Falck Properties, LLC v. Parkvale Financial Corp. (In Re Brownsville Property Corp.)

469 B.R. 216, 2012 WL 1508009
CourtUnited States Bankruptcy Court, W.D. Pennsylvania
DecidedApril 30, 2012
Docket19-20432
StatusPublished
Cited by5 cases

This text of 469 B.R. 216 (Falck Properties, LLC v. Parkvale Financial Corp. (In Re Brownsville Property Corp.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Falck Properties, LLC v. Parkvale Financial Corp. (In Re Brownsville Property Corp.), 469 B.R. 216, 2012 WL 1508009 (Pa. 2012).

Opinion

MEMORANDUM OPINION

THOMAS P. AGRESTI, Chief Judge.

This adversary proceeding originated as an action filed by Falck Properties, LLC (“Falck”) against Parkvale Financial Corporation (“Parkvale”) in the Allegheny County Court of Common Pleas on December 29, 2011. See Falck Properties, LLC v. Parkvale Financial Corporation, No. GD 11-027202 (“the State Court Case”). On January 27, 2012, Parkvale filed a Notice of Removal to the District Court, together with a motion asking the District Court to refer the matter to this Court. On February 8, 2012, the Hon. Terrence F. McVerry of the District Court signed a consent order which the Parties had submitted agreeing that the case would be referred to this Court for decision, while reserving the right of the Parties to litigate all issues relating to the removal and the underlying case.

Presently before the Court are two preliminary motions. First, a Motion to Dismiss Plaintiff’s Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Motion to Dismiss”), filed by Parkvale at Doc. No. 6. Second, a Motion to Remand Proceedings to the Court of Common Pleas of Allegheny County or in the Alternative, Abstain from Hearing the Case (“Motion to Remand”), filed by Falck at Doc. No. 13. The two Motions have been fully briefed and argued by the Parties and are ripe for decision. For the reasons that follow, both of the Motions will be denied.

FACTUAL AND PROCEDURAL BACKGROUND

Because of its importance to resolution of the issues raised in the Motions, it is necessary to go into the background in some detail. Brownsville Property Corporation (“BPC” or Debtor) was a non-profit corporation that filed a Chapter 7 bankruptcy petition on March 22, 2010. The sole asset of BPC was real estate located at 125-127 Simpson Road, Brownsville, Pa., on which was operated a facility known as Brownsville Tri-County Hospital, and a medical office building. This real property (hereinafter “the Property”) consisted of Fayette County Parcel Nos. 30-04-0202 and 30-04-0202-TO-0.

The BPC bankruptcy is part of a cluster of what may be termed the “Brownsville cases.” The entity which operated *219 Brownsville Tri-County Hospital was Brownsville Health Solutions, Inc. a/k/a Brownsville Health Services Corporation (“BHS”). BHS is itself a debtor in an associated Chapter 11 bankruptcy case that was filed on February 18, 2009, and subsequently converted to Chapter 7. See In re Brownsville Health Solutions, Inc., Case No. 09-20998-TPA. Brownsville General Hospital, Inc. (“BGH”), which has also filed a case under Chapter 7 of the Bankruptcy Code, was an earlier version of the entity that operated this same medical facility, and in fact formerly owned the Property before it was conveyed to a newly-created BPC. See In re Brownsville General Hospital, Inc., Case No. 06-20253-TPA, filed on January 24, 2006. Finally, West Point Health Corporation owned some condominium units and leaseholds in buildings which were part of this same medical facility. See In re West Point Health Corporation, Case No. 10-22146-TPA, filed under Chapter 7 of the Bankruptcy Code on March 29, 2010. The same Chapter 7 Trustee (“Trustee”) is administering the BPC, BHS, and West Point bankruptcy estates. In the BGH case, a plan was confirmed and a Plan Administrator appointed (“Plan Administrator”).

The primary secured creditor in the BPC bankruptcy was Parkvale, which held a first and second hen position on the Property pursuant to mortgages granted in 2007 as part of a loan transaction involving BPC and other Brownsville entities. The loan went into default in the pre-petition period, and in 2009 Parkvale caused a default judgment to be entered in Fayette County against BPC in the amount of $1,415,903.34. Parkvale had scheduled the Property to be sold at a sheriff sale when the filing of the BPC case intervened to stay such sale.

On May 14, 2010, Parkvale filed a motion to dismiss the BPC bankruptcy case for cause under 11 U.S.C. § 707(a) as having not been filed in good faith, and in the alternative sought relief from stay so the sheriff sale could proceed. See Doc. No. 36 in the main BPC case. 1 The details of the allegations in that motion and the response thereto are not germane for present purposes 2 but it is of significance to note that the Court entered an Order on August 18, 2010, granting the motion in part and directing that the BPC property be sold by November 15, 2010, with Park-vale to be paid in full out of the sale proceeds. See Doc. No. 104. That same Order also provided that if the Property was not sold by the November 15th deadline, then the BPC bankruptcy would be dismissed and Parkvale could proceed with a sheriff sale on November 18, 2010. The Trustee attempted to sell the Property at a public auction in September 2010, but there were no bids made. On October 15, 2010, a further Order was entered which, inter alia, amended the August 18th Order to provide that the case would not be dismissed if a motion to sell the Property were filed with the consent of Parkvale *220 prior to the November 18th sheriff sale permitted by the prior order. See Doc. No. 144.

On November 10, 2010, the Trustee entered into a “binding letter of intent” with Falck whereby Falck agreed to buy the Property (along with a separate condominium unit located at 104 Simpson Road and owned by BHS) for a price of $1.8 million. On November 12, 2010, the Trustee filed an Expedited Motion for Order Approving Sale of (i) All Real Property of the Debtor Free and Clear of Liens, Claims, Encumbrances and Interests Outside the Ordinary Course of Business, and (ii) Granting Related Relief (“Sale Motion”), Doc. No. 146. The Sale Motion, which was not filed with Parkvale’s consent, proposed that the sale to Falck be approved, with a closing to occur on or before the later of 75 days after Court approval of the sale, or January 31, 2011, that Falck tender payment of $100,000 in hand monies to Park-vale and that no further contingencies be recognized. The Trustee asked that the Sale Motion be heard before the scheduled November 18, 2010 sheriff sale.

Parkvale filed an objection to the Sale Motion. While it complained about the “last second” nature of the Sale Motion and various other aspects of the proposed sale, Parkvale said it would be willing to consent to the sale if certain conditions were met, including the closing to occur by December 31, 2010 and the $100,000 of hand money to be immediately paid to Parkvale. See Doc. No. 153.

An expedited hearing on the Sale Motion was held on November 17, 2010.

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469 B.R. 216, 2012 WL 1508009, Counsel Stack Legal Research, https://law.counselstack.com/opinion/falck-properties-llc-v-parkvale-financial-corp-in-re-brownsville-pawb-2012.