Federal Deposit Insurance Corporation v. Phoenix Casa Del Sol, L.L.C.
2:09-cv-02556
D. Ariz.Mar 3, 2011Background
- Appointing orders: state court appointed Resolute Commercial Services, LLC as receiver for a 72-unit Phoenix apartment complex, later FDIC appointed as receiver of the bank under FIRREA.
- Property disposition: the Casa Del Sol property was sold by Trustee’s Sale on December 17, 2009 for $920,000.
- Motion era: May 24, 2010, Receiver moved to terminate receivership, exonerate bond, disburse funds, and approve final accounting; FDIC opposed only on form and timing of payment for expenses.
- Hearing process: December 2010 hearing(s) deferred several issues; the form/date of FDIC payment remained unresolved, with FDIC not providing a final decision by the Court’s deadline.
- Court ruling context: the dispute centers on payment form (cash vs receiver’s certificates) and priority of repayment under FIRREA; the Court ultimately rules on payment form/timing and priority while granting the termination and accounting approval.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Form and timing of payment for pre-FDIC expenses | Receiver seeks cash payment for pre-FDIC expenses | FDIC may use receiver’s certificates; form/date not subject to court dictate | FDIC may pay with receiver’s certificates; payment must be made promptly but form controlled by FIRREA |
| Priority of FDIC-received payments as administrative expenses | Expenses should be administrative expenses with high priority | Priority governed by FIRREA; avoid unsecured creditor issues | Receiver’s expenses (pre- and post-FDIC) are administrative expenses and receive high priority under 1821(d)(11) |
| Authority to set a payment date | Court should set a definite date for payment | Court lacks authority to fix cash payment date | Court cannot fix cash-date but requires payment forthwith; priority determined as above |
| Termination of receivership and final accounting | Motion should terminate receivership and approve accounting | Arguments contested; continue proceedings | Order terminating receivership, approving final accounting, and exonerating bond subject to payment conditions |
| Delivery of records and bond exoneration | Deliver records and exonerate bond upon conditions satisfied | Record transfer and bond status depend on final order | Records to be delivered within about 15 days; bond exonerated; action to be closed |
Key Cases Cited
- Battista v. FDIC, 195 F.3d 1113 (9th Cir. 1999) (FDIC payment by receiver's certificates; pro rata distribution concerns)