BLOG

On December 4, 2012, Chief Judge Karen S. Jennemann entered an order confirming the plan of reorganization proposed by the Debtor, Waterford Lakes Capital Partners, LLC (“Waterford Lakes”) over the objection of the Orange County Tax Collector in the case of In re Waterford Lakes Capital Partners, LLC,  Case No: 6:12-bk-08675-KSJ, in the Middle District of Florida Bankruptcy Court, Orlando Division. Waterford Lakes owns the underlying real property where an entertainment center, known as the Firkin & Keggler, operates. Under the plan, the operating entity will be merged into Waterford Lakes.

Under the Plan, the Debtor proposed to pay the Orange County Tax Collector all of its past and current real and personal property taxes over a 54 month period.  The payments were to be amortized over this period with a balloon payment due 54 months from the Debtor’s petition date.  Orange County objected to the plan, arguing that the proposed balloon payment and amortization of the debt was not “fair and equitable” treatment as required under 11 U.S.C. 1129(b).  At the confirmation hearing, Debtor’s counsel, Scott Shuker of Latham, Luna, Eden & Beaudine, LLP, argued that the proposed treatment met the statutory requirements of 1129(b).  Mr. Shuker argued that not only was Orange County going to be paid in full over the plan period, but the amortized payments were equal monthly installments as the Code requires and further argued that there was no statutory provision that prohibited such proposed payment.

Chief Judge Jennemann agreed with the Debtor’s position, overruled the objection of Orange County and confirmed the Debtor’s plan. This ruling may provide additional guidance for future debtors’ proposed treatment of tax collectors claims in Chapter 11 reorganization cases.  Counsel for the Debtor are Scott Shuker, Justin Luna and Chris Thompson.

Scott Shuker can be reached at rshuker@lathamluna.com or 407-481-5800.