EXHIBIT 10.42
IN THE UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF ARKANSAS
LITTLE ROCK DIVISION
IN RE: CAPITOL DEVELOPMENT OF ARKANSAS, INC. NO. 0043142M
DEBTOR-IN-POSSESSION (CHAPTER 11)
ORDER RESOLVING MOTION FOR RELIEF FROM STAY
On this day comes on for hearing the Motion for Relief From Stay filed
on November 13, 2001, by Nathaniel S. Shapo, the Director of Insurance for the
State of Illinois, in his Capacity as the Statutory and Court Affirmed
Liquidator of Resure, Inc., in Liquidation (the "Liquidator"). The Debtor
appeared by and through its counsel, Geoffrey B. Treece. The Liquidator appeared
by and through its counsel, Gregory M. Hopkins. Upon the pleadings, consent of
the parties and other matters of proof and law, the Court finds and orders as
follows:
1. The Court has jurisdiction pursuant to 28 U.S.C.ss.ss.157 and 1334.
This matter is a corE proceeding. The Court has the authority and the power to
enter a final order.
2. The Liquidator is the holder of a secured claim against the Debtor
and property of the estate. As of December 17, 2001, the claim owed by the
Debtor to the Liquidator is $7,040,731.91, exclusive of attorney's fees,
abstracting and other costs advanced by the Liquidator, court costs and other
amounts as allowed by the agreements between the parties and by applicable law,
with interest continuing to accrue thereon after December 17, 2001 at the
default rate of fifteen percent (15%) per annum (the "Liquidator's Claim").
Specifically, the Liquidator holds first priority mortgages against certain real
estate owned by the Debtor located in Maumelle, Pulaski County, Arkansas, said
real estate consisting of a 701.03 acre tract ("Tract A" or "Parcel 1").
3. The automatic stay provisions of 11 U.S.C. ss.362(a) are hereby
relaxed effective upon entry of an Order (the "Cook County Order") of the
Circuit Court of Cook County Illinois (the "Cook County Court") in Case No. 97
CH 01974 approving the agreements of the Liquidator and the Debtor set forth in
this Order, subject however to the forbearance agreements of the parties as set
forth in paragraph 4 hereof. The Liquidator shall promptly petition the Cook
County Court for the Cook County Order and promptly request a hearing thereon as
early as practicable. In the event that the Cook County Order is denied, this
Order shall be null and void, all presently pending Motions shall be placed on
the docket of this Court and neither the Liquidator nor the Debtor shall be
bound by or have the right to enforce any of the terms of the agreements set
forth elsewhere herein, including the forbearance agreements and settlement
agreements set forth in paragraphs 4 and 5 herein, the Decree shall be delivered
by counsel for Liquidator to counsel for Debtor, and the recitations in
paragraph 2 shall no effect.
4. The Liquidator agrees to forbear from all collection effort,
including but not limited to execution, entry of a decree, pleadings, hearings
and other actions for a Forbearance Period herein described. The Forbearance
Period shall be through and including a date (the "Option A Date") which shall
be the latter of a date (i) February 15, 2002, if Liquidator has obtained and
given written notice of the entry of the Cook County Order to Debtor's counsel
prior to January 15, 2002, or (ii) a date which is one day for each day after
January 15, 2002, until such date that Liquidator has obtained the Cook County
Order and has given written notice of the entry of the Cook County Order to
Debtor's counsel, after February 15, 2002; provided, however, that if, on or
before six (6) days prior to the Option A Date, Debtor elects Option B by the
giving of written notice to counsel for the Liquidator (the "Option B Election
ORDER/PAGE 2
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Notice"), then the Forbearance Period shall be through and including a date (the
"Option B Date") which shall be the latter of a date (i) April 15, 2002, if
Liquidator has obtained and given written notice of the entry of the Cook County
Order to Debtor's counsel prior to January 15, 2002, the Cook County Order, or
(ii) a date which is one day for each day after January 15, 2002, until such
date that Liquidator has obtained the Cook County Order and has given written
notice of the entry of the Cook County Order to Debtor's counsel, after April
15, 2002. If the Debtor fails to timely give the Option B Election Notice, the
Forbearance Period shall end on the Option A Date.
5. The Liquidator agrees to accept in full and final satisfaction of
the Liquidator's Claim a payment tendered to Liquidator in the amount of
$3,850,000.00 on or before the Option A Date ("Option A"). If Debtor timely
elects Option B, then following such election, the Liquidator agrees to accept
in full and final satisfaction of the Liquidator's Claim a payment tendered to
Liquidator after the Option A Date and on or before the Option B Date in the
amount of $3,987,353.95, together with simple interest at the annual rate of
nine percent (9%) accrued from April 24, 2000, until the date such payment is
tendered to Liquidator ("Option B"). In the event of tender of the payments
provided herein for full and final satisfaction of Liquidator's Claim for either
Option A or Option B, the Liquidator shall immediately execute and deliver to
Debtor a release of all liens and encumbrances which Liquidator may have in and
to Tract A. Unless otherwise agreed in writing, all payments to the Liquidator
shall be made by wire transfer.
6. In the event that the full amount of such payments pursuant to
either Option A or Option B are not tendered to Liquidator on or before the
Option A Date, in the event of a tender pursuant to Option A, or on or before
the Option B Date, in the event of a tender pursuant to Option B, Liquidator
shall be entitled to immediate entry of an Consent Foreclosure Decree and In Rem
ORDER/PAGE 3
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Judgment (the "Decree") in the Pulaski County Chancery (now Circuit) Court Case
No. EQ 99-2034 (the "Pulaski County Action") for the total amount of
Liquidator's Claim and may proceed to fully enforce all its rights against Tract
A (a/k/a Parcel 1) free and clear of the stay in this matter or any future case
which may be filed by the Debtor. Contemporaneously with the entry of this
Order, the Debtor shall execute and deliver the Decree to counsel for the
Liquidator who shall hold and enter only pursuant to the terms of this Order. In
the event that payment in full and final satisfaction of Liquidator's Claim is
timely tendered to Liquidator pursuant to this Order, the counsel for Liquidator
shall deliver the Decree to counsel for Debtor and the Liquidator shall promptly
dismiss the Pulaski County Action, with prejudice.
IT IS SO ORDERED.
/s/ James Mixon
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HONORABLE JAMES G. MIXON
U. S. BANKRUPTCY JUDGE
DATE: 12/20/01
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APPROVED AND ENTRY REQUESTED:
ATTORNEYS FOR DEBTOR:
Quattlebaum, Grooms, Tull
& Burrow PLLC
111 Center Street,
Suite 1900
Little Rock, Arkansas 72201
By: /s/ Geoffrey B. Treece
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Geoffrey B. Treece
AR Bar No. 84-146
ATTORNEYS FOR LIQUIDATOR:
Hopkins & Allison
A Professional Association
1000 West Second Street
Little Rock, Arkansas 72201
ORDER/PAGE 4
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By: /s/ Gregory M. Hopkins
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Gregory M. Hopkins
AR Bar No. 81-093
cc. Jim Hollis
U. S. Trustee's Office
500 South Broadway
Suite 201
Little Rock, Arkansas 72201
G. Robert Hardin
Hardin & Grace, P. A.
410 West Third Street
Suite 200
Little Rock, Arkansas 72201\
Ronald A. Hope
Howell, Trice & Hope, P. A.
211 Spring Street
Little Rock, Arkansas 72201
John R. Peel
Peel & Simmons
120 South Glenwood Avenue
Russellville, Arkansas 72811
Fredrick S. Wetzel
1500 Riverfront Drive
Suite 104
Little Rock, Arkansas 72202
ORDER/PAGE 5
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