UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION. (Substantively Consolidated Under Case No. 8:10-bk CPM)

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1 UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION In re: Chapter HOTELS4U, LLC, HAPPY DUCK LIMITED, Debtors. Case No. 8:10-bk CPM Case No. 8:10-bk CPM (Substantively Consolidated Under Case No. 8:10-bk CPM) / CHAPTER 7 TRUSTEE S MOTION AND NOTICE OF PROPOSED COMPROMISE OF CONTROVERSY BETWEEN TRUSTEE AND THE MARK TRAVEL CORPORATION NOTICE OF OPPORTUNITY TO OBJECT AND FOR HEARING Pursuant to Local Rule , the Court will consider this Motion without further notice or hearing unless a party in interest files an objection within twenty-one (21) days from the date this paper is entered on the docket. If you object to the relief requested in this paper, you must file your objection with the Clerk of the Court at the Sam M. Gibbons U.S. Courthouse, 801 North Florida Avenue, Suite 555, Tampa, FL , and serve a copy on the movant s attorney, Lori V Vaughan, Esquire, Trenam Kemker, P. O. Box 1102, Tampa, FL If you file and serve an objection within the time permitted, the Court may schedule a hearing and you will be notified. If you do not file an objection within the time permitted, the Court will consider that you do not oppose the granting of the relief requested in the paper, will proceed to consider the paper without further notice or hearing, and may grant the relief requested. LAUREN GREENE, as the duly appointed Chapter 7 Trustee (the Trustee ) of the bankruptcy estate of 1800Hotels4U, LLC, d/b/a 1800Hotels.com and the bankruptcy estate of Happy Duck Limited (collectively, the Debtors ) files her Motion and Notice of Proposed Compromise of Controversy Between Trustee and The Mark Travel Corporation, and states: 1

2 Background 1. On July 13, 2010, the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code (the Petition Date ). 2. On October 12, 2010, the Court entered an order converting the cases to Chapter 7. Lauren Greene was appointed the Chapter 7 trustee. 3. On April 8, 2011, the Court entered an Order Granting Chapter 7 Trustee s Joinder in Support of Motion for Substantive Consolidation wherein the Debtors cases were substantively consolidated. 4. On July 10, 2012, Trustee instituted an adversary proceeding (8:12-ap CPM) against The Mark Travel Corporation ( Mark Travel ) by filing a one count complaint (Doc. No. 1) (the Complaint ) seeking to avoid $1,141, in alleged preferential transfers received from the Debtors (the Transfers ). 5. On August 3, 2012, Mark Travel filed its answer and affirmative defenses (Doc. No. 5), raising various defenses, including, but not limited to, that the Transfers were not on account of antecedent debt and Mark Travel provided subsequent new value to the Debtors. Mark Travel also provided documentation in support of its defenses in response to the Trustee s discovery requests. 6. On April 15, 2013, Mark Travel filed its Motion for Summary Judgment and Memorandum of Law, arguing its various affirmative defenses constituted a complete defense to the Complaint. 7. On June 4, 2013, the Trustee and Mark Travel participated in a court ordered mediation and the parties have reached a settlement. 8. This motion is being filed to seek Court approval of the terms of the settlement. 2

3 The Proposed Compromise 8. For full and final satisfaction of the Transfers, Mark Travel shall pay the sum of Ninety-Five Thousand and 00/100 Dollars ($95,000.00) to the Trustee in one lump sum payment (the Settlement Amount ), which payment shall be tendered to the Trustee within fourteen (14) days of entry of a final non-appealable Bankruptcy Court Order approving the terms of this compromise. Mark Travel also waives any claims in the Debtors bankruptcy, including, but not limited to, any claim under 11 U.S.C. 502(h) and an alleged $32, administrative expense claim. 9. Payment of the Settlement Amount shall be tendered to the Trustee via attorney s trust account check or cashier s check payable to Lauren Greene, Chapter 7 Trustee and sent to Lori V. Vaughan, Esquire, Trenam Kemker, P.O. Box 1102, Tampa, Florida In return for payment of the Settlement Amount by Mark Travel, the Trustee shall dismiss the Complaint with prejudice within five (5) days of receipt of the Settlement Amount and release claims against Mark Travel. Best Interest of the Parties 11. The compromise outlined in this motion results in the ability of the Trustee and Mark Travel to curtail the outlay of additional legal fees in litigating the issues, and results in a recovery for the benefit of creditors of the bankruptcy estate. 12. The Trustee and Mark Travel believe it is in their best interests to enter into an agreement to resolve through this compromise the issues raised in the Complaint. 13. It is generally recognized that the law favors compromise of disputes over litigation. In re Blair, 538 F.2d 849 (9 th Cir. 1976). Some courts have held that a proposed settlement should be approved unless it yields less than the lowest amount that the litigation 3

4 could reasonably produce. In re New Concept Housing, Inc., 951 F.2d 932 (8 th Cir. 1991). In In re Justice Oaks II, Ltd., 898 F.2d 1544, 1549 (11 th Cir. 1990), cert. denied 498 U.S. 959, 111 S. Ct. 387, 112 L. Ed. 2d 398 (1990), the court enunciated certain factors which must be considered in determining whether to approve a compromise, which are (a) the probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience, and delay necessarily attending it; and (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises. To approve the compromise, this Court need not determine which party would ultimately prevail, but only that the matter is open to reasonable doubt. Protective Comm. for Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424, 88 S. Ct. 1157, 1163, 20 L.Ed.2d 1 (1968) ( In administering reorganization proceedings in an economical and practical manner it will often be wise to arrange the settlement of claims as to which there are substantial and reasonable doubts. ). 14. The compromise outlined in this motion fairly resolves the risks of litigation and any anticipated difficulties. 15. This compromise was negotiated at arm s length. 16. In light of the foregoing, the Trustee and Mark Travel request that this Court approve the proposed compromise. 17. Counsel for the Trustee certifies that counsel for Mark Travel has agreed to entry of an order granting the relief requested herein. 4

5 WHEREFORE, the Trustee requests that this Court enter an order that (i) grants this motion to compromise controversy under the terms detailed herein; (ii) authorizes the parties to consummate the settlement; and (iii) grants such additional relief as the Court deems appropriate. Dated: June 12, 2013 /s/ Lori V. Vaughan LORI V. VAUGHAN Florida Bar No LARA R. FERNANDEZ Florida Bar No RHYS P. LEONARD Florida Bar No TRENAM, KEMKER, P.A. Suite 2700, Bank of America Plaza 101 East Kennedy Boulevard Tampa, Florida Tel: (813) Fax: (813) Attorneys for Lauren P. Greene, Chapter 7 Trustee CERTIFICATE OF SERVICE I HEREBY CERTIFY that on June 12, 2013, a true and correct copy of the foregoing Chapter 7 Trustee s Motion and Notice of Proposed Compromise of Controversy was served electronically via the CM/ECF Noticing System to: Ulster Bank Ireland Limited and Ulster Bank Limited, c/o E. Colin Thompson, DLA Piper US LLP, 100 N. Tampa Street, Suite 2200, Tampa, FL 33602; National Westminster Bank, PLC, c/o E. Colin Thompson, DLA Piper US LLP, 100 N. Tampa Street, Suite 2200, Tampa, FL 33602; and United States Trustee, Timberlake Annex, Suite 1200, Tampa, FL 33602; by electronic mail to: Ryan C. Reinert, Esq. (rreinert@shutts.com); and Russell S. Long, Davis & Kuelthau, s.c., via at (rlong@dkattorneys.com), and to all parties registered through the Court s CM/ECF noticing system; and by U.S. Mail to: 1800Hotels4U, LLC and Happy Duck Limited, c/o Graham Peakin, 4623 W. Woodmere Road, Tampa, FL (pro se Debtors); and via electronic mail to Kurtzman Carson Consultants pursuant to this Court s Order (Doc. No. 361). /s/ Lori V. Vaughan Attorney 5