Trustees Report October  31 2017


Major activities affecting case closing which are not reflected above, and matters pending, date of hearing or sale, and other action: Pursuant to Schedule "A" of the Sworn Schedules, Debtor listed his ownership interest in 


(a) commercial real property known generally as 155 Liberty Road, Villa Rica, Douglas County, Georgia 30180, consisting of a building on two acres (the "Commercial Property"); 


(b) an unencumbered real property known generally as 8931 Timmons Circle, Villa Rica, Douglas County, Georgia 30180, consisting of 4.25 acres ("Timmons Circle");


 (c) an unencumbered real property known generally as 2191 Andy Mountain Road, Villa Rica, Douglas County, Georgia 30180 ("Andy Mountain Road" and 


(d) an unencumbered subdivision in La Higuera, Chile, consisting of 161 one-acre lots (the "Chile Property"; and collectively with the Commercial Property, Timmons Circle, and Andy Mountain Road, the "Properties"). Pursuant to Schedule "C" of the Sworn Schedules, Debtor incorrectly claimed an exemption under O.C.G.A. † 44-13-100(a)(1) in both Timmons Circle and Andy Mountain Road for $21,000.00 each, even though neither was Debtor's residence. 


Debtor resided at the Commercial Property. Therefore, Trustee was constrained to object to exemptions [Doc. No. 26] (the "Objection to Exemptions"). Pursuant to Schedule "D" of the Sworn Schedules, the Commercial Property is encumbered by (i) a first position security deed in favor of Jerry E. Austin ("Mr. Austin") with a loan payoff in the amount of $497,400.00, and (ii) a second position security deed in favor of Lawson Realty LLC with a loan payoff in the amount of $22,600.00. 


Mr. Austin filed a Motion for Relief from the Automatic Stay [Doc. No. 18] (the "Stay Relief Motion"), indicating a delinquency in loan payments totaling $38,486.28 (the "Mortgage Arrearages"). The hearing on the Stay Relief Motion was scheduled for October 28, 2015, but was rescheduled at Trustee's request, so he could further investigate the value of the Commercial Property. 


At the 341 Meeting, Trustee discussed at length with Debtor his plans for liquidation of the Properties, particularly, the Chile Property.


 On October 25, 2015, a Notice of Appearance [Doc. No. 20] was filed by Richard K. Valldejuli, Jr. as counsel for Debtor.








On Sunday, October 25, 2015, Debtor filed a Motion to Convert Chapter 7 Case to a Case Under Chapter 13 [Doc. No. 21] (the "Motion to Convert"). No communication with Trustee was attempted by counsel prior to filing the Motion to Convert, causing Trustee to incur numerous fees and costs as Trustee proceeded with the administration of the Estate. 


On October 29, 2015, the Trustee filed a response in opposition to the Motion to Convert (the Trustee's Response)[Doc. No. 29]. Debtor had not filed an amended budget to show how his circumstances had changed since the Case was filed that would justify a conversion of the Case to Chapter 13. Pursuant to Schedules "I" and "J," of the Sworn Schedules, Debtor had no income whatsoever and monthly expenses of almost $6,000.00. Thus, it appeared Debtor was proposing to fund a Chapter 13 plan by the liquidation of his assets. That appeared not to be an effective reorgani]ation but a liquidation plan.


 On November 4, 2015, Mr. Austin and Lawson Realty, Inc. (collectively, the "Creditors") filed a response joining the opposition asserted by the Trustee to the Motion to Convert (the "Creditors' Response") [Doc. No. 35]. On November 17, 2015, Debtor filed an addendum to the Motion to Convert (the "Addendum") [Doc. No. 40]. Counsel for Debtor, Applicant, counsel for the Creditors, and counsel for the United States Trustee appeared at the Hearing. Having considered the Motion to Convert, Addendum, the Trustee's response, and the Creditors' Response along with the statements and arguments of counsel at the Hearing, and for the reasons stated on the record, the Court entered an Order granting the Motion to Convert, providing for an accelerated 341 meeting and confirmation hearing, and stipulated that if Debtor failed to confirm a Chapter 13 plan or failed to comply with any of the provisions provided for in his Chapter 13 plan, this case would not be dismissed, and, instead, would be reconverted to Chapter 7 [Doc. No. 43]. 


The Chapter 13 Plan was not confirmed and the Case was re-converted to Chapter 7 on July 13, 2016 [Doc. No. 91], and Trustee was re-appointed on July 18, 2016 [Doc. No. 93]. 


Trustee had been in vigorous negotiations with multiple potential buyers. After multiple rounds of bidding, Trustee entered into a Purchase and Sale Agreement for sale of the Commerical Property "as is, where is," for the total sale price of $415,000.00, subject to Bankruptcy Court approval. Trustee filed pursuant to 11 U.S.C. †† 363(b) and (f) Trustee's Motion for (I) Approval of Bidding and Auction Procedures, (II) Authority to (A) Sell Property of the Estate Free and Clear of Liens, Claims, Interests and Encumbrances and (B) Disburse Certain Proceeds at Closing, and (III) Turnover of Commercial Property Prior to Closing of Proposed Sale (the "Sale Motion") [Doc. No. 113]. At the Sale Hearing, Trustee conducted an auction to sell the Commercial Property to the highest bidder (the "Auction"). As a result of the Auction, the successful bidder placed the $475,000.00 winning bid price (the "Purchase Price"). The Court entered an Order [Doc. No. 126], granting the Sale Motion and approving sale of the Commercial Property at the Purchase Price (the "Sale Order"). 


Trustee closed on the sale of the Property. Trustee's closing attorney and authori]ed disbursing agent made those disbursements authori]ed by the Sale Order. Debtor again filed a Motion to Re-Convert to Chapter 13 [Doc. No. 120]. Trustee filed his objection to same [Doc. No. 135]. Based upon the record in the case, the testimony at the hearing, and the arguments of the parties, the Court found that Debtor failed to carry his burden of proof on the Motion to Re-convert. The Trustee's objection was sustained and the Debtor's motion to Re-Convert was denied pursuant to Court Order [Doc. No. 138]. 


Trustee filed pursuant to 11 U.S.C. †† 363(b) and (f) a Motion for Authority to (I) Sell Real Property of the Estate Free and Clear of Liens, Interests, and Encumbrances and (II) Disburse Certain Proceeds at Closing [Doc. No.102] (the "Andy Mountain Sale Motion"), seeking authority to sell the Andy Mountain Property by public auction. After a lengthy hearing, the Court entered an Order [Doc. No. 110], granting the Andy Mountain Sale Motion and approving the Contract (the "Andy Mountain Sale Order"). 


Trustee entered into a Purchase and Sale Agreement for the sale of the Andy Mountain Property "as is, where is" for a sale price of $15,950.00, inclusive of a ten (10%) percent buyer's premium of $1,450.00. Trustee closed on the sale of the Andy Mountain Property. Trustee's authorized disbursing agent made those disbursements authorised by the Andy Mountain Sale Order. 


Trustee tried to persuade Debtor to execute an irrevocable power of attorney with respect to the Chilean property to avoid an expensive ancillary insolvency proceeding in Chile. Trustee filed an application for employment of Ricardo Reveco and the law firm of Carey y Cta as Special Counsel to represent the estate with respect to efforts to liquidate the Chile Property, including, if necessary, the commencement and handling of an ancillary insolvency proceeding in Chile (Doc. No. 145) (the "Special Counsel Application"). 


In the Special Counsel Application, Trustee noted that "Ancillary proceedings may not be necessary if Debtor executes an irrevocable power of attorney to sell the Chile Property, which irrevocable mandate will need to be granted by a public deed executed before a consul of Chile in the United States." The Court entered an Order [Doc. No. 146] granting the Special Counsel Application and approving the Trustee's employment of Carey y Cta ("Special Counsel") as special counsel for the estate. Thereafter, Trustee coordinated with Special Counsel and attempted to coordinate with the Debtor to arrange a schedule for the Debtor to fly to the Chile consulate in Miami at the Estate's expense so that the Debtor Page: 2 Case 15-64523-pwb Doc 163 Filed 10/31/17 Entered 10/31/17 21:43:18 Desc Page 2 of 7 could execute the necessary power of attorney documents before a consul of Chile. 


After much delay, Debtor sent counsel for Trustee an email which made it clear that Debtor had no intention of cooperating with the Trustee in a streamlined procedure that would permit the estate to sell the Chile Property without the necessity of filing an ancillary insolvency proceeding in the courts of Chile. 
Trustee filed a motion seeking authority for Trustee to (i) act as the foreign representative (as such term is defined in the cross-border regulation of the insolvency laws of Chile) for the Debtor; (ii) seek recognition by the courts of Chile of the chapter 7 case and the orders entered by this Court; (iii) request the courts of Chile to lend assistance to this Court in protecting the property of the Debtor's estate; and (iv) seek any other appropriate relief from the courts of Chile, as applicable, that is just and proper in furtherance of the protection of the Debtor's estate or the interest of a creditor or creditors [Doc. No. 150]. Pursuant to Court Order [Doc. No. 152], Trustee's motion was granted.