Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 1 of 68 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION www.flsb.uscourts.gov ) Chapter 11 Cases In re: ) ) Case No. 08-10928-JKO TOUSA, INC., et al., ) Jointly Administered ) Debtors. ) ) DEBTORS MOTION FOR ENTRY OF AN ORDER PURSUANT TO SECTION 363(b) OF THE BANKRUPTCY CODE AND RULE 9019 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AUTHORIZING TOUSA TEXAS, L.P. TO ENTER INTO SETTLEMENT AGREEMENTS RESOLVING CERTAIN CONSTRUCTION DEFECT LITIGATION TOUSA, Inc. and its affiliated debtors and debtors in possession in the above-captioned, jointly administered chapter 11 cases (collectively, the Debtors ) seek entry of an order, substantially in the form annexed hereto as Exhibit A, authorizing TOUSA Texas, L.P., f/k/a Newmark Homes, L.P., a Texas limited partnership ( TOUSA Texas ) to enter into certain settlement agreements resolving the case of Grabowski v. Newmark Homes, L.P., et al., Case No. 39901, presently pending in the Chancery Court for Williamson County, Tennessee. In support of this motion, Debtors respectfully represent as follows: Jurisdiction 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 2. Venue in this Court is proper pursuant to 28 U.S.C. 1408 and 1409. 3. The bases for the relief requested herein are section 363(b) of title 11 of the United States Code (the Bankruptcy Code ) and Rule 9019 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ).
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 2 of 68 Introduction 4. The settlement agreements presented pursuant to this motion will resolve litigation that was brought as a result of alleged construction defects in a home constructed and sold by TOUSA Texas to Glen and Colleen Grabowski (together, the Grabowskis ) following the commencement of this chapter 11 case. More specifically, the Grabowskis entered into a contract to purchase a single family residence, located in Nolensville, Tennessee, from TOUSA Texas for $575,000.00 on June 30, 2008. Following mediation and significant arm s length, multi-party negotiations subsequent thereto, the Debtors believe that the settlement of the Grabowskis claims (on the terms set forth in the settlement agreements) is fair and equitable and in the best interests of the Debtors estates and their creditors. Factual Background A. TOUSA Texas s Purchase of Grabowski Lot from Cates-Kottas and Grabowskis Purchase of Residence from TOUSA Texas. 5. On September 14, 2004, TOUSA Texas entered into the Agreement for Sale and Purchase of Real Estate with developer Cates-Kottas Development Company, LLC ( Cates- Kottas ), pursuant to which TOUSA Texas agreed to purchase from Cates-Kottas 194 fully developed single family lots (the Lots ) for the construction of residential homes for a proposed new subdivision in Williamson County, Tennessee (the Cates-Kottas Agreement ). 6. Pursuant to the Cates-Kottas Agreement, Cates-Kottas was required to develop all necessary infrastructure and improvements for development of the Lots, including the installation of all utilities to the Lot lines. Cates-Kottas also warranted and represented to TOUSA Texas that there were no geological characteristics or conditions on any Lot which adversely affected its use for the construction of single family residences.
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 3 of 68 7. Cates-Kottas contracted with Gresham, Smith and Partners ( Gresham Smith ) to prepare a survey and plat for a portion of the single family lots known as Benington, Section Four (the Benington Subdivision ), the particular subdivision in which the Grabowskis residence was constructed. 8. On July 6, 2007, Gresham Smith recorded in the Williamson County Register of Deeds the plat for the Benington Subdivision (the Gresham Smith Plat ). Notably, although the Gresham Smith Plat reflects the existence of a drainage easement for Lots 1416, 1417, 1418, and part of 1415, no drainage easement was shown for Lot 1424, the lot upon which the Grabowskis residence was to be constructed. The Gresham Smith Plat also did not show the presence of an existing stream bed on Lot 1424. 9. On October 3, 2007, TOUSA Texas acquired Lot 1424 from Cates-Kottas as a finished lot pursuant to the Cates-Kottas Agreement and began constructing a single family residence. 10. In early 2008, pursuant to TOUSA Texas request, Garman Engineering Company, LLC ( Garman ) evaluated Lot 1424 s drainage system to confirm that it met the requirements of the applicable building codes. TOUSA Texas also retained Garman to inspect the construction of Lot 1424 s footings for the crawlspace foundation for the wood-frame house which TOUSA Texas was in the process of constructing on the lot. After completing its evaluation, Garman opined and certified, in its capacity as a professional engineer, that the foundation drainage system and the footings for the crawlspace foundation for the Grabowskis residence met the structural requirements of the applicable building codes.
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 4 of 68 11. TOUSA Texas continued the construction of the Grabowskis residence on Lot 1424 and, on June 30, 2008, the Grabowskis entered into the New Home Sale Agreement to purchase the residence from TOUSA Texas for $575,000.00. 12. Sometime after the Grabowskis closed on their home, they complained to TOUSA Texas that a swale of water continually ran through their yard and caused massive drainage problems. In addition, the Grabowskis notified TOUSA Texas that there were several elements of the interior of the home that they alleged were constructed in an unworkmanlike manner and which needed to be repaired. TOUSA Texas performed certain repairs, but the Grabowskis claimed that the drainage issues continued to reoccur even after TOUSA Texas closed its Nashville division as part of its liquidation plan. 13. The Grabowskis then contacted Professional Warranty Service Corporation ( PWSC ) in connection with the recurring drainage problems on their property. 1 Over the course of several months, PWSC retained the services of several contractors and engineers to inspect and evaluate the drainage problem at the Grabowski residence, as well as other problems, and formulate a remediation plan. The remediation plan for the drainage issue included the construction and installation of a catch basin system. 14. The Grabowskis allege that the remediation work performed by PWSC was inadequate and did not solve the drainage problem. 1 TOUSA Texas and PWSC are parties to a Limited Participation Agreement ( LPA ), pursuant to which PWSC provided certain warranty coverage for homes constructed by TOUSA Texas post petition. The drainage issue at the Grabowski residence, however, was not provided warranty coverage under the LPA because TOUSA Texas had knowledge of the drainage issue prior to entering into the LPA. Rather, PWSC agreed to provide warranty repair services to the Grabowskis not knowing that the drainage issue was excluded, and TOUSA Texas subsequently reimbursed PWSC for all services rendered.
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 5 of 68 B. Grabowskis Complaint. 15. On June 30, 2011, the Grabowskis filed a complaint, captioned Grabowski v. Newmark Homes, L.P., et al., Case No. 39901, in the Chancery Court for Williamson County, at Franklin in Tennessee (the State Court ), against TOUSA Texas and various other defendants asserting a number of claims associated with the purchase of their residence (the Action ). A copy of the complaint filed in the Action is attached hereto as Exhibit B. The Grabowskis seek relief against TOUSA Texas under theories of breach of contract, violation of consumer protection laws, negligent misrepresentation, common law negligence, negligence per se, breach of warranty, and gross negligence. In addition to monetary damages, the Grabowskis seek rescission of their purchase agreement with TOUSA Texas. 16. The Grabowskis allege in their complaint that TOUSA Texas failed to construct their home in conformance with the specifications set forth in the New Home Sale Agreement, and failed to construct the home in accordance with accepted building standards. The Grabowskis also allege that TOUSA Texas s attempted repairs were completed in an unworkmanlike manner and that ultimately, the Grabowskis home cannot be repaired in a commercially feasible manner. The Grabowskis seek to rescind the New Home Sale Agreement, and also seek an award of damages for their out-of-pocket costs in attempting to make repairs to their residence. 17. The Grabowskis assert similar claims against defendants Cates-Kottas, which developed the lot upon which the Grabowskis residence was constructed, Garman, which provided engineering services in connection with the Grabowskis residence, Gresham Smith, which prepared the plat for the subdivision in which the Grabowskis residence was constructed, and PWSC, which performed certain warranty work on the Grabowski residence.
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 6 of 68 18. Although the Complaint itself did not include any such allegations, the Grabowskis, during the course of protracted negotiations with TOUSA Texas, raised a potential claim for mold damage and personal injury allegedly arising from exposure to such mold. C. Procedural History 19. TOUSA Texas commenced this chapter 11 case on January 28, 2008. Subsequent to the filing of this chapter 11 case, the TOUSA Texas continued to construct, and enter into purchase contracts to sell, residences in various regions throughout the country. 20. On May 15, 2010, the Grabowskis filed the Application for Administrative Expense [E.C.F. #5561], pursuant to which they sought the allowance of an administrative expense for damages allegedly caused by TOUSA Texas in connection with the purchase of their residence. More specifically, the Grabowskis alleged that they were fraudulently induced by TOUSA Texas to purchase their residence, which was constructed on top of a stream bed and allegedly rendered the residence unfit for its intended use. 21. On June 29, 2011, the Grabowskis filed the Motion or Relief From Automatic Stay [E.C.F. #7849], seeking relief from the automatic stay to pursue their claims against TOUSA Texas in Tennessee state court. 22. On June 30, 2011, the Grabowskis filed the Action in State Court against TOUSA Texas and various other defendants. 23. On September 23, 2011, Gresham Smith moved for summary judgment on grounds that the Grabowskis claims were untimely pursuant to Tenn.Code Ann. 28-3-114. Before the motion was heard, the Grabowskis entered into an agreed order granting summary judgment in favor of Gresham Smith, which order was entered by the State Court on December 19, 2011.
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 7 of 68 24. On August 31, 2011, Cates-Kottas moved to dismiss the Action on the basis that it was barred by the applicable statute of limitations. On December 7, 2011, the Grabowskis filed a Notice of Voluntary Nonsuit with respect to Cates-Kottas, and the order of nonsuit dismissing Cates-Kottas was entered by the State Court on December 15, 2011. 25. On January 5, 2012, the Grabowskis filed a notice of non-suit as to Garman. On January 13, 2012, the State Court entered an Order of Voluntary Nonsuit, and dismissed the Grabowskis claims against Garman without prejudice. 26. On February 17, 2012, this Court entered the Agreed Order Granting, in Part, Glen and Colleen Grabowskis Motion for Relief from Automatic Stay and Ordering Mediation (the Mediation Order ) [E.C.F. # 8525]. 27. Pursuant to the Mediation Order, a mediation session was held in Nashville, Tennessee, in which the Grabowskis, Garman, Cates-Kottas, TOUSA Texas, PWSC, and PWSC s insurer, Zurich American Insurance Company ( Zurich ), participated. D. Mediation between Grabowskis, TOUSA Texas, Cates-Kottas, Garman, PWSC, and Zurich. 28. On June 14, 2012, the Grabowskis, TOUSA Texas, Cates-Kottas, Garman, PWSC, and PWSC s insurer, Zurich, participated in a mediation conducted by John Blankenship, of the law firm of Blankenship & Blankenship. 29. Professional Engineer Tom Allen, the Senior Project Manager of the engineering firm of Neel-Schaffer, Inc., participated in the mediation and discussed various proposals for remediation to address the Grabowskis drainage problems. 30. At this mediation, the parties reached a preliminary agreement, pursuant to which Cates-Kottas agreed to contribute Twenty Thousand Dollars ($20,000.00), and Garman agreed to
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 8 of 68 contribute Thirty Thousand Dollars ($30,000.00) towards the remediation work proposed by Tom Allen. 31. Over the course of the past four months, there have been extensive negotiations between the Grabowskis, TOUSA Texas, PWSC, Tom Allen, and mediator John Blankenship regarding the proposed remediation plan, and fine tuning of the design to meet the approval of the Grabowskis and the applicable governmental entities. E. The Garman Settlement Agreement. 32. TOUSA Texas seeks authorization to enter into a settlement agreement between and among Garman, Cates-Kottas, the Grabowskis, Zurich, TOUSA Texas, and PWSC ( Garman Settlement Agreement ), a copy of which attached hereto as Exhibit C. 33. Pursuant to the Garman Agreement, Garman has agreed to contribute $30,000.00 and Cates-Kottas agreed to contribute $20,000.00 towards the remediation work to be performed at the Grabowskis residence. 34. Under the terms of the Garman Agreement, Garman and Cates-Kottas are required to deposit the total sum of $50,000.00 into an escrow account maintained by Blankenship & Blankenship. In exchange for these payments, all claims against Garman and Cates-Kottas are released by the Grabowskis, TOUSA Texas, PWSC, and Zurich. In addition, Garman and Cates-Kottas release all claims against the Grabowskis, TOUSA Texas, PWSC, Zurich. F. The Global Settlement Agreement and Release. 35. TOUSA Texas also seeks authorization to enter into a settlement agreement between and among the Grabowskis and the adult children of the Grabowskis, Scott Grabowski, Lisa Grabowski, and Dana Grabowski (the Grabowski Children ), TOUSA Texas, PWSC, and Zurich ( Global Settlement Agreement ), a copy of which attached hereto as Exhibit D.
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 9 of 68 36. Pursuant to the terms of the Global Settlement Agreement, the Grabowskis will receive a total sum of $222,100.00 in full and final settlement of the Action, which sum shall be paid as follows: (a) TOUSA Texas will pay the sum of $97,100.00; (b) PWSC and Zurich will pay the sum of $75,000.00; (c) Mediator John Blankenship will release the sum of $50,000.00, which will be placed in the escrow account of Blankenship & Blankenship under the terms of the Garman Settlement Agreement, to the Grabowskis; and (d) The payments referenced in Paragraphs (a) through (c) will be made within seven business (7) days after this Court approves the Global Settlement Agreement. 37. Pursuant to the terms of the Global Settlement Agreement, the Grabowskis have complete discretion to use the settlement sum in any manner in which they deem appropriate, including, but not limited to, the performance of remediation work at the Property. If the Grabowkis choose to use the settlement sum to perform remediation work, the Grabowkis acknowledge that TOUSA Texas, PWSC, and Zurich will not be responsible for coordinating any remediation work, performing any remediation work, or be liable for claims arising from or related to any remediation work. The Grabowskis also specifically waive any and all claims against TOUSA Texas, PWSC, and Zurich related to or arising from any remediation work. 38. Pursuant to the Global Settlement Agreement, the Grabowskis, the Grabowski Children, TOUSA Texas, PWSC, and Zurich have agreed to a mutual release of claims.
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 10 of 68 Relief Requested 39. By this motion, the TOUSA Texas requests entry of an order, pursuant to section 363(b) of the Bankruptcy Code and Bankruptcy Rule 9019(a), authorizing TOUSA Texas to enter into the Garman Settlement Agreement and the Global Settlement Agreement. Supporting Authority 40. Section 363(b) of the Bankruptcy Code permits a debtor to use, sell or lease property of the estate outside the ordinary course of business after notice and a hearing. 11 U.S.C. 363(b). Additionally, Bankruptcy Rule 9019(a) permits a bankruptcy court to approve a compromise or settlement after notice and a hearing. FED. R. BANKR. P. 9019(a). In many instances, compromises or settlements under Bankruptcy Rule 9019 are considered to be a sale of property of the estate outside the ordinary course of business under section 363(b) of the Bankruptcy Code. See, e.g., Northview Motors, Inc. v. Chrysler Motors Corp., 186 F.3d 346, 350-51 (3d Cir. 1999) (noting that settlements and compromises are generally considered to be a sale of property of the estate). 41. To the extent that the proposed entry into and performance under the Garman Settlement Agreement and the Global Settlement Agreement are viewed as a use of estate property, the requested relief should be considered under the business judgment standard. See, e.g., In re Friedman s Inc., 336 B.R. 891, 895 (Bankr. S.D. Ga. 2005) ( Courts review a debtor s use of estate property outside of the ordinary course of business pursuant to a debtor s demonstration of sound business judgment. ); In re Tom s Foods, Inc., 2005 WL 3022022, *2 (Bankr. M.D. Ga. 2005) ( In determining whether to approve a proposed sale under section 363, courts generally apply standards that... represent essentially a business judgment test. ); In re Phoenix Steel Corp., 82 B.R. 334, 335-36 (Bankr. D. Del. 1987) (stating that judicial approval
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 11 of 68 under section 363 of the Bankruptcy Code requires a showing that the proposed action is supported by, among other things, a good business reason). 42. To the extent that the proposed entry into the Garman Settlement Agreement and the Global Settlement Agreement is viewed as a settlement of litigation, the bankruptcy court s central inquiry is whether the proposed settlement and the related use of estate assets are fair and equitable and are in the best interests of the estate. See, e.g., Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968) (noting that [c]ompromises are a normal part of the process of reorganization, and holding that in determining whether a settlement is in the best interests of the estate, the court considers whether the settlement is fair and equitable ) (citation omitted); In re Atlanta Retail, Inc., 456 F.3d 1277, 1289 (11th Cir. 2006) (noting a bankruptcy court is required to consider whether a proposed sale under section 363(b) is fair ); In re Se. Banking Corp., 314 B.R. 250, 272-73 (Bankr. S.D. Fla. 2004) (holding a bankruptcy court considers whether a settlement is fair and equitable ); Friedman s, Inc., 336 B.R. at 895 (noting court considers whether a debtor s proposed use of property for a proposed key employee retention program is fair and reasonable ); see also Wallis v. Justice Oaks II, Ltd. (In re Justice Oaks II, Ltd.), 898 F.2d 1544, 1549 (11th Cir. 1990) (setting forth four factors to be considered in review of settlements). Furthermore, in deciding whether to approve or disapprove a proposed settlement, a bankruptcy court must consider the following four factors: (a) The probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; [and] (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises. Justice Oaks II, 898 F.2d at 1549. All four factors need not be satisfied in every
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 12 of 68 case. See In re Chira, 567 F.3d 1307, 1313 (11th Cir. 2009) (affirming the bankruptcy court s decision to approve a settlement agreement where all relevant Justice Oaks II factors supported approval). 43. In exercising its review under both section 363(b) of the Bankruptcy Code and Bankruptcy Rule 9019, a bankruptcy court gives weight to a debtor s sound business judgment. See, e.g., Friedman s Inc., 336 B.R. at 895 ( Courts review a debtor s use of estate property outside of the ordinary course of business pursuant to a debtor s demonstration of sound business judgment. ); Se. Banking Corp., 314 B.R. at 273 (noting a court gives weight to the [debtor s] informed judgment in considering a settlement under Bankruptcy Rule 9019); see also Abeles v. Infotechnology (In re Infotechnology), 1995 U.S. App. LEXIS 39883 at *4-5 (2d Cir. Nov. 9, 1995) (noting that in determining whether to approve a debtor s motion to settle a controversy, a court does not substitute its judgment for that of the debtor). 44. The Debtors firmly believe that the Garman Settlement Agreement and the Global Settlement Agreement represent an appropriate and reasonable compromise of significant claims and litigation that TOUSA Texas has diligently sought to address through protracted mediation and negotiations with the parties to the State Court Action. The Debtors submits that entry into the Garman Settlement Agreement and the Global Settlement Agreement is the most effective means to avoid the cost, risk and distraction associated with defending against the Action, filing a cross-claim against PWSC, and filing third party complaints against Cates-Kottas and Garman, as well as potential other third parties that may have performed improper remediation work on the Grabowski residence. Moreover, since the Grabowskis seek to rescind their purchase agreement with TOUSA Texas, and a refund of their $575,000.00 purchase price, the proposed settlement constitutes a significant reduction in TOUSA Texas s obligation. To that end, the
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 13 of 68 Garman Settlement Agreement and the Global Settlement Agreement will result in an expedient resolution of disputes between TOUSA Texas and the Grabowskis. 45. In light of the foregoing, the Debtors submit that entry into the Garman Settlement Agreement and the Global Settlement Agreement is fair and equitable, constitutes a sound exercise of the Debtors business judgment and is in the best interests of the Debtors estates and their creditors. Moreover, the Debtors have consulted with the Creditors Committee regarding both the Settlement Agreement and the Global Settlement Agreement, and the Creditors Committee supports the relief requested herein. Accordingly, the Debtors respectfully request that this Court authorize TOUSA Texas to enter into the Settlement Agreement and the Global Settlement Agreement. Notice 46. Debtors have provided notice of this motion to: (a) the Office of the United States Trustee for the Southern District of Florida; (b) counsel to the Creditors Committee; (c) counsel to the agent for the Debtors prepetition first lien facilities; (d) counsel to the agent for the Debtors prepetition second lien facility; (e) counsel to the ad hoc group of lenders, assignees or participants with respect to the Debtors prepetition second lien facility; (f) the Internal Revenue Service; (g) the Securities and Exchange Commission; (h) the indenture trustee for each of the Debtors outstanding bond issuances; (i) the parties to the State Court Action; (j) mediator John Blankenship; and (k) all parties who have filed notices of appearance and requests for pleadings in these chapter 11 cases. In light of the nature of the relief requested, the Debtors respectfully submit that no further notice is necessary. WHEREFORE, for the reasons set forth herein, the Debtors respectfully request that the Court enter an order, substantially in the form annexed hereto as Exhibit A, (a) authorizing TOUSA Texas to enter into the Garman Settlement Agreement and the Global Settlement
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 14 of 68 Agreements and (b) authorizing TOUSA Texas to take any and all actions reasonably necessary to consummate the Garman Settlement Agreement and the Global Settlement Agreement, and perform any and all obligations contemplated in the Garman Settlement Agreement and the Global Settlement Agreement. I HEREBY CERTIFY that I am admitted to the Bar of the United States District Court for the Southern District of Florida, and I am in compliance with the additional qualifications to practice in this Court as set forth in Local Rule 2090-1. Dated: October 26, 2012 Respectfully submitted, GREENBERG TRAURIG, P.A. /s/ Padma G. Hinrichs Padma G. Hinrichs (Florida Bar No. 0554758) 777 South Flagler Drive, Suite 300 East West Palm Beach, FL 33401 Telephone: (561) 650-7978 Facsimile: (561) 655-6222 Counsel to the Debtor s
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 15 of 68 Exhibit A Proposed Order
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 16 of 68 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA FORT LAUDERDALE DIVISION www.flsb.uscourts.gov In re: ) Chapter 11 Cases ) Case No. 08-10928-JKO TOUSA, INC., et al., ) Jointly Administered ) Debtors. ) ) ORDER PURSUANT TO SECTION 363(b) OF THE BANKRUPTCY CODE AND RULE 9019 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AUTHORIZING TOUSA TEXAS, L.P. TO ENTER INTO SETTLEMENT AGREEMENTS RESOLVING CERTAIN CONSTRUCTION DEFECT LITIGATION Upon the motion [ECF No. ] (the Motion ) of TOUSA, Inc. and its affiliated debtors and debtors in possession in the above-captioned, jointly administered chapter 11 cases (collectively, the Debtors ), for entry of an order authorizing TOUSA Texas, L.P., f/k/a Newmark Homes, L.P., a Texas limited partnership ( TOUSA Texas ), to: (a) enter into (i) the Garman Settlement Agreement, a copy of which is attached hereto as Exhibit 1 and (ii) the
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 17 of 68 Global Settlement Agreement, a copy of which is attached hereto as Exhibit 2 and (b) take any and all actions reasonably necessary to consummate the Garman Settlement Agreement and the Global Settlement Agreement and perform any and all obligations thereunder; and it appearing that the Garman Settlement Agreement and the Global Settlement Agreement were negotiated, proposed and entered into by the parties thereto without collusion and in good faith; and it also appearing that the relief requested in the Motion is in the best interests of the Debtors estates, their creditors and other parties in interest; and the Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. 157 and 1334; and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. 157(b); and venue being proper before this court pursuant to 28 U.S.C. 1408 and 1409; and due and proper notice of the Motion having been provided to all proper parties under the circumstances, and it appearing that no other or further notice need be provided; and upon the arguments and testimony presented at the hearing before the Court, and any objections to the Motion having been withdrawn, resolved or overruled on the merits; and after due deliberation and sufficient cause appearing therefore, it is ORDERED that: 1. The Motion is granted to the extent set forth herein. 2. Pursuant to section 363(b) of the Bankruptcy Code and Bankruptcy Rule 9019, the Garman Settlement Agreement, including the releases provided for therein, is approved in all respects, and TOUSA Texas is authorized to enter into the Garman Settlement Agreement and perform all of its obligations thereunder and to execute and deliver all such other documents or instruments related to the Garman Settlement Agreement, and take such other action as may be necessary or appropriate to implement and effectuate the transactions contemplated in the Motion and the Garman Settlement Agreement.
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 18 of 68 3. Pursuant to section 363(b) of the Bankruptcy Code, the Global Settlement Agreement is approved in all respects and TOUSA Texas is authorized to enter into the Global Settlement Agreement and perform all of its obligations thereunder and to execute and deliver all such other documents or instruments related to the Global Settlement Agreement, and take such other action as may be necessary or appropriate to implement and effectuate the transactions contemplated in the Motion and the Global Settlement Agreement. 4. The lack of any specific description or inclusion of any particular provision of the Garman Settlement Agreement or Global Settlement Agreement in this Order shall not diminish or impair the effectiveness of such provision, it being the intent of this Court that the Garman Settlement Agreement or Global Settlement Agreement be approved in their entirety. 5. Notwithstanding any provision in the Bankruptcy Rules to the contrary, (i) the terms of this Order shall be immediately effective and enforceable upon its entry, (ii) TOUSA Texas is not subject to any stay in the implementation, enforcement or realization of the relief granted in this Order, and (iii) TOUSA Texas may, in its discretion and without further delay, take any action and perform any act authorized under this Order. 6. The relief granted herein shall be binding upon any chapter 11 trustee appointed in these chapter 11 cases and upon any chapter 7 trustee appointed in the event of a subsequent conversion of these chapter 11 cases to cases under chapter 7. 7. The Court shall retain jurisdiction with respect to any matters, claims, rights or disputes arising from or related to the implementation of this Order. ###
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 19 of 68 Submitted by: GREENBERG TRAURIG, P.A. Padma G. Hinrichs (Florida Bar No. 0554758) 777 South Flagler Drive, Suite 300 East West Palm Beach, FL 33401 Telephone: (561) 650-7978 Facsimile: (561) 655-6222 Counsel to the Debtors Copies to: Padma G. Hinrichs (Attorney Hinrichs shall upon receipt serve a copy of this Order upon all interested parties and file a certificate of service.)
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Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 66 of 68
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 67 of 68
Case 08-10928-JKO Doc 8887 Filed 10/26/12 Page 68 of 68