United States Department of Justice, Tax Division v. Pflum et al

Filing 55

ORDER signed by Senior Judge Morrison C. England, Jr. on 04/12/23 GRANTING 49 Motion for Sale of Properties as detailed in the order (cc: USM, Financial). (Benson, A.)

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DAVID A. HUBBERT
Deputy Assistant Attorney General

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HERBERT W. LINDER
U.S. Department of Justice
717 N. Harwood, Suite 400
Dallas, Texas 75201
[phone] or 880-9721
[phone] [fax]
[e-mail]

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Attorney for the United States
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Of Counsel
PHILLIP A. TALBERT
United States Attorney

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Attorneys for the United States of America
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IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF CALIFORNIA

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UNITED STATES OF AMERICA,
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Case No. 2:15-CV-02659-MCE-CKD
Plaintiff,
Order Granting the United States’
Motion for
Order of Sale of Properties

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v.
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DAVID PFLUM
PILOT ENTERPRISE, LLC,
FRIDAY HARBOR WY, LLC,
STATE OF CALIFORNIA FRANCHISE TAX
BOARD,
EL DORADO COUNTY,
SAN JOAQUIN COUNTY, and
CITY OF STOCKTON.
Defendants.

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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES

ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF
PROPERTIES

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Pending before the Court is the United States’ Motion for an Order of Sale of Properties
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located at 1274 Dedi Avenue, South Lake Tahoe, CA, and 1278 Dedi Avenue, South Lake
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Tahoe, CA, by IRS PALS (“Motion.”) The Court entered final judgment in this action on
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September 13, 2017, ordering that the federal tax liens on these two properties be foreclosed, the
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properties sold, and the proceeds distributed to the United States, to be applied to David Pflum’s
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federal tax debts and to the El Dorado County Tax Collector and the State of California
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Franchise Tax Board, as set forth in their respective stipulations.
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The Court GRANTS this Motion and ORDERS as follows:
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1.

The subject real properties to be sold are located at 1274 Dedi Avenue, South Lake

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Tahoe, CA, and 1278 Dedi Avenue, South Lake Tahoe, CA, (“Properties”).
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The 1274 Dedi Property, APN 032-282-34-100, is fully described as follows:

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The land referred to herein below is situated in the City of South Lake Tahoe, County of
El Dorado, State of California, and described as follows:

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Lot 85, Block 3, as shown on the Map of “Armstrong Subdivision No. 7” filed for record
June 29, 1954, in Block “B” of Maps, Page 39, El Dorado County Records.

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The 1278 Dedi Property, APN 032-282-33-100, is fully described as follows:
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The land referred to herein below is situated in the City of South Lake Tahoe, County of
El Dorado, State of California, and described as follows:

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Lot 84, Block 3, as shown on the Map of “Armstrong Subdivision No. 7” filed for record
June 29, 1954, in Block “B” of Maps, Page 39, El Dorado County.

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2.

The IRS’s Property Appraisal & Liquidation Specialist (“PALS”) is authorized and

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directed under 26 U.S.C. §§7403(c) and (d), 28 U.S.C. §§ 2001, 2002 and 2004, to offer for
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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES

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public sale and to sell the Properties, together with any improvements, buildings, and

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appurtenances thereon.

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appropriate to preserve these properties, including, without limitation, retaining a locksmith or

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other person, if necessary, to change or install locks or other security devices on these properties,

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until the deed thereto is delivered to the successful purchaser.

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4.

PALS is authorized to have free access to the Properties and to take all actions

The terms and conditions of the sale are as follows:

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a. The Properties shall be sold together, or separately, at the sole discretion of

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the United States, and such sale shall be free and clear of all liens or other claims

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of any party to this proceeding, including additional fees and costs, from sale

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proceeds;

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b. The sale shall be subject to building lines, if established, all laws, ordinances,

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and governmental regulations (including building and zoning ordinances)

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affecting these properties and easements and restrictions of record, if any;

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c. The sale of the Properties by public auction, shall be held at the courthouse of

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the county or city in which the Properties are located; on the premises of either of

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the Properties; or at any other place in accordance with the provisions of 28

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U.S.C. § § 2001 & 2002, and 2004;

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d. The date and time for the sales are to be announced by the PALS;

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e. The IRS PALS may, in their discretion, hold one or more open houses at the

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Property for viewing by potential bidders. David Pflum, and any person

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occupying the Properties, shall not interfere in any way with an open house.

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f. After the PALS has determined the date and time for sale, they shall insert the

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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES

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same in the Notice of Sale and shall promptly mail a copy of the Notice of Sale,

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by regular and certified mail, return receipt requested, to each of the following:

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Herb Linder
Trial Attorney, Tax Division
U.S. Department of Justice
717 N. Harwood, Suite 400
Dallas, Texas 75201
Attorney for United States

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JILL BOWERS
1300 I Street, Suite 125
P.O. Box 944255
Sacramento, CA 94244-2550
Attorneys for Defendant State of California Franchise
Tax Board
Janeth D. Sanpedro
County of El Dorado
330 Fair Lane
Placerville, CA. 95667
Attorney for Defendant Eldorado County.
David G. Pflum
509 W. Willow, Apt. 8
St. Marys, KS 66536

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Wendy Pierson or current occupant
1274 Dedi Avenue,
South Lake Tahoe, CA 96150

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g. Notice of the sale shall be published once a week for at least four consecutive

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weeks before the sale in at least one newspaper regularly issued and of general

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circulation in Eldorado County, California. Furthermore, at the discretion of the

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IRS PALS, the sale may be advertised by any other means deemed appropriate,

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expressly including placement of a listing with a broker, provided that the fee for

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the advertisement is a flat sum and not a commission on the sale price. Each

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notice of the sale shall contain a description of the Property, but need not contain

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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES

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a full legal description, and shall also contain the terms and conditions of sale in

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this order of sale.

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h. The minimum bid will be determined by the PALS and shall be inserted into

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the Notice of Sale. If the minimum bid is not met or exceeded, the PALS may,

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without further permission of this Court, and under the terms and conditions in

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this order of sale, hold a new public sale, and may reduce the minimum bid;

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i. At the time of the sale, the winning bidder shall deposit with the PALS, by

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money order or by certified check or cashier’s check payable to the “United States

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District Court for the Eastern District of California” a deposit in an amount

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between five (5) and twenty (20) percent of the minimum bid, as specified by the

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PALS in the published notice of sale. Before being permitted to bid at the sale,

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potential bidders shall show the PALS proof that they are able to comply with this

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requirement. No bids will be accepted from any person who has not presented

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proof that, if they are the successful bidder, they can make the deposit required by

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this Order;

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j. The balance of the purchase prices for the Properties shall be paid to the PALS

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within thirty (30) days after the date the bid is accepted, by a certified or cashier’s

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check, payable to the United States District Court for the Eastern District of

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California. If a successful bidder fails to fulfill this requirement, the deposit shall

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be forfeited and shall be applied to cover the expenses of the sale, with any

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amount remaining to be applied to the federal tax liabilities at issue of David

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Pflum. The Property shall be again offered for sale under the terms and

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conditions of the order of sale or, in the alternative, sold to the second highest

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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES

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bidder, at the sole discretion of the United States. The United States may bid as a

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credit against its judgment without tender of cash;

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k. The Clerk of the Court shall receive and deposit all funds collected as a result

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of the foreclosure and sale of the Properties, into the account for the registry of

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the Court for later distribution.

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l. The sale of the of the Properties shall be subject to confirmation by this Court.

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On confirmation of the sale, ownership, risk of loss and possession shall transfer

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to the respective successful bidder(s), and all interests in, liens against, and titles

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and claims to, the Properties that are held or asserted by the parties to this action

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are discharged and extinguished.

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m. After the confirmation of the sale, the IRS shall execute and deliver a deed

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under the authority of this Court conveying the respective Properties, effective as

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of the date of the confirmation of the sale, to the respective successful bidder(s) or

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as designated in writing by the successful bidder(s). The successful bidder(s)

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shall pay, in addition to the amount of the bid, any documentary stamps and

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registry fees as provided by law; and

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n. The sales are ordered under 26 U.S.C. §§7403(c) and (d), 28 U.S.C. §§ 2001,

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2002 and 2004 and are made without right of redemption.

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the IRS PALS are authorized to have free access to the Properties and to take all actions

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necessary to preserve the Property, including, but not limited to, retaining a locksmith or other

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person to change or install locks or other security devices on any part of the Property.

From 30 days after the date this Order is signed until the sale is confirmed, the Marshal or

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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES

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The Marshal or the IRS PALS may, in his or her discretion, make payments for utilities,

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repairs, and the like that are reasonably necessary to maintain or preserve the Property until the

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Property is sold. Such payments may be reimbursed as a cost of sale.

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further order or process from the Court shall be required.

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8.

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David Pflum, and any person occupying the Properties with or without his permission, The

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termination of the possessory rights shall take effect on the date 30 days after the date this Order

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is signed, David Pflum and any person occupying the Properties with or without his permission,

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is hereby ordered to vacate the Properties no later than the date 30 days after the date this Order

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is signed. They shall take with them their personal property, but leave in place all improvements,

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buildings, fixtures, and appurtenances to the Property. The United States Marshal or PALS shall

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provide notice of the order to defendants and any other person occupying the Properties by hand

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delivery or by leaving it in a prominent location at the property. The United States may, in

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writing and in its sole discretion, extend the time to vacate.

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continues to occupy the Property after the date 30 days after the date this Order is signed, they

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shall be considered to be trespassers. In that event, the U.S. Marshals Service is authorized and

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directed to take any and all necessary action, including but not limited to the use of reasonable

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force, to enter and remain on the premises, which includes, but is not limited to, the land,

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buildings, vehicles, and any other structures located thereon, for the purpose of executing this

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Order of Sale. The United States Marshals Service is further authorized and directed to arrest or

This Order shall constitute a special writ of execution with respect to David Plfum and no

This Order of Sale terminates any right of possession to the Properties held by defendant

If David Pflum, or any person occupying the Properties with or without his permission,

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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES

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evict from the premises any persons who obstruct, attempt to obstruct, or interfere or attempt to

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interfere in any way with this Order of Sale.

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by the time specified herein, the personal property remaining on the Properties thereafter is

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deemed forfeited and abandoned, and the United States Marshal’s Office or PALS is authorized

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to remove it and to dispose of it in any manner it deems appropriate, including sale, in which

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case the proceeds of the sale are to be paid into the Court and applied first to the expenses of sale

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and the balance to the parties as directed by the Court. Checks for the purchase of personal

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property shall be made out to the “Clerk of the District Court for the Easter District of California

If any person fails or refuses to remove his or her personal property from the Properties

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and the Clerk is directed to accept these checks and deposit them into the Court’s registry for

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distribution pursuant to further order of this Court.

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necessary to preserve the Properties (including all buildings, improvements, fixtures, and

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appurtenances on the Properties) in its current condition including, without limitation,

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maintaining a fire and casualty Insurance policy on the Properties, and ensuring that ad valorem

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taxes on the Property are paid in a timely fashion. David Pflum shall neither commit waste

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against the Property nor cause or permit anyone else to do so. David Pflum shall neither do

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anything that tends to reduce the value or marketability of the Properties nor cause or permit

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anyone else to do so. David Pflum shall not record any instruments, publish any notice, or take

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any other action (such as running newspaper advertisements or posting signs) that may directly

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or indirectly tend to adversely affect the value of the Properties or that may tend to deter or

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discourage potential bidders from participating in the public auction, nor shall he cause or permit

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anyone else to do so.

Until the sale of the Properties is confirmed, David Plfum shall take all reasonable steps

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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES

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12.

After the sale, the parties shall file further motions detailing who and in what

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amounts the sales proceeds should be distributed to. The Court shall distribute the proceeds of

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the sale, as set forth by a subsequent Order of this Court.

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IT IS SO ORDERED.
Dated: April 12, 2023

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ORDER GRANTING THE UNITED STATES’ MOTION FOR ORDER OF SALE OF PROPERTIES