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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA(WEST PALM BEACH DIVISION)www.flsb.uscourts.gov
In re: Case No. 11-33802-BKC-PGH
THOMAS G. HINNERS,
Debtor. /
Chapter 7
ORDER PURSUANT TO BANKRUPTCY RULE 9019 APPROVING COMPROMISE
AND SETTLEMENT OF CONTROVERSY BETWEEN CHAPTER 7 TRUSTEE,
DEBTOR, BRIAN HINNERS, CERTAIN OTHER ADVERSARY DEFENDANTS,AND JEROME MANSKE, PATRICK MANSKE AND ARGENT CORPORATION
THIS CAUSE having come before the Court for hearing on December 8, 2014 at 1:00 p.m.
pursuant to Federal Rule of Bankruptcy Procedure 9019 upon the Chapter 7 Trustees Amended
Motion to Approve Compromise and Settlement of Controversies Between the Chapter 7 Trustee,
the Debtor, Brian Hinners and certain other Adversary Defendants,1 Jerome Manske, Patrick
Manske and Argent Corporation (the Motion) [ECF No. 719]; that due and proper notice of the
Motion having been given by the Trustee in accordance with the applicable provisions of the
1Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the
Motion.
ORDERED in the Southern District of Florida on December 9, 2014.
Paul G. Hyman, Jr.Chief United States Bankruptcy Judge
_____________________________________________________________________________
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Bankruptcy Code and the Federal Rules of Bankruptcy Procedure, and that no further notice of the
Motion is necessary; and it appearing that the Trustee, the Debtor, Brian Hinners and certain other
Adversary Defendants, Jerome Manske, Patrick Manske and Argent Corporation through their
respective counsel, have conferred and reached an agreement as to the issues raised in the
Adversary Proceedings, the Amended Objection and Motion and all other matters between the
parties; and the Court having reviewed the Motion, the terms of the Settlement Agreement and
having heard the arguments and representations of counsel for the parties; having considered the
Limited Objection to Trustees Amended Motion to Approve Compromise and Settlement of
Controversies Between Chapter 7 Trustee, Debtor, Brian Hinners, and Certain Other Adversary
Defendants, Jerome Manske, Patrick Manske, and Argent Corporation [ECF No. 742]; and, upon
consideration of the factors set forth in Wallis v. Justice Oaks II, Ltd.(In re Justice Oaks II, Ltd.),
898 F.2d 1544 (11th Cir. 1990), the Court finding that the proposed Settlement is fair, reasonable,
and in the best interests of the estate; and being otherwise duly advised in the premises, it is hereby:
ORDERED THAT:
1. The Motion is GRANTED as set forth herein.
2. The terms of the Settlement Agreement attached hereto as Exhibit Aare approved
and incorporated herein in their entirety.
3. Brian Hinners confirms and represents to the Court that the Settlement Proceeds
will not be paid with funds from Groves of Delray II Ltd., other than from allowed distributions in
accordance with Paragraph 4.2 of the Amended and Restated Agreement of Limited Partnership
of Groves of Delray II, Ltd. dated December 8, 2011. In the event that this representation is
breached, after notice and a hearing, Brian Hinners will be required to indemnify the estate for any
damages it sustains. Any prevailing party moving under this paragraph shall be entitled to its
reasonable attorneys fees and costs.
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4. Any and all claims relating to the real property with a location address of 10625 El
Paraiso Place, Delray Beach, Florida 33446 (Parcel Control Number: 00-42-43-27-05-067-0372)
(the Subject Property) filed by or relating to Jerome J. Manske, Patrick H. Manske and/or Argent
Corporation shall be deemed released, satisfied, and or discharged from the foregoing real
property. As such, if needed, Jerome J. Manske, Patrick H. Manske and/or Argent Corporation
shall assist and cooperate with providing any documents reasonably needed to the closing agent
including:
a. Satisfaction of or Release of the Subject Property from Judgment against Thomas
G. Hinners in favor of Jerome J. Manske and Patrick H. Manske recorded in O.R.
Book 23965, Page 1649, and Affidavit of Creditor recorded in O.R. Book 23965,
Page 1647, Public Records of Palm Beach County, Florida.
b. Satisfaction of or release of the Subject Property from Judgment against Thomas
G. Hinners in favor of Jerome J. Manske and Patrick H. Manske recorded in O.R.
Book 24387, Page 1630, and Affidavit recorded in O.R. Book 24387, Page 1628,together with Discharge of Lis Pendens, as to subject property, recorded April 5,
2011 in O.R. Book 24442, Page 435, and release of Subject Property from that
certain Case No. 502011CA004893XXXXMB in the Circuit Court of Palm Beach
County, Florida.
c. Record satisfaction of or release of the Subject Property from that certain Final
Judgment recorded in O.R. Book 7728, Page 987, and Affidavit of JudgmentCreditor in O.R. Book 7728, Page 985, Public Records of Palm Beach County,Florida.
5. The Court reserves jurisdiction to interpret and enforce the terms of the Settlement
Agreement and of this Order, and further reserves jurisdiction to enforce the terms of the
Settlement Agreement.
###
Submitted by:
Nicole Testa Mehdipour, Esquire
Law Office of Nicole Testa Mehdipour, PA
200 East Broward Blvd. Suite 1110
Fort Lauderdale, FL 33301
(Attorney Mehdipour shall serve a copy of the signed Order on all interested parties and file with the
Court a certificate of service conforming with Local Rule 2002-1(F)).
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TIIOMAS
G.
HINNERS,
Debtor.
UNITED ST TES B NKRUPTCY COURT
SOUTHERN
DISTRICT OF FLORID
WEST P LM
BE CH
IVISION
CASE NO. 1133802-PGH
CHAPTER?
SEJTLEMENT GREEMENT
This Agreement is entered into
as
the result
of
mediation held
on
Friday, September 4, 2014
among Nicole Testa Mehdipour, Trustee ( Trustee ), Tom Hinners ( T. Hinners and/or Debtor ),
Auburn Development, LLC ( Auburn Development ), Auburn Management, Inc. ( Auburn Mgmt'' ),
Auburn Trace, Ltd. ( Auburn Trace ), Brian Hinners ( B. Hinners ), Groves of Delray, Ltd.
( Groves ), Village
of
Delray Ltd. ( Village ) and Walden Pond, Ltd. ( Walden'') (collectively the
Adversary Defendants ) AND Jerome Manske and Patrick H Manske (hereinafter Manskes ) and
Argent Corporation ( Argent ).
PROCEDURE ND
F CTU L
HISTORY
. On September 24, 1987, Manskes obtained a judgment against T. Hinners in the state
ofWisconsin, Case Number, 652-696.
2. Subsequent thereto, the Manskes attempted
to
domesticate that judgment
in
the state
of Florida under Case Number: 93-7358-AH, in the Circuit Court
in
and for Palm Beach County,
Florida (the Florida Action ).
3. The Florida Action resulted in an order
on
October 13, 1994 ruling that the Wisconsin
judgment was unenforceable
in
florida, on statute
of
limitations grounds.
4.
On or about May 17, 1995, Manskes filed a motion with the Wisconsin
e 0urt
seeking
to
renew the judgment under Wisconsin law. On or about February 11, 1997, the Wisconsin court
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entered a renewed judgment in favor o the Manskes
and
against T. Hinners in the. amount o
239,354.10,
plus
interest at 12% per annum,
from June
18, 1987.
5 In or about May of2010, the Manskes conveyed to Argent the right to collect on the
subject judgment.
6.
In or about September, 2010, Argent filed amotion with the Wisconsin court to renew
the judgment under Wisconsin law. On
or
about January
24,
2011, the Wisconsin court renewed the
judgment against T.
Hinners in
favor o Manskes/ Argent
for
collective
damages
in the amount of
878,463.25. On or about March 3, 2011, Manskes/Argent recorded the
2011
judgment
in
the state
o
Florida.
7.
On
or about April
1, 2011
T. Hinners filed
a
Notice o Lis Pendens and Complaint to
Stay
Foreign Judgment in
the 15'
circuit court
in
and
for Palm Beach
County,
Case Number:
50201
ICA004893XXXXMB.
8.
On
or about August 26,
2011
Argent
filed
an involuntary bankruptcy petition against
T. Hinners which is the case at bar. T. Hinners initially contested the involuntary petition until March
2,
2012
at
which time
T.
Hinners
filed
a
motion
to
convert the case to
a
case
under Chapter
11. The
order for reliefwas granted on March 5, 2012 (ECF
59).
9.
Extensive litigation
and
motion practice continued during the Chapter i l between
Argent, the Manskes and the Debtor, which included two appeals to the District ourt (Case
Numbers: 9:12-CV-80684-KMW and 9:12-CV-80930-KAM).
10.
On or about August 30, 2012, T. Hinners filed a complaint against Argent and the
Manskes, Adversary Case Number: 12 1872.
11. On or about October 24, 2012, T. Hinners filed a motion to reconvert the case to
Chapter?.
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12. On or about October 30, 2012, the bankruptcy court entered an order re-converting
the case (ECF No. 399). On October 31, 2012, Nicole TestaMehdipour was appointed as the Chapter
7 Trustee (ECFNo. 401), and became the pennanent Trustee
in
the case after
the
341 Meeting was
held and concluded.
13.
On
or about Janumy 28, 2013, Argent filed an adversary proceeding against T.
Hinners (Case Number: 13-1077).
14. The rwo adversary proceedings - Hinners
vs
Argent and Argent vs. Hinners were
consolidated for
trial
15.
On
or about July 31, 2013 the court granted partial summary judgment
on
the
counts
under 11 U.S.C. 523 detennining the debts were non-dischargeable. The court deferred ruling on
whether the judgment was enforceable based upon the 1994 circuit court action and referred the matter
back to the state court for determination, which matter is still pending.
16
An appeal was taken to the U.S. District
Court
Case Numbers: 13-80900,
and
13-
80901. These appeals were consolidated into Case Number: 9:13-CB-81297-KAM . An order
affinning the bankruptcy court's judgment was entered on
May
19, 2014.
17. An appeal was taken to the
11th
Circuit Court
of
Appeals, Case Number: 14-12693,
which matter is still pending.
18. On or about February 3, 2014, the Trustee filed an Objection to Debtor's Claimed
Exemptions and Scheduled Valuation ofProperty and Motion for Turnover of
Estate
Property (ECF
No. 609), and subseqnently filed an Amended Objection to Debtor's Claimed Exemptions and
Scheduled Valuation
of
Property and Motion for Turnover
of
Estate Property (ECF No. 616) (the
Amended Objection/Motion ).
19. n or about February 20, 2014, and March 5, 2014, the Trustee filed multiple
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adversary proceedings against insiders o T. Hinners (the Adversary Defendants ). These
adversaries include: Trustee v. B. Hinners (14-1207); Trustee v Walden (14-1261); Trustee v Groves
(14-1262); Trustee v Auburn Trace (14-1273); Trustee v Auburn Development (14-1264); Trustee v
Auburn Mgmt (14-1265); Trustee v Village (14-1270) (collectively, with the. Amended
Objection/Motion, the Trustee Contested Matters ).
20. All o he Trustee Contested Matters remain pending.
21. During the Chapter 11 case, a mediation was held between
T.
Hinners
and
Argent,
which proved unsuccessful.
22.
On or about July
18,
2014, a mediation was held between the Trustee and all o the
parties
to
this agreement, other than Argent, and the Manskes, which resulted in an initial settlement
being reached (ECF
No.
688). A motion to approve that settlement was initially filed before the
bankruptcy court
and
objections were filed by Argent and the Manskes (ECF
No.
696).
23. There are CtJrrently still multiple motions requiring evidentiary hearings before the
court betwet. ll all parties to this agreement.
24.
In
an
effort
to
globally resolve all
_pending
actions, contested motions and litigation
before this court and all other courts, the parties held a global mediation on September 4,
2014.
This
mediation lasted over eight hours. Coupled with the preccdiug mediations, the Agreement that was
reached on September th is a culmination o over
20
honrs o mediated time.
SETI LEMENT TERMS
25. In consideration o he promises
and
mutual covenants and WJdertakings contained
herein
and
other good and valuable consideration,
the
receipt
and
sufficiency
o
which
is
hereby
aclrnowledged by the parties, the parties agree to the following
t rms
a11d conditions as full and
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complete
settlement o ll ctions between all of the p rties wherever located
as
set forth in
more det il below
a. B. Hinners shall pay
to the
Trustee the total
sum
o Seven HW1dred
Thousand Dollars ($700,000.00) in
complete and total
settlement
o
ll claims asserted or that could
have
been asserted in
all
Trustee Contested Matters set forth above ( Settlement Proceeds'').
b. The Settlement Proceeds shall be paid s
follows:
1)
bree
Hundred
Thousand Dollars ($300,000.00) upon approval o
he
Settlement Agreement
by
the bankruptcy
court;
2)
Fifty-Thousand Dollars ($50,000.00)
on
or before January 1, 2015; 3) Three Hundred
Fifty-Thousand Dollars ($350,000.00)
on
or before March 1, 2015.
c.
In
addition to
the
above, B. Hinners and/or T. Hinners shall make payments
directly to Argent/Manskes ( Manske Payments''),
c/o
o their
attorney,
Allison Friedman, totaling
One Hundred Thousand
Dollars
($100,000.00) on the following schedule: 1) Twenty-Five
Thousand Dollars ($25,000.00) upon approval
o
he Agreement by the
bankruptcy
court; 2)
Twenty-Five Thousand Dollars ($25,000.00) on or before
March
1, 2015; 3) Twenty-Five
Thousand
Dollars ($25,000.00)
on
or before December 31,
2015;
4) Twenty-Five Thousand Dollars
($25,000.00) on or before the later
o
June l, 2016
or
upon distribution by
the
bankruptcy Trustee of
the
proceeds o he estate, pursuant
to
a Trustee's Final Report ( TFR ) it is contemplated in this
Agreement that this payment may come from a
partial
assignment o a Chapter 11 administrative
claim, as will be described herein).
d. Upon payment o he initial installment of the Settlement Proceeds, the
Trustee shall
dismiss all o
he adversary proceedings against
the
Adversary Defendants, with
prejudice, each party bearing its
own
attorney's
fees
and costs associated with the adversary
proceedings and exchange general releases
o
any and
ll claims
between the Trustee and the
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j.
The Adversary Defendants proofs of claim numbered
18, 19,
20, and
21
are
disallowed.
k. The parties
agree
to a
One HlUldred Thousand
Dollar
( 100,000.00)
carve-
out from the estate for
payment
to
Argent. Argent shall otherwise
participate
with the other general
unsecured
creditors in
distributions by
the
estate.
l. Upon payment o he initial instalhnent ofthe Settlement Proceeds,
T.
Hinners shall receive his
discharge. The
Trustee
may
seek to
revoke the
discharge if
there is
any
default in
making
the remaining
installments of
he Settlement Proceeds.
m.
Upon
payment
of
he
full
Settlement
Proceeds,
all
assets
listed on T.
Hinners
bankruptcy schedules (excluding
those
assets which were previously turned over to the
Trustee
and liquidated) shall
be
adjudicated exempt and any non-exempt assets may
be
transferred
to B.
Hinners.
n. Upon payment of he initial installment of the Settlement Proceeds, the
Trustee
shall submit a proposed greed Order resolving
the Amended
Objectioll/Motion
and
requesting
that
the
Court
reserve
and
retain jurisdiction
to
enforce the
terms
of this
settlement
Agreement as provided for herein.
o.
All parties
to
this agreement stipulate that they have reviewed any filed
administrative claims and
are
aware
of
he amounts
of
he un-filed administrative claims and will
not file
objections to any administrative claims herein; provided, however, the Trustee
may,
in her
discretion, object to/seek to
modify
the amount offees sought by the professiOllals
she
engaged.
p.
Any
and all pending
motions
between the
parties
not otherwise
specifically
delineated
herein shall
be
either withdrawn or
denied.
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q. Any and all payments to Argent/Manskes under this agreement, including
distributions as a general unsecured creditor, shall not exceed Four Hundred Thousand Dollars
( 400,000.00) collectively.
r. n the event
that
Argent receives or will receive
in
excess
of
Four Hundred
Thousand Dollars ( 400,000.00), the first Twenty-Five Thousand Dollars ( 25,000.00)
of
any
amount
in excess
of
Pour
Hundred
Thousand Dollars ( 400,000.00) shall be offset against
the final
payment owed
by
T. Hinners to Argent. The next Twenty-Five Thousand Dollars ( 25,000.00)
of
any
excess to be received
by
Argent will be credited to the estate.
Any arnoWlts
thereafter shall be
oftSet
again:>'
the
obligations
of
he
estate and Hinners on a pro-rata
basis.
s.
n the event that Argent receives in
excess of
Four
HWldred
Thousand
Dollars
( 400,000.00) owing to
the
timing
of he
payments,
it
shall remit any such excess to
the
parties
Wlder
the fonnula set forth above.
t. n the event that Argent does not receive a combined Four Hundred
Thousand Dollars ( 400,000.00) from payments under this agreement, Les Osborne
and
the firm
of
Rappaport Osborne Rappaport,
P.L.
agree to assign
up
to 25,000.00
of
heir Chapter
11
administrative claim as payment directly to Argent on the TFR. n the event this payment is made,
the
final
payment
due
from T. Hinners directly
to
Argent, on or before June
1,
2016, will be deemed
satisfied.
u
In the event
of
any defaults on any
of
he payments of the Settlement
Proceeds or
Manske
Payments
as
provided herein, the Trustee and/or Argent/Manskes
shall
provide
notice
to
Les
Osborne at [email protected] and [email protected]
and
Brad Shraiberg
l
AND by calling Les Osborne at 561-368-2200 and Brad Shraiberg l
561-
443-0800.
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v. T.
Hinners, B. Hinners and/or any Adversary Defendant
sh lll
have five
(5)
business days from receipt
of
notice to cure ny default.
n
the event the
default
is
not cured,
judgment
sh lll
be entered against B. Hinners and
T.
Hinners, jointly and severally, in the amolUlt of
One
Million Dollars ($1,000,000.00), less credit for any payments made
out of he
settlement, in
favor of
he Trustee.
w
n addition
to
the above, Argent/
Manskes
shall be entitled
to a
non-
dischargeable
judgment
against
T. Hinners for
the amolUlt
set
forth
in their
claim,
11-1 less any
payments made under the Settlement.
x. This
agreement
is subject to
approval by the
bankruptcy court n the
event
the
bankruptcy
court does not approve this
Settlement,
nothing contained herein shall be deemed a
representation or admission by any party.
y. The court shall reserve jurisdiction to enforce the tenns of this
Settlement.
26.
This agreement was prepared
and
approved by counsel for all parties herein
and
there will be
no
presumptions
against the
drafter.
27.
t ls
the
h1tent
of
this
agreementto
settle
all issues
between
all parties het'llin and in
the
event
any specific
action
or proceeding
has
not
been
specifically set forth, the parties shall
acl
to
resolve that action or
proceeding
to the intent of his agreement.
28.
This
Agreement
may be signed in cotmter-parts.
~ ; ~
T. Hinners _/ ..
Les
Osborne
/
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B Hinners (mdividually
and
as authorized agent
o Adversary Defendants)
z ~ ~
Jerome
Manske
PatrickH a n s k ~
Argent
Allison
Friedman
Nicole TestaMehd pour,
Trustee
Michael Foster
RlckReyes
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B.
Hi Ulers
(individually
and
as
authorized
agent
of
Adversary
Defendants)
Brad Shraiberg
.'crome
Manske
Argent
_ t J ~
Allison
Friedman
Nicole Testa Mehdipour, Trustee
Michael Foster
Rick Reyes
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B.
Hinners
individually
and
as
authorized agent
o
Adversary Defondants
Brad
Sb.raiberg
Jerome
Manske
Patrick H Manske
Argent
Allison Friedman
Nicole
Testa
Mehdipour, Trustee
Michael Foster
Rick Reyes
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B.
Hirmers
individually and
as
authorized agent o
Adversary
Defendants
Brad
Shraiberg
Jerome
Manske
Patrick H
Manske
Argent
Allison
Friedman
Nicole Testa
Mehdipour,
Trustee
Michael Foster
Rick Reyes
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B.
Hinners
individmuly
and
as
authorized
agent
of
Adversary
Defendants
Brad Slm1iberg
Jerome Manske
Patrick H
Manske
Argent
Allison Friedman
Rick
Reyes