Opinion
Case Nos. 03-31511, 04-38046, and 04-38012 (Jointly Administered Under Case No. 03-31511-DK), Adversary No. 06-1498-DK.
September 24, 2008
Joel I. Sher, Bar No. 00719, Diarmuid F. Gorham, Bar No. 25859, Shapiro Sher Guinot Sandler, Baltimore, Maryland, Attorneys for Roger Schlossberg, Chapter 7 Trustee.
Ronald Drescher, Bar No. 08712, Drescher Associates, P.A., Baltimore, MD, Attorneys for Eastern Savings Bank, FSB.
STIPULATION AND CONSENT ORDER RESOLVING CLAIMS OF PLAINTIFF AGAINST EASTERN SAVINGS BANK, FSB ONLY
Roger Schlossberg, Chapter 11 Trustee for Ennis and Ritza Whatley (the "Whatleys") and as authorized person for Whatley Enterprises, LLC ("Enterprises"), and GJHG LLC (the "Trustee"), and Eastern Savings Bank, FSB ("ESB") hereby agree and stipulate as follows:
WHEREAS, on or about July 21, 2006, the Trustee filed a Complaint (the "Complaint") to Avoid and Recover Fraudulent Transfers against, inter alia, ESB, Anthony Russell, and Phyllis Russell, and TCRM Commercial Corporation (collectively, the "Defendants"). The Complaint sought, inter alia, to avoid certain transfers made by Enterprises to the Defendants; and
WHEREAS, the claims asserted against the Defendants arise in connection with a $2,200,000 loan from ESB to Enterprises (the "ESB Loan"); and
WHEREAS, ESB filed the following Proofs of Claim in connection with the ESB Loan: (1) Proof of Claim No. 5 in the aggregate amount of $1,882,143.90 in the Enterprises' bankruptcy case (Case No. 04-38012,), and (2) Proof of Claim No. 6 in the aggregate amount of $1,821,239.47 in the Whatleys' bankruptcy case (Case No. 03-31511) (collectively, the "ESB Proofs of Claim"); and
WHEREAS, pursuant to the terms of the Debtors' Joint Plan of Reorganization (the "Plan"), all claims asserted by ESB in connection with the ESB Loan were classified and treated as the Class 1 Whatley Enterprises Secured Claim (the "Class 1 Claim") (collectively, the Class 1 Claim and the ESB Proofs of Claim are referred to as the "ESB Claims"); and
WHEREAS pursuant to the Court's May 5, 2008 Order Confirming Joint Plan of Reorganization (the "Confirmation Order"), the treatment of the Class 1 Claim was modified such that the Trustee was directed to escrow the sum of $2.2 million as the sole source of satisfaction and security for the ESB Claims (the "Escrowed Funds"), to the extent that the Court determined that ESB had an allowed secured or unsecured claim as provided under Section 4.1 of the Plan; and
WHEREAS, this Adversary Proceeding was initiated in keeping with the terms and provisions of the Plan and Confirmation Order; and
WHEREAS, the parties conducted discovery, upon the completion of which, ESB filed a Motion for Summary Judgment or in the Alternative for Summary Adjudication of Issues, which is currently pending before the Court; and
WHEREAS, the Trustee and ESB have negotiated a consensual resolution with respect to the relief sought in the Complaint and with respect to ESB's treatment under the Plan; and
WHEREAS, ESB and the Trustee consent and agree that ESB shall receive the sum of $2.1 million on account of, and in satisfaction in full of the ESB Claims and any and all claims asserted by, or that could be asserted by, ESB against the Trustee and/or the estates of the Whatleys, Enterprises and/or GJHG; and
WHEREAS, the Trustee shall retain the remaining $100,000 of the Escrowed Funds, and shall dismiss all claims asserted against ESB in the Complaint with prejudice; and
WHEREAS, the Trustee and ESB agree to the mutual general releases set forth below.
Now therefore, upon consideration of the foregoing, and for good cause shown, it is by the United States Bankruptcy Court for the District of Maryland (Baltimore Division),
ORDERED that the sum of $2,100,000 shall be disbursed to ESB from the Escrowed Funds within ten (10) days of the entry of this order in full and final satisfaction of the ESB Claims and any and all claims asserted by, or that could be asserted by, ESB against the Trustee and/or the estates of the Whatleys, Enterprises and/or GJHG; and it is further
ORDERED that the Complaint is hereby dismissed with prejudice solely as to ESB; and it is further
ORDERED that the Trustee shall retain the sum of $100,000 from the Escrowed Funds; and it is further
ORDERED that upon entry of this Order, the Trustee, the bankruptcy estates of the Whatleys, Enterprises and GJHG for themselves and each of their respective affiliates, successors and predecessors-in-interest, agents and assigns release, discharge, waive, and relinquish any and all claims, demands of whatever nature, actions and causes of action, known or unknown, against ESB, and its respective affiliates, successors and predecessors-in-interest and any of their respective attorneys, employees and agents arising out of, or related to, the ESB Claims and/or the Complaint; and it is further
ORDERED, upon entry of this Consent Order, ESB for itself and its respective affiliates, successors and predecessors-in-interest, agents and assigns, releases, discharges, waives, and relinquishes any and all claims, demands of whatever nature, actions and causes of action, known or unknown, against the Trustee, and the respective bankruptcy estates of the Whatleys, Enterprises and GJHG and each of their respective affiliates, successors and predecessors-in-interest and any of their respective attorneys, employees and agents arising out of or related to the ESB Claims and/or the Complaint.
AGREED, STIPULATED AND CONSENTED TO:
SO ORDERED