In re Spokane Country Club

John A. Rossmeissl Bankruptcy Judge

Chapter 11

FINDINGS OF FACT AND CONCLUSIONS OF LAW RE: CONFIRMATION OF LIQUIDATING PLAN OF REORGANIZATION

This matter came on for hearing upon the Liquidating Plan Of Reorganization that was filed by the Spokane Country Club ("SCC") on June 9, 2016. The Court considered the comments of counsel, and the records and files herein, including the following:

¦ Order Authorizing Rejection Of Executory Contracts regarding Valley Empire Collection [Dkt. No. 229];
¦ Order: (1) Authorizing Sale Of Assets To The Kalispel Tribe Of Indians Free And Clear Of Liens, Claims, Encumbrances, And Other Interests Pursuant To 11 U.S.C. § 363; (2) Authorizing Compromise Of Claims

And Approving Settlement Agreement; And (3) Shortening Time For Notice [Dkt. No. 1134];
¦ Order Authorizing Rejection Of Executory Contracts And Unexpired Leases And Shortening Time [Dkt. No. 1143];
¦ Order Granting Partial Relief From Order: (1) Authorizing Sale Of Assets To The Kalispel Tribe Of Indians Free And Clear Of Liens, Claims, Encumbrances, And Other Interests Pursuant To 11 U.S.C. § 363; (2) Authorizing Compromise Of Claims And Approving Settlement Agreement; And (3) Shortening Time For Notice [Dkt. No. 1186];
¦ Report On Sale Of Assets To The Kalispel Tribe Of Indians, And The Compromise Of Claims With Drusilla Hieber, Laura Skaer, Nancy Van Noy, And Tracy Christensen n/k/a Tracy Villanueva [Dkt. No. 1206];
¦ Supplemental Report On Sale Of Assets To The Kalispel Tribe Of Indians, And The Compromise Of Claims With Drusilla Hieber, Laura Skaer, Nancy Van Noy, And Tracy Christensen n/k/a Tracy Villanueva [Dkt. No. 1239];
¦ Disclosure Statement Re: Liquidating Plan Of Reorganization [Dkt. No. 1326] (the "Disclosure Statement");
¦ Liquidating Plan Of Reorganization [Dkt. No. 1327] (the "Plan");
¦ Notice Of Filing Of Written Disclosure Statement And Proposed Liquidating Plan Of Reorganization [Dkt. No. 1331];
¦ Supplement To Disclosure Statement Re: Liquidating Plan Of Reorganization [Dkt. No. 1348];
¦ Notice Of Hearing Re: Approval Of Disclosure Statement Re: Liquidating Plan Of Reorganization [Dkt. No. 1350];
¦ Declaration Of Service [Via First Class U.S. Mail] regarding Notice of Hearing [Dkt. No. 1351];

¦ Order Approving Disclosure Statement Re: Liquidating Plan Of Reorganization And Setting Confirmation Hearing [Dkt. No. 1356] (the "Order Approving Disclosure Statement");
¦ List Classifying Claims And Interests Pursuant To Disclosure Statement Re: Liquidating Plan Of Reorganization And Liquidating Plan Of Reorganization [Dkt No. 1357];
¦ Notice Of Approval Of Disclosure Statement Re: Liquidating Plan Of Reorganization, And Matters Relating To Confirmation [Dkt. No. 1358];
¦ Declaration Of Service [Via First Class U.S. Mail] regarding balloting materials [Dkt. No. 1359];
¦ Report Of Balloting and Ballot Summary [Dkt. Nos. 1515 and 1515-1];
¦ Declaration Of Mitch Blumenthal In Support Of Confirmation Of Liquidating Plan Of Reorganization [Dkt. No. 1522] (the "Declaration of Blumenthal"); and
¦ Memorandum In Support Of Confirmation Of Liquidating Plan Of Reorganization [Dkt. No. 1523];

Based on the foregoing, the Court enters the following FINDINGS OF FACT:

1. SCC filed a Disclosure Statement and Plan on June 9, 2016.

2. On August 4, 2016, following appropriate motion and notice, the Court entered the Order Approving Disclosure Statement.

3. SCC transmitted the Order Approving Disclosure Statement, the Disclosure Statement, the Supplement To Disclosure Statement Re: Liquidating Plan Of Reorganization, the Plan, and related materials to the Master Mailing List on August 5, 2016.

4. Similar claims are classified appropriately in each class. The Plan provides the same treatment for each claim or interest within a particular class.

5. SCC did not solicit acceptances or rejections of the Plan except as authorized by the Order Approving Disclosure Statement.

6. The Plan provides for payment of the balance of any allowed priority claims, allowed outstanding priority non-tax claims, and general unsecured claims to be paid in full within two (2) weeks of the Effective Date of the Plan. All remaining funds will be paid to equity security interest holders within the reasonable discretion of the Reorganized SCC, but not later than twenty-four (24) months after the Effective Date of the Plan.

If the Order confirming the Plan is not appealed, and no motion for reconsideration or similar relief is pending, the Effective Date will be the fifteenth day after the Confirmation Date. If the Order is appealed, or a motion for reconsideration or similar relief is pending, the Effective Date will be fifteen (15) days after the Order becomes a Final Order. --------

7. The Plan has been proposed in good faith and not by any means forbidden by law.

8. The compensation of Davidson Backman Medeiros PLLC and Anastasi, Moore & Martin, PLLC for services rendered through the confirmation date will be subject to Court approval after notice and hearing. Davidson Backman Medeiros PLLC and Anastasi, Moore & Martin, PLLC will be employed after confirmation at their normal and usual hourly rates, plus reimbursement for expenses.

9. The Plan provides for no rate changes after confirmation of the Plan with any governmental regulatory commission with jurisdiction over the rates of SCC.

10. Classes 2 and 3 are impaired. One hundred percent (100%) of the general unsecured creditors (Class 2) that voted accepted the Plan. Of the equity security interest holders (Class 3) that voted, ninety-nine point two percent (99.20%) by number accepted the Plan.

11. As evidenced by the Declaration of Blumenthal and the Liquidation Analysis attached to the Disclosure Statement, creditors will receive a greater distribution under the Plan than creditors would receive if the assets of SCC were liquidated by a Chapter 7 Trustee or by any other means.

12. The Plan provides for the liquidation of the assets of the bankruptcy estate of SCC and the distribution of funds to the holders of allowed claims in accordance with their statutory priority. There will be no need for further financial reorganization.

13. The Plan provides for payment of administrative claims upon allowance by the Court.

14. The Plan provides for payment of all U.S. Trustee fees when due, through the closing of the case.

15. All SCC contributions to employee benefit plans have been paid. The SCC 401k Plan has been terminated. SCC has no remaining retiree benefits.

16. The Plan provides that, on and after the Effective Date, all entities who have held, currently hold, or may hold a debt, claim, or interest against SCC, the bankruptcy estate, SCC's existing or former trustees, officers, employees, or agents, the Reorganized SCC, the Reorganized SCC's trustees, officers, employees, or agents, or their respective property based on any act or omission, transaction, or other activity of any kind or nature that occurred prior to the Effective Date, or otherwise arose or accrued prior to the Effective Date, or that is otherwise discharged pursuant to the Plan, will be permanently enjoined from taking any of the following actions: (a) commencing or continuing in any manner any action or proceeding against SCC, SCC's existing or former trustees, officers, employees, or agents, the Reorganized SCC, the Reorganized SCC's trustees, officers, employees, or agents, or their respective property; (b) enforcing, attaching, collecting, or recovering in any manner any judgment, award, decree, or order against SCC, SCC's existing or former trustees, officers, employees, or agents, the Reorganized SCC, the Reorganized SCC's trustees, officers, employees, or agents, or their respective property; (c) creating, perfecting, or enforcing any legal encumbrance against SCC, SCC's existing or former trustees, officers, employees, or agents, the Reorganized SCC, the Reorganized SCC's trustees, officers, employees, or agents, or their respective property; and (d) commencing or continuing any action, in any manner, in any place that does not comply with or is inconsistent with the provisions of the Plan, the Confirmation Order, or the discharge provisions of Code § 1141. The Plan further provides that any entity injured by any willful violation of such permanent injunction will recover actual damages, including, without limitation, costs and attorney's fees, and, in appropriate circumstances, recover punitive damages.

17. The Plan provides that, pursuant to RCW 24.06.035, captioned Nonprofit status - Member's officers' immunity from liability, as set forth at RCW 24.06.035(1), each existing and former trustee and officer of SCC will have the same immunity from liability as is granted in RCW 4.24.264, which states:

(1) Except as provided in subsection (2) of this section, a member of the board of directors or an officer of any nonprofit corporation is not individually liable for any discretionary decision or failure to make a discretionary decision within his or her official capacity as director or officer unless the decision or failure to decide constitutes gross negligence.
(2) Nothing in this section shall limit or modify in any manner the duties or liabilities of a director or officer of a corporation to the corporation or the corporation's members.

18. The Plan provides that, as authorized by RCW 24.06.035(2), no existing and former trustee and officer of SCC will be individually liable to SCC or its shareholders or members in their capacity as shareholders or members for conduct within his or her official capacity as a director or officer after July 22, 2001, except for acts or omissions that involve intentional misconduct or a knowing violation of the law, or that involve a transaction from which the director or officer will personally receive a benefit in money, property, or services to which the director or officer is not legally entitled.

19. The Plan provides that SCC, the Reorganized SCC, and their respective present or former officers, directors, employees, members, agents, representatives, shareholders, attorneys, accountants, financial advisors, vendors, consultants, experts, or professionals of the foregoing reserve all rights, before or after the Effective Date, to seek exculpation and release from any claims (including, without limitation, any claims whether known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity, or otherwise) for any past or future actions taken or omitted under or in connection with, related to, effecting, or arising out of this bankruptcy case including, without limitation, the formulation, negotiation, documentation, preparation, dissemination, implementation, administration, confirmation, or consummation of the Plan and Disclosure Statement; except only for actions or omissions to the extent determined by a court of competent jurisdiction (in a Final Order) to be by reason of such party's gross negligence, willful misconduct, or fraud, and in all respects such party will be entitled to rely upon the advice of counsel with respect to his or her duties and responsibilities under the Plan, including the right to assert that any act or omission taken with the approval of the Bankruptcy Court will be conclusively deemed not to constitute gross negligence, willful misconduct, or fraud unless the approval of the Bankruptcy Court was obtained by fraud or misrepresentation.

20. The Plan provides that, on the Effective Date, all matters provided for under the Plan that would otherwise require approval of the trustees, officers, or members of SCC or the Reorganized SCC, including, without limitation, the implementation and performance of the Plan, including the filing of Articles of Dissolution, may occur without any further action by the trustees, officers, or members of SCC.

21. No objections to confirmation of the Plan were filed.

Based on the foregoing FINDINGS OF FACT, the Court enters the following CONCLUSIONS OF LAW:

1. The Plan has been accepted in writing by the creditors and equity security holders whose acceptance is required by law.

2. The provisions of Chapter 11 have been complied with; the Plan has been proposed in good faith and not by means forbidden by law.

3. Each holder of a claim or interest has accepted the Plan or will receive or retain under the Plan, property of a value, as of the Effective Date of the Plan, that is not less than the amount that such holder would receive or retain if SCC was liquidated under Chapter 7 of the Code on such date, the Plan does not discriminate unfairly, and is fair and equitable with respect to each class of claims or interests that are impaired under the Plan.

4. All payments made or promised by SCC by a person issuing securities or acquiring property under the Plan or by any other person for services or for costs and expenses in, or in connection with, the Plan and incident to the case, have been fully disclosed to the Court and are reasonable or, if to be fixed after confirmation of the Plan, will be subject to approval of the Court.

5. The identity, qualifications, and affiliations of the persons who are to be directors or officers, if any, of SCC and the Reorganized SCC after confirmation of the Plan have been fully disclosed, and the appointment of such persons to such offices or the continued appointment of such persons to such offices, or their continuance therein, is equitable and consistent with the interests of the creditors and equity security holders and with public policy.

6. The identity of any insider that will be employed or retained by SCC and the Reorganized SCC and their compensation has been fully disclosed.

7. Confirmation of the Plan is not likely to be followed by the need for further financial reorganization of SCC.

8. The Plan shall be substantially consummated pursuant to 11 U.S.C. § 1101(2) upon commencement of distributions under the Plan, upon full payment of all administrative expenses, and upon the conclusion of all contested matters.

injured by any willful violation of such permanent injunction should recover actual damages, including, without limitation, costs and attorney's fees, and, in appropriate circumstances, recover punitive damages.

10. Pursuant to RCW 24.06.035, captioned Nonprofit status - Member's officers' immunity from liability, as set forth at RCW 24.06.035(1), each existing and/or former trustee and officer of SCC should have the same immunity from liability as is granted in RCW 4.24.264, which states:

(1) Except as provided in subsection (2) of this section, a member of the board of directors or an officer of any nonprofit corporation is not individually liable for any discretionary decision or failure to make a discretionary decision within his or her official capacity as director or officer unless the decision or failure to decide constitutes gross negligence.
(2) Nothing in this section shall limit or modify in any manner the duties or liabilities of a director or officer of a corporation to the corporation or the corporation's members.

11. As authorized by RCW 24.06.035(2), no existing and/or former trustee and officer of SCC should be individually liable to SCC or its shareholders or members in their capacity as shareholders or members for conduct within his or her official capacity as a director or officer after July 22, 2001, except for acts or omissions that involve intentional misconduct or a knowing violation of the law, or that involve a transaction from which the director or officer will personally receive a benefit in money, property, or services to which the director or officer is not legally entitled.

12. SCC, the Reorganized SCC, and their respective present or former officers, directors, employees, members, agents, representatives, shareholders, attorneys, accountants, financial advisors, vendors, consultants, experts, or professionals of the foregoing should reserve all rights, before or after the Effective Date, to seek exculpation and release from any claims (including, without limitation, any claims whether known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity, or otherwise) for any past or future actions taken or omitted under or in connection with, related to, effecting, or arising out of this bankruptcy case including, without limitation, the formulation, negotiation, documentation, preparation, dissemination, implementation, administration, confirmation, or consummation of the Plan and Disclosure Statement; except only for actions or omissions to the extent determined by a court of competent jurisdiction (in a Final Order) to be by reason of such party's gross negligence, willful misconduct, or fraud, and in all respects such party should be entitled to rely upon the advice of counsel with respect to his or her duties and responsibilities under the Plan, including the right to assert that any act or omission taken with the approval of the Bankruptcy Court will be conclusively deemed not to constitute gross negligence, willful misconduct, or fraud unless the approval of the Bankruptcy Court was obtained by fraud or misrepresentation.

13. On the Effective Date, all matters provided for under the Plan that would otherwise require approval of the trustees, officers, or members of SCC or the Reorganized SCC, including, without limitation, the implementation and performance of the Plan, including the filing of Articles of Dissolution, should occur without any further action by the trustees, officers, or members of SCC.

So Ordered. Dated: September 20th, 2016

/s/ _________

John A. Rossmeissl

Bankruptcy Judge

/// End of Order ///

Presented by: DAVIDSON BACKMAN MEDEIROS PLLC /s/ Barry W . Davidson
Barry W. Davidson, WSBA No. 07908
Attorney for the Spokane Country Club
1550 Bank of America Financial Center
601 West Riverside Avenue
Spokane, Washington 99201
Telephone: (509) 624-4600