Nilhan Developers, LLC v. Westplan Investors Acquisitions, LLC (In re Bay Circle Props., LLC)

593 B.R. 14
CourtUnited States Bankruptcy Court, N.D. Georgia
DecidedNovember 1, 2018
DocketCASE NO. 15-58440-WLH; ADV. PROC. NO. 18-5193-WLH
StatusPublished
Cited by2 cases

This text of 593 B.R. 14 (Nilhan Developers, LLC v. Westplan Investors Acquisitions, LLC (In re Bay Circle Props., LLC)) 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
Nilhan Developers, LLC v. Westplan Investors Acquisitions, LLC (In re Bay Circle Props., LLC), 593 B.R. 14 (Ga. 2018).

Opinion

Wendy L. Hagenau U.S., Bankruptcy Court Judge

This matter is before the Court on the Motion to Dismiss filed by Westplan Investors Acquisitions, LLC ("Westplan") and Accent Cumberland Apartments, LP ("Accent") (collectively, "Defendants") [Docket No. 4]. The Court has jurisdiction of this matter under 28 U.S.C. § 1334. The Complaint alleges the matter is core, but the Motion to Dismiss raises the question of whether this is a core matter under 28 U.S.C. § 157. Nevertheless, all parties have consented to the Court's entry of this Order as a final order without prejudice to Defendants' position the Court cannot enter any other final orders without their consent [Docket Nos. 8 and 9].

FACTS

The Debtor filed its bankruptcy petition under Chapter 11 of the United States Bankruptcy Code on May 4, 2015 (Case No. 15-58443 which was jointly administered with Case No. 15-58440). The Debtor's Schedules reflect it owned real estate including property located at 2800 and 2810 Spring Road, Smyrna, Georgia. The property located at 2800 Spring Road is identified as a shopping center consisting of 1.56 acres ("2800 Spring Road"). The property identified as 2810 Spring Road is described as office suites consisting of three buildings on 7.14 acres ("2810 Spring Road"; together with 2800 Spring Road, the "Property"). The Property is located in the general vicinity of SunTrust Park, where the Atlanta Braves play.

Nilhan's Property was collateral for a loan made by Wells Fargo to affiliates of the Debtor and the Debtor's principal Chittranjan (Chuck) Thakkar and his wife, and guaranteed by the Debtor and other affiliates. The threatened foreclosure by Wells Fargo on some of its collateral prompted the bankruptcy filing in 2015 of the Debtor and other affiliates. After the bankruptcy case was filed, Wells Fargo, the Debtor and the other obligors entered into a settlement agreement approved by this Court. The settlement agreement required the full amount of the debt to Wells Fargo to be paid in full by April 30, 2017 and set various deadlines for interim payments. In the settlement agreement, the parties agreed that the release price for the Property was $5.2 million. If Wells Fargo was not paid in full by April 30, 2017, it could record deeds-in-lieu of foreclosure on the Debtor's Property and property of the other obligors without further *18hearing. After the settlement agreement was finalized and approved, Wells Fargo assigned its interest and claim to Bay Point Capital Partners, LP ("Bay Point").

In anticipation of this April 30, 2017 deadline, the Debtor filed a motion on April 11, 2017 [Case No. 15-58440, Docket No. 634] to sell the Property for $7 million to Westplan. The contract for sale called for certain adjustments to the purchase price. The Debtor asked the Court to authorize the sale to Westplan free and clear of any liens pursuant to 11 U.S.C. § 363. Attached to the motion was a "Standard Form Contract of Sale" between Westplan and the Debtor for the sale of the Property ("Contract"). The Debtor supplemented the motion on April 19, 2017 by including the site plan which was to have been attached to the Contract as an exhibit. The supplement to the motion also included an "Assignment of Standard Form Contract of Sale" representing that Westplan had assigned all of its rights and interests under the Contract to Accent as of April 6, 2017. Under this assignment, Accent assumed all of the obligations and liabilities of Westplan under the terms of the Contract. Included in the Contract is paragraph 26 entitled "Buy Back". This paragraph states as follows in its entirety:

26. BUY BACK. Seller acknowledges that Purchaser intends to apply to rezone the Property to allow the development of a multi-use project on the Property and, as part of such rezoning, the Purchaser will obtain annexation into the City of Smyrna. After Closing, the Seller shall have the right to purchase a portion of the Property utilized for the proposed hotel, office and retail (as shown on the rezoning/annexation site plan attached and incorporated (sic) herein as Exhibit B) ("HOR Property") for $2,500,00.00 Seller's right to purchase the HOR Property shall be valid for sixty (60) days from the date of final rezoning and annexation. Purchaser shall deliver notice to Seller of such final rezoning and annexation. If Seller fails to close and acquire the HOR Property within such sixty (60) day period, then Seller's right shall be null and void and Seller shall no longer have such right. If Seller acquires the HOR Property, Seller and Purchaser shall enter into joint development and master site agreement addressing common development issues, such as construction costs, easements and maintenance costs. The rezoning and annexation shall provide the guidelines and framework for the joint development and master site agreement as determined by the Purchaser. The joint development and master site agreement shall designate the proportionate share of costs and expenses for each party based upon acreage within the proposed multi-use project, such costs and expenses shall include but not be limited to, those costs associated with engineering, architectural, geotechnical, oversight, developing, grading and infrastructure (such as stormwater, driveways, utilities and parking). The parties agree that such common development costs and expenses shall be escrowed at the closing of the HOR Property. Purchaser shall have the right to determine the contractors and service providers for the multi-family project.
Further, if after Closing Purchaser is denied rezoning and annexation by the applicable authorities, Seller shall have the right to purchase the Property for $7,750,000.00 plus costs and expenses set forth in the second paragraph of Section 7, as well as interest at a rate of fifteen percent (15%) compounded annually *19from the date of Closing. Seller's right to purchase the Property shall be valid for ninety (90) days from the date Purchaser was denied the rezoning and annexation. Purchaser shall deliver notice to Seller of the denial of the rezoning and annexation. If Seller fails to close and acquire the Property within such ninety (90) day period, then Seller's right shall be null and void and Seller shall no longer have such right.

Bay Point objected to the proposed sale as did another major creditor.

The Court held hearings on April 24, 2017 and April 27, 2017 on the motion to sell to the Defendants as well as on several other motions filed by the Debtor and its affiliates in contemplation of the April 30, 2017 deadline to pay Bay Point in full. The Court heard testimony from a representative from the Defendants and from Mr. Thakkar regarding the proposed sale, the proposed rezoning of the Property, and the potential Buy Back provision.

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Bluebook (online)
593 B.R. 14, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nilhan-developers-llc-v-westplan-investors-acquisitions-llc-in-re-bay-ganb-2018.