POLSINELLI LLP, WESLEY HURST, ESQ. (CA # 127564), Los Angeles, CA, DESIGNATED AS COUNSEL FOR SERVICE.
DAVID D. FERGUSON (MO #37854), AARON C. JACKSON (MO #59392), Polsinelli PC, , Kansas City, MO, ATTORNEYS FOR U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF WAMU COMMERCIAL MORTGAGE SECURITIES TRUST 2007-SL3 COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-SL3.
BENJAMIN B. WAGNER, United States Attorney, Kevin C. Khasigian, Assistant U.S. Attorney.
ORRICK HERRINGTON & SUTCLIFF, LLP COURTNEY J. LINN, Counsel for Borrower.
STIPULATION AND ORDER OF PLAINTIFF, SECURED LENDER/CLAIMANT, AND BORROWER TO APPOINTMENT OF RECEIVER TO TAKE POSSESSION OF, ADMINISTER, MARKET FOR SALE, AND SELL PROPERTY SUBJECT TO POTENTIAL FORFEITURE AND LIEN
TROY L. NUNLEY, District Judge.
COMES NOW United States of America, the Plaintiff in this action ("Plaintiff"), U.S. Bank National Association, as Trustee for the Registered Holders of WAMU Commercial Mortgage Securities Trust 2007-SL3 Commercial Mortgage Pass-Through Certificates, Series 2007-SL3 ("Lender"), and Volen 7 Properties, LLC, a California limited liability company, each by and through undersigned counsel, and hereby stipulate, and request an order of this Court approving said stipulation (the "Stipulation"), to the appointment of Brandon Scott to act as receiver (the "Receiver") to take possession of, administer, and market for sale certain real property, improvements thereon, and personal property that is both subject to forfeiture in this action and subject to a first-priority lien in favor of Lender, securing indebtedness of greater than $900, 000.00 owed to Lender. In support of this Stipulation and the parties' request for approval of the same, the parties state as follows.
1. Lender is the holder and owner of that certain commercial real estate mortgage loan (the "Loan") in the original principal amount of $860, 000.00 (the "Loan"), the borrower under which is Volen Properties 7, LLC ("Borrower").
2. In connection with Lender's ownership of the Loan, Lender is the holder of that certain Promissory Note, dated December 15, 2006, in the original principal amount of $860, 000.00, the maker of which is identified as Borrower (the "Note"). A copy of the Note is attached hereto as Exhibit 1.
3. In connection with Lender's ownership of the Loan, Lender is also the owner of that certain Deed of Trust, Security Agreement, Assignment of Leases and Rents, and Fixture Filing (the "Security Instrument"), dated as of December 15, 2006, under which Borrower is the grantor. A copy of the Security Instrument is attached hereto as Exhibit 2.
4. By the terms of the Security Instrument, Borrower granted a first-priority lien on certain real property, improvements thereon, and personal property identified in the Security Instrument (collectively, the "Property"). The Property includes certain real property and improvements, comprising an 8822 square-foot, seven-unit office building located at 10940 Fair Oaks Boulevard in Fair Oaks, California.
5. The Loan is in default, including by virtue of Borrower's failure to make monthly payments on the Loan, as and when called for under the Note and Security Instrument, since October 2012. Borrower's obligations under the Loan have been accelerated and are immediately due and owing to Lender.
Commencement of This Action
6. Borrower's principal and managing member is Bart W. Volen ("Volen"). On March 20, 2012, the United States commenced this in rem action against certain properties owned by entities owned and/or controlled by Volen, seeking forfeiture of such properties. Among the properties that are the subject of this action is the Property.
Request for Relief
7. Accordingly, the Property is subject to liquidation, either via the foreclosure process (which may be judicial or non-judicial under California law) by virtue of Borrower's default on the Loan, or via the forfeiture provisions of 18 U.S.C. Section 981, et al.
8. Plaintiff, Lender, and Borrower desire to maximize the return from a sale of the Property, so that Lender's secured indebtedness may be paid in full from such sale and so that the proceeds of the sale in excess of the debt owed to Lender may be disbursed to the IRS pending further order of the Court. Lender has duly filed its claim in this case in the following amounts: principal in the amount of $811, 624.33; interest through April 19, 2012 in the amount of $7621.05; default interest through April 19, 2012 in the amount of $338.19; interest after April 19, 2012 at the per diem rate of $155.40; default interest after April 19, 2012 at the per diem rate of $112.73; processing and documentation fees in the amount of $75.00; fees and costs, including attorneys fees, through April 19, 2012 in the amount of $14, 755.00; and fees and costs, including attorneys fees, that have accrued and have continued to accrue thereafter (collectively, the "Indebtedness").
9. While nothing is certain, Plaintiff, Lender, and Borrower have agreed that, and are hopeful that, the Property may have a value in excess of the Indebtedness. Plaintiff, Lender and Borrower have further agreed that neither a foreclosure sale of the Property nor an immediate sale of the Property under 18 U.S.C. Section 981 would maximize the return on the Property and instead would virtually ensure that the return for the Property would be less than the amount of the Indebtedness. Accordingly, Plaintiff, Lender, and Borrower have stipulated and agreed that the superior course of action would be to appoint Scott as Receiver, without bond, so that Scott may administer the Property, take such actions as are reasonably necessary to increase the marketability of the Property, market the Property - in an orderly but prompt fashion - for sale, and then sell the Property pursuant to a procedure agreed to by Plaintiff and Lender, as such sale would be in the best interests of the receivership estate created by the appointment of the Receiver, and maximize return for the benefit of Plaintiff, Lender, and Borrower.
10. Scott is a principal at BLR Asset Management ("BLR"), which has experience managing real property throughout the State of California. A copy of Scott's curriculum vitae is attached hereto as Exhibit 3.
11. Scott would retain Voit Real Estate Services as the broker for sale of the Property. Scott proposes to market the Property for sale over a period of approximately 120 days. After such marketing Scott will, subject to the terms and provisions hereinafter set forth in this paragraph, sell the Property free and clear of Plaintiff's interest and Lender's interest on a specified sale date (the "Sale Date") to the third-party bidder (the "Sale") placing the highest and best bid for the Property (the "Third Party Bid"), provided, however, if such Sale would result in a yield of net sale proceeds (after payment of a sale commission of six percent of the gross sale price to Voit, together with other expenses of sale) less than the Indebtedness and if such Sale is not approved by Lender, the Receiver will on the Sale Date sell the Property to the Lender (the "Lender Sale") for an amount that is $1000.00 in excess of the Third Party Bid (the "Lender Sale Price") (which Lender Sale Price may be paid by Lender by Lender crediting such Lender Sale Price against the Indebtedness).
12. Following consummation of the Sale or Lender Sale, the net proceeds of the sale up to the amount of the Indebtedness shall be delivered to Lender at closing, the Receiver shall retain an amount equal to the amount of his unpaid fees and costs pending approval of such fees and costs by the Court, the Receiver shall forward remaining proceeds to the IRS pending further order of the Court, Lender shall release its lien on the Property, and the IRS shall release and withdraw its lis pendens on the Property. The Court's Order pursuant to this Stipulation would be self-effectuating and would not only approve the Sale or Lender Sale, but serve as confirmation of the same, without further order of the Court, and the purchase price paid after the Receiver's marketing efforts would establish the fair value of the Property, the parties hereto waiving the benefits of any other procedure, under law or otherwise, that may establish fair or appraised value. In the event of sale to the Lender, no broker's commission shall be payable in connection with such sale.
13. Except for the rights and benefits established by the terms of this Stipulation, and so long as the parties hereto comply with their obligations hereunder, upon entry of the order submitted herewith (the "Order") Lender waives any rights to further litigate against the United States concerning its ...