Feb 28, 2013

In a letter to homeowners, the TMA attorney outlines recent developments in the foreclosure process.

On February 21, 2013, Judge Owen's clerk emailed a Decision on issues heard in a January 31st, 2013, hearing. Banner Sabey had requested the hearing to allow amendment of its proposed decree of foreclosure to reflect that it had acquired all of the liens that were adjudicated to be senior to Credit Suisse and as the single senior, consolidated, lienholder, it should be allowed to credit bid at a foreclosure sale of Village Plaza, instead of paying cash for each of the 5 liens that are senior to Credit Suisse. Credit Suisse objected.

 

 The Decision grants Banner Sabey's motion and overruled Credit Suisse's objections. It gives Credit Suisse another 10 days (until close of business on March 4) to object.

 

            Here's are a few options that may play out:

 

Option A

Credit Suisse does not object by end of business day, March 4^th, 2013                

 

Banner Sabey requests that the Sheriff conduct a Sheriff's sale on Village Plaza

(likely waiting the 42 days to see if an appeal is filed).

 

Next - Sheriff sends out notices to all other creditors who have claims against TRLLC.

 

20+ days after notice the Sheriff conducts a sale.

 

Banner Sabey "credit bids" Approximately $13,500,000 and becomes the creditor in possession,

(A credit bid is similar to a court appointed credit card for the money that is already owed.)

- OR-

Credit Suisse bids $13,500,000 cash and becomes the creditor in possession

 

- OR -

Another potential redemptioner makes that bid and becomes the creditor in possession.

Any creditor in possession of Village Plaza will wait out a 6-month period for TRLLC or another clamant / redemptioner to "redeem" by paying Banner $13,500,000 + interest + legal fees before receiving a sheriff's deed that vests a fee simple interest clear of all other lines except taxes and the North Lake Water/Sewer LID liens and ongoing assessments.

 

Each redemptioner can be bought out by a subsequent redemptioner paying him what he paid to redeem, plus what TRLLC owes him, plus interest, plus legal fees.

 

Option B

Credit Suisse objects before close of business day March 4^th, 2013

 

There will be a waiting period for more post-trial hearings and decisions to clarify and rule on Credit Suisse's objections      

 

Option C.

Credit Suisse appeals to the Idaho Supreme court within 42 days from the decree in the form proposed by Banner Sabey, throwing the matter into a suspended and likely delayed gray zone, e.g., Credit Suisse raises post-trial issues regarding whether a stay should be granted to prevent Banner-Sabey's scheduling of a Sheriff's sale. Appeal by itself does not bar a sale although it slows things down while Banner seeks permission to proceed to a sale.

 

- AND/OR -

D. Another creditor who objects to the decisions regarding Village Plaza, e.g., YMC Mechanical, appeals (YMC has indicated it will appeal 1) the decision that denied its claim of seniority over CS and also 2) the seniority of the architects, as architects have never before been classified as material men or laborers entitled to a construction lien for goods or labor incorporated into the real estate/improvements) with attendant delay.

 

- AND/OR -

E. Banner/Sabey's scheduling of a sheriff's sale prompts CS to schedule a sale for the decree on the undeveloped land and the Mountain facilities/state leased land and prompts MHTN, BAG and OZ to schedule sheriff's sales on property where they are senior to CS. After some delay, these could occur even if an appeal is filed, assuming no stay is granted. Stay usually requires posting a bond to secure the party whose collection is postponed by the stay. Amount of bond (double the judgment amount) in this case may be prohibitive for any party, e.g., CS would need to post a $27,000,000 bond to stay enforcement of Banner's decree.

 

- AND/OR -

F. Something else unpredictable or improbable happens to create more delay.