IN ADMIRALTY
RICHARD A. JONES, District Judge.
Plaintiffs Stanley G. Simonson and Rebecca I. Simonson ("Plaintiffs") have commenced this proceeding for the purpose, among others, of securing a sale at foreclosure of the M/V LUCKY BUCK, Coast Guard Official Number 567411, pursuant to a preferred ship mortgage granted to secure a debt owing to the Plaintiffs. The parties have agreed that the expeditious conduct of that sale is in the interests of all parties, and so have stipulated to the following facts and to the following relief:
Stipulated Facts:
1. Defendant TKO FISHERIES LIMITED ("TKO") executed a Promissory Note in favor of the Plaintiffs, dated April 1, 2011, in the original principal amount of $2,500,000 (the "Note").
2. Signature Seafoods, Inc., the sole owner of the M/V LUCKY BUCK, executed a Preferred Ship Mortgage (the "Mortgage"), dated April 1, 2011, encumbering the M/V LUCKY BUCK as security for the obligations evidenced by the Note. The Mortgage was filed at the National Vessel Documentation Center on April 26, 2011 and was recorded in Batch Number 798687 with the Document Identification number 13488355.
3. The Mortgage encumbered the entirety of the M/V LUCKY BUCK and constitutes a preferred mortgage for purposes of 46 U.S.C. § 31301(6) and related provisions of title 46 of the United States Code.
4. The M/V LUCKY BUCK is within the navigable waters of this district and within the jurisdiction of this Court.
5. Beginning on or about August 1, 2015, and thereafter, TKO failed to make principal and interest payments due under the Note, and failed to cure that default within any applicable cure period. The unpaid balance of the Note as of April 6, 2018, is $2,177,893.44, which amount consists of principal in the amount of $1,625,516.77, interest in the amount of $440,830.67, and fees and costs recoverable under the Note in the amount of $111,546.00. The Note accrues interest at a rate of $541.84 per diem.
6. The Court issued a Warrant to Arrest the M/V LUCKY BUCK (Dkt. 8-1) and appointed a Substitute Custodian Docket Entry (Dkt. 9) on November 16, 2017. The United States Marshal arrested the M/V LUCKY BUCK and it has been in the custody of the Substitute Custodian since that date.
7. Signature Seafoods, Inc., is the current owner of the M/V LUCKY BUCK. After notice, no party other than Signature Seafoods, Inc. has filed a claim of interest in the M/V LUCKY BUCK. The Court has entered an order of default barring the claims of all persons except Signature Seafoods, Inc. against the M/V LUCKY BUCK. (Dkt. 30.)
8. Plaintiffs have paid all expenses for the preservation and care the M/V LUCKY BUCK since its arrest.
Stipulated Relief:
9. The Mortgage shall be foreclosed upon confirmation of the sale described herein.
10. The U. S. Marshal shall cause the M/V LUCKY BUCK (including all marine equipment, electronics, machinery, accessions, and appurtenances for thereto; the personal property aboard or used in the operation of the vessel; and all additions, substitutions, replacements, fittings, furnishings, accessions, accessories, supplies, operating manuals, plans, specifications, improvements, and tools therefor or thereto) to be condemned and sold at public auction to the highest and best bidder, the sale to be held alongside the vessel on a date and at a time satisfactory to the U.S. Marshal. LAR 145 shall, to the extent applicable, supply the procedure and terms for such sale, except as otherwise provided herein.
11. At such sale, Plaintiffs will be permitted, but not required, to submit one or more credit bids in amounts not to exceed the then-outstanding unpaid balance owing under the Note, with any bid by the Plaintiffs in excess of such balance to include cash equal to the difference between such balance and the amount of the bid.
12. The minimum successful bid at such sale shall be $500,000. If no bid in this or a greater amount is received at the noticed sale, the U.S. Marshal shall adjourn the sale and shall confer with the Plaintiffs regarding a continuance or cancellation of the sale.
13. Upon confirmation of the sale and delivery of title to the successful bidder, the U.S. Marshal shall release to the Plaintiffs all cash proceeds generated by the sale for application to the then-outstanding unpaid balance owing under the Note, except to the extent of any cash in excess of such balance, which excess shall be placed with the registry of Court for later distribution. To the extent the Plaintiffs are the successful bidders, the credit component of the Plaintiffs' successful bid shall be applied, upon confirmation and delivery of title of the M/V LUCKY BUCK to the Plaintiffs, to reduce the amount of the thenoutstanding unpaid balance owing under the Note.
14. The sale of the M/V LUCKY BUCK at foreclosure will result in the elimination and release of all liens, whether known or unknown, from the M/V LUCKY BUCK in accordance with the general maritime law and will terminate any ownership or other interest in the M/V LUCKY BUCK held or asserted by any person or entity other than the successful bidder.
15. This Stipulated Judgment (i) is without prejudice to the Plaintiffs' rights to seek in this action the imposition of one or more money judgments against any of the in personam Defendants for amounts owing under the Note at the time such judgments are sought, as any such amounts may be reduced in connection with any sale of the M/V LUCKY BUCK and (ii) is without prejudice to any defenses to in personam liability under the Note or payment guarantees relating to the Note that might be available to any of the Defendants.
16. The Plaintiffs' Complaint in this proceeding also sought foreclosure of the M/V SPEEDWELL. The U.S. Marshal has not arrested the M/V SPEEDWELL, and nothing in this Order shall affect in any respect the Plaintiffs' rights as against the M/V SPEEDWELL.
JUDGMENT AND ORDER
1. The foregoing shall constitute, as applicable, the Court's findings and conclusions with respect to the matters addressed herein, and the stipulated relief described above shall be incorporated into this judgment as an order and directive of the Court.
2. In connection with the foregoing, the Plaintiffs shall have, and hereby are awarded, a judgment of foreclosure in rem against the M/V LUCKY BUCK on the terms described herein.
