trustee’s application to employ norman j....

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION

IN RE: ) ) POINTE PROPERTIES, LLC, ) Case No. 17-06729-JJG-11 ) Debtor. )

TRUSTEE’S APPLICATION TO EMPLOY NORMAN J. GALLIVAN, INC. AS AUCTIONEER

Deborah J. Caruso, the chapter 7 trustee in this case (the “Trustee”), by counsel, pursuant

to 11 U.S.C. § 327(a), Rule 2014 of the Federal Rules of Bankruptcy Procedure, and Local Rule

B-6004-1(b) and B-6005-1, requests entry of an order authorizing the Trustee to employ Norman

J. Gallivan, Inc. (“Gallivan”) as auctioneer with respect to real estate, on the following grounds:

I. JURISDICTION

1. The Court has jurisdiction over this motion pursuant to 28 U.S.C. §§ 157 and

1334. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2).

2. Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.

3. The statutory predicates for relief are section 327 of Title 11 of the United States

Code (the “Bankruptcy Code”) and Rule 2014 of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”).

II. BACKGROUND

4. On September 5, 2017, Pointe Properties, LLC (the “Debtor”) filed a voluntary

petition for relief under chapter 11 of the Bankruptcy Code. On November 3, 2017 (the

“Conversion Date”), the case was converted to a chapter 7 case and the Trustee was appointed as

interim trustee in the case pursuant to section 701(a)(1) of the Bankruptcy Code. The Trustee

Case 17-06729-JJG-7A Doc 142 Filed 02/15/18 EOD 02/15/18 12:47:23 Pg 1 of 9

became the case trustee in the bankruptcy case following the conclusion of the first meeting of

creditors on December 19, 2017, pursuant to section 702(d) of the Bankruptcy Code.

5. The Debtor is the owner of the Eagle Pointe Golf Resort in Bloomington, Indiana.

The Eagle Pointe Golf Resort is an 18 hole golf course on approximately 128.54 acres. It

includes approximately 7 structures located on its premises. Such structures include the

following:

(a) Club House (12,737 sq. ft.);

(b) Eagles Nest (4,472 sq. ft. consisting of 2 bathrooms, a standup bar serving area, a utility room and 3 storage closets);

(c) Birdies/ Play-and-Stay (1,892 sq. ft. consisting of 4 bedrooms, 2 baths, kitchen and living area);

(d) Cabana Bar/Pool Storage (1,380 sq. ft.);

(e) Hot Dog Shack (101 sq. ft.); and

(f) Two maintenance barns for equipment storage and repair. 6. According to the Summary of Assets and Liabilities for Non-Individuals filed on

October 10, 2017 (the “Schedules”) [Doc 54], the Debtor asserts that as of the Petition Date, the

aggregate amount of approximately $990,000 was alleged to be due and owing in respect of

certain loans and other financial accommodations made by US Income Partners, LLC (“USIP”)

pursuant to certain prepetition financing documents and related filings. USIP and the Trustee

have stipulated that as of the Petition Date, the Debtor was indebted to USIP in an amount of at

least $1,134,375.96 (such amount, combined with USIP’s legal fees, accruing interest, costs and

all expenses charged or chargeable under certain prepetition loan documents, the “Prepetition

Indebtedness”) is due and owing from the Debtor.

7. The Prepetition Indebtedness is evidenced by, among other things, the following:

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(a) A Promissory Note, dated December 22, 2016, in the original principal amount of $990,000 (the “Note”).

(b) Mortgage, Assignment of Leases and Rents and Security Agreement made by the Debtor in favor of USIP, dated as of December 22, 2016 (the “Mortgage”), which was recorded on December 28, 2016 as Document Number 2016018014 in the office of the Monroe County, Indiana Recorder, which grants USIP a mortgage lien upon real estate, improvements and fixtures owned by the Debtor in Monroe County, Indiana.

(c) A Security Agreement, from the Debtor in favor of USIP, which was

executed on December 22, 2016 (the “Security Agreement”), which grants USIP a security interest in, among other things, the Debtor’s accounts receivable inventory, equipment, and general intangibles. A UCC Financing Statement was filed with the Indiana Secretary of State on December 22, 2016 as Document Number 2016000101456 which describes the property listed above (the “Financing Statement”) (the Note, the Mortgage, the Security Agreement, the Financing Statement, and all other documents, instruments, agreements entered into in connection therewith, the “Prepetition Loan Documents”).

8. In addition, on January 24, 2018, the Court entered its Final Order (I) Authorizing

Secured Postpetition Financing, (II) Granting Senior Liens and Superpriority Administrative

Expense Status, (III) Granting Limited Relief from the Automatic Stay, and (IV) Granting

Related Relief (the “Financing Order”) [Doc 135], authorizing the Debtor’s bankruptcy estate to

obtain secured postpetition financing on a superpriority basis in the form of a revolving loan (the

“TIP Loan”) from USIP.

9. The Debtor’s obligations pursuant to the Prepetition Loan Documents are secured

by a first priority security interest in substantially all of the Debtor’s tangible and intangible

personal property and a first priority mortgage lien upon the Debtor’s real estate. The TIP Loan

is secured on a superpriority basis on all of the Debtor’s assets, including the real estate and

personal property at issue in this motion.

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10. After arms-length negotiations with USIP, the Debtor’s primary secured creditor,

the Trustee has agreed to sell the Debtor’s real estate and personal property (USIP’s collateral) in

exchange for a carveout from USIP’s collateral and the proceeds thereof for (a) the Trustee’s

commission as permitted under and limited by section 326(a) of the Bankruptcy Code (the

“Trustee Fee Carveout”), and (b) the Legal Fee Carveout (as defined in the Final Order (I)

authorizing Secured Postpetition Financing, (II) Granting Senior Liens and Superpriority

Administrative Expense Status, (III) Granting Limited Relief from the Automatic Stay, and (IV)

Granting Related Relief (the “TIP Order”).

11. The Trustee requires the assistance of Gallivan to market and sell the Debtor’s

real estate and certain personal property located at the real estate (the “Property”) at auction.

USIP has consented to the retention of Gallivan as the Trustee’s auctioneer. Gallivan and the

Trustee have negotiated an Exclusive Listing Agreement (the “Agreement”), setting forth the

terms and conditions of Gallivan’s proposed engagement by the Debtor’s bankruptcy estate. The

Agreement is attached and incorporated as Exhibit 1.

III. RELIEF REQUESTED

12. The Trustee requests entry of an order, pursuant to section 327(a) of the

Bankruptcy Code and Bankruptcy Rule 2014(a), authorizing the Trustee to employ and retain

Gallivan as the Trustee’s auctioneer in the Debtor’s bankruptcy case on the terms and conditions

set forth in the Agreement.

Terms of the Agreement

13. Gallivan shall have the exclusive right to sell the Property until May 15, 2018;

provided however, subject to Court approval, the Property will be sold at auction on March 22,

2018. Gallivan will charge a 6% buyer’s premium on the sale, if the buyer is represented by a

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broker, and in the event the buyer is not represented by a broker, Gallivan will only retain 5% of

the buyer’s premium and the unused 1% will be returned to the bankruptcy estate, subject to

USIP’s lien. In the event USIP elects to credit bid and is the prevailing bidder, Gallivan will be

entitled to a buyer’s premium equal to 1% of the total purchase price, equal to the credit bid.

14. Gallivan will be entitled to reimbursement of expenses in an amount of up to

$9,500.00, to be paid out of the net sale proceeds or by USIP in the event USIP closes on a sale

pursuant to its credit bid.

15. All compensation earned by Gallivan and reimbursement of expenses incurred by

Gallivan are subject to final approval of the Court, and will be held in escrow by the Trustee

until final Court approval is obtained. Upon approval from the Court, the Trustee shall promptly

pay Gallivan its approved compensation and reimbursement of expenses.

16. In addition, qualified bidders will be required to place an initial earnest deposit of

$50,000.00 (the “Qualifying Bidder Deposit”). The prevailing bidder at the auction will be

required to submit an additional earnest deposit within three (3) business days after the auction,

in amount when added to the Qualifying Bidder Deposit, shall equal 10% of the total purchase

price for the Property. The backup bidder at the auction will be required to submit an additional

earnest deposit within five (5) business days of notice from the Trustee of the prevailing bidder’s

failure to timely consummate the sale, in an amount when added to the Qualifying Bidder

Deposit, will equal 10% of the total purchase price pursuant to the backup bid. Any deposit

forfeited for any reason by the prevailing bidder or the backup bidder will be shared by the

Trustee and Gallivan on a 75/25 split in favor the Trustee, after payment of all expenses incurred

by Gallivan, subject to USIP’s lien.

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17. As the Trustee’s auctioneer, Gallivan will not come into possession or control of

assets or proceeds of assets of the Debtor’s bankruptcy estate. As such, the Trustee requests the

Court waive the requirement for Gallivan to post a bond with the Office of the United States

Trustee, as contemplated by Local Rule B-6005-1(a).

IV. GROUNDS FOR GRANTING RELIEF

18. Section 327(a) of the Bankruptcy Code authorizes the Trustee to retain one or

more “other professional persons” that do not hold or represent an interest adverse to the

bankruptcy estate, and that are disinterested persons. It is essential that the Trustee retain a

professional capable of selling the Property as expeditiously as possible so that the Trustee can

liquidate the Property while minimizing ongoing expenses associated with maintaining the

Property. After consideration of the proposal Gallivan and in consultation with USIP, the

Trustee has determined that Gallivan’s proposal, as set forth in the Agreement, provides the most

prudent method of liquidating the Property.

19. Gallivan has significant experience with marketing and selling real estate and

personal property, and is well qualified to handle this type of an auction.

20. To the best of the Trustee’s knowledge, Gallivan does not have any relevant

connection with the Debtor, its creditors, any other party-in-interest, their respective attorneys

and accountants, the United States Trustee or any person employed in the Office of the United

States Trustee other than as set forth in the Declaration of Disinterestedness of Norman J.

Gallivan attached and incorporated as Exhibit 2. Accordingly, the Trustee believes Gallivan is a

“disinterested person” as that term is defined in section 101(14) of the Bankruptcy Code, and

Gallivan does not hold or represent any interest adverse to the Debtor’s bankruptcy estate.

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V. NOTICE

21. The Trustee will serve a copy of this application, along with the attached Exhibits

1 and 2 on the following: (a) the Office of the United States Trustee; (b) the Debtor’s counsel;

(c) counsel for USIP; (d) USIP; (e) all other parties reasonably believed to have an interest in the

Property, including Monroe County Treasurer, South Central Regional Sewer District, Shelby

Gravel, Inc. d/b/a Shelby Materials, Deaton’s Mechanical Company, Inc., Harrell-Fish, Inc.,

Nicholson-Williams, Inc. d/b/a Coldwell Banker Commercial Benchmark, Natalie Slagle, and

the Indiana Department of Revenue; and (d) those parties who have requested notice pursuant to

Bankruptcy Rule 2002.

WHEREFORE, the Trustee respectfully requests entry of an order: (i) authorizing the

employment of Gallivan, upon the terms outlined in this application and as reflected in the

Agreement; (ii) waive the bond requirement contemplated in Local Rule B-6005-1(a); and (iii)

granting the Trustee all other just and proper relief.

Respectfully submitted,

RUBIN & LEVIN, P.C.

By: /s/ Meredith R. Theisen Meredith R. Theisen

Deborah J. Caruso (Atty. No. 4273-49) John C. Hoard (Atty. No. 8024-49) Meredith R. Theisen (Atty. No. 28804-49) RUBIN & LEVIN, P.C. 135 N. Pennsylvania Street, Suite 1400 Indianapolis, Indiana 46204 Tel: (317) 634-0300 Fax: (317) 263-9411 Email: [email protected] [email protected]

[email protected] Attorneys for Deborah J. Caruso, Trustee

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CERTIFICATE OF SERVICE

I hereby certify that on February 15, 2018, a copy of the foregoing Trustee’s Application to Employ Norman J. Gallivan, Inc. as Auctioneer was filed electronically. Notice of this filing will be sent to the following parties through the Court’s Electronic Case Filing System. Parties may access this filing through the Court’s system.

Steven Dean Carpenter [email protected] Deborah J. Caruso [email protected], [email protected] Ben T. Caughey [email protected] Howard Russell Cohen [email protected], [email protected] Laura A DuVall [email protected], [email protected] John R. Humphrey [email protected], [email protected];[email protected] Edward M King [email protected], [email protected];[email protected] David R. Krebs [email protected], [email protected] James G. Lauck [email protected], [email protected] Michael P. O'Neil [email protected], [email protected] Angela F. Parker [email protected], [email protected] John W. Richards [email protected], [email protected] Jonathan David Sundheimer [email protected] Steven P. Taylor [email protected], [email protected];[email protected];[email protected] U.S. Trustee [email protected]

I further certify that on February 15, 2018, a copy of the foregoing Trustee’s Application to Employ Norman J. Gallivan, Inc. as Auctioneer was mailed by first-class U.S. Mail, postage prepaid, and properly addressed to the following: Monroe County Treasurer 100 W. Kirkwood Avenue Bloomington, IN 47404

US Income Partners, LLC 3445 Winton Place, Suite 228 Rochester, NY 14623

Nicholson-Williams, Inc. d/b/a Coldwell Banker Commercial Benchmark c/o Willard DJR Nicholson, Registered Agent 4348 Southpoint Blvd. #310 Jacksonville, FL 32216

South Central Regional Sewer District 528 N. Walnut Street Bloomington, IN 47404

Shelby Gravel, Inc. d/b/a Shelby Materials P.O. Box 242 Shelbyville, IN 46176

Shelby Gravel, Inc. d/b/a Shelby Materials c/o Aaron Haehl, Registered Agent 157 E. Rampart Street Shelbyville, IN 46176

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Deaton’s Mechanical Company, Inc. 1435 Brookville Way Suite J Indianapolis, IN 46239

Deaton’s Mechanical Company, Inc. c/o Gary W. Deaton, Registered Agent 4355 N. S.R. 9 Greenfield, IN 46140

Harrell-Fish, Inc. c/o Joseph R. Fuschetto & Joseph Daniel O’Connor Bunger & Robertson 226 South College Ave. P.O. Box 910 Bloomington, IN 47402

Harrell-Fish, Inc. c/o David E. Conner, Registered Agent 2010 Vernal Pike Bloomington, IN 47402

Indiana Department of Revenue Bankruptcy Section, MS108 100 N. Senate Ave., N240 Indianapolis, IN 46204

Natalie Slagle c/o David Joseph Barker 650 N. Rangeline Road Carmel, IN 46032

Shelby Materials 5156 N. Indianapolis Rd. Columbus, IN 47203-9439

Jeff Heinzmann Heinzmann Law Office LLC P.O. Box 336 Fishers, IN 46038

M. Michael Stephenson McNeely Stephenson 2150 Intelliplex Drive Shelbyville, IN 46176

/s/ Meredith R. Theisen

Meredith R. Theisen f:\wp80\trustee\caruso\pointe properties, llc - 86740901\drafts\application employ gallivan - final.docx

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7170 Zionsville Road Indianapolis, IN 46268

317.227.3720 317.227.3725- faxwww.NJGALLIVAN.com

NORMAN J. GALLIVAN, INC. EXCLUSIVE LISTING AGREEMENT

This Agreement (“Agreement”) is made and entered into as of this ___ day of February, 2018, by and between Norman J. Gallivan, Inc., an Indiana corporation whose principal place of business is 7170 Zionsville Road, Indianapolis, Indiana 46268 (the “Auctioneer”), and Deborah J. Caruso, the duly appointed Chapter 7 Trustee for the bankruptcy estate of Pointe Properties, LLC, and not in her individual capacity (the “Seller”) for the sale of real estate and personal property owned by Pointe Properties, LLC, which is generally located at 2250 E Pointe Rd, Bloomington, IN 47401 other than a certain walk in cooler located on such real estate(the “Property”).

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which Seller and Auctioneer hereby expressly acknowledge Seller and Auctioneer agree as follows:

1. Exclusive Term. Seller hereby grants to Auctioneer the exclusive right to sell theProperty at auction for a period commencing on the date of this Agreement and ending at midnight on May 15, 2018 (the “Exclusive Term”), at which point this Agreement will terminate unless the parties extend the agreement in writing.

2. Auction and Sale of Property. The Property shall be sold at public auction, to be held onApril 16, 2018. The selling price of the property shall be determined by competitive bidding, and sale subject to Bankruptcy Court approval.

Auction terms will include a buyer’s premium of six percent (6%) will be added to the bid price, to equal the total purchase price.

Registrants for the auction will be required to place an initial earnest money deposit in the amount of fifty thousand dollars ($50,000.00), to be eligible to bid. The successful bidder at auction will be required to submit an additional earnest money deposit within three days after the auction, in an amount when added to the initial deposit, will equal ten percent (10%) of the total purchase price. The earnest money deposits from the successful bidder are non-refundable. The backup bidder at the auction will be required to submit an additional earnest money deposit within five days of notice from the Seller of the successful bidder’s failure to timely consummate the sale, in an amount when added to the initial deposit, will equal ten percent (10%) of the total purchase price pursuant to the backup bid.

Any such deposit forfeited for any reason by a successful bidder or backup bidder will be shared by the Seller and the Auctioneer on a 75/25 split in favor of the Seller, after payment of all expenses incurred by the Auctioneer permitted under section 4 of this Agreement. Any

Exhibit 1 1 of 3

Case 17-06729-JJG-7A Doc 142-1 Filed 02/15/18 EOD 02/15/18 12:47:23 Pg 1 of 3

material auction terms not specifically addressed herein shall be agreed upon by Seller and Auctioneer in advance of the auction.

3. Commission. If the Seller sells the Property during the Exclusive Term, Seller agrees topay Auctioneer a commission equal to the six percent (6%) buyer’s premium charged at the auction (the “Auction Commission”). If the Purchaser is not represented by a broker, the Auctioneer will receive a five percent (5%) sales commission. If the lender credit bids and purchases the Property, the lender shall pay Auctioneer a buyer’s premium equal to one percent (1%) of the amount of the credit bid and shall not be obligated to pay the buyer’s premium described in the previous sentence. All commissions earned by the Auctioneer are subject to final approval from the United States Bankruptcy Court for the Southern District of Indiana, Indianapolis Division (the “Bankruptcy Court”). All such commissions shall be held in escrow by the Seller until Bankruptcy Court approval is obtained. Upon final approval from the Bankruptcy Court of the commissions, the Seller shall promptly pay the Auctioneer its approved commissions.

4. Advertising; Fees and Expenses. Auctioneer will advertise the Property in advance ofthe auction, which will include sending notices and information to prospective purchasers, and placement in appropriate publications and/or media. Seller agrees to allow Auctioneer to place advertising signs on the Property during the Exclusive Term, and to place “Sold” or similar signs on the Property until closing is complete. Seller agrees to be responsible for Auctioneer’s fees and expenses of advertising and conducting the sale in an amount of up to ninety-five hundred dollars ($9,500.00) (the “Fees and Expenses”), to be paid out of the net proceeds or by lender, in the event the purchase is made by the lender’s credit bid, to be held in escrow by the Seller pending final approval from the Bankruptcy Court. Additional expenses beyond the fees and advertising and conducting the sale, such as maintenance, repairs, and Phase I environmental reports, if requested, are the responsibility of the Seller.

5. Obligations of Auctioneer. Auctioneer agrees to develop and place advertising, placesigns, show the Property, conduct the auction, and assist in the completion of sale documents and in closing on the Property. Auctioneer agrees to use its best efforts to obtain the highest available price at the auction; Seller acknowledges, however, that Auctioneer makes no representations or guarantees concerning the price for which the Property may sell. Auctioneer is not responsible for the failure to collect any amounts due from purchasers.

6. Obligations of Seller. Seller agrees, if in her possession, to provide completedocumentary information relating to the property, including but not limited to deeds, title abstracts, surveys, tax bills, and tax maps, and to respond in a timely manner to all inquiries regarding the Property.

7. Escrow. Any money required to be held in escrow shall be deposited in an escrowaccount controlled by the Seller.

Exhibit 12 of 3


8. Risk of Loss. Seller assumes all risk of loss to the Property until closing. Auctioneer willnot be held responsible for fire, theft, vandalism, or other losses. Seller shall, at Seller’s sole expense, keep the Property insured until closing and, at Auctioneer’s request, shall provide Auctioneer with proof of insurance sufficient in coverage.

9. Entire Agreement. This Agreement constitutes the entire Agreement between Sellerand Auctioneer and supersedes all prior discussions, negotiations, and agreements, whether oral or written. No amendment, alterations, or withdrawal of this Agreement shall be valid or binding unless made in writing and signed by both Seller and Auctioneer.

10. Jurisdiction and Venue; Choice of Law. This Agreement shall be governed by andconstrued in accordance with the laws of the State of Indiana, notwithstanding its conflict of laws provisions. The Bankruptcy Court shall retain exclusive jurisdiction to enforce this Agreement, including after the bankruptcy case is dismissed, closed or converted to any other chapter of the Bankruptcy Code.

SELLER: Deborah J. Caruso, Trustee AUCTIONEER: Norman J. Gallivan, Inc.

By: ________________________ By: ___________________________________

f:\wp80\trustee\caruso\pointe properties, llc - 86740901\drafts\application employ gallivan - ex.1 (listing agreement) - final.docx

Exhibit 13 of 3


Exhibit 2 1 of 3


Exhibit 2 2 of 3


Exhibit 23 of 3
