Evergreen Homes Bankruptcy Case Updates
You are invited to attend an open Informational Meeting on the Evergreen Homes Bankruptcy cases on Friday August 8, 2008 at 10:00 A.M. – 12:00 P.M. at
the Radisson Hotel, 20 W. Mill Street, Akron, Ohio 44308.
This is a voluntary informational meeting provided by the Official Committee of Unsecured Creditors. You are welcome to attend, but attendance is not
mandatory and your rights will not be affected if you do or do not attend.
The Official Committee of Unsecured Creditors for Evergreen Homes, LLC Evergreen Builders, LLC; and Evergreen Investment Corporation (the “Committee”) are
made up of unsecured creditors as follows:
Bernard Wolak, Chairman
Gerald Huhn
Daniel Alfrieri
Evelyn Valentine
William Materna
The Committee and its attorney, Michael A. Steel, are in the process of gathering information about Evergreen’s financial affairs. This
information will help in determining the position the Committee takes regarding the viability of Evergreen as an on-going business
operation, its likelihood of being able to effectively reorganize, and whether certain claims exist to recover funds for creditors of
Evergreen. The Committee may also weigh in on other issues such as the treatment of second mortgages, payment of interest, sale of
real property, and other operational type issues that Evergreen may seek Court approval on in the future. Evergreen must seek authority
from the Bankruptcy Court in order to pay certain obligations, sell property, or seek financing. If appropriate, the Committee may
support or oppose these motions brought before the Court. On other matters, the Committee may not take any position.
The Committee represents generally the interests of all unsecured creditors to maximize distribution and benefit to unsecured creditors.
The Committee will make an effort to keep unsecured creditors informed of Evergreen’s efforts to reorganize and pay creditor claims.
The Committee or its attorney can neither represent individual creditors nor provide legal advice to individuals, but will do their best
to answer general questions that are applicable to all unsecured creditors. If you are uncertain as to your legal rights as a creditor,
you are encouraged to seek the advise of an attorney. It will be cost prohibitive to send out notice to all creditors of each action the
Committee takes during the pendency of this bankruptcy case. The Court may send you notice of some matters but not necessarily all
activities in this case. The Committee and its legal counsel will be periodically placing information on this website to advise of
upcoming matters.
Evergreen Homes, LLC (“Evergreen Homes”) was in the business of selling new construction and rehabilitated homes in Summit, Stark and
Cuyahoga counties. Evergreen Builders, LLC (“Evergreen Builders”) principally built the homes sold by Evergreen Homes. Evergreen Investment
Corporation (“Evergreen Investment”) raised money through the issuance of investment certificates that purport to be backed by the assets
of Evergreen Homes. Evergreen Investment holds many second mortgages on properties that were sold by Evergreen Homes.
On April 29, 2007, each of the Evergreen entities filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code.
Each Evergreen entity continues to operate as a “Debtor-in-Possession.” This means that Evergreen will continue to do business, but under
the protection and obligations set forth in the Bankruptcy Code. On September 12, 2007, the bankruptcy court ordered that the respective
bankruptcy cases of the three Evergreen entities will be administered jointly (to see a copy of the court’s September 12, 2007, Order,
click here). This means that rather than the filings of each of the respective bankruptcy cases being
kept separate, the court now requires that they be filed in one single place – under the new jointly-administered case, Bankruptcy Case No.
07-51261.
At the time of Evergreen’s bankruptcy filing, David Willan was the Managing Member of Evergreen Homes and Evergreen Builders, and the
President of Evergreen Investment Corporation. After a review of the available information, however, the Committee and its attorney
determined that new leadership was in the best interests of both the Evergreen entities and their respective unsecured creditors. On
August 10, 2007, the Committee filed a motion in the bankruptcy court for a court order appointing a Chapter 11 trustee to assume control
of the Evergreen entities (to see a copy of the Committee’s motion for the appointment of a trustee, click
here). While the Evergreen entities, under the control of David Willan, objected to Mr. Willan’s
replacement, the United States Trustee filed a brief in support of the Committee’s motion. After some negotiation between Mr. Willan, the
Committee and the U.S. Trustee, the parties agreed upon an arrangement that satisfied the concerns of all. Pursuant to the bankruptcy
court’s September 13, 2007, Agreed Interim Order, Mr. Willan was required to cede his positions and control of the respective Evergreen
entities to a third party (to see a copy of the court’s September 13, 2007, Agreed Interim Order, click
here). The Agreed Interim Order set forth a timeline and procedure by which a third party manager
would be selected to replace Mr. Willan. Pursuant to that procedure, Charles S. Deutchman was selected by the Committee of Unsecured
Creditors and was hired as Chief Operation Officer of Evergreen Homes and Evergreen Builders, and as president of Evergreen Investment
Corporation (to see a copy of the Order Appointing Charles S. Deutchman, Shared Management Resources, as Interim Chief Operating Officer,
click here.) Since his hiring, Mr. Deutchman has ably and responsibly managed the respective Evergreen
entities, and the Committee has confidence that he will continue to effectively lead. Mr. Deutchman has caused monthly operating reports
for the Evergreen entities to be filed through April 2008. Those reports are available for download by clicking
here.
On December 19, 2007, David Willan was named in a 147 count criminal indictment along with 16 other individuals by the Summit County Grand
Jury. This indictment also included charges against former Evergreen employees Sandy Langer, Mandie Pugh, Daniel Mohler, Richard Borodkin,
Nicole Ford-Pappas, Brianna Fullerton and Daniel Ringer.
Despite the extremely serious nature of the allegations against the former Evergreen employees, there will be no anticipated effect on the
Evergreen entities’ respective Chapter 11 cases. Fortunately, pursuant to the Agreed Interim Order, the Committee succeeded in forcing
Mr. Willan to cede his positions and control of the respective Evergreen entities to Charles S. Deutchman months prior to the indictment.
As a result, Mr. Deutchman will continue in his capacity as Chief Operating Officer. The role of the Committee will also be unaffected and
will continue to investigate and monitor the ongoing operations of Evergreen. Finally, the Committee believes that a proposed plan of
reorganization / liquidation will occur in the next few months.
On January 24, 2008, the Official Committee of Unsecured Creditors and Evergreen filed a Joint Motion to Compromise Controversy with Daniel
Ringer (to see a copy of the Joint Motion, click here). Despite the terms of the Agreed Interim
Order dated September 13, 2007, Brittain Holdings had not conveyed any assets to Evergreen nor has Evergreen received any mortgage payments
from Daniel Ringer. This Joint Motion was filed with the goal of abiding by the terms of the September 13, 2007 Order as closely as possible.
The Joint Motion was granted by the Court on April 11, 2008 (to see a copy of the Agreed Order, click here).
The Agreed Order required Daniel Ringer to convey title and ownership of 1110 Brittain Road to Evergreen Investment Corporation. Following
entry of the Agreed Order, the property located at 1110 Brittain Road was conveyed to Evergreen Investment Corporation on May 12, 2008.
In addition, the Committee procured quitclaim deeds from Brittain Holdings in favor of Evergreen Investment Corporation on properties
located at 741 Roselawn Avenue, Akron, Ohio 44306 and 429 McGowan Street, Akron, Ohio 44306.
As landlord at 1110 Brittain Road, Evergreen Investment Corporation is entitled to income from its ownership in the property. Evergreen
has recently filed a motion seeking approval of a proposed lease to the existing tenant (to see a copy of the motion to approve lease,
click here). This will provide Evergreen another source of income as it strives to repay its debts.
By design, the proposed lease is short term in nature (6 months) which would allow Evergreen the ability to liquidate the property at any
time for the benefit of creditors. Any proposed sale or lease of the property is subject to further review and must be approved by the
Bankruptcy Court.
On June 3, 2008, the Bankruptcy Court established a claims bar date of July 21, 2008. It is imperative that all creditors
file a proof of claim by July 21, 2008 (to see a copy of the Order Establishing Claims Bar Date, click
here).
Finally, the Committee has been working closely with Charles Deutchman and Evergreen in its preparation of a plan of reorganization /
liquidation. This effort culminated with the filing of a First Amended Joint Plan of Reorganization on June 2, 2008 (to see a copy of
the First Amended Plan, click here). This Chapter 11 Plan was jointly filed by Evergreen Homes and
the Official Committee of Unsecured Creditors and has been submitted to the Bankruptcy Court for review and approval. Evergreen and the
Committee also filed its Second Amended Disclosure Statement on June 11, 2008 (to see a copy of the Second Amended Disclosure Statement,
click here) which was approved by the Bankruptcy Court on June 12, 2008 to see a copy of the Order
Provisionally Approving Second Amended Disclosure Statement, click here).
Due to the filing of the First Amended Joint Plan or Reorganization and Second Amended Disclosure Statement, the United States Bankruptcy
Court has scheduled a confirmation hearing for August 18, 2008 at 9:30 A.M. You are strongly encouraged to carefully review Second Amended
Disclosure Statement as it contains vital information and procedures relevant to confirmation of the plan. If you are uncertain as to
your legal rights as a creditor, you are strongly encouraged to seek the advice of an attorney.
Relative to the administration of the Evergreen bankruptcy estate itself, since the Evergreen entities’ bankruptcy filing, they periodically
have and will continue to file motions seeking authority to sell of certain real estate free and clear of all liens. It is anticipated that
these motions will frequently appear on the docket and that the merits of each motion will be set to be discussed at hearings before the
Court. The Committee also anticipates that motions for relief from stay by creditors holding a 1st mortgage on property owned by a buyer
of an Evergreen home will also frequently be filed and appear on the docket. Generally, Evergreen holds a second mortgage on such property
sold by Evergreen to these buyers. To be clear, if a buyer defaults on its obligation to pay his or her 1st mortgage, such creditor may
need to file a motion for relief from stay seeking permission to proceed in state court for a foreclosure sale. Evergreen is named in such
actions because it holds an interest in these properties (the 2nd mortgage). The creditor may not proceed with the state court foreclosure
action until it obtains consent of the Bankruptcy Court. Generally, no objection has been made to these motions.
Your questions and concerns are important to us. Your questions and concerns may also be the same as hundreds of other similarly situated
companies and individuals. The Committee will attempt to provide information in a timely and cost effective manner. Please be patient with
our efforts. The process of determining the direction or ultimate outcome of Evergreen may take many months. In the meantime, the Committee
will strive to keep creditors informed by updating information on the website. Court hearings are open to the public. You are not required
to attend unless you have an individual and particular matter before the Court. While you may not be able to direct comments to the Court
without proper prior filings, each status conference will be an opportunity to hear pending issues before the Bankruptcy Court.
UPCOMING SCHEDULE FOR EVERGREEN BANKRUPTCY CASE:
AUGUST 18, 2008 @ 9:30 A.M.
1 Chapter 11 Voluntary Petition. Fee Amount $1039 Filed by Evergreen Homes, LLC. Chapter 11 Plan due by 8/27/2007. Disclosure Statement due by 8/27/2007. Corporate Ownership Statement Due by 5/4/2007. Atty Disclosure Statement due 5/14/2007. Schedule A due 5/14/2007. Schedule B due 5/14/2007. Schedule D due 5/14/2007. Schedule E due 5/14/2007. Schedule F due 5/14/2007. Schedule G due 5/14/2007. Schedule H due 5/14/2007. Statement of Financial Affairs due 5/14/2007. Summary of schedules due 5/14/2007. Incomplete Filings due by 5/14/2007. (Mentzer, Howard aty)
4 Motion to Use Cash Collateral Filed by Debtor Evergreen Homes, LLC. (Mentzer, Howard aty)
421 ORDER PROVISIONALLY APPROVING SECOND AMENDED AND RESTATED DISCLOSURE STATEMENT AND FIXING TIME FOR FILING ACCEPTANCES OR REJECTIONS OF FIRST AMENDED JOINT PLAN OF LIQUIDATION, COMBINED WITH NOTICE THEREOF. Signed on 6/12/2008 (RE: related document(s) 420 Second Amended and Restated Disclosure Statement). (bmont, crt) (Entered: 06/12/2008)
HEARING NOT HELD. CONDITIONAL APPROVAL OF 2ND AMENDED DISCLOSURE STATEMENT. CONFIRMATION HEARING SET FOR 8/18/08 AT 9:30 AM. Hearing scheduled (RE: related document(s)420 Disclosure Statement, 1 Voluntary Petition (Chapter 11), 419 Disclosure Statement, 4 Motion to Use Cash Collateral, 403 Amended Plan, 404 Disclosure Statement) Confirmation Hearing scheduled for 8/18/2008 at 09:30 AM at 260 Fed Bldg Akron. (bmont, ) (Entered: 06/13/2008)
For more information, contact Michael Steel. www.goldman-rosen.com
330-376-8336