In Bullet Points - Sequence of Events

By Summit 1031 Bankruptcy

February 28, 2010

2/28/2010 Post from www.Summit1031Bankruptcy.com

Early 12/2008 Summit Principals see a liquidity crisis coming in two or three months.
Early 12/2008 Principals meet with Susan Ford at Sussman Shank.
Early 12/2008 Susan Ford recommends Chapter 11 Debtor in Possession bankruptcy
Early 12/2008 Susan Ford recommends Terry Vance to come in and run show as CRO
Early 12/2008 Key Bend Developer refers Summit Principals to KEVIN PADRICK [ http://www.summit1031bkjustice.com/?tag=kevin-padrick ]
Early 12/2008 Padrick, owner of Obsidian Finance Group, meets w/Principals
Early 12/2008 Kevin Padrick sells himself to Summit Shareholders.
Early 12/2008 Summit principals give OK to hire Padrick and Obsidian. Obsidian Finance gets $100k
12/18/2008 Summit files Chap. 11- focuses on selling properties and investments to pay back creditors.
12/19/09 SUMMIT'S WEBSITE ANNOUNCEMENT - EXPLAINS OBSIDIAN FINANCE'S ROLE AS HIRED BY TERRY VANCE AS FINANCIAL CONSULTANTS TO SUMMIT ACCOMMODATORS INC. THEIR JOB WAS TO ADVISE ON TAX ISSUES, PREPARE PLAN TO MITIGATE DAMAGES, AND HELP LIQUIDATE ASSETS TO SETTLE CLAIMS [ http://www.studeycpa.com/pdf/Summit1219pressrelease.pdf ]
Obsidian did not do the job they were supposed to do, instead they charged the estate to get a better job by working for himself instead of for Terry Vance.
Late 12/2008 New Summit CRO Vance hires KEVIN PADRICK [ http://www.summit1031bkjustice.com/?tag=kevin-padrick ] as approved by Summit Principals to help liquidate assets.
Late 12/2008 Summit Principals provide Padrick with all financial information on properties
01/2009 & 02/2009 KEVIN PADRICK [ http://www.stevenhedberg.com/ ] works with STEVEN
HEDBURG [ http://www.studeycpa.com/pdf/HedburgPadrickREsubCRO.bmp ] more than Terry Vance to take Terry's place. Not sure how this is working to help Summit???
02/2009 PADRICK SELLS HIMSELF TO THE CREDITORS' COMMITTEE [ http://www.anniebuell.com/ ]
2/10/09 - Sussman Shank and PERKINS COIE [ http://www.summit1031bkjustice.com/?p=1982 ] file a joint motion to replace Terry Vance as CRO with Obsidian Finance as CRO. In the document it says that Terry Vance was on board with replacing himself with Obsidian - Huh!
Recordings & EMAILS [ http://www.studeycpa.com/pdf/EmailFromTerrytoKevin.pdf ] show that Terry Vance was not on board and had not been communicated with.
2/11/09 - JUDGE RANDALL DUNN, KEVIN PADRICK, STEVEN HEDBURG OF PERKINS COIE, SUSAN FORD OF SUSSMAN SHANK AND MS. VIVIENNE POPPERL OF THE US TRUSTEE'S OFFICE DECIDE TO APPOINT A TRUSTE IN ABOUT 40 MINUTES. THE ALL WANT OBSIDIAN TO BE TRUSTEE. THEY ALL AGREE THAT THE PROFESSIONALS ARE CAUSING THE DELAYS, SO THEY WANT TO RESOLVE BY MUDDING IT UP WITH MORE PROFESSIONALS. [ http://www.summit1031bkjustice.com/?p=2716 ] Breaking their own code section 1104(a).
2/12/09 OBSIDIAN FINANCE & KEVIN PADRICK [ http://www.summit1031bkjustice.com/?tag=kevin-padrick ] come to Bend to give us the Presentation instructed by the Judge at the 2/11/09 HEARING. The presentation was supposed to start at 10AM. This is when I set up the camera. Ryan Norwood [ http://www.summit1031bkjustice.com/?tag=ryan-norwood ] and Ewan Rose [ http://www.summit1031bkjustice.com/?tag=ewan-rose ] were in another room.
2/12/09 KEVIN PADRICK [ http://www.summit1031bkjustice.com/?tag=kevin-padrick ] was tardy bay about 40 minutes. He was having trouble landing his plane. You all know how that goes. So a lot went on in this 40 MINUTES. It is like a picture of time. WHAT HAPPENS AT THE 02/11/09 HEARING DOES NOT MATCH WHAT HAPPENS AT THE 2/12/09 OBSIDIAN FINANCE PRESENTATIONS. [ http://www.summit1031bkjustice.com/?page_id=254 ]
2/12/09 WE LET THE US TRUSTEE'S OFFICE KNOW OUR CONCERNS. [ http://www.studeycpa.com/pdf/EmailUSTrustee.pdf ] Terry Vance puts his name in the hat. US Trustee chooses KEVIN PADRICK [ http://www.summit1031bkjustice.com/?tag=kevin-padrick ] as trustee because an entity cannot be a trustee.
Result - Kevin Padrick got himself appointed trustee where he personally gets paid:
1) 3% on the assets (including $15 million of cash already sitting there- that's a cool half million up front),
2) 15% on the on all liquidated assets, proceeds from bonds, and proceeds from actions against third parties.
3) 10% success fee for recovery of assets in excess of principal claims of $13 million. He also can choose to share a part of the success fee with his own attorney, Tonkin Torp.
4) His charge rate at $600/hour for all time spent being the trustee of the Summit Accommodators Liquidating Trust, and
5) His charge rate $600 and the charge rate of all other profesisonal services (including those from Obsidian) to pursue all third party claims, assets of principals and third party claims against financial institutions. Oh yes, that is right Kevin Padrick is not ACCOUNTABLE to anyone.
6) The agreement allows Kevin Padrick to pay his attorneys', Tonkon Torp, hourly rates at $600/hour.
PADRICK BLOWS OFF REAL PROPERTY OFFERS PRIOR TO THE PLAN CONFIRMATION BECAUSE HE DOESN'T GET THE BONUS PAY (15% AND 10%). [ http://www.summit1031bkjustice.com/?page_id=674 ]
Once plan is confirmed, Padrick sort of works at selling properties. More wastes time with lawsuits where he is accussing everyone of aiding and abetting. What does UMPQUA SAY ABOUT THIS?
I have to find out fees but I think they are around $5 Million at this time. A year later and the situation has exploded from $13 Million in Claims to $40 Million in Claims.
Creditors get change on the dollar of what they would have got if they Reorganization was handled with the Highest Fiduciary Duty.

6:39 AM