In re Yellowstone Mountain Club, LLC
Decision Date | 30 September 2011 |
Docket Number | Nos. 08–61570–11,08–61572–11.,08–61571–11,08–61573–11,s. 08–61570–11 |
Citation | 460 B.R. 254 |
Parties | In re YELLOWSTONE MOUNTAIN CLUB, LLC, Debtor.In re Yellowstone Development, LLC, Debtor.In re Yellowstone Club Construction Company, LLC, Debtor.In re Big Sky Ridge, LLC, Debtor. |
Court | U.S. Bankruptcy Court — District of Montana |
OPINION TEXT STARTS HERE
Connie Sue Martin, Bullivant Houser Bailey PC, Seattle, WA, Craig D. Martinson, Billings, MT, David A. Ernst, Thomas L. Hutchinson, Bullivant Houser Bailey PC, Portland, OR, Gig A. Tollefsen, Berg Lilly & Tollefsen, Bozeman, MT, James A. Patten, Billings, MT, Lawrence R. Ream, Bullivant Houser Bailey PC, Seattle, WA, Richard G. Birinyi, Schwabe, Williamson & Wyatt, Seattle, WA, Stephen Deatherage, Troy Greenfield, Bullivant Houser Bailey PC, Seattle, WA, for Debtors.
The Court is tasked with writing yet another chapter in the Yellowstone Club bankruptcy saga, which has been ongoing for almost three years. If this were a book, the reader would most likely read the chapters of the saga in sequence and in a relatively compressed period of time. But this is not a novel and one cannot thumb through a prior chapter to glean a forgotten fact. Thus, the Court directs the reader to prior chapters (Memoranda of Decision and Orders) that provide some insight as to why another chapter is necessary. Relevant facts may be found in this Court's Memorandum of Decision and Order entered in this case at docket entry nos. 1025 and 1026. One may also look at the Memoranda of Decision, Order and Judgment found at docket entry nos. 292, 293, 575 and 582 in related Adversary Proceeding 09–00014, Timothy L. Blixseth v. Marc S. Kirschner, Trustee of the Yellowstone Club Liquidating Trust. Along these same lines, the Court also granted various requests for judicial notice found at docket entry nos. 2203, 2209, 2224 ( ), 2228 and 2240.
2. To identify and delineate those persons or representatives who are properly within the scope, under 11 U.S.C. § 524(e), of the exculpation and limitation of liability clause set forth in Section 8.4 of Debtor's Third Amended Joint Plan of Reorganization, and
3. To further consider approval of the Settlement Term Sheet found at docket entry no 947–12.
Upon motion of Blixseth, the Court entered an Order on June 16, 2011, continuing the July 11, 2011, hearing to July 25, 2011. By separate Order entered July 27, 2011, this Court vacated further hearing on whether the Debtors' plan was proposed in good faith, concluding nothing in Judge Haddon's November 2, 2010, Memorandum and Order required this Court to revisit the issue of good faith.
At the hearing held July 25 and 26, 2011, in Missoula, Blixseth was represented by Michael J. Flynn of Boston, Massachusetts (“Flynn”), Philip H. Stillman of Miami Beach, Florida (“Stillman”), Christopher J. Conant of Denver, Colorado and Patrick T. Fox of Helena, Montana; Debtors were represented by James A. Patten of Billings, Montana (“Patten”) and Richard Birinyi and Larry Ream of Seattle, Washington; Credit Suisse, Cayman Island Branch (“Credit Suisse”), was represented by Evan Levy, Mark McDermott and Sean Marlaire of New York, New York and Richard J. Orizotti of Butte, Montana; the Ad Hoc Group of Class B Unit Holders was represented by Clark Whitmore of Minneapolis, Minnesota and Ronald A. Bender of Missoula, Montana; CrossHarbor Capital Partners LLC (“CrossHarbor”), New CH YMC Acquisition LLC, CrossHarbor Institutional Partners LP and CIP Yellowstone Lending LLC were represented by Paul D. Moore (“Moore”) and Barry D. Green of Boston, Massachusetts and Benjamin P. Hursh of Missoula, Montana; Robert Sumpter (“Sumpter”) was represented by Stephen Mackey of Billings, Montana; Normandy Hill Capital, LP was represented by Robert G. Burns of New York, New York and Quentin M. Rhoades of Missoula, Montana; Marc S. Kirschner, Trustee (“Liquidating Trustee”) of the Yellowstone Club Liquidating Trust (“YCLT”), was represented by John Turner of Amarillo, Texas, Brian Glasser of Charleston, West Virginia and Shane Coleman and Charles Hingle of Billings, Montana; attorney Thomas L. Hutchinson was represented by Robert F. James of Great Falls, Montana; attorney J. Thomas Beckett (“Beckett”) was represented by Trent M. Gardner of Bozeman, Montana; the law firm of Garlington, Lohn & Robinson was represented by Dale Cockrell of Kalispell, Montana; Creditor Liquidity LP was represented by Dean A. Stensland of Missoula, Montana; Debtors' attorney Patten was represented by Mike McMahon of Helena, Montana; and Big Sky Shuttle, Inc. was represented by Jon Binney of Missoula, Montana. Patten, Matthew Kidd, Stephen R. Brown (“Brown”), Larry Ream, and Beckett testified. The Court agreed to admit the transcript of Ronald Greenspan's (“Greenspan”)—the Debtors' chief restructuring officer—Rule 2004 examination as part of the record.1
As noted earlier, certain matters are, at the direction of Judge Haddon's November 2, 2010, Memorandum and Order, once again before this Court. Judge Haddon's Memorandum and Order is clear, unambiguous and, in this Court's opinion, quite narrow. First, Judge Haddon held this Court erred when it proceeded to confirm the Debtors' Third Amended Joint Plan of Reorganization without appropriate notice and opportunity for all parties to object to the Yellowstone Club Settlement Term Sheet (“Settlement Term Sheet”) filed May 22, 2009, at docket entry 947–12, which Settlement Term Sheet was incorporated into the Debtors' Third Amended Joint Plan of Reorganization. The Court's Orders of May 27, 2011, and June 16, 2011, setting approval of the Settlement Term Sheet for hearing on July 25, 2011, satisfy any notice required by F.R.B.P.2002 and F.R.B.P. 9019.
In response to this Court's notice and presumably in an effort to satisfy F.R.B.P. 9019, Debtors, CrossHarbor and New CH YMC Acquisition, LLC filed on June 10, 2011, a Joint Motion for Order Pursuant to Bankruptcy Rule 9019 Authorizing and Approving the Yellowstone Club Settlement Term Sheet Nunc Pro Tunc (“Rule 9019 Motion”). Sumpter (dkt 2186), Red Rock Investments, LLC (dkt 2189), Creditor Liquidity, LP (dkt 2196), K & L Gates LLP (dkt 2197) and Blixseth filed objections to the Debtors, CrossHarbor and New CH YMC Acquisition, LLC's Rule 9019 Motion.
Sumpter objects to approval of the Settlement Term Sheet on three grounds. First, Sumpter argues that the Settlement Term Sheet vacates the Court's Partial and Interim Order in Adversary Proceeding 09–00014. Second, Sumpter takes issue with the composition of YCLT's liquidating trust board. Finally, Sumpter raises several arguments that challenge the Settlement Term Sheet's treatment of Class 4 claims. In particular, Sumpter argues the Settlement Term Sheet “is not fair and equitable or in the best interests of the estate” because of the treatment of Class 4 creditors who were not designated as trade creditors: “the unpaid, unsecured claim holders are now partially put into the fourth tranche on a pari passu basis with Credit Suisse and subordinate to the purchaser of the Trade Creditor claims.” Red Rock Investments, LLC and K & L Gates LLP's skeletal objections echo Sumpter's objection that the Settlement Term Sheet provides for disparate treatment of Class 4 creditors. Creditor Liquidity, LP also objects to approval of the Settlement Term Sheet on grounds it violates the requirements of 11 U.S.C. § 1123(a)(4). In addition, Creditor Liquidity, LP argues the Settlement Term Sheet inequitably modified the Debtors' Second Amended Plan, the plan upon which ballots were cast. Finally, Creditor Liquidity, LP argues the Settlement Term Sheet does not result...
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