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Sale 2010

Bankruptcy 363 Sale Auction

185-Unit Bulk Condo Package - Catherine Courts Condominiums

Condo Deconversion Opportunity

Chicago, IL (O'Hare Neighborhood)

Qualifying Bid Deadline: November 13, 2020

Bid Procedures

Pursuant to the Order (A) Establishing Bid Procedures in Connection With Sale of Certain Real Property of the Debtor, (B) Approving the Form And Manner Of Notices, (C) Setting a Final Hearing, and (D) Granting Related Relief, the following bid procedures (the “Bid Procedures”) shall govern the sale of the condominium units (each, a “Condo Unit” and collectively, the “Condo Units”) owned by Catherine Courts Condominium, LLC (the “Debtor”):

  1. Assets to be Sold. The Condo Units are comprised of 185 condominium units1 in the Catherine Courts Condominium complex (“Complex”) in Chicago, Illinois. In addition, the Debtor, through its broker, will be collecting contracts (“Additional Contracts”) for the sale of additional units (“Additional Condo Units”) within the Complex (the “Additional Units”) from unit owners other than the Debtor that are willing to sell their units via these Bid Procedures. The Additional Contracts obtained will be periodically uploaded into the data room (“Data Room”) to be maintained by the Debtor’s broker, NRC Realty & Capital Advisors, LLC (“NRC”), and the Additional Units will be offered for sale (upon the prices and terms reflected in the Additional Contracts) alongside the Condo Units.

    1Upon further review, the Debtor has determined that while there are 185 units included in the Sale, there are only 181 property index numbers and deeds to be transferred as a result of certain units being combined to form larger units.
  2. Structure of Bids. The Condo Units will be offered for sale as a package. Bidders (as defined herein) may only submit Bids (as defined herein) for all of the Condo Units in total.

    Bidders will also be allowed to (a) select which of the Additional Units, if any, they would like to immediately acquire pursuant to prices and terms of the corresponding Additional Contracts and (b) submit counter-offers for any Additional Units that the Potential Bidder (as defined below) would like to acquire, but on different terms than in the corresponding Additional Contracts.
  3. Timing and Location of Auction. The Auction shall be conducted on or about November 20, 2020 (the “Auction Date”) at 10:00 a.m. The Auction will be held either (a) at the offices of Goldstein & McClintock LLLP, 111 W. Washington Street, Suite 1221, Chicago, Illinois 60602 or (b) remotely (in which case NRC will provide instructions to Qualified Bidders as provided for below). In the event of a change in time, place, or nature (such as to a remote electronic Auction) of the Auction (which the Debtor shall have discretion to delay in its reasonable business judgment, the Debtor shall use its reasonable best efforts to notify all Qualified Bidders (as defined below) who have timely submitted Qualified Bids (as defined below) at least 24 hours prior to the Auction.
  4. Amount of Initial Bid. Any bid must comply with the Minimum Bid (as defined below) requirements. Moreover, prior to the Bid Deadline, the Debtor shall have the discretion to designate any Bid as the Stalking Horse Bid (as defined below) with respect to the Condo Units (in which case the Debtor shall file with the Court revised bid procedures and serve such procedures on all secured creditors, the top twenty unsecured creditors of Debtor (as identified in Debtor’s petition), all parties who have expressed interest in the Condo Units, and the United States Trustee, and may grant such stalking horse bidder some or all of the protections discussed below. If a Stalking Horse Bidder (as defined below) is selected, this may increase the Minimum Bid Amount.
  5. Required Submissions for Bid. In order to participate in the bidding process, each person (each, a “Potential Bidder”) must deliver to the Debtor’s counsel and broker NRC (via overnight mail to Amrit Kapai, Goldstein & McClintock LLLP, 111 West Washington Street, Suite 1221, Chicago, Illinois 60602 and David Levy, NRC Realty & Capital Advisors, 445 W. Erie, Suite 210, Chicago, Illinois 60654 or via electronic mail to amritk@goldmclaw.com and david.levy@nrc.com) the following (collectively, the “Required Bid Items”), on or before the Bid Deadline:
    1. an executed purchase agreement (a “Purchase Agreement”) for the Condo Units being bid upon substantially in the form attached hereto as Exhibit A (a Word version of which is included in the Data Room) that offers an amount equal to or greater than the Minimum Bid Amount for the Condo Units;
    2. an executed form (the “Additional Condo Form”), in the form to be provided by NRC (including in the Data Room) that identifies (i) in Exhibit A which Additional Units the Potential Bidder is willing to acquire pursuant to prices and terms of the corresponding Additional Contracts and (ii) in Exhibit B which Additional Units the Potential Bidder would like to acquire, but on different terms than in the corresponding Additional Contracts, and for each such Additional Unit, identifying the specific changes requested by the Potential Bidder.
    3. a deposit of 2.5% of the Bid amount for the Condo Units and the Additional Condo Units identified in Exhibit A to the Additional Condo Form (the “Initial Escrow Deposit”), in the form of a certified check or otherwise immediately available funds payable to NRC Realty & Capital Advisors, LLC to be submitted along with the Purchase Agreement and held in escrow. The Initial Escrow Deposit from the Successful Bidder (as defined herein) shall be applied to the Purchase Price (as defined herein);
    4. an executed nondisclosure agreement (the “NDA”) in a form to be provided by NRC unless previously provided;
    5. written evidence satisfactory to the Debtor of the Potential Bidder’s chief executive officer or other appropriate senior executive’s approval of the contemplated acquisition of the Condo Units and, if applicable, Additional Condo Units;
    6. financial statements showing that the Potential Bidder has ample and present ability to close on the Condo Units and Additional Condo Units identified in Exhibit A to the Additional Condo Form; and
    7. a signed statement, in the form to be provided by NRC, including via the Data Room: (i) acknowledging the prohibition against collusive bidding and (ii) acknowledging that the Potential Bidder’s failure to close on one or more of the Additional Units will not change or otherwise impact its bid for the Condo Units (since the Debtor is not the transferor of the Additional Condo Units).
  6. Impact of Bid Submission. A “Bid” is a Purchase Agreement from a Potential Bidder stating that:
    1. the Potential Bidder offers to purchase the Condo Units upon the same or better terms and conditions than those set forth in the Purchase Agreement submitted by the Stalking Horse Bidder, if any, with the Potential Bidder’s Purchase Agreement marked to show any and all amendments and modifications from the Purchase Agreement submitted by the Stalking Horse Bidder, if any, including, but not limited to, purchase price (the “Purchase Price”) and contact information of the purchaser;
    2. the Potential Bidder is willing to purchase (i) the Condo Units for a price at or greater than the applicable Minimum Bid for the Condo Units and (ii) the Additional Condo Units identified in Exhibit A to the Additional Condo Form upon the terms of the corresponding Additional Contracts;
    3. the Potential Bidder is prepared to enter into and consummate the transaction by the Closing Date;
    4. the Potential Bidder is not entitled to a break-up fee or expense reimbursement; and
    5. the offer is irrevocable until the Auction has taken place and the Potential Bidder is not approved as the Successful Bidder (as defined below) or Back-up Bidder (as defined below); whether due to the Potential Bidder being not selected by the Debtor, the Potential Bidder not being approved by the Court, or for any other reason whatsoever; in which case the Initial Escrow Deposit will be refunded unless forfeited as a result of a breach.
  7. Deadline for Qualifying Bid Submissions. Bids shall be due on or before November 13, 2020 at 4:00 p.m. CT. In the event that the Debtor, in consultation with counsel to the Catherine Courts Condominium Association of Chicago (the "Association") and counsel to Parkway Bank & Trust Co. ("Parkway), has chosen a Stalking Horse Bidder, if the Debtor does not receive any Qualified Bids other than such Stalking Horse Bid by the Bid Deadline, the Debtor will report the same to the Court, through the filing of a notice, and the party submitting such Stalking Horse Bid shall be deemed the Successful Bidder without holding the Auction.
  8. Determination of Qualified Bids. For a Bid to be deemed a “Qualified Bid,” it must comply with the requirements of and be accompanied by the additional information set forth in Paragraphs 4 and 5 above, as determined in the discretion of the Debtor (the Debtor also reserves the right to waive any and all such requirements and to deem a Bid to be a Qualified Bid in the absence of some or all such requirements, except that the amount of the Minimum Bid, as defined herein, may not be changed). A “Qualified Bidder” is a Potential Bidder that submits a Qualified Bid and, in the Debtor’s reasonable discretion, is determined to demonstrate the financial capability to consummate the purchase of the Condo Units and any Additional Condo Units that are the subject of its Qualified Bid.
  9. Impact of Bid Rejection. If the Debtor determines that a Potential Bidder is not a Qualified Bidder, the Debtor shall return the Initial Escrow Deposit to the Potential Bidder promptly upon such determination. At the Auction, only Qualified Bidders who have submitted Qualified Bids shall be ensured of being able to bid on the Condo Units.
  10. Credit Bid. Parkway Bank waives the right to credit bid in light of the Minimum Bid requirement below.
  11. Minimum Bid. The Debtor will not accept any Bid or Bids for all of the Condo Units of less than $15,000,000 (the “Minimum Bid”)
  12. Procedures for the Auction. The Auction shall be conducted in accordance with commercially reasonable procedures to be established by counsel to the Debtor and NRC. The minimum bid increment shall be $25,000 with additional bids to be submitted in increments of $25,000 each.
  13. Right to Select Back-Up Bidder(s). At the conclusion of the Auction, the Debtor may designate a “Back-Up Bidder” or multiple Back-Up Bidders if necessary, provided that the Back-Up Bidder(s) is/are willing to purchase the Condo Units for at least the Minimum Bid. If, for any reason, the party that submits a Successful Bid fails to consummate the purchase of the Condo Units:
    1. the Back-Up Bidder(s) shall be deemed to have submitted the highest and best bid for the Condo Units, and shall be deemed the Successful Bid, and any party submitting such bid, the Successful Bidder; and
    2. the Debtor shall be authorized to effectuate the sale of the Condo Units to the Back-Up Bidder(s) as soon as is commercially reasonable without further order of the Court (and the Back-Up Bidder shall have the right to close on the sale of all Additional Units included in its Bid). The Back-Up Bidder(s)’s deposit shall be held in escrow until the closing of the transaction with the Successful Bidder.
  14. Determination of Successful Bid. Upon completion of the Auction, the Debtor, in its sole discretion, but in consultation with counsel to the Association and counsel to Parkway, shall select the Bid that will maximize the value of the Condo Units and is in the best interest of the Debtor, its bankruptcy estate, and its creditors (the “Successful Bid)”) provided that the Successful Bid conform to these Bid Procedures. A hearing to approve the Successful Bid shall be held by the Court on December 7, 2020. Upon entry of an order by the Court approving the sale (the “Final Sale Order”), the Debtor shall be authorized, without further order of the Court, to take all steps needed to close the transaction and effectuate a sale to the party who submitted the Successful Bid (or to a Back-Up Bidder or Bidders, if necessary) in conformity with these Bid Procedures. The Final Sale Order will also provide that any sale contemplated herein shall be free and clear of liens, claims, and encumbrances pursuant to section 363(f) and (k) and/or 1123 of the Bankruptcy Code. The Initial Escrow Deposit for the Qualified Bidder who submitted the Successful Bid shall be non-refundable until such Successful Bidder closes on the Condo Units and, if applicable, Additional Condo Units that were included in its Bid. If any party submitting a Successful Bid fails to close the sale, such party’s Initial Escrow Deposit shall be retained by the Debtor on account of damages suffered by them as a result of such failure to close, without prejudice to the Debtor’s ability to seek additional damages from such party. Within two (2) business days of Court approval of the Successful Bid, the Successful Bidder will be required to increase its deposit to five (5%) percent of the Purchase Price for the Condo Units and Additional Units, if any.
  15. Stalking Horse Bid Protections. In the event that a Stalking Horse Bidder is chosen, the Debtor, in its reasonable business judgment and in consultation with NRC, shall have the right to grant to the party submitting the Stalking Horse Bid (the “Stalking Horse Bidder,” and the bid submitted by such party, the “Stalking Horse Bid”) the following protections:
    1. The right to receive a break-up fee in an amount no higher than 1.5% of the Stalking Horse Bid (the “Break Up Fee”) in the event that (a) the Stalking Horse Bidder is not selected by the Debtor as the Successful Bidder and (b) the Sale of the Condo Units to the Successful Bidder closes. The Break up Fee will be payable to the Stalking Horse Bidder at Closing. Except for the foregoing, no event or occurrence shall entitle the Stalking Horse Bidder to the Break up Fee. For the avoidance of doubt, if the Break up Fee becomes due pursuant to the terms of this Agreement and the Confirmation Order, such fees and expenses shall be paid only once. Further for the avoidance of doubt, notwithstanding anything to the contrary herein, the Break up Fee shall not become due, nor shall it be payable by the Debtor or any other party, unless the payment of the Break up Fee is expressly required hereunder.
    2. To the extent a Break up Fee becomes due, the Break up Fee shall be entitled to administrative expense treatment in the Chapter 11 Case. Upon receispt of the Break up Fee, the Stalking Horse Bidder shall make no other claims for expense reimbursement from the Debtor. The Break up Fee and other protections described hereunder and in the Bid Procedures shall be referred to herein as the “Bid Protections.”
  16. Negotiating Additional Contracts. The highest Qualified Bidder, including the Stalking Horse Bidder, shall be afforded until the Auction to negotiate terms with the owners of the Additional Condo Units which the Stalking Horse Bidder or highest Qualified Bidder would like to acquire, as indicated in Exhibit B: Additional Contracts of the Additional Condo Form. Prior to the Auction, the Stalking Horse Bidder or highest Qualified Bidder must provide an updated version of the Additional Condo Form with updated Exhibits A and B, if an agreement on terms has been reached on any Additional Contracts. Copies of all Additional Contracts must be provided to the Debtor.
  17. Closing of Sale. Closing of the sale of the Condo Units to the Successful Bidder shall occur no later than December 30, 2020 (the “Closing Date”). The Closing Date may be extended by either written agreement of the Debtor or order of the Court upon cause shown.
  18. As-Is Where-Is Sale. Except as stated above and as set forth in the related Purchase Agreement, the Condo Units are being sold on an “AS IS, WHERE IS, WITH ALL FAULTS,” basis. Neither Debtor, NRC nor any of their representatives make any warranty or representation, express or implied, or arising by operation of law, including, without limitation, any warranty of condition, habitability, or merchantability or fitness for a particular purpose, with respect to the Condo Units. The Successful Bidder will purchase the Condo Units based solely on its own investigations. Potential Bidders acknowledge that they have conducted any investigations that they have considered necessary or advisable and that they are not relying upon any representations whatsoever. No warranty or representation, express or implied, is made by Debtor, NRC, or any of their representatives, as to the accuracy or completeness of the information provided to bidders.
  19. Buyer’s Premium. The Successful Bidder shall pay, in addition to the Purchase Price, a Buyer’s Premium equal to 2.5% of the Purchase Price for the Condo Units and the Additional Condo Units, if any at closing.
  20. Cooperating Broker Commission. Should the Successful Bidder be represented by a cooperating broker (“Co-broker”), the Debtor will pay the Co-broker a commission equal to 1% of the amount of the Successful Bid for the Condo Units, provided that the Co-broker has properly registered the Successful Bidder with NRC in writing at least three (3) days prior to the date of the Qualifying Bid Submission deadline.
  21. Additional Condo Units Owner Incentive. Should the Condo Units sell for a gross purchase price of $19,000,000 or greater, before inclusion of the Buyer’s Premium (the “Excess Purchase Price”), the Debtor agrees to pay the Additional Condo Unit owners who close escrow on the sale of their Additional Units to the buyer of the Condo Units through the bankruptcy proceedings, a prorata share of 50% of the Excess Purchase Price as determined by the gross purchase prices of all of the Additional Units.