Opinion
Case No. 10-25819-TJC.
August 1, 2011
McNAMEE, HOSEA, JERNIGAN, KIM GREENAN LYNCH, P.A., Steven L. Goldberg (Fed. Bar No. 28089), Greenbelt, MD, Attorneys for the Debtor.
SUTHERLAND ASBILL BRENNAN LLP, Mark D. Sherrill ( pro hac vice), Washington, DC, Attorneys for CAPCO.
The debtor, Citadel Land, Inc. (the "Debtor"), and CAPCO 1998-D7 Brightside Office, LLC ("CAPCO") enter into this Stipulated Order Extending (A) Deadline for the Debtor to File an Objection to the Claim of CAPCO 1998-D7 Brightside Office, LLC, and (B) Certain Dates Related to Discovery (the "Stipulation") and stipulate as follows:
Recitals
A. Until the consummation of the Sale (as defined below), the Debtor was the owner of that certain real property (the "Property") located at 1802 Brightseat Road, Landover, Maryland.
B. CAPCO is a secured lender to the Debtor. CAPCO holds that certain Deed of Trust Note dated May 29, 1998 in the original principal amount of $3,101,987; a Deed of Trust, Assignment of Leases and Rents and Security Agreement dated May 29, 1998 (as amended); and an Assignment of Leases and Rents dated May 29, 1998 (collectively, the "Prepetition Loan Documents").
C. CAPCO has filed a proof of claim (the "Claim"), asserting a secured claim pursuant to the Prepetition Loan Documents in the amount of $3,310,075.92 plus certain amounts that continued accruing after the filing of the Claim.
D. On July 13, 2010, the Debtor entered into an Agreement of Sale (the "Sale Agreement") with Blue Capital Group, LLC (the "Purchaser"). The Sale Agreement provided for the sale (the "Sale") of the Property to the Purchaser. On August 24, 2010, the Court entered an Order Granting the Motion to Sell (the "Sale Order") (docket no. 39).
E. In May 2011, the Debtor and the Purchaser were in the process of finalizing the terms of the Sale. It was clear that the Sale would provide for adequate funds for the Debtor to pay all allowed claims in full, but the Debtor questioned whether certain components of CAPCO's Claim should be allowed (the "Claim Issues").
F. Accordingly, on May 26, 2011, the Debtor filed an Emergency Motion to Approve Sale of Property with Proceeds to be Placed in Escrow Pending Further Order of the Court (the "Escrow Motion") (docket no. 106). In the Escrow Motion, the Debtor requested authority to consummate the Sale, but to withhold a portion of the Sale proceeds in escrow, pending resolution of the Claim Issues.
G. On June 6, 2010, the Court entered its Order Granting Emergency Motion to Approve Sale of Property with Proceeds to be Placed in Escrow Pending Further Order of Court (the "Escrow Order") (docket no. 115). Under the terms of the Escrow Order, the Debtor was authorized to proceed with the Sale. The Debtor was also directed to withhold $225,000 of the Sale proceeds and to hold it in escrow. The Escrow Order instructed that the Debtor must file an objection to the Claim within 60 days of the entry of the Escrow Order, or else release the escrowed funds to CAPCO. 60 days after the entry of the Escrow Order is August 5, 2011 (the "Objection Deadline").
H. On June 27, 2011, the Debtor served two subpoenas on CAPCO: one (the "Document Subpoena") requiring the production of certain documents no later than July 28, 2011; and one (the "Deposition Subpoena" and collectively with the Document Subpoena, the "Subpoenas") requiring the oral examination of an authorized representative of CAPCO on July 29, 2011.
I. In the intervening time, the Debtor and CAPCO (collectively, the "Parties") have entered into preliminary settlement discussions. The Parties believe that all interests would be best served if the Claim Issues could be resolved expeditiously and without the expenditure of resources necessary for CAPCO to produce all documents required under the Document Subpoena and for the Debtor to depose CAPCO's authorized representative.
J. Notwithstanding the foregoing, the Debtor believes that it needs some documents to allow it to make an informed judgment with regard to the Claim Issues. Accordingly, the Debtor has issued an informal request (the "Informal Document Request") for a smaller subset of documents than those required under the Document Subpoena.
NOW, THEREFORE, in consideration of the mutual promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is hereby STIPULATED AND AGREED between the Parties that:
1. Subject to applicable law, CAPCO shall cooperate with the Debtor to comply with the Informal Document Request.
2. The Objection Deadline shall be extended to September 6, 2011.
3. The dates, times and deadlines required under the Subpoenas shall be postponed, to dates and times to be agreed upon in good faith by the Parties.