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Case:12-24882-ABC Doc#:521 Filed:10/05/12
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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF COLORADO In re: Cordillera Golf Club, LLC Tax ID / EIN: 27-0331317 Debtor. ) ) ) ) ) )
Case No. 12-24882-ABC Chapter 11
JOINT MOTION OF THE DEBTOR AND OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR ORDER: (A) AUTHORIZING AND SCHEDULING THE SALE OF SUBSTANTIALLY ALL OPERATING ASSETS OF THE ESTATE, FREE AND CLEAR OF ALL LIENS, CLAIMS, AND ENCUMBRANCES, (B) APPROVING PROCEDURES FOR THE SUBMISSION OF QUALIFYING BIDS AND CONDUCTING THE SALE, AND (C) APPROVING THE FORM AND MANNER OF NOTICE PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 2002 TO THE HONORABLE A. BRUCE CAMPBELL, U.S. BANKRUPTCY JUDGE: Cordillera Golf Club, LLC, the Debtor and Debtor-in-Possession ("Debtor") under the above captioned Chapter 11 bankruptcy case ("Bankruptcy Case"), together with the Official Committee of Unsecured Creditors appointed in the Bankruptcy Case ("Committee"), by and through their undersigned counsel, jointly file this Motion for Order: (A) Authorizing and Scheduling the Sale of Substantially All Operating Assets of the Estate, Free and Clear of All Liens, Claims, and Encumbrances, (B) Approving Procedures for the Submission of Qualifying Bids and Conducting the Sale, and (C) Approving the Form and Manner of Notice Pursuant to Federal Rule of Bankruptcy Procedure 2002 ("Motion"), and in support, would respectfully show this Court as follows: I. 1. JURISDICTION
This Court has jurisdiction over this Bankruptcy Case and this Motion pursuant to
28 U.S.C. 157 and 1334. This Motion constitutes a core proceeding within the meaning of 28 U.S.C. 157(b)(2)(A), (N) and (O). The statutory predicate for the relief sought herein is 11 U.S.C. 363.
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Venue of the Bankruptcy Case and this Motion in this District is proper pursuant
to 28 U.S.C. 1408 and 1409. II. 3. BACKGROUND
On June 26, 2012 ("Petition Date"), the Debtor filed with the United States
Bankruptcy Court for the District of Delaware its voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code), thereby initiating its bankruptcy case (assigned Case No. 12-11893), with the Delaware Bankruptcy Court (the Bankruptcy Case). On July 16, 2012, the Delaware Bankruptcy Court entered its Order transferring venue of this case to this Court. A. Pre-petition Background 4. The Debtor is the owner and operator of "The Club at Cordillera" (the "Club"),
located within the Cordillera residential community in Edwards, Colorado in Eagle County. The Club includes three 18-hole golf courses, a short course, three tennis centers, fitness facilities, five indoor and outdoor pools, a summer camp with clubhouse for children, and riding, hiking and cross-country ski trails. See Declaration of Daniel L. Fitchett, Jr. in Support of Chapter 11 Petitions and First Day Relief [Docket No. 4] (Fitchett Declaration), 5-7. 5. On or about June 26, 2009, the Debtor entered into a loan agreement with Alpine
Bank ("Alpine"), under which the Debtor allegedly owes Alpine in excess of $12.7 million, which debt is purportedly secured by substantially all of the Debtor's real and personal property (the "Alpine Loan"). Fitchett Declaration, 50-52, 54. Specifically, Alpine asserts that the Debtors obligations are secured by liens and security interests in the Debtors: (i) real property on which the Club facilities are located; (ii) furniture, equipment and fixtures; (iii) permits, licenses, water rights, and other contract rights; (iv) assignments of revenues; and (v) inventory,
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Entered:10/05/12 14:30:36 Page3 of 20 Alpine asserts that it is owed
accounts receivable, general intangibles, and tort claims.1
approximately $13,037,559.18, as of the Petition Date, in addition to such amounts, if any, as are allowable under 11 U.S.C. 506(b), and any amounts for post-petition credit extended by Alpine to the Debtor ("Alpine Claim"). 6. The Debtor's ultimate indirect equity interest holder, David Wilhelm (Wilhelm),
is also alleged to be a secured creditor of the Debtor pursuant to a loan transaction dated as of June 23, 2010 (the "Wilhelm Loan" and collectively with the Alpine Loan, the "Senior Loans"). Wilhelm also asserts security interests and liens in and to the Debtor's real and personal property to secure the repayment of these obligations.2 Wilhelm asserts that the amount of the Wilhelm Loan is $7,532,837.05, as of the Petition Date, in addition to such amounts, if any, as are allowable under 11 U.S.C. 506(b) (Wilhelm Claim).3 B. General Case Background 7. On July 6, 2012, the United States Trustee filed its Notice of Appointment of
Committee of Unsecured Creditors [Docket No. 86], thereby forming the Committee. 8. The Debtor derives the vast majority of its revenues through fees and dues related
to Club memberships paid by the Club's members. Fitchett Declaration, 6. Over the past several years, the Debtor's relationships with its members has become strained, resulting in
See Emergency Motion of the Debtor for Entry of Interim and Final Orders Pursuant to 11 U.S.C. 105, 361, 362, 363(c), 364(c), 364(d), and 364(e) and Fed. R. Bankr. P. 2002, 4001 and 9014 (i) Authorizing Debtor to Obtain Post-Petition Secured Financing, (ii) Granting Security Interest and Superpriority Administrative Expense Claims, (iii) Granting Adequate Protection to Pre-Petition Secured Parties, (iv) Authorizing the Use of Cash Collateral as Provided Herein, and (v) Scheduling a Final Hearing [Docket No. 59] ("Original DIP Financing Motion"), at 7. See Original DIP Financing Motion, at 8, 9. Wilhelm has purportedly assigned as collateral a portion of his alleged security interests to Dr. Jeffrey Rush, as Trustee of The Rush Family Trust (Rush Trust) pursuant to a related loan allegedly made by such Rush Trust to Wilhelm in the amount of approximately $3.75 million, which loan was allegedly guaranteed by the Debtor on an unsecured basis (the "Rush/Wilhelm Loan"). See Declaration of Christopher Celentino in Support of Application for an Order Authorizing the Retention and Employment of Foley & Lardner LLP as General Bankruptcy Counsel to the Debtor, Nunc Pro Tunc to the Petition Date [Docket No. 115], at 15. This amount is, for purposes of the Global Settlement (as defined herein), inclusive of all amounts owed by the Debtor on account of obligations asserted by the Rush Trust against the Debtor.
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ongoing litigation in Colorado State Courts.4 These disputes have had a substantial impact on the Debtor and its operations. See Status Report, at p. 2. 9. These disputes have also led to certain members filing a Motion in the
Bankruptcy Case on July 24, 2012, seeking the appointment of a chapter 11 trustee for the Debtor's estate (Trustee Motion). On August 7, 2012, the Committee, the Cordillera Property Owners Association (CPOA), and the Cordillera Metropolitan District ("Metropolitan District") joined in the relief requested in the Trustee Motion, and the Debtor filed its opposition thereto, which opposition was joined by Wilhelm. See Docket Nos. 341 344. 10. On August 30, 2012, the Debtor filed its Motion for Final Order Approving
Debtor-In-Possession Financing, Use of Cash Collateral and Adequate Protection [Docket No. 402] ("Final DIP Motion"), pursuant to which the Debtor proposed to incur post-petition financing from Alpine on a first priority priming basis, in the aggregate amount of $3,239,995.00 (inclusive of funds previously advanced pursuant to prior interim / emergency funding requests). 11. The Committee subsequently informed the Debtor and Alpine of its intent to
object to the Final DIP Motion, and conducted discovery thereon. The filing of objections to the Final DIP Motion that were contemplated by the Committee and/or other parties in interest was ultimately mooted by the compromise reached by the Debtor and the Committee with major estate constituencies as further set forth below. C. The Global Settlement 12. On September 12th and 13th, 2012, the Debtor, the Committee, the Class
Representatives, the CPOA, Cordillera Transition Corporation, the Metropolitan District, Wilhelm, Alpine, and certain other parties in interest participated in an extensive mediation, with
See Debtor's Status Report as Requested by the Court [Docket No. 193] ("Status Report"), at p. 2; Motion filed by Cheryl M. Foley, Thomas Wilner, Jane Wilner, Charles Jackson, Mary Jackson and Kevin B. Allen, Individually and as Representatives (collectively, the "Class Representatives") of a Certified Class of Members ("Member Class"), to Transfer Venue [Docket No. 69] ("Venue Motion"), at p. 2.
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Deborah D. Williamson serving as mediator ("Mediator"), in an effort to resolve their disputes regarding the Trustee Motion, the Final DIP Motion, certain issues regarding the administration of the Bankruptcy Case, certain litigation pending among the Debtor, the members, Wilhelm and others, and the Debtor's efforts to restructure its affairs generally. Following such mediation, on September 24, 2012, the parties executed a Term Sheet ("Term Sheet") outlining a global settlement ("Global Settlement") that provides for the compromise and settlement of certain litigation among the parties and a sale process for the Debtors operating assets. 13. In summary, the Global Settlement allows for the parties to consensually resolve
their disputes relating to the Trustee Motion, the Final DIP Motion, the Senior Claims, litigation pending between the Debtor, Wilhelm and various member groups, and to propose a consensual chapter 11 plan providing for among other things, the distribution of certain proceeds from the sale of the Debtor's assets. The Global Settlement, as set forth in the Term Sheet, contemplates the sale of the Debtor's "operating assets," comprising substantially all of the assets of the Debtor's estate ("Operating Assets"). In order to effectively conduct the sale of the Operating Assets, the parties seek this Courts approval of the Bid Procedures (as defined below) provided herein.5 The moving parties will be filing a plan that contemplates the sale process herein. 14. Accordingly, by this Motion, the Debtor and Committee respectfully request the
entry of an order, in the form to be submitted prior to the hearing: (i) approving the Bid Procedures; (ii) approving and fixing the date, time and place for an auction of the Operating Assets ("Auction"); (iii) approving the form of Asset Purchase Agreement ("APA") for the sale of the Operating Assets to the Successful Bidder (as defined in the Bid Procedures);
5
The recital of terms of the Global Settlement contained herein is not intended in any way to vary or impact the terms of the parties' agreements as memorialized in the Term Sheet. In any and all instances where any conflict may appear to exist between the terms recited in this Motion and the provisions of the Term Sheet, the Term Sheet shall control. However, this Motion is intended to implement certain provisions of the Term Sheet and the Court's order granting the relief sought in this Motion and implementing the sale process will supersede the corresponding provisions of the Term Sheet. Contemporaneously herewith, the Debtor and the Committee are filing with the Bankruptcy Court a motion seeking approval of the Term Sheet and portions of the Global Settlement (9019 Motion).
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(iv) scheduling a final hearing to approve the sale free and clear of all liens (except for statutory liens arising in favor of taxing authorities for real or business personal property taxes6, and any and all recorded covenants, declarations, Public Utility Districts, easements, and other similar recorded documents to which the liens securing the allowed secured claim of Alpine and Wilhelm are subject), claims, encumbrances and other interests (including without limitation all claims, interests or rights which arise or may arise out of the Membership Documents (defined below)); and (v) approving the form and manner of notices of the Bid Procedures, the Auction, and final Sale Hearing (as defined herein); and (vi) granting related relief. D. The Operating Assets 15. The required form of Asset Purchase Agreement (as defined in the Bid
Procedures, APA), to be filed prior to a hearing to approve the Bid Procedures shall set forth the definitive, controlling and governing description of the Operating Assets. By way of
information, the Operating Assets essentially include all of the Debtor's right, title and interest in and to any and all real and personal property owned by the Debtor or used in connection with the operation of the Club, including without limitation, all real and personal property, fixtures, furniture, equipment, inventory, intellectual property, goodwill, contracts, supplies, licenses, permits, ownership interests in unincorporated Club restaurants, water rights, and copies of the Debtor's books and records.7 The Operating Assets do not include: (i) any and all claims and causes of action arising in favor of the Debtor or the bankruptcy estate pursuant to any provision of the Bankruptcy Code, including but not limited to offsets, avoidance actions, counterclaims, and defenses and affirmative defenses to claims, provided that warranty claims pertaining to
Taxes secured by liens on the Operating Assets that are due and owing at the time of the closing of the sale shall attach to the Sale Proceeds with the same validity priority and enforceability, whereas the Operating Assets will not be sold free and clear of any taxes secured by a lien on the Operating Assets that are accrued but not yet due and owing. As set forth below, the Debtor shall retain originals of its books and records necessary or appropriate to perform any continuing duties to administer the Bankruptcy Case and matters that may arise in relation thereto, provided that the purchaser shall have the opportunity to copy any and all such books and records relating to the Operating Assets.
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specific Operating Assets shall not be excluded therefrom; (ii) any and all claims or causes of action against any person or entity existing as of the filing of the Bankruptcy Case including but not limited to claims or actions against any member, offsets, counterclaims and defenses and affirmative defenses to claims and expressly including any such claims or causes of action that are being compromised and released pursuant to the Global Settlement; (iii) any and all contracts for membership in the Debtor's Club, membership applications, membership plans, rules and regulations of the Club and all amendments and modifications thereto (collectively, Membership Documents), which contracts are being rejected by the estate to the extent they constitute executory contracts or unexpired leases; (iv) originals of the Debtor's books and records necessary or appropriate for the continued administration of the Bankruptcy Case and matters that may arise in relation thereto, including, without limitation, personnel records, consumer records, tax records, and records relating to claims or litigation proceedings; (v) cash, accounts receivable, deposit accounts, or other cash equivalents.8 E. The Bid Procedures 16. A true and correct copy of the proposed Bid Procedures is attached hereto as
Exhibit "B" and incorporated herein by reference for all purposes (Bid Procedures).9 The Debtor, the Committee and their professionals have negotiated and designed the Bid Procedures to be administered by the Mediator, in order to: (i) facilitate the identification of Potential Bidders having a genuine interest in submitting a bid to acquire the Operating Assets, and having the likely wherewithal to qualify as a Qualified Bidder; (ii) provide a process for the qualification of Qualified Bidders; (iii) establish and identify opening Bids and Increased Bid requirements, as well as other provisions for conducting the Auction; and (v) establish the
8 9
Certain claims and causes of action are being released by the Debtor and/or its estate pursuant to the 9019 Motion. All capitalized terms appearing herein which are not separately defined shall have the meanings ascribed to such terms in the Bid Procedures. The following recitals of the Bid Procedures is subject in all respects to the Bid Procedures attached hereto, and are not intended in any way to vary or impact the provisions of such Bid Procedures. Interested parties are encouraged to review the full and complete Bid Procedures with their own counsel.
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process for the consideration and selection of a Qualified Bid as a Successful Bid or Backup Bid for the Operating Assets. 17. Specifically, the Bid Procedures provide a process for Potential Bidders to obtain
Bid Packages and Due Diligence Access from the Debtor by providing a Bidder Information Sheet and agreeing to confidentiality obligations. A copy of the required form of confidentiality agreement is attached to the Bid Procedures as Exhibit "A" and a copy of the Bidder Information Sheet is attached to the Bid Procedures as Exhibit "B." 18. In addition, in connection with the Bid Procedures this Motion proposes a process
to allow for the assumption and assignment of executory contract and unexpired leases to the purchaser of the Operating Assets, as follows: (i) By no later than November 1, 2012, the Debtor shall file and serve on all known counterparties and required notice parties a Schedule of Executory Contracts and Unexpired Leases ("365 Schedule") that may be assumed and assigned to the purchaser of the Operating Assets, including the proposed cure amount required pursuant to section 365 of the Bankruptcy Code for their assumption and assignment, if any. The APA, to be approved by this Court, shall further set forth each executory contract and unexpired lease to be assumed and assigned to the purchaser pursuant thereto, and the Debtor's estimate of any cure payment amount required for same; and Contract counterparties would then have fourteen (14) days to file and serve upon the Debtor and Committee an objection setting forth with particularity any objection to assumption and assignment of their contract, their asserted proper cure amount, documentation of same, and stating whether the objecting contract counterparty may assert any objection to the assignment of their contract to the ultimate purchaser.
(ii)
19.
The Debtor accordingly requests by this Motion the Court's authority, to be
granted at the Sale Hearing, to assume and assign to the purchaser any of the executory contracts and unexpired leases set forth in the 365 Schedule, including the approval of the cure amount, if any, set forth therein for payment as a predicate to such assumption and assignment. To the extent that any objection to the assumption and/or assignment of any executory contract or
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unexpired lease included in the APA is not resolved consensually prior to the Sale Hearing, the movants propose that this Court resolve any such objection at the Sale Hearing.10 20. The Bid Procedures also set out both the criteria applicable to a Potential Bidders
qualification as a Qualified Bidder and the requirements for a bid to qualify for consideration as a Qualified Bid. Such requirements include, without limitation: (i) Each Bid must be to acquire all of the Operating Assets, in cash at closing, and be unconditional and irrevocable save and except for this Court's approval;11 The Bidder's agreement that: (1) if its Bid is selected as the Successful Bid, the Bidder is ready, willing and able to close on the purchase of the Operating Assets by no later than 4:00 p.m. prevailing Mountain time, on December 28, 2012; (2) if its Bid is selected as the Backup Bid and the Mediator notifies the Backup Bidder on or prior to 5:00 p.m. prevailing Mountain time, on December 28, 2012, that the Mediator has elected (upon consultation with the Oversight Parties) to sell the Operating Assets to the Backup Bidder, the Backup Bidder is ready, willing and able to close on the purchase of the Operating Assets within two (2) Business Days of receipt of written notice from the Mediator of such election; Satisfactory information delivered to the Mediator, demonstrating a Bidders financial capability to close the transaction proposed under the Bid and to provide "adequate assurance of future performance," within the meaning of section 365(f)(2)(B) of the Bankruptcy Code, in relation to any executory contracts and unexpired leases to be assumed and assigned to such Bidder under the Sale. Satisfactory information required in this subsection (iii) may be evidenced by: (1) recent financial statements of the Bidder and/or its direct or indirect equity interest holder(s); or (2) such other evidence as may be reasonably satisfactory as determined by the Mediator, and establishing the unconditional availability of funds to the Bidder sufficient to pay the Bid consideration in cash12;
(ii)
(iii)
10
Notwithstanding the listing of an executory contract or unexpired lease in the 365 Schedule or APA, the Mediator and Debtor, in consultation with the Successful Bidder / Backup Bidder, reserve all rights to withdraw any such designations at the Sale Hearing. Notwithstanding the foregoing, pursuant to section 363(k) of the Bankruptcy Code, Alpine or the holder of the Alpine Claim is entitled to credit bid the Alpine Claim, subject only to verification of the calculation of such amount, and the holder of the Wilhelm Claim is entitled to credit bid the Wilhelm Claim, subject only to verification of the calculation of such amount, provided however that any Bid by the holder of the Wilhelm Claim must nevertheless be in cash up to the extent of the Alpine Claim, and taxes then due and secured by a lien on the Operating Assets. Moreover, notwithstanding anything herein to the contrary, and as further provided in the Bid Procedures, Alpine, should it elect to credit bid as provided in the Bid Procedures, shall be deemed a Qualified Bidder, and any such credit bid shall be deemed a Qualified Bid. Pursuant to the Bid Procedures, such financial information should be delivered only to the Mediator, who shall hold such financial information confidential other than for purposes of providing her reasons for disqualifying any Bid or Bidder, provided that the Mediator shall have no liability whatsoever in connection with her administration of the Bid Procedures.
11
12
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Evidence that the Bidder has or will have by closing any requisite organizational authorizations and approvals necessary to consummate the Sale; Disclosure of all of the Bidder's connections (if any) with the Debtor, the Debtor's creditors, any other party in interest in the Bankruptcy Case, their respective attorneys and accountants or advisors; That Bids must remain confidential other than to the extent disclosure is contemplated or required in the Bid Procedures; Disclosure of any post-closing relationship or connection the Bidder then contemplates having with the Debtor (including any officer, director, shareholder, managing member, insider or affiliate of the Debtor), including a description of the Bidder's proposal (if any) to employ or otherwise retain any of the Debtor's employees Club members and/or creditors if it successfully acquires the Operating Assets;
(v)
(vi) (vii)
(viii) A Deposit in an amount not less than $500,000, to be refunded to any Bidder who does not prevail in acquiring the Operating Assets, but subject to forfeiture if: (1) a Qualified Bidder withdraws its Bid before the announcement of the Successful Bidder and Backup Bidder; (2) the Successful Bidder attempts to modify or withdraw its Bid without closing the Sale, except due to the failure of any conditions to close not the fault of the Successful Bidder; (3) the Backup Bidder attempts to modify or withdraw its Backup Bid prior to closing the Sale, unless the Sale shall have closed with the Successful Bidder, and except due to the failure of any conditions to close not the fault of the Backup Bidder. (ix) An executed asset purchase agreement in the form of the APA, identifying executory contracts and unexpired leases to be assumed in connection with the Sale, and otherwise containing the same or substantially identical terms and conditions as the APA, together with a "redlined" or otherwise marked copy reflecting any revisions made to conform the APA to the Bidder's APA, provided that such APA shall not be effective until the Mediator declares such Bidder to be the Successful Bidder or Backup Bidder (and as such APA may be required to be conformed to the Successful or Backup Bid as provided in the Bid Procedures).
See Bid Procedures, V. The Bid Procedures also contemplate and permit current and former members of the Club and other prospective bidders with an interest in less than all of the Operating Assets to approach, discuss and agree with other members and parties about submitting a joint bid to acquire all of the Operating Assets, provided that such joint Bid and the Bidding parties otherwise qualify under the procedures; and further provided, such joint Bid shall
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be presented as one Bid with one APA and the Debtor/estate shall not be required to deal with multiple parties, but rather shall deal only with a designated representative with respect to such joint Bid. 21. The Bid Procedures establish a Bid Deadline of 12:00 noon, prevailing
Mountain Time, on December 3, 2012. See Bid Procedures, VI. Any Bidders submitting Qualified Bids then become Qualified Bidders. In the event of competitive bidding, the Bid Procedures call for an Auction to be conducted by the Mediator at 10:00 a.m., prevailing Mountain Time, on December 10, 2012, at the offices of the Debtor's counsel, Sender & Wasserman, P.C., 1660 Lincoln Street, Suite 2200, Denver, Colorado 80264. Attendance at the Auction must be in person.13 22. With respect to the Auction, the Bid Procedures further provide for a minimum
Increased Bid (overbid) requirement of $100,000.00, and provide details on the process for conducting the Auction, making Increased Bids, and identifying the Successful and Backup Bids. See Bid Procedures, VII. F. Schedule for the Sale Hearing and Implementing the Sale 23. At the conclusion of the Auction, the Mediator shall declare the identity of the
Successful Bidder and the Backup Bidder to all parties in interest present at the Auction, and the Debtor will file and serve upon all required notice parties, as set forth more fully below, notice of the Successful Bid amount, the Successful Bidder, the Backup Bid amount and the Backup Bidder (if any), by no later than 10:00 a.m., prevailing Mountain Time, on December 11, 2012 ("Sale Notice"). The Sale Notice will inform parties in interest of the intention to have this Court approve the sale of the Operating Assets to the Successful Bidder at the final hearing to
13
In the event that a Bidder submits a Bid prior to the December 3, 2012 Bid Deadline, and the Mediator determines pursuant to the Bid Procedures that such Bid is not a Qualified Bid, the Mediator shall make reasonable efforts to inform the Bidder of such disqualification and the reasons for same, in order to attempt to allow the Bidder to remedy any such defects prior to the Bid Deadline.
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approve the Sale (Sale Hearing) as well as the assumption and assignment of executory contracts to be assigned to the purchaser and any cure amounts required for same. The Debtor and Committee, accordingly, request that this Court's Order approving the Bid Procedures and this Motion schedule the Sale Hearing between December 12, 2012 and December 28, 2012. 24. Notwithstanding any other provision of this Motion or the Bid Procedures, the
Bankruptcy Court reserves jurisdiction to approve the Sale and related matters. G. Notice in Accordance With Bankruptcy Rule 2002 25. The Debtor and Committee propose to give notice of the Bid Procedures, the
Auction, the proposed Sale, and the Sale Notice as described below. The Debtor shall serve by first class mail or electronic means, as soon as practicable following this Court's entry of its Order approving this Motion, approving the Bid Procedures, and scheduling the Sale Hearing, a copy of the Court's Order, including the Bid Procedures and a notice detailing the Auction procedures, the deadline for filing the Sale Notice, and the time and date of the Sale Hearing, to the following: (i) (ii) (iii) (iv) The Office of the United States Trustee; All parties who have requested notice pursuant to Bankruptcy Rule 2002; All known secured creditors of the Debtor; Federal, state and local regulatory and taxing authorities that are reasonably ascertainable by the Debtor and are either creditors or other parties in interest in this Bankruptcy Case; and Any parties identified by the Debtor, Alpine or the Committee as potential purchasers of the Operating Assets.
(v) 26.
In addition, the Debtor, with the assistance of GA Keen Realty, LLC ("GA Keen
Realty") shall take efforts to market and advertise the Auction as determined in their reasonable business judgment subject to limitation in the Budget relating to the Final DIP Motion and order thereon [Docket No. 495] and available funds.
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Following the conclusion of the Auction and the filing of the Sale Notice, the
Debtor will serve the Sale Notice within the time specified on: (i) the Office of the United States Trustee; (ii) all parties who have requested notice pursuant to Bankruptcy Rule 2002; (iii) all known secured creditors of the Debtor; (iv) Federal, state and local regulatory and taxing authorities that are reasonably ascertainable by the Debtor and are either creditors or other parties in interest in this Bankruptcy Case; and (v) all Qualified Bidders. 28. The Debtor and Committee submit that the foregoing notices are reasonably
calculated to provide timely and adequate notice of the Bid Procedures, the Auction, the Sale and the Sale Hearing, as well as all other proceedings to be held thereon, to creditors and other parties of interest, including those that express an interest on bidding on the Debtor's Operating Assets. H. Use of Sale Proceeds 29. The Term Sheet contemplates that the 9019 Motion will be filed with the Court
which will, among other things, provide for the allowance of the Alpine Claim and the Wilhelm Claim. Provided that the 9019 Motion is granted before the Sale Hearing, the Debtor and Committee respectfully request that this Court's Order approving the Sale to the Successful Bidder provide for the Debtor to pay the allowed secured claims of the taxing authorities for real and personal property taxes and the allowed portions of the Alpine Claim and Wilhelm Claim, in the order of their priority, from and to the extent of the net cash proceeds of the Sale. Such payments will allow the estate to avoid the continued accrual of unnecessary interest, costs and potentially other charges. 30. The moving parties also request that the Court determine that the sale is exempt
from transfer or similar taxes pursuant to Section 1146 to the extent applicable.
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ARGUMENTS AND AUTHORITIES
The Business Judgment Standard Governs Sales Outside of the Ordinary Course of Business and the Assumption and Assignment of Executory Contracts 31. Based on the foregoing, the Debtor and Committee submit that the relief
requested herein is necessary and appropriate, in the best interest of the Debtor and its estate and should be granted in all respects. 32. This Court may authorize the sale of the Operating Assets pursuant to Section
363(b)(1) of the Bankruptcy Code. The sale of the assets of an estate other than in the ordinary course of business may be approved when: (i) there is a sound business reason for the sale; (ii) accurate and reasonable notice is provided to interested parties; (iii) the price is fair, reasonable and adequate; and (iv) the sale is made to the purchaser in good faith. See, e.g., In re Delaware & Hudson Ry. Co., 124 B.R. 169, 176 (D. Del. 1991); In re Stroud Ford, Inc., 163 B.R. 730, 732 (Bankr. M.D. Pa. 1993); In re Titusville Country Club, 128 B.R. 396, 399 (Bankr. W.D. Pa. 1991); In re Industrial Valley Refrigeration and Air Conditioning Supplies, Inc., 77 B.R. 15, 21 (Bankr. E.D. Pa. 1987). 33. The Debtor is entitled to use its business judgment in determining whether to sell
assets outside of the ordinary course of business. See Institutional Creditors of Continental Air Lines Inc. v. Continental Air Lines Inc. (In re Continental Air Lines Inc.), 780 F.2d 1223, 1226 (5th Cir. 1986); In re JL Building, LLC, 452 B.R. 854, 859 (Bankr. D. Utah 2011). Accordingly, the Sale should be authorized pursuant to section 363 if a sound business purposes exists for the Sale. See Stephens Indus. Inc. v. McClung, 789 F.2d 386, 390 (6th Cir. 1986); In re WBQ Pship, 189 B.R. 97, 102 (Bankr. E.D. Va. 1995). 34. So too is the case with respect to the assumption of executory contracts and
unexpired leases. Pursuant to section 365 of the Bankruptcy Code, a debtor, subject to the courts approval, may assume or reject any executory contract or unexpired lease of the debtor.
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11 U.S.C. 365(a) (2012). A debtors decision to assume an executory contract or unexpired lease is subject to the business judgment rule, meaning that a debtors decision should be approved by the Court, so long as that decision is supported by a sound business reason, with due deference to the debtors business judgment. See NLRB v. Bildisco, 465 U.S. 513, 524 (1984) (providing that the business judgment standard is traditionally applied by courts when deciding if a debtor-in-possession may assume or reject pursuant to section 365(a)) of the Bankruptcy Code); Orion Pictures Corp. v. Showtime Networks Inc. (In re Orion Pictures Corp.), 4 F.3d 1095, 1099 (2d Cir. 1993). A debtors decision to assume should be accepted, except upon a finding of bad faith or gross abuse of [the debtors] business discretion. Lubrizol Enters. Inc. v. Richmond Metal Finishers, Inc. (In re Richmond Metal Finishers, Inc.), 756 F.2d 1043, 1047 (4th Cir. 1985). 35. Here, the Sale proposed is the product of an extremely difficult negotiation among
the Debtor, the Committee, and numerous estate creditors and parties in interest pursuant to a formal mediation. It constitutes a fundamental component of the Global Settlement that resolves virtually all of the major disputes in this Bankruptcy Case and allows the Debtor and parties in interest to focus their efforts on a consensual plan. In addition, the Bid Procedures were
negotiated at arms' length and by numerous parties whose interests are advanced by maximizing the proceeds to be received by the estate. 36. Finally, the Debtor's assets will have been adequately marketed and exposed to
market, because the Debtor has explored such market during the pendency of this Bankruptcy Case, and has engaged GA Keen Realty, under this Court's authority, to continue the Debtor's marketing efforts. See Docket No. 311. 37. Conversely, if this Motion is not approved, the loss of the Global Settlement
severely and directly threatens to impact the value of the estate, which will then continue to be
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embroiled in the disputes recited herein. The paramount goal in any proposed sale of property of the estate is to maximize the proceeds received by the estate. See, e.g., Four B. Corp. v. Food Barn Stores, Inc., 107 F.3d 558, 564-65 (8th Cir. 1997) (in bankruptcy sales, "a primary objective of the Code [is] to enhance the value of the estate at hand"); Official Committee of Subordinated Bondholders v. Integrated Resources, Inc., 147 B.R. 650, 659 (S.D.N.Y. 1992) ("It is a well-established principle of bankruptcy law that the objective of bankruptcy sales and the Debtor's duty with respect to such sales is to obtain the highest price or overall greatest benefit possible for the estate" (quoting In re Atlanta Packaging Products, Inc., 99 B.R. 124, 131 (Bankr. N.D. Ga. 1988)). B. Sales Free and Clear, and Good Faith Purchaser Protections 38. Section 363(f) of the Bankruptcy Code authorizes the Debtor to sell property
outside of their ordinary course of business "free and clear of any interest in such property of an entity other than the estate, only if (1) (2) (3) (4) (5) applicable nonbankruptcy law permits sale of such property free and clear of such interest; such entity consents; such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property; such interest is in bona fide dispute; or such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest.
11 U.S.C. 363(f) (2004). 39. The Debtor may sell property free and clear if any one of these five conditions is
satisfied. See Futuresource LLC v. Reuters Ltd., 312 F.3d 281, 285 (7th Cir. 2002); Newport Acquisition Co. No. 1 L.L.C. v. Crossroads Capitals Partners L.L.C. (In re C-Power Prods.
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Inc.), 230 B.R. 800, 803 (Bankr. N.D. Tex. 1998); Citicorp Homeowners Servs. Inc. v. Elliot (In re Elliot), 94 B.R. 343, 345 (Bankr. E.D. Pa. 1988). 40. Here, the Debtor and Committee submit that these conditions are met in this
instance. The parties known to the Debtor to assert lien interests in and to the Operating Assets have either consented to the Sale, or in the case of taxing authorities holding liens over the Operating Assets, will be fully paid or allowed to have their liens continue to attach to the Operating Assets. Furthermore, the secured claims of all creditors with interests in the Operating Assets are adequately protected in accordance with section 363(e) of the Bankruptcy Code insofar as such interests shall attach to the proceeds of the Sale with the same validity, priority, and extent as previously existed. 41. The arms' length negotiations giving rise to the Bid Procedures and this Motion
ensures a fair process for the Sale. The disinterested Mediator is proposed to administer the Bid Procedures, and to conduct the Auction, subject to approval by the Court. Accordingly, the Debtor and Committee will request at the Sale Hearing that the Sale to the Successful / Backup Bidder be approved affording the protections under Section 363(m) of the Bankruptcy Code, or any other law, to the purchaser as a good faith purchaser. IV. 42. NO STAY OF ORDER
Because the Debtor and Committee have an interest in promptly disposing of the
Operating Assets, and because the proposed Sale structure contemplates that the Debtor will return to the Court for a hearing to approve the Successful Bidder on a final basis, the Debtor and Committee further request, pursuant to Rule 6004(h) of the Federal Rules of Bankruptcy Procedure, that this Court waive the fourteen (14) day automatic stay of any final order granting this Motion and order that the final relief requested in this Motion may be immediately available upon the entry of an order approving the Sale.
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WHEREFORE, PREMISES CONSIDERED, the Debtor and the Committee respectfully request that this Court enter an order: (i) granting this Motion; (ii) approving the Bid Procedures and authorizing the Debtor to sell the Operating Assets under those procedures; (iii) authorizing the Sale free and clear of all liens, claims, interests and encumbrances, other than as expressly set forth herein, with any and all liens, claims, interests, and encumbrances that may exist with respect to the Operating Assets to attach to the proceeds of the sale with the same validity, priority, and extent as previously existed; (iv) scheduling the final Sale Hearing to approve the sale to the Successful Bidder / Backup Bidder; (v) waiving any automatic stay with respect to the relief requested in this Motion; and (vi) granting the Debtor and the Committee such other and further relief to which it may show itself to be justly entitled.
Date: October 5, 2012
Respectfully submitted, FOLEY & LARDNER LLP By: /s/ Christopher Celentino Christopher Celentino (CA No. 131688) Mikel Bistrow (CA No. 102978) Dawn A. Messick (CA No. 236941) Admitted Pro Hac Vice 402 West Broadway, Suite 2100 San Diego, California 92101 Telephone: 619-234-6655 Facsimile: 619-234-3510 Email: ccelentino@foley.com Email: mbistrow@foley.com Email: dmessick@foley.com -andSENDER & WASSERMAN, P.C. Harvey Sender, #7546 1660 Lincoln Street, Suite 2200 Denver, CO 80264 Telephone: 303-296-1999 Facsimile: 303-296-7600 Email: sender@sendwass.com Attorneys for Debtor and Debtor-in-Possession
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HOLLAND & HART LLP By: /s/ Risa Lynn Wolf-Smith Risa Lynn Wolf-Smith, #15835 Clarissa M. Raney, #40374 HOLLAND & HART LLP 555 Seventeenth Street, Suite 3200 Denver, Colorado 80202 Telephone: 303-295-8000 Facsimile: 303-295-8261 rwolf@hollandhart.com cmraney@hollandhart.com -andMUNSCH HARDT KOPF & HARR, P.C. Russell L. Munsch (admitted PHV) Texas Bar No. 14671500 Joseph J. Wielebinski (admitted PHV) Texas Bar No. 21432400 Jay H. Ong (admitted PHV) Texas Bar No. 24028756 Zachery Z. Annable (admitted PHV) Texas Bar No. 24053075 3800 Lincoln Plaza 500 N. Akard Street Dallas, Texas 75201-6659 Telephone (214) 855-7500 Facsimile (214) 978-4335 ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS
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EXHIBIT A Proposed Order to be Provided Prior to Hearing
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EXHIBIT B Bidding Procedures
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BID PROCEDURES The following bid procedures (the "Bid Procedures") govern the sale ("Sale") of the operating assets (collectively, the "Operating Assets") of Cordillera Golf Club, LLC ("Debtor"), d/b/a The Club at Cordillera (the "Club"), in connection with its pending Chapter 11 bankruptcy case, Case No. 12-24882-ABC (the "Bankruptcy Case") in the U.S. Bankruptcy Court for the District of Colorado (the "Bankruptcy Court"). By order of the Bankruptcy Court (the "Bid Procedures Order"), these Bid Procedures have been approved and are applicable to all Bidders and Bids, with any proposed sale of the Operating Assets to be subject to the final approval of the Bankruptcy Court pursuant to section 363 of 11 U.S.C. 101, et seq. (the "Bankruptcy Code"). I. THE AUCTIONEER AND OVERSIGHT PARTIES The sales process outlined under these Bid Procedures will be conducted by Deborah Williamson (including any successor mediator as may be agreed by the parties, the "Mediator"), utilizing the services of GA Keen Realty Advisors, LLC as provided in these Bid Procedures, in consultation with the Debtor and the Official Committee of Unsecured Creditors appointed by the United States Trustee in the Bankruptcy Case (the "Committee" and collectively with the Debtor, the "Oversight Parties"), and subject to approval by the Bankruptcy Court. II. OPERATING ASSETS 1. Single Lot. The Operating Assets, as more particularly described below and as defined in the Asset Purchase Agreement described below, are to be sold in a single aggregate lot at the Auction provided for under these Bid Procedures ("Auction"), subject to competitive bidding in accordance with these Bid Procedures and Bankruptcy Court approval. Notwithstanding the requirement that Bids must be for the entirety of the Debtor's Operating Assets under these Bid Procedures, nothing in these Bid Procedures is intended to prevent or impair the ability of current and former members of the Club and other prospective bidders with an interest in purchasing less than all of the Operating Assets, to approach, discuss and agree with other parties about submitting a single, joint Bid to acquire all of the Operating Assets provided that such Bid and the Bidding party / parties must otherwise qualify under these procedures; and further, such joint Bid shall be made as one bid, with one APA and the Debtor and its estate shall not be required to deal with multiple parties, but rather shall deal only with a designated representative with respect to such joint Bid; which Bid must also designate the transferee(s) and specify which asset is to be transferred to the specific transferee to the extent it is more than one entity; however, all parties participating in the joint Bid must disclose their identity to the same extent as participants in any single Bid. Nothing herein shall modify or diminish any of the rights or obligations set forth in or arising pursuant to section 363(n) of the Bankruptcy Code. The Operating Assets. A. The Operating Assets include all of the Debtor's right, title and interest in and to any and all real and personal property owned by the Debtor or used in connection with the operation of the Debtor's business, including without limitation, all golf courses, golf course assets, fixtures, furniture, equipment, inventory, intellectual
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2.
BID PROCEDURES 4842-7095-1441.5
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property, goodwill, contracts, supplies, licenses, permits, ownership interests in unincorporated Club restaurants, athletic club, facilities, water rights, and access to make copies of books and records, in each case to the extent assignable, all as more particularly described in the Asset Purchase Agreement.1 Interested parties are encouraged to consult the Debtor's bankruptcy Schedules, as amended, for a detailed listing of the Debtor's assets. B. Notwithstanding the foregoing, expressly excluded from the Operating Assets are: (i) any and all claims and causes of action arising in favor of the Debtor or the estate pursuant to any provision of the Bankruptcy Code, including but not limited to avoidance action rights, offsets, counterclaims, and defenses and affirmative defenses to claims2; (ii) any and all contracts for membership in the Debtor's Club, membership applications, membership plans, rules, regulations of the Club and all amendments and modifications thereto (collectively, the Membership Documents), which Membership Documents are being rejected by the estate to the extent they constitute executory contracts or unexpired leases; (iii) originals of the Debtor's books and records necessary or appropriate for the continued administration of the Bankruptcy Case and any matters arising in relation thereto, including, without limitation, personnel records, consumer records, tax records, and records relating to claims or litigation proceedings; and (iv) cash, accounts receivable, deposit accounts, and other cash equivalents.
3.
"AS IS, WHERE IS". THE SALE OF THE OPERATING ASSETS WILL BE ON AN AS IS, WHERE IS BASIS AND WITHOUT REPRESENTATIONS OR WARRANTIES OF ANY KIND, NATURE, OR DESCRIPTION BY THE DEBTOR, ITS AGENTS, OR ITS ESTATE, INCLUDING WITHOUT LIMITATION ANY REPRESENTATION OR WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, EXCEPT TO THE EXTENT SET FORTH IN THE APA (AS DEFINED BELOW). EXCEPT AS EXPRESSLY PROVIDED HEREIN, NONE OF THE MEDIATOR, THE OVERSIGHT PARTIES, NOR THEIR RESPECTIVE COUNSEL, PROFESSIONALS, OFFICERS, EMPLOYEES, REPRESENTATIVES OR AGENTS MAKES ANY REPRESENTATION OR WARRANTY REGARDING ANY INFORMATION OR REPRESENTATION REGARDING THE DEBTOR, ITS OPERATIONS, THE CLUB, ASSETS, LIABILITIES, LIENS OR FINANCIAL CONDITION TO BE PROVIDED TO A POTENTIAL BIDDER IN CONNECTION WITH THE BID PROCEDURES SET FORTH HEREIN, THE SALE, THE AUCTION OR THE OPERATING ASSETS. CONSEQUENTLY, NO REPRESENTATION IS MADE BY THE MEDIATOR, THE OVERSIGHT PARTIES, OR THEIR RESPECTIVE COUNSEL, PROFESSIONALS, OFFICERS, EMPLOYEES, REPRESENTATIVES OR AGENTS REGARDING THE ACCURACY, RELIABILITY, VERACITY, ADEQUACY, OR
The APA, as defined herein, shall contain the definitive and controlling list of the Operating Assets and the description of such Operating Assets in these Bid Procedures is intended solely for informational purposes. Certain claims and causes of action are being released by the Debtor and/or its estate pursuant to the 9019 Motion, as defined in the motion seeking the Bankruptcy Court's approval of these Bid Procedures. PAGE 2
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COMPLETENESS OF ANY INFORMATION PROVIDED IN CONNECTION WITH OR RELATED TO THESE BID PROCEDURES, THE AUCTION OR THE SALE AND ALL INTERESTED PARTIES ARE ENCOURAGED TO CONSULT WITH THEIR OWN ADVISORS REGARDING ANY SUCH INFORMATION. 4. 5. The Sale must be entirely for cash consideration, except as expressly provided otherwise herein. Sale Free and Clear. All of the Debtor's right, title, and interest in and to the Operating Assets will be sold free and clear of all liens, security interests, encumbrances, claims, charges, options, and interests thereon or therein (collectively, the "Liens"), with the exception of: A. B. statutory liens arising in favor of taxing authorities to secure the payment of allowed real and business personal property taxes; and any and all recorded covenants, declarations, Public Utility Districts, easements, and other similar recorded documents to which the liens securing the allowed secured claims of the Senior Lien Claim Holders as defined in Section VII below are subject.
The Liens will attach to any net cash proceeds from the sale of the Operating Assets, in the order of their priority, with the same validity, force, and effect which they now have against the Operating Assets, except as to any such lien which the APA provides is a lien which shall remain as a lien on a particular asset and that such particular asset shall be transferred subject to such lien. 6. APA. Except as otherwise set forth herein, any Sale will be made only under the same or substantially identical terms and conditions as set forth in the form of Asset Purchase Agreement approved by the Court as part of the Bid Procedures Order ("APA"). The APA may be obtained by any Interested Bidder (as defined below) in accordance with the instructions set out below. Executory Contracts and Unexpired Leases. A. The APA approved by the Bankruptcy Court shall set forth each executory contract and unexpired lease to be assumed and assigned to the purchaser pursuant thereto, and the Debtor's estimate of any cure payment amount required for same. Further, by no later than November 1, 2012, the Debtor shall file and serve on all known counterparties and required notice parties a Schedule of Executory Contracts and Unexpired Leases ("365 Schedule") that may be assumed and assigned to the purchaser of the Operating Assets, including the proposed cure amount required pursuant to section 365 of the Bankruptcy Code for their assumption and assignment, if any. The Bankruptcy Court's order approving these Bid Procedures shall set firth the applicable procedure for the resolution of any disputes regarding the assumption and/or assignment of any executory contracts or unexpired leases, including but not limited to the amount of any cure payment required for same.
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7.
B.
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III. POTENTIAL BIDDERS 1. Expression of Interest. An interested bidder "Potential Bidder" is any person or entity who contacts Harold Bordwin of GA Keen Realty Advisors, LLC ("Keen Realty") or the Mediator and completes the bidder information sheet, in the form of Exhibit B attached hereto (the "Bidder Information Sheet"), containing such information as to allow Keen Realty or the Mediator to adequately identify the person or entity interested in bidding on the Operating Assets and, if the party is an entity, such information as to allow Keen Realty or the Mediator to identify the officer or authorized agent who will appear on behalf of the party. Delivery of Bidder Information Sheets. Bidder Information Sheets shall be delivered to Deborah D. Williamson, COX SMITH, 112 E. Pecan Street, Suite 1800, San Antonio, Texas 78205, Facsimile: (210) 226-8395, dwilliamson@coxsmith.com, and to Harold Bordwin, GA Keen Realty Advisors, LLC, 130 W. 42 St., Ste. 1001, New York, NY 10036, hbordwin@greatamerican.com. IV. DUE DILIGENCE 1. Due Diligence Access. Provided a Potential Bidder has executed and returned a completed Bidder Information Sheet, such Potential Bidder will, prior to the Bid Deadline (as defined below), be provided a password to an on-line electronic data site. To gain access to the data, the Potential Bidder shall be required to accept the disclaimer and terms of the granted access to an on-line electronic data site ("Due Diligence Access"), including its agreement to a confidentiality agreement (the Confidentiality Agreement), the terms of which shall be substantially consistent with those contained in Exhibit A attached hereto. Requests for information regarding the Operating Assets not contained in the data site shall be directed to Keen Realty via e-mail as follows: hbordwin@greatamerican.com and sferrone@greatamerican.com. Once a Potential Bidder has been provided with Due Diligence Access, the Debtor's professionals will attempt to coordinate and comply with all reasonable requests for information regarding the Operating Assets that has not been provided through the Due Diligence Access. 2. Exclusion of Potential Bidders. Notwithstanding anything to the contrary contained in these Bid Procedures, Keen Realty may deny Due Diligence Access to any Potential Bidder, after consulting with the Mediator and the Oversight Parties, if Keen Realty reasonably believes the Potential Bidder has no bona fide intention to submit a competitive bid for the Operating Assets or that the Potential Bidder seeks Due Diligence Access for an improper purpose, including, without limitation, wasting resources of the Debtor's estate, harassing the Debtor, competing with the Debtor's business, depressing the value of the Debtor's assets or those of its estate, or otherwise disrupting the sales process. Notwithstanding the foregoing, the Mediator shall have the ultimate authority to override Keen's determination to exclude a bidder from Due Diligence Access if she disagrees with such determination.
2.
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V. QUALIFIED BIDS 1. Bid Packages. In order for a Potential Bidder's initial bid to purchase the Operating Assets (each a "Bid") to qualify for consideration (upon such qualification the Potential Bidder making such Qualified Bid (as defined herein) shall become a "Bidder"), such Bid must consist of the following information and items and be delivered to the Mediator (collectively, the Bid Package) as follows: Deborah D. Williamson, COX SMITH, 112 E. Pecan Street, Suite 1800, San Antonio, Texas 78205, Facsimile: (210) 226-8395, dwilliamson@coxsmith.com, so that it is actually received by the Mediator by no later than the Bid Deadline (as defined below), with a copy to Harold Bordwin, GA Keen Realty Advisors, LLC, 130 W. 42 St., Ste. 1001, New York, NY 10036, hbordwin@greatamerican.com: A. Executed Copy of APA. A written offer in the form of the APA executed by the Bidder or its duly-authorized representative (if an entity), to acquire the Operating Assets for an exact amount of consideration, in U.S. Dollars, which must: i. ii. Provide such consideration payable by wire transfer at closing; be unconditional, save and except for Bankruptcy Court approval, and without limiting the generality of the foregoing, must not be conditioned upon acceptance of one or more other bids, financing or additional due diligence; Be for the entirety of the Operating Assets as described in the APA.
iii. B.
The Bidder's written, binding commitment that: i. ii. iii. The Bid is irrevocable until the earlier to occur of the closing of the Sale or January 15, 2013; The Bidder agrees to keep its Bid confidential except to the extent that disclosure is expressly contemplated or provided in these Bid Procedures; If the Bidder is selected as the Successful Bidder, such Bidder is ready, willing and able to close on the purchase of the Operating Assets with no contingencies whatsoever, other than Bankruptcy Court approval of the transaction, which Closing shall, subject to such approval, be no later than 4:00 p.m. prevailing Mountain time, on December 28, 2012; and If the Bidder is selected as the Backup Bidder, then should the Sale to the Successful Bidder fail to close for any reason and the Mediator notifies the Backup Bidder on or prior to 5:00 p.m. prevailing Mountain Time, on December 28, 2012, that the Mediator has elected (upon consultation with the Oversight Parties) to sell the Operating Assets to the Backup Bidder then the Backup Bidder is ready, willing and able to close on the purchase of the Operating Assets with no contingencies whatsoever other than Bankruptcy Court approval of the transaction, within two (2) Business Days of receipt of written notice from the Mediator of such election.
iv.
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C.
Evidence that the Bidder has or will obtain the requisite internal authorizations and approvals necessary to consummate the proposed transaction without the necessity of obtaining the consent of any other person or entity; A written statement identifying all of the Bidder's (including its officers, directors, shareholders, general partners, limited partners, managing members, managers, and/or members, as applicable) connections (if any) with the Debtor, the Debtor's creditors, any other party in interest in the Bankruptcy Case, their respective attorneys, accountants and advisors; A written statement setting forth any post-closing relationship or connection the Bidder contemplates having with the Debtor (including any officer, director, shareholder, managing member, insider or affiliate of the Debtor), including a description of the Bidder's plans (if any) to employ or otherwise retain any of the Debtors employees if its successfully acquires the Operating Assets; A cashier's check made payable to the Stewart Title, as escrow agent for the Debtor's estate for purposes of these Bid Procedures, or a wire transfer, in an amount of $500,000 ("Deposit"). Wire instructions shall be provided upon request. Among other things, Bankruptcy Court's Order approving these Bid Procedures shall expressly provide for the Bidder's forfeiture of the Deposit if: i. the Bidder is determined to be a Qualified Bidder (as defined below) and withdraws its Bid or withdraws any subsequent Increased Bid (as defined below) before the announcement of the Successful Bidder and Backup Bidder; the Bidder is determined to be the Successful Bidder and attempts to modify or withdraw its Bid or any subsequent Increased Bid without closing the Sale transaction pursuant to such Bid or obtaining the Mediator's consent or order of the Bankruptcy Court; or the Bidder is determined to be the Backup Bidder and attempts to modify or withdraw its designated Backup Bid prior to closing on the Sale, unless the Sale shall have closed with the Successful Bidder.
D.
E.
F.
ii.
iii.
The Deposit shall be returned to the Bidder if (i) the Bidder is determined not to be a Qualified Bidder, (ii) the Bidder is determined not to be the Successful Bidder or Backup Bidder, or (iii) the Bidder is determined to be the Backup Bidder and the Sale is closed with the Successful Bidder. Deposits shall be returned, interest free, within five (5) business days following the Auction, provided however that, in the case of the Back Up Bidder, its Deposit shall be returned, interest free, within five (5) business days of the Closing of the Sale to the Successful Bidder. The Deposit shall be applied to the purchase price upon closing; and G. An executed, definitive asset purchase agreement, containing the same or substantially identical terms and conditions as, the APA, together with a "redlined" or otherwise marked copy reflecting any revisions, changes and
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differences made to conform the APA to the Bidder's APA, provided that such APA shall not be effective until the Mediator declares such Bidder to be the Successful Bidder or Backup Bidder (and as such APA may be required to be conformed to the Successful or Backup Bid) as provided in sections VII.E and G of these Bid Procedures. 2. Form of APA Required. In addition to the foregoing requirements, the Bid and Bidder's APA shall not contain terms that are materially more burdensome or conditional than the terms of the APA, shall not be conditioned on the Bidder obtaining financing or additional due diligence, and shall not entitle the Bidder to any break-up fee, termination fee, expense reimbursement, or similar type of payment. Satisfactory Financial Disclosures to Mediator. The Bidder must further deliver to the Mediator with its Bid Package, but not to GA Keen Realty Advisors, LLC, information demonstrating an ability to close and consummate the transaction proposed under the Bid and to perform all obligations associated therewith, which, notwithstanding the foregoing, may be evidenced by: A. recent financial statements of the Bidder (or if the Bidder is an entity recently formed for the purpose of acquiring the Operating Assets, current financial statements of one or more direct or indirect equity holder(s) of the Bidder), current audited financial statements, a non-contingent financing commitment from an accredited financial institution, copies of current statements or correspondence from a bank or other accredited financial institution evidencing that the Bidder has sufficient liquid assets available to consummate the sale through its specific Bid and provide "adequate assurance of future performance," within the meaning of section 365(f)(2)(B) of the Bankruptcy Code, in relation to any executory contracts and unexpired leases to be assumed and assigned to such Bidder under the proposed transaction; and such other or alternative financial disclosure acceptable to the Mediator (including evidence that the Bidder has adequate resources to close the transaction) which demonstrates the financial capability of the Bidder to both consummate the Sale through its specific Bid and provide "adequate assurance of future performance," within the meaning of section 365(f)(2)(B) of the Bankruptcy Code, in relation to any executory contracts and unexpired leases to be assumed and assigned to such Bidder under the proposed transaction. Without limiting the foregoing, evidence of financial capability means the provision of documentation establishing the unconditional availability of funds or unconditional loan commitments to the Bidder sufficient to pay the Bid consideration in cash.
3.
B.
C.
4.
Qualification of Bids and Bidders. Only those Bidders who submit a Bid Package in compliance with all of the foregoing requirements on or before the Bid Deadline (as defined below) shall be entitled to have their respective Bids (a "Qualified Bid") considered by the Mediator (such a Bidder referred to herein as a "Qualified Bidder"). Each Qualified Bidder shall be notified of such designation by the Mediator.
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A.
Any Bidder who submits a proposed Bid shall be deemed to have acknowledged that it has had the opportunity to conduct any and all due diligence prior to making the Bid, that it has relied only on its own independent review, advice of its counsel and advisors, and that it has not relied on any statements, representations or promises by the Debtor, the Mediator, the Committee, Keen Realty, any of their respective advisors or professionals, or any other party regarding the Operating Assets, or these Bid Procedures. A Bidder who timely submits a written Bid but fails to satisfy all of the above requirements shall be promptly notified by the Mediator and given an opportunity to promptly cure such defects to the satisfaction of the Mediator, in her reasonable discretion. Only Qualified Bidders shall be allowed to participate at the Auction (as defined below). VI. BID DEADLINE AND DISTRIBUTION OF QUALIFIED BIDS
B.
1.
Bid Deadline. All Bids must be submitted to the Mediator (with a copy to GA Keen Realty Advisors, LLC) by no later than 12:00 noon, prevailing Mountain Time, on December 3, 2012 (the "Bid Deadline"). Thereafter, the Mediator, in consultation with the Oversight Parties, will determine which of the Bids are Qualified Bids submitted by Qualified Bidders. A Bid will not be considered by Mediator, and will not qualify as a Qualified Bid, unless the Bid Package is actually received by the Mediator, either hard copy or electronically, including evidence of the completion of the wire transfer or delivery of the cashiers check for the Deposit on or prior to the Bid Deadline. Transmission of Bids to Counsel for the Debtor and the Committee. The Mediator shall transmit a summary of all Qualified Bids received by the Bid Deadline (excluding the identity of the Bidder), via e-mail, to respective counsel for the Debtor, Alpine Bank, Wilhelm, the Committee and to all Qualified Bidders by 12:00 p.m., prevailing Mountain Time, on December 4, 2012. The Mediator shall transmit a summary of the Bids received by the Bid Deadline that were determined by the Mediator to not be Qualified Bids (excluding the identity of the Bidder) to respective counsel for the Debtor and the Committee. The Debtor and the Committee may challenge the Mediators decision not to qualify a Bid by providing notice to the Mediator at dwilliamson@coxsmith.com no later than December 7, 2012. VII. THE AUCTION
2.
1.
Time and Place of Auction. The Mediator shall conduct the Auction only if more than one Qualified Bid (which may include an election to credit bid from Alpine Bank, David Wilhelm (Wilhelm) or the holders of their respective claims (the Senior Lien Claim Holders) as provided herein) for the Operating Assets is received by the Mediator by the Bid Deadline or the Election Deadline, applicable. If only one Qualified Bid is made, such Bid shall be submitted to the Bankruptcy Court for approval at the Sale Hearing without the need for an Auction. A. If an Auction is held, the Auction will be conducted on December 10, 2012, at 10:00 a.m., prevailing Mountain Time, at the offices of the Debtor's counsel,
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Sender & Wasserman, P.C., 1660 Lincoln Street, Suite 2200, Denver, Colorado 80264. B. Only three (3) representatives of each of any Qualified Bidders, the Mediator, Debtor, Committee, Class Representatives, Alpine Bank, Wilhelm, the Debtor's Chief Restructuring Officer, Keen Realty, Cordillera Property Owners Association, Cordillera Valley Club Property Owners Association, United States Trustee, and Cordillera Transition Corporation, as well as their respective counsel, may attend the Auction.
2.
Auction Procedures. The Mediator, in consultation with the Oversight Parties, will conduct the Auction in the manner that she determines is likely to result in the highest, best, or otherwise financially superior offer(s) for the Operating Assets. In conducting the Auction, the following procedures (collectively, the "Auction Procedures") shall apply: A. At the outset of the Auction, the Mediator shall declare the Bid determined by the Mediator (upon consultation with the Oversight Parties) to be the highest and best Bid received, which bid shall be the "Opening Bid." Qualified Bidders will be permitted to increase their Bids at the Auction (each such increased Bid, an "Increased Bid"), provided however that: i. ii. iii. B. The minimum amount of increased consideration required for a successive Increased Bid (the "Minimum Bid Increment") will be $100,000.00; Qualified Bidders are free to submit an Increased Bid in an amount in excess of the Minimum Bid Increment. Qualified Bidders may submit Increased Bids at the Auction by submitting the Increased Bid amount to the Mediator verbally at the Auction.
Prior to the Auction, the Mediator shall provide all Qualified Bidders with the amount of the Bids of Opening Bid, and the need to qualify for at least that amount in order to participate in the Auction. Qualified Bidders must qualify up to the amount of the Opening Bid in order to attend the Auction. Qualified Bidders who submit an Increased Bid above the level to which they have demonstrated financial capability to consummate a transaction to the satisfaction of the Mediator may be required to provide proof of their ability to consummate the Increased Bid prior to the Mediator's acceptance of such an Increased Bid. All Bidders are encouraged to pre-qualify to the amount for which they may wish to bid or to bring proof of financial capability at such higher level with them to the Auction. The Auction shall commence with the Opening Bid. The Mediator, in her discretion, may reasonably determine to limit Bidders time to submit a next Bid. All incremental Increased Bids at Auction shall be made and received in one room, on an open basis, and all Qualified Bidders shall be entitled to be present for all bidding with the understanding that the amount of each Increased Bid will be fully disclosed to all other Qualified Bidders throughout the entire Auction.
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The Qualified Bidder with the highest and best final Bid for the Operating Assets at the close of the Auction (the "Successful Bid"), as determined by the Mediator in consultation with the Oversight Parties, shall be the "Successful Bidder." The Mediators determination of what constitutes the Opening Bid, first and second highest and best Bids will be based upon the exercise of Mediators discretion and may take into consideration price, modifications to the APA, closing risk, risk of delay, financial condition, and such other factors as Mediator may deem relevant. The Qualified Bidder having the next highest Bid below the Bid of the Successful Bidder (the "Backup Bid"), as determined by the Mediator in consultation with the Oversight Parties, shall be the "Backup Bidder." i. The Successful Bid shall remain open, irrevocable and binding on the Successful Bidder until the closing of the Sale, and shall be deemed withdrawn only in the event it is not approved by the Bankruptcy Court. The Backup Bid shall remain open, irrevocable and binding on the Backup Bidder until the earlier of (i) the closing of the Sale to the Successful Bidder or (ii) 5:00 p.m. prevailing Mountain time, on January 15, 2013. No Successful Bid or Backup Bid is binding on the Debtor or its estate until the Bankruptcy Court enters an Order approving the Sale of the Operating Assets to the Successful Bidder / Backup Bidder. Bids attempted to be made after the Auction is closed are automatically disqualified.
ii.
iii.
iv. E. F.
At the conclusion of the Auction, the Mediator shall declare the identity of the Successful Bidder and the Backup Bidder to all parties present at the Auction. The Mediator, in consultation with the Oversight Parties, may adopt such other Auction Procedures that, in the Mediator's reasonable judgment, will best promote the goal of a fair and competitive bidding process consistent with these Bid Procedures and any applicable Bankruptcy Court orders. At the conclusion of the Auction: i. The Successful Bidder and the Backup Bidder shall modify and execute the APA to be consistent with the results of the Auction prior to leaving the Auction; The Successful Bidder shall supplement its Deposit within two business days by cashiers check made payable to the escrow agent for the Debtors estate, or by wire transfer, so that the amount of Deposit equals $1 million. Failure to do so may result in the Backup Bidder being declared the Successful Bidder, which declaration shall obligate the newly declared Successful Bidder to also comply with this section.
G.
ii.
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VIII. SENIOR LENDERS 1. Notwithstanding any other provision hereof, the holder of the allowed secured claim of Alpine Bank (the Alpine Bank Claim Holder), if it elects to credit bid under Section 363(k) of the Bankruptcy Code as hereinafter provided, shall be deemed without more a Qualified Bidder and entitled to bid at the Auction, and any such credit bid shall be deemed a Qualified Bid. Notwithstanding any other provision hereof, the holder of the allowed secured claim held by Wilhelm (the Wilhelm Claim Holder), unless it does not intend to Bid, must submit to the Mediator by no later than the Bid Deadline, a Bidder Information Sheet and satisfactory financial information demonstrating an ability to close and consummate a transaction in an amount not less than (i) the amount of taxes then due and secured by liens on the Debtor's real and personal property, and (ii) the amount of the allowed obligations of the Debtor to Alpine Bank, as set forth in section V.3. Notwithstanding any other provision hereof, the Wilhelm Claim Holder must submit a completed Bid Package on or before 5:00 p.m. prevailing Mountain time, on December 6, 2012. Notwithstanding any other provision hereof, the Alpine Bank Claim Holder and the Wilhelm Claim Holder, shall each have the right, pursuant to section 363(k) of the Bankruptcy Code, to credit bid the allowed amount of their secured claim as a component of any Bid for the Operating Assets including, in the case of the Alpine Bank Claim Holder, any outstanding post-petition credit extended to the Debtor by Alpine Bank with Bankruptcy Court approval, provided however that, any Bid by the Wilhelm Claim Holder must include cash up to and including amounts for the payment of (i) the amount of taxes then due and secured by liens on the Debtor's real and personal property; (ii) up to the amount of the allowed obligations of the Debtor to Alpine Bank; and (iii) the amount by which such Bid exceeds the amount of the foregoing tax liens and allowed secured claims of Alpine Bank and Wilhelm. The Wilhelm Claim Holder shall execute and deliver an APA to the Mediator as a condition of his initial bid at the Auction. The Alpine Bank Claim Holder and the Wilhelm Claim Holder must provide written notice to the Mediator, with a copy to Keen Realty and the Oversight Parties, of their intent to credit Bid no later than 5:00 p.m. prevailing Mountain Time on December 6, 2012 ("Election Deadline"). Additionally, to the extent that any Bid by the Wilhelm Claim Holder must include a cash component in addition to the amount of its allowed credit Bid, if the Wilhelm Claim Holder intends to submit a Bid it must pre-qualify in the amount of such cash component. If Alpine credit Bids at the Auction, it shall no later than the time of its Bid specifically designate which of the Operating Assets listed in the APA to which such credit Bid applies. Notwithstanding section VII.G, the Alpine Claim Holder need not provide or increase any deposit if it is the Successful Bidder, and if the holder of the Wilhelm Claim is the Successful Bidder, section VII.G and the percentage set forth therein shall apply only to the extent of the cash components of such Successful Bid.
2.
3.
4.
5.
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IX. SALE HEARING 1. Notice and Approval of the Successful Bid. Following the Bid Deadline and/or the Auction, if conducted, the Debtor shall file in the Bankruptcy Case and serve upon all required notice parties notice of the Successful Bid amount, the Successful Bidder, the Backup Bid amount and the Backup Bidder (if any), subject to Bankruptcy Court approval, by no later than 5:00 p.m., prevailing Mountain Time, on December 12, 2012. Sale Hearing and Approval. The Debtor and Committee have filed a motion for approval of the Sale of the Operating Assets, subject to the completion of the Sale process set out in these Bid Procedures (the "Sale Motion"). A. A final, evidentiary hearing to confirm the results of the Sale, to confirm the results of the Auction, and to consider all of the other relief requested in the Sale Motion (the "Sale Hearing") shall be held before the Bankruptcy Court on December , 2010, at _____ a.m./p.m., prevailing Mountain Time. Following approval of the Successful Bid at the Sale Hearing, then the Debtor may close on the Successful Bid or Backup Bid. An appeal of the Order approving the Sale of the Operating Assets entered in the form approved by the Successful / Backup Bidder (as applicable) shall not, absent a stay pending appeal or injunction enjoining the closing of such Sale, relieve any party of the obligation to close the Sale. X. MISCELLANEOUS A party's participation in the Sale process outlined herein shall constitute: (i) consent by such party to be subject to the jurisdiction of the Bankruptcy Court, for all purposes, in connection with any and all matters relating to the Sale of the Operating Assets and these Bid Procedures; and (ii) the party's acknowledgment of its review, understanding and acceptance of all of the Bid Procedures outlined herein.
2.
B. C.
PAGE 12
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EXHIBIT A
[CONFIDENTIALITY AGREEMENT]
4842-7095-1441.5
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CONFIDENTIALITY AGREEMENT This Confidentiality Agreement (the "Agreement") is hereby entered into for the benefit of Cordillera Golf Club, LLC, dba The Club at Cordillera (the "Debtor"), a Delaware limited liability company and Debtor in bankruptcy under Case Number 12-24882-ABC (Bankr. D. Colo.) (the "Bankruptcy Case"), by ______________________, a __________ corporation ("Recipient") (Debtor and Recipient herein collectively referred to as the "Parties"), to evidence the Parties' agreement, effective as of _________________, 2012, with respect to Debtor's disclosure of certain Confidential Information (as defined herein below) to Recipient in connection with Recipient's evaluation of the possibility of a business transaction between the Parties pursuant to which Recipient would acquire certain of Debtor's assets (a "Transaction"). RESTRICTIONS AND OBLIGATIONS 1. Recipient recognizes and acknowledges that, during the course of Recipient's evaluation of a Transaction, Recipient will receive Confidential Information from Debtor, and that such information is proprietary to and the property of Debtor. Recipient agrees to take all reasonable precautions against disclosure of the Confidential Information to third persons, except as expressly authorized herein. Without limiting the foregoing, Recipient shall take at least those measures that it takes to protect its own most highly confidential information. Recipient may disclose the Confidential Information to any co-bidders in any circumstance where Recipient has joined with others to submit a joint bid, its officers, directors, agents, employees, prospective financing sources, and representatives, including financial and legal advisors, on a need-to-know basis solely in connection with evaluating the Transaction (collectively, "Representatives"). Representatives shall be informed by Recipient of the confidential nature of the Confidential Information and shall be directed by Recipient to treat the Confidential Information confidentially. Recipient agrees to be responsible for the actions of its Representatives and for any breach of the terms of this Agreement by such a Representative. Recipient agrees not to disclose or use any Confidential Information, except as required in connection with Recipient's evaluation of a Transaction with Debtor or as required by law, provided that if such disclosure is required by law, Recipient shall give Debtor prompt written notice of such requirement prior to such disclosure and assist Debtor in protecting the Confidential Information from public disclosure. Upon Debtor's written request or, if earlier, upon Recipient's and/or Debtor's determination not to proceed with a Transaction, Recipient shall return to Debtor or destroy all materials in the possession, or under the control, of Recipient that contain Confidential Information, including any reports, analyses, memoranda and other materials that were prepared by Recipient, or any of its Representatives, and that include or were based on Confidential Information. If Recipient elects to destroy such information, it shall promptly certify in writing to Debtor that Recipient has destroyed all such information in accordance with this Agreement. DEFINITION OF CONFIDENTIAL INFORMATION 1. "Confidential Information" means information, knowledge or data that is nonpublic,
Page 1
2.
3.
CONFIDENTIALITY AGREEMENT 4842-7095-1441.5
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confidential or proprietary in nature that is disclosed to or made known to Recipient by Debtor in connection with, as a consequence of, or by virtue of Recipient's evaluation of a Transaction with Debtor, including, without limitation, Debtor's business operations, financial statements, services, products, formulas, pricing strategies, computer programs and systems, trade secrets, inventions, processes, research and development, work performed or to be performed for customers or prospects, membership lists, customer records, current or prospective customers, prospects, lists of employees and salary information, marketing plans and strategies, forecasts, budgets, compilations, data, studies and other similar material. Such information shall be deemed Confidential Information regardless of whether disclosed orally, in writing or in any other form or medium (including without limitation electronic or computer-based data) and includes without limitation information obtained by meeting with representatives of Debtor and all notes, analyses, compilations, forecasts, reports, studies or other materials (in whatever form, whether documentary, computer storage or otherwise) prepared by Recipient or its Representatives that contain or otherwise reflect such information. 2. Recipient acknowledges that Debtor has spent significant time, effort, and money to develop the Confidential Information, which Debtor considers vital to its business and goodwill. Recipient also acknowledges that the Confidential Information has been or will be communicated to or acquired by Recipient in the course of evaluation of a Transaction with Debtor, and Debtor desires to proceed with the possibility of a Transaction with Recipient only if, in doing so, it can protect its Confidential Information and goodwill. Exclusions from Confidential Information. The Parties agree that Confidential Information shall not include any information to the extent that the information: (i) is or becomes generally available to the public other than as a result of a breach of this Agreement by Recipient or its Representatives, (ii) is or becomes available to Recipient on a non-confidential basis from a source which is entitled to disclose it to Recipient, (iii) is in Recipient's rightful possession prior to receipt from Debtor and was not subject to any obligation of confidentiality, or (iv) is or was independently developed by Recipient without using the Confidential Information received from Debtor. Injunctive Relief; Enforcement. It is hereby understood and agreed that damages shall be an inadequate remedy in the event of a breach by Recipient of any of the foregoing covenants and that any such breach by Recipient will cause Debtor great and irreparable injury and damage. Accordingly, Recipient agrees that Debtor shall be entitled, without waiving any additional rights or remedies otherwise available to Debtor at law or in equity or by statute, to injunctive and other equitable relief in the event of a breach or intended or threatened breach by Recipient of any of said covenants. In the event of litigation relating to this Agreement, the non-prevailing Party shall reimburse the prevailing party for its costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) incurred in connection with such litigation. NO WARRANTY. ALL CONFIDENTIAL INFORMATION IS PROVIDED "AS IS." DEBTOR MAKES NO WARRANTIES, EXPRESS, IMPLIED OR OTHERWISE, REGARDING ITS ACCURACY OR COMPLETENESS. No License. All Confidential Information of Debtor and copies thereof are, and will
Page 2
3.
4.
5.
6.
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remain, exclusively owned by Debtor. All items and information prepared by Recipient incorporating or derived from any part of the Confidential Information of Debtor will also be considered Confidential Information of Debtor and owned exclusively by Debtor. Nothing in this Agreement is intended to grant any rights to Recipient under any patent, mask work right or copyright of Debtor, nor shall this Agreement grant to Recipient any rights in or to the Confidential Information of Debtor except as expressly set forth herein. MISCELLANEOUS 1. 2. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado. Severability. In case any one or more of the provisions contained herein shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such provision(s) had never been contained herein, provided that such provision(s) shall be curtailed, limited or eliminated only to the extent necessary to remove the invalidity, illegality or unenforceability. Waiver. No waiver by Debtor of any breach by Recipient of any of the provisions of this Agreement shall be deemed a waiver of any preceding or succeeding breach of the same or any other provisions hereof. No such waiver shall be effective unless in writing and then only to the extent expressly set forth in writing. Entire Agreement. This Agreement constitutes the entire agreement of the Parties with respect to the subject matter contained herein, provided that nothing herein shall act to affect, modify or amend any other confidentiality or nondisclosure agreement entered into by the Debtor and any other person or entity. Neither this Agreement nor the disclosure or receipt of the Confidential Information or any other activity contemplated hereunder shall constitute, or imply, any promise or intention by either Party to enter into any type of business transaction or relationship with the other party. This Agreement may be amended only by a subsequent written agreement executed by both Parties. No Assignment. This Agreement is non-assignable, and none of the rights conferred hereby may be assigned or transferred by Recipient to any third party. Warranty of Authority. Each of the signatories hereto hereby warrants that he/she is fully authorized to execute this Agreement on behalf of the Party for whom he/she is signing. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement, and all of which, when taken together, shall be deemed to constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by facsimile transmission or other electronic means shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile or other electronic means shall be deemed to be their original signatures for any purpose whatsoever. Notwithstanding the foregoing, this Agreement is entered into for the benefit of the Debtor and its estate in the Bankruptcy Case, and accordingly, is binding upon execution of the Recipient irrespective of
Page 3
3.
4.
5. 6. 7.
Case:12-24882-ABC Doc#:521-1 Filed:10/05/12 25 execution by the Debtor.
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Page 4
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IN WITNESS WHEREOF, the undersigned representatives of the Parties have executed this Agreement effective as of the date first written above. DEBTOR: The Cordillera Golf Club, LLC, dba The Club at Cordillera Address for Notices to Debtor: _________________________________ _________________________________ Fax:__________________
By:_______________________________ Name: Title:
RECIPIENT: Address for Notices to Recipient: _________________________________ _________________________________ Fax:__________________
By: _______________________________ Name: Title:
Page 5
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Disclaimer&ConditionsofUse
ThisMemorandumisbeingprovidedtoYouinconnectionYourinterestinaTransaction.Thepurposeof this Memorandum is to furnish You with certain information regarding a prospective Transaction and certainoftherisksattendantthereto.AlloftheinformationcontainedinthisMemorandumisbasedon thecurrent,goodfaithunderstandingoftheCompanyanditsadvisors. This Memorandum contains proprietary nonpublic information regarding the operations, business, expectations,plansandprospectsoftheCompany. TheEvaluationMaterialhasbeenpreparedbyCompanyforthepurposeofprovidingYouwithgeneral information to assist You in making Your own evaluation of the Company and its assets and does not purporttocontainalloftheinformationthatYoumaydesire.Norepresentationorwarranty,expressor implied, is made by the Company and/or its Advisors as to the accuracy or completeness of the EvaluationMaterial. Inallcases,YoushouldconductYourowninvestigationandanalysisoftheCompany,itsassets,andof the Evaluation Material. The Evaluation Material should not be relied upon as a promise or representation by the Company and/or Advisory as to the past or the future performance of the Company or the value of Companys business or assets. The contents of this Memorandum have not beenauditedandhavenotbeenindependentlyverifiedbyAdvisor. The Company and/or Advisor: (A) expressly disclaim any and all liability relating to the use of the EvaluationMaterial;(B)undertakenoobligationtoupdatetheEvaluationMaterialsandanyestimates, projections and forwardlooking statements, if any, contained therein; and (C) do not undertake any obligationtoprovideYouwithaccesstoanyadditionalinformation. ThedeliveryofthisMemorandumshallnotcreateanimplicationthattherehavebeennochangesinthe affairs of the Company since the date hereof or that the information herein is correct as of any time subsequenttothedateofthisMemorandum.ThisMemorandumsupersedesandreplacesanyandall previousinformationdeliveredormadeavailabletoYoubyoronbehalfoftheCompany. AllEvaluationMaterialshouldbereadinconjunctionwithandissubjecttothisDisclaimer&Conditions of Use statement, as well as the Forward Looking Statements/Important Factors and Associated Risks provisions set forth below. Only those representations and warranties to the extent made in a definitive,writtenagreementexecutedbytheCompany,subjecttosuchlimitationsandrestrictionsas maybespecifiedtherein,shallhaveanybindingorlegaleffect. YourparticipationinthisprocessdoesnotassureanytransactionwiththeCompany.TheCompanymay enterintoadefinitiveagreementwithanotherpartywithBankruptcyCourtapproval. By accepting this Memorandum, You confirm that You are bound by all of the provisions of Your ConfidentialityandNonDisclosureAgreementwiththeCompany. AdvisorisactingastheCompanysintermediaryinconnectionwiththeproposedTransaction. Only Advisor is: (a) authorized to distribute this Memorandum and other Evaluation Materials to you, and(b)authorizedtorespondtoyourquestionsandcommentsconcerningCompany,theClubFacilities, and/or a Transaction. You should not proceed to close a Transaction unless you are satisfied that CompanyandAdvisorhaveprovidedYouwithallnecessaryEvaluationMaterialsandrespondedtoallof Yourquestionsandconcerns.Advisorwillarrangeallcontactsforappropriateduediligence.Youagree not to contact the Company or any of the Companys other advisors, management or personnel regardingduediligence.
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You are not to construe the contents of this Memorandum, the Evaluation Materials, or any other communications from Company and/or Advisor as legal or tax advice. You should consult Your own attorney, accountant and other advisors, at Your own expense, for advice as to: (a) the legal, tax, economic,andotherconsequencesofaTransaction,and(b)thesuitabilityofaTransactiontoYouand Yourcircumstances. This Memorandum does not constitute an offer or solicitation to any person residing in a jurisdiction wheresuchofferorsolicitationisnotauthorizedorinwhichthepersonmakingtheofferorsolicitation isnotqualifiedtodoso. AnyandallTransactionsaresubjecttoBankruptcyCourtapproval. Allcommunications,inquiries,andrequestsforinformationregardingtheCompanyshouldbedirected totheAdvisorspersonnellistedbelow: GAKeenRealtyAdvisors,LLC Ste1001,130W.42St.,NewYork,NY10036 (646)3819222 MattBordwinCoPresident, Ext.4302 mbordwin@GreatAmerican.com
HaroldJ.BordwinCoPresident, Ext.4301 hbordwin@GreatAmerican.com
CraigFoxSeniorVP Ext.4303 cfox@GreatAmerican.com
StacyFerroneSeniorAssociate Ext.4308 sferrone@GreatAmerican.com
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ForwardLookingStatements ImportantFactorsandAssociatedRisks
ThisMemorandumandtheEvaluationMaterialsmaycontaincertainforwardlookingstatementswithinthe meaning of Section27A of the Securities Act and Section 21 E of the Securities Exchange Act of 1934, as amended, and, to the extent applicable, the Company intends that such forwardlooking statements be subject to the safe harbors created thereby. These forwardlooking statements include the plans and objectives of the Company for future operations, including plans and objectives relating to the future economic performance of the Company. The forwardlooking statements and associated risks set forth in this Memorandum include or relate to the successful implementation and operation of the Company's business plan. Actual results and developments may differ materially from Companys expectations and predictions which are reflected in this Memorandum and in the Evaluation Materials. Such discrepancies betweenactualresultsandtheCompanysexpectationsandpredictionsmaybeduetoanumberofrisksand uncertainties,manyofwhicharebeyondthecontrolofCompany. AllsubsequentwrittenandoralforwardlookingstatementsattributabletotheCompanyand/orAdvisorare expresslyqualifiedintheirentiretybythecautionarystatementscontainedorreferredtointhissectionand theDisclaimer&ConditionsofUseabove. TheforwardlookingstatementsincludedhereinarebasedonCompanyscurrentexpectationsthatinvolvea number of risks and uncertainties. These forwardlooking statements are based on various assumptions regardingtheCompanyanditsproposedoperations.Suchassumptionsinvolvejudgmentswithrespectto, amongotherthings,theresolutionofCompanysBankruptcyProceeding,theoutcomeofvariouslitigations inwhichtheCompanyanditsprincipalsarebothplaintiffsanddefendants,thevalueofCompanysassets, futureeconomic,competitiveandmarketconditionsandfuturebusinessdecisions,allofwhicharedifficult orimpossibletopredictaccuratelyandmanyofwhicharebeyondthecontroloftheCompany.Althoughthe Company believes that the assumptions underlying the forwardlooking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplatedinforwardlookinginformationwillberealized.Inaddition,asalsodisclosedelsewhereinthis document,thebusinessandoperationsoftheCompanyaresubjecttosubstantialrisks,whichincreasethe uncertaintyinherentinsuchforwardlookingstatements.Inlightofthesignificantuncertaintiesinherentin theforwardlookingstatementsincludedherein,theinclusionofsuchinformationshouldnotberegardedas a representation by the Company and/or Advisor that the objectives or plans of the Company will be achieved. TheCompanyand/orAdvisorarenotmakinganyrecommendationsandtherecipientofthisMemorandum should not infer any representation about the likely existence of any particular future set of facts or circumstances. ThespreadsheetsandbusinessmodelsincludedwiththeseEvaluationMaterialsconstituteforwardlooking statements. In addition, the words estimate, anticipate, plan, intend, expect, proposed, and similarexpressionsareintendedtoidentifyforwardlookingstatements.Theseforwardlookingstatements involveandaresubjecttoknownandunknownrisks,uncertaintiesandotherfactorswhichcouldcausethe actualresults,performance(financialoroperating)oftheCompanyorachievementstodiffermateriallyfrom theoutcomes,expressedorimplied,bysuchforwardlookingstatementsortheprojectionssetforthherein. Youarecautionednottoplaceunduerelianceontheseforwardlookingstatements,whichspeakonlyasof thedatehereof.TheCompanyspecificallydisclaimsanyobligationtoreleaseanyrevisionstotheseforward lookingstatementstoreflecteventsorcircumstancesafterthedatehereofortoreflecttheoccurrenceof unanticipatedevents.
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EXHIBIT B
[BIDDER INFORMATION SHEET]
4842-7095-1441.5
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BIDDER INFORMATION SHEET The following information is hereby provided by the Potential Bidder (as defined below) in accordance with the Bid Procedures approved by order of the U.S. Bankruptcy Court for the District of Colorado in the case of In re Cordillera Golf Club, LLC, dba The Club at Cordillera, Case No. 12-24882-ABC (the "Bid Procedures"). Unless separately defined herein, all capitalized terms shall have the meanings assigned to them in the Bid Procedures. POTENTIAL BIDDER'S NAME: ("Potential Bidder") TAX IDENTIFICATION NUMBER:________________________
POTENTIAL BIDDER'S ADDRESS:
POTENTIAL BIDDER'S LEGAL COUNSEL
AUTHORIZED OFFICER(S)/AGENT(S):*
*such individuals as have been authorized to act on behalf of Potential Bidder in communicating with the Mediator / Debtor on matters regulated by the Bid Procedures.
Name: Title: Office Phone: Fax: Cell Phone: E-Mail:
Name: Title: Office Phone: Fax: Cell Phone: E-Mail:
[add additional names and contact information as appropriate] ACKNOWLEDGMENT By signing below, the undersigned (as the Potential Bidder or as the representative of the Potential Bidder authorized to execute and submit this Bidder Information Sheet on behalf of the Potential Bidder) hereby (i) represents that Potential Bidder has a bona fide interest in submitting a Bid for the purchase of all or some of the Debtors' Operating Assets, and that Potential Bidder is hereby submitting this executed Bidder Information Sheet to request Due Diligence Access and to participate in the sales process established under the Bid Procedures; (ii) acknowledges that the undersigned has reviewed and understands all of the Bid Procedures and that Potential Bidder accepts and agrees to be bound by all of the Bid Procedures; and (iii) acknowledges
4842-7095-1441.5
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Potential Bidder's consent to be subject to the jurisdiction of the Bankruptcy Court, for all purposes, in connection with any and all matters relating to the Sale and the Bid Procedures. Dated: [signature] Title:
4842-7095-1441.5

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Case:12-24882-ABC Doc#:521 Filed:10/05/12

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Case No. 12-24882-ABC Chapter 11

Case:12-24882-ABC Doc#:521 Filed:10/05/12 2.

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to 28 U.S.C. 1408 and 1409. II. 3. BACKGROUND

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Case:12-24882-ABC Doc#:521 Filed:10/05/12

Entered:10/05/12 14:30:36 Page3 of 20 Alpine asserts that it is owed

accounts receivable, general intangibles, and tort claims.1

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________________________________________________________________________________________________________ Page 4 4846-2249-0385.1

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________________________________________________________________________________________________________ Page 5 4846-2249-0385.1

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________________________________________________________________________________________________________ Page 7 4846-2249-0385.1

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The Debtor accordingly requests by this Motion the Court's authority, to be

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________________________________________________________________________________________________________ Page 9 4846-2249-0385.1

Case:12-24882-ABC Doc#:521 Filed:10/05/12 (iv)

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________________________________________________________________________________________________________ Page 11 4846-2249-0385.1

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Case:12-24882-ABC Doc#:521 Filed:10/05/12 III. A.

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ARGUMENTS AND AUTHORITIES

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Date: October 5, 2012

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EXHIBIT A Proposed Order to be Provided Prior to Hearing

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RECIPIENT: Address for Notices to Recipient: _________________ _ Fax:__