Castle Arch Real Estate Investment Company, LLC
Case #11-35082 JTM (Lead Case)

Affiliated Entities

Case #11-32237 - CAOP Managers, LLC
Case #11-35240 - Castle Arch Opportunity Partners I, LLC
Case #11-35241 - Castle Arch Opportunity Partners II, LLC
Case #11-35242 - Castle Arch Kingman, LLC
Case #11-35246 - Castle Arch Smyrna, LLC
Case #11-35243 - Castle Arch Secured Development Fund, LLC
(Jointly Administered)


URGENT UPDATE

THE TRUSTEE ANTICIPATES COMPLETING THE 2013 INCOME TAX RETURNS, SCHEDULES K-1, AND GRANTOR LETTERS BY JULY 15, 2014. The Trustee has been working on completing and addressing various IRS and various tax requirements relating to the implementation of the Legacy, CAOPI, and CAOPII liquidating trusts created pursuant to the confirmed plan. As a result of the creation of these trusts, the 2013 Schedule K-1 will cover activity between January 1, 2013 through the Effective Date of the Plan and creation of the Trusts (July 22, 2013). For the period beginning on July 23, 2013 through December 31, 2013, Grantor Letters (Schedule K-1 equivalent) will be issued to all beneficiaries of the Trusts. Please consult with your tax advisor regarding your individual reporting requirements.

THE REVISED CAOP I AND CAOP II SCHEDULE(S) K-1 FOR 2012 WERE SENT OUT ON JUNE 20, 2013. Subsequent to the preparation and mailing of the 2012 Schedule(s) K-1 for Castle Arch Opportunity Partners I, LLC (CAOP I) and Castle Arch Opportunity Partners II, LLC (CAOP II) additional information was received that will require adjustments to be made to the amounts reported on the Schedule(s) K-1 of CAOP I and CAOP II. DO NOT USE the amounts reported on the Schedules K-1 that have been previously mailed for preparation of your 2012 income taxes.

On May 3, 2012, D. Ray Strong was appointed as the Chapter 11 Trustee (‘Trustee") for the bankruptcy estate of Castle Arch Real Estate Investment Company, LLC. Upon his appointment, the Chapter 11 Trustee also became the Manager of the other affiliated Debtors.

On September 29, 2012, the Trustee filed with the Bankruptcy Court: (1) a proposed Disclosure Statement for Chapter 11 Trustee’s Plan of Liquidation Dated September 29, 2012 (the "Proposed Disclosure Statement"); and (2) the proposed Chapter 11 Trustee’s Plan of Liquidation Dated September 29, 2012 (the "Proposed Plan").

On October 11, 2012, the Trustee filed a Motion to approve the adequacy of information in the Proposed Disclosure Statement and his proposed procedures for soliciting votes on the Proposed Plan. Prior to the objection deadline, five objections were filed with the Court on November 26, 2012. The preliminary hearing for this Motion was heard on December 3, 2012 at 2:00 pm. At the hearing, a final hearing for the Proposed Disclosure Statement was set for January 31, 2013. As a result of the responses by several parties, the Trustee determined in his business judgment to address the substantive consolidation issues prior to finalizing the Amended Proposed Disclosure Statement and seeking confirmation of his Proposed Plan. A motion for substantive consolidation of CAREIC, CAOP Managers, CAK, CAS, CASDF, and a Castle Arch Star Valley, LLC was filed by the Trustee on December 28, 2012. The hearing for the substantive consolidation motion was held on January 31, 2013. As a result of the hearing, the motion was approved by the Court. On February 8, 2012, the Court entered an Order and Findings of Fact granting substantive consolidation. On February 25, 2013, the Trustee filed an Amended Proposed Disclosure Statement. The final hearing on the adequacy of the Amended Proposed Disclosure Statement was held on March 21, 2013. At this hearing, the Bankruptcy Court approved the adequacy of the Amended Proposed Disclosure Statement with some additional modifications presented at the hearing. As a result, the revised First Amended Disclosure Statement was prepared (See below link) and served on parties of interest along with the revised Plan and individual voting ballots. The deadline for return of voting ballots was May 13, 2013. The Trustee received sufficient votes in support of the Plan and no objections were filed in opposition to the confirmation of the Plan. The confirmation hearing for the Plan was held on May 30, 2013 and the Court executed an Order confirming the Plan on June 7, 2013. As a result, the Plan became effective on July 22, 2013. Below are various key documents relating to the confirmation of the Plan.

On October 2, 2013, the Trustee of the CAOP II Trust made an initial distribution to preferred investors holding Class C5 equity interests as identified in the confirmed Plan. This initial payment represents a distribution of 22.98% of the allowed Class C5 equity interests. Enclosed with the distribution checks was an important notification that should be read immediately. This notification indicates that the distribution checks has been prepared and issued based on the information contained in the amended Bankruptcy Schedules, tax returns, and other Debtor records. The Trustee has made efforts to issue the distribution checks to the correct payee. However, due to missing, incomplete, or erroneous records of the Debtor, the initial distribution check may not be issued to the appropriate Individual Retirement Account ("IRA") or other qualified retirement plan administrator. If your CAOP II investment is held in an IRA or other qualified retirement plan and the initial distribution check has not been issued directly to your IRA or retirement plan administrator, the check should be forwarded immediately to your IRA or retirement plan administrator for immediate deposit into your IRA or other qualified retirement plan account, to avoid potential tax liability and early distribution penalties. Please consult your IRA, qualified plan administrator, or tax advisor for further advice.

The timing of distributions, if any, to the creditors and investors of the Legacy Debtors and CAOP I will be dependent on the liquidation of remaining assets and resolution of outstanding claims. Given the nature of the remaining assets and complexity of certain claims of the Legacy Debtors and CAOP I, this process could take a significant amount of time to complete.

This website serves to provide certain case-related information and progress updates with respect to the various bankruptcy cases, and is intended for informational purposes only. Please check back often as additional information will be added and/or updated as it becomes available.

The information contained on this page is provided for informational purposes only. This page does not purport to include all Trustee-related information relating to the Castle Arch bankruptcy cases which may affect your legal rights. The information on this page is subject to change without notice, and the accuracy of the information is not guaranteed. You are not justified in relying on any of the information provided on this page. You should immediately consult competent professionals (a) to determine your rights and obligations, (b) to identify hearings and deadlines that may affect your rights or obligations, (c) to independently verify all dates and deadlines that may affect your rights and obligations, and (d) to protect your rights and to preserve your rights in the Castle Arch bankruptcy cases.

Last Updated 6/16/2014 12:44:34 PM