1985-09 Approving the Negotiated Settlement in the Case of Lion Capital Group.I
KODIAK ISLAND BOROUGH
RESOLUTION NO. 85-9-R
A RESOLUTION OF THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH APPROVING
THE NEGOTIATED SETTLEMENT IN THE CASE OF LION CAPITAL GROUP.
WHEREAS, at 11:00 a.m. on November 9, 1984 a meeting was held of the
Official Committee of School District and Municipal Creditors as well as all
members of its constituency (collectively the "Committee") in In re Lion
Capital Group, et al. 84-B-10668 through 84-B-10672 (HCB), matters pending in
the United States Bankruptcy Court for the Southern District of New York; and
WHEREAS, throughout the course of said meeting, held at the office
of Anderson Russell Kill & Olick, P.C. ("ARKO"), 666 Third Avenue, New York,
New York, Bryce S. Weeks, Finance Director/Treasurer of Kodiak Island Borough,
a member of the Committee was in attendance; and
WHEREAS, at said meeting a resolution was proposed concerning the
compromise and settlement of the combined claims of members of the Committee
in an adversary proceeding entitled Bradford Trust Company v. Lesser, at al.
85-5608A, in which Kodiak Island Borough is named defendant; and
WHEREAS, under the terms of the proposed compromise and settlement,
and pursuant to the calculation of all known existing assets and liabilities
of the Estate of Lion Capital Group, the Committee, plus two additional
parties (collectively called the "Repo Creditors") are likely to receive
pursuant to a Plan of Reorganization, in sum, (1) $17.5 million in cash, and
(2) rights to the first proceeds, if any, of litigations (the "Litigations")
including a litigation concerning certain demand notes issued by limited
partners of Lion Capital Associates and Blackburn Associates, which entities
are general partners of Lion Capital Group, said notes being in the total face
amount of $23,432,000 until 90% of claims are received; and
WHEREAS, under the terms of the proposed compromise and settlement
the projected $17.5 million cash proceeds or so much thereof as the Trustee
can promptly distribute, less (from the Committee's portion) remaining legal
fees and expenses due to ARKO as fixed by Court Order, will be distributed
among the Repo Creditors on a pro rata basis, said basis to be established by
the claim of each Repo Creditor as a proportion of the total claims of all
Repo Creditors against the estate of Lion Capital Group; and
WHEREAS, under the terms of an inter -creditor agreement reached
between and among the Repo Creditors on November 9, 1984 the proceeds of the
Litigations will be distributed among the members of the Committee the same
9
pro rata basis as the $17.5 million until all Repo Creditors have recovered
72% of their claims; thereafter all the next proceeds of the Litigations shall
be distributed pro rata to those Repo Creditors who would have been in a
position to benefit if the preference claims asserted by the Trustee in his
Amended Answer, Counterclaim and Crossclaims had proceeded until such Repo
Creditors had recovered 77% of their claims, at which time distributions would
return to a pro rata distribution among all Repo Creditors; and
WHEREAS, action is required to authorize our participation in and
approval of the compromise and settlement as summarized hereinabove; and
WHEREAS, adoption of this resolution has been this date formally
moved, seconded, voted upon by us and approved, it is hereby
RESOLVED, that the Assembly of the Kodiak Island Borough does hereby
adopt and approve the terms of the foregoing compromise and settlement; and it
is further
RESOLVED, that Bryce S. Weeks, Finance Director/Treasurer is hereby
authorized and directed, as our representative and agent, to vote, acknowledge
or execute documents and instruments, and otherwise do all things necessary,
convenient or proper in our name and on our behalf as is necessary to
effectuate our participation in the aforesaid compromise and settlement.
Adopted this 7th day of February, 1985.
ATTEST:
By_ ,
Boy6dgh Clerk
Drafted by:
KOD]L�
ND BOROUGH /
BYs- -i' 2
Borough Mayor, Deputy
Russell, Kill & Olick, At
Recommended by: Finance Director
Resolution 85-9-R
Page 2
of New York