Filed: Sep. 20, 2012
Latest Update: Sep. 20, 2012
Summary: STIPULATION AND CONSENT ORDER RESOLVING EMERGENCY MOTION TO COMPEL DEBTOR TO (1) SELL AND TRANSFER MALL PROPERTY PURSUANT TO CONFIRMED CHAPTER 11 PLAN, AND (2) DISTRIBUTE FUNDS PURSUANT TO CASH COLLATERAL AGREEMENT THOMAS J. CATLIOTA, Bankruptcy Judge. La Union Center, LLC ("La Union Center") and Marc Albert, the Disbursing Agent for the estate of the Jin Suk Kim Trust (the "Disbursing Agent"), collectively the "Parties"), by their undersigned counsel, hereby stipulate and agree as follows:
Summary: STIPULATION AND CONSENT ORDER RESOLVING EMERGENCY MOTION TO COMPEL DEBTOR TO (1) SELL AND TRANSFER MALL PROPERTY PURSUANT TO CONFIRMED CHAPTER 11 PLAN, AND (2) DISTRIBUTE FUNDS PURSUANT TO CASH COLLATERAL AGREEMENT THOMAS J. CATLIOTA, Bankruptcy Judge. La Union Center, LLC ("La Union Center") and Marc Albert, the Disbursing Agent for the estate of the Jin Suk Kim Trust (the "Disbursing Agent"), collectively the "Parties"), by their undersigned counsel, hereby stipulate and agree as follows: R..
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STIPULATION AND CONSENT ORDER RESOLVING EMERGENCY MOTION TO COMPEL DEBTOR TO (1) SELL AND TRANSFER MALL PROPERTY PURSUANT TO CONFIRMED CHAPTER 11 PLAN, AND (2) DISTRIBUTE FUNDS PURSUANT TO CASH COLLATERAL AGREEMENT
THOMAS J. CATLIOTA, Bankruptcy Judge.
La Union Center, LLC ("La Union Center") and Marc Albert, the Disbursing Agent for the estate of the Jin Suk Kim Trust (the "Disbursing Agent"), collectively the "Parties"), by their undersigned counsel, hereby stipulate and agree as follows:
Recitals
WHEREAS, on March 1, 2011, the Jin Suk Kim Trust d/b/a La Union Mall (the "Debtor") filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code.
WHEREAS, as of the date of the bankruptcy filing, the Debtor was the owner of real property, improvements and related personal property located at 1401 University Boulevard East, Hyattsville, Maryland ("Mall Property"). La Union Center, LLC ("La Union Center") was the secured creditor with a first priority security interest and lien on the Mall Property.
WHEREAS, on June 4, 2012, La Union Center filed a Disclosure Statement (the "Disclosure Statement") and a Plan of Reorganization, which was amended on June 6, 2012 (the "Plan").
WHEREAS, following a hearing held on July 25, 2012, the Court entered an Order Approving Disclosure Statement and Confirming Amended Plan of Reorganization Proposed by Secured Creditor La Union Center, LLC (the "Confirmation Order").
WHEREAS, pursuant to the Plan and Confirmation Order, Marc Albert was appointed as the Disbursing Agent for the Debtor's estate (the "Estate") and is authorized to take all actions necessary to consummate the Plan, including finalizing all sales and transfers of property and making all payments required under the Plan.
WHEREAS, pursuant to Section 6.1 of the Plan, the Debtor was required to sell and transfer the Mall Property to La Union Center on the Effective Date in full satisfaction of La Union Center's claims in the Debtor's case.
WHEREAS, the Effective Date of the Plan occurred on August 13, 2012.
WHEREAS, on August 16, 2012, La Union Center filed a Motion to Compel Debtor to (1) Sell and Transfer Mall Property Pursuant to Confirmed Chapter 11 Plan, and (2) Distribute Funds Pursuant to Cash Collateral Agreement (the "Motion").
WHEREAS, on August 17, 2012, the Estate and the Disbursing Agent filed a response (the "Response") to the Motion.
WHEREAS, on August 29, 2012, the Court held a hearing on the Motion and Response.
WHEREAS, on August 30, 2012 the Court entered a Consent Order Authorizing Disbursing Agent to Issue Deed. By the Order, the Court authorized and directed the Disbursing Agent to execute and deliver the deed to the Mall Property to La Union Center, and further directed that all rents collected from the Mall Property be held in escrow until further order of the Court or agreement by the parties.
WHEREAS, on August 31, 2012, the Disbursing Agent delivered the executed deed to the Mall Property to La Union Center.
WHEREAS, the parties attempted to settle the remaining issues in dispute, including the payment of open invoices relating to the Mall Property and distribution of cash on hand, but were unsuccessful in reaching a resolution.
WHEREAS, on September 5, 2012, the Court held a telephonic hearing and issued a ruling on the payment of open invoices relating to the Mall Property. Specifically, the Court held that the Estate was responsible for all bills which were due and/or accrued prior to August 31, 2012 (i.e. the invoices contained in Tab 3 of the binder (the "Invoice Binder") utilized at the August 29 hearing) (the "Estate Invoices") and that La Union Center was responsible for all bills due or accruing after September 1, 2012 (contained in Tab 1 of the Invoice Binder). Further, the Court held that any invoices for goods or services which spanned both pre- and post-sale of the Mall Property, or any invoices which benefited both the Estate and La Union Center, should be apportioned and paid by both parties (those invoices contained in Tab 2 of the Invoice Binder, plus the payment due to the Debtor's special counsel William Monks ("Monks") on account of a multi-year property tax reduction and payment taken by Site Management Group as a commission for a long term lease with respect to the Mall Property).
WHEREAS, the parties have negotiated in good faith and have reached a consensual resolution, as set forth below, with respect to all remaining issues and have agreed to settlement of all open matters.
IT IS, THEREFORE, HEREBY STIPULATED AND AGREED BY AND BETWEEN THE PARTIES THAT:
1. Site Management is directed to immediately close all accounts relating to the Estate and shall turn over to the Disbursing Agent all money and property relating to the Debtor's Estate, including but not limited to books, records, checks, and cash on hand.
2. La Union Center and the Disbursing Agent have agreed that in satisfaction of all amounts owned by La Union Center to the Estate in respect of the Court's ruling, the Estate shall have exclusive title to all cash on hand as of September 5, 2012, in the amount of $90,442.83. This includes all amounts delivered to Site Management as of September 5, 2012 whether or not the checks cleared by that date. The Disbursing Agent and/or Site Management Company shall provide to La Union Center a detailed accounting with respect to the cash on hand, rents received, and all other accounts receivables and accounts payables.
3. All current rents received after September 5, 2012 shall be the exclusive property of La Union Center.
4. The Estate shall pay all invoices contained in Tabs 2 and 3 of the Invoice Binder. The Estate shall not be responsible to pay the invoices contained in Tab 1 of the Invoice Binder.
5. Any additional invoices or claims relating to the Mall Property not contained in the Invoice Binder shall be paid (a) by the Estate if the goods or services were provided prior to August 31, 2012; (b) by La Union Center if the goods or services were provided after August 31, 2012, or (c) by the Parties on a pro-rated basis if they relate to both pre and post August 31. La Union Center is not aware of or has been advised of any additional invoices in categories (a) or (c).
6. The Estate shall retain sole ownership of all accounts receivable relating to former tenants who were not in possession of space at the Mall Property as of August 31, 2012. With respect to accounts receivable owed by tenants who were in possession of space at the Mall Property as of August 31, 2012, La Union Center will pay to the Estate $25,000 to purchase such receivables, with the exception of the accounts receivable related to the tenant The Matthews Group (as outlined below) (the "Accounts Receivable"). The $25,000 purchase price shall be paid in 6 equal monthly installments of $4,166.66, with the first payment to be due October 15, 2012. The final payment will be in the amount of $4,166.67 and will be paid no later than March 15, 2013. La Union Center may prepay the total amount due for the Accounts Receivables without penalty. If La Union Center receives a real property tax refund, all funds received in respect of such refund shall be paid to the Disbursing Agent toward satisfaction of the then outstanding balance owed for the purchase of the Accounts Receivable. If La Union Center fails to timely pay any installment due or fails to remit any real property tax refund to the Disbursing Agent as set forth above, all accounts receivable for amounts due and owing prior to August 31, 2012 shall revest in the Debtor's estate.
7. The Disbursing Agent and La Union Center shall jointly pursue The Matthews Group to recover the past due rental amounts due to the Estate and to enforce rent obligations owed to La Union Center from September 1, 2012 forward. The parties agree that the Estate shall retain any amounts received from the Mathews Group for pre-August 31, 2012 rents and La Union Center shall retain all amounts due for rent due September 1, 2012 and thereafter. Any settlement with the Mathews Group shall require the consent of both Parties and any such settlement shall require that the Debtor's estate must receive no less than $40,000 for rent due for the period preceding August 31, 2012.
8. La Union Center and the Disbursing Agent, on behalf of the Estate, shall jointly pursue an action against Site Management Company for return of the $37,440 commission which was paid without authorization and in contravention of the Cash Collateral Agreement and any other claims the estate may have against Site Management. Whiteford Taylor & Preston shall be lead counsel in this matter. Any settlement of such claims shall require the consent of both Parties. Any funds paid by Site Management (via settlement or judgment), shall be split 50% to Estate and 50% to La Union Center.
9. Any real estate tax refund due with respect to the Mall Property shall be payable solely to La Union Center, and all governmental agencies who may process any such refund shall remit said refund to La Union Center LLC and deliver same to undersigned counsel for La Union Center LLC. The Disbursing Agent and the Estate shall have no claim to any such refund, except as set forth in paragraph 5 above, and in the event that a taxing authority incorrectly delivers such refund to the Estate, the Disbursing Agent will immediately remit such refund to La Union Center's undersigned counsel.
10. The Disbursing Agent will provide any and all records in his possession relating to the Mall Property to La Union Center and will direct that Site Management Company to cooperate with La Union Center during this transition of records.
11. Site Management is ordered to cooperate with La Union Center in respect of providing information and records relating to the Mall Property and responding fully to all requests for information relating to the Mall Property.
