get out as soon as possible and cut the expense of heating and maintaining the building throughout the winter.

In addition to the Pollards, creditors include American Express Bank and Chase Bank USA (for credit card payments) and Do It Best Corp. for inventory.

Door remains open for higher offers

Baked into the bankruptcy process is the commitment to get the highest amount possible for the creditors. So while this deal is basically done and agreed to, the door remains open for “higher or better offers” until Friday, Oct. 16. The minimum higher bid is $597,200 and further increases must be in increments of at least $10,000. Also, a bidder must show they have the financial ability to close on the property.

Trustee Obuchowski told The Telegraph that, “At this point, the process has worked as it should, with a sale taking place quickly with a good return for the bank and other creditors while preserving a project with economic viability for the community.”