STIPULATION AND ORDER OF DISMISSAL WITH PREJUDICE

JAMES F. SCHNEIDER, Bankruptcy Judge.

WHEREAS, on November 23, 2007, Fieldstone Mortgage Company (the "Debtor") filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the "Bankruptcy Code") with the United States Bankruptcy Court for the District of Maryland (Baltimore Division) (the "Bankruptcy Court");

WHEREAS, the Fieldstone Mortgage Company Plan Trust (the "Trust") was created pursuant to the Debtor's Revised Plan of Reorganization (the "Plan") to, inter alia, object to certain claims and make certain distributions under the Plan;

WHEREAS, Steven D. Sass, LLC and Martin Fletcher, Esquire (the "Trustees") were appointed as trustees of the Trust;

WHEREAS, the Trust has made a number of partial distributions to the Debtor's former Employees1 on account of their Allowed Priority Wage Claims (the "Priority Distributions"), which claims the Trust asserts are treated as fourth level priority claims pursuant to section 507(a)(4) of the Bankruptcy Code;

WHEREAS, the Trust asserts that the Allowed Priority Wage Claims will not be paid in full because the Trust does not have sufficient funds to pay such claims in full;

WHEREAS, the Trust asserts that the Priority Distributions were made to the Employees exclusive of applicable wage taxes and withholdings, as required by the Plan;

WHEREAS, the Trust asserts that the Employees' portion of taxes and withholdings, which were withheld from the Priority Distributions to the Employees, were paid to the various taxing authorities pursuant to the terms of the Plan;

WHEREAS, the Debtor's portion of the applicable wage taxes related to the Priority Distributions, such as Medicare tax and unemployment insurance, typically due from an employer on its payroll (the "Employer Taxes"), were not paid to the various taxing authorities;

WHEREAS, the Trust asserts that the Employer Taxes were not paid to the various taxing authorities, including the Internal Revenue Service ("IRS"), because such taxes are treated as eighth level priority claims under section 507(a)(8)(D) of the Bankruptcy Code, and cannot be paid unless the Allowed Priority Wage Claims are paid in full;

WHEREAS, on or about January 4, 2012, the IRS filed a Notice of Federal Tax Lien asserting a Tax Lien upon the Trust's assets in favor of the United States in the amount of $53,769.35 for certain unpaid Employer Taxes allegedly owed by the Trust to the IRS with respect to the Priority Distributions;

WHEREAS, the IRS advised the Trust that it was investigating whether Steven D. Sass2, Martin Fletcher, Esquire and Chad J. Toms, Esquire3 may be held personally liable for the Employer Taxes allegedly owed by the Trust to the IRS;

WHEREAS, on May 14, 2012, Steven D. Sass, LLC, as trustee of the FMC Plan Trust, ("Plaintiff") initiated the above-captioned adversary proceeding (the "Action") in the Bankruptcy Court by filing a Complaint for Declaratory and Injunctive Relief (the "Complaint") against the United States of America (the "Defendant");

WHEREAS, by the Action, the Plaintiff seeks, inter alia, the following relief: (1) a declaration that the Tax Lien placed against the Trust's assets by the IRS is invalid; (2) a declaration that the filing of the Tax Lien was a violation of the Injunction Against Interference with the Plan; (3) a declaration that the filing of the Tax Lien was a violation of the Plan Injunction; (4) a declaration that the Plaintiff may distribute Trust assets pursuant to the Plan, free and clear of the Tax Lien; (5) a declaration that the Trustees and Trust's counsel are not personally liable to the Defendant or the IRS for the Employer Taxes; (6) entry of an order removing and retracting the Tax Lien and Notice of Federal Tax Lien; and (7) entry of a permanent injunction preventing the IRS from asserting a lien on any assets of the Trust for the Employer Taxes;

WHEREAS, the Defendant has notified the Plaintiff that the IRS has released the Tax Lien, withdrew the Notice of Federal Tax Lien and ceased collection efforts with respect to the Employer Taxes;

WHEREAS, the Plaintiff and Defendant desire to avoid further costs and expenses associated with this Action;

WHEREAS, the Plaintiff and the Defendant agree that the Tax Lien is invalid;

WHEREAS, the Plaintiff and the Defendant further agree that the IRS will not assert any lien on the Trust's assets or take any further action to collect the Employer Taxes from the Trust;

WHEREAS, the Plaintiff and the Defendant further agree that the Trust may make all distributions of Trust assets free and clear of the Tax Lien in accordance with the terms of the Plan;

WHEREAS, the Plaintiff and the Defendant further agree that Steven D. Sass, Martin Fletcher, Esquire, Chad J. Toms, Esquire and other professionals retained by and working for the Trust are not personally responsible for, and shall have no liability to the Defendant or the IRS for, payment of the Employer Taxes.

NOW, THEREFORE, it is, by the United States Bankruptcy Court for the District of Maryland, hereby

ORDERED, that the foregoing recitals are a material part of this Stipulation and are incorporated into and made a part of this Order, as if set forth at length herein; and it is further

ORDERED, that the Trust is authorized to make all distributions of Trust assets free and clear of the Tax Lien in accordance with the terms of the Plan; and it is further

ORDERED, that Pursuant to Rule 41(a) of the Federal Rules of Civil Procedure as made applicable by Rule 7041 of the Federal Rules of Bankruptcy Procedure, this Action shall be dismissed with prejudice and each party shall bear its own costs and expenses of this litigation; and it is further

ORDERED, that this Court shall retain jurisdiction with respect to any matters, claims, rights or disputes arising from, based upon or related to this order.

SO ORDERED