Case 11-35082 Doc 480 Filed 11/30/12 Entered 11/30/12 10:35:44 Desc Main Document Page 1 of 6 Gregory J. Adams (6159) Jeremy C. Sink (9916) McKAY, BURTON & THURMAN For Castle Arch Opportunity Partners I 170 South Main Street, Suite 800 Salt Lake City, Utah 84101 Telephone: (801) 521-4135 Telefax: (801) 521-4252 E-mail: gadams@mbt-law.com E-mail: jsink@mbt-law.com IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF UTAH CENTRAL DIVISION In re: : : CASTLE ARCH REAL ESTATE : Bankruptcy No. 11-35082 INVESTMENT COMPANY, LLC; : Bankruptcy No. 11-35237 CASTLE ARCH OPPORTUNITY : Bankruptcy No. 11-35240 PARTNERS I, LLC; CASTLE ARCH : Bankruptcy No. 11-35241 OPPORTUNITY PARTNERS II, LLC; : Bankruptcy No. 11-35242 CASTLE ARCH KINGMAN, LLC; : Bankruptcy No. 11-35243 CASTLE ARCH SECURED : Bankruptcy No. 11-35246 DEVELOPMENT FUND, LLC; AND : (Jointly Administered Chapter 11) CASTLE ARCH SMYRNA, LLC, : : Honorable Joel T. Marker Debtor(s). : MOTION FOR AN ORDER APPROVING THE SALE OF REAL PROPERTY FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS D. Ray Strong, as Chapter 11 Trustee for Castle Arch Real Estate Investment Company, LLC and manager of affiliated entities (the Trustee and Manager ), including Castle Arch Opportunity Partners, I, LLC, herein moves the Court for an order approving the sale of real property located at 5313 South 51 st Dr., Laveen, AZ 85339, also known as Assessor s # 104-74- 601, also known as River Walk Villages Phase 2A Lot #50, as more fully described below. The Trustee/Manager makes this motion pursuant to Sections 363 and 724 of the Bankruptcy Code and
Case 11-35082 Doc 480 Filed 11/30/12 Entered 11/30/12 10:35:44 Desc Main Document Page 2 of 6 Bankruptcy Rule 6004. In support of this motion, the Trustee/Manager respectfully states as follows: Jurisdiction 1. This Court has jurisdiction to consider this motion pursuant to 28 U.S.C. 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). Venue is proper pursuant to 28 U.S.C. 1408. Case Information 2. On October 17, 2011, Castle Arch Real Estate Investment Company, LLC ( CAREIC ) filed a petition seeking relief under Chapter 11 of the Bankruptcy Code. 3. On October 20, 2011, each of the other debtors also filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (together with CAREIC, these entities are referred to herein as the Debtors ). This October 20, 2011 petition date, together with CAREIC s October 17, 2011 petition date, are referred to herein as the Petition Date. 4. The Debtors respective Chapter 11 cases are being jointly administered. 5. On May 3, 2012, the Trustee/Manager was appointed the Chapter 11 Trustee of CAREIC. 6. Among other assets, Castle Arch Opportunity Partners, I, LLC owns real property located at 5313 South 51 st Dr., Laveen, AZ 85339, also known as Assessor s # 104-74- 601, also known as River Walk Villages Phase 2A Lot #50 (hereinafter the Property ). 7. The Trustee/Manager proposes the sale of the Property to the buyer described below, or the sale of the same to a higher and better bidder, if any, pursuant to the terms set forth herein. 2
Case 11-35082 Doc 480 Filed 11/30/12 Entered 11/30/12 10:35:44 Desc Main Document Page 3 of 6 8. In order to maximize the recovery for the Debtors and its creditors, if there are additional bidders, the Trustee\Manager will hold an auction to sell the Property. Terms of Proposed Sale 9. Identification of Purchaser. The purchaser is Graeme Anderson. 10. Property to be Sold. Graeme Anderson has offered to purchase the Property for $142,000 ( Purchase Price ). The closing is to occur within 40 days of bankruptcy court approval as set forth in the Real Estate Purchase Contract and addendums (collectively the REPC ) attached hereto as Exhibit 1. The REPC has been negotiated at arms length and in good faith by the Trustee/Manager and Graeme Anderson. The Trustee/Manager reasonably believes and therefore alleges that the Graeme Anderson is a good faith purchaser within the meaning of 11 U.S.C. 363 and that the sale price is not and will not be controlled by an agreement prohibited by 11 U.S.C. 363(n). The sale includes the following: A. Real property and improvements located at 5313 South 51 st Dr., Laveen, AZ 85339, also known as Assessor s # 104-74-601, also known as River Walk Villages Phase 2A Lot #50,. 11. Liens. The Property is to be sold free and clear of any and all liens, claims, encumbrances and interests with valid liens to attach to the proceeds. 12. Distribution of Sale Proceeds. The Trustee/Manager intends to close this transaction at Magnus Title. From the sale proceeds the Trustee/Manager will pay the following: A. 6% broker/agent commissions 3
Case 11-35082 Doc 480 Filed 11/30/12 Entered 11/30/12 10:35:44 Desc Main Document Page 4 of 6 B. Property taxes; C. Title insurance; and D. Other miscellaneous closing costs required at closing. Solicitation of Competing Bids and Description of Auction Procedure 13. Sale Subject to Higher and Better Bids. The Trustee/Manager s sale of the Property is subject to higher and better bids and the Trustee/Manager hereby solicits competing bids from parties in interest. 14. Procedure for higher and better bids. Any higher and better bid is to be made to the Trustee/Manager in writing at least four (4) business days prior to the scheduled hearing ( Bid Deadline ) to approve this agreement. The Trustee/Manager shall give notice of any higher and/or better offers to Graeme Anderson and shall arrange an auction between Anderson and any party(ies) making a higher and better offer prior to the hearing to approve this agreement. The highest and/or best bidder at this auction along with its winning bid shall then be presented to the Court as the purchasing party for the Property at the hearing for this motion. The highest and/or best bidder at any auction agrees to pay the bid amount within 40 days of bankruptcy court approval and accept the sale subject to all other terms set forth herein and set forth on the REPC. 15. Higher and Better Bids. Higher and/or better offers must be a minimum of $1,000.00 greater than the current highest offer accepted by the Trustee/Manager and subsequent bids at the auction, if any, shall be in increments of not less than $500.00. Bidders must agree to and sign the REPC in a form similar to the document attached hereto as Exhibit 1 and provide documentation of a financing source or proof of cash sufficient to pay the Purchase Price. 4
Case 11-35082 Doc 480 Filed 11/30/12 Entered 11/30/12 10:35:44 Desc Main Document Page 5 of 6 16. Default. In the event the successful bidder does not pay the Purchase Price within 40 days of bankruptcy court approval, this agreement shall be null and void and the Property shall remain property of the bankruptcy estate, or sold to a backup bidder as set forth below. Additionally, any earnest money or other deposits submitted to the Trustee/Manager in connection with the purchase or bid will be forfeited upon default. 17. Auction Procedures. If one or more qualified competing bids are submitted by the Bid Deadline, the Trustee/Manager will conduct an auction on the following terms: a) The Property will be auctioned as a single lot. The auction will be a stand alone auction, meaning that the successful bidder will be entitled to purchase the property notwithstanding that another bidder may attempt to offer more for the Debtor s entire estate or any other combination of lots which includes these assets. b) The auction will only be held if the Trustee/Manager receives a timely qualified bid which the Trustee determines to be higher and better than the Anderson offer. Further notice of the auction will be arranged between the Trustee and the respective bidders. c) Bids at the auction will be in increments of at least $500.00 greater than the last bid, and the auction will be closed within a reasonable time after the last bid made, within the Trustee/Managers s discretion. d) The winning bidder must close the sale and pay the balance of the Purchase Price above the deposit no later than forty days after entry of the Court order approving the sale. e) The Trustee/Manager may take a backup bid from any third party for the sale of the Property on terms that may be agreed to between the Trustee/Manager and that third 5
Case 11-35082 Doc 480 Filed 11/30/12 Entered 11/30/12 10:35:44 Desc Main Document Page 6 of 6 party; provided however, any backup bid shall be expressly made subject to the failure of the winning bidder at the auction to timely close upon its winning bid and Court approval. 18. Request for Waiver of Stay. To enable the successful buyer to close on the Property earlier, if desired, the Trustee requests that the Court order that the 14 day stay of Bankruptcy Rule 6004(h) be waived and that the order approving the sale be effective upon entry. WHEREFORE, the Trustee respectfully requests that the Court enter an order granting the relief requested herein. DATED this 30 th day of November, 2012. McKAY, BURTON & THURMAN By: /S/ Jeremy C. Sink Attorneys for CAOP I, LLC 6
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