2022 Asset Sale of the Year Award: Haven Campus Communities-Starkville, LLC

ABI’s Asset Sales Committee awarded the 2022 Asset Sale of the Year Award to counsel for the stakeholders involved in the successful 11 U.S.C. § 363 sale of the assets and interests of chapter 11 debtor Haven Campus Communities-Starkville, LLC in In re Haven Campus Communities-Starkville, LLC, which came before Hon. Selene Maddox of the U.S. Bankruptcy Court for the Northern District of Mississippi (Case No. 21-10931-SDM). The committee announced the winners during ABI’s Annual Spring Meeting in Washington, D.C., in April.

Centered around the debtor’s 400+-unit student housing facility located in the university town of Starkville, Miss., home of the Mississippi State Bulldogs, the awarded sale was the culmination of a creatively designed and strategically executed and coordinated effort led primarily by the team representing the secured lender, Sarah Beth Wilson (Jackson, Miss.) and Danielle Mashburn-Myrick (Mobile, Ala.) of Phelps Dunbar LLP, and the team representing the chapter 11 debtor, David L. Bury, Jr. and Thomas B. Norton of Stone & Baxter, LLP (Macon, Ga.), and Douglas C. Noble of McCraney, Montagnet, Quin & Noble, PLLC (Ridgeland, Miss.).

Accomplished in the midst of multiple ongoing actions pending in various federal and state courts, under the weight of myriad complications presented by disputed boundary lines and amassed property tax obligations owing concerning the debtor’s primary asset (its real property known as “Haven on 12,”), and in the middle of an aggressive collateral attack against the lead lender launched by certain of the community banks who owned participation interests in the secured loan who opposed the coordination endeavor with the debtor and its professionals, the Haven on 12 sale was the successful culmination of a creatively conceived and expertly executed joint adventure by the parties and their legal counsel. The result the professionals involved were able to achieve under the circumstances presented by the case, the property and the surrounding litigation was quite extraordinary. The sale, which closed on June 1, 2022, provided value to stakeholders, evidenced creativity and ingenuity in its planning, pursuit and execution, and demonstrated in the professionals involved true professionalism and a commitment to achieving the best possible outcome for their clients.

About the Asset Sale of the Year Award

ABI’s Asset Sales Committee receives and pores over nominations submitted for the award annually from nominations received concerning complex sales of distressed assets completed nationwide in the preceding calendar year. The criteria utilized by the committee to determine the Asset Sale of the Year and Honorable Mention(s) include:

• Completion of a strategic distressed asset sale (the “Sale”) resulting in provision of value to stakeholders;
• A display of excellence across the full spectrum of the sale process, from the initial targeting through pursuit, structuring and financing, to completion and closing of the sale transaction;
• A sale reflecting a high level of professional expertise in the design of the transaction, and/or evidencing a high level of creativity and skill in completing the transaction;
• A sale of strategic or legal significance and impact, including overcoming challenges to design, completion, innovative financial engineering, and/or motivating agreement across multiple stakeholders.

The Recipient: The “Haven on 12” Sale

All of the assets and interests of chapter 11 debtor Haven Campus Communities-Starkville, LLC (the “debtor” or “Haven-Starkville”), including the property, were purchased by a third-party buyer at a purchase price of $17,250,000 through the sale, which closed on June 1, 2022. The sale generated proceeds sufficient to, among other things, pay and satisfy the full amount of principal indebtedness outstanding and accrued interest owed on the multi-bank-participated loan secured by the assets, pay certain estate professionals’ fees and transactional costs, and satisfy the interests of numerous stakeholders.

The sale was the culmination of a multi-year dispute involving more than 20 lawyers, six lawsuits and a mediation, five participant banks, four individual guarantors, three judicial forums, two insurance policy issuers, two failed pre-petition third-party sales, an assertedly aggrieved adjoining property owner flanked by various implicated chain-of-title parties in a stalled-out state-court lawsuit-turned-cloud-on-title restricting the marketability of the property, a worldwide health pandemic paralyzing industries including — among so many others — the college student housing market, a failed collateral attack to seize decisional authority of the lead lender and stop execution of the progression toward the successful sale initiated by participant banks and shut down in federal district court, a marathon “lock-in” mediation expertly led by another bankruptcy court judge at the order of the presiding judge on the request of the parties, a re-drawing of the property’s boundary lines, an aggressive marketing adventure of a distressed property in a devastated market sector with a highly uncertain future, and one extremely creative, precision-crafted and cautiously navigated path to the ultimately highly successful finish line, which could only have been achieved with the determined commitment and focused coordination evidenced by the lead lender of the participated loan secured by the property, the debtor and their respective legal teams, together with a multitude of other stakeholders whose buy-in was required at different stages along the way.

Chapter 1: The Loan

On June 16, 2014, to construct and operate to point of sale a 400+-unit gated student housing complex to be located in Starkville, Miss. (home of Mississippi State University); to feature an exercise facility, coffee house, billiard and entertainment hall, large pool, numerous outdoor grills with large televisions, indoor and outdoor lounge areas, and more; and to be known as “Haven on 12” (the “property”), Haven-Starkville secured a loan for nearly $19 million, participation interests in which were subsequently sold by lead lender Origin Bank to five smaller banks (the “participant banks”). Collateral pledged as security for the loan included a first-priority lien on and security interest in Haven on 12 and all associated improvements, as well as a first-priority lien on and interest in all proceeds, leases and rents, and certain other accounts and intangibles, together with commercial guaranty agreements executed by four principals of the debtor (the “guarantors”) — all residents of Georgia, home of Mississippi State’s rival Bulldogs.

The participation interests in the loan sold by Origin to the participant banks in 2016 were in varying percentage interest stakes, but each was evidenced by near-identical participation agreements that named Origin as the lead lender for all purposes, including all rights to select counsel and elect remedies for purposes of pursuit in the event of default(s) and otherwise, and putting upon Origin the obligations associated with doing the same, with the agreement of all participants to share any associated fee, cost and expense obligations as may be incurred by Origin in connection with the loan, guaranties, and maintenance and value-preservation concerning all collateral pledged as security, and endeavors to enforce, collect and litigate related to associated indebtedness, guaranty and collateral obligations.

The loan and all indebtedness obligations matured and became due and owed in full on Nov. 30, 2020 (the “maturity date”) — the date by which all stakeholders had anticipated, pursuant to the debtor’s and guarantors’ plan for the project, that the property would have already been completed, been in operation, and been the subject of a closed sale to a third party, with the proceeds having been applied to fully pay and satisfy all debt secured by it. However, much to the disappointment of all stakeholders involved — including not only the debtor and guarantors, but also the lead lender and participant banks — this was not how this property’s story played out.

The COVID-19 global pandemic wreaked havoc upon countless industries worldwide in 2020 and in the following years. Casualties included those operating in the student housing facility market, where universities and colleges around the world had shuttered their doors, and parents and would-be college students scratched their heads as they watched and read the news waiting to hear whether — and when — in-person learning would resume.

As the maturity date approached, the debtor saw numerous attempted sales fail to close. In the fall of 2020, the debtor indicated it would default on the repayment obligations due and owed on the fast-approaching maturity date, absent accommodations requested from the lender. The lead lender engaged its legal team at Phelps Dunbar LLP and disclosed the request by the debtor to the participant banks and commenced endeavors to seek consensus on the plan forward in order to respond to the debtor’s requests for more time and more money. That consensus was, regretfully, never reached, as anxiety and fears grew in the participant banks, and each attempted to go their own routes contrary to the participation agreements’ terms (routes that all would come to regret, as they led only to the waste of precious time and resources by all parties involved; more on this below).

The timeline on the project and the maturity of the debt secured by it; the escalation to litigation of an originally small, later snowballing, dispute with an adjacent landowner over the location of the property’s boundary lines, which appeared as a cloud on a pre-foreclosure title search; the market-disrupting impacts of the COVID-19 pandemic then in full swing; and the quarrelling and dissent that arose among certain of the assertedly cash-strapped community participant banks on which way to go and how to proceed, coincided to present all of the stakeholders — and their ultimate legal teams — with what some in the South might refer to as a “real pickle.”

Chapter 2: Why the Debtor’s Pre-Bankruptcy Sale Attempts Failed to Close

A few years earlier, in or about 2018, the debtor had locked in on a potential buyer for the property. Negotiations began and seemed to be well on their way to a closing on a sale of the property to a third-party buyer. Negotiations quickly came crashing down when the debtor realized that an adjoining property owner, Development Enterprises of Starkville, Inc. (DES), asserted that it owned a certain portion of the property that comprised a section of the debtor’s facility’s parking lot.

After several attempts to repair a retaining wall and related drainage structures that were located on the disputed portion of the debtor’s property, which were met with demands to vacate the property by the adjacent property owner, relations spiraled, and the maintenance needs related to the property’s water run-off were deferred and becoming ever more urgent. The debtor turned to its insurer, which ultimately filed an action on behalf of the debtor against the adjacent property owner in the Chancery Court of Oktibbeha County, Miss. (14th District) (filed April 11, 2018) (the “Boundary Line Dispute”/“Lawsuit 1”), for a declaratory judgment to confirm the location of the property’s boundary line shared with the adjoining property, its being consistent with the property description set forth in the deed by which the debtor took title to the property, and it being as described in the deed of trust granted to the lender as security in connection with the loan. The adjoining landowner later filed counterclaims alleging that the debtor and the improvements put upon the property were encroaching on the adjacent property, diverting water onto the property and causing damage to the property and the pecan trees that grew on it. Numerous additional parties in the chain of title were added as parties, and claims to quiet title and for damages were added. The debtor tendered the title claims to its title insurer and related tort claims to its general liability carrier, each of which tendered representation for certain, but not all, claims.

The stagnant-but-still-pending Boundary Line Dispute reared its head when the lender obtained an updated title search report on the property in late summer/early fall of 2020 in connection with the debtor’s requests for more time and more money, while the maturity date barreled closer and closer, and previously purported near-closings on sales of the property had all fallen through. Presenting as a potential cloud on the title of the property, investigation into the Boundary Line Dispute revealed that it indeed concerned the property serving as collateral for the loan, that the action had languished in the state court with little to no progress, and that, based on its progression, there was no end anywhere in sight, as it was still in the pleadings stage. New parties had only recently been added, and not all had yet even been served or appeared. No scheduling order had been entered, no trial date had been set, and discovery had not even commenced. It was a mess moving at a sloth’s pace.

Moreover, real property tax obligations assessed on the property by Oktibbeha County, Miss., were discovered not to have been timely paid by the debtor in violation of the loan documents and guaranty requirements, and in the absence of required notices to the lender pursuant to applicable state law. This now presented an additional category of problems, with tax obligations amounting to nearly $1.3 million, certain of which required immediate satisfaction at the risk of loss of title to the property and the lender’s first-priority lien presented by an impending tax sale noticed to be conducted by the county for payment of the outstanding and growing tax obligations with interest and associated penalties.

The debtor and guarantors engaged Richard Gaudet of GGG Partners, LLC and ultimately relayed to the lender that the prior attempted sales concerning the property had failed due to, among other possible things, the complications presented by the ongoing Boundary Line Dispute and the potentially disastrous effects of adverse rulings in that action as upon the subject property, which issues were ultimately only compounded with title searches completed assuredly indicating significant and growing real property taxes owed and outstanding concerning the property. With no third-party sale and the maturity date barreling down, and in the absence of terms agreed to by the participant banks so as to allow the lender to propose any forbearance of the final maturity date of the loan obligations (certain participant bank consensus was required by the terms of the participation agreements to complete any principal loan term modifications, including any extension of the final maturity date), all stakeholders braced for impact, and those without legal counsel retained some.

Chapter 3: To Court

The maturity date came and went without payment of the loan obligations. The lender made demand and shortly thereafter brought suit against the debtor and each of the individual guarantors in the U.S. District Court for the Southern District of Mississippi for a judgment on the outstanding indebtedness repayment obligations owed, then exceeding $16 million, and for an order requiring payment of the real property tax obligations and compliance by the parties with the terms of the assignment of leases and rents also pledged as collateral, entitling the lender to direct receipt of all rent and lease payments concerning the property, which remained in operation with tenants at all times throughout the ordeal (“Lawsuit 2” and, eventually, “Lawsuit 3”).[1] The lender quickly moved for summary judgment and for a temporary restraining order and preliminary injunction seeking to seize the debtor’s rents, and secured the setting of an emergency hearing before Senior U.S. District Court Judge Hon. Tom S. Lee.

Chapter 4: Upset Bank Loan Participants

Lurking in the shadows of the lender’s enforcement and collection activities were the five community banks that held nonrecourse participations in the loan. As the maturity date approached and the scale of the debtor’s financial woes and the property’s title and marketability obstacles were discovered and coming further into focus, in the landscape of the COVID-19 pandemic and the rapidly changing fiscal and regulatory environment being faced by community banks and regional and national lenders alike, and without themselves having any answers on what path they desired the lender to take but disagreeing with and disputing all proposals put forward by the lender, the participant banks wanted repayment of their portions. They wanted out, and fast.

Four of the five hired legal counsel (identified herein below) at varying times and in varying forms made demands unfounded by the terms of the participation agreements for repurchase by the lender of the participant banks’ interests, which invitations were declined by the lender. Upon the refusal of the lender to provide the participant banks with the immediate cash they apparently were in desperate need of through elective repurchase of their participation interests, and despite the fact that no one wanted to own this property in the fall of 2020 subject to the pending claims and potentially drastic effects of any adverse outcome in the Boundary Line Dispute, and with the property nevertheless facing an imminent loss of title through a potential county tax sale, certain participant banks made an unreasonable demand that the lender — which held all decisional authority and power as to enforcement and collection activities and elections of remedies pursuant to the terms of the participation agreements — initiate a power-of-sale foreclosure sale of the property and a credit bid to purchase it (with no contribution by the participant banks), and demanded that the lender do so right away. No participant bank was able to explain why or how a foreclosure sale was a reasonable option presented under the circumstances where the property served as the only valuable asset securing the loan, and where any sale under the cloud of the pending Boundary Line Dispute and real property tax liens would severely impugn — if not entirely defeat — its marketability and value, and moreover would have likely exposed the lender to challenges to the commercial reasonableness of the sale and potentially prevented it from recovering a judgment for the assuredly gigantic deficiency that would then remain still owed and outstanding under the loan as against the debtor and/or guarantors, pursuant to applicable state law.

With the participant banks and their legal counsel all over the board with what each believed to be the proper and best course to proceed as to the property and the loan, and with their various demands and attempts to wrest full control of the enforcement and collection endeavors (which were placed with the lead lender by the express terms of all original loan documents and security agreements, as well as by the terms of all participation agreements), the aggrieved participant banks decided to turn to litigation. One of the participant banks filed suit against the lender in the U.S. District Court for the Southern District of Mississippi (“Lawsuit 4”), then two others also filed suit against the lender in the same court (“Lawsuit 5”), then another did the same (“Lawsuit 6”) (altogether, the “Participant Bank Lawsuits”), all seeking to effect a change of control to allow the participant banks, or their chosen legal counsel, to determine their own destinies as to the indebtedness remaining owed. The suits asserted claims, including breach of the participation agreements and certain common law tort claims, against the lender.

Most colorfully, three of the participant banks asked the court for a temporary restraining order removing the lender as lead bank under the participation agreements and forcing the lender to fire its chosen legal counsel and allow the participant banks to choose who would represent the participated loan — in other words, the participant banks wanted an order overriding the express terms of the participation agreements and instead permitting them to choose legal counsel and make all decisions concerning pursuit of enforcement and collection. Conveniently, the legal counsel proposed by those participant banks was the very legal counsel who prepared and filed suit against the lender for certain of them, in which obscene, outlandish and defamatory allegations were made concerning the lender’s chosen counsel, putting himself out instead as a better choice for the full group.

In an already impossible situation presented by the Boundary Line Dispute concerning the property and the refusals of the guarantors and debtor to turn over the rent and lease proceeds collateral or to put up the cash to pay the tax obligations, which would lead to the loss of title and the lender’s lien imminently, and with the emergency hearing date in Lawsuit 2 approaching (on the lender’s motions for an order requiring the guarantors and debtor to turn over the proceeds and pay the amount required to prevent loss of title), the participant banks were forcing the lender to fight a multi-front battle while forging full speed ahead with endeavors to resuscitate the property’s marketability and value as fast as possible and to recover as much of the outstanding indebtedness as quickly as possible. The house was on fire, and the natives were restless. So they all turned on the only party trying to help them — the lead lender — as they each grasped for money, and control, out of fear and the lack of an obvious path forward that each could agree on was the best one. The path was not clear to any of the stakeholders involved.

Chapter 5: Strategy, Execution, Resolution

What was needed to resolve all outstanding issues among all parties was a sale of the property. To accomplish that, certain of the real property taxes had to be paid imminently, the Boundary Line Dispute had to be resolved on an expedited timeline, and numerous parties who didn’t much trust or care for one another had to set aside their differences and meet at the negotiating table — several negotiating tables, really. Guided by seasoned bankruptcy and restructuring counsel, the parties, while well aware that their differences would persist, settled on a strategy to best accomplish a consensual resolution.

With the TRO Motion (filed by the certain few participant banks seeking to wrest control of the decisional authority for moving forward from the lead lender) fully briefed and being litigated in an expedited hearing in the district court, the parties agreed to a brief continuation of the hearing conditioned on an agreement by the guarantors to come out of pocket roughly $500,000 to redeem the property from the 2019 tax sale (which presented the immediate risk of loss of title to and lien upon the property). Further, the debtor, whose counsel had a fully executed chapter 11 petition for the Northern District of Georgia that was ready for filing depending on the outcome of the TRO hearing, agreed to file a voluntary chapter 11 petition in the U.S. Bankruptcy Court for the Northern District of Mississippi (within which the property was located), rather than in the debtor’s preferred forum in Georgia, and the parties agreed that the debtor would promptly upon filing remove the Boundary Line Dispute to the same bankruptcy court (“Lawsuit 7”). The debtor filed a voluntary chapter 11 petition on May 11, 2021,[2] and a Notice of Removal on May 18, 2021.[3]

While the bankruptcy itself was part of an agreement with the lender, it was hardly an “easy” bankruptcy. The lender and borrower engaged in numerous negotiations throughout the bankruptcy to come to terms on various issues, such as the use of cash collateral and extensions of the exclusivity period for the debtor to file a plan. All the while, the lender was marching forward on summary judgment pleadings against the guarantors in Lawsuit 1 in district court (two of which served as the debtor’s primary principals and were the decision-makers with respect to the debtor), while the two guarantors were opposing it through their separate Mississippi counsel. Summary judgment was granted against the guarantors while also being stayed, in part, for the determination of the amount of the liability.

Of course, it could not be as simple as a feud between the lender and the debtor’s principals causing tension to rise in the bankruptcy case. In the district court litigation (and after the court’s ruling on summary judgment), one of the guarantors (who was not involved in the debtor) made known through new counsel (Mike Wallace of Wise, Carter, Child & Carraway, PLLC) — separate and apart from counsel representing the rest of the guarantors (Craig Geno of Law Offices of Craig Geno, PLLC) — for the first time that he had diminishing mental capacity as well as a conflict with the other named defendants/guarantors. As a result, new counsel entered the arena for that guarantor: He filed a new answer, sought to have the summary judgment vacated as to him, and sought to sever and transfer the litigation to Georgia. Needless to say, the guarantor litigation was its own ball of chaos that ran along simultaneously now with the ongoing participant bank lawsuits, while the debtor’s bankruptcy counsel and lender’s counsel continued to work furiously to find common ground and inch closer to a sale.

While the litigation against the guarantors (and against the lead lender by the participant banks) raged on, the debtor successfully removed the Boundary Line Dispute to district court in order to get a referral to the bankruptcy court. On July 6, 2021, the district court did exactly that and referred the Boundary Line Dispute to the bankruptcy court for adjudication.[4] The lender immediately then moved to intervene in the removed Boundary Line Dispute, and after hearing the matter, the bankruptcy court granted the motion to intervene on Oct. 7, 2021. One month later, at the lender’s urging and by agreement of the debtor and numerous other parties, Hon. Jason Woodard of the U.S. Bankruptcy Court for the Northern District of Mississippi presided over an eight-hour settlement conference/mediation that ended in the parties announcing terms into the record that would fully and finally resolve all claims in the Boundary Line Dispute — including a rewrite of the property’s legal description moving the boundary lines, and agreements by the parties to insert terms into any § 363 sale that may be accomplished that would provide for certain issues as to water-routing and drainage to be repaired. After a hiccup related to issues confirming the location of the boundary line and yet another on-site walk-through with surveyors, the settlement agreement and proposed boundary line instrument were agreed upon by all parties to the Boundary Line Dispute, and Judge Maddox entered the order approving the settlement agreement on Feb. 2, 2022. The boundary-line instrument was recorded in the land records, and the stakeholders saw a result that no one was certain would be reached within the next 12 months, or even 24: Lawsuits 1 and 7 were then resolved, and a major cloud on title and previously presented marketability constraints concerning the property were, too.

With the property redeemed from the potential loss of title previously presented by the county tax sale (thanks to the guarantors’ compliance with the terms agreed to by and between counsel for the guarantors and counsel for the lender in connection with continuing the emergency hearing on the lender’s TRO motion in the district court litigation filed by the lender against the debtor and guarantors), the cloud on title resolved by virtue of the agreed and recorded new boundary line agreement and the Boundary Line Dispute having been settled and closed, and the debtor proceeding forward in its chapter 11 proceeding before Judge Maddox, the debtor proceeded to market the property to potential buyers, walking a tightrope to get the property sold in a less-than-strong real estate market in a sector with a still-unknown future (college student housing). The lender continued to work to move forward for final determinations concerning the extent of liability as against the guarantors in the district court litigation so that the court could enter its final summary judgment in favor of the lender to defend against the endeavors by the one guarantor’s separate counsel to have summary judgment overturned as to him, and to defend against the participant bank lawsuits and all other manner of continued attacks by the participant banks and their counsel at every turn still seeking to stop all endeavors by the lender to coordinate to complete a type of sale they did not understand (viewing endeavors to prepare the collateral property for a sale capable of achieving returns in the ballpark of its market value — rather than completing a fire sale for fast cash, then pursuing the guarantors in litigation in efforts to recover what would be a gigantic deficiency balance — as something indicative of the lender conspiring with the debtor and/or guarantors). The lender and the debtor’s bankruptcy counsel continued to work through issues related to cash-collateral usage and rent rolls — having entered the season of lease sign-ups for the coming new school semester, and being forced to address deferred maintenance issues concerning the property that required attention in preparation for welcoming [what all hoped would be many] new student tenants.

Within weeks of commencing marketing efforts, the debtor received multiple offers, of which a viable offer on the property was made and presented to the lender to facilitate commencement of global settlement negotiations. With a viable sale of the property for a purchase price at its fair market value on the near horizon — something that at nearly all points previously seemed nothing short of impossible to everyone involved and onlookers alike, most especially, it seemed, the participant banks and counsel, the lender and debtor set forth to negotiate what had been envisioned as a potential global resolution of all ongoing disputes, claims and litigation — including the litigation ongoing in the participant bank lawsuits, the guarantor district court litigation, and the lender’s claims against the debtor in the bankruptcy case, and — a previously unknown, but since revealed, dispute — claims that had arisen as between the guarantors themselves, and certain of the guarantors as against the debtor. The debtor’s counsel set into negotiations with the buyer for the proposed sale, which — among other difficulties — required that the buyer and/or debtor or guarantors agree to certain maintenance and repair provisions that had been a condition of the resolution approved in the Boundary Line Dispute.

Even with all of the extra bells and whistles that needed to be incorporated into this proposed sale — not the least of which was the amounts still required for satisfaction of the outstanding property tax obligations owed on the property — the debtor was able to negotiate a sale price that not only was on par with the original offer that the debtor had in 2018 and in 2020 before the chaos erupted around the debtor (and the COVID-19 pandemic was unleashed on the market), but also incorporated the very specific requirements that were necessary to satisfy the agreement reached with respect to the Boundary Line Dispute, and the lender consented to those terms so as to provide for the satisfaction of certain of those obligations from the sale proceeds prior to remittance to the lender for satisfaction of the secured loan. The lender was forced to negotiate exhaustingly with the participant banks to secure agreed-upon terms that would allow for the lender to approve the proposed sale of the loan collateral (the property) and to agree to the proposed terms for the sale and the amounts of proceeds that the lender proposed it would remit to each participant bank for their participation shares in the loan. Finally securing an agreement from the participant banks, the lender was able to agree to terms for the proposed sale of the property.

On May 12, 2022, the court approved the sale motion, and on June 1, 2022, the sale closed. The lender, debtor and guarantors had negotiated and entered into terms providing for contributions by certain of the guarantors to the proceeds, which were remitted together with proceeds from the sale to the lender, and the amount fully repaid and satisfied the total outstanding principal balance owed under the loan secured by the property and accrued interest. Also, the lender agreed to dismiss with prejudice its claims against those guarantors in the district court litigation, and it entered into a settlement agreement with the participant banks whereby the lender agreed to remit to each participant bank involved in the participant bank lawsuits against the lender its percentage interest of principal, although the lender would keep those participant banks’ accrued interest percentages for payment of the attorneys’ fees the lender had been forced to incur in defending against the participant bank lawsuits (which served only to further delay and multiply the complications all parties were forced to endure to reach this miraculous happy ending). All claims in the participant bank lawsuits were dismissed with prejudice. After the period agreed to by and between the lender and the debtor and guarantors between remittance to the lender of the proceeds plus contributions by the guarantors (built in to protect the lender against potential preference claims in the event of any bankruptcy filing by a guarantor), the lender dismissed its claims against the guarantors with prejudice. In one transaction, this successful § 363 sale thus paid the secured lender’s claim and also served as the resolution for Lawsuits 2, 4, 5 and 6. Lawsuits 1 and 7 were resolved when the parties forged through the Boundary Line Dispute litigation with the support of the removed action agreed to be heard by Judge Maddox (which was only possible due to the agreement reached by and between lender’s counsel and counsel for the guarantors in the district court litigation on the steps of the courthouse on the date of the emergency hearing set for the lender’s TRO Motion against the debtor and guarantors), and with the help of the successful settlement conference/mediation led by Judge Woodard.

The result achieved was nothing short of a miracle to those on the periphery of what began as a complex mess and soon began to resemble a potential dumpster fire. The professionals representing the lender and the debtor and guarantors remained resolute and steadfast in their abilities to keep the ship on course so to arrive in safe waters. Those involved on behalf of the debtor, the guarantors and the lender exhibited the highest levels of professionalism, skill and excellence through deep and muddy waters, even after others had taken to engaging in an actual mud fight unbecoming of legal professionals. The coordination, teamwork and buy-in of the lead teams and their professionals are proud of the remarkable sale achieved, which served their clients’ respective best interests — the prize secured at the end of what was a very long, trying and arduous road for a property in Starkville, Miss.

The teams are grateful for the support and patience of the U.S. Trustee’s Office throughout the bankruptcy proceedings. The teams moreover express their appreciation and gratitude for the esteemed judgment of the members of the judiciary presiding over the cases involved, namely Hon. Selene Maddox, U.S. Bankruptcy Court Judge for the Northern District of Mississippi (presiding over the debtor’s chapter 11 bankruptcy case), and Hon. Tom S. Lee, Senior U.S. District Court Judge for the Southern District of Mississippi (who presided over every single one of the district court lawsuits, including the lender’s action against the debtor and guarantors and all of the participant bank lawsuits, which were consolidated into the first filed case for administrative purposes), as well as for the commitment, patience and time given by Hon. Jason Woodard, Chief U.S. Bankruptcy Court Judge for the Northern District of Mississippi, during the settlement conference he presided over that led to the resolution of the Boundary Line Dispute.

The lender’s legal team was comprised of attorneys with Phelps Dunbar, LLP and included Sarah Beth Wilson (Jackson, Miss.) as lead counsel together with Danielle Mashburn-Myrick (Mobile, Ala.), as well as Mike Hurst, W. Thomas Silar, Jr. and Todd Butler, and associates including Nash Gilmore, Mallory K. Bland and Garrett Anderson (Jackson, Miss.). The debtor’s legal team was comprised of David L. Bury, Jr., Ward Stone, Jr. and Thomas B. Norton of Stone & Baxter LLP (Macon, Ga.), together with Douglas C. Noble of McCraney, Montagnet, Quin & Noble, PLLC (Ridgeland, Miss.). The guarantors were represented by Craig M. Geno of the Law Offices of Craig M. Geno, PLLC (Ridgeland, Miss.) and represented on an interim basis by J. Walter Newman IV of Newman & Newman (Ridgeland, Miss.).