Opinion
Civil Action No. 5:99-CV-161-OC-21GRJ
August 23, 2002
ROBERT L. WELSH, ESQUIRE, CAROL KOEHLER IDE, ESQUIRE, U.S. Department of Justice, Tax Division, Washington D.C., JOHN C. McDOUGAL, ESQUIRE Special Litigation Assistant Office of Chief Counsel Internal Revenue Service District Counsel, Richmond, Virginia, Representative of ROBERT B. ("Brad") ARNOLD, Ocala, Florida, and Representative of ROBERT B. ("Brad") ARNOLD, Leyford Cay, Nassau Bahamas.
ROBERT P. KELLY, ESQUIRE, Gary J. Rotella Associates, P.A. Fort Lauderdale, Florida, Attorneys for: DBA MARKETING, INC.; NAHAMA LIMITED COMPANY.
HARRIS K. SOLOMON, ESQUIRE, Brinkley, McNerney, Morgan, Solomon Tatum, LLP, Fort Lauderdale, Florida, Attorneys for: DBA MARKETING, INC., NAHAMA LIMITED COMPANY, THE ARNOLD GROUP, INC. MULTI-HOUSING OF FLORIDA, INC., and R.B. ASSOCIATES, INC.
SEAN L. WILSON, ESQUIRE, Coral Springs, Florida, Attorney for: WILLARD M. ARNOLD.
G. MICHAEL MAHONEY, ESQUIRE, McLin, Burnsed, Morrison, Johnson, Newman Roy, P.A., Leesburg, Florida, Attorney for COLONIAL BANK.
RICHARD SIEGMEISTER, ESQUIRE, Richard Siegmeister, P.A., Coconut Grove, Florida, Attorney for DOROTHY N. ARNOLD.
JONATHAN S. DEAN, ESQUIRE, Dean Dean, LLP, Ocala, Florida, Attorney for JAMES RIESENBERG.
ROBERT D. GATTON, ESQUIRE, Broad Cassel, P.A., Orlando, Florida, Attorney for LCA Land Acquisition, Inc.
BRIAN A. McDOWELL, ESQUIRE, Holland Knight, PA., Orlando, Florida, Attorney for Fortune Capital Partners, Inc.
TIMOTHY S. SPONSELLER, ESQUIRE, Chambersburg, PA., Attorney for JJG Enterprises and JJG ENTERPRISES, Chambersburg, Pennsylvania, Buyer.
SUZANNE BARTO HILL, ESQUIRE, Rumberger, Kirk Caldwell, Orlando, FL., Attorney for Multilee, Inc.
MULTILEE, INC., c/o Harold L. Brake, President, St. Thomas, PA., HILLSIDE POULTRY FARMS, G. Clifford Gayman c/o Mr. Charles Wagner George L. Ebener Associates, Realtors Shippensburg, PA.
ROBERT F. HIGGINS, ESQUIRE, Lowndes, Drosdick, Doster, Kantor Reed, P.A., Orlando, Florida, Attorney for Receiver.
ORDER ON MOTION FOR CONFIRMATION OF SALE OF PROPERTY OF THE RECEIVERSHIP ESTATE (CHAMBERSBURG, FRANKLIN COUNTY, PENNSYLVANIA) TO JJG ENTERPRISES
Filed herein are the Receiver's Motion for Confirmation of Sale of Property of the Receivership Estate (Chambersburg, Franklin County, Pennsylvania) to JJG Enterprises (Dkt. 309). A hearing to consider the Receiver's Motion for Confirmation of Sale of Property of the Receivership Estate (Chambersburg, Franklin County, Pennsylvania) to JJG Enterprises (Dkt. 309) was held on August 23, 2002. In light of argument of counsel for the Receiver and the submissions of record, the Court finds that the sale of the property of the Receivership Estate consisting of the real property described in Exhibit "A" attached hereto to JJG Enterprises is in the best interest of the Receivership Estate and the Parties to this action.
The Receiver's submissions reflect that the competing offer received by the Receiver from Multilee, Inc. has been withdrawn and that Hillside Poultry Farms has not pursued it's initial interest in the Property. As a result, the offer of JJG Enterprises represents the best offer for the property.
The Receiver's submissions reflect that the owner of the Subject Property, Nahama, Ltd. ("Nahama"), is a foreign entity, subject to withholding tax upon the foreclosure sale of properties owned by them under I.R.S. Reg. § 1.1445-2(d)(3). Under the special "alternative amount" withholding rules provided in I.R.S. Reg. § 1.1445-2(d)(3), if this Court determines that the defendant will not realize any portion of the proceeds from the sale of the property, because the amount of the tax lien/judgment held by Plaintiff which is being foreclosed exceeds the amount of the proceeds to be realized from the sale otherwise due to the lien holder, then the "alternative amount" to be withheld is zero and no withholding of the sales proceeds is required. This Court entered a judgment against Nahama for $55,086,200.02, plus interest (Dkt. 251). As the tax lien judgment against Nahama exceeds the purchase price, it is clear that defendant would not realize any of the proceeds from the sale of the Subject Property.
Upon consideration thereof, it is hereby ORDERED:
1. The Receiver's Motion for Confirmation of Sale of Property of the Receivership Estate (Chambersburg, Franklin County, Pennsylvania) (Dkt. 309), is GRANTED. The offer to purchase submitted by JJG Enterprises is APPROVED. The Receiver is authorized to execute the proposed Agreement of Purchase and Sale submitted by JJG Enterprises and to proceed with the sale of the Subject Property as frilly described in Exhibit "A" attached hereto on the terms and conditions set forth in said agreement.
2. The private sale of the Subject Property known as Chambersburg, Franklin County, Pennsylvania, as fully described in Exhibit "A" attached hereto to JJG Enterprises is CONFIRMED.
3. The private sale of the Subject Property to JJG Enterprises shall be free and clear of any federal tax liens held by the United States of America.
4. The Court finds that under the special "alternative amount" withholding rule in I.R.S. Reg. § 1.1445-2(d)(3), the Defendant, Nahama, will not realize any proceeds from the sale of the Subject Properties and therefore neither the Receiver nor JJG Enterprises is required to withhold any of the sale proceeds for the purpose of paying federal taxes on the sales.
5. The Receiver is authorized to satisfy any liens or encumbrances that are to be paid as a conditions of the sale, to pay all closing costs associated with the sale, including the Receivervs attorneys' fees and costs, and to pay the Receiver's commission pursuant to the provisions of the Order on Motion of Receiver for Approval of Receiver's Compensation Arrangements and for Authority to Pay the Receiver's Compensation and Expenses of the Receivership on a Monthly Basis (Dkt. 54). The Receiver shall disburse the balance of the sale proceeds to Plaintiff.
EXHIBIT "A" LEGAL DESCRIPTION
ALL THAT LAND BEING SITUATE IN CHAMBERSBURG BOROUGH AND HAMILTON TOWNSHIP, FRANKLIN COUNTY, PENNSYLVANIA, BEING BOUNDED AND DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE CENTERLINE OF SR. 4010, COMMERCE STREET; THENCE BY LANDS OF IRA H. AND HILDA L. BANNER THROUGH A PIN OFFSET 25.00' NORTH 29° 33'23" EAST 486.09' TO A SET IRON PIN IN A TREE STUMP; THENCE ALONG LANDS OF IRA H. AND HILDA L. BANNER AND MYRON YOUNG NORTH 16° 36'20" EAST 686.31' TO AN EXISTING CONCRETE MONUMENT; THENCE ALONG LANDS OF MYRON YOUNG NORTH 14° 36'01" EAST 468.15' TO AN EXISTING CONCRETE MONUMENT AT LANDS OF SPIRIT OF CHRIST COMMUNITY CHURCH; THENCE BY LAND OF THE SPIRIT OF CHRIST COMMUNITY CHURCH NORTH 14° 363'01" EAST 331.11' TO AN EXISTING CONCRETE MONUMENT; THENCE ALONG THE SAME NORTH 86° 47'55" EAST 737.20' TO A SET IRON PIN; THENCE ALONG THE SAME SOUTH 61° 05'00" EAST 317.06' TO AN EXISTING IRON PIN AT LANDS OF TIMOTHY M. GILES AND MARIA ISIDRA GILES; THENCE ALONG LANDS OF TIMOTHY M. GILES AND MARIA ISIDRA GILES AND LANDS OF TERRY L. HARBAUGH, AND LANDS OF PAUL S. HELFRICH AND BARBARA C. HELFRICH SOUTH 61° 05'00 EAST 474.80' TO AN EXISTING CONCRETE MONUMENT AT LANDS OF ROBERT L. COREY AND DOROTHEA A. COREY; THENCE ALONG LANDS OF ROBERT L. COREY AND DOROTHEA A. COREY SOUTH 61° 05'00" EAST 258.73' TO A SET IRON PIN AT LANDS OF WILSON COLLEGE; THENCE ALONG LANDS OF WILSON COLLEGE SOUTH 43°'03" EAST 760.28' TO A SET IRON PIN; THENCE ALONG THE SAME SOUTH 52° 27'39" EAST 1390.23' TO AN EXISTING IRON PIN ON DIVISION LINE BETWEEN THE BOROUGH OF CHAMBERSBURG AND HAMILTON TOWNSHIP; THENCE WITH THE TOWNSHIP LINE AND ALONG OTHER LANDS OF NAHAMA LIMITED, A BAHAMAS CORPORATION, SOUTH 46° 40'14" WEST 5.72' TO AN EXISTING CONCRETE BOROUGH LINE MONUMENT; THENCE ALONG THE TOWNSHIP LINE AND BY THE SAME SOUTH 60° 45'52" WEST 2043.39' TO AN EXISTING CONCRETE BOROUGH LINE MONUMENT; THENCE ALONG THE TOWNSHIP LINE AND BY THE SAME SOUTH 82° 03'52" WEST 237.13' TO A POINT AT LANDS OF THE MAYOR AND TOWN COUNCIL OF THE BOROUGH OF CHAMBERSBURG; THENCE ALONG LANDS OF THE MAYOR AND TOWN COUNCIL OF THE BOROUGH OF CHAMBERSBURG NORTH 52° 44'36" WEST 71.10' TO AN EXISTING IRON PIN; THENCE ALONG THE SAME THROUGH AN IRON PIN OFFSET 23.82' FROM THE CENTERLINE OF SR. 4010, COMMERCE STREET, SOUTH 37° 15'24" WEST 323.82' TO A POINT IN THE CENTERLINE OF SR. 4010, COMMERCE STREET; THENCE ALONG THE CENTERLINE OF S.R. 4010, COMMERCE STREET, NORTH 45° 00'00" WEST 222.77' TO A POINT ON THE TOWNSHIP LINE AND IN THE CENTERLINE OF SR. 4010, COMMERCE STREET; THENCE WITH THE CENTERLINE OF SR. 4010, COMMERCE STREET NORTH 45° 11'49' WEST 43.72' TO A POINT IN THE CENTERLINE OF SR. 4010, COMMERCE STREET; THENCE BY THE SAME NORTH 38° 41'29" WEST 168.05' TO A POINT IN THE CENTERLINE OF SR. 4010, COMMERCE STREET; THENCE WITH THE CENTERLINE OF S.R. 4010, COMMERCE STREET NORTH 42° 35'24" WEST 333.08' TO A POINT IN THE CENTERLINE OF S.R. 4010, COMMERCE STREET; THENCE WITH THE CENTERLINE OF SR. 4010, COMMERCE STREET NORTH 55° 19'46" WEST 347.85' TO A POINT IN THE CENTERLINE OF S.R. 4010, COMMERCE STREET; THENCE BY THE SAME NORTH 55° 19'46" WEST 194.84' TO A POINT IN THE CENTERLINE OF S.R. 4010, COMMERCE STREET; THENCE BY THE SAME NORTH 60° 29'17" WEST 782.26' TO A POINT IN THE CENTERLINE OF SR. 4010, COMMERCE STREET, THE PLACE OF BEGINNING.
CONTAINING 6,739, 322.9 SQUARE FEET OR 154.71 ACRES AS SHOWN ON A FINAL SUBDIVISION PLAN FOR NAHAMA LIMITED, A BAHAMA'S CORPORATION, BY THOMAS MICHAEL ENGLERTH SURVEYING, DATED OCTOBER 3, 2001, AND APPROVED BY FRANKLIN COUNTY PLANNING COMMISSION ON DECEMBER 6, 2001, HAMILTON TOWNSHIP BOARD OF SUPERVISORS ON JANUARY 7, 2002, AND TOWN COUNCIL OF THE BOROUGH OF CHAMBERSBURG ON JANUARY 23, 2002; AND SUBJECT TO ANY CONDITIONS, RESTRICTIONS, RIGHTS OF WAY OR EASEMENTS OF RECORD.