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Home My WebLink About04869 - EPIC RESORTS EPIC CAPITAL CORPORATION SETTLEMENT AGREEMENT \ Epic Resorts Settlement Agreement AGREEMENT #4869 SETTLEMENT AGREEMENT AND RELEAS M07473, 4-7-04 THIS SETTLEMENT.AGREEMENT AND RELEASE (the "Agreement") is made and entered into as of the Effective Date (as that Tenn is defined below) by and between The Official Committee of Unsecured Creditors of Epic Capital Corporation and Epic Resorts, LLC (the "Committee"), on behalf of the estate of Epic Resorts, LLC (the "Debtor"), the City of Palm Springs (the "Defendant"), and Anthony H.N. Schnelling (the "Trustee"), court appointed chapter 11 trustee for the Debtor and other affiliated entities that are debtors in bankruptcy cases pending in the United States Bankruptcy Court for the District of Delaware, jointly administered under case No. 01-2458 (collectively the "Parties"), who intending to be legally bound hereby stipulate and agree as follows: 1. WHEREAS, on or about July 19, 2001 (the "Petition Date"), four creditors of the Debtor filed involuntary petitions under Chapter 7 of Title 11 of the United States Code (the `Bankruptcy Code") against the Debtor and Epic Capital Corporation (collectively with the Debtor, the "Initial Debtors") in the United States Bankruptcy Court for the District of Delaware (the "Court"); and 2. WHEREAS, on or about October 12, 2001, the Initial Debtors consented to the conversion of their cases to proceedings under Chapter I 1 of the Bankruptcy Code; and 3. WHEREAS, on October 16, 2001, this Court entered orders for relief in each of the Initial Debtors' cases (the "Petition Date"); and 4. WHEREAS, on or about October 30, 2001, this Court entered an order administratively consolidating the Initial Debtors' cases into Epic Capital Corporation, et al; and 5. WHEREAS, on or about October 7, 2003, this Court entered an order authorizing the Committee to prosecute avoidance actions on behalf of the Debtor's estate, (main case docket item 1067); and 6. WHEREAS, on or about October 13, 2003, the Committee filed that certain Complaint to Avoid and Recover Preferential Transfers and Post-Petition Transfers Pursuant to 11 U.S.C. §§ 547, 549, and 550 (as may have been subsequently amended, the "Complaint") styled The Official Committee of Unsecured Creditors of Epic Capital Corporation and Epic Resorts, LLC, on behalf of the Estate of Epic Resorts, LLC, v. City of Palna Springs, which was assigned adversary proceeding number 03- 56831(MFW) (the "Action"). The Action seeks to avoid payments made by Debtor to the City of Palm Springs under a Mitigation Agreement dated April 1, 1999, with the same; and 7. WHEREAS, by way of the Complaint the Committee seeks to recover from the Defendant $ 31,984.82 in alleged preferential transfers (the "Demand"); and 8. WHEREAS, the Defendant has asserted various defenses to the Demand; and 9. WHEREAS, the Parties wish to resolve the Demand without incurring the expense and uncertainty of further litigation; 10. NOW THEREFORE, the Committee, on behalf of the Debtor and its estate, and the Defendant has agreed to resolve the Demand on the following teens: (i) In frill satisfaction of the Demand, the Defendant will pay to Epic Resorts, LLC the sum of twenty thousand ($20,000.00) dollars (the "Payment"), as approved by the Court on January 13, 2004. This Payment shall be made by check payable to Epic Resorts, LLC (Tax I.D. No. 23-2888968) and delivered to counsel for the Committee within ten (10) days after the Defendant is notified that the Agreement is fully executed and approved by all parties and the Defendant approves the same. The Committee shall deposit said Payment promptly upon receipt of the saute, and the Action shall be dismissed with prejudice within ten (10) days of clearance of the Payment check. The Defendant, including its officials, agents, employees, and attorneys, shall not be required to produce records and reconstruct the financial history of its dealings with the Debtor and its affiliates, including the payment history of the same under this Settlement. The Committee shall file any and all papers and make all court appearances necessary to effectuate this Settlement at its sole cost and expense. (ii) Except as set forth in the following paragraph (iv), the Committee, on behalf of the Debtor and its estate, on the one hand, and the Defendant, on the other, do hereby remise, 2 release, discharge and acquit each other, and each other's respective employees, members, attorneys, officers, representatives, successor and assigns from any and all claims, actions, liabilities, debts and causes of action whatsoever, however incurred or arising, now existing or that could arise out of the Action and/or the Mitigation Agreement, known or unknown and/or relating to or pertaining to the Debtor's bankruptcy (the "Release"). Each party shall bear its own costs, expenses and attorneys' fees. (iii) The Parties acknowledge that they may hereafter discover facts different from or in addition to those that they now know or believe to be true with respect to the claims, demands, causes of action, obligations, damages, and liabilities of any nature whatsoever that are the subject of the Release set forth in Paragraph (ii) of this Agreement, and expressly agree to assume the risk of the possible discovery of additional or different facts, and agree that this Agreement shall be and remain effective in all respects regardless of such additional or different facts. (iv) The Defendant shall be pennitted to file a proof of claim in the amount of the Settlement Payment pursuant to 11 U.S.C. § 502(h) within forty-five (45) days after dismissal of the action, and take any necessary action to secure payment of all or a portion of same in accordance with bankruptcy law. (v) This Agreement is being executed for settlement purposes only and does not constitute an admission of liability by any party. (vi) The Parties and the individuals executing this Agreement on behalf of the Parties represent and warrant that they have the authority to execute this Agreement and that when executed for the undersigned party that party will be bound hereunder. (vii) This Agreement shall become effective on the date executed by the last party to do so (the "Effective Date"), and when approved by the Court, if required. 3 (viii) This Agreement may be executed in duplicate counterparts, including by facsimile, each of which shall be deemed an original and all of which when taken together shall constitute one and the same instrument. (ix) This Agreement contains the entire agreement between the Parties with regard to its contents and may only be amended in a writing executed by both Parties hereto, subject to approval by the Court, if required. (x) The Parties acknowledge that this Agreement was jointly prepared by them, by and through their respective legal counsel, and any uncertainty or ambiguity existing herein shall not be interpreted against any of the Parties, but otherwise shall be interpreted according to the application of the rules on interpretation of contracts. (xi) Failure to insist on compliance with any term, covenant or condition contained in this Agreement shall not be deemed a waiver of that term, covenant or condition, nor shall any waiver or relinquishment of any right or power contained in this Agreement at any one time or more times be deemed a waiver or relinquishment of any right or power at any other time or times. [SIGNATURE PAGE FOLLOWS] 4 IN WITNESS WHEREOF, the Parties, through their undersigned representatives, are executing this Agreement as of the day and year set forth below. CITY OF PALM SPRINGS THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF EPIC CAPITAL CORPORATION AND EPIC RESORTS, LLC, ON BEHALF OF THE ESTATE OF EPIC RESORTS, LLC —�� J POTTER ANDERSON & CORROON LLP It SaL. 5� David J. Baldwin (# 1010) W. Harding Drane, Jr. (# 1023) Date: Madison L. Cashman (# 4079) 1313 North Market Street Hercules Plaza, Sixth Floor Approved As To Form: P.O. Box 951 Wilmington, DE 19899-0951 Telephone: (302) 984-6000 BY: Facsimile: (302) 658-1192 David Ales re, Esq. City Attorney Counsel for the Official Committee of Unsecured Creditors of Epic Capital APIP d VED 8V ,HE Cr" Corporation and Epic Resorts, LLC Date: A alt4 HAPTE�R 91 TRUSTEE _i A�tiony H.N. Sclui ling Bridge Consulting ft� 747 Third Avenue, Suite 20-A New York, NY 10017 Court Appointed Chapter 11 Trustee for the Debtors Date: 5