Case Doc 82 Filed 11/09/17 Entered 11/09/17 15:05:29 Desc Main Document Page 1 of 38 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA

Similar documents
Case Doc 582 Filed 02/27/19 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA DURHAM DIVISION

Knowledge Learning Corporation ( KLC ), by its undersigned counsel, hereby objects to

MOTION FOR AN ORDER APPROVING THE SALE OF REAL PROPERTY FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS

Case 3:16-cv PK Document 591 Filed 03/14/18 Page 1 of 7

Case No D.C. No. OHS-16 Chapter 9. In re: CITY OF STOCKTON, CALIFORNIA, Debtor. Case Filed 02/04/14 Doc 1245

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Case KG Doc 316 Filed 10/08/15 Page 1 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) ) )

OBJECTION BY CONVERGYS CORPORATION TO NOTICE OF (I) DEBTORS' INTENT TO ASSUME AND ASSIGN CERTAIN EXECUTORY CONTRACTS AND (II) PROPOSED CURE AMOUNT

(collectively, Urban Science ), through their undersigned counsel, hereby submit this limited

Case JMC-7A Doc 1133 Filed 01/31/17 EOD 01/31/17 13:25:18 Pg 1 of 10 SO ORDERED: January 31, 2017.

Case No D.C. No. OHS-24 Chapter 9. In re: CITY OF STOCKTON, CALIFORNIA, Debtor. Case Filed 02/10/15 Doc 1882

Case No D.C. No. OHS-20 Chapter 9. In re: CITY OF STOCKTON, CALIFORNIA, Debtor. Case Filed 10/06/14 Doc 1728

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN. Appellant/Defendant, v. Case No. 12-C Appellant/Defendant. Case No.

rbk Doc#236 Filed 03/22/18 Entered 03/22/18 15:00:22 Main Document Pg 1 of 9

Real Estate Committee ABI Committee News

Case MFW Doc 317 Filed 05/17/16 Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) ) ) ) ) ) ) ) ) ) ) )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

VIRGINIA ASSOCIATION OF REALTORS Commercial Purchase Agreement

Case Document 367 Filed in TXSB on 11/04/16 Page 1 of 6

Case 2:12-cv BSJ Document 1429 Filed 11/13/18 Page 1 of 17

Mold Masters Co., ( Mold Masters ) a creditor and party-in-interest in this case objects,

JH:SRF:JMG:brf AGENDA DRAFT 4/06/2016 ESCROW AGREEMENT

IN RE CLINTON TOWNSHIP, ) NEW JERSEY COUNCIL HUNTERDON COUNTY ) ON AFFORDABLE HOUSING

COMMERICAL PURCHASE AGREEMENT

IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA CHAPTER 7

smb Doc 14 Filed 03/20/17 Entered 03/20/17 18:44:32 Main Document Pg 1 of 8. ( Chapter J 1)

PURCHASE AND SALE AGREEMENT

Case JMC-7A Doc 738 Filed 12/08/16 EOD 12/08/16 15:01:37 Pg 1 of 10 SO ORDERED: December 8, 2016.

Credit Underwriting, Lease Structures and Documentation Provisions

mg Doc 8675 Filed 06/01/15 Entered 06/01/15 16:49:05 Main Document Pg 1 of 27

MEMORANDUM AND ORDER Case No. 1:17-cv FB Case No. 1:17-cv FB. Appellant, -against-

WhereNet Corp. ( WhereNet ), by and through its undersigned counsel, hereby files this

Case reg Doc 40 Filed 06/20/16 Entered 06/20/16 14:20:14

WHEN THE TENANT FILES BANKRUPTCY

Protecting The Landlord s Rent Claim In Bankruptcy: Letters Of Credit And Other Issues

ESCROW AGREEMENT. Dated, Relating to

shl Doc 479 Filed 10/04/18 Entered 10/04/18 19:03:40 Main Document Pg 1 of 2

Exhibit C OFFER TO PURCHASE PROPERTY

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) ) ) ) ) ) ) OPINION 1. Before the Court is the Objection of the FLYi and

RESIDENTIAL REAL ESTATE PURCHASE AND SALE AGREEMENT SALE BY BANKRUPTCY ESTATE

Case MFW Doc 1818 Filed 05/12/16 Page 1 of 5 UNITED STATES BANKRUPCTY COURT DISTRICT OF DELAWARE. Chapter 11

MATTHEW MEYER COUNTY August 7, 2017

IN AND FOR THE COUNTY OF MARICOPA ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

Municipality of Anchorage PURCHASE AND SALE AGREEMENT FOR HLB Parcel C in Chugiak, Alaska

Case 2:12-cv BSJ Document 772 Filed 09/30/14 Page 1 of 14

Case 8:16-cv CJC-DFM Document 281 Filed 07/27/18 Page 1 of 10 Page ID #:9937

STANDARD TERMS AND CONDITIONS Equipment Lease Form DCR 309

AMENDED OBJECTION TO PROPOSED CURE AMOUNTS AND RESERVATION OF RIGHTS. Allied Systems Holdings, Inc., Allied Automotive Group, Inc.

Case Doc 196 Filed 03/03/17 Entered 03/03/17 16:50:44 Desc Main Document Page 1 of 6

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION SENATE DRS35055-LTz-20A* (2/14)

Bidding Procedures and Sale Orders: The Keys to Distress M&A

located in the 14. City/Township of CLEARWATER, County of WRIGHT, 15. State of Minnesota, PID # (s) 16.

Manufacturers and Traders Trust Company ( M&T ) not individually, but solely in

ESCROW AGREEMENT. Relating to the advance crossover refunding of the outstanding

AGREEMENT OF PURCHASE AND SALE. This Agreement of Purchase and Sale ( Agreement ( Agreement ), dated as of,is made by and between:

Case: HJB Doc #: 1385 Filed: 03/04/15 Desc: Main Document Page 1 of 10 Hearing Requested for March 18, 2015 at 11:00 a.m.

UNITED STATES DISTRICT COURT DISTRICT OF NEVADA

Municipality of Anchorage PURCHASE AND SALE AGREEMENT FOR LOT 17, NEVILLA PARK SUBDIVISION

October 5, 2018 CUSIP NUMBERS AC AE AD 0 1

BACKGROUND. Earnest money dispute. Should the money be released to the seller? Why should the

LEASE-LEASEBACK SUBLEASE AGREEMENT. Dated as of April 1, Between. Newark Unified School District. and. Environmental Systems, Inc.

Case KJC Doc 1303 Filed 05/11/17 Page 1 of 4 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE.

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION DETROIT

Case 2:12-cv BSJ Document 102 Filed 12/28/12 Page 1 of 17

FILED: NEW YORK COUNTY CLERK 01/29/ :04 PM INDEX NO /2017 NYSCEF DOC. NO. 99 RECEIVED NYSCEF: 01/29/2018

CONTRACT FOR SALE AND PURCHASE

COMMERCIAL LEASES IN BANKRUPTCY. John M. August. Upon the filing of a petition pursuant to the Bankruptcy Code, 11 U.S.C. 101,

Case 1:10-cv FAM Document 80 Entered on FLSD Docket 10/19/2012 Page 1 of 7

Case tnw Doc 1317 Filed 07/31/14 Entered 07/31/14 16:23:51 Desc Main Document Page 1 of 9

: : Debtors. : : : LIMITED OBJECTION OF HYDROGENICS CORPORATION TO DEBTORS PROPOSED ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS

( Supplier ), by its attorneys Foley & Lardner LLP, hereby submits this objection (the

4.01 PROPERTY OF THE ESTATE

THIS FORM HAS IMPORTANT LEGAL CONSEQUENCES AND THE PARTIES SHOULD CONSULT LEGAL AND TAX OR OTHER COUNSEL BEFORE SIGNING.

Washtenaw County Treasurer Terms and Conditions of Sale July 20, August 24, and September 28, 2018

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION SECURITIES AND EXCHANGE COMMISSION,

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN. Honorable John T. Gregg

K & R Properties of Fayetteville, Inc. PO Box Fayetteville, NC (910)

8:19-cv LSC-CRZ Doc # 1 Filed: 01/30/19 Page 1 of 11 - Page ID # 1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEBRASKA

PURCHASE AND SALE AGREEMENT AND RECEIPT FOR EARNEST MONEY

Case 4:15-cv DLH-CSM Document 119 Filed 10/18/16 Page 1 of 14

Buyer s Initials Seller s Initials DRAFT G. SHORT SALE APPROVAL CONTINGENCY

Chapter 21. Earnest Money Procedures for Licensees INTRODUCTION

Estate Procedures for

TRANSFER OF DEVELOPMENT RIGHTS CONSERVATION EASEMENT

Uniform Assignment of Rents Act

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF LOUISIANA LAFAYETTE DIVISION CHAPTER 11

The parties, intending to be legally bound, hereby agree as follows:

PURCHASE AND SALE AGREEMENT BY AND BETWEEN COUNTY OF CHESTERFIELD, VIRGINIA AND SPORTS COMPLEX HOLDINGS, LLC, a Georgia limited liability company

AMENDED FINAL PURCHASE AND SALE AGREEMENT

AMENDED MEMORANDUM OPINION AND ORDER LIFTING STAY. Fox 716 Realty LLC ( Landlord ), the landlord and a creditor of Sweet N Sour

THIS CONVEYANCE IS SUBJECT TO

REAL ESTATE LEASE. County, Indiana, or a portion of said real estate, described as follows:

LEASE AGREEMENT WITNESSETH:

PROPERTY MANAGEMENT AGREEMENT

ARIZONA TAX COURT TX /18/2006 HONORABLE MARK W. ARMSTRONG

IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION

Staying Alive! How New Lease and Other Leasehold Mortgagee Protection Provisions Really Work When the Ground Lessee Defaults

ESCROW AGREEMENT (2003 CERTIFICATES) By and Between CITY OF FOUNTAIN VALLEY. and. MUFG UNION BANK, N.A., as Escrow Bank. Dated as of February 1, 2016

AN ACT RELATIVE TO THE ESTATE OF HOMESTEAD. (see Senate, No ) Approved by the Governor, December 16, 2010

Case BLS Doc 331 Filed 09/18/13 Page 1 of 30 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE.

Transcription:

Document Page 1 of 38 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA In re: THE CROSIER COMMUNITY OF PHOENIX, an Arizona non-profit corporation, Chapter 11 Case No. 17-41683 Debtor. NOTICE OF HEARING AND MOTION FOR AN ORDER APPROVING THE SALE OF REAL PROPERTY TO: The United States Bankruptcy Judge, the United States Trustee, and other parties-ininterest as specified in Local Rule 9013-3(a)(2). The Crosier Community of Phoenix, debtor in the above-captioned reorganization case, hereby respectfully moves the court for the relief requested below and gives notice of hearing: 1. The court will hold a hearing on this motion before the Honorable Robert J. Kressel on December 21, 2017 at 9:00 a.m. in Courtroom 8 West, at the United States Courthouse, 300 South Fourth Street, Minneapolis, Minnesota 55415. 2. Pursuant to Local Rule 9006-1(c), any response to this application must be filed and served no later than December 15, 2017, which is five (5) days before the time set for the hearing (including Saturdays, Sundays, and holidays). UNLESS A RESPONSE OPPOSING THIS MOTION IS TIMELY FILED, THE COURT MAY GRANT THE MOTION WITHOUT A HEARING. 3. The court has jurisdiction over this motion pursuant to 28 U.S.C. 157 and 1334, Fed. R. Bankr. P. 5005, and Local Rules 1070-1 and 1073-1. This is a core proceeding pursuant to 28 U.S.C. 157(b). Venue is proper pursuant to 28 U.S.C. 1408 and 1409. QB\155907.00003\48778255.3

Document Page 2 of 38 4. This motion arises under 11 U.S.C. 105(a), 363 and 541 and Bankruptcy Rules 2002 and 6004. This motion is filed under Local Rules 6004-1(e) and 9013-1 through 9013-3. Notice of the hearing on this motion is provided pursuant to Bankruptcy Rule 2002(a) and Local Rules 2002-1(b), 2002-4(a), and 9013-3. Notice of this motion has been provided in accordance with the provisions of Local Rules 2002-1 and 2002-4 concerning a sale of less than substantially all of the debtor s assets. RELIEF REQUESTED 5. The debtor requests an order approving the sale of certain real property located at 2617 E. Campbell Avenue, Phoenix, AZ 85016, for the total sum of $725,000.00 to A34 Real Estate Holdings ( A34 ). The sale of the property is governed by the Purchase Agreement dated October 30, 2017. A true and correct copy of the Purchase Agreement is attached hereto as Exhibit A. 6. Bankruptcy Rule 6004(h) provides, in substance, that an order authorizing the use, sale, or lease of a debtor s property is stayed for a period of fourteen (14) days after entry of the order unless the court orders otherwise. The debtor understands the value of this rule to preserve parties rights in cases where objections to sales are filed and not resolved consensually. However, the debtor does not believe that a stay pending appeal will be necessary or appropriate under the circumstances of this case, particularly if no objections to the motion are filed. For this reason, the debtor requests that any order approving the sale be effective immediately. BACKGROUND 7. The debtor filed its voluntary petition on June 1, 2017 and has remained a debtorin-possession pursuant to 11 U.S.C. 1107(a) and 1108. QB\155907.00003\48778255.3 2

Document Page 3 of 38 8. For a description of the debtor and its operations, the debtor respectfully refers the court and parties-in-interest to the Declaration of Thomas A. Enneking, osc in Support of Chapter 11 Petitions [Dkt. No. 9] (the Enneking Declaration ). 9. The property consists of three buildings: two residential structures with a total of 10 studio apartments, and one larger structure where a full kitchen, offices, and a conference room are located. 10. The debtor holds title to the subject real property in fee simple. It believes the property was constructed in the 1950s or 1960s. 11. Prior to the debtor s acquisition, the property was owned by the Diocese of Phoenix and used for religious purposes. The debtor purchased the property from the Diocese in 1984 for $150,000.00. 12. Since 1984, the debtor has added 4 additional apartments, and expanded the main structure to include space for a chapel. 13. The debtor used the property primarily as a residence for individual Crosiers. That changed in 2016, however, when several Crosiers moved to a new location and the debtor transitioned the property into administrative offices in an attempt to downsize and streamline its operations. To generate funds for their plan of reorganization and operations, the debtor determined to sell the property and move the administrative offices into leased office space, just as the Crosiers who previously resided there moved into leased residential space. Therefore, in 2017, the debtor obtained a broker s opinion of value from real estate broker Levrose Real Estate, LLC. 14. In the debtor s schedules filed on June 15, 2017, the debtor valued the property at $1,146,600.00, which was the value that Levrose had opined for the property. QB\155907.00003\48778255.3 3

Document Page 4 of 38 15. At the time debtor filed its schedules, it believed that the broker s opinion of value represented an accurate estimate of the property s value. 16. Since the petition date, the debtor has moved its administrative offices and the few remaining Crosiers residing at the property to other locations. Thus, the property is currently vacant and is no longer necessary to the debtor s ongoing operations. 17. Beginning in June, 2017, Levrose began unofficially marketing the property to various group home and residential treatment business associations, via email and phone calls. It did not generate sufficient interest, so on July 18, 2017, the debtor filed an Application for an Order Authorizing the Employment of Levrose Real Estate, LLC as Real Estate Broker for the Debtor and Debtor-in-Possession [Dkt. No. 59]. 18. On July 20, 2017, the court entered an Order Approving Employment of Levrose Real Estate, LLC as Real Estate Broker for the Debtor-in-Possession [Dkt. No. 60]. 19. Once the order was entered, the property was officially listed for sale at $1.15 million based on the pre-petition opinion of value. The property was listed on Costar and Loopnet, which are the national generally accepted property listing services for this type of property. In the last 90 days, the property s specific information was viewed approximately 16,400 times. 20. The debtor s broker, Levrose, also sent out an email blast to the Arizona Commercial Brokerage Community. This includes 380 commercial Arizona real estate brokers. The email blast was sent six times to this group. 21. Despite the targeted and broad marketing, the debtor received only two offers for the property, one of which was substantially lower than the current offer. 22. The value of a property is highest when it is put to its highest and best use. Due to the unique nature and layout of the property, its highest and best use is as one of the following: (i) QB\155907.00003\48778255.3 4

Document Page 5 of 38 a group home or skilled nursing facility; or (ii) a multifamily residential property. However, potential buyers in those categories considering purchasing the property have brought several difficulties to the debtor s attention that affect the desirability of the property. 23. By way of example, when A34, the current proposed buyer, met with the City of Phoenix, it was informed that the property is currently not up to code. For instance, the property should have a total of 14 parking spots, but it only has 11. Additionally, the current R-3 zoning classification only permits 9 units on the property, but it currently has 10 studio apartments. Fortunately for the debtor, these violations were not enforced against it during its ownership of the property. But any new purchaser of the property seeking building permits will be forced to remedy these violations. 24. Building permits are necessary because, aside from the foregoing, the property will require numerous repairs and upgrades regardless of its ultimate use. If the property is to serve as a group home or skilled nursing facility, each of the studio apartments would require substantial upgrades to accommodate the elderly, sick, or disabled (depending on the type of home or nursing facility) before they would be suitable. On the other hand, if used as multifamily residence, at a minimum, the studio apartments would need to be renovated to include kitchenettes as well as other basic amenities expected in modern multifamily housing. The building including the group kitchen and chapel would also have to be renovated for a use other than residences, given that the number of units on the property already exceeds that allowed by code. 25. Regardless of the ultimate use, the property is at least 50 years old, and there are predictably some general deferred maintenance issues that will require attention. One specific matter of concern is that the roofs on all three structures will require replacement in the near future, QB\155907.00003\48778255.3 5

Document Page 6 of 38 and the property will need to be made more accessible to bring it into compliance with regulations promulgated under the Americans with Disabilities Act of 1991. 26. Not surprisingly considering these issues that will require substantial investment by a buyer before the property will be suited to its use, the debtor received no interest in the property at the listing price. All interest in the property has been at a substantially lower purchase price. In fact, prior to entering into the Purchase Agreement, the only other offer received by the debtor was for $550,000.00. 27. After the current proposed buyer, A34 s, initial offer at an amount below $700,000.00, the debtor successfully negotiated the purchase price up to $725,000.00. The debtor now believes this is the highest and best offer it can obtain for the property. 28. The Purchase Agreement is conditioned upon the approval of this Court. Additionally, it contains a thirty-seven (37) day diligence period in which the buyer may rescind the Purchase Agreement for any reason without penalty. The diligence period began to run on October 30, 2017, and will expire on December 6, 2017. 29. A34 has made the $30,000.00 earnest money deposit required under the Purchase Agreement, which is fully refundable to A34 until the diligence period has expired. After that time, the earnest money will be retained by the debtor if A34 does not consummate the sale. 30. A34 is a third party unrelated to the debtor, and the Purchase Agreement represents an arms-length transaction negotiated in good faith. 31. To the best of the debtor s knowledge, the property is not subject to any existing liens or encumbrances, so the entire purchase price will be remitted to the debtor to be used as part of its contribution for a plan of reorganization. QB\155907.00003\48778255.3 6

Document Page 7 of 38 32. As indicated in the Enneking Declaration, the debtors have entered into a settlement with their insurers, Twin City Fire Insurance Company and Hartford Accident and Indemnity Company. Pursuant to that settlement, the debtors have agreed to contribute a sum certain to a plan of reorganization. The debtors will be seeking approval of that settlement by separate motion and through the plan. It is mentioned here only to confirm that the purchase price of the property will have no impact on the amount of the contribution to be made by the debtors to a plan. 33. The debtor has discussed the relief requested herein with the committee, and the committee has no objection to this motion. 34. This motion is supported by the attached memorandum of law and proposed order, in addition to the Affidavit of Aaron Norwood in Support of Debtor s Motion for an Order Approving the Sale of Real Property. Attached hereto as Exhibit B. WHEREFORE, the debtor requests entry of an order: A. Approving the sale of the property; B. Waiving the stay provision of Bankruptcy Rule 6004(h); and C. Granting such other and further relief as the court deems just and equitable under the circumstances. Dated: November 9, 2017. QUARLES & BRADY LLP /s/ Elizabeth S. Fella Susan G. Boswell (AZ Bar No. 004791) Lori L. Winkelman (AZ Bar No. 021400) Elizabeth S. Fella (AZ Bar No. 025236) Admitted Pro Hac Vice One S. Church Ave., Suite 1700 Tucson, AZ 85701 (520) 770-8700 susan.boswell@quarles.com lori.winkelman@quarles.com elizabeth.fella@quarles.com QB\155907.00003\48778255.3 7

Document Page 8 of 38 -and- Thomas J. Flynn (MN Bar No. 0030570) LARKIN HOFFMAN 8300 Norman Center Drive Suite 1000 Minneapolis, Minnesota 55437 (952) 896-3362 tflynn@larkinhoffman.com Counsel for the Debtor QB\155907.00003\48778255.3 8

Document Page 9 of 38 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA In re: THE CROSIER COMMUNITY OF PHOENIX, an Arizona non-profit corporation, Chapter 11 Case No. 17-41683 Debtor. VERIFICATION OF THOMAS ENNEKING, OSC I, Thomas Enneking, President of The Crosier Community of Phoenix, declare under penalty of perjury that the facts contained in the motion and memorandum are true and correct to the best of my knowledge, information and belief. Executed on: November 9, 2017 /s/ Thomas Enneking THOMAS ENNEKING, osc QB\155907.00003\48778255.3 9

Document Page 10 of 38 EXHIBIT A

Document Page 11 of 38

Document Page 12 of 38

Document Page 13 of 38

Document Page 14 of 38

Document Page 15 of 38

Document Page 16 of 38

Document Page 17 of 38

Document Page 18 of 38

Document Page 19 of 38

Document Page 20 of 38

Document Page 21 of 38

Document Page 22 of 38

Document Page 23 of 38

Document Page 24 of 38

Document Page 25 of 38

Document Page 26 of 38 EXHIBIT B

Document Page 27 of 38 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA In re: THE CROSIER COMMUNITY OF PHOENIX, an Arizona non-profit corporation, Chapter 11 Case No. 17-41683 Debtor. AFFIDAVIT OF AARON NORWOOD IN SUPPORT OF DEBTOR'S MOTION FOR AN ORDER APPROVING THE SALE OF REAL PROPERTY TO: The United States Bankruptcy Judge, the United States Trustee, and other parties-ininterest as specified in Local Rule 9013-3(a)(2). I, Aaron Norwood, hereby declare under penalty of perjury of the laws of the United States as follows: 1. I am a senior associate with Levrose Commercial Real Estate. I have more than ten years of experience in the commercial real estate market, and specialize in sales of multitenant properties. 2. In my capacity with Levrose, as authorized by the Bankruptcy Court in its Order Approving Employment of Levrose Real Estate, LLC as Real Estate Broker for the Debtor-In- Possession [Dkt. No. 60] entered on July 20, 2017, I represent the Crosier Community of Phoenix in its efforts to sell that certain real property located at 2617 E. Campbell Ave., Phoenix, AZ 85016. 3. The property consists of three buildings: two residential structures with a total of 10 studio apartments, and one larger structure where a full kitchen, offices, and a conference room are located. In May, 2017, Levrose provided the debtor with its opinion of value on the property. Levrose valued the property at $1,146,600.00. Note that an opinion of value is exactly QB\155907.00003\49121972.1

Document Page 28 of 38 what the name indicates: it is a mere opinion of value, not an appraisal. As such, is not performed with the same degree of detailed inspection and analysis that must be undertaken in an appraisal. 4. Beginning in June, 2017, I began unofficially marketing the property to various group home and residential treatment business associations, via email and phone calls. However, the property did not generate sufficient interest with these groups, so it was necessary to widen the marketing campaign. 5. In July, 2017, I listed the property on multiple listing services for sale at $1.15 million. These were Costar and Loopnet, which are the national generally accepted property listing services for this type of property. In the last 90 days, the property s specific information was viewed approximately 16,400 times through these services. 6. During this period, I also sent out an email blast regarding this property to the Arizona Commercial Brokerage Community. This includes 380 commercial Arizona real estate brokers. The email blast was sent six times to this group. 7. The value of a property is highest when it is put to its highest and best use. Due to the unique nature and layout of the property, its highest and best use is as one of the following: (i) a group home or skilled nursing facility; or (ii) a multifamily residential property. However, potential buyers in those categories considering purchasing the property have brought several difficulties to the debtor s attention that affect the desirability of the property. 8. A34, the current proposed buyer, informed me that when it met with the City of Phoenix, it was informed that the property is currently not up to code. For instance, the property should have a total of 14 parking spots, but it only has 11. Additionally, the current R-3 zoning classification only permits 9 units on the property, but it currently has 10 studio apartments. QB\155907.00003\49121972.1 2

Document Page 29 of 38 Fortunately for the debtor, these violations were not enforced against it during its ownership of the property. But any new purchaser of the property seeking building permits will be forced to remedy these violations. 9. Building permits are necessary because, aside from the foregoing, the property will require numerous repairs and upgrades regardless of its ultimate use. If the property is to serve as a group home or skilled nursing facility, each of the studio apartments would require substantial upgrades to accommodate the elderly, sick, or disabled (depending on the type of home or nursing facility) before they would be suitable. On the other hand, if used as multifamily residence, at a minimum, the studio apartments would need to be renovated include kitchenettes as well as other basic amenities expected in modern multifamily housing. The building including the group kitchen and chapel would also have to be renovated for a use other than residences, given that the number of units on the property already exceeds that allowed by code. 10. The roofs on all three structures will require replacement in the near future, and the property will need to be made more accessible to bring it into compliance with regulations promulgated under the Americans with Disabilities Act of 1991. 11. These issues were not taken into account in our pre-petition opinion of value. They will require substantial investment by a buyer before the property will be suited to its use. As a result, we did not receive any interest in the property when it was listed for $1,150,000. 12. All interest in the property has been at a substantially lower purchase price. In fact, prior to entering into the Purchase Agreement, the only other offer received was for $550,000. QB\155907.00003\49121972.1 3

Document Page 30 of 38 13. After the current proposed buyer, A34 s, initial offer at an amount below $700,000, the debtor successfully negotiated the purchase price up to $725,000. The debtor now believes this is the highest and best offer it can obtain for the property because this and the $550,000 offers were the only two offers it obtained. 14. A34 and the debtor negotiated the Purchase Agreement that is attached to the debtor's motion at arms-length and, to the best of my knowledge, are not related to each other or to Levrose. If called to testify in this matter, I would testify as set forth above under penalty of perjury of the laws of the United States. RESPECTFULLY SUBMITTED this 8th day of November, 2017. Aaron Norwood Senior Associate, Levrose Commercial Real Estate QB\155907.00003\49121972.1 4

Document Page 31 of 38 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA In re: THE CROSIER COMMUNITY OF PHOENIX, an Arizona non-profit corporation, Chapter 11 Case No. 17-41683 Debtor. MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION FOR AN ORDER APPROVING THE SALE OF REAL PROPERTY The Crosier Community of Phoenix respectfully submits this memorandum in support of its motion seeking an order approving the sale of real property as contemplated by the Purchase Agreement. I. FACTS. The factual basis for this memorandum is set forth in the motion and is incorporated as though fully set forth herein. II. LEGAL ARGUMENT. A. The sale of the property should be approved because it is a valid exercise of the debtor s business judgment. Courts have uniformly held that a sale of property of a bankruptcy estate should be approved when it is justified by a sound business purpose. See Four B. Corp. v. Food Barn Stores, Inc. (In re Food Barn Stores, Inc.), 107 F.3d 558, 567 n.16 (8th Cir. 1997). As long as a sale appears to enhance a debtor s estate, court approval of a trustee s decision to sell should only be withheld if the trustee s judgment is clearly erroneous, too speculative, or contrary to the provisions of the Bankruptcy Code. GBL Holding Co., Inc. v. Blackburn/Travis/Cole, Ltd., 331 B.R. 251, 255 (N.D. Tex. 2005); In re Lajijani, 325 B.R. 282, 289 (B.A.P. 9th Cir. 2005); In re QB\155907.00003\48778255.3 10

Document Page 32 of 38 WPRV-TV, Inc., 143 B.R. 315, 319 (D.P.R. 1991) ( The trustee has ample discretion to administer the estate, including authority to conduct public or private sales of estate property. Courts have much discretion on whether to approve proposed sales, but the trustee s business judgment is subject to great judicial deference. ). The rules applicable to sales by a trustee have been applied with equal force to sales proposed by a debtor acting as debtor-in-possession under 11 U.S.C. 1107 and to proposals made by a trustee or debtor-in-possession with respect to the procedures to govern the proposed sale. See, e.g., Official Committee of Subordinated Bondholders v. Integrated Resources, Inc. (In re Integrated Resources, Inc.), 147 B.R. 650, 656 57 (Bankr. S.D.N.Y. 1992). The debtor firmly believes it is in the best interest of the debtor s estate to sell the property under the Purchase Agreement. The sale of the property will result in cash to the estate, and will assist the debtor in contributing to a plan of reorganization (although, again, the purchase price does not affect the debtor s contribution to the plan, which will be a sum certain that was negotiated pre-petition). The debtor has professionally marketed the property for a reasonable period of time, with targeted information having been provided to group home and residential treatment businesses and 380 Arizona commercial real estate brokers, and listed on national real estate listing services. The property received approximately 16,400 views on those services, but the debtor received only two offers, one of which was substantially lower than the current offer. Based upon its marketing efforts, the newly-discovered existing code and zoning violations, and the condition of the property, the debtor believes that the purchase price constitutes the fair market value of the property. The debtor has been able to negotiate a reasonably short diligence period for the purchaser and believes that the price and terms set forth in the Purchase Agreement are the highest and best available. Additionally, the property is not necessary for the debtor s operations and will QB\155907.00003\48778255.3 11

Document Page 33 of 38 merely burden the debtor with the cost of upkeep and utilities if it remains on the market. Moreover, the committee has been informed of the relief requested herein, and the committee has no objection to this motion. For all these reasons, the sale contemplated by the Purchase Agreement should be approved. B. The buyer is entitled to protection under 11 U.S.C. 363(m). In accordance with 11 U.S.C. 363(m), a good faith purchaser is one who purchases assets for value, in good faith, and without notice of adverse claims. In re Made In Detroit, Inc., 414 F.3d 576, 581 (6th Cir. 2005); In re Mark Bell Furniture Warehouse, Inc., 992 F.2d 7, 9 (1st Cir. 1993); In re Willemain v. Kivitz, 764 F.2d 1019, 1023 (4th Cir. 1985); In re Abbotts Dairies of Pennsylvania, Inc., 788 F.2d 143, 147 (3rd Cir. 1986). The Purchase Agreement was negotiated at arms length. To the debtor s knowledge, the buyer is not related to the debtor or the other owners in any way. The sale will be voluntary, without compulsion or duress, and with each party acting in its own self-interest. The debtor believes that providing the buyer with 363(m) protection will ensure that closing of the proposed sale will occur promptly and the maximum price will be received for the property. Accordingly, any order approving the proposed sale should include a provision that the buyer is a good faith purchaser within the meaning of 11 U.S.C. 363(m) and contain a finding that the sale constitutes an arms length sale between a willing seller and a willing buyer. C. Waiver of Rule 6004(h). The debtor further requests that the (fourteen) 14-day stay that would otherwise be imposed by Fed. R. Bankr. P. 6004(h) be lifted to permit the proposed sale and to close as soon as possible upon the entry of an order granting this motion. QB\155907.00003\48778255.3 12

Document Page 34 of 38 III. CONCLUSION. For the foregoing reasons, the debtor respectfully requests that the court grant this motion and grant the debtor such other and further relief it deems just and equitable under the circumstances. Dated: November 9, 2017. QUARLES & BRADY LLP /s/ Elizabeth S. Fella Susan G. Boswell (AZ Bar No. 004791) Lori L. Winkelman (AZ Bar No. 021400) Elizabeth S. Fella (AZ Bar No. 025236) Admitted Pro Hac Vice One S. Church Ave., Suite 1700 Tucson, AZ 85701 (520) 770-8700 susan.boswell@quarles.com lori.winkelman@quarles.com elizabeth.fella@quarles.com -and- Thomas J. Flynn (MN Bar No. 0030570) LARKIN HOFFMAN 8300 Norman Center Drive Suite 1000 Minneapolis, Minnesota 55437 (952) 896-3362 tflynn@larkinhoffman.com Counsel for the Debtor QB\155907.00003\48778255.3 13

Document Page 35 of 38 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA In re: THE CROSIER COMMUNITY OF PHOENIX, an Arizona non-profit corporation, Chapter 11 Case No. 17-41683 Debtor. ORDER APPROVING THE SALE OF REAL PROPERTY This case came before the court on the motion of the debtor seeking an order approving the sale of real property. Based on the motion and the file, IT IS ORDERED: 1. The motion is granted; 2. The Purchase Agreement is approved and the sale of the property pursuant to the Purchase Agreement is authorized under 11 U.S.C. 363(b); 3. The debtor is authorized to take all actions and execute and deliver all documents, instruments and agreements consistent with the Purchase Agreement that are deemed necessary or appropriate to implement and effect the sale of the property; 4. The debtor is authorized to pay from the proceeds of the sale any and all customary closing or title fees and expenses and all other expenses required to be paid under the terms of the Purchase Agreement; DATED: 5. The buyer is a good faith purchaser within the meaning of 11 U.S.C. 363(m); 6. Notwithstanding Fed. R. Bankr. P. 6004(h), this order is effective immediately. ROBERT J. KRESSEL UNITED BANKRUPTCY COURT JUDGE QB\155907.00003\48778255.3 14

Document Page 36 of 38 UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA In re: THE CROSIER COMMUNITY OF PHOENIX, an Arizona non-profit corporation, Chapter 11 Case No. 17-41683 Debtor. CERTIFICATE OF SERVICE I, Elizabeth S. Fella, declare under penalty of perjury that on November 9, 2017 I caused to be served the foregoing Notice of Hearing and Motion for an Order Approving the Sale of Real Property to each entity named below at the e-mail address or mailing address stated for each entity: Sarah J. Wencil U.S. Trustee s Office 1015 U.S. Courthouse 300 South Fourth Street Minneapolis, MN 55415 sarah.j.wencil@usdoj.gov Robert W. Vaccaro Gaskins Bennett Birrell Schupp LLP 333 South 7th Street, Suite 3000 Minneapolis, MN 55402-2440 rvaccaro@gaskinsbennett.com Debtors Proposed Special Insurance Counsel Robert L. McCollum McCollum, Crowley, Moschet, Miller & Laak, Ltd. 700 Wells Fargo Plaza 7900 Xerxes Avenue South Bloomington, MN 55431 rlm@mccollumlaw.com Local Counsel for Twin City Fire Insurance Company and Hartford Accident and Indemnity Company U.S. Trustee s Office U.S. Trustee s Office 1015 U.S. Courthouse 300 South Fourth Street Minneapolis, MN 55415 ustpregion12.mn.ecf@usdoj.gov William Tipping Larson King 30 East Seventh Street Saint Paul, MN 55101 btipping@larsonking.com Debtors Proposed Special Litigation Counsel Joshua D. Weinberg Corinne Lane Shipman & Goodwin 1875 K Street NW, Suite 600 Washington, DC 20006 JWeinberg@goodwin.com CLane@goodwin.com Counsel for Twin City Fire Insurance Company and Hartford Accident and Indemnity Company QB\155907.00003\48778255.3 15

Document Page 37 of 38 Jeffrey R. Anderson Mike Finnegan Jeffrey Anderson & Associates 366 Jackson Street, Suite 100 St. Paul, MN 55101 Jeff@andersonadvocates.com Mike@andersonadvocates.com Counsel for Various Tort Claimants and Individual Members of the Official Committee of Unsecured Creditors Michael A. Bryant Bradshaw & Bryant, PLLC 1505 Division Street Waite Park, MN 56387 mike@minnesotapersonalinjury.com Counsel for Certain Personal Injury Creditors Patrick W. Ledray 10740 Zieglers Drive Brooklyn Park, MN 55443 ledraylaw@aol.com Counsel for Tort Claimant *Courtesy copy, has not appeared. Office of the Attorney General 445 Minnesota Street, Suite 1400 St. Paul, MN 55101 Internal Revenue Service Wells Fargo Place 30 E. 7th Street Mail Stop 5700 St. Paul, MN 55101 Robert T. Kugler Edwin H. Caldie Phillip J. Ashfield Brittany M. Michael Andrew J. Glasnovich Stinson Leonard Street LLP 150 South Fifth Street, Suite 2300 Minneapolis, MN 55402 robert.kugler@stinson.com ed.caldie@stinson.com phillip.ashfield@stinson.com brittany.michael@stinson.com drew.glasnovich@stinson.com Counsel for the Official Committee of Unsecured Creditors Anthony Pirrotti, Jr. Pirrotti & Glatt Law Firm LLC 2 Overhill Road, Suite 200 Scarsdale, NY 10583 anthony@pirrottilawfirm.com Counsel for Tort Claimant *Courtesy copy, has not appeared. Mark Gallagher Law Offices of Mark Gallagher 66 Kaiholu Place Kailua, Hawaii 96734 *Courtesy copy, has not appeared. City of Onamia 621 Main Street Onamia, MN 56359 Internal Revenue Service Centralized Insolvency Operations Unit P.O. Box 7346 Philadelphia, PA 19101 QB\155907.00003\48778255.3 16

Document Page 38 of 38 District Counsel Internal Revenue Service 380 Jackson Street, Suite 650 St. Paul, MN 55101 Office of the U.S. Attorney 600 U.S. Courthouse 300 S. Fourth Street Minneapolis, MN 55415 Minnesota Department of Revenue Collection Enforcement 551 Bankruptcy Section 600 N. Robert Street St. Paul, MN 55101 Secretary of State 60 Empire Drive, Suite 100 St. Paul, MN 55103 Dated: November 9, 2017 /s/ Elizabeth S. Fella QB\155907.00003\48778255.3 17