High-Top Holdings, Inc. v. RREF II BB Acquisitions, LLC (In re High-Top Holdings, Inc.)

564 B.R. 784
CourtUnited States Bankruptcy Court, N.D. Georgia
DecidedJanuary 27, 2017
DocketCASE NUMBERS 16-10022-WHD; ADVERSARY PROCEEDING NO. 16-1007-WHD, ADVERSARY PROCEEDING NO. 16-1008-WHD, ADVERSARY PROCEEDING NO. 16-1010-WHD, ADVERSARY PROCEEDING NO. 16-1011-WHD, ADVERSARY PROCEEDING NO. 16-1012-WHD
StatusPublished
Cited by4 cases

This text of 564 B.R. 784 (High-Top Holdings, Inc. v. RREF II BB Acquisitions, LLC (In re High-Top Holdings, Inc.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
High-Top Holdings, Inc. v. RREF II BB Acquisitions, LLC (In re High-Top Holdings, Inc.), 564 B.R. 784 (Ga. 2017).

Opinion

ORDER

W. Homer Drake, U.S. Bankruptcy Court Judge

Before the Court are the Motions for Summary Judgment filed by RREF II BB Acquisitions, LLC (hereinafter “Acquisitions”) and RREF II BB-GA, LLC (hereinafter “BB-GA” and, collectively with Acquisitions, the “RREF Entities”) in the above-styled adversary proceedings.

In these adversary proceedings, High-Top Holdings, Inc. (hereinafter the “Debt- or”) names the RREF Entities and at least one other entity1 as defendants. Count I of each complaint, as well as counterclaims/crossclaims filed by all but one of the non-RREF defendants, seek a determination of the validity and extent of a lien [788]*788held by BB-GA on certain properties. The Debtor asserts that the lien is invalid and that, even if it is valid, the properties to which the lien would attach are subject to equitable interests held, by other entities. In adversary proceeding 16-1007, the Debtor also alleges that a deed to secure debt is invalid (as part of Count I), and brings claims against' Acquisitions for breach of contract (Count II), unjust enrichment (Count III), fraud in the inducement (Count IV), punitive damages (Count V), and attorney’s fees and costs (Count VI), all arising from alleged pre-petition conduct.

Jurisdiction and Authority

The Court finds that it has subject matter jurisdiction over the matters raised in these adversary proceedings. See 28 U.S.C. §§ 157(a), 1834. The Court also finds that Count I of each complaint and the counterclaims/crossclaims seeking a determination of the validity and extent of liens are core proceedings, subject to final determination by this Court. See 28 U.S.C. § 157(b)(2)(A), (K). However, the Court finds that Counts II, III, IV, V, and VI of adversary proceeding 16-1007 are non-core proceedings, as they do “not involve a right created by federal bankruptcy law, and [they are] not [proceedings] that would arise only in bankruptcy.” See Andersen 2000, Inc. v. Greenwich Ins. Co. (In re Anderson 2000, Inc.), 2007 WL 7142578, at *8 (Bankr. N.D. Ga. Sept. 28, 2007) (Drake, J.) (quoting The Whiting-Turner Contracting Co. v. Elec. Machinery Enters., Inc. (In re Elec. Machinery Enters., Inc.), 479 F.3d 791, 798 (11th Cir. 2007)); see also Giuliano v. Genesis Fin. Solutions, Inc. (In re Axiant, LLC), 2012 WL 5614588, at *1 (Bankr. D. Del. Nov. 15, 2012) (“[B]reach of contract and unjust enrichment claims are not core proceedings.”). Consequently, though the Court may “hear” those proceedings, it “may only ‘submit proposed findings of fact and conclusions of law to the district court, and any final order or judgment shall be entered by the district court.” Id. (quoting)). 28 U.S.C. § 157(c)(1)). Nevertheless, should the Court conclude that final judgment is appropriate, the parties may consent to the entry of that judgment. See 28 U.S.C. § 157(c)(2). Therefore, if necessary, “the Court will allow the parties an opportunity to do so prior to the Court’s submission of proposed findings of fact and conclusions of law to the District Court.” Id.

Background

A. Pre-Bankruptcy

On August 8, 2004, the Debtor executed a promissory note (hereinafter “Note 1”) payable to Main Street Bank in the amount of $876,581. Note 1 was secured by a deed to secure debt (hereinafter “DSD-1”) encumbering property known as 1710 Newnan Road in Spalding County, Georgia (hereinafter the “Newnan Road Property”).

On May 24, 2007, Holiday Investments, Inc. (hereinafter “Holiday”) executed a promissory note (hereinafter “Note 3”) payable to Branch Banking & Trust Co. in the principal amount of $709,775.23. Note 3 was likewise secured by a deed to secure debt (hereinafter “DSD-3”) encumbering the Newnan Road Property.

On March 26, 2013, Note 1 and Note 3 were assigned to Acquisitions, along with DSD-1 and DSD-3. In April of 2013, Acquisitions, the Debtor, and Holiday entered into an agreement (hereinafter the “Pre-Negotiation Agreement”) containing a provision requiring all modifications to any agreement or contract the parties entered into to be in writing and signed by Acquisitions and all other necessary parties.

[789]*789On May 22, 2013, Acquisitions and the Debtor executed an agreement (hereinafter the “Letter Agreement”). The header of the Letter Agreement references the loan “made by Branch Banking & Trust Company to High Top Holdings, Inc —in the original principal amount of $876,581.” The Letter Agreement calls for the Debtor to sell the Newnan Road Property for no less than $478,784.35 (which the RREF Entities assert was the payoff amount on Note 1 at the time of the Agreement). That amount would then be paid to Acquisitions, who would then “promptly deliver to [the Debtor] a recordable release of the Property from the lien of the Security Instrument.” The Letter Agreement is signed by Michael Jackson, currently the-Debtor’s Chief Financial Officer, as the “Manager” of the Debtor (which is misidentified in the signature block as “High Top Holdings, LLC”) and by Michael Jackson and Japeth Jackson, who was a principal of the Debtor, as guarantors. Holiday was not a party to the agreement.

On May 30, 2013, the Debtor, after acquiring the funds through a loan from Bank of the Ozarks, paid Acquisitions $478,784.35. Subsequently, Acquisitions released DSD-1.

On September 27, 2013, Acquisitions filed suit to enforce Note 3 in the Lamar County Superior Court (hereinafter the “Lamar Action”) against Holiday, the Debtor, Michael Jackson, and C. Richard Morrow. In-' April of 2014, a settlement agreement (hereinafter the “Settlement Agreement”) was entered into. As in the Letter Agreement, the Settlement Agreement does not include the Debtor’s proper name but references “High-Top Holdings, LLC.”

In addition to other terms, the Settlement Agreement contained a provision whereby the parties identified as the defendants agreed to

release and forever discharge [Acquisitions].. .from any and all claims, actions, causes of actions, suits, demands, complaints, and obligations, whether in law or in equity, whether known to them or unknown, whether ex contractu or ex delicto, for damages of every kind, character or description, costs, expenses, compensation, punitive damages, exemplary damages, consequential damages, or any other thing whatsoever, whether these damages or losses are known, unknown, foreseen, unforeseen, patent or latent from the beginning of time ' through and including the effective date 'of this Agreement.

The Settlement Agreement was signed by Michael Jackson in his individual capacity, in his capacity as president of Holiday, and in his capacity as president of “High-Top Holdings, LLC.”

On April 10, 2014, the Superior Court entered a consent judgment (hereinafter the “Lamar. Judgment”) against Holiday, the Debtor, Michael Jackson, and C. Richard Morrow, jointly and severally, in the amount of $607,360.23 plus interest and attorney’s fees.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
564 B.R. 784, Counsel Stack Legal Research, https://law.counselstack.com/opinion/high-top-holdings-inc-v-rref-ii-bb-acquisitions-llc-in-re-high-top-ganb-2017.