In Re: Medford Crossings North LLC
| Decision Date | 20 January 2011 |
| Docket Number | NO. 07-25126,NO. 07-25124,NO. 07-25133,NO. 07-25135,NO. 07-25129,NO. 07-25127,NO. 07-25125,NO. 07-25131,CASE NO. 07-25115,NO. 07-25591,NO. 07-25587,NO. 07-25121,07-25121,07-25124,07-25125,07-25126,07-25127,07-25129,07-25131,07-25133,07-25135,07-25587,07-25591 |
| Parties | In re: MEDFORD CROSSINGS NORTH, LLC, et al., Debtors. |
| Court | U.S. Bankruptcy Court — District of New Jersey |
NOT FOR PUBLICATION
(Jointly Administered Under
APPEARANCES:
Courtney A. Schael, Esquire
ASHFORD-SCHAEL, LLC
Attorneys for the Debtors
Michael J. Shavel, Esquire
D. Andrew Bertorelli, Jr., Esquire
SPECTOR, GADON & ROSEN, P.C.
Attorneys for Medford Village East Associates, LLC
and Laurel Pines, LLC
Trent S. Dickey, Esquire
Valerie A. Hamilton, Esquire
SILLS, CUMMIS & GROSS, P.C.
One Riverfront Plaza
Attorneys for Ripco Ventures, Inc.
Donald Campbell, Jr., Esquire
Paul H. Schneider, Esquire
GIORDANO, HALLERAN & CIESLA, P.C.
Attorneys for U.S. Home Corp., d/b/a Lennar Homes
Stephen D. Samost
Oren Klein, Esquire
PARKER McCAY, P.A.
Three Greentree Centre
Attorneys for Township of Medford
Jeffrey Sponder, Esquire
Office of the U.S. Trustee
One Newark Center
Robert M. Greenbaum, Esquire
SAUL EWING, LLP
Centre Square West
Attorneys for Cubellis, Inc.
Derrick R. Frejomil, Esquire
RIKER, DANZIG, SCHERER, HYLAND &
PERETTI, LLP
One Speedwell Avenue
Attorneys for Freedman Cohen Development, LLC;
FC Development, LLC; and Carl Freedman
Stephen McNally, Esquire
CHIUMENTO, McNALLY & SHOCKLEY, LLC
Cherry Tree Corporate Center
Attorneys for Pennoni Associates
Before the Court are Motions for Directed Verdict Filed by Stephen D. Samost, on behalf of Laurel Pines, LLC ("Laurel"), Medford Village East Associates, LLC ("MVE"), Stephen D. Samost ("Samost" and collectively with Laurel and MVE, the "MVE Litigants"), U.S. Home Corp., d/b/a Lennar Homes ("Lennar") and Cubellis, Inc. ("Cubellis" and collectively with MVE Litigants and Lennar, the "Movants"), asking this Court to find that the Third Amended Plan of Reorganization of Medford Crossings North LLC (07-25115) ("MCN"), Medford Crossings South LLC (07-25121) ("MCS"), Purple Tree One LLC (07-25124), Purple Tree Two LLC (0725125), Purple Tree Three LLC (07-25126), Purple Tree Four (07-25127), Purple Tree Five (0725129), Purple Tree Ten LLC (07-25131), Purple Tree Investments LLC (07-25133) (collectively the "Purple Tree Entities"), FC Medford Residential LLC (07-25135) ("FCMR"), Medford Crossings North Urban Renewal LLC (07-25587) and Medford Crossings South Urban Renewal LLC (07-25591) (the "CUREs") (MCN, MCS, Purple Tree Entities, FCMR and CUREs collectively referred to herein as the "Debtors") under chapter 11 of title of 11 of the United States Code (the "Bankruptcy Code") dated September 29, 2008, is unconfirmable.
The cases have a long and tortured history displaying continuous animosity among the parties and contentiousness in each and every matter. While the Debtors originally expressed a desire to reorganize and complete the pending construction project, more fully described below, it soon became apparent that a plan of liquidation was the only available avenue. A liquidating plan and disclosure statement were filed on April 14, 2008, an amended plan and disclosure statement filed on June 13, 2008 and a Third Modified Plan and Third Modified Disclosure Statement were filed on September 29, 2008 (the "Third Modified Plan" or the "Plan" and the "Third Modified Disclosure Statement" or the "Disclosure Statement"). The Disclosure Statement was approved by order dated October 28, 2008 and amended order dated October 31, 2008 and confirmation was originally scheduled for December 19, 2008. Objections to the Plan were filed by Lennar, Cubellis, MVE, Laurel, Pennoni Associates, Inc. ("Pennoni") and Medford Township (the "Township"). The objection of Pennoni and the Township were resolved prior to the hearing on confirmation and the remaining objections continued through a contested confirmation hearing which took place over many hearing dates spanning months. The confirmation hearing commenced on January 29, 2009 and testimony concluded on July 16, 2009. The parties then spent several weeks attempting to agree on the admissibility of the volumes of documents. The Court held a hearing on the exhibits whose admissibility were still disputed on August 13, 2009 resulting in an order dated November 20, 2009 which specifically identified each admitted document. On September 4, 2009, MVE, Laurel, Samost and Cubellis filed the Motions for Directed at issue, all seeking a determination that the Bankruptcy Court lacked jurisdiction to approve the releases and injunction contained in the Debtors'(collectively referred to herein as the "Motions for Directed Verdict"). The Court took these matters under advisement to make findings of fact and conclusions of law as to whether the Debtors had met their burden to show that the proposed Plan was confirmable.2
On October 17, 2007, MCS, MCN, the Purple Tree Entities and FCMR filed Chapter 11 petitions in the United States Bankruptcy Court for the District of New Jersey (the "Bankruptcy Court"). An order providing for joint administration of the cases was entered on October 23, 2007. On October 25, 2007 the CUREs also filed chapter 11 petitions which were ordered to be jointly administered with the previously filed cases by order dated December 4, 2007. Since the filing of its bankruptcy petitions, the Debtors have been operating as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
MCN was formed on October 12, 2004 and MCS was formed on October 22, 2004 in accordance with Certificates of Formation filed with the New Jersey Department of Treasury on October 13, 2004 and October 25, 2004, respectively. Limited liability agreements dated October 22, 2004 provide for initial contributions and additional capital contributions by the members as may be needed to accomplish the business purposes of the company. The members of MCN are Medford Crossings North Development Associates LLC and Ripco Ventures, Inc. ("Ripco"). The members of MCS are Medford Crossings South Development, South Associates LLC and Ripco. Mitchell R. Cohen ("Cohen") signed both agreements on behalf of Medford Crossings North Development Associates LLC and Medford Crossings South Development LLC and Christopher Conlin ("Conlin") signed both documents on behalf of Ripco. Despite both agreements stating that Schedule I attached to the agreements describes the amount of initial contribution of the members, Schedule I attached to the LLC agreement of MCN has no amount listed and the LLC agreement of MCS has no schedule I attached. Although the agreements are dated October 22, 2004, they both reference an agreement of sale with Medford Township, assignment of rights to Purple Tree Investment LLC, which was formed in 2006, and an agreement of sale with Lennar which was executed in 2006, clearly indicating that the agreements could not have been executed in 2004, and the debtors provided no explanation for the discrepancy.
The Purple Tree Entities were each formed on May 5, 2006 pursuant to the amended and restated Limited Liability Agreements submitted into evidence. FCMR and Ripco were the members of each of these entities. Each agreement also provides for initial contributions as set forth on Schedule I but none of the agreements has a Schedule I attached. Purple Tree Investments LLC was also formed on or about May 5, 2006 pursuant to an amended and restated limited liability agreement, of which FCMR and Ripco were members. Schedule I is attached to the limited liability agreement, but it reflects no amount of initial capital contribution. Mitchell R. Cohen signed each agreement on behalf of FCMR and Christopher Conlin signed on behalf of Ripco.
FCMR was formed on May 2, 2006 pursuant to a limited liability agreement. Mitchell Cohen, Carl Freedman, Mark Arencibia and Scott Ciocco are identified as members, but only Mitchell Cohen and Carl Freedman signed the limited liability agreement. Schedule I attached to the agreement purports to identify the amount of initial capital contributions, but the amounts are left blank for Freedman and Cohen and are zero for Arencibia and Ciocco. No limited liability agreements were presented relating to the formation of Medford Crossings North Urban Renewal LLC ("MCN Urban Renewal") or Medford Crossings South Urban Renewal LLC ("MCS Urban Renewal"), collectively the CUREs.
The purpose of the formation of the various Debtor entities was the completion of a development project located on Route 70 in Medford Township, now known as Medford Crossings (the "Project"). The Project was ongoing for many years prior to the involvement of the Debtors and their principals, and extensive litigation was involved. Samost, an attorney and developer, was involved with the Project since its inception. The land in question was purchased at various times and by various entities owned and/or controlled by Samost in the mid-1980's. The properties were eventually transferred to Medford Village East Associates, LLC ("MVE"), an entity owned and controlled by Samost. MVE is a creditor in this case and objects to the proposed plan of reorganization.
In late 2003 and early 2004 Cohen and Carl Freedman ("Freedman") negotiated with Samost for the right to acquire and develop the property, which included both commercial and residential portions, and spanned both north and south of Route 70 in Medford Township (the "Property"). Freedman met Samost through a mutual friend and they became friendly. Freedman was aware of the extensive litigation involving this project but he believed that he could be part of the solution to the problems which existed regarding the development. He felt it unnecessary to look into the details of the past litigation as it was his intention to move forwardwith the project. Freedman and Cohen were members of an entity known as Freedman Cohen...
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