No. 04-00757-W11, Jointly Administered Under, Docket No. 2300 [Motion for Order], 2301 [Stipulation], 2302 [Notice of Motion], 2328 [Declaration of Lyons in Support of Motion], 2716 [Request for Entry of Order].United States Bankruptcy Court, E.D. Washington.
April 26, 2005
Barry W. Davidson, Robert S. Delaney, DAVIDSON MEDEIROS, Spokane, Washington, and Charles R. Ekberg, Susan Brye Jahnke, Mary Jo Heston, LANE POWELL PC, Seattle, Washington, Attorneys for Metropolitan Mortgage and Securities Co., Inc., Debtor and Debtor-in-Possession.
Ford Elsaesser, Doug B. Marks, Bruce A. Anderson, ELSAESSER JARZABEK ANDERSON MARKS, ELLIOTT AND McHUGH, CHARTERED, Sandpoint, Idaho, and Jeffrey T. Wegner, John J. Jolley, Jr., KUTAK ROCK LLP, Omaha, Nebraska, Attorneys for Summit Securities, Inc., Debtor and Debtor-in-Possession.
ORDER APPROVING STIPULATION REGARDING LIENS SECURING INTERCOMPANY LOANS
PATRICIA WILLIAMS, Chief Judge, Bankruptcy
THIS MATTER having come on regularly for hearing upon the Motion of Metropolitan Mortgage Securities Co., Inc. (“Metropolitan”) and Summit
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Securities, Inc. (“Summit”), by and through their respective counsel, for an Order Approving Stipulation Regarding Liens Securing Intercompany Loans, the Court being fully advised in the premises and having reviewed the Motion, Stipulation, and Declaration of Maggie Lyons filed in support thereof; and having determined that good cause exists for the relief requested in the Motion; NOW THEREFORE,
IT IS HEREBY ORDERED that Metropolitan and Summit are authorized to enter into the Stipulation Regarding Liens Securing Intercompany Loans (the “Stipulation”)[1] and that said Stipulation is hereby approved.
IT IS FURTHER ORDERED that Metropolitan’s pre-petition liens upon the Structured Settlement Portfolio Collateral, the Timber Harvesting Agreement, and the proceeds thereof shall be deemed avoided as of the Petition Date and preserved for the benefit of Summit’s bankruptcy estate. Metropolitan shall have no rights to setoff or recoupment against the Structured Settlement Portfolio Collateral, the Timber Harvesting Agreement, and the proceeds thereof.
IT IS FURTHER ORDERED that Metropolitan’s adequate protection liens in the Adequate Protection Assets and the proceeds thereof, as described in Exhibit B to the Order Authorizing Summit’s Use of Metropolitan’s Cash Collateral and Granting Adequate Protection dated June 9, 2004 (the “Cash Collateral Order”),
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shall be deemed null and void and Metropolitan shall have no rights to setoff or recoupment against the Adequate Protection Assets or the proceeds thereof.
IT IS FURTHER ORDERED that Metropolitan’s adequate protection liens in the Structured Settlement Portfolio Collateral and the proceeds thereof shall be limited to the extent of any diminution in value of the Mortgage Backed Receivable Collateral as a result of Summit’s use thereof.
IT IS FURTHER ORDERED that Metropolitan’s lien on the Mortgage Backed Receivable Collateral shall be deemed valid and duly perfected as of August 1, 2003.
IT IS FURTHER ORDERED that Metropolitan’s lien on the SGH Stock shall be deemed valid and duly perfected as of September 16, 2003.
IT IS FURTHER ORDERED that Metropolitan’s liens on the Mortgage Backed Receivable Collateral and the SGH Stock shall not be subject to avoidance pursuant to the laws of any state or the United States, including but not limited to Chapter 5 of the Bankruptcy Code, by Summit or its successors or assigns, including but not limited to, any trustee appointed in the above-captioned bankruptcy case.
IT IS FURTHER ORDERED that although Metropolitan’s pre-petition liens on the Structured Settlement Portfolio and the Timber Harvesting Agreement are deemed avoided pursuant to the Stipulation, the underlying debts owed to
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Metropolitan that were secured by the Structured Settlement Portfolio and the Timber Harvesting Agreement shall be valid unsecured debts and claims which will be allowed as valid unsecured claims in the Summit bankruptcy proceeding. The following claims by Metropolitan against Summit shall be allowed as valid unsecured claims as part of the settlement: the 2000 Note, as amended by the 2000 Note Amendment, in the amount of $9,775,482.09; that portion of the Koa Note in the amount of $16,000,000.00 that is unsecured; that portion of the Receivable Note in the amount of $2,023,877.05 that is unsecured; and the Line of Credit in the amount of $13,700,000.00.
IT IS FURTHER ORDERED that nothing contained in the Stipulation affects any other claims of either Debtor against the other or any claims of either Debtor against third parties.