UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

Transcription

1 WILLIAM G. MONTGOMERY MARICOPA COUNTY ATTORNEY By: LORI A. LEWIS Deputy County Attorney State Bar No MCAO Firm No CIVIL SERVICES DIVISION Security Center Building 222 North Central Avenue, Suite 1100 Phoenix, Arizona Telephone (602) Attorneys for Maricopa County Treasurer UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In Re: Borders Group, Inc., et al., Case No. 1:11-bk MG Chapter 11 Proceedings Debtors. LIMITED OBJECTION OF MARICOPA COUNTY TREASURER TO DEBTORS MOTION FOR ORDER PURSUANT TO SECTIONS 105, 363 AND 365 OF THE BANKRUPTCY CODE AND RULES 2002, 6004, 6006 AND 9014 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE (I) APPROVING THE SALE OF SUBSTANTIALLY ALL OF THE DEBTORS ASSETS FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS AND THE ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES RELATED THERETO, (II) APPROVING SALE PROCEDURES AND BREAK-UP FEE, AND (III) GRANTING RELATED RELIEF (THE SALE MOTION ) COMES NOW, Maricopa County Treasurer ( MCT ) and files this objection to the Sale Motion, and provides notice that it claims perfected statutory liens in accordance with A.R.S , and would respectfully show the Court in support thereof the following:

2 1. MCT s Claims: The Maricopa County Treasurer is a local taxing authority which levies ad valorem property taxes on real and personal property located within Maricopa County. As set forth in the proofs of claim filed by MCT on or about March 7, 20121, Debtor s personal property located in Maricopa County is encumbered with fully perfected tax liens for tax years 2004, 2005, 2007, 2008 in the amount of $24,306.72, and tax year 2011 in the estimated amount of $52, Pursuant to Arizona statute, the 2011 tax lien attached pre-petition on January 1, See, A.R.S (C)(1). The tax liens are prior and superior to all liens and encumbrances on the property except liens held by the State of Arizona or liens for taxes accruing in any other years. A.R.S (C)(3). Interest accrues on the MCT secured tax claims at the statutory rate of 16% per annum until paid in full, if not timely paid. See 11 U.S.C. 511 and A.R.S Lien Retention for 2011 taxes: MCT objects to the Sale Motion as the 2011 property taxes have not yet been liquidated, and the Sale Motion does not provide for the retention of MCT s statutory property tax lien to secure their payment when due. The 2011 tax lien arose on January 1, 2011, the tax rate will be determined in August and the 2011 taxes will be liquidated in amount on or around September 1, MCT requests that the sale order provide that the property tax liens for the 2011 taxes should remain attached to the property to be sold, to ensure that the buyer pays the full and actual amount of 2011 personal property taxes (estimated at $52,693.46) that will become due after the sale. 1 The 2011 taxes will not be liquidated in amount until on or around September 1, 2011.

3 3. Payment of Personal Property Taxes: MCT objects to the Sale Motion as it fails to provide for payment of the MCT Claim from the sale proceeds of the property. As set forth above, the Debtor owes personal property taxes for tax years 2004, 2005, 2007 and 2008 currently totaling $24,306.72, with interest continuing to accrue. Under A.R.S (C)(2), Maricopa County s liens on the property to be sold are not satisfied or removed until one of the following occurs: (a) The taxes, penalties, charges and interest are paid. (b) Title to the property has finally vested in a purchaser under a sale for taxes (c) A certificate of removal and abatement has been issued pursuant to Accordingly, the liens for personal property taxes encumbering the property cannot be removed until the MCT Claim is paid in full. Arizona law further provides that It is unlawful for the owner, a lienholder, a conditional vendor or any other person to knowingly sell or transfer personal property or remove it from its location until the taxes on the property are paid. See A.R.S (A). The county is entitled to have its tax liens on the property paid from the sale of which the funds were derived. Brans v. City of Dallas, Texas, 217 F.2d 640, 641 (5th Cir.1954). MCT contends that the 2004, 2005, 2007 and 2008 taxes should be paid from the sale proceeds prior to the payment of any other claims. WHEREFORE, MCT respectfully requests that any sale order entered pursuant to the Sale Motion provides (1) that MCT s statutory lien remains attached to the property to be sold until the 2011 taxes on the property are paid in full, and (2) the MCT claims for 2004, 2005, 2007 and 2008 personal property taxes are fully paid at closing from the

4 sale proceeds. MCT further prays for any additional relief to which it may be justly entitled. RESPECTFULLY SUBMITTED this 14th day of July, MARICOPA COUNTY OFFICE OF WILLIAM G. MONTGOMERY MARICOPA COUNTY ATTORNEY BY: /s/ Lori A. Lewis LORI A. LEWIS Deputy County Attorney Attorney for Maricopa County Treasurer CERTIFICATE OF SERVICE I hereby certify that a true copy of the foregoing has been served via the Court's Electronic Case Filing system on July 14, 2011, to the ECF Noticing Parties and on the parties listed below by electronic mail this 14th day of July, Andrew K. Glenn, Esq David M. Friedman, Esq. Jeffrey R. Gleit, Esq. Kasowitz, Benson, Torres & Friedman LLP 1633 Broadway New York, New York [aglenn@kasowitz.com] [DFriedman@kasowitz.com] [jgleit@kasowitz.com] Paul K. Schwartzberg, Esq. Brian Shoichi Masumoto, Esq. Tracy Davis, Esq. Linda Riffkin, Esq. Office of the United States Trustee Southern District of New York 33 Whitehall Street New York, New York [nbank60@hotmail.com] Bruce D. Buechler, Esq. /s/ Lori A. Lewis Lori A. Lewis

5 Paul Kizel, Esq. Lowenstein Sandler PC 65 Livingston Avenue Roseland, New Jersey Bruce S. Nathan, Esq. Lowenstein Sandler 1251 Avenue of the Americas New York, New York WendyWalker, Esq. Morgan, Lewis & Bockius LLP 101 Park Avenue New York, New York Snadra Vrejan, Esq. Morgan, Lewis & Bockius 225 Franklin Street, 16th Floor Boston, Massachusetts Kevin Simard, Esq. Choate Hall & Stewart LLP Two International Place Boston, Massachusetts James S. Carr, Esq. Robert L. LeHane, Esq. Benjamin D. Feder, Esq. Kelley Drye & Warren LLP 101 Park Avenue New York, New York Julia Frost-Davies, Esq. Andrew Gallo, Esq. Bingham McCutchen LLP One Federal Street Boston, Massachusetts