FROM: Stephen J. Lord, Attorney at Law, Counsel to Tamarack Municipal Association
RE: Foreclosure Update
DATE: July 11, 2012
Credit Suisse foreclosure
On June 18, 2012, Judge Owen issued two critical documents in this case:
1. Credit Suisse’s Decree of Foreclosure (the “Decree”), which is now a final, enforceable, and appealable judgment, and
2. A Memorandum Decision and Order (the “OPINION”) regarding disputed issues between Credit Suisse and senior construction lien creditors on the Village Plaza, BAG, Trillium, and Lake Wing properties. Those “senior lien creditors” are BAG Holdings, Tri State Electric, Kessler Construction, OZ Architecture, MHTN Architects, and Banner/Sabey Construction Company.
On July 2 and 3, 2012, Banner Sabey, OZ, Tri State, MHTN and BAG filed motions to reconsider the omission of the Receivership Moan from the prior decisions.
Among other things, the Judge’s June 18th Opinion determined that the $12,000,000 Receivership Mortgage, and its priority and status, had not been adjudicated because none of the senior creditors had amended their complaints to seek foreclosure of this “Receivership Mortgage.” The court itself created the Receivership Mortgage during Douglas Wilson’s failed attempt to keep the Resort operating through 2009. Wilson shut off ski operations on March 4th, 2009, and terminated the Receivership after spending $12,000,000 on his own fees, legal fees and an operating budget from October 2008 to March 2009. However, that left a $12,000,000 court-imposed mortgage on the Resort. As part of obtaining approval for imposing the Receivership Mortgage, the Receivership Lenders agreed that the Receivership Mortgage would have the same priority as the initial $250,000,000 credit Suisse mortgage from 2006.
Judge Owen’s prior decisions determined that Tristate, OZ, Kessler Construction, MHTN and Banner Sabey had liens that are senior to Credit Suisse’s initial mortgage on Village Plaza. Bag Holdings has a senior lien on certain parcels outside of Village Plaza that are set aside for luxury hotel sites. OZ Architecture also has a lien for work done on Trillium Townhomes, and MHTN has a senior lien on the incomplete Lake Wing. Both of these are likewise senior to the Credit Suisse $250,000,000 mortgage. Banner/Sabey filed a motion to reconsider and have the Court re-determine that foreclosure of these senior construction lien claims would also foreclose the Receivership Mortgage.
This is the only matter on which any parties requested reconsideration as a result of the June 18th, 2012, Opinion. BAG, Tri-State and MHTN joined Banner/Sabey’s Motion to Reconsider. OZ filed its own Motion to Reconsider. Banner/Sabey and OZ alternatively moved to add as defendant Credit Suisse in its capacity as agent for the Receiver Mortgage. MHTN, BAG and Tri-State also joined in this alternative.
Other issues which might have been raised would be whether or not the senior lien creditors ranked between Tri-State and Credit Suisse (including Kessler, OZ, MHTN, and Banner/Sabey) were or were not entitled to be classified as “redemptioners.” In the June 18th opinion, Judge Owen decided that this set of lien creditors are not entitled to redeem once one of them starts the process. However, the parties did not request reconsideration of this ruling. Also, none of them contested the Judge’s decision that credit bidding would not be allowed on Village Plaza.
On July 10th, 2012, OZ provided notice that its motion to reconsider or in the alternative to amend its complaint will be heard on August 2nd, 2012, at 10:00 AM in the Ada County courthouse. BAG also asked for an August 2nd, 2012, 10:00 AM hearing on its motion and joined Banner Sabey’s motions.
None of the motions to reconsider have an impact on the previously reported dates for events that arise from the June 18 Decree that the Judge issued allowing Credit Suisse to foreclose. Again, that decree starts the 42-day time for appeals. That appeal period expires at the close of business on July 30th. Credit Suisse has indicated that it will wait for the appeal period to expire before it asks the sheriff to start the auction/sale process.
If no appeal is filed, Credit Suisse has indicated that it plans to move promptly to foreclose through a Sheriff’s sale, meaning that it would have the right of possession to all parts of the Resort still owned by Tamarack Resort LLC aside from Village Plaza, Lake Wing and certain Trillium Townhomes. Tamarack Resort LLC has a one-year right of redemption after the date the Sheriff issues her “certificate of sale” on the day of foreclosure. The Sheriff must provide notice of the time and place of the sale (auction) to all parties 20 days prior to the sale date.
If an appeal is filed, it may create other delay. As further matters and issues evolve in this case, we will keep you updated.
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