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HomeMy WebLinkAboutExhibit-SUBTHIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. SETTLEMENT TERM SHEET This Settlement Term Sheet (the "Agreement') is made by and among Drew M. Dillworth, the duly appointed, authorized, and acting chapter 7 bankruptcy trustee ("Trustee Dlllworth") of the bankruptcy estate of Wagner Square, LLC, a Florida limited liability company ("Debtor"), the City of Miami (the "City"), Debra Slnkle Kolsky, as trustee for the Debra Slnkle Kolsky Trust (the "Trust"), Jackson Square, LLC, a Florida limited liability company ("Jackson Square"), Redevco Civic Center, LLC, a Florida limited liability company ("Redevco"), Wagner Square I, LLC, a Florida limited liability company ("Wagner I"), and Wagner Square III, LLC, a Florida limited liability company ("Wagner III"). Trustee Dilworth, the City, the Trust, Jackson. Square, Redevco, Wagner I, and Wagner III are individually referred to as "Party" or collectively referred to as the "Parties." WHEREAS, on April'.30,'2012, three creditors of the Debtor filed an involuntary Chapter 7 petition against the Debtor, initiating the bankruptcy case styled In re Wagner Square, LLC, 12-20659-LMI; WHEREAS, on May 29, 2012, the holders of certain of the equity interests in the Debtor filed a motion consenting to the entry of an Order for Relief provided the case was converted to Chapter 11 and a trustee was appointed; WHEREAS, the holders of the remaining equity interests in the Debtor consented to such relief on June 4, 2012; WHEREAS, on June 7, 2012, the Court entered the Order for Relief and an Order granting the motion to convert the case to Chapter 11 and to appoint a Chapter 11 trustee of the Debtor's Estate. Trustee Dlllworth was selected and confirmed to serve as the Chapter 11 Trustee of the Debtor's estate on June 12 and 14, 2012; WHEREAS; on June 15, 2012, Trustee Dillworth filed the Sale Motion, seeking authority for a private sale of Debtor's vacant parcel of real estate located In Miami - Dade County, Florida ("Real Property"), free and clear of all liens, claims and encumbrances,with all such: liens, claims and encumbrances, if any, attaching to the proceeds of the sale, and releted relief; WHEREAS, the City claims certain Interests in the Real Property Including, without limitation, a mortgage Ilen and restrictive covenants (the "City Interests") as' more particularly detailed In the Sale Motion; 42248781 vl 4729577 vl I of 5 (2 - 00751 a - E('h,' b;1- SO6 1122487R] vl 729577 vl THiS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. WHEREAS, the City opposes the Sale Motion free and clear of the City Interests; WHEREAS, the City;:iriterests also extend to and encumber two additional parcels of real estate (the "Two Related Properties"), contiguous to the Real Property, which Two Related Properties are Indirectly owned by Jackson Square and Redevco through affiliates of the Debtor known as Wagner Square I, LLC, and Wagner Square III, LLC; WHEREAS, the Parties mutually desire to resolve the disputes concerning the Sale Motion, the Real Property, the Two Related Properties, and the City Interests. NOW THEREFORE, in consideration of the foregoing and the mutual promises, undertakings and agreements contained herein, the Parties agree as follows: 1. Incorporation of Recitals. The foregoing recitals are true and correct and incorporated herein by reference. 2. Sale of the Real Property. The City shall consent to the Sale Motion and, upon approval of the Bankruptcy Court, Trustee Dlllworth shall close on the transaction (the "VA Transaction") contemplated in the Sale Motion. At closing, the City shall be paid the sum of $1,650,000,00 from the sale proceeds of the VA Transaction (the "VA Proceeds"). At closing on the VA Transaction, and from the VA Proceeds, Trustee Dillworth shall satisfy in full -any, obligations of the City on the BEDI grant from the United States Department of Housing and Urban Development ("HUD"), which BEDI loan is associated with the Real Property and the Two Related Properties. Upon execution of this Agreement, and until .diosing of the VA Transaction, Trustee Dlllworth, Jackson Square, and/or Redevco shall be permitted to negotiate with HUD on the amount of the obligations of the Clty on the BEDI grant, and the City shall not directly or indirectly interfere with such negotiations. No Party shall be permitted to litigate (via motion, objection, adversary proceeding, or otherwise) with HUD concerning the Clty's obligation on the BEDI grant. 3. Transfer of the Two Related .Properties tQ the City. At closing on the VA Transaction, Jackson Square, Redevco, Wagner I, and Wagner III shall cause the Two Related Properties to be transferred to the City free and clear of liens, claims, and encumbrances (with any such liens, claims, encumbrances to be paid at closing on the VA Transaction from the VA Proceeds). 4. Section 108 Loan Surplus. Upon closing of the VA Transaction, the Clty shall repay the Section 108 loan to HUD from funds currently held In escrow with Suntrust Bank. Any surplus in the Suntrust Bank escrow account after payment of the Section 108 loan to HUD shall be remitted to Trustee Dlllworth. The City represents that as of the date of this Agreement, the most recent amortization schedule concerning 2 of 5 i';;.'r'4'• THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. the Section 108 Loan shows a principal balance of $3,611,000.00, interest due of $12,177.50, for a total balance owed of $3,623,177.50 with accruing interest. 5. Bankruptcy Court & City Commission Approval and Effect of Agreement. This Agreement is subject of approval of the both the City Commission (and provided no Mayoral veto is exercised) and the Bankruptcy Court presiding over the Debtor's and Wagner I's bankruptcy case. Should either the City Commission or the Bankruptcy Court not approve the terms of this Agreement, the Agreement Is null and vold and shall have no force or effect and shall not be enforceable by or against the Parties hereto and the Parties shall be restored to their prior position without any prejudice. 6. Bankruptcy Court) Retention of Jurisdiction, The Bankruptcy Court to retain jurisdiction to Interpretiand enforce, all the terms of this Agreement. 7. Acknowledgement of Terms. The Parties acknowledge and agree that they have been represented by legal counsel and; (I) they have completely read and fully understand this Agreement and have voluntarily accepted the terms contained herein for the purposes of making a full and final compromise, adjustment and settlement; and (ii) they have determined that this settlement is fair and reasonable under all the circumstances and that this determination is based solely upon their independent judgment after an opportunity to consult with counsel of their choice and, that in making this determination, they have had an adequate opportunity to discuss and assess the merits of all claims or potential claims. 8. Savings Clause. To the extent that any provision of this Agreement is deemed by a court of competent jurisdiction to be unenforceable, void or voidable, this Agreement Is modified to the minimum extent necessary to exclude or strike only that discrete portion that is deemed by such court to be unenforceable, vold or voidable and the remainder of this Agreement shall continue to remain In full force and effect and be valid and binding on the Parties. 9. Counterparts.: .;and: ;. Copies. Thls Agreement may be executed simultaneously in two or maecourfterparts, each of which shall be deemed an original, but ail of which together shall;constltute one and the same Agreement. A facsimile, .pdf or electronic copy of this Agreement and any signature hereon shall be considered for all purposes as originals and delivery of an executed counterpart. 10. Merger Clause. This Agreement constitutes the entire agreement of the Parties. All prior oral and written agreements for all Parties are only those that are set forth herein and none of the Parties Is relying on any promise or representation not set forth In this Agreement. This Agreement can be amended only In writing, signed by all Parties, and none of the terms, conditions or provisions of the Agreement can be 112248781 vi I/729577 vl 3 of5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL, BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. waived, changed, altered or modified except by an Instrument in writing signed by all the Parties against whom enforcement of such change Is sought. 11. Choice of Law and Jurisdiction. The Parties agree that the Agreement is governed by Florida law and federal law relating to the Bankruptcy Code and consent to and agree to the Bankruptcy Court for the Southern District of Florida retaining and having exclusive jurisdiction to Interpret and enforce the terms of this Agreement and the judgments to be Issued or entered hereunder. 12. Joint Drafting. This Agreement shall be deemed to have been jointly drafted by the Parties, and in construing and interpreting this Agreement, no provisions shall be construed and Interpreted for or against any of the Parties because such provisions or any other provision of the Agreement as a whole Is purportedly prepared or requested by such Party. 13. Captions. Captions In this agreement are Included for identification and shall not be used to interpret the Agreement. 14. Releases. Atclosing; the Parties shall exchange mutual general releases of any and all claims among them excepting (I) only those obligations under this Agreement, (II) the scheduled unsecured claim In the Debtor's case of $111,986.65 in favor of the City of Miami -Treasurer (the "Scheduled Unsecured Clarm"), to the extent such claim is a claim other than a claim In favor of the Department of Community Development (in which case all parties reserve all rights, claims, arguments, and objections In respect of the Scheduled Unsecured Claim). 15. Further Assurances. The Parties agree that they will execute ail documents necessary to effectuate the transactions contemplated by this Agreement. 02248781 v1 • N729577v1 4 of 5 THIS DOCUMENT IS A SUBSTITUTION TO ORIGINAL. BACKUP ORIGINAL CAN BE SEEN AT THE END OF THIS DOCUMENT. DREW DILLWORTH, AS CHAPTER 7 RUSTEE..FOR-TFIE DEBTOR ,re,) O (h t)v,^ 1 (M. y The Debra Sinkle Kolsky Trust, Debra Sirikl i Kolsky, its Tru,,tee 112248781 v1 11729577 v I 50f5 CITY OF MIAM R G' E SQUARE WAGN QUARE III, C, By' .Da ed: July 10, 2012 SUBSTITUTED WHEREAS, the City opposes the Sale Motion free and clear of the City Interests; WHEREAS, the City Interests also extend to and encumber two additional cels of real estate (the "Two Related Properties"), contiguous to the Real Property, wh Two Related Properties are indirectly owned by Jackson Square and Redevco thro affiliates of the Debtor known as Wagner Square I, LLC, and Wagner Square III, LL W REAS, .the Parties mutually desire to resolve the disputes concerning the Sale Motion, e Real Property, the Two Related Properties, and the City Interests. NOW T REFORE, in consideration of the foregoing and the mutual promises, undertakings and ! reements contained herein, the Parties agree as follows: 1. lncorpo ion of Recitals. The foregoing recitals are true and correct and incorporated herein by ference. 2. Sale of,the. - I.,Property. The City shall consent to the Sale Motion and,. upon approval of the Bankr cy Court, Trustee Dillworth shall close on the transaction (the "VA Transaction") conte •lated in the Sale Motion. At closing, the City shall be paid the sum of $1,650,000.00 •m the sale proceeds of the VA Transaction (the "VA Proceeds"). At closing on the Transaction, and from the VA Proceeds, Trustee Dillworth shall satisfy in full any obli• tions of the City on the BEDI grant from the United States Department of Housing and •an Development ("HUD"), which BEDI loan is associated with the Real Property and Two. Related Properties. Upon execution of this Agreement, and until closing of the A Transaction, Trustee Dillworth, Jackson Square, and/or Redevco shall be permitted • negotiate with HUD on the amount of the obligations of the City on the BEDI grant, a • the City shall not directly or indirectly interfere with such negotiations. No Party s I be permitted to litigate (via motion, objection, adversary proceeding, or otherwls= with HUD concerning the City's obligation on the BEDI grant. 3. Transfer of: the TwoRelated Properties: t• he City. At closing on the VA Transaction, Jackson Square, Redevco, Wagner I, and gner III shall cause the Two Related Properties to be transferred to the City free an• lear of liens, claims, and encumbrances (with any such liens, claims, encumbrances tbe paid at closing on the VA Transaction from the VA Proceeds). 4. Section 108 Loan Surplus. Upon closing of the VA ansaction, the City shall repay the Section 108 loan to HUD from funds currently h • d in escrow with Suntrust Bank. Any surplus in the Suntrust Bank escrow account aft- payment of the Section 108 loan to HUD shall be remitted to Trustee Dillworth. The ity represents that as of the date of this Agreement, the most recent amortization schedu - concerning N2248781v1 11729577 vl 2 of 5 ,,2- 00 Exhib�f SUBSTITUTED the Section 108 Loan shows a principal balance of $3,611,000.00, interest due of 12,177,50, for a total balance owed of $3,623,177,50 with accruing interest. 5. Bankruptcy Court & City Commission Approval and Effect of Agreement. This reement is subject of approval of the both the City Commission (and provided no Mayora eto is exercised) and the Bankruptcy Court presiding over the Debtor's and Wagner bankruptcy case. Should either the City Commission or the Bankruptcy Court not a. •rove the terms of this Agreement, the Agreement is null and void and shall have no force effect and shall not be enforceable by or against the Parties hereto and the Parties shal ,e restored to their prior position without any prejudice. 6. Bankr tc o rt Retention of Jurisdiction. The Bankruptcy Court to retain jurisdiction to in pret and enforce all the terms of this Agreement. 7. Ackn.wled they have been represente fully understand this Agreem herein for the purposes of m settlement; and (ii) they have de under all the circumstances and th independent judgment after an opport that in making this determination, they ha assess the merits of all claims or potential c -. s. ent of Terms. The Parties acknowledge and agree that y legal counsel and; (i) they have completely read and t and have voluntarily accepted the terms contained ing a full and final compromise, adjustment and ined that this settlement is fair and reasonable this determination is based solely upon their 'ty to consult with counsel of their choice and, had an adequate opportunity to discuss and 8. Savings Clause. To the extent t any provision of this Agreement is deemed by a court of competent jurisdiction to be enforceable, void or voidable, this Agreement is modified to the minimum extent nece - ry to exclude or strike only that discrete portion that is deemed by such court to be un: orceable, void or voidable and the remainder of this Agreement shall continue to remain full force and effect and be valid and binding on the Parties. 9. Counterparts and Copies. This Agreeme may be executed simultaneously in two or more counterparts, each of which shall b . deemed an original, but all of which together shall constitute one and the same Agreeme . A facsimile, .pdf or electronic copy of this Agreement and any signature hereon shall , - considered for all purposes as originals and delivery of an executed counterpart. 10. Merger Clause, This Agreement constitutes the entire agree -nt of the Parties. All prior oral and written agreements for all Parties are only those thare set forth herein and none of the Parties is relying on any promise or representation of set forth in this Agreement. This Agreement can be amended only in writing, signed _ all Parties, and none of the terms, conditions or provisions of the Agreement can •e N2248181 vl N729577 vi 3 of 5 SUBSTITUTED waived, changed, altered or modified except by an instrument in writing signed by all the Parties against whom enforcement of such change is sought. 11. Choice of Law and_Jurisdiction. The Parties agree that the Agreement is go rned by Florida law and federal law relating to the Bankruptcy Code and consent to and . cree to the Bankruptcy Court for the Southern District of Florida retaining and having -xclusive jurisdiction to interpret and enforce the terms of this Agreement and the judg -nts to be Issued or entered hereunder, 12. Joint Draftin•. This Agreement shall be deemed to have been jointly drafted by the 'arties, and in construing and interpreting this Agreement, no provisions shall be const • d and interpreted for or against any of the Parties because such provisions or any 'ther provision of the Agreement as a whole is purportedly prepared or requested by su Party. 13. Captions. Captions in this agreement are included for identification and shall not be used to ante • et the Agreement. 14. Releases. At • osing, the Parties shall exchange mutual general releases of any and all claims amon• them excepting (I) only those obligations under this Agreement, (II) the scheduled secured claim in the Debtor's case of $111,986.65 in favor of the City of Miaml-Treasu (the "Scheduled Unsecured Claim"), to the extent such claim is a claim other than claim in favor of the Department of Community Development (in which case all p ' ies reserve all rights, claims, arguments, and objections in respect of the Scheduled secured Claim). 15. Further Assurances. Th Parties agree that they will execute all documents necessary to effectuate the trans • Ions contemplated by this Agreement. N2243731 v1 0729577 v1 4 of 5 SUBSTITUTED DREW DILLWORTH, AS CHAPTER 7 T T-EEF�F�`H€-Q,�BTOR D(byre ,Ixaft_e_ The Debra Sinkl = olsky Trust, Debra Sink! Kolsky, as T a224S781vI M729577 v 1 5 of 5 CITY OF MIAM REDErrVC1 O CIVII , fl ENTER, LLC, Q JACKS :e ARE, LLC, 3 SQUARE I, A WAN � QUARE III, L C, kr Nkj6 /c, Dated my 10, 2012 �� y