I looked over the revised settlement last night, and it looks pretty solid. The "insiders" are subordinating their claims. The Bank of Scotland is taking slightly less than it was getting in the original settlement. The unsecured creditors are still getting their chunk. I don't see any reason why the judge would not approve the settlement today, but I'm no bankruptcy lawyer. And like I said before — I'm done making predictions about this case. Won't go there.
According to the new sale motion, all objections to the sale have been resolved except for one: an objection from the West Stanislaus Fire Protection District. I'm not sure I've ever even mentioned the fire district's concerns, because at every step, it appeared as though they would be resolved easily. But apparently they still haven't been.
My understanding is that the fire district wants it written into the sale that a permanent fire station must be built in Diablo Grande before the 500th (or is it 501st?) housing permit is issued. On multiple occasions, Diablo Grande's lawyer has said (and the judge has agreed) that it was not necessary to write that into the sale because rules like that automatically transfer with the purchase of the land. Sounds like semantics to me, but again, I'm no expert here. The other aspect of the fire district's objection relates to permanent housing in Diablo Grande for firefighters stationed there. That seems like it might be more of a sticking point, but we'll see.
In a note at the top of the revised sale motion, Diablo Grande's attorney writes "The Debtor intends to seek the Court's guidance with respect to the resolution of (the fire district's) objection." I can't imagine something that seems so simple could derail a sale that is so overwhelmingly complicated, but stranger things have happened.
Stay tuned.
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