This week we're highlighting the sale of twenty two (22) residential real properties located in Atlanta, Georgia from Capital City Developers, LLC, the debtor and debtor-in possession, (“Debtor”).
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Twenty-Two Residential Properties in Atlanta
Snippet from the Sale Motion
BACKGROUND
On September 24, 2014 (the “Petition Date”), Debtor filed with the Court a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. Since the Petition Date, Debtor has operated its business affairs as a debtor-in-possession pursuant to §§ 1107 and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed, and no official committee of creditors or equity interest holders has yet been established.
As of the Petition Date, Debtor owned twenty-two (22) residential real properties located in Atlanta, Georgia which are identified on the attached Exhibit A
(the “Properties”). Each of the properties is encumbered by a first in priority deed to secured debt held by Bank of North Georgia (“BNG”).
On August 1, 2011, BNG obtained a judgment against the Debtor in the amount of $2,715,649.24 arising from an action to recover amounts due pursuant to nineteen (19) promissory notes executed by the Debtor. The Properties are collateral for the promissory notes.
The Properties may also be encumbered by other liens, including but not
limited to liens for ad valorem real property taxes totaling approximately $100,000 and judgment liens.
As of the Petition Date, the aggregate market value of the Properties is estimated by Debtor, as being in excess of $1 million. As noted previously, five (5) of the Properties have been the subject of tax sales and will have to be redeemed in order to be sold and three (3) are the subject of fraudulent deeds out of the Debtor to a third party which will have to be set aside.
The purpose of this
Motion is to obtain authority for Debtor to sell the Properties identified on the attached Exhibit A pursuant to the procedures proposed herein. The sale will take place under the terms and conditions described in the Motion and attached exhibits, as they may be amended or supplemented by Debtor or by the instructions of the Court.
RELIEF REQUESTED
By this Motion, Debtor seeks the Court’s approval to allow Debtor to sell the Properties for the highest and best price free and clear of all liens, claims and encumbrances, except any liens arising from any real property ad valorem taxes due on the Properties, pursuant to the procedures set forth herein.
The sale will be AS IS WHERE IS with a full disclaimer by Debtor of any warranties and subject to all matters of survey and record. All purchasers must be willing and able to close within thirty (30) days of the entry of an order by the Bankruptcy Court approving the sale.
The Properties may be sold individually or in groups as the case may be in order to maximize the proceeds from the sale.
The proceeds from the sale of the Properties will be paid to BNG up to the amount of its claim in the Bankruptcy as to that Property.
PROCEDURES GOVERNING THE SALE OF THE PROPERTIES
Debtor proposes to retain Synergy Real Estate Group, LLC and Masharn Wilson (the “Broker”) to market the sale of the Properties.
Specifically, the Broker will market the Properties for sale for a period of sixty (60) days after the entry of Orders approving the retention of the Broker and granting this Motion (the “Marketing Period”). The Broker shall use a standard Atlanta Board of Realtors residential real estate form contract and all offers must be made on the form with no changes from the printed type, except that the contract form will include a provision that all sales are “AS IS” “WHERE IS” and that neither Debtor, its management,
attorneys, nor Broker represent or guaranty the accuracy of the financial information contained in the Motion or sales information. All due diligence risk shall be the responsibility of the offeror.
The deadline for the submission of contracts for the purchase of the Properties will be the end of the Marketing Period.
At the end of the Marketing Period, the Broker will submit a report to Debtor listing all offers to purchase the Properties. Debtor will then select the highest and best offer and notify
all offerors regarding the selection within five (5) days of the end of the Marketing Period and file such report with the Court (“Report of Winning Bids”) and serve a copy on all offerors along with a copy of the order granting this Motion and setting the Sale Approval Hearing, as defined herein.
Pursuant to the Motion, the Debtor also requests the Court to set a hearing seventy (70) days following the entry of the Orders approving the retention of the Broker and granting this Motion (the “Sale Approval Hearing”) to approve the offerors and to consider any higher and better offers.
The sales of the Properties must close within thirty (30) days following e entry of an Order approving the sale by the Bankruptcy Court. A detail of the proposed schedule for the marketing of the Properties is attached hereto as
Exhibit B.
In addition to the foregoing, the Debtor proposed the following procedures for the bidders on the Properties:
a) Each bid must include an earnest money deposit of $2,500.00 in certified funds payable to Debtor’s attorney, Schreeder, Wheeler & Flint, LLP.
b) Earnest money shall be held in the escrow account by Debtor’s attorney and shall be returned to unsuccessful bidders thirty (30) days following the expiration of the Marketing Period.
c) Each offer must be on the form approved in this Motion and all sales are “As Is, Where Is”.
d) Each bidder shall conduct its own title, survey or other due diligence at its sole cost and expense prior to the deadline for submitting bids per the schedule in the Motion.
e) Neither Debtor, its management, attorney nor Broker represent or guaranty the accuracy of the financial information contained in the Motion or sales information.
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