Jun 21, 2012

In a June 21, 2012 letter to Tamarack Homeowners, the TMA attorney provided this update.

    On June 18, 2012, Judge Owen granted Credit Suisse's Decree of Foreclosure. That means that any party who feels "aggrieved" by any adverse rulings that resulted in Credit Suisse, for example, being senior on everything except the Village Plaza, Lake Wing, the BAG parcels, and certain Trillium Townhomes, now has 42 days to file an appeal.

 

            Credit Suisse has indicated that it will wait 42 days before asking the sheriff to start the process of conducting a sheriff's sale.

 

            Idaho law appears to allow a sheriff's sale as soon as 20 days after the sheriff first provides the appropriate notices that the sheriff will be conducting a sale. However, I anticipate that, because of the complexity of this case, the sheriff, and perhaps Credit Suisse as well, will ask for a longer period than 20 days.

 

            On June 18, the Judge also issued a Memorandum Decision regarding several outstanding questions about process, and priority, for various parties to conduct foreclosure sales on:

 

            Village Plaza

            BAG Parcels

            Lake Wing

            OZ - Trillium Townhomes

 

            Many of these concerns had to do with Credit Suisse's objections to the terminology used in the proposed decrees.

 

            However, the Judge did indicate that MHTN will be able to submit a credit bid with respect to Lake Wing, BAG Holdings will be able to submit a credit bid with respect to the Belvedere Ridge, B21, B22, and Fairmont Parcels, and OZ will be able to submit a cash bid for the Trillium Townhomes.  

 

            The Judge declined to allow credit bidding for Village Plaza, due to the fact that there are so many competing and conflicting creditors, and the lack of a cash bid at any point makes apportionment and distribution difficult if not impossible.

 

            In his Memorandum Decision and Order Regarding Proposed Judgments and Decrees of Foreclosure and Orders of Sale dated June 18, 2012, Judge Owen determined that a cash bid should be applied to Village Plaza's creditors in rank of priority as follows:

 

            Pro rata to Tri State Electric, Kessler, and Oz Architects

            Any balance pro rata to Banner/Sabey and MHTN

            Any remaining cash to Credit Suisse

 

            Credit Suisse had objected to paragraphs 12 and 13 of Banner/Sabey's Proposed Decree of Foreclosure of the Village Plaza Property. The Judge agreed with Credit Suisse's objection to paragraph 12 because it addressed junior interests that had not been adjudicated, but declined to accept Credit Suisse's objection to paragraph 13, because the junior interests addressed in paragraph 13 were also those referenced under state law.

 

            The Judge also sustained Credit Suisse's objection to termination of its general borrower mortgage, because the general mortgage Credit Suisse has with respect to most assets at Tamarack does not include the Village Plaza Property.

 

            The Judge specifically indicated that the Receiver mortgage had not been adjudicated, and therefore he would not enter any orders indicating whether the Receiver mortgage is or is not foreclosed by any other decree.

 

            The Judge also addressed redemption rights. The Judge indicated that a debtor has a statutory right of redemption under Idaho Code § 6-101 and Idaho Code § 11-401. Also judgment lien creditors whose judgment liens existed as of the date of commencement of the foreclosure also have a redemptioner's interest. However, the Judge sustained Credit Suisse's objection to language in paragraph 16 of Banner/Sabey's Proposed Judgment and Decree of Foreclosure in which it seemed to reserve to Tri-State, Kessler, Banner/Sabey, Oz Architecture and MHTN redemption rights.

 

            At the same time, the Court rejected Credit Suisse's argument that Tamarack Resort, LLC lost its redemption rights with Credit Suisse's entry of default and default judgment. The Court therefore overruled Credit Suisse's assertion that Tamarack Resort, LLC's statutory right of redemption was cut off by the entry of default and default judgment (Memorandum Decision Page 28).

 

            The Judge sustained some Credit Suisse objections, overruled other Credit Suisse objections and requested that counsel for Banner/Sabey, OZ Architecture, MHTN, and BAG submit revised, proposed decrees of foreclosure reflecting the Court's determinations. Those need to be submitted within 14 days of June 18, 2012, which establishes the submission date as July 2, 2012.

 

If your interested in reviewing the hundred or so pages of both filings they can found on the TMA website at www.tmaidaho.com. Click on the Legal Documents link on the left. Please be aware it will take about 30 seconds for the PDF to download.

  

Stephen J. Lord, TMA Counsel