Opinion
Jointly Administered Under: No. 04-00757-W11.
May 23, 2005
Barry W. Davidson, Robert S. Delaney, DAVIDSON MEDEIROS, Spokane, Washington and Charles R. Ekberg, Mary Jo Heston, Susan Bryn Jahnke, LANE POWELL PC, Seattle, Washington, Counsel for Metropolitan Mortgage Securities Co., Inc., Debtor and Debtor-in-Possession.
Douglas B. Marks, Ford Elsaesser, Bruce A. Anderson, ELSAESSER, JARZABEK, ANDERSON, MARKS, ELLIOTT McHUGH, Sandpoint, Idaho, and Jeffrey T. Wegner, John J. Jolley, Jr., KUTAK ROCK LLP, Omaha, Nebraska, Counsel for Summit Securities, Inc., Debtor and Debtor-in-Possession.
THIS MATTER having come on regularly for hearing upon the Motion dated March 31, 2005 (Docket No. 2440) (the "Motion"), of Metropolitan Mortgage Securities Co., Inc. ("Metropolitan"), and Summit Securities, Inc. ("Summit") by and through their counsel, for an Order Authorizing Sale Of Structured Settlements Free And Clear Of Liens, Approving Receivables Purchase Agreement, And Granting Related Relief, authorizing and approving the sale by Metropolitan and Summit (the "Debtors" or the "Sellers") of certain portfolios of receivables and related assets entitling the Sellers to certain payments (as defined in the Purchase Agreement and whether owned by Metropolitan and/or Summit, "Portfolio Property") to SSC Settlements, LLC (the "Purchaser"), pursuant to that certain Receivables Purchase Agreement, dated as of March 12, 2005 (the "Purchase Agreement"), free and clear of liens, claims and encumbrances, as expressly set forth in the Purchase Agreement, and the granting of certain related relief; and the Court having reviewed the Motion and any responses thereto, and having considered the statements of counsel, and adequate and sufficient notice of the Motion, the Purchase Agreement and all transactions contemplated thereunder and in this order (the "Sale Order"), having been given to those parties in interest entitled to receive notice pursuant to the Standing Order Limiting Notice In Jointly Administered Case entered herein on February 6, 2004 (the "Standing Order"), and as required by the Purchase Agreement, including the Claimants, the Annuity Providers and the Obligors; and all interested parties having been afforded an opportunity to be heard with respect to the Motion and all relief requested therein; and the Court having determined that the legal and factual bases set forth in the Motion and supporting pleadings establish just cause for the relief granted herein; and the Court having entered findings of fact and conclusions of law pursuant to Bankruptcy Rule 7052, made applicable to this proceeding pursuant to Bankruptcy Rule 9014, with findings of fact to be construed as conclusions of law and conclusions of law shall be construed as findings of fact when appropriate, with all capitalized terms not otherwise defined herein having the meanings given such terms in the Motion or Purchase Agreement, as the case may be, NOW, THEREFORE:
Capitalized terms used and not otherwise defined in this Sale Order shall be defined as set forth in the Purchase Agreement.
IT IS HEREBY ORDERED that except as otherwise provided in this Sale Order (and subject to the terms of the Supplemental Court Orders, as applicable to specific Portfolio Properties), the relief requested in the Motion is granted in all respects and to the extent that any objections to any of the relief requested in the Motion have not been withdrawn or resolved by stipulation prior to the entry of this Sale Order or are not resolved by the relief granted herein, all such objections are hereby overruled in their entirety on the merits with prejudice.
IT IS FURTHER ORDERED that the terms and conditions of the Purchase Agreement are approved, and the sale of Portfolio Property in exchange for the Purchase Price is authorized under 363(b) of the Bankruptcy Code.
IT IS FURTHER ORDERED that, in accordance with the provisions of the Purchase Agreement, upon the satisfaction of the Conditions to Funding (including, without limitation, the issuance of one or more Supplemental Court Order(s)), on the Closing Date with respect to a particular Funding Request, Portfolio Property which is the subject of the Funding Request (the "Transferred Portfolio Property") shall be transferred to Purchaser.
IT IS FURTHER ORDERED that except as permitted or otherwise provided for in the Purchase Agreement, this Sale Order or any Supplemental Court Order, pursuant to section 363(f) of the Bankruptcy Code, upon the occurrence of each Closing Date, Transferred Portfolio Property shall be transferred to the Purchaser and shall be free and clear of (a) all Liens, and (b) all claims (as that term is defined in section 101(5) of the Bankruptcy Code), liabilities, obligations, demands, guaranties, options, rights, contractual commitments, restrictions, interests and matters of any kind and nature, whether arising prior to or subsequent to the commencement of these chapter 11 cases, and whether imposed by agreement, understanding, law, equity or otherwise (including, without limitation, claims and encumbrances), and debts arising under, relating to, or in connection with any acts of either or both of the Debtors (i) that purport to give to any party, including, without limitation, any Debtor, a right or option to effect any forfeiture, modification, right of first refusal, or termination of any of the Sellers' or the Purchaser's interests in such Portfolio Property, or any similar rights, or (ii) in respect of taxes, restrictions, rights of first refusal, charges or interests of any kind or nature, if any, including, but not limited to, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership) (collectively, "Claims"), with all such non-assumed Liens and Claims to attach to the Debtors' interest in the proceeds of the Proposed Sale, in the order of their priority, with the same validity, force and effect which they now have against such Portfolio Property, subject to any rights, claims and defenses the Debtors may possess with respect thereto.
IT IS FURTHER ORDERED that except as permitted by the Purchase Agreement, this Sale Order or any Supplemental Court Order, all persons and entities, including, but not limited to, all debt security holders, equity security holders, governmental, tax and regulatory authorities, lenders, trade and other creditors, holding Liens or Claims of any kind or nature whatsoever against or in Transferred Portfolio Property (whether legal or equitable, secured or unsecured, matured or unmatured, contingent or non-contingent, liquidated or unliquidated, senior or subordinated), arising under or out of, in connection with, or in any way relating to, Transferred Portfolio Property or the transfer of Transferred Portfolio Property to the Purchaser, shall be and hereby are forever barred, estopped and permanently enjoined from asserting, prosecuting or otherwise pursuing against the Purchaser, its property, its successors and assigns, its affiliates or Transferred Portfolio Property, such persons' or entities' Liens or Claims. Following each Closing Date, no holder of an interest in or Claim against the Debtors shall interfere with the Purchaser's title to or use and enjoyment of Transferred Portfolio Property based on or related to such Liens or Claims, and all such Claims and Liens, if any, shall be, and hereby are channeled, transferred and attached solely and exclusively to the proceeds of the Proposed Sale.
IT IS FURTHER ORDERED that the transfer of Portfolio Property to the Purchaser pursuant to the Purchase Agreement shall not result in (i) the Purchaser having any liability or responsibility for any claim against the Debtors (other than any liability or responsibility provided for under a Supplemental Court Order) or against an insider of the Debtors, or (ii) the Purchaser having any liability or responsibility to the Debtors except pursuant to the Purchase Agreement and this Sale Order.
IT IS FURTHER ORDERED that the Purchaser shall have no liability or responsibility for any liability or other obligation of the Debtors arising under or related to Portfolio Property other than as expressly set forth in the Purchase Agreement or a Supplemental Court Order. Without limiting the effect or scope of the foregoing, the transfer of Portfolio Property from the Sellers to the Purchaser does not and will not subject the Purchaser or any of its affiliates, successors or assigns or its respective properties (including Transferred Portfolio Property) to any liability for claims (as that term is defined in section 101(5) of the Bankruptcy Code) against the Debtors or Transferred Portfolio Property by reason of such transfer under the laws of the United States or any state, territory or possession thereof applicable to such transactions. Neither the Purchaser nor its affiliates, successors or assigns shall be deemed, as a result of any action taken in connection with the purchase of Portfolio Property to: (a) be a successor to the Debtors; (b) have, de facto or otherwise, merged with or into the Debtors; or (c) be a continuation or substantial continuation of the Debtors or any enterprise of the Debtors. Neither the Purchaser nor its affiliates, successors or assigns are acquiring or assuming any liability, warranty or other obligation of the Debtors (other than any such liability, warranty or obligation provided for under a Supplemental Court Order), including, without limitation, any tax incurred but unpaid by the Debtors prior to the Closing Date, including, but not limited to, any tax, any fine or penalty relating to a tax, or any addition to tax, whether or not previously assessed, fixed or audited, whether or not paid, and whether or not contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction, except as otherwise expressly provided in the Purchase Agreement.
IT IS FURTHER ORDERED that the transfer of Transferred Portfolio Property to the Purchaser pursuant to the Purchase Agreement constitutes a legal, valid and effective transfer of Transferred Portfolio Property, and shall vest the Purchaser with all right, title and interest of the Debtors in and to such Transferred Portfolio Property free and clear of all Claims and Liens of any kind or nature whatsoever, except as permitted or otherwise provided for in the Purchase Agreement, this Sale Order or any Supplemental Court Order.
IT IS FURTHER ORDERED that as of each Closing Date, this Sale Order and the entry of an appropriate Supplemental Court Order shall be construed and shall constitute for any and all purposes a full and complete general assignment, conveyance and transfer of Transferred Portfolio Property or a bill of sale transferring good and marketable title in such Transferred Portfolio Property to the Purchaser. Each and every federal, state, and local governmental agency or department is hereby directed to accept any and all documents and instruments necessary and appropriate to consummate the transactions contemplated by the Purchase Agreement.
IT IS FURTHER ORDERED that this Sale Order is and shall be effective as a determination that all Liens shall be, and are, without further action by any person or entity, released with respect to Transferred Portfolio Property as of each Closing Date, except as permitted or otherwise provided for in the Purchase Agreement, this Sale Order or any Supplemental Court Order.
IT IS FURTHER ORDERED that this Sale Order and any Supplemental Court Order entered with respect to Transferred Portfolio Property shall be binding upon and shall govern the acts of all entities, including without limitation all filing agents, filing officers, title agents, title companies, recorders of mortgages, recorders of deeds, registrars of deeds, administrative agencies, governmental departments, secretaries of state, federal, state and local officials, and all other persons and entities who may be required by operation of law, the duties of their office, or contract, to accept, file, register or otherwise record or release any documents or instruments, or who may be required to report or insure any title or state of title in or to any of such Transferred Portfolio Property.
IT IS FURTHER ORDERED that except as otherwise provided in the Purchase Agreement and respect to and in compliance with section 363(f) of the Bankruptcy Code, to the extent Transferred Portfolio Property is subject to valid and enforceable liens, claims, interests and encumbrances, it will, except as permitted or otherwise provided for in the Purchase Agreement, this Sale Order or any Supplemental Court Order, be sold free and clear of all liens, claims, interests and encumbrances, and the liens, claims, interests and encumbrances will attach to the net proceeds of the Proposed Sale with the same validity, priority, force and effect as such liens, claims, interests and encumbrances had upon such Transferred Portfolio Property immediately prior to the Closing Date. Nothing in this paragraph is intended to be or should be construed as creating any greater or lesser rights of the asserted lienholders to the proceeds of the Proposed Sale than had existed immediately prior to the sale. On each Closing Date, the Purchaser shall pay to the Sellers that portion of the Purchase Price relating to the Transferred Personal Property to be transferred on that Closing Date by wire transfer as directed by Sellers in immediately available U.S. Dollar denominated funds in accordance with the terms of the Purchase Agreement.
IT IS FURTHER ORDERED that pursuant to section 363(b) of the Bankruptcy Code, upon the entry of one or more Supplemental Court Orders as required by the Purchase Agreement, the Debtors are: (i) authorized and empowered to execute and deliver the Purchase Agreement and to consummate the sale of Portfolio Property to the Purchaser pursuant to and in accordance with the terms and conditions of the Purchase Agreement and the related transactions in connection therewith, and the form and content of the Purchase Agreement and the exhibits attached thereto are approved; (ii) authorized and empowered to negotiate, execute and deliver such other and further documents as may be necessary or appropriate to implement and consummate the Purchase Agreement; and (iii) authorized and empowered to perform their respective obligations under the Purchase Agreement and other related agreements and otherwise to consummate all of the transactions contemplated thereby and to take all further actions as may reasonably be requested by the Purchaser for the purpose of assembling, transferring, granting or conveying to the Purchaser, or reducing to possession, any and all of Portfolio Property, or as may be necessary to ensure the performance of the obligations contemplated by the Purchase Agreement.
IT IS FURTHER ORDERED that the Debtors and each other person having duties or responsibilities under the Purchase Agreement, the related agreements, or this Sale Order and their respective directors, officers, general partners, members, agents, representatives, and attorneys, are authorized and empowered: (i) to carry out all of the provisions of the Purchase Agreement and other related agreements; (ii) to issue, execute, deliver, file, and record, as appropriate, the documents evidencing and consummating the Purchase Agreement and other related agreements; (iii) to take any and all actions contemplated by the Purchase Agreement, the related agreements, or this Sale Order; (iv) to issue, execute, deliver, file, and record, as appropriate, such other contracts, instruments, releases, indentures, mortgages, deeds, bills of sale, assignments, leases, or other agreements or documents; (v) to perform such other acts and execute and deliver such other documents, as are consistent with, and necessary or appropriate to implement, effectuate and consummate the intent of the parties in entering into the Purchase Agreement and the related agreements including making any nonmaterial modifications, amendments or corrections of those agreements that may be required so that they more fully reflect such intent, and this Sale Order and the transactions contemplated thereby and hereby, all without further application to, or order of, the Court or further action by their respective directors, stockholders, or partners, and with like effect as if such actions had been taken by unanimous action of the respective directors, stockholders, and partners of such entities. All such additional agreements, documents, and instruments shall be deemed to be "related agreements" for purposes of this Sale Order. The secretary of each of the Debtors shall be, and hereby is, authorized to certify or attest to any of the foregoing actions (but no such certification or attestation shall be required to make any such action valid, binding, and enforceable). The Debtors are further authorized and empowered, but not obligated, to cause to be filed with the secretary of state of any state or other applicable officials of any applicable governmental units any and all certificates, agreements, or amendments necessary or appropriate to effectuate the transactions contemplated by the Purchase Agreement, the related agreements and this Sale Order, and all such other actions, filings, or recordings as may be required under appropriate provisions of the applicable laws of all applicable governmental units, or as any of the officers of the Debtors may determine are necessary or appropriate. The execution of any such document, or the taking of any such action shall be, and hereby is, deemed conclusive evidence of the authority of such person to so act. Without limiting the generality of the foregoing, this Sale Order and any Supplemental Court Order(s) which are issued shall constitute all approvals and consents, if any, required by the applicable state corporation laws, and all other applicable business corporation, trust, and other laws of the applicable governmental units with respect to the implementation and consummation of the Purchase Agreement and this Sale Order and the transactions contemplated thereby and hereby.
IT IS FURTHER ORDERED that the consideration provided by the Purchaser for Portfolio Property under the Purchase Agreement is fair and reasonable and may not be avoided under Bankruptcy Code section 363(n).
IT IS FURTHER ORDERED that the transactions contemplated by the Purchase Agreement are undertaken by the Purchaser in good faith, as that term is used in Bankruptcy Code section 363(m) and, accordingly, the reversal or modification on appeal of the authorization provided herein to consummate the Proposed Sale unless such authorization is duly stayed pending such appeal. The Purchaser is a good-faith purchaser of Portfolio Property, and is entitled to all of the benefits and protections afforded by Bankruptcy Code section 363(m).
IT IS FURTHER ORDERED that following each Closing Date, the Debtors shall have no liability or responsibility for any liability or other obligation arising under or related to Transferred Portfolio Property, other than as expressly set forth in the Purchase Agreement, this Sale Order or any Supplemental Court Order. Following each Closing Date, the Debtors and their affiliates shall (except as otherwise provided in the Purchase Agreement, this Sale Order or any Supplemental Court Order) have no liabilities or obligations arising out of or resulting from the ownership, possession, lease, license, operation, use of, and disposition of Transferred Portfolio Property. Following each Closing Date, all persons and entities shall (except as otherwise provided in the Purchase Agreement, this Sale Order or any Supplemental Court Order) be forever enjoined from in any way pursuing any of the Debtors or their affiliates to recover any claim that such person or entity had or may have against the Debtors or their affiliates in respect of such liabilities or obligations.
IT IS FURTHER ORDERED that the Purchase Agreement and all other documents, agreements, and instruments necessary to effectuate and consummate the transactions contemplated by the Purchase Agreement, together with the terms and provisions of this Sale Order and any Supplemental Court Orders, shall be binding upon and shall inure to the benefit of the Debtors, the Purchaser, and their respective successors and assigns, notwithstanding any subsequent appointment of a trustee for one or more of the Debtors or their debtor affiliates, under any chapter of the Bankruptcy Code, as to which trustee such documents, agreements, and instruments (and the terms and provisions thereof) shall be binding in all respects.
IT IS FURTHER ORDERED that (except as otherwise provided in the Purchase Agreement, this Sale Order or any Supplemental Court Order) if any person or entity that has filed financing statements, mortgages, mechanic's liens, lis pendens or other documents or agreements evidencing Liens with respect to Transferred Portfolio Property shall not have delivered to the Debtors and the Purchaser prior to the Closing Date, in proper form for filing and executed by the appropriate parties, termination statements, instruments of satisfaction, releases of all Liens which the person or entity has with respect to Transferred Portfolio Property or otherwise, then (i) the Debtors hereby are authorized to execute and file such statements, instruments, releases and other documents on behalf of the person or entity with respect to such property and (ii) the Purchaser hereby is authorized to file, register or otherwise record a certified copy of this Sale Order, which, once filed, registered or otherwise recorded, shall constitute conclusive evidence of the release of all Liens in Transferred Portfolio Property as of the Closing Date of any kind or nature whatsoever.
IT IS FURTHER ORDERED that (except as otherwise provided in the Purchase Agreement, this Sale Order or any Supplemental Court Order) all persons who hold Claims against or Liens in the Debtors are forever barred, estopped and permanently enjoined from asserting or prosecuting any claims or causes of action against the Purchaser, its affiliates, or any of its respective officers, directors, employees, attorneys or advisors, arising out of or in connection with the Proposed Sale.
IT IS FURTHER ORDERED that after each Closing Date, no person or entity, including, without limitation, any federal, state or local taxing authority, may (a) attach or perfect a lien or security interest against Transferred Portfolio Property, or (b) collect or attempt to collect from the Purchaser or any of its affiliates, any tax or other amount alleged to be owing by one or more of the Debtors (i) for any period commencing before and concluding prior to or after the Closing Date, or (ii) assessed prior to and payable after the Closing Date, except as otherwise specifically provided in the Purchase Agreement, this Sale Order or a Supplemental Court Order.
IT IS FURTHER ORDERED that nothing contained in any plan of reorganization for any of the Debtors which is confirmed in these cases or any order confirming any such plan or in any other order in these cases (including any order entered after any conversion of these cases to cases under chapter 7 of the Bankruptcy Code) shall alter, conflict with, or derogate from, the provisions of the Purchase Agreement, this Sale Order or any Supplemental Court Order.
IT IS FURTHER ORDERED that neither the entry of this Sale Order nor anything contained herein shall affect any of the rights of any Obligor or Annuity Provider in, to, under or with respect to (i) any Settlement, Settlement Agreement or Annuity Contract, (ii) the transactions giving rise to the Debtors' actual or claimed interests in Receivables, or (iii) any claims, liabilities, damages, losses, costs or expenses (including attorneys' fees) arising from or otherwise related to such transactions, including without limitation any such claims, liabilities, damages, losses, costs or expenses (collectively, "Insurer Burdens") arising from Competing Claims (as hereinafter defined) to rights to receive Periodic Payments under any Settlement, Settlement Agreement or Annuity Contract. All such rights of any Obligor or Annuity Provider (collectively, "Reserved Insurer Rights") and any and all related objections of any Obligor or Annuity Provider to the Motion or the Purchase Agreement are hereby reserved and may be asserted in connection with the Court's consideration of any Supplemental Court Order with respect to Portfolio Property in which such Obligor or Annuity Provider is concerned. Without limiting the generality of the foregoing, the Reserved Insurer Rights include the rights of any Obligor or Annuity Provider (A) to contest the validity of the Debtors' interest in Receivables, (B) to assert and preserve any and all recoupment rights, setoffs and counterclaims, (C) to assert a requirement that such Obligor or Annuity Issuer be held harmless from and indemnified against Competing Claims to Periodic Payments, and (D) to assert a requirement that Transferred Portfolio Property be transferred subject to the rights of Insurers to recover for Insurer Burdens. As used in this Sale Order, the term "Competing Claim" means a claim to Periodic Payments (whether due in the past, present or future) or related rights, including without limitation a claim asserted by (I) a judgment creditor of a Claimant (or of a Claimant's predecessor-in-interest), (II) a creditor of a Claimant (or of a Claimant's predecessor-in-interest) claiming to have a security interest in or other lien on the Claimant's rights to receive Periodic Payments, (III) a trustee representing the estate of a Claimant in a case under the United States Bankruptcy Code or a "custodian" for a Claimant, as the term "custodian" is defined in 11 U.S.C. Section 101, (IV) a Person other than the Debtors that claims to have purchased or obtained a security interest in a Claimant's rights to receive Periodic Payments pursuant to a structured settlement factoring transaction with a Claimant (or a Claimant's predecessor-in-interest), (V) a Person asserting rights as a successor-in-interest (including without limitation a Person asserting rights as a beneficiary, contingent beneficiary or contingent payee) to either a deceased Claimant or a deceased Claimant's predecessor-in-interest, (VI) a current or former spouse or domestic partner asserting a community property, marital property or similar interest in a Claimant's rights to receive Periodic Payments (including without limitation an interest arising from a civil union), or (VII) a federal, state, county or municipal governmental authority. In connection with any motion seeking entry of a Supplemental Court Order with respect to Portfolio Property, each Claimant, Obligor and Annuity Provider concerned in such Portfolio Property shall be given not less than 20 days' notice and afforded an opportunity to respond to such motion, without regard to whether such Claimant, Obligor or Annuity Provider responded to the Motion.
IT IS FURTHER ORDERED that the failure specifically to include any particular provisions of the Purchase Agreement in this Sale Order shall not diminish or impair the effectiveness of such provisions, it being the intent of the Court that the Purchase Agreement be authorized and approved in its entirety. Likewise, all of the provisions of this Sale Order are nonseverable and mutually dependent.
IT IS FURTHER ORDERED that the Purchase Agreement may be modified, amended, or supplemented by agreement of the Debtors and the Purchaser without further action of the Court, provided that any such modification, amendment, or supplement is not material and substantially conforms to and effectuates the Purchase Agreement.
IT IS FURTHER ORDERED that the Court retains jurisdiction to interpret and enforce the provisions of the Purchase Agreement and this Sale Order in all respects, including, without limitation, retaining exclusive jurisdiction to determine or resolve any and all objections to or disputes among the parties to the Purchase Agreement regarding all issues or disputes with respect to the Purchase Agreement and issuing Supplemental Court Orders in respect thereof, provided however that, in the event the Court abstains from exercising, or declines to exercise, jurisdiction with respect to any matter referred to in this paragraph or is without jurisdiction, such abstention, refusal, or lack of jurisdiction shall have no effect upon and shall not control, prohibit, or limit the exercise of jurisdiction of any other court having competent jurisdiction with respect to any such matter.
IT IS FURTHER ORDERED that notwithstanding the provisions of Bankruptcy Rules 6004(g) and 6006(d), this Sale Order shall not be stayed for ten (10) days after the entry hereof, but shall be effective and enforceable immediately upon issuance hereof. Time is of the essence in closing the transactions referenced herein and the Debtors and the Purchaser intend to close the Proposed Sale as soon as practicable. Therefore, any party objecting to this Sale Order must exercise due diligence in filing an appeal and pursuing a stay, or risk its appeal being foreclosed as moot.