plan. The sale was to close on May 28, 2003, in conjunction with the scheduled confirmation hearing on the debtor’s plan. At the confirmation hearing, counsel for Resort advised the parties that his client could not go through with the purchase. Wright also attended this hearing on behalf of Resort. Wright addressed the Court at length regarding Resort’s failure to close on the purchase. Because this sale was the sole means of implementing the debtor’s plan, the Court denied confirmation of the plan. More significantly, the debtor’s exclusivity period expired.
In the ensuing months, six different entities filed proposed reorganization plans to acquire the Property,2 leading to difficult procedural issues regarding soliciting votes for so many competing plans. One plan proponent was Perdido Key Realty, LLC. This was a limited liability company created by a company known as Strategica as a vehicle to
acquire the property.
Wright had contacted Strategica about
purchasing the Property. Strategica also promised him
For Wright’s efforts, an equity interest in the
purchasing 20, 2003,
entity, Perdido Key Realty. On the Court conducted a hearing
August to sort
through the any, would
plans and determine sent to creditors for
which plan, if consideration.
Attorney Realty at
Nick Bangos represented Perdido Key this hearing. The Court deferred ruling on
which plan(s) would be sent to scheduled a follow up hearing to occur 2003.
creditors and on August 25,
Wright also attended the hearing on August 20, 2003. At this hearing, Wright first learned that WCI was a potential purchaser of the Property
to the plan submitted by the
debtor’s limited Development
Anthony, in which Wright advised Anthony Confidentiality Agreement with WCI.
Once the debtor’s exclusivity period expired, several
parties in interest filed acquire the Property.
plans in attempts to 18, 2003, Pinnacle
Communities, LLC filed its plan (Doc. No. 23, 2003, Champion filed its plan (Doc. August 8, 2003, Perdido Key Resort
173); on June No. 175); on Development
Company, LLC filed its plan (Doc. No. 2003, Perdido Key Realty, LLC filed
217); on August 8, its plan (Doc. No.
220); on Amended August 8, (Doc. No.
August 8, 2003, the debtor filed its Plan of Reorganization (Doc. No. 222); 2003, Advocate Investments, LLC filed 224).
Second and on its plan
By August 2003, both Thomas and Corelli, the two WCI representatives who had spoken to Wright about the Property, had found new jobs. There was no one then employed by WCI who had any knowledge of the Confidentiality Agreement or Wright’s involvement in the Property. Rather, Champion negotiated with WCI representatives who had never met Wright and had no information
regarding the Property. On sent Anthony a copy
August 22, 2003, Wright of the Confidentiality
Agreement. Key Realty’s
Wright also wrote a letter to attorney, Bangos, enclosing a
Perdido copy of
hearing scheduled for August correspondence, Wright knew
25, 2003. that WCI
management also had actual knowledge of the Confidentiality Agreement.
At the hearing on August 25, 2003, the Court determined that only two plans would be sent to creditors—the plan proposed by Champion, which the debtor later supported and which proposed WCI would purchase the Property, and the plan proposed by Advocate Investments, which contemplated a public auction of the Property.
Champion then joined forces with the debtor’s general partner to file a Third Amended Plan which proposed a cash sale of the Property to WCI for $25 million. Wright had knowledge of the plan and WCI’s purchase offer.
The debtor also was aware of the existence of the Confidentiality Agreement between WCI and Wright well prior to the confirmation hearing. On September 26, 2003, Bangos sent an e-mail message to the debtor’s attorney advising him of Wright’s Confidentiality Agreement with WCI and specifically threatening to file an action for injunctive relief to stop the sale to WCI. Bangos also wrote to Jay Enis, a principal at Strategica, and informed him of Wright’s Confidentiality Agreement and recognized that enforcing the agreement would require “break- neck speed” in the needed litigation. Clearly, Bangos recognized that immediate litigation was needed u n d e r t h e C o n f i d e n t i a l i t y A g r e e m e n t , i n o r d e r t o s t o p However, neither Wright nor the sale to WCI.
Strategica hired Bangos or any other lawyer to pursue this litigation or otherwise to challenge WCI’s purchase of the Property.
On October 9, 2003, the Court held a confirmation hearing to consider the competing