Opinion
Case No. BK-N-03-52300 BK-N-03-52304 and BK-N-03052470 BK-N-03-52474.
September 21, 2004
THOMAS J. MAGILL, ESQ., JEREMY C. KLEINMAN, ESQ., QUARLES BRADY LLP, Chicago, IL, KAARAN E. THOMAS, DAVID C. McELHINNEY, BECKLEY SINGLETON, CHTD., Reno, NV, Attorneys for Celebrity Resorts LLC.
GEOFFREY GILES, LAW OFFICES OF GEOFFREY GILES, Reno, Nevada, ZIRKEL WIRELESS LLC.
JUDY B. CALTON, ESQ., HONIGMAN MILLER SCHWARTZ AND COHN LLP, Detroit, MI, C. ALAN BENTLEY, TRUSTEE.
STIPULATION AND ORDER CONCERNING THE TRUSTEE'S LEASE REJECTION, NINTH MOTION
WHEREAS, Zirkel Wireless LLC ("Zirkel") entered into a Use of Facilities Lease Agreement (the "Use Agreement") with Preferred Equities Corporation, the predecessor in interest to Mego Financial Corp. and its related entities (collectively, the "Debtor") for use of certain rooftop space at the Debtor's former Hilltop Resort in Steamboat Springs, Colorado (the "Resort) to operate a wireless internet antenna tower;
WHEREAS, on or about November 21, 2003, C. Alan Bentley, not individually but as trustee for the Debtor's Chapter 11 Estate (the "Trustee"), consummated the sale of the Estate's interest in the Resort to Celebrity Resorts LLC, as nominee of First Continental Corporation ("Celebrity");
WHEREAS, on April 2, 2004, the Trustee sent a notice to Zirkel announcing the Trustee's intention to reject the Use Agreement by filing his Ninth Rejection Motion;
WHEREAS, on April 13, 2004, Zirkel filed its Objection to Lease Rejection, Ninth Motion (the "Response"), asserting that "the executory contract followed the property and no longer has anything to do with the estate or second that lessees have rights to preserve their leasehold interests under the Section 365(h)(1)(A)(ii) and this court should determine that such an exercise is proper." Response, p. 4;
WHEREAS, Celebrity filed its Reply of Celebrity Resorts LLC to Zirkel Wireless LLC's Objection to Lease Rejection, Ninth Motion (the "Reply"), asserting that Zirkel was not entitled to assert rights under Section 365(h) of the Bankruptcy Code and that the Resort was transferred to Celebrity free and clear of, inter alia, the Use Agreement pursuant to 11 U.S.C. § 363(f).
WHEREAS, this Court has scheduled a trial on the Trustee's Ninth Rejection Motion and Zirkel's Response and Celebrity's Reply thereto, which trial is presently set for September 27, 2004;
WHEREAS, Zirkel and Celebrity have each determined that a consensual settlement of the present dispute will be in each party's best interest;
WHEREAS, while Zirkel and Celebrity have not yet negotiated a final settlement, they jointly believe that further settlement discussions are very likely to result in a consensual resolution of this matter, including all issues now in dispute between them, without the necessity for a trial;
WHEREAS, the Debtor's Estate is not incurring any further administrative expense obligations under the Use Agreement and the Trustee does not object to a continuance of the trial date for the Trustee's Ninth Rejection Motion and Zirkel's Response and Celebrity's Reply thereto;
NOW THEREFORE, upon the foregoing stipulations and agreements by and between the parties to this Stipulation and Order, it is hereby ordered as follows:
1. The September 27, 2004 trial date on the Trustee's Ninth Rejection Motion, and Zirkel's Response and Celebrity's Reply thereto is hereby stricken.
2. Trial on the Trustee's Ninth Rejection Motion and Zirkel's Response and Celebrity's Reply thereto shall be rescheduled to commence at 2:00 p.m. on December 13, 2004.