HomeMy WebLinkAboutA030 - Email from Rob Kubat regarding Eastgate Development Bankruptcy & Bank Proposal Rod P. Kubat
To: boliver@marshallnet.com
Subject: Eastgate Development Bankruptcy ,
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Gail:
The Bank would agree to an Order for Use of Cash Collateral, in form and content acceptable to the Bank and me, that
allowed "net sale proceeds" from the sale of the lots to Clinic Investments and Freels as follows:
1. From the "net sale proceeds" of the Clinic Investment sale, the following amounts could be used:
a. 2�_0 QIl would be paid to First National Bank to be held in an escrow account for the construction of the bike
paths along,E. 13th Street and along Dayton Avenue. This money would be paid to Manatt's upon completion of the bike
paths and approval of the bike paths by the City of Ames.
r"b`7 $,12,cnJ would be paid t,the City of Ames to pay in full the water main tapping fees for the subdivision.
c. $18 746.59 would be paid to the City of Ames to pay in full the City's enainP?rin_a�s incurred to date.
d. i4—MAQ49 would be paid to the City of Ames to pay in full the street light insulation bill for the subdivision.
e. If not already paid from the gross sales proceeds, up to $14,039 to be paid to the Story County Treasurer to
pay the real estate taxes against the subdivision.
f. The balance.of such net sale proceeds would be paid to First National Bank to apply against its debt.
2. From the "net sale proceeds" of the Freel sale, the following amounts could be used:
a. The difference between (i) $120,000 and (ii) the sum of the amounts paid under subparagraphs a through e of
paragraph 1 above (estimated to be approximately$10,000) can be paid to junior lienholders as the Debtor determines.
b. The balance of such net sale proceeds would be paid to First National Bank to apply against its debt.
V In return for the payments set forth above in paragraph 1, the City of Ames would agree to do the following:
a. Issue building permits to Clinic Investments and the Freels, as well as other purchasers of the lots so long as
they are entitled to such building permits without taking into account any obligation under the Development Agreement, but
subject to subparagraph c below.
b. Release any and all liens, charges and encumbrances against all the lots sold in the subdivision as each lot is
sold until 50% of such lots are sold.
c. After 50% of such lots are sold, the City would release any and all liens,charges and encumbrances against
each lot as it is sold, provided that a pro rata share of the estimated cost of widening Dayton Avenue as described in the
Development Agreement is escrowed in a manner then acceptable to the City, the Debtor and the Bank. Notwithstanding
the foregoing proviso, an escrow shall not be required unless the City, in good faith certifies under oath that it believes
widening of Dayton Avenue is likely to be required.
With respect to the need for insurance, Mr. Davis will need to come up with that money from the over$2,000,000 he took
from the Company. The Bank is not willing to release monies for this expense or his other expenses Mr. Davis is .
requesting in your proposed budget.
I will only be available until noon tomorrow. As you know, John Klaus needs to have a proposal in his hands by tomorrow
in order to have time to consider it before the hearing on Wednesday. January 3, 2001 at 1:30 p.m. Please respond first
thing in the morning.
I look forward to your reply.
Best Regards,
Rod Kubat
1 '
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NYEMASTER, GOODE, VOIGTS, WEST,
HANSELL & O'BRIEN
A PROFESSIONAL CORPORATION
ATTORNEYS AND COUNSELORS AT LAW
L.R.VOICTS BRADFORD L.AUSTIN MARK D.ALJETS ANGELA L.WATSON 700 WALNLIr,SUITE 1600
JAMES B.WEST SARA J.SERSLAND G.THOMAS SULLIVAN JENNIFER L.VERGILII Des MOINES,IOWA 50309-3899
EDGAR F.HANSELL HAYWARD L.DRAPER JOAN PLETCHER KM K.FARRELL-KOLB
W.DON BRITTIN,JR. IAMES E.GRYIZNER THOMAS H.WALTON MARY E.FUNK (515)283-3100
R.CRAIG SHNFS MICHAEL W.THRALL WILLARD L.BOYD m DEBRA L.HULETT
DON MUYSKENS MARK C.DICKINSON TEFFREY W.COURTER JOHN T.CLENDENIN
ROGER L.FERRIS GREGORY B.WILCOX HALLIE E.STILL-CARIS AMY L.VAN DUYN 1416 BUCKEYE AvENuE,SurrE 200
LAWRENCE E.MYERS JOHN F.LORENTZEN L.W."BILL"ROSEBROOK NEAL K.WESTIN AIv1Fs,IOWA 50010-8070
KEITH E.LUCHTEL ROD KUBAT TERRY L.MONSON STEPHANIE L.MAREfI'
GERALD J.NEWBROUGH STEVEN J.ROY BARRY I.NADLER (515)233-3000
ROBERT A.VANORSDEL FRANK B.HARTY DAVID W.BENSON OF COUNSEL WRITER'S DIRECT DIAL NUMBER
RICHARD J.SAPP JAMES C.WINE BRIAN J.HUMKE SAMUEL G.O'BRIEN
G.R.NEUMANN BRUCE W.BAKER DEBORAH S.KRAUTH JOHN J.MCLAUGHLIN (515)283-31 97
RUSSELL E.SCHRAGE THOMAS W.FOLEY PAULA S.DIERENFELD DREW R.TILLOTSON E-MAIL:RPK Q@NYEMASTER.COM
CARLTON T.KING STEVEN H.LYTLE COREEN K.BEZDICEK FRANK B.COMFORT
GREGORY P.PAGE TERRY C.HANCOCK JOHN B.TUFFNELL LUTHER L.HILL,JR.
RANDALL G.HORSTMANN ANTHONY A.LONGNECKER JILL M.STEVENSON FACSIMILE
JAY EATON JOSEPH A.QUINN ANGEL A.WEST RAY NYEMASTER (51 5)2R3 33108
BURNS MOSSMAN WADE H.SCHUT KATHRYN A.OVERBERG (1914-1995)
REPLY TO:
DES MOINES
December 29, 2000
!AN -
Mr. John Klaus
City Attorney
City of Ames
515 Clark
Ames, IA 50010
RE: Eastgate Development, Inc. Bankruptcy
Case No. 00-04163-CJ (Chapter 11), United States Bankruptcy Court, Southern District
of Iowa, Central Division
Dear Klaus:
Enclosed with this letter is a proposal that First National Bank, Ames, Iowa (the "Bank") made
to Mr. Boliver, the attorney for Eastgate Development, Inc. Please advise me whether or not the
City of Ames would agree to the terms of the enclosed proposal. I would appreciate receiving a
written response the morning of January 3, 2001, if at all possible.
I appreciate your cooperation and assistance.
Very truly yours,
IN kEC&-t
Rod Kubat
Enclosure
• Page 1 of 1
Paul Wiegand
From: John Klaus<kaus@city.ames.ia.us>
To: <rpk@nyemaster.com>; <bolivar@marshallnet.com>
Cc: <wiegand@city.ames.ia.us>
Sent: Tuesday, January 02, 2001 11:27 AM
Subject: Eastgate Development Bankruptcy
The numbers are all right, but the "3"will have to be as follows:
3. In return for the payments set forth above in paragraph 1, the City of Ames would agree to do the following:
a. issue building permits to Clinic Investments and the Freels, as well as the purchasers of the lots so long
as they are entitled to such building permits without taking into account any obligation under the Development
Agreement, but subject to subparagraph b below.
b. release any and all liens, charges, and encumbrances against the lots sold in the subdivision as each of
the lots is sold provided that a pro rata share of the estimated cost of widening Dayton Avenue as described
in the Development Agreement is consented to by an agreement for assessment in a form acceptable to the
city, said consent and agreement to be executed prior to the said release of encumbrance.
01/03/2001