Case No. 09-34051.United States Bankruptcy Court, D. Maryland, (Greenbelt Division).
March 25, 2010
STIPULATION AND CONSENT ORDER RESOLVING MOTION OF WILMINGTON SAVINGS FUND SOCIETY, FSB FOR RELIEF FROM THE AUTOMATIC STAY
THOMAS CATLIOTA, Bankruptcy Judge
Wilmington Savings Fund Society, FSB (“WSFS”), Island Excursions, Inc. (the “Debtor”) and Gary Rosen, Chapter 7 Trustee (the “Trustee”), by their respective undersigned
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attorneys, hereby stipulate to the following resolution of the Motion of Wilmington Savings Fund Society, FSB for Relief from the Automatic Stay (the “Motion”):
I. JURISDICTION
1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and 11 U.S.C. § 362(d).
2. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408
and 1409.
3. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(G).
II. BACKGROUNDA. Parties
4. The Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on December 9, 2009 (the “Petition Date”).
5. The Trustee was appointed as Chapter 7 Trustee for the Debtor’s bankruptcy estate.
6. WSFS is a federal savings bank organized under the laws of the state of Delaware and is a secured creditor in the Debtor’s bankruptcy by virtue of a first priority ship mortgage and a duly perfected security interest in two boat propellers.
B. Factual Background
7. The parties expressly agree that pursuant to a promissory note dated March 28, 2007 (the “$350,000 Note”), the Debtor became indebted to WSFS in the original principal amount of $350,000.
8. The parties further agree that WSFS holds a valid allowed secured claim against the estate that is secured by a fully and properly perfected lien against a 54.5-foot marine vessel christened “Thriller 08,” official number 1193820, hull number OTPTH308I503 (the “Vessel”).
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9. As of the Petition Date, the total amount due and owing WSFS under the $350,000 Note was $304,285.40, comprising principal in the amount of $296,215.49, accrued and unpaid interest in the amount of $7,395.67, and late charges in the amount of 673.98.
10. The parties expressly agree that pursuant to a Business Loan Agreement and promissory note dated December 16, 2008 and amended May 21, 2009 (the “$23,000 Note”) the Debtor became indebted to WSFS in the original principal amount of $23,000.
11. The parties further agree that WSFS holds a valid allowed secured claim against the estate that is secured by a fully and properly perfected lien against certain collateral, including collateral described as “19 × 26 6 blade Custom Rolla Propeller for Asd-8 225” and any replacements (the “Propellers”).
12. As of the Petition Date, the total amount due and owing to WSFS under the $23,000 Note was $22,964.27, comprising principal balance in the amount of $22,606.11, accrued and unpaid interest in the amount of $316.66, late fees in the amount of $11.50, and a UCC fee in the amount of $30.
13. Prior to the Petition Date, the Debtor failed to make payments due to WSFS under the various loan documents, including the $350,000 Note and the $23,000 Note, and in accordance with the terms and conditions contained therein. Therefore, the Debtor was in default under the loan documents.
14. The Debtor desires to market and sell the Vessel and the Propellers, and the Trustee and WSFS agree to allow the Debtor to take such actions, pursuant to the provisions and requirements of this Consent Order.
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AGREEMENT
15. The foregoing recitals of fact and representations by the parties constitute an essential part of this Consent Order and are substantively made a part hereof.
16. Grounds exist to justify relief from the automatic stay, and, accordingly, the Trustee and the Debtor consent to the lifting of the automatic stay on the Vessel and the Propellers (collectively, the “Property”) pursuant to 11 U.S.C. § 362 in order to permit WSFS to exercise its rights and remedies against the Property in accordance with its loan documents and applicable nonbankruptcy law, including without limitation, the right to sell the Property and to apply the proceeds of the sale of the Property to the outstanding indebtedness owed to WSFS.
17. Notwithstanding the foregoing, WSFS conditionally agrees to forbear from enforcing its interests against the Property, and the proceeds of same for a period of sixty (60) days from the date of entry of this Consent Order, so long as each of the following conditions are met and no Event of Default (as hereinafter defined) has occurred:
(a) For so long as WSFS forbears under the terms of this Consent Order, the Vessel shall remain at the Indian River Marina, 39415 Inlet Road, Rehoboth Beach, DE 19971, at all times, and shall not be removed from that location or placed in the water without the prior written consent of WSFS.
(b) The Debtor shall actively market the Property, but shall not be permitted to undertake any steps to sell the Property at public auction, nor shall the Debtor have the authority to execute any agreements for the sale of the Property.
(c) The Debtor shall be responsible for any rental fees due to Indian River Marina for so long as WSFS forbears under the terms of this Consent Order.
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(d) The Debtor shall provide the Trustee and WSFS with updates on the status of its efforts to market and sell the Property every two weeks during the term of the forbearance under this Consent Order.
(e) The Property may not be sold by the Trustee for an amount that is not sufficient to pay all claims secured by the Property in full, including, without limitation, all of WSFS’s fees, expenses and attorneys’ fees, as provided under the loan documents.
18. The period of forbearance set forth herein shall terminate upon the earlier of sixty (60) days from the entry of this Order or the occurrence of an “Event of Default” hereunder.
19. The occurrence of any one or more of the following shall constitute an “Event of Default”:
(a) the final nonappealable dismissal of the Debtor’s Chapter 7 case;
(b) the failure of the Debtor to comply with any or all other specific requirements of this Consent Order.
20. Upon the occurrence of an “Event of Default” hereunder, and without further notice to the Debtor, or order of the Bankruptcy Court, the forbearance contemplated by this Consent Order shall automatically terminate and WSFS shall be entitled to exercise its rights and remedies against the Property in accordance with its loan documents and applicable nonbankruptcy law, including without limitation, the right to repossess and sell the Property and to apply the proceeds of the sale of the Property to the Debtor’s outstanding indebtedness with WSFS.
21. The terms of this Consent Order shall be binding on the Debtor’s and the Trustee’s successors and assigns.
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22. The parties agree to execute such other and further documents as are required to effectuate the intention of this Consent Order.
23. Notice of this Consent Order is waived pursuant to Fed.R.Bankr.P. 4001(d)(4) because the Motion was sufficient to afford reasonable notice of the material provisions of the agreement and opportunity for a hearing.
SO ORDERED.
Patricia A. Borenstein, Fed. Bar No.: 27668, Miles Stockbridge P.C., Baltimore, MD, Attorneys for WSFS.
Gary A. Rosen, Esquire, Rockville, MD, James E. Smith, II, Esquire, Keyser, WV, Attorneys for Debtor.
I HEREBY CERTIFY that the terms of the copy of this 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.