Opinion
Case No. 11-24801
2012-01-25
In re: MT. VERNON PROPERTIES, LLC, Debtor.
SO ORDERED
_____________
U.S. BANKRUPTCY JUDGE
Chapter 11
STIPULATION AND CONSENT ORDER
Carrollton Bank, City National Bank, Fannie Mae, First Mariner Bank and Colombo Bank (collectively, the "Lenders"), and the Debtor, Mt. Vernon Properties, LLC (the "Debtor"), by and through their undersigned counsel, hereby stipulate and agree as follows:
STIPULATION
WHEREAS, on July 18, 2011, the Debtor filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The Debtor continues to manage and operate its business as a debtor-in-possession pursuant to §§ 1107(a) and 1108 of the Bankruptcy Code; and
WHEREAS, the Debtor is the owner of twenty-seven (27) parcels of real property located in Baltimore City (collectively, the "Properties") that the Debtor operates as multi-family rental properties; and
WHEREAS, the Properties are subject to valid, perfected, enforceable and non-avoidable first priority security interests and liens granted by the Debtor to the Lenders as more particularly set forth in the Sale Motion and the various proofs of claim filed herein by the Lenders [see Claim No.'s 8, 15, 16, 17,18, 19, 20, 21 and 22]; and
WHEREAS, on November 16, 2011, with the consent of the Lenders, the Debtor filed a Motion of Debtor for Entry of an Order, (i) Approving Sale Procedures Related to the Sale of the Real Property Subject to the Liens of City National Bank, Fannie Mae, First Mariner Bank, Colombo Bank and Carrollton Bank Free and Clear of Liens, Claims and Interest and Scheduling an Auction and Sale Hearing; and (ii) Approving Sale of such Property Free and Clear of Liens, Claims and Interest [Docket No. 96] (the "Sale Motion") wherein the Debtor scheduled an auction sale for the Properties and the other real property and improvements owned by the Debtor for January 23, 2012 at 11:00 am at Alex Cooper Auctioneers in Towson, Maryland (the "Auctioneer"); and
WHEREAS, in connection with the Sale Motion, on December 5, 2011, the Debtor filed an Application of Debtor for Authority to Employ and Retain Alex Cooper Auctioneers, Inc. as the Broker and Auctioneer to Conduct and Auction all the Debtor's Real Properties Subject to the Liens of City National Bank, Fannie Mae, First Mariner Bank, Colombo Bank and Carrollton Bank [Docket No. 106] (the "Application to Employ"); and
WHEREAS, at the hearing on the Sale Motion held on November 29, 2011, the Debtor presented the Sale Motion in support thereof, and counsel for the Lenders appeared and presented support for the Sale Motion; and
WHEREAS, on December 7, 2011, this Court entered an Order approving the Sale Motion ("Bidding Procedures Order"); and
WHEREAS, on December 12, 2011, this Court entered an Order approving the Application to Employ the Auctioneer ("Cooper Order"); and
WHEREAS, all parties then acted in reliance on the Bidding Procedures Order and Cooper Order including, but not limited to, engaging the Auctioneer to fulfill the terms of the Cooper Order, commencing advertising of the auction, including preparing signs and print ads for the sale, at considerable time and cost; and
WHEREAS, on December 28, 2011, the Lenders learned that the Debtor refused to show the Properties to the Auctioneer and otherwise failed to cooperate with the Auctioneer in compliance with the Bidding Procedures Order and Cooper Order; and
WHEREAS, later that same day, the Debtor filed (a) a Withdrawal of Motion of Debtor for Entry of an Order: (i) Approving Sale Procedures Related to the Sale of the Real Properties Subject to the Liens of City National Bank, Fannie Mae, First Mariner Bank, Colombo Bank and Carrollton Bank Free and Clear of Liens, Claims and Interests, and Scheduling an Auction and Sale Hearing; and (ii) Approving Sale of such Properties Fee and clear of Liens, Claims and Interests [Docket No. 124] (the "Motion to Withdrawal"); and (iii) a Motion to Dismiss Chapter 11 Case [Docket No. 125] (the "Motion to Dismiss"); and
WHEREAS, on January 9, 2012, Fannie Mae filed a Motion to Strike Debtor's Withdrawal of Motion [Docket No. 124] (the "Motion to Strike"); and
WHEREAS, on January 10, 2012, Carrollton Bank filed a Joint Emergency Motion to Appoint Chapter 11 Trustee and Request for Hearing Thereon [Docket No. 134] (the "Emergency Motion"); and
WHEREAS, this Court set a hearing on the Motion to Withdrawal, the Motion to Dismiss, the Motion to Strike, and the Emergency Motion for January 17, 2012 at 2:00 p.m. (the "Hearing"); and
WHEREAS, the parties have reached a resolution of their dispute and wish to avoid further delay of the sale of the Properties and the additional cost and expense associated with the appointment of a Chapter 11 trustee at this time. Accordingly, the parties hereby stipulate and agree to reschedule the sale of the Properties subject to the terms and conditions of this Stipulation and Consent Order:
CONSENT ORDER
NOW THEREFORE, on the basis of the foregoing Stipulations, it is, by the United States Bankruptcy Court for the District of Maryland, hereby
ORDERED, that the Motion to Dismiss and Motion to Withdraw are hereby DENIED; and it is further
ORDERED, that the Motion to Strike is GRANTED; and it is further
ORDERED, that entry of an Order approving the Emergency Motion is stayed unless and until one or more of the Lenders files with this Court an "Affidavit of Non-Compliance", as that term is defined below; and it is further
ORDERED, that the Debtor shall fully cooperate with the Auctioneer in scheduling the auction of the Properties, preparing for the auction, conducting the auction and closing on the auction; and it is further
ORDERED, that the Bidding Procedures Order is hereby modified as set forth herein; and it is further
ORDERED, that the auction of the Properties pursuant to the terms and conditions of the Bidding Procedures Order is hereby rescheduled to February 23, 2012, to begin at 11:00 a.m. at the offices of Alex Cooper Auctioneers, Inc., 908 York Road, Towson, Maryland 21204; and it is further
ORDERED, that Court will conduct a Sale Hearing for approval of the High Bids, whether cash bids or credit bids, on February 27, 2012, at 3:00 p.m., before the Honorable David E. Rice, Courtroom 9D, United States Bankruptcy Court for the District of Maryland, 101 W. Lombard Street, Baltimore, Maryland 21201; and it is further
ORDERED, that objections to the sale of the Properties, if any, must be (a) in writing, (b) conformed to the requirements of the Bankruptcy Code, the Bankruptcy Rules and the local rules of the United States Bankruptcy Court for the District of Maryland, (c) set forth the name of the objector, the name of the objector's claims against the interest and the Debtor's estate or property, and the legal and factual basis for the objection, and (d) be filed with the Court and served so that they are received no later than 5:00 p.m. on February 24, 2012, by counsel to the Debtor, Meridan Law, LLC, 600 Reisterstown Road, Suite 700, Baltimore, Maryland 21208, Attention: Aryeh E. Stein, Esquire; and it is further
ORDERED, that the Revised Bidding Procedures attached hereto as Exhibit "A" are hereby approved; and it is further
ORDERED, that the other terms and conditions of the Bidding Procedures Order are adopted herein and incorporated herein by reference; and it is further
ORDERED, that in the event the Debtor fails to fully cooperate with the Auctioneer in scheduling the auction of the Properties, preparing for the auction, providing information and documents requested by the Auctioneer, conducting the auction and closing on the auction as contemplated herein, which such non-compliance shall be determined in the sole and absolute discretion of the Lenders, then one or more of the Lenders may file with this Court an affidavit notifying all parties, including the Debtor and its counsel, of the Debtor's failure to comply with the terms and conditions of this Stipulation and Consent Order (the "Affidavit of Non-Compliance"); and it is further
ORDERED, that upon the filing of an Affidavit of Non-Compliance, this Court, without further delay or the need for further hearing, shall enter an Order granting the Emergency Motion and directing the United States Trustee to appoint one disinterested person to serve as trustee in this case; and it is further
ORDERED, that the Debtor shall be held in contempt of Court if it fails to fully comply with its obligations under this Stipulation and Consent Order or any prior Order of this Court.
AGREED AND CONSENTED TO AS TO FORM AND SUBSTANCE:
_____________
Michael C. Bolesta, Esquire
Gebhardt & Smith LLP
One South Street, Suite 2200
Baltimore, Maryland 21202
Attorneys for Carrollton Bank
_____________
Aryeh E. Stein, Esquire
Meridian Law, LLC
600 Reisterstown Road
Baltimore, Maryland 21208
Attorney for the Debtor, Mt. Vernon Properties, LLC
_____________
Marc E. Shach
Weinstock, Friedman & Freidman, P.A.
4 Reservoir Circle
Baltimore, Maryland 21208
Attorneys for City National Bank
_____________
Christopher J. Giaimo
Baker & Hostetler, LLP
1050 Connecticut Avenue, NW
Washington, DC 20036
Attorneys for Fannie Mae
_____________
Nelson Deckelbaum
Cooter, Mangold, Deckelbaum & Karas, LLP
5301 Wisconsin Avenue, NW, Suite 500
Washington DC 20015
Attorneys for Colombo Bank
_____________
Susan J. Klein
Gordon Feinblatt Rothman Hoffberger & Hollander LLC
233 East Redwood Street
Baltimore, Maryland 21202
Attorneys for First Mariner Bank
I HEREBY CERTIFY that the terms of the copy of the Stipulation and Consent Order submitted to this Court are identical to those set forth in the original Consent Order; and the signatures represented by the /s/reference the signatures of the consenting parties in the original Consent Order.
_____________
Michael C. Bolesta, Esquire
Gebhardt & Smith LLP
One South Street, Suite 2200
Baltimore, Maryland 21202
Attorneys for Carrollton Bank
Cc:
Michael C. Bolesta
Gebhardt & Smith LLP
One South Street, Suite 2200
Baltimore, Maryland 21202
Attorneys for Carrollton Bank
Aryeh E. Stein, Esquire
Meridian Law, LLC
600 Reisterstown Road
Baltimore, Maryland 21208
Attorney for the Debtor, Mt. Vernon Properties, LLC
Mt. Vernon Properties, LLC
355 N. Calvert Street
Baltimore, Maryland 21202
Debtor
Marc E. Shach
Weinstock, Friedman & Freidman, P.A.
4 Reservoir Circle
Baltimore, Maryland 21208
Attorneys for City National Bank
Christopher J. Giaimo
Baker & Hostetler, LLP
1050 Connecticut Avenue, NW
Washington, DC 20036
Attorneys for Fannie Mae
Nelson Deckelbaum
Cooter, Mangold, Deckelbaum & Karas, LLP
5301 Wisconsin Avenue, NW, Suite 500
Washington DC 20015
Attorneys for Colombo Bank
Susan J. Klein
Gordon Feinblatt Rothman Hoffberger & Hollander LLC
233 East Redwood Street
Baltimore, Maryland 21202
Attorneys for First Mariner Bank
Edmund A. Goldberg
Assistant United States Trustee
Office of the U.S. Trustee
101 West Lombard Street, Suite 2625
Baltimore, Maryland 21201
END OF ORDER
EXHIBIT A
In re: MT. VERNON PROPERTIES, LLC, Debtor.
Case No: 11-24801
(Chapter 11)
BIDDING PROCEDURES
These Bidding Procedures set forth the process by which Mt. Vernon Properties, LLC (the "Debtor") is authorized to conduct a sale by auction (the "Auction") of substantially all of its assets as more fully described below and in the form Asset Purchase Agreement attached hereto as Exhibit 1. These Bidding Procedures were approved by the Order, to which these Bidding Procedures are attached (the "Sale Procedures Order"), of the United States Bankruptcy Court for the District of Maryland, Baltimore Division (the "Court"), in the above-captioned case.
Unless defined herein, all capitalized words shall have the meanings described to them in the Motion.
1. Assets to be Sold.
As set forth in the Motion, the Debtor is the owner of twenty-seven (27) parcels of real property located in Baltimore City. Each individual parcel is referred to as a "Property" and all twenty-seven parcels are collectively referred to as "the Properties."
The Properties are subject to valid, perfected, enforceable and non-avoidable first (and in some instances, second) priority security interests and liens granted by the Debtor to City National Bank, Fannie Mae, First Mariner Bank, Colombo Bank and Carrollton Bank (the "Lenders"). With respect to City National Bank and Fannie Mae, certain of their security interests and liens attach to more than one Property. In such instances, those Properties will be collectively referred to as "Property Portfolios." The Properties, and where applicable, Property Portfolios, are set forth below. CITY NATIONAL BANK CNB Loan 1 Property Portfolio:
807 St. Paul St, Baltimore, MD 21202
802-806 Cathedral St, Baltimore MD 21202
809 Park Ave, Baltimore MD 21202
CNB Loan 2 Property:
1220 St. Paul St., Baltimore, MD 21202
CNB Loan 3 Property:
811 Park Ave., Baltimore, MD 21201
CNB Loan 4 Property Portfolio:
10 E. Biddle St., Baltimore MD 21202
14 E. Biddle St., Baltimore MD 21202
16 E. Biddle St., Baltimore MD 21202
FANNIE MAE St. Paul and Calvert St. Property Portfolio:
1021 St. Paul Street, Baltimore, MD 21202
930 N. Calvert Street, Baltimore, MD 21202
938 N. Calvert Street, Baltimore, MD 21202
1012 N. Calvert Street, Baltimore, MD 21202
1020 N. Calvert Street, Baltimore, MD 21202
1022 N. Calvert Street, Baltimore, MD 21202
1026 N. Calvert Street, Baltimore, MD 21202
1038 N. Calvert Street, Baltimore, MD 21202
1210 N. Calvert Street, Baltimore, MD 21202
838 & 840 Park Ave. Property Portfolio:
838 Park Avenue, Baltimore, MD 21202
840 Park Avenue, Baltimore, MD 21202
811 St. Paul St. Property:
811 St. Paul St., Baltimore, MD 21202
Belvidere Place Property
115 East Eager Street, Baltimore, MD 21202
COLOMBO BANK Loan No. 1 Property:
8 E. Eager St., Baltimore, MD 21202
Loan No. 2 Property:
906 St. Paul St., Baltimore, MD 21202
CARROLLTON BANK Loan No. 1 Property:
904 St. Paul St, Baltimore, MD 21202
Loan No. 2 Property:
902 St. Paul St., Baltimore, MD 21202
FIRST MARINER BANK Loan No. 1 Property:
13 E. Read St, Baltimore, MD
Loan No. 2 Property:
712 St. Paul St, Baltimore, MD
2. Asset Information
The Debtor shall use all necessary efforts to immediately prepare a Bidder's Information Packet for each property(the "Packet") which may include such items as detailed Auction information, property description, the Agreement of Sale, preliminary title examination report, detailed property information, environmental and other third party reports, real estate tax bill, local zoning information, local market information, surveys, site plans, copies of all approvals, terms of sale, bidder's affidavit, rent rolls, lead paint certificates, and other applicable information. Upon execution of an appropriate confidentiality agreement the Packet(s) may be reviewed through the Auctioneer (as defined below).
3. Terms of Sale
The Debtor is seeking to sell (i) all of the Debtor's right in each Property pursuant to the form Asset Purchase Agreement (together with any improvements thereon, including but not limited to, furniture, fixtures and equipment, collectively, "FF&E"), (ii) any and all licenses, authorizations, permits and approvals issued by any governmental authority and relating to the Debtor's ownership and operation of each Property (to the extent assignable, the "Licenses"), and (iii) any executory contracts associated therewith, including but not limited to tenant leases (collectively, the "Contracts") (the Property, FF&E, Licenses, and the Contracts are referred to herein collectively as the "Assets").
The Assets will be sold free and clear of all liens, claims, and encumbrances pursuant to Section 363 of the Bankruptcy Code and the Contracts will be assumed and assigned to the respective purchaser(s) pursuant to Section 365 of the Bankruptcy Code, as more fully described in the Motion and/or the proposed Order Approving Sale.
As more fully described in the form Asset Purchase Agreement, each property is being sold subject to a special warranty deed.
4. Excluded Assets.
The Debtor is not selling: (i) any equity interest in or held by the Debtor, (ii) any cash, accounts, or receivables, (iii) any causes of action, claims, insurance proceeds or rights, nor (iv) rent due under tenant leases but not paid as of the closing date; until closing, all rents shall be collected by the Debtor pursuant to the terms of the applicable cash collateral orders.
5. Submission of Bids.
(a) Bid Deadline. Any party desiring to qualify for participation in the Auction (a "Bidder") must deliver a copies of its offer or offers (a "Bid") in writing or via email to (1) Debtor's counsel, Aryeh E. Stein, Meridian Law, LLC, 600 Reistertown Road, Suite 700, Baltimore, Maryland 21208, astein@meridianlawfirm.com, (2) Edmund Goldberg, Trial Attorney, Office of the United States Trustee (see "UST") 101 West Lombard Street, Suite 2625, Baltimore, MD 21201, Edmund.A.Goldberg@usdoj.gov, (3) Paul R. Cooper, 908 York Road, Towson, MD 21204, paul@alexcooper.com (the "Actioneer"), and(4) to counsel for the respective Lender for the Property upon which the Bid or Bids is submitted; (i) if for a Property subject to a City National Bank lien, to Marc E. Shach, Weinstock, Friedman & Freidman, P.A, 4 Reservoir Circle, Baltimore, Maryland 21208, marc.shach@weinstocklegal.com, (ii) if for a Property subject to a Fannie Mae lien, to Christopher J. Giaimo, Baker & Hostetler, LLP, 1050 Connecticut Avenue, NW, Washington, DC 20036, cgiaimo@bakerlaw.com, (iii) if for a Property subject to a Colombo Bank lien, to Nelson Deckelbaum, Cooter, Mangold, Deckelbaum & Karas, LLP, 5301 Wisconsin Avenue, NW, Suite 500, Washington DC 20015, ndeckelbaum@cootermangold.com, (iv) if for a Property subject to a Carrollton Bank lien, to Michael C. Bolesta, Gebhardt & Smith LLP, One South Street, Suite 2200, Baltimore, Maryland 21202, mbole@gebsmith.com, and (v) if for a Property subject to a First Mariner Bank lien, to Susan J. Klein, Gordon Feinblatt Rothman Hoffberger & Hollander LLC, 233 East Redwood Street, Baltimore, Maryland 21202, sklein@gfrlaw.com, such that the Bid is actually received no later than 5:00 p.m. prevailing Eastern Time on February 21, 2012 (the "Bid Deadline"). Bids received after the Bid Deadline may be rejected by the Auctioneer; however, the Auctioneer reserves the right, after consultation with the Debtor and respective Lenders, to deem a Bid received after the Bid Deadline a Qualified Bid (defined below).
(b) Qualified Bid. Unless the Debtor, after consultation with the respective Lenders, determines otherwise, only those Bids that meet with the following qualifications will be considered "Qualified Bids" by the Debtor:
i. a Bid can be submitted for one or more Properties or one or more Property Portfolios. However, if a Bid is submitted for one or more, but not all, of the Properties in a Property Portfolio, the Bid shall apportion the proposed purchase price for each such Property and in no event, shall a single Bid contain Properties subject to security interest and liens of different Lenders.
ii. The Bid must be accompanied by (a) a deposit at least equal to $25,000 per Property (i.e. if a party wishes to bid on a Property Portfolios that contains 3 Properties the Deposit would be $75,000.00), in the form of a certified or cashier's check made payable to Alex Cooper Auctioneers, Inc.. The check
shall be delivered to Paul R. Cooper at Alex Cooper Auctioneers, Inc., 908 York Road, Towson, MD or deposits may also be wired
(b) a duly executed asset acquisition agreement that is substantially similar to the Asset Purchase Agreement or containing more favorable terms and conditions than are contained in the Asset Purchase Agreement, including, but not limited to, a closing date fifteen (15) days following entry of an Order Approving the Sale (hereinafter defined), unless extended to a later date by written consent of the applicable Lender, with such agreement accompanied by a black-lined version marked to reflect variations thereto; without limiting the generality of the foregoing, such Bid shall be for substantially all of the assets of a Property or Property Portfolio, including but not limited to, the FF&E, but may include all or less than all of the Licenses and Contracts. In such instance, the Bid shall clearly delineate which Licenses and/or Contracts, if any, the bidder seeks to have assigned.
iii. A bid shall not include any due diligence, inspection, financing, zoning, environmental or any other contingency except the entry of an order of this Court approving the sale pursuant to Section 363(b) of the Bankruptcy Code (the "Order Approving the Sale").
iv. the Bid must (unless otherwise determined by the Debtor after consultation with the respective Lender(s)): (a) give sufficient indicia that the Bidder or its representative is legally empowered, by power of attorney or otherwise, to both bid on behalf of the Bidder and also to complete and sign, on behalf of the Bidder, a binding and enforceable asset purchase agreement; and (b) include sufficient information to permit the Debtor to determine the proposed Bidder's (i) financial wherewithal to close the proposed transaction, and (ii) with respect to the Licenses and/or Contracts, ability to comply with section 365 of the Bankruptcy Code, including providing adequate assurance of such Bidder's ability to perform in the future.
v. Following receipt of the Bids, the Debtor, the respective Lender and the Auctioneer will analyze each Bid to determine, in good faith, whether such Bid is a Qualified Bid. The Debtor, the respective Lender, and/or the Auctioneer may request additional information from a Bidder to discuss or clarify terms and evaluate the Bidder's ability to consummate the transaction and to fulfill its obligations in connection therewith, and such Bidder shall be obligated to provide such information.
vi. After it determines which Bids are Qualified Bids pursuant to subparagraphs (i - v) above, the Auctioneer will distribute to each holder of a Qualified Bid (a "Qualified Bidder"), the UST, and Lenders, a list of the Qualified Bids and their terms (or copies thereof) by 5:00 p.m. Eastern Time on February 22, 2012. Preceding the Auction, the Auctioneer will disclose to Qualified Bidders, the UST and the Lenders, the amount and terms of the highest
proposed Qualified Bid (the "Highest Pre-Auction Bid") for each Property or Property Portfolio.(c) Credit Bidding by Lenders
i. The Lenders shall have the right, but not the obligation, to submit a credit bid for each of the Properties, or, where applicable, on the Property Portfolio, which is subject to their respective security interests and liens pursuant to Section 363(k) of the Bankruptcy Code. Such credit bid shall be deemed a Qualified Bid without having to satisfy the requirements set forth in Paragraphs 5(b)(ii), (iii) and (iv) above and each Lender shall be considered a Qualified Bidder. Each Lender shall be permitted to bid its credit bid at the Auction in an amount up to and including the amount stated in its Proof of Claim.
6. Auction, Bidding, Increments.
(a) The Auction will be held at the offices of Alex Cooper Auctioneer, Inc., 908 York Road, Towson, Maryland 21204, on February 23, 2012, at 11:00 a.m prevailing Eastern Time or such later date as is determined by the Debtor in consultation with the Lenders. Only Qualified Bidders will be permitted to participate in the bidding for the Properties at the Auction. For a Qualified Bid to be considered, the Qualified Bidder must appear in person at the Auction or through a duly authorized representative, including, but not limited to counsel, unless alternative arrangements satisfactory to the Debtor have been made in advance.
(b) All bidding is open and public. The Auction shall be conducted by the Auctioneer with the estate to bear such costs. To bid during the Auction, Bidders, or their authorized agents, shall openly communicate their bid to the Auctioneer. In addition to the purchase price, the Winning Bidder (defined below) shall pay 5% of such purchase price for each Property or Property Portfolio to the Auctioneer at closing (the "Buyer's Premium")
(c) At the Auction, (i) Qualified Bidders will have the opportunity to bid on the individual Properties in $10,000 increments, starting with $10,000 above the Highest Pre-Auction Bid, or, with respect to Property Portfolios, $15,000 increments, starting with $15,000 above the Highest Pre-Auction Bid on a Property Portfolio, (ii) each Qualified Bidder shall have the right to continue to improve its bid in such manner and on such terms as determined by the Auctioneer at the time thereof; (iii) bidding will continue until such time as the highest or best bid is determined; and (iv) upon conclusion of the Auction, the Auctioneer, in consultation with the Debtor, and the respective Lender shall determine the highest or otherwise best bid, which the Debtor shall submit for approval by the Court (the "Winning Bid"). The holder of the Winning Bid shall be referred to as the "Winning Bidder." The deadline to file and objection to a Winning Bid is February 24, 2012 by 5:00 p.m. prevailing Eastern Time.
(d) If (i) a Bid is received for one or more, but not all, of the Properties in a Property Portfolio, and (ii) the respective Lender which holds the lien on such Property or Properties submits a credit bid for the entire Property Portfolio, that Bid shall not constitute the highest and best bid for the Property or Properties unless (a) the Lender, in its sole and absolute discretion, consents, or (b) the Bid exceeds the amount of the Lender's credit bid.
(e) Any Bid made at the Auction shall constitute, to the extent it does not already, an irrevocable offer that is binding on the Qualified Bidder from the time it is made through the date on which the Court approves or rejects the offer of a competing Qualified Bidder.
(f) The Auctioneer, with the consent of the Debtor and Lenders or Lender, where applicable, reserves the right to reopen bidding and re-bid any of the Properties, in the event of a bidding dispute at the Auction.
(g) Except as expressly set forth in the paragraph (6) (g) Bids made after the bidding is concluded at the Auction shall not be considered. In the event the Winning Bidder is not a Lender and the Back-Up Bidder (as defined below) is also a not a Lender, the respective Lender shall have the right to submit a Bid immediately after the bidding has concluded that is less than the Winning Bid but greater than the non-Lender Back-Up Bid, and thereby become the Back-up Bidder (as defined below). The non-Lender that was the Back-Up Bidder prior to the Lender's exercise of this right shall have the right to match the Lender's bid made pursuant to this paragraph. A Lender may also exercise this right if there is no non-Lender Back-Up Bidder, by making a Bid lower than the Winning Bid immediately after the bidding has concluded.
(h) At the conclusion of the bidding, the Auctioneer shall return to any unsuccessful bidder the amount of that bidder's deposit, if that bidder is not determined to be, or does not consent to be, the Back-Up Bidder (defined below).
(i) Within three (3) business days of conclusion of the Auction, the Winning Bidder and the Back-Up Bidder shall increase their respective deposits, by wire transfer, cashier's, bank or certified check to 10% of the Winning Bid and Back-Up Bid amount for the Property or Property Portfolio. Such addition funds shall be paid in the same manner as set forth in paragraph 5 (b) (ii) above. A Lender who is a Winning Bidder or the Back-Up Bidder shall not be required to provide a deposit.
7. Bankruptcy Court Approval and Sale Hearing.
The sale of each of the Properties contemplated herein shall be subject to the entry of an Order Approving Sale for each Property or Property Portfolio, as applicable: (a) approving the sale and transfer of each of the Properties; and (b) containing a finding that the successful bidder(s) is (are) a good faith purchase pursuant to section 363(m) of the Bankruptcy Code. The Sale Hearing to approve the sale to the holder or holders of such Winning Bid(s) will be held on February 27, 2012, at 3:00 p.m. before the Honorable David E. Rice, United States Bankruptcy Judge, in the United Courthouse, Courtroom 9-D, located at Garmatz Federal Courthouse, 101 West Lombard Street, Baltimore 21202, or such other date set by the Court.
8. Closing.
The closing of the sale of the Assets to the Winning Bidder(s) will occur in accordance with the terms of the applicable asset purchase agreements, but in no event shall be more than twenty (20) days from entry of the Order Approving the Sale.
9. Failure to Consummate Purchase.
If for any reason a Winning Bidder fails to consummate the sale of the Assets, or any part thereof, the holder of the second highest and best bid (the "Back-Up Bid" or "Back-Up Bidder") will automatically be deemed to have submitted the highest and best bid, if so approved by the Court. If such failure to consummate the purchase is the result of a breach by the Winning Bidder, such breaching party's deposit shall be forfeited to the Debtor, and the Debtor specifically reserves the right to seek all available damages from the defaulting Bidder. A credit bid submitted by a Lender (made during bidding or thereafter pursuant to paragraph 6(g) above) may be eligible to be the Back-Up Bid in the event a Winning Bidder is unable to close. In the event that a non-Lender Back-Up Bidder cannot consummate the purchase within ten (10) days of service of notice of its elevation to Winning Bidder, the automatic stay imposed by Section 362 of the Bankruptcy Code (the "Stay") shall immediately terminate with respect to each Property included in such Bid in favor of the Lender for which Property the lien is subject, without further order of the Court. In the event no Qualified Bids are received for a Property or Property Portfolio by the conclusion of the Auction, the Stay shall be terminated in favor of the Lender as of the date of the Sale Hearing upon submission of an appropriate order.
The deposit(s) of the holder(s) of the Back-Up Bid(s) shall not be returned until the closing of the sale to the Winning Bidder
10. Jurisdiction of the Court.
The Debtor shall conduct this sale for and as authorized by the Court for the benefit of the Debtor's estate and its creditors. All bidders, their brokers, representatives and agents, are deemed to have submitted to the exclusive jurisdiction of the Court with respect to any dispute relating to all matters related to the Auction and all terms and conditions of the transfer of the Properties.
11. Reservation of Rights; Deadline Extensions.
The Debtor reserves the right, in consultation with the Lenders, to: (i) impose, at or prior to the Auction, additional terms and conditions on the sale of the Assets consistent with the Sale Procedures Order; and (ii) extend the deadlines set forth in the Bidding Procedures, adjourn the Auction, and/or adjourn the Sale Hearing in open court without further notice subject to approval of the Court.
12. Disclaimer
Each Bidder, by submitting a Bid for any of the Properties, shall be deemed to acknowledge and represent:
(a) That it is bound by the Bidding Procedures contained herein;
(b) That it had an opportunity to inspect and examine the relevant Property and to review all pertinent documents and information with respect to the Property prior to making its offer and that it relied solely on that review and upon its own investigation, own independent review, investigation and/or inspection of any documents and/or the Property in making its Bid; and
(c) That it did not rely upon any written or oral statements, warranties or representatives of the Debtor, Lenders or Auctioneer, or their agents regarding any of the Properties, or the completeness of any information provided in connection with the Debtor Properties, the bidding process or the Auction.