Case No. 10-23467.United States Bankruptcy Court, D. Maryland, (Baltimore Division).
November 5, 2010
STIPULATION AND CONSENT ORDER MODIFYING AUTOMATIC STAY AS TO REAL PROPERTIES KNOWN AS 603 AND 605 E. PATAPSCO AVENUE, BALTIMORE, MARYLAND 21225
NANCY ALQUIST, Bankruptcy Judge
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SummitBridge National Investments LLC (“Summit”) and Rehoboth Church of Deliverance (the “Debtor”) hereby enter into this Stipulation and Consent Order (the “Consent Order”) pursuant to which the parties resolve Summit’s Motion to Terminate the Automatic Stay as to Real Properties Known as 603 and 605 E. Patapsco Avenue, Baltimore, Maryland 21225 [Dkt. No. 20] (the “Lift Stay Motion”) filed herein and the Debtor’s Response thereto [Dkt. No. 23] as follows:
WHEREAS, the Debtor is the fee simple owner of: (i) that certain real property commonly known as 603 E. Patapsco Avenue, Baltimore, Maryland 21225, which is believed to contain 0.207 acres and is improved by an 8,418 square foot building which is currently used as a church (“Property 1”); and (ii) that certain real property commonly known as 605 E. Patapsco Avenue, Baltimore, Maryland 21225, is believed to contain 0.750 acres and is improved by a 2,399 square foot building formerly used as a fast food restaurant but currently vacant (“Property 2” together with Property 1, the “Property”);
WHEREAS, on June 15, 2010 (the “Petition Date”) the Debtor filed a voluntary petition for relief pursuant to Chapter 11 of the Bankruptcy Code;
WHEREAS, prior to the Petition Date, on or about September 30, 2005, PNC Bank, N.A., successor-in-interest to Mercantile Potomac Bank, a division of Mercantile Safe Deposit and Trust Company (the “Bank”), extended a loan to the Debtor in the original principal amount of Seven Hundred Fifty Thousand Dollars ($750,000.00);
WHEREAS, the loan is evidenced by a Promissory Note, dated September 30, 2005 (the “Original Note”), in the original principal amount of Seven Hundred Fifty Thousand Dollars ($750,000.00), as subsequently modified and amended by a Change
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in Terms Agreement dated February 16, 2007 (the “Change in Terms Agreement”), increasing the principal under the Original Note to One Million Fifty-Three Thousand Four Hundred Ninety Dollars and Seventy-Two Cents ($1,053,490.72);
WHEREAS, as security for the payment and performance of the Note, the Debtor executed and delivered a Purchase Money Deed of Trust dated September 30, 2005 (the “Original Deed of Trust”) to the trustees named therein and recorded among the Land Records of Baltimore City, Maryland, in Liber 6963, folio 153 which, inter alia, encumbers the Property;
WHEREAS, the Original Deed of Trust was modified by a Modification of Deed of Trust (the “Modification”) dated February 16, 2007 and subsequently recorded among the Land Records of Baltimore City, Maryland, in Liber 9101, folio 415,
WHEREAS, the Original Deed of Trust and the Modification are referred to hereinafter collectively as the “Deed of Trust”;
WHEREAS, pursuant to an Endorsement and Allonge to Promissory Note (the “Allonge”), an Assignment of Purchase Money Deed of Trust (the “DOT Assignment”), and an Assignment of Modification of Deed of Trust (the “Modification Assignment”), all dated November 4, 2008, the Bank, inter alia, assigned the Note and the Deed of Trust to Summit (together the Original Note, the Change in Terms Agreement, the Deed of Trust, the Allonge, the DOT Assignment, the Modification Assignment and the various documents relating thereto or executed in connection therewith are collectively referred to as the “Loan Documents”);
WHEREAS, Debtor has defaulted under the Note by, among other things, failing to make payments thereunder when due;
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WHEREAS, as of the Petition Date, the Debtor is indebted to Summit under the Note in the amount of $1,173,847.24, exclusive of attorney’s fees, and further charges, including, without limitation, additional interest, late charges, and attorneys fees which continue to accrue;
WHEREAS, the Debtor acknowledges that the debt owed to Summit is secured by valid and perfected liens in and upon the Property and it does not dispute the extent and validity of Summit’s liens in and upon the Property;
WHEREAS, after discussions between Summit and the Debtor, it has been agreed that the automatic stay should be lifted and the Lift Stay Motion granted provided that the Debtor shall be allowed to remain in possession of the Property if it doesn’t default on its obligations hereunder;
NOW THEREFORE, upon consideration of the foregoing, it appearing that Summit and the Debtor have consented to the terms and conditions of this Consent Order and that notice of this proposed Consent Order have been given in accordance with Rule 4001(d) of the Federal Rules of Bankruptcy Procedure, and cause having been shown, it is hereby AGREED AND STIPULATED TO by the parties hereto, and by the United States Bankruptcy Court for the District of Maryland, Baltimore Division it is hereby:
ORDERED, that the terms of this Consent Order are approved; and it is further
ORDERED, that the Court approves and makes the findings of facts set forth in the “WHEREAS” paragraphs set forth above; and it is further,
ORDERED, that the Lift Stay Motion is hereby GRANTED on the terms and conditions hereof; and it is further
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ORDERED, that the automatic stay of 11 U.S.C. § 362 is hereby terminated to permit Summit to immediately exercise its available rights and remedies with respect to the Property under the Deed of Trust and applicable law including, without limitation: (a) publishing advertisements of the sale of the Property; (b) selling the Property in proceedings to foreclose on the Property under the Deed of Trust in the Circuit Court for Baltimore City entitled Louis J. Ebert and Bob Van Galoubandi, SubstituteTrustees v. Rehoboth Church of Deliverance Case No. 24-0-10-002682 (the “Foreclosure Case”) or otherwise; (c) obtaining ratification of the sale of the Property in the Foreclosure Case; (d) conveying the Property to the purchaser following ratification of the sale in the Foreclosure Case; (e) submitting the distribution of the proceeds of sale to the auditor appointed by the Circuit Court for Baltimore City for determination; and (f) distributing the proceeds of sale of the Property in accordance with the auditor’s report following ratification thereof by the Circuit Court for Baltimore City; and it is further
ORDERED, that, notwithstanding the foregoing, the Debtor shall be allowed to maintain possession of the Property until the occurrence of a Termination Event as more fully set forth below; and it is further
ORDERED, that the Debtor shall provide proof to Summit’s satisfaction on or before the date of the entry of this Consent Order that the Property is insured for its full replacement cost by a reputable insurer with Summit listed as the Loss Payee and the Debtor shall maintain such insurance in effect at its expense for so long as it remains in possession of the Property; and it is further
ORDERED, that, so long as the Debtor maintains possession of the Property, it shall maintain them in a condition reasonably satisfactory to Summit at the Debtor’s
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expense; and it is further
ORDERED, that the Debtor shall pay to Summit Four Thousand Dollars ($4,000.00) per month, in the form of a certified check, cashier’s check, money order or other form of immediately available funds beginning on October 25, 2010 and continuing on the 25th Day of each month thereafter until the earlier of: (i) payment of the Debt in full; or (ii) the confirmation of a reorganization plan in accordance with this Consent Order; and it is further
ORDERED, that payments hereunder shall be deemed made when received by Summitbridge National Investments LLC, Wells Fargo Center, 1700 Lincoln Street, Suite 2150, Denver, CO 80203; and it is further
ORDERED, that Summit, or its representatives, shall have access to inspect the Property and to audit the Debtor’s books and records upon reasonable notice; and it is further
ORDERED, that the Debtor shall ensure that no further liens or encumbrances of any kind or type, whether voluntary or involuntary, shall be placed against the Property without Summit’s prior written consent; and it is further
ORDERED, that the Debtor shall not be able to sell, transfer, lease, or otherwise dispose of or exploit the Property without the written permission of Summit; and it is further
ORDERED, that, unless Summit agrees otherwise in writing, the financial, economic and business terms and conditions of this Consent Order shall be included in any Chapter 11 Plan filed by the Debtor, failing which shall constitute a Termination Event hereunder; and it is further
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ORDERED, that the terms of this Consent Order shall be binding on any subsequently appointed trustee; and it is further
ORDERED, that the following events shall constitute “Events of Default” under this Consent Order:
1. The failure of the Debtor to perform any act required by the preceding paragraphs of this Consent Order when and as performance is due under the terms and conditions hereof; and
2. any default under the Loan Documents; and it is further
ORDERED, that upon the occurrence of an Event of Default, Summit shall file with the Court and deliver to counsel to the Debtor a notice that an Event of Default has occurred (the “Notice of Default”); and it is further
ORDERED, that, unless the filing and service of the Notice of Default constitutes a Termination Event as set forth herein, if the Debtor disputes whether an Event of Default has occurred, they must file an objection to the Notice of Default with the Court within seven (7) business days after the filing of the Notice of Default or forever waive such objection; and it is further
ORDERED, that, unless the filing and service of the Notice of Default constitutes a Termination Event as set forth herein, if the Debtor files a timely objection to Summit’s Notice of Default, the Court, upon not less than two (2) business days notice to Summit and an opportunity for a hearing, the Court will determine whether an Event of Default has occurred; and it is further
ORDERED, that the following shall constitute a “Termination Event”:
1. The determination by the Court that an Event of Default has occurred;
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2. the failure by the Debtor to file an objection to a Notice of Default within seven (7) business days after the filing of such Notice of Default; and
3. the filing and service of a second Notice of Default.
ORDERED, that upon the occurrence of a Termination Event, the Debtor shall immediately vacate the Property without further notice or order of the Court; and it is further
ORDERED, that nothing herein shall constitute an agreement, an admission or a determination regarding, among other things, what constitutes sufficient “adequate protection” as that term is defined under the Bankruptcy Code, and the parties hereto expressly reserve any and all of their respective rights, claims, and defenses in connection therewith; and it is further
ORDERED, that this Consent Order shall not be construed to reinstate the obligations of the Debtor or the maturities of the Loan Documents, nor shall the Consent Order be construed to cure the defaults (which defaults are specifically preserved) or be a novation of the Loan Documents; and it is further
ORDERED, that the provisions of Bankruptcy Rule 4001(a)(3) are waived; and it is further
ORDERED, that the parties are directed to take all steps necessary to effectuate this Consent Order.
SO ORDERED
Joshua D. Bradley, Bar No. 28821, Rosenberg ¦ Martin ¦ Greenberg, LLP, Baltimore, Maryland,
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Counsel for Summitbridge National Investments, LLC.
Stephen J. Kleeman, Bar No. 01040, Towson, Maryland, Counsel for Rehoboth Church of Deliverance.