Opinion
Case No. 09-17787 No. 17790 No. 17792 (DWK) Adversary No. 10-0898-DWK
08-05-2011
JOEL I. SHER, CHAPTER 11 TRUSTEE FOR TMST HOME LOANS, INC. F/K/A THORNBURG MORTGAGE HOME LOANS, INC., Plaintiff, v. LUXURY MORTGAGE CORP., Defendant. In re TMST, INC. f/k/a Thornburg Mortgage, Inc., et al., Debtors.
Gary H. Leibowitz (Bar No. 24717) Counsel to Luxury Mortgage Corp. SHAPIRO SHER GUINOT & SANDLER Richard M. Goldberg, Esquire Counsel to Joel I. Sher, Trustee
SO ORDERED
DUNCAN W. KEER
U. S. BANKRUPTCY JUDGE
(Jointly Administered under Case No. 09-17787)
STIPULATION AND CONSENT ORDER (I) TEMPORARILY STAYING
LITIGATION, DISCOVERY AND PENDING MOTIONS, (II) EXTENDING THE
DISCOVERY DEADLINES; (II) WITHDRAWING DEFENDANT'S MOTION TO
DISMISS; AND (III) EXTENDING DEFENDANT'S TIME TO FILE AN
ANSWER AND COMPLAINT AGAINST THIRD PARTY
This Stipulation and Consent Order is entered into by and between Plaintiff, Joel I. Sher, Chapter 11 Trustee (the "Trustee") for TMST Home Loans, Inc. f/k/a Thornburg Mortgage Home Loans, Inc. ("TMHL") and Defendant, Luxury Mortgage Corp. ("Luxury"), pursuant to which the parties stipulate and agree as follows:
Procedural Background
1. On November 24, 2010, the Trustee filed the Complaint for Damages, Indemnification and Specific Performance (the "Complaint"). [Dkt. No. 1].
2. On December 20, 2010, the parties filed a Stipulation and Consent Order to Extend the Answer Deadline. [Dkt. No. 5]. The Court entered the Consent Order on December 23, 2010 extending the deadline to January 29, 2011. [Dkt. No. 6].
3. On January 21, 2011, the parties filed their Joint Rule 26(f) Report and proposed Scheduling Order. [Dkt. No. 8].
4. On January 28, 2011, Luxury filed a Motion to Dismiss, or in the Alternative, Change Venue, and a Memorandum in Support (the "Motion to Dismiss"), which was amended on January 31, 2011 [Dkt. Nos. 10, 12, 13]. The Trustee has opposed the Motion to Dismiss, [Dkt. No. 18]. The Court has not ruled on the Motion to Dismiss. The parties have consensually engaged in discovery while the Motion to Dismiss has been pending.
5. On February 17, 2011, the Trustee filed a Motion for Summary Judgment and Memorandum in Support ("Motion for Summary Judgment"). [Dkt. No. 15]. The Court has not ruled on the Motion for Summary Judgment. On March 4, 2011, Luxury filed a Motion to Defer a Ruling on the Motion for Summary Judgment. [Dkt. Nos. 20, 21].
6. On April 29, 2011, the parties filed a Joint Motion for Approval of a Supplemental Joint Rule 26(f) Report and Entry of an Amended Scheduling Order which extended the deadline for the completion of fact discovery by 30 days to June 17, 2011, and extended the deadline for filing dispositive motions to 30 days after the completion of fact discovery [Dkt. No. 40]. The Court entered the Amended Scheduling Order. [Dkt. No. 46].
7. On June 21, 2011, Luxury filed a Second Motion to Amend the Scheduling Order [Dkt. No. 63]. The Court granted Luxury's motion and entered an Order on June 23, 2011 extending the discovery deadlines through and including August 16, 2011. [Dkt. No. 64].
Agreement Regarding Pending Motions and Discovery
8. On July 25, 2011, the parties and their counsel met to discuss a potential settlement. The settlement discussions were productive. However, to avoid the extensive costs of litigation while the parties take certain actions as are necessary outside of the Adversary Proceeding to foster a possible settlement of the Adversary Proceeding, the parties require, and accordingly respectfully seek, a temporary stay of discovery and pending motions herein. In that respect, the parties have agreed to a temporary stay of litigation, followed by a streamlined process for resolution of the pending motions, and a schedule for the completion of discovery in the event the parties are unable to consummate a settlement.
9. Accordingly, by agreement of the parties, and the Court being satisfied that good cause has been shown for the entry of this Stipulation and Consent Order and that the relief requested herein is in the best interests of creditors, Luxury and the Debtors' estates, IT IS HEREBY STIPULATED, AGREED AND ORDERED, that:
a. Luxury shall promptly withdraw its Motion to Dismiss with prejudice;
b. All pending motions, including, but not limited to, the Trustee's Motion for Summary Judgment, are hereby stayed through and including December 31, 2011. If the parties are unable to resolve this Adversary Proceeding during the course of this agreed stay, Luxury shall be entitled to file a subsequent opposition to the Trustee's Motion for Summary Judgment no later than January 14, 2012;
c. All currently propounded discovery is hereby stayed through and including November 30, 2011. The discovery deadline is extended from the currently scheduled date of August 16, 2011 through and including December 31, 2011 to afford the parties an opportunity to complete discovery, including the remaining depositions that may need to be noted, in the event the parties are unable to resolve this Adversary Proceeding before November 30, 2011;
d. The Trustee shall take such actions to (i) prosecute TMHL's foreclosure of the property located at 982 Noyack Road, Southampton, NY 11968, the property that is at issue in this Adversary Proceeding (the "Property"), in the case styled Thornburg Mortgage v. Visilios Gregoriadis (Case No. 029712-2009) pending in the Supreme Court of Suffolk County, New York, (ii) continue to assert and advance TMHL's rights and interests in the foreclosure action filed in the Supreme Court of Suffolk County, New York styled E*Trade Bank v. Donald MacPherson, (Case No. 033098-2007) whereby E*Trade has asserted a first priority mortgage on the Property, and (iii) take such actions as are appropriate for the Trustee, in his sole discretion, to assert and advance the Trustee's and TMHL's rights with respect to the Property outside of this Adversary Proceeding, including, but not limited to, asserting the Trustee's and TMHL's right and claims against other parties involved in the sale of the Property. Luxury consents to and shall cooperate in the Trustee's actions set forth herein, and shall not use such actions against the Trustee in the event the Adversary Proceeding is not settled, provided the Trustee's actions are reasonable and taken in good faith;
e. The Trustee shall provide Luxury's counsel with status reports on the progress of his actions listed in paragraph (d) above, and shall provide such additional information and consultation as may be reasonably be requested by Luxury's counsel;
f. The time for Luxury to file an Answer to the Complaint and a Third Party Complaint, if any, shall be extended through and including November30, 2011. Notwithstanding the stay of pending litigation between the Trustee and Luxury described herein, Luxury may file an Answer and Third Party Complaints in this adversary proceeding at any time before November 30, 2011;
g. Without admitting any liability in this adversary proceeding or waiving any of its defenses, Luxury shall contribute $10,000 to the Trustee on August 30, 2011, September 30, 2011, and October 30, 2011 for a total of $30,000 (the "Payments"), to defray the costs of the TMHL bankruptcy estate to maintain the Property. The Payments shall be non-refundable except in the event the Trustee recovers the full amount of his claim asserted in this Adversary Proceeding from an entity or person other than Luxury whereupon, the Trustee shall refund the Payments to Luxury. In the event the Trustee obtains a judgment against Luxury in this adversary proceeding, the Payments shall be credited against the judgment amount; and
h. The deadlines in this Stipulation and Consent Order are without prejudice to the parties seeking an extension thereof, subject to Court approval.
THE UNDERSIGNED CONSENT AND AGREE
TO THE ENTRY OF THIS ORDER ON BEHALF OF THEIR RESPECTIVE CLIENT HEREIN :
COLE, SCHOTZ, MEISEL,
FORMAN & LEONARD, P.A.
Gary H. Leibowitz (Bar No. 24717)
Counsel to Luxury Mortgage Corp.
SHAPIRO SHER GUINOT & SANDLER
Richard M. Goldberg, Esquire
Counsel to Joel I. Sher, Trustee
Certification Pursuant to Admin. Order 03-02, Ex. A, Sec. V.B.1
I HEREBY CERTIFY that the terms of the copy of the foregoing consent order 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.
Gary H. Leibowitz
END OF ORDER
cc:
Gary H. Leibowitz, Esquire
Cole, Schotz, Meisel, Forman & Leonard, P.A.
300 East Lombard Street, Suite 2000
Baltimore, MD 21202
Paul Knag, Esquire
Murtha Cullina LLP
177 Broad Street
Stamford, Connecticut 06901
Richard M. Goldberg, Esquire
Shapiro Sher Guinot & Sandler
36 South Charles Street, 20th Floor
Baltimore, MD 21201-3147