U.S. Bank National Association v. Norfolk Country Inn L.L.C. et al
Filing
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ORDER granting 10 Motion to Appoint Receiver. Great American Hotel Group, Inc. or a special purpose entity formed by it to act as receiver, is appointed receiver. The Receiver shall make, execute and deliver to the Clerk of this Court a bond as provided by law in the sum of $50,000 and upon approval of this bond, this Order shall take effect immediately. The hearing set for Monday, September 28, 2015, at 10:00 a.m. 20 is cancelled. Ordered by Chief Judge Laurie Smith Camp. (JSF)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
U.S. BANK NATIONAL ASSOCIATION,
Plaintiff,
8:15CV299
vs.
ORDER
NORFOLK COUNTRY INN, L.L.C.,
ROBERT L. PAGAN, AND MICHAEL
WIESELER,
Defendants.
This matter is before the Court on the Motion to Appoint Receiver (Filing No. 10)
filed by Plaintiff U.S. Bank National Association (the "Bank").
The parties have
represented to the Court that they agree to the appointment of a receiver of the rights
and interests of defendant Norfolk Country Inn L.L.C., ("Norfolk"), in and to the
“Collateral” (set forth on Exhibit A attached to this Order) and the “Receipts” (set forth
on Exhibit B attached to this Order and as defined in the Complaint (Filing No. 1)) (the
Collateral and the Receipts are collectively referred in this Order as the "Property").
The parties agree that the Court may enter an order in which the receiver shall take
possession and control of the Property; collect the Receipts; protect the Property from
further loss and waste, market the Property for sale, and if a buyer is identified, seek
this Court's approval to consummate the sale.
The parties have submitted a joint proposed order to the Court and have
represented that the hearing, set for September 28, 2015, at 10:00 a.m. is no longer
necessary upon the Court’s entry of this Order. The Court has considered the record in
this case, including the allegations of the Complaint (Filing No. 1), the Motion (Filing No.
10) and evidence submitted in support (Filing No. 12), the exhibits, statements of
counsel, and applicable law. The Court concludes that for good cause shown, and
pursuant to Fed. R. Civ. P. 66, the Motion to Appoint Receiver (Filing No. 10) will be
granted. Accordingly,
IT IS ORDERED:
1. Motion Granted. The Motion for Appointment of Receiver (Filing No. 10) is
granted.
2. Receiver Appointment.
Great American Hotel Group Inc., or a special
purpose entity formed by it to act as receiver, is appointed receiver (the "Receiver").
3. Receiver to Take Possession and Protect.
The Receiver is hereby
authorized and directed to take possession and control of the Property; to operate the
Property and in particular to collect the Receipts; to protect the Property from loss and
waste; to exercise all powers and rights permitted by law and the loan documents
governing the lending relationship between the Bank and Norfolk (“Loan Documents”).
In addition, the Receiver is authorized to (a) market the Property for sale, (b) identify a
buyer, and (c) then seek approval of the Court to consummate such sale (collectively
the "Sale").
4. Pre-Receivership Bills.
The Receiver shall have no responsibility for
payment of any utility bills, unpaid payroll expenses or other unpaid invoices for
services or utilities incurred by, or for the benefit of, Norfolk, and which came due prior
to the Receiver taking possession of the Property. No utility or other vendor may
terminate service or the provision of other goods or services to the Property as a result
of the non-payment of pre-receivership obligations without prior order of this Court.
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5. Collection and Use of Receipts / Bank Accounts.
a. The Receiver is authorized to receive, collect, use and hold the Receipts in
the operation of the Property.
b. Norfolk, its managers, agents and employees and all persons interested in
the Property are hereby authorized and directed to immediately pay and deliver to the
Receiver possession and control of the Property and the Receipts.
c. Norfolk and its managers, agents and employees and all persons interested
in the Property are hereby authorized and directed to immediately pay and deliver to
the Receiver all Receipts that have been received by them, are being held by them,
or which come into their possession.
d. In particular, all account debtors and guests of the Property are hereby
directed to pay Receipts to the Receiver and specifically shall not pay Receipts to
Norfolk or its owners or agents.
e. The Receiver is authorized to (i) pay all the operating expenses of the
Property incurred in the ordinary course of business in the operation of the Property,
including payments to the Bank under the Loan Documents and to pay taxes owing,
Property expenses, utilities, taxes, wages, the Bank's debt, and other obligations
needed in order to protect, care for, and maintain the Property; (ii) prepare and
operate the Property pursuant to a budget acceptable to the Bank; (iii) fulfill the
obligations of Norfolk with regard to any existing agreements; and (iv) prevent
possible waste and loss of income; provided however, that the Receiver shall not be
permitted to make capital expenditures in excess of an aggregate of $2,000.00 per
month for the Property without providing written notice to Bank and Norfolk and
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obtaining either written approval of the Bank or an order of this Court after notice to
the Bank and Norfolk and an opportunity for a hearing.
f. The Receiver is authorized to take control of all bank accounts of Norfolk
with respect to the Property, and to open a bank account or accounts in the name of
the Receiver and deposit the Receipts and any proceeds of the Property in said
account(s). Receiver is further authorized to redirect merchant credit card deposits
and payments to the bank accounts controlled and established by the Receiver.
6. Additional Duties of Receiver. In addition to the other duties set forth in this
Order, the Receiver shall:
a. perform an accounting of the Receipts generated from the Property and an
accounting of all costs and expenses in connection therewith.
b. prepare monthly operating reports and balance sheets with respect to the
Property in a form satisfactory to the Bank (the "Reports"). Every thirty days from the
date of this Order, the Receiver shall file the Reports with the Court and provide
copies of the Reports to the Bank, and Norfolk and its owners.
c. keep complete and accurate records of all funds coming into Receiver's
possession, and of all costs, expenses, and disbursements made or incurred by
Receiver, and make the accountings and reports set forth in this Order;
d. Open all mail addressed to Norfolk, its agents, servants, employees,
representatives, or all persons or entities acting under or in concert with Norfolk
regarding the Property.
7. Receiver Compensation. The Receiver shall be compensated on a monthly
basis from the gross monthly Receipts of the Property in an amount that is the greater
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of: (a) 3% of Gross Receipts from the Property each month, or (b) $4500.00 each
month (the "Receiver's Fee").
The Receiver's Fee shall be paid from the cash
generated by the Property so long as the net cash received by the Receiver and on
hand each month is sufficient to pay the current necessary bills (as determined by the
Receiver) plus the Receiver's Fee.
8. Licenses. To the extent permissible by law, the Receiver is authorized to
utilize all existing licenses and permits of Norfolk with respect to the Property, including
any liquor, restaurant, guest house, motel, inn, and hotel licenses or permits, and to
continue using the name, website and other tangible and intangible personal property of
Norfolk in conjunction with its operation of the Property. The Receiver shall maintain
property, casualty, and dram shop insurance in amounts and in such form as is
satisfactory to the Bank.
9. Advances.
To the extent that the Receipts are insufficient to pay the
expenses and/or capital expenditures (authorized to be expended in accordance with
this Order) with respect to the Property, the Bank may, but shall not be obligated to,
advance funds to pay such expenditures. If the Bank advances funds to pay such
expenditures, all sums so advanced or paid by the Bank shall be prior and superior to
any and all other liens and encumbrances against or relating to the Property, and by
advancing such funds, The Bank shall not be considered an owner or operator of the
Property. Notwithstanding anything contained herein to the contrary, neither the Bank
nor the Receiver shall in any manner be obligated to pay for such expenditures.
10. Books, records, and assistance. Norfolk and its managers, agents and
employees and all persons interested in Norfolk and/or the Property are hereby directed
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to assist the Receiver by, inter alia, making available to the Receiver all books and
records relating to the Property wherever located, including any information contained
on computer disk, magnetic tape or other medium, and otherwise cooperate with the
Receiver to the fullest extent practicable in the fulfillment of the Receiver's duties,
including, but not limited to, making all information available to the Receiver necessary
to perform an accounting; executing all transfer cards and account assignments in favor
of the Receiver as may be necessary to give the Receiver exclusive signatory authority
and control over all of Norfolk's deposit accounts with respect to the Property, and
otherwise cooperate with the Receiver to the fullest extent practicable in the fulfillment
of the Receiver's duties. No depositary institution (other than the Bank) where Norfolk
has deposited funds shall be permitted to offset such funds without first obtaining an
order of this Court on notice to the Receiver, the Bank, Norfolk and its owners, and after
an opportunity for a hearing.
11. Contracts. The Receiver is authorized to enter into leases, contracts, and
agreements to operate the Property. The Receiver may seek Court approval to reject /
terminate any Contracts.
12. The Sale.
The Receiver shall engage a broker to implement the Sale, and
the broker and the terms and conditions of such engagement shall be acceptable to the
Bank. The Receiver and the broker shall periodically apprise the Bank, Norfolk, and its
owners of all efforts to market the Property. Any offers to purchase the Property shall
be presented to the Bank and Norfolk and no offers, including for less than the amount
of the Debt (as defined in the Complaint), shall be accepted by the Receiver without
Court approval.
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13. Further Powers. The Receiver shall have such other and further powers as
the Court by its order from time to time may grant and direct.
14. Inspections. The Bank and its agents shall have the right to inspect the
Property and the books and records of Receiver at any reasonable time upon
reasonable notice.
15. Utility Companies. Each utility company or entity providing service to the
Property shall be prohibited from demanding that Receiver deposit additional funds in
advance or satisfy obligations incurred prior to the date of this Order to maintain or
secure such service. Each utility company or entity providing service to the Property
may apply any pre-receivership deposits against amounts owed to satisfy obligations
incurred prior to the date of this Order. Any amount of pre-receivership deposits in
excess of pre-receivership obligations shall be transferred to the Receiver.
16. Professionals.
The Receiver is authorized to engage professionals to
assist him in performing his duties hereunder, including engaging property managers or
other professionals needed to properly effect this Order.
17. Insurance.
All insurance companies providing insurance to Norfolk with
respect to the Property and/or the Property shall add the Receiver as a named insured
and/or loss payee under such policies.
Defendants, and their property managers,
employees, insurance agents and insurance carriers: (a) are prohibited from canceling,
reducing or modifying any and all insurance coverage in existence with respect to the
Property without further order of this Court, and (b) shall cooperate with the Receiver to
keep appropriate insurance coverage in place, and to take such steps as are necessary
to ensure the Receiver is added as an additional named insured and that the Bank is
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continuously a lost payee under all insurance policies.
18. Receiver Bond. The Receiver shall make, execute and deliver to the Clerk
of this Court a bond as provided by law in the sum of $50,000 and upon approval of this
bond, this Order shall take effect immediately.
19. Hearing. The Hearing set for Monday, September 28, 2015, at 10:00 a.m.
(Filing No. 20) is cancelled.
Dated this 16th day of September, 2015
BY THE COURT:
s/Laurie Smith Camp
Chief United States District Judge
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EXHIBIT A – LEGAL DESCRIPTION
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EXHIBIT B - DEFINITION OF RECEIPTS
"Receipts" means all funds received from account debtors and guests who stay at the Collateral
and who are obligated to pay for their rooms, food, drink and other amenities, including all form
of rents, fees, payments, income, profits, revenues, credit card payments and receipts, cash,
checks, payment instruments and intangibles, charges, proceeds, accounts, accounts receivable,
receipts, refunds, rebates, credits, rights to receive value, and any form of cash received or to be
received with respect to, or as a result of, the Collateral.
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