HomeMy WebLinkAbout4/7/2004 - STAFF REPORTS (17) SETTLEMENT AGREEMENT AND RELEASE
THIS SETTLEMENT AGREEMENT AND RELEASE (the "Agreement") is made and
entered into as of the Effective Date (as that term 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 1 I 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 11 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 I U.S.C. §§ 547,
549, and 550 (as may have been subsequently amended, the "Complaint") styled The Official Committee
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of Unsecured Creditors of Epic Capital Corporation and Epic Resorts, LLC, on behalf of the Estate of
Epic Resorts, LLC v. City of Palm 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 Connnittee 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 terms:
(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 same, 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,
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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 permitted to file a proof of claim in the amount of the
Settlement Payment pursuant to I 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 o apprved by the Court, if required.
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(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 riles on interpretation of contracts.
(xi) Failure to insist on compliance with any tern, 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 relinquishrment of any right or power at any other time or
times.
[SIGNATURE PAGE FOLLOWS]
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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 OFEPIC RESORTS, LLC
By: By: t 4
POTTER ANDERSON & CORROON LLP
Its:
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
lax Telephone: (302) 984-6000
BY Facsimile: (302) 658-1192
David AlAilaic, Esq.
City Attorney Counsel for the Official Committee of
Unsecured Creditors of Epic Capital
Corporation and Epic
ll/Resorts,
LLC
Date: khy- t6G��.
I3APTEI Ilj R STEE_;
Ailthony H.N. Schnelli g
Bridge Consulting LLC
747 Third Avenue, Suite '0-A
New York, NY 10017
Court Appointed Chapter II Trustee for the Debtors
;
Date: � " ,�1 � U
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, MAY 19 2004 7: 52AM HP LnSERJET 3200 P• 2
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February 18,2004
Palm Sprmgs City Council
3200li.'I'ahyuiraCanyon Way
Pahn'�pnngs, CA 92262
Dear Pmhn Spmnl s City Council:
SUBJ FCi1
'Phis to an appeal to reverse the Vebruary llth, 2004 decision of the Palm Springs Buildmg Deparrmeru to
allow 'vtatrncr and Oliphant, a California General Partnership, relief From condition of approval #24,
rucluuing underground rdocvion of above ground utility lines that are less than 35 KV, mdusrve of the
powr.rluu: running north south through the eastern portion of Lot 420,and those lines on or adjaceur to this
project, located on the north side of 'Cachevah Drive, between Avenida Caballeros and Sunrise Way, R-f-C
Zone,Section 11,
We, the following residents, would like to have the owners of the tract kCWP their promise to underground
urilltics as they signed to do when they received approval for the project. At least some of the powerlines are
on d-mir land,although they have built a fence set approximately 1-2 Feet back within their houndanes so th;at it
,would appear that the powerlines are not on their land. They have not transferred ownership of the strip of
hand in front of their Fence to any of the residents that we know of.
Respectfully,
N A ML'. .�ll1)Itl':SS
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. MAY 19 2004 7: 53AM HP LASERJET 3200 P• 3
February 18, 2004
Palm Springs City Council
3200 E. Tabquitz Canyon Way
Palm Springs,CA 92262
Dear Pahn Springs City Council:
This is an appeal to reverse the February I Ith, 2004 decision of die Palm Springs Building
Department to allow Matzner and Oliphant, a California General Partnership, relief from
condition of approval #24, requiring underground relocation of above ground utility lines
that are less than 35 KA,inclusive of the powerlinc running north south through the eastern
porcon of Lot #20, and those lines on or adjacent to this project, located on the north side
of T'achevab Drive, between Avenida Caballeros and Sunrise Way,R-1-C Zone, Section I L
We, the following residents,would like to have the owners of the tract keep their promise to
underground utilities on properties adjacent and abutting theirs, as they signed to do whm
they received approval for the project. At least some of the powerlines may even be on their
land. Please vote to make Palm Springs a safer and more beautiful place.
Respectfully;
N121uf14. ADDRESS
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MINUTE ORDER NO.
APPROVING A SETTLEMENT
AGREEMENT BY AND BETWEEN EPIC
CAPITAL CORPORATION AND EPIC
RESORTS, LLC, ET. AL. AND THE CITY
OF PALM SPRINGS.
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I HEREBY CERTIFY that this Minute Order, approving a settlement agreement
by and between Epic Capital Corporation and Epic Resorts, LLC, et.al. and the
City of Palm Springs, was adopted by the City Council of the City of Palm
Springs, California, in a meeting thereof held on the 71h day of April, 2004.
PATRICIA A. SANDERS
City Clerk