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)


Proofs of Claim and Interest

Any distribution of assets that may be available will only be made to creditors, and perhaps, holders of interests who hold "allowed" claims or interests in the relevant bankruptcy case.

Proofs of Claim

If you believe you have a right to payment from any of the debtors, you may have a "claim" against the relevant debtor. Your claim may be allowed if it is listed in the relevant debtors’ schedules as being undisputed, liquidated and non-contingent. If the claim is not so listed (or is not listed at all), a claim will only be allowed after the filing of a Proof of Claim with the United States Bankruptcy Court for the District of Utah (the "Court") prior to the expiration of the Claims Bar Date (defined below). The Proof of Claim must be filed in the case of the Debtor against whom the claim is against. See the Claims Register links below.

The deadline for non-governmental entities to file Proofs of Claim against each of the Debtors expired on February 21, 2012—which is the "Claims Bar Date." This Claims Bar Date does not apply to intercompany claims. Proofs of Claim that have been filed will be reviewed and, if necessary, may be subject to objection by the Trustee or other parties in interest. In the event that an objection is filed, notice will be provided to the claimant with opportunity for hearing.

Proofs of Interest

A "Notice of Chapter 11 Bankruptcy Case, Meeting of Equity Holders & Deadlines" (the "Notice") was filed by each of the debtors and served on known holders of equity interests in each of the respective debtors. According to this Notice, all persons holding interests were listed on an exhibit attached to the Notice, and this exhibit also listed the class of equity and amount of equity interests in each class. Persons who received this Notice were instructed to file a Proof of Interest only if they did not agree with information on the exhibit. The Notice further provided that the deadline to file Proofs of Interest against any of one of the debtors expired on April 20, 2012—which is the "Proof of Interest Bar Date." Proofs of Interest that have been filed will be reviewed and, if necessary, may be subject to objection by the Trustee or other parties in interest. In the event that an objection is filed, notice will be provided to the person who filed the Proof of Interest and that person will have an opportunity to respond and for a hearing.

Claims Registers as of May 18, 2012

Notices for Proofs of Claim

Notices for Proofs of Interest

Trustee Claims Objections and Other Claim Filings

  • Last date to file Proofs of Claim: February 21, 2012
  • Last date to file Proofs of Claim (government): April 16, 2012
  • Last date to file Proofs of Interest: April 20, 2012
  • Last date to file Administrative Claim (Non-Professionals): August 21, 2013
  • Last date to file Professional Administrative Claim: September 5, 2013

Other Claims Related Information

The Trustee has finalized a global settlement that settled, among other things, all claims filed and asserted against the various Debtors by Longview Financial Holdings, Inc. and Longview Financial Group, Inc. (together "Longview") which totaled over $8.2 million. The material terms of the settlement include a $1 million cash payment to Longview from a Private Company Management Liability insurance policy, an allowed unsecured claim in the various Debtors totaling $385,000, Longview’s acceptance of the Trustee’s proposed plan of liquidation, and dismissal of various litigation currently pending. The agreed upon allowed unsecured claim of Longview was allocated to the individual bankruptcy estates as follows: $290,896.49 (CAREIC), $2,337.87 (CAK), $6,424.11 (CAS), $10,095.19 (CASDF), $60,341.85 (CAOPI), and $15,086.49 (CAOPII). As a result, the Trustee filed a motion with the Bankruptcy Court seeking approval of the settlement on November 14, 2012. A copy of the motion and attached settlement agreement is included in the link below. On November 26, 2012, Hunt Law Corporation filed the only objection to the Longview settlement. A hearing was held on December 10, 2012 and the Longview settlement was approved. The Trustee believes that the approval of this major settlement is a significant step in moving the cases forward.

The Trustee has reached a settlement regarding the unsecured claim asserted against the CAREIC estate by Nolan and Kimberlee Higa in the amount of $415,500 (Claim No. 41). The material terms of the settlement include: (1) an agreed upon unsecured claim in CAREIC for $260,000; (2) Higas will pay all outstanding property taxes on the 12 acre Kingman property subject to agreements between the Higas and CAREIC and execute a quit claim deed transferring the property to the Trustee for the benefit of the Legacy Debtors; (3) Higas will file a Notice of Dismissal in the State Court Proceeding against CAREIC, dismissing such proceeding with prejudice; (4) Trustee will file a Notice of Dismissal in the Bankruptcy Court Adversary Proceeding, dismissing such with prejudice; and (5) parties agree to mutually release claims. The Settlement was approved by the Court on May 7, 2013.

On or about June 18, 2010, the Hunt Law Corporation, P.C. (the "Hunt Firm") filed a lawsuit against CAREIC in Utah State Court. On April 12, 2011, a judgment was ultimately obtained by the Hunt Firm in the amount of $285,112.00 for unpaid legal fees. The judgment was domesticated to Arizona and a judgment lien was recorded on the Kingman, Arizona property owned by CAREIC/CAK. The Hunt Firm filed an original proof of claim against CARIEC in the amount of $293,876.69 in February 2012 (Claim No. 35-1) and amended the proof of claims in November 2012 asserting a secured claim of $307,449.99 and a general unsecured claims in the amount of $28,903.00 (Claim No. 35-2). The Trustee also understands that the Hunt parties were also intending to assert an administrative expense claim. The Trustee engaged in an investigation of these claims and potential claims the estates may have against the Hunt parties since his appointment. The parties realized each claim or potential claims were subject to dispute and without admitting or denying any liability, and taking due consideration of the cost of litigation and the financial standing of both parties, the parties agreed to enter into a settlement. The material terms of the settlement include: (a) the proofs of claims filed by the Hunt Firm will be disallowed in their entirety, and the Hunt parties will not receive any distribution in this bankruptcy case or from the liquidating trusts; (b) Hunt parties will file a Notice of Dismissal in the Utah State Court proceedings with prejudice; (c) Hunt parties will file a Notice of Dismissal in the Arizona State Court proceeding with prejudice; (d) Hunt parties will release the judgment lien on the Kingman property; (e) Hunt parties will continue to cooperate with the Trustee in the administration of the Debtors’ estates, including but not limited to (i) providing reasonably requested information to the Trustee concerning the Debtors and their business affairs; and (ii) reasonably cooperating with the Trustee in discovery or trial relating to any litigation that the Trustee has or may commence on behalf of the Debtors’ estate; and (f) parties will provided mutual releases of claims against each other as set forth in the settlement agreement. A motion to approve the settlement was filed on May 23, 2013. The hearing on the settlement was scheduled for June 20, 2013 at 9:00 am. No objections were filed and an Order approving the settlement was entered by the Bankruptcy Court on June 21, 2013 without hearing.

The professionals of the various Debtors filed fee applications seeking approval of outstanding fees and costs. A hearing was held on August 27, 2013 where the Court approved the requested fees and costs and the Trustee provided a brief status report. The audio file of the hearing is attached to the link below. The fees and costs approved by the Court for the Legacy Debtors (which will not be paid until unencumbered assets are liquidated and cash is available) are: (a) Trustee/Manager - $278,315.78; (b) Dorsey & Whitney (CAREIC Counsel) - $1,103,210.32; (c) BRG (Accountants) - $320,683.13; (d) Jones Waldo (Unsecured Creditors Committee Counsel) - $247,461.20; and (e) Labertew & Associates (CAK, CAS, and CAOP Managers Counsel) - $74,096.50. The fees and costs approved by the Court for Durham Jones & Pinegar (CAOP II counsel) are $139,023.52. McKay Burton & Thurman (CAOP I counsel) previously sought and was awarded fees and costs in June 2013 in the amount of $134,581.27. They subsequently filed an second fee application in the amount of $8,869.84 in July 2013 which was also approved by the Court. The approved CAOP professional fees were paid by the Trustee upon obtaining the executed Order of the Court authorizing payment. One September 16, 2013, Pearson Butler & Carson (CASDF Counsel) filed a fee application for $22,475.86 for unpaid pre-effective date fees and costs. A hearing has not been scheduled to approve these fees.

In August 2013, three administrative claims were filed against the Legacy Debtors by Claugus & Mitchell, Glen Martinsen (former accountant of the Debtors) ("Martinsen"), and Trent Waddoups (former Receiver of the Debtors) ("Waddoups") as a result of the administrative claims bar date set pursuant to the confirmed Plan. The Claugus & Mitchell claim was in the amount of $103,740, plus interest at the rate of 20% per annum, and costs advanced in the amount of $12,784. The Trustee filed an objection to the claim on September 12, 2013. The claims was later withdrawn on September 19, 2013. The Martinsen claim was filed in the amount of $28,500.00. The Trustee settled this claim for $20,500 which was approved by the Court on November 26, 2013. The Waddoups claim was in the amount of $102,861.60. The Trustee filed an objection to the claim on September 16, 2013 and the parties began to negotiate a resolution. The parties were able to settle the administrative claim asserted by Waddoups and the Trustee’s alleged claims against Waddoups. The settlement includes a payment from Waddoups of $30,415.00, withdrawal of fees and costs asserted by Waddoups totaling $48,900, and resolution of the Trustee’s objections of fees previously paid to Waddoups. A motion seeking approval of the Waddoups settlement was filed by the Trustee on January 30, 2014 and the Court issued an Order approving the settlement on February 26, 2013.

On September 9, 2013, the Trustee and Tennessee Department of Revenue stipulated to the treatment of its claim against the Consolidated Debtors. The stipulation provides for an allowed unsecured claims of $10,000 paid in accordance with the provisions of the Plan. Additionally, the stipulation provides for an allowed priority claim of $45,839.70 payable in four annual installments beginning on September 4, 2013.

The Legacy Debtors, CAOPI, and CAOPII settled the disputed post-petition management fees pursuant to the Conflict Referee procedures outlined in the approved Plan and Liquidation Trust Agreements. A settlement agreement was executed between the parties and a motion was submitted to the Court for approval on October 4, 2013. The settlement terms included: (a) payment of $66,774.19 by CAOPI to the Legacy Trust for unpaid debtor-in-possession management fees ("DIP Management Fees") for the period of October 17, 2011 through April 30, 2013; (b) payment of $66,129.03 by CAOPII to the Legacy Trust for unpaid DIP Management Fees for the period of October 17, 2011 through April 30, 2013; (c) payment of $6,929.94 by CAOPI to the Legacy Trust for unpaid or "true-up" of the Trustee period management fees ("Trustee Period Management Fees") as set forth in the approved Cash Management Order during the period of May 1, 2013 through the Effective Date of the Plan on July 22, 2013; (d) and payment of $5,038.17 by CAOPI to the Legacy Trust for unpaid or "true-up" of the Trustee Period Management Fees as set forth in the approved Cash Management Order during the period of May 1, 2013 through the Effective Date of the Plan on July 22, 2013. The settlement was approved by the Court on October 23, 2013. The other outstanding intercompany claim issues are currently being analyzed and will be submitted to the Conflict Referee for resolution upon completion of analysis.

The Trustee has reached a settlement regarding the unsecured claim asserted against the CAREIC estate by Jerry Sharko’s and Company, Inc. ("Sharko") in the amount of $1,504,494.64 (Claim No. 31). The material terms of the settlement include: (1) an agreed upon unsecured claim against the Legacy Debtors in the amount of $900,000; (2) Sharko will retain title and ownership of the 60 acre Kingman property subject to agreements between Sharko and CAREIC and the Legacy Debtors shall have no claims against or liabilities related to the property; (3) Sharko will file a Notice of Dismissal in the State Court Proceeding against CAREIC, dismissing such proceeding with prejudice; (4) Trustee will file a Notice of Dismissal in the Bankruptcy Court Adversary Proceeding, dismissing such with prejudice; and (5) parties agree to mutually release claims. The Settlement was approved by the Court on November 20, 2013.

The Legacy Trust and CAOP II Trust have settled all remaining disputed prepetition intercompany claims pursuant to the Conflict Referee procedures outlined in the approved Plan and Liquidation Trust Agreements. A settlement agreement was executed between the parties and a motion was submitted to the Court for approval on July 11, 2014. The settlement terms included: (a) Legacy Trust shall have an allowed general unsecured claim against the CAOP II Trust in the total amount of $42,661, and (b) the parties have provided each other mutual release. The Bankruptcy Court approved the settlement on August 1, 2014.

The Legacy Trust and CAOP I Trust have settled all remaining disputed prepetition intercompany claims (except mismanagement claims) pursuant to the Conflict Referee procedures outlined in the approved Plan and Liquidation Trust Agreements. A settlement agreement was executed between the parties and a motion was submitted to the Bankruptcy Court for approval on November 12, 2014. The settlement terms included: (a) return of the Tooele Land to the Legacy Trust; (b) Legacy Trust to retain title to the Tooele Water; (c) CAOP I Trust shall have an allowed general unsecured claim against the Legacy Trust in the total amount of $5,327,853, and (d) the CAOP I Trust shall have a right to payment in the amount of $77,182 from the net sale proceeds of the Tooele Land resulting from a new value preference defense. The Bankruptcy Court entered an Order approving the settlement on December 12, 2014.

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 7/13/2017 11:44:47 AM