Temecula Valley Bancorp Inc. (fka TMCVP)

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Enterprising Investor

05/07/15 12:33 PM

Post #46

Re: #41: @Enterprising Investor - Motion to Approve Compromise Under Rule 9019 Notice

Response to Motion to Approve Compromise Under Rule 9019 Notice of Motion and Motion for Order Approving Settlement Agreement By and Between the Trustee and the Federal Deposit Insurance Corporation. Filed by Creditor Wilmington Trust Company (4/23/15)

No objection. Reservation of right to file objections to the fees that will ultimately be sought by KTBS and BSF in final fee applications filed with this Court.

Wilmington Trust Company, in its capacity as Indenture Trustee, holds approximately 91% in dollar amount of the valid claims against the Debtor’s estate and the undisputed largest creditor.

Indenture dated as of September 20, 2004
$8,248,000

Indenture dated as of September 29, 2005
$8,248,000

Junior Subordinated Indenture dated as of September 27, 2006
$12,372,000

Junior Subordinated Indenture dated as of January 17, 2008
$22,901,250

TOTAL: $51,769,250.00

Enterprising Investor

05/07/15 11:35 AM

Post #45

Re: #42: @Enterprising Investor - Hearing scheduled for 5/7/2015 at 9:30

Utilizing Court Call to participate in "listen only" mode.

Enterprising Investor

04/21/15 11:25 AM

Post #44

Re: #43: @Enterprising Investor - Settlement

TMCVP holders could recover about $1.72 based on a $10 liquidation value.

Enterprising Investor

04/21/15 11:07 AM

Post #43

Re: #42: @Enterprising Investor - Hearing scheduled for 5/7/2015 at 9:30

Settlement

Background Facts Regarding the Settlement Agreement

The Settlement Agreement is a comprehensive resolution of numerous, longstanding disputes between the Trustee and the FDIC-Receiver related to Bancorp’s Bankruptcy Case and the complex relationship between Bancorp, whose Estate is administered by the Trustee, and the Bank, for which the FDIC-Receiver acts as receiver. Most notably, the Settlement Agreement consensually resolves the parties’ ongoing litigation over more than $34 million of income tax refunds (together with all interest earned thereon, the “Tax Refunds”) and results in a global resolution of all other claims and potential disputes between the FDIC-Receiver and the Trustee.

More specifically, the Settlement Agreement provides in pertinent part that:

- the Trustee and the FDIC-Receiver will divide all the Tax Refunds on a 45/55 basis, whereby the Estate will receive 45% of all funds presently held in escrow (at least $15,319,249.30) and the FDIC-Receiver will receive 55% of such funds (at least $18,723,526.92);

- to the extent any future Tax Refunds are received, the Estate and the FDIC-Receiver will also divide such future Tax Refunds on the same 45/55 basis;

- all pending litigation between the Trustee and the FDIC-Receiver, including the Adversary Proceeding, will be dismissed with prejudice;

- the FDIC Proof of Claim will be withdrawn in its entirety and with prejudice and no further proofs of claim will be filed by the FDIC-Receiver;

- the FDIC-Receiver and the Trustee, on behalf of the Estate, will provide full and mutual releases to each other; and

- the Trustee and the FDIC-Receiver will each retain any claims or causes of action against directors and officers of Bancorp, the Bank, or their respective subsidiaries, as well as against certain other third parties.

The FDIC will be motivated to settle quickly. The Trustee retained two law firms to act as her special counsel in the Tax Refund ownership litigation on a contingency fee basis – Boies, Schiller & Flexner LLP and Klee, Tuchin, Bogdanoff & Stern LLP.

The first dollars recovered will reimburse the Estate for all expenses paid. If any funds remain after payment of all those expenses, then:

b. If the FDIC Tax Litigation settles within 9 months of this Court’s approval of this Application, then 20% of the Net Recoveries will be paid as a contingency fee to BSF and KTB&S (with 12% payable to BSF and 8% payable to KTB&S). The balance (80%) shall remain in the Estate to be distributed as required by applicable law.

c. If the FDIC Tax Litigation settles or is finally adjudicated after the 9-month period described in paragraph B.2.b., then 25% of the Net Recoveries will be paid as a contingency fee to BSF and KTB&S (with 15% payable to BSF and 10% payable to KTB&S). The balance (75%) shall remain in the Estate to be distributed as required by applicable law.

Thus, the 9-month period referenced runs through 6/19/15. If the FDIC settles before 6/19/15, the fee will only be 20 percent of Net Recoveries. Afterwards, the firms receive 25 percent of Net Recoveries.

Estimated distributions to creditors under the Settlement Agreement based on a 20 percent contingency fee:

Gross Tax Refund Recovery: $15,322,500

Special Counsel Contingency Fees (20%) (includes 20% of $500,000 in saved administrative expenses and 20% of the imputed value of waived FDIC claim of $15,322,500): $3,716,000

Other Administrative Expenses: $1,000,000

Distributable Funds: $10,606,500

Total Unsecured Claims: $61,750,000

Percentage Recovery on General Unsecured Claims: 17.18%

Total to be Distributed to the FDIC-Receiver: N/A

Total to be Distributed to Non-FDIC Creditors: $10,606,500

Enterprising Investor

04/21/15 11:04 AM

Post #42

Re: #41: @Enterprising Investor - Motion to Approve Compromise Under Rule 9019 Notice

Hearing scheduled for 5/7/2015 at 9:30

Judge Scott H. Yun.

Source: PACER [Docket 162]

Enterprising Investor

04/21/15 11:04 AM

Post #41

Motion to Approve Compromise Under Rule 9019 Notice of Motion and Motion for Order Approving Settlement Agreement By and Between the Trustee and the Federal Deposit Insurance Corporation; Memorandum of Points and Authorities; Declaration of Helen R. Frazer in Support Thereof (with proof of service) Filed by Trustee Helen R. Frazer (4/10/15)

Source: PACER [Docket 161]