AUBURN – A judge has ordered an Auburn woman to stop selling assets unless she gets permission from the two community groups that are suing her for more than $124,000 in unpaid loans.

And if Linda Hertell sells anything, the judge ordered, the proceeds must be seized and set aside so the money will be available if the court rules in favor of the groups, the Androscoggin Valley Council of Governments and the Lewiston-Auburn Economic Growth Council.

Hertell, owner of the defunct Richardson Hollow Mental Health Services, represented herself Thursday and cried periodically throughout the hearing. Although she does have buildings up for sale, Hertell said the only assets that have actually sold are pieces of office furniture. She said she didn’t know why the two groups believed she would hide money from them.

“I don’t understand how particleboard and steel desks and stuff like that that’s being sold for $20 each to satisfy the state of Maine constitutes any form of fraud,” she said.

But Rebecca Webber, the attorney for the AVCOG and the LAEGC, claimed Hertell set up a series of intertwining shell companies designed to keep her assets – including at least 14 properties in six counties – out of the hands of debt collectors.

“That’s bankruptcy planning,” Webber said.

Hertell has owned several local companies, the most well-known of which was Richardson Hollow, a once-thriving business that served adults and children with mental illness. At its peak, the 10-year-old company had about 1,000 clients and more than 200 employees.

But in 2007, Richardson Hollow began to founder. Paychecks ran late and workers weren’t fully reimbursed for mileage. Top managers were laid off and some workers were told to give up their benefits or quit. In mid-September, Richardson Hollow closed its doors.

Hertell borrowed a total of $150,000 from AVCOG and the LAEGC in 2000, when Richardson Hollow was doing well. The community business loans were largely government funded.

Although Hertell initially made payments, the groups claim she hasn’t paid them in months and owes the principal, interest and fees.

Fearing that Hertell spread assets among her various limited liability companies, AVCOG and the LAEGC named Hertell and 10 of her companies in the lawsuit and in their request for Thursday’s order. Webber told the judge that Hertell’s companies are “impossible to untangle.”

“What we can’t do is tell you what she’s selling where. We haven’t been able to track down everything she owns yet,” Webber said. “But there will be nothing left if she keeps on this course.”

She portrayed Hertell as a savvy businesswoman who knows exactly how to hide money from lenders. Webber said in court that the Web site of Magnusson Balfour, a Portland-based brokerage firm, lists Hertell as a broker and presents an impressive list of Hertell’s business achievements, including 25 years in real estate management and investment, several awards and a current term as president of the Auburn Business Association.

“This is not someone who didn’t know what she was doing,” Webber said.

Hertell defended the Web site as advertising.

“You don’t put out brochures saying, ‘I’m a washed-up CEO, you should hire me,'” she said.

Hertell said she’s simply made some business mistakes, including “little things that are just neglectful.”

Although Webber continued to assert that Hertell is savvy enough to hide funds from lenders she doesn’t want to pay, she argued that the court should side with AVCOG and the LAEGC even if the judge believed Hertell’s claims.

“If Ms. Hertell doesn’t know what she’s doing, then the court needs to step in and protect these public funds,” Webber said.

The judge agreed, ordering a temporary restraining order that prevents Hertell or her companies from selling, transferring or giving away assets without approval. Any proceeds will be set aside until a judge can rule on the groups’ lawsuit.

This was the second time Hertell had been sued in the wake of Richardson Hollow’s sudden closure. The state filed suit against her and Richardson Hollow on behalf of 126 workers who were owed more than $190,000 in back wages and vacation pay. A judge dropped Hertell’s name from the suit late last year when the Maine Attorney General’s Office didn’t file the paperwork required to keep the complaint against her alive.

Richardson Hollow settled the suit in June and agreed to pay the money owed, though the company’s attorney said at the time that he doubted the cash-strapped former business had the ability to pay. The state has said it plans to pursue the sale of any company assets.