HAMMOND | For the past two months, it seemed the auctioneer's cry of "Sold!" and the bang of the gavel at the court-ordered auction of missing nose doctor Mark Weinberger's former Merrillville surgical center didn't really seal the deal.
Raghuveer and Anita Nayak, of Oak Brook, won the high bid -- $1.46 million -- for the property at 255 E. 90th Drive at the July 12 auction.
But when it came time for the formal closure of the property, Citibank, the mortgage holder, said the couple would have to pay an additional $120,000 in back taxes for the property.
The Nayaks refused and took the issue to court.
Late Thursday, U.S. Magistrate Paul Cherry issued a stipulated order indicating Citibank and the Nayaks agreed the couple would pay $10,000 in back taxes and would be allowed to proceed with the sale.
Attorneys for Citibank and the Nayaks did not return calls seeking comment.
The auction in question was ordered by the federal court to collect money aimed at helping clear some of the debt the missing nose doctor owes to his many creditors, including Citibank. Citibank is suing Weinberger and his clinic to recover some of the debt.
The Nayaks on Aug. 8 asked the federal court to allow them to become a party to the Citibank lawsuit. U.S. Magistrate Judge Paul Cherry granted the motion Aug. 30, allowing the Nayaks to fight for the property in the courts.
Weinberger was reported missing by family members in late September 2004 after he chose not to return home with them from a trip to Greece. He never returned, but his wife, Michelle Weinberger, reported his credit cards were used in the French Riviera.
Since his disappearance, Weinberger has been the subject of numerous other lawsuits alleging malpractice. His Indiana medical license also has been revoked.
According to documents filed in federal court by Hammond attorney J. Justin Murphy, who is representing the Nayaks in the case, the contract for the sale of the building "specifically provided that taxes for 2003, 2004 and 2005 were to be paid for by the seller (Citibank) subject to proration of the 2005 taxes between the seller and purchaser (the Nayaks) as of date of closing."
The contract was approved by court order on July 14 for the amount of $1.46 million.
Murphy argued in his motion to the court that Citibank made no objections to the proceedings spelled out by the court during the planning process for the auction or at the July 13 court hearing solidifying the sales contract.
But one week later, Citibank said it wanted an additional $120,000 for back taxes and refused to close on the property without the additional payment.
The Nayaks also bought a generator attached to the building for $28,000 as well as $450,000 worth of other items sold at auction. The couple believed the cost of the generator should have been included in the purchase price of the building.
Cherry agreed, ordering the generator to be included in the $1.46 million for the building.
In a related matter, a class action suit filed in Lake Superior Court by Weinberger's patients is scheduled to return to court Tuesday before Lake Superior Judge John Pera. The suit, filed in October, alleges Weinberger's medical negligence -- a misdiagnosis -- caused the death of Phyllis Barnes, of Valparaiso.