Opinion
Case No: 10-32799-JS.
August 4, 2011
Lawrence J. Yumkas, 06357, Lisa Yonka Stevens, 27728, Logan, Yumkas, Vidmar Sweeney, LLC, Annapolis, Maryland, Attorneys for Maureen T. Lamb.
John C. Gordon, 10039, Severna Park, Maryland, Attorney for Debtor Stanley Arthur Newquist, III and non-filing co-debtor Aimee T. Newquist.
STIPULATION AND CONSENT ORDER TERMINATING AUTOMATIC STAY AS TO CERTAIN REAL PROPERTY
Stanley Arthur Newquist, III, the debtor and debtor-in-possession herein (the "Debtor"), Aimee T. Newquist ("Mrs. Newquist"), and Maureen T. Lamb ("Ms. Lamb"), by their respective undersigned counsel, hereby enter into this Stipulation and Consent Order Terminating Automatic Stay (the "Stipulation and Consent Order"), and state as follows:
Recitals
A. The Debtor filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code on October 4, 2010 (the "Petition Date").
B. Mrs. Newquist is the wife of the Debtor and co-debtor on the Mortgage Note as defined infra.
C. The real property at issue in this Stipulation and Consent Order is known as 56 Madison Place, Annapolis, Maryland 21401 (the "Property").
D. Ms. Lamb is a secured creditor of the Debtor to whom the Debtor and Mrs. Newquist jointly and severally owe the principal amount of $511,143.25 as of the Petition Date, plus ten months of unpaid accrued interest of $25,550, as set forth under the terms of the Mortgage Note defined below.
E. On or about January 12, 2005, Ms. Lamb sold her right, title and interest in the Property to the Debtor and Mrs. Newquist as tenants by the entirety for the sum of $500,000 (the "Purchase Price"). A true and accurate copy of the Deed as recorded in the Land Records of Anne Arundel County at Liber 15824, folio 661 is attached as Exhibit 1 to the Motion for Relief from Automatic Stay as to Certain Real Property (the "Motion") and is incorporated herein by reference.
F. In connection with Ms. Lamb's sale of the Property, the Debtor and Mrs. Newquist, jointly and severally executed a certain Purchase Money Mortgage, dated January 12, 2005 (the "Mortgage Note"), giving Ms. Lamb a security interest in the Property securing payment of the Purchase Price plus certain closing costs, bringing the total owed under the Mortgage Note to $511,143.25. The Mortgage Note called for interest only payments to be paid at the rate of six percent (6%) per annum, in equal consecutive monthly installments of $2,555.72 for five (5) years, at which time the entire balance of said principal mortgage indebtedness was immediately due and payable. The Mortgage Note was recorded in the Land Records of Anne Arundel County at Liber 15824, folio 664. A true and accurate copy of the Mortgage Note is attached as Exhibit 2 to the Motion and is incorporated herein by reference.
G. On January 8, 2010, the parties entered into a Modification of Mortgage whereby, inter alia, the maturity date of the Mortgage Note was extended until January 12, 2015. A true and accurate copy of the Modification of Mortgage as recorded in the Land Records of Anne Arundel County at Liber 21982, folio 496 is attached as Exhibit 3 to the Motion and is incorporated herein by reference.
H. Events of default occurred and continue to occur under the Mortgage Note as a result of which, and pursuant to the terms of the Mortgage Note, all amounts payable under the Mortgage Note became and remain immediately due and payable.
I. The Debtor agrees that Ms. Lamb has an allowed claim in the Debtor's bankruptcy case in an amount no less than the $511,143.25, plus unpaid interest payments accruing since October 2010 in the amount of $25,550, as set forth under the terms of the Mortgage Note.
J. On June 13, 2011, Ms. Lamb filed the Motion seeking entry of an order terminating the automatic stay with respect to her interest in and to the Property and authorizing her to do any and all acts necessary and/or proper to enforce her rights with respect to the Property, including, but not limited to, taking possession of the Property, selling the same, and applying the proceeds of the sale to the obligations owing her by the Debtor and Mrs. Newquist.
K. The Motion and Notice of Motion for Relief from Automatic Stay and Hearing Thereon as to Certain Real Property ("Notice of Motion") were duly served by Ms. Lamb on the Debtor, Mrs. Newquist, the Debtor and Mrs. Newquist's counsel John C. Gordon, and the Office of the U.S. Trustee.
L. The hearing on the Motion was set for July 29, 2011; however, due to the Debtor's father becoming ill, the parties filed a Joint Motion to Continue Hearing on Motion for Relief from Automatic Stay as to Certain Real Property. The Court granted the continuance, and the hearing is set for August 5, 2011.
M. The Debtor and Mrs. Newquist admit that they cannot commence making adequate protection payments to Ms. Lamb as required by 11 U.S.C. § 362(d)(1) and the Mortgage Note and that the Property is not necessary to the Debtor's effective reorganization.
N. The Debtor, Mrs. Newquist and Ms. Lamb have negotiated an agreement that, among other things, would transfer the Property back to Ms. Lamb and, in exchange, allow the Debtor and Mrs. Newquist to lease Unit 1 of the Property, along with the shed located at the rear of the Property, so that the Debtor and Mrs. Newquist can continue to pursue their respective businesses.
O. The Debtor, Mrs. Newquist and Ms. Lamb have agreed to the terms of this Stipulation and Consent Order as it is in the best interests of the Debtor and his estate and avoids the risks and costs of further litigation.
NOW, THEREFORE, it is hereby ORDERED, ADJUDED, and DECREED as follows:
1. That the automatic stay pursuant to 11 U.S.C. § 362(a) shall be terminated for all purposes and that the Debtor and Mrs. Newquist be authorized and directed to transfer the Property by deed in lieu of foreclosure to Ms. Lamb no later than August 31, 2011, and pay all cost associated with such transfer.
2. If the Debtor or Mrs. Newquist fails or refuses to transfer the Property and execute all documents necessary to duly and validly transfer the Property by 5:00 p.m. on August 31, 2011, Ms. Lamb shall be entitled to foreclose on the Property without any further order of this Court and Ms. Lamb shall retain all rights to collect all sums due and owing under the Mortgage Note, including, but not limited to, all post-petition arrearages, attorneys' fees and costs, and expenses relating to the foreclosure.
3. Mrs. Newquist and Ms. Lamb shall execute on or before August 31, 2011, a lease, containing the terms agreed upon by Mrs. Newquist and Ms. Lamb, for Unit 1 of the Property along with the shed located at the rear of the Property.
4. If a lease for Unit 1 is not executed by 5:00 p.m. on August 31, 2011, such failure will constitute a default under this Stipulation and Consent Order, and Ms. Lamb shall be entitled to foreclose on the Property without any further order of this Court.
5. Upon transfer of the Property to Ms. Lamb, any tenant that does not currently possess a written lease, which tenants may include Justin Newquist, Jodi Manning and Elizabeth Wells, shall execute a new written lease with Ms. Lamb or shall otherwise be treated as month-to-month tenants under Maryland law.
6. The post-petition arrears due under the Mortgage Note of $25,550 shall be paid pursuant to a post-petition confessed judgment note (the "Post-Petition Note"), which the Debtor is hereby authorized and directed to execute.
7. The Debtor and Mrs. Newquist shall execute the Post-Petition Note on or before August 31, 2011.
8. If such Post-Petition Note is not executed by 5:00 p.m. on August 31, 2011, Ms. Lamb shall be entitled to foreclose on the Property without any further order of this Court.
9. In full satisfaction of the Mortgage Note and consideration of this Stipulation and Consent Order, and assuming that the Debtor and Mrs. Newquist timely meet their obligations under this Stipulation and Consent Order, Ms. Lamb shall waive all postpetition attorneys' fees and collection costs as provided under the Mortgage Note.
10. If the Debtor and/or Mrs. Newquist default under the terms of the lease, the Post-Petition Note or this Stipulation and Consent Order, Ms. Lamb shall be entitled to exercise and enforce her state law and contractual rights and remedies thereto, including seeking the post-petition attorneys' fees, collection costs and all interest due thereon or incurred thereto at the then current post-judgment interest rate without any further order of this Court.
I HEREBY CERTIFY that the terms of the copy of the Stipulation and Consent Order Terminating Automatic Stay as to Certain Real Property submitted to the Court are identical to those set forth in the original consent order; and the signatures represented by the /s/ on this copy reference the signatures of consenting parties on the original consent order.