Matter of Oak Winds, Bankruptcy No. 79-1617 C.
| Decision Date | 28 May 1980 |
| Docket Number | Bankruptcy No. 79-1617 C. |
| Citation | 4 BR 528 |
| Parties | In the Matter of: OAK WINDS, a Florida Limited Partnership, Debtor. |
| Court | U.S. Bankruptcy Court — Middle District of Florida |
Albert I. Gordon, Gordon & Maney, Tampa, Fla., Richard H. Malchon, Jr., Earle & Earle, St. Petersburg, Fla., for Southeast First Bank of Miami.
Charles F. Ketchey, Jr., Himes, Terry & Ketchey, Tampa, Fla., for Rodgers Const. Inc.
Stephen O. Cole, McMullen, Everett, Logan Marquardt & Cline, Clearwater, Fla., for Debtor and others.
ORDER OVERRULING OBJECTION TO DISMISSAL AND FINAL ORDER OF DISMISSAL
On November 21, 1979, the Southeast First National Bank of Miami filed an Involuntary Creditor's Petition against Oak Winds, a Florida Limited Partnership, seeking an Order for Relief under Chapter 11 of the Bankruptcy Code. Oak Winds filed an answer generally contesting the Involuntary Petition.
On February 21, 1980, the Southeast First National Bank of Miami hereinafter called "Bank", entered into a Stipulation with the Debtor wherein, among other things, the Debtor consented to the immediate entry of an Order for Relief pursuant to 11 U.S.C., § 303(h).
No Order for Relief was entered, as on March 4, 1980, the Bank and the Debtor filed a Joint Application to dismiss the Petition With Prejudice. On March 10, 1980, and in compliance with § 303(j) of the Bankruptcy Code, this Court entered an Order Dismissing the Petition With Prejudice, which provided among other things:
"This Order of Dismissal shall become effective only after ten (10) days notice to Creditors of Oak Winds, the Debtor herein, unless a written objection thereto is filed within such ten day period by a creditor receiving such notice."
Joe M. Rodgers and Assoc., Inc., hereinafter called "Rodgers", filed an unsecured Proof of Claim and timely written objection to the dismissal. The Bank filed a Motion to Strike such objection alleging that Rodgers indeed is not a creditor of the Debtor. The parties agreed not to try the issue of whether Rodgers is a creditor of the Debtor pending a determination as to whether dismissal is in the best interest of the estate.
A hearing was duly held on May 3, 1980, on the issue of whether the dismissal was in the best interest of the estate, at which hearing Rodgers, the Bank and the Debtor presented evidence by way of live testimony and by way of an elaborate trial stipulation as to certain facts and documentation.
The facts relevant to the issues outlined above are basically without dispute and can be briefly summarized as follows:
Oak Winds is a Florida Limited Partnership and at the time pertinent to the controversy, was the owner and operator of a 456 unit apartment house complex constructed on property acquired by Oak Winds under a long-term ground lease. The complex is located in the city of Clearwater Florida and has additional facilities such as swimming pools and tennis courts and, of course, built-in appliances customarily furnished by this type of apartment house complex. Oak Winds, having defaulted on this mortgage obligation to Southeast First National Bank of Miami, the creditor who filed this involuntary proceeding under Chapter 11 of the Bankruptcy Code together with two other loan participants whose involvement is not relevant to this controversy, filed a complaint in the Circuit Court for Pinellas County, Florida and sought to foreclose the mortgage encumbering the leasehold interest of Oak Winds and also to enforce the security interest held by the Bank on chattels owned by and located in the apartment house complex. Shortly after the institution of the foreclosure proceeding, at the request of the Bank, the Circuit Court appointed Dwight McCormick to take over the project as a receiver, who took possession of the complex and assumed the operation of same.
The record further reveals that the apartment house complex was unfortunately constructed in a low-lying land area with no build-up and most importantly, as developed later, with a totally inadequate drainage system which was not even designed to handle the normal flow of water, let alone an abnormal flow caused by excessive precipitation.
On May 8, 1979, a torential rainfall hit Pinellas County and, in a very short span of time, poured a tremendous amount of water on the complex. As the result there was an almost total inundation of the entire county and, of course, the entire apartment house complex flooded. The water rose over the parking lot, covered the swimming pools and tennis courts and reached the level of approximately six feet in 146 units which, of course, rendered these units totally uninhabitable and they are still uninhabitable. In addition, as a direct result of the flooding the rentability of other directly unaffected apartments became significantly impaired to the extent they have...
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