HomeMy WebLinkAboutExhibitSTIPULATION OF SETTLEMENT
THIS Stipulation (the "Stipulation"), dated as of November _, 2007, is entered
into by Wynwood Community Economic Development Corporation, Inc., as debtor and debtor in
possession, ("Wynwood" or the "Debtor") and the City of Miami, a municipal corporation of the
State of Florida, (the "City"). Wynwood and the City are hereafter referred to as the "Parties"
and each a "Party".
RECITALS
A. On June 15, 2005 (the "Petition Date"), Wynwood filed a voluntary petition under
Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States
Bankruptcy Court for the Southern District of Florida (the "Bankruptcy Court") under Case No.
05-15867-BKC-AJC (the "Chapter 11 Case").
B. Wynwood is the fee simple owner of the real property described on the attached
Exhibit A (the "Wynwood Parcel") and the real property described on the attached Exhibit B (the
"Outparcels").
C. The Wynwood Parcel was deeded by the City to Wynwood. The City asserts a
right of reverter (the "Reverter") with respect to the Wynwood Parcel that is contained in one or
more deeds, including a Special Warranty Deed dated September 7, 1990; a Corrective Special
Warranty Deed dated February 18, 1993; and Second Corrective Special Warranty Deeds dated
July 8, 1993, July 6, 1994, and March 16, 1995. The City also asserts a mortgage lien by virtue
of a Mortgage and Security Agreement dated March 10, 1997, recorded in Official Records Book
17561, page 4230, or otherwise (the "Mortgage") on the Wynwood Parcel. Wynwood disputes
the enforceability of mortgage on, and the Reverter with respect to, the Wynwood Parcel.
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D. The City commenced a foreclosure proceeding with respect to the Wynwood
Parcel in the Circuit Court in and for Miami -Dade County styled City of Miami v. Wynwood
Community Economic Development Corporation, et al., Case No. 94-12875-CA-30'. In the
Foreclosure Proceeding, the Circuit Court denied the City the right to foreclosure the Wynwood
Parcel based in part, upon the City's breach of a settlement agreement between the City and
Wynwood. The City contends that the Circuit Court has not set aside or otherwise invalidated
the City's mortgage.
E. Pursuant to the terms of a Note and Mortgage dated March 23, 1998, recorded in
Official Records Book 18035, page 1838, Miami Capital Development, Inc. ("Miami Capital"),
an affiliate of the City, made loans and other advances (the "DFTZ Loan") to Dade Foreign
Trade Zone ("DFTZ"). Wynwood granted Miami Capital a mortgage lien on the Outparcels as
additional collateral security for the DFTZ Loan (the "Outparcel Mortgage"). Wynwood is not
an obligor with respect to the DFTZ Loan. The City asserts that it owns and holds the DFTZ
Loan, including the Outparcel Mortgage. Wynwood contests the validity and enforceability of
the Outparcel Mortgage.
F. On or about May 5, 2005, Wynwood and its counsel filed in the Foreclosure
Proceeding an application for the allowance and payment of the attorneys' fees and costs
incurred in connection with the Foreclosure Proceeding (the "Fee Request"). As of the date
hereof, the Fee Request is pending and has not been adjudicated by the Circuit Court. The City
disputes that it is liable for any of Wynwood's attorneys' fees and costs, including those that are
the subject of the Fee Request.
. Case No. 94-12875-CA-30 was consolidated with Case No. 99-13762-CA-30. Both cases shall together be
referred to as the "Foreclosure Proceeding".
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G. On December 11, 2000, Wynwood commenced an action against the City in the
United States District Court for the Southern District of Florida styled Wynwood Community
Economic Development Corporation v. City of Miami, Case No.00-4680-JAL (the "District
Court Action"). The City disputes any liability in the District Court Action.
H. On March 14, 2007, Wynwood filed an adversary proceeding in the Bankruptcy
Case, Case No. 07-01135-BKC-AJC-A (the "Adversary Proceeding"), seeking an adjudication of
the validity, priority and extent of the liens and interests asserted against the Wynwood Parcel,
including the Mortgage and Reverter. The City filed an Answer and Affirmative Defenses and
has also moved for partial summary judgment in the Adversary Proceeding.
I. In connection with its anticipated plan of reorganization, Wynwood shall sell the
Wynwood Parcel free and clear of all liens, claims, interests and encumbrances pursuant to 11
U.S.C. § 363 and such sale shall be subject to competitive bidding, including the submission of
higher or better offers. It is contemplated that the Wynwood Parcel will be sold together with an
adjacent parcel of real property owned by Realty Investment & Mortgage Corporation (the
"RIMCI Parcel"), which is described on Exhibit C, in accordance with a settlement agreement
between Wynwood and RIMCI, approved by the Bankruptcy Court on May 9, 2007 (the "RIMCI
Settlement"). The RIMCI Settlement provides a formula for the division of sale proceeds
between Wynwood and RIMCI. The Wynwood Parcel and the RIMCI Parcel are hereafter
referred to as the "Sale Property" and the contemplated joint sale as the "Sale".
J. The City has consented to the sale of the Wynwood Parcel, subject to competitive
bidding, including the submission of higher or better offers, free and clear of the Mortgage, the
Reverter and any other liens, claims or interests, with all of the City's liens, claims, interests and
encumbrances attaching to Wynwood's portion of the Sale proceeds.
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K. After good faith arms' -length negotiations and in order to avoid the uncertainty,
expense and delay of continued litigation, it is the intention and desire of the Parties to settle,
compromise and resolve any and all of the claims, causes of action, counterclaims, differences,
disagreements and disputes which have existed and may now exist between them on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, based upon the foregoing recitals, in consideration of the
promises and mutual covenants contained in this Stipulation, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
stipulate and agree as follows:
1. The above recitals are true and correct.
2. Following (a) the entry of Final Order approving this Stipulation, and (b) approval
of this Stipulation by the City of Miami Commission:
a. The City shall promptly convey to Wynwood, clear, marketable and insurable title
to the Wynwood Parcel and the Outparcels. Notwithstanding the foregoing, the
City shall not be obligated to cure any title defects arising from any third party
claims, nor shall the City be required to expend any money to cure any title defects.
b. The City shall promptly execute and deliver the following documents necessary for
Wynwood to convey clear, marketable and insurable title to the Wynwood Parcel,
including:
(i) a release and satisfaction of the Mortgage and any interest in
easements pertaining to the Wynwood Parcel;
(ii) a general warranty deed for the Wynwood Parcel to Wynwood
containing the legal description shown on Exhibit A;
(iii) a general warranty deed conveying the Reverter to Wynwood:
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(iv) a discharge of Lis Pendens filed in Case Styled °City of Miami, a
Florida Municipal Corporation v. Dade Foreign Trade Zone, Inc.,
Case No. 99-13742-CA-20 in Miami -Dade County, Florida as
disclosed by Notice of Lis Pendens Recorded in Official Records
Book 18644, page 1185;
(v) a release and satisfaction of Code Enforcement Lien recorded in
Official Records Book 17064, page 2017;
(vi) a release and satisfaction of the Notice of Violation recorded in
Official Records Book 24870, page 3581;
(vii) a release and satisfaction of the Lien Sale Certificate No.
199801001258 recorded in Official Records Book 22396, page
4242; and
(viii) a release and satisfaction of any other code enforcement or zoning
violations, liens or interests which the City may hold with respect
to the Wynwood Parcel, up to the date of the closing of the Sale.
c. The City and Wynwood will cooperate in the Sale. Wynwood shall retain the first
$6.45 million of Net Proceeds realized by Wynwood from the Sale, free and clear
of any lien, claim or interest of the City, including claims on account of the
Reverter and the Mortgage. For purposes of this Stipulation "Net Proceeds" shall
mean the total proceeds realized from the Sale of the Sale Property, less payment of
(i) all usual and customary costs of sale, including real estate commissions
approved by the Bankruptcy Court, (ii) alI real estate taxes on the Sale Property,
(iii) all liens, interests and encumbrances against the Wynwood Parcel, except any
liens or interests claimed by the City which are being released and satisfied as
provided hereunder, and (iv) all amounts payable to RIMCI under the RIMCI
Settlement. In the event Wynwood disputes the amount or validity of any lien,
interest or encumbrance, an amount equal to such lien, interest or encumbrance
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together with an allowance for any accruing interest shall be held in escrow
pending resolution of the disputed claim;
d. Net Proceeds realized by Wynwood in excess of $6.45 million, shall be split
between Wynwood and the City with 55% of such excess Net Proceeds retained by
Wynwood, free and clear of any lien, claim or interest of the City, including claims
on account of the Reverter and the mortgage, and 45% irrevocably paid to the City;
e. Wynwood shall dismiss the District Court Action with prejudice;
f. Wynwood shall dismiss the Fee Request, with prejudice;
g. Wynwood shall dismiss the Adversary Proceeding against the City with prejudice;
h. Each of Wynwood and the City shall bear its own fees and costs, including the cost
of attorneys, in the Foreclosure Action, the District Court Action, the Chapter 11
Case and the Adversary Proceeding;
i. Each of Wynwood and the City shall exchange Mutual General Releases in
substantially the same form as is attached hereto as Exhibit D thereby releasing all
claims and causes of action that each has or may have against the other, except for
claims arising from or relating to this Stipulation; and
j. The City shall promptly execute and deliver to Wynwood the following documents
necessary for Wynwood to convey clear, marketable and insurable title to the
Outparcels, including:
(i) a release and satisfaction of the Outparcel Mortgage and any
interest in easements pertaining to the Outparcels, provided,
however, nothing in this Stipulation will prejudice, prohibit or
otherwise impair the City's right to enforce the DFTZ Loans
against any party other than Wynwood;
(ii) a general warranty deed for the Outparcels to Wynwood
containing the legal description shown on Exhibit B;
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(iii) a general warranty deed conveying reverter interests of the City in
the Outparcels, if any, to Wynwood; and
(iv) a release and satisfaction of any code enforcement or zoning
violations, liens or interests which the City may hold with respect
to the Outparcels up to the date this Stipulation is fully approved in
accordance with paragraph 13, hereof
The City shall not be entitled to any proceeds from any sale by Wynwood of the
Outparcels.
3. Any payment due to the City in accordance with this Stipulation shall be paid to.
the City promptly upon receipt of such amounts by Wynwood. Further, to the extent that
Wynwood reserves any proceeds from the Sale on account of disputed claims, liens or liabilities
that would be paid before the sharing formula described in paragraph 1(a) and 1(b) of this
Stipulation is effective (e.g., disputed real estate taxes, commissions, or closing costs that would
be paid from gross proceeds of the sale), and following closing Wynwood is or becomes entitled
to receive all or any portion of the proceeds so reserved, such proceeds received by Wynwood
shall be allocated and promptly paid to the City in accordance with provisions of Paragraph 1(a)
and 1(b) of this Stipulation.
4. Any plan of reorganization proposed by Wynwood in the Chapter 11 Case shall
provide for Wynwood (or any successor) continuing to operate as a not for profit entity under 26
U.S.C. § 501(c)(3). Nothing in this Stipulation or any plan shall, however, require Wynwood to
operate within the City of Miami or otherwise act as a restriction on or limitation to Wynwood's
activities or business. Any proceeds of the Sale retained by Wynwood shall be used to pay
allowed claims and administrative expenses in the Chapter 11 Case or shall be used for a public
purpose consistent with Wynwood's § 501(c)(3) status and its articles of incorporation.
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5. The City shall make available up to $50,000 in grant money to reimburse either
(a) the stalking horse party or (b) the successful purchaser of the Wynwood Parcel pursuant to a
Bankruptcy Court approved sale, for the actual, documented, third party expenses for
environmental inspections or audits of the Wynwood Parcel. The City shall have no obligation
to advance any funds for any remediation of the Wynwood Parcel by any party or any purchaser.
6. Promptly following the execution and delivery of this Stipulation, Wynwood shall
file a motion in the Chapter 11 Case pursuant to Rule 9019 of the Federal Rules of Bankruptcy
Procedure and applicable law seeking Bankruptcy Court approval of the Stipulation and the
transactions contemplated hereby.
7. The Stipulation is the product of the Parties' good faith, arms' -length negotiations.
Each Party has had the benefit of the advice of counsel of its choosing and has entered into this
Stipulation freely and without compulsion.
8. Each Party shall cooperate to consummate the terms of this Stipulation as set forth
above. In addition, each Party shall cooperate and take such action and execute such other and
further documents as may be reasonably requested from time to time to carry out the terms,
provisions and intent of this Stipulation, including, but not limited to the correction of any
scriver or other non -substantive errors that may be contained in the exhibits.
9. This Stipulation may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument.
10. This Stipulation shall be binding upon the Parties' respective predecessors,
successors and assigns including any subsequently appointed trustee in the Chapter 11 Case, or
any chapter 7 trustee in the event the Chapter 11 Case is converted to a case under chapter 7 of
the Bankruptcy Code.
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11. This Stipulation and any documents executed in accordance herewith shall
constitute the complete agreement of the Parties, which shall supersede any and all prior
agreements of the Parties, and which shall not be subject to amendment or modification unless
done so by a writing executed by the Parties.
12. This Stipulation shall be construed under Florida law.
13. This Stipulation and the transactions contemplated hereby are subject to the
approval of (a) the Bankruptcy Court by Final Order and (b) the Miami City Commission,
including any necessary resolutions. If (a) and (b) in this paragraph do not occur on or before
December 31, 2007, or such later date as agreed to by the Parties in writing, this Stipulation shall
be null and void and of no further effect. Nothing in this Stipulation shall constitute or be
construed as an admission by either Party. The Parties agree that the Bankruptcy Court shall
retain jurisdiction to enforce the terms and provisions of this Stipulation.
14. For purposes of this Stipulation the term "Final Order" shall mean an order as to
which the time for filing an appeal, a motion for rehearing or a motion for reconsideration has
lapsed under applicable law.
15. The City hereby agrees that it shall not assert a right to credit bid at the Sale
pursuant to 11 U.S.C. § 363(k), or otherwise.
16. Notwithstanding anything in this Stipulation to the contrary, the Parties agree to
execute and deliver to Artist Lofts, LLC, the Partial Termination of the Easement and Operating
Agreement and Parking Easement attached as Exhibit E upon approval of the Stipulation by
Final Order of the Bankruptcy Court and approval by the Miami City Commission.
AGREED AND ACKNOWLEDGED:
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Wynwood Community Economic Development Corporation, Inc.
By:
Its:
City of Miami
By:
Its:
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