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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

Cordillera Golf Club, LLC, dba The Club at Cordillera.

Debtor.

Chapter 11

Case No.: 12-11893 (CSS)

Related Docket No. 1,69, 71 Hearing Dates: July 16, 2012, 10 a.m. EDT (Requested) Objection Deadline: July 11 at 12 p.m. EDT (Requested)

MOTION OF CORDILLERA PROPERTY OWNERS ASSOCIATION, INC. AND CORDILLERA METROPOLITAN DISTRICT TO TRANSFER VENUE TO COLORADO AND JOINDER IN THE MOTION OF CHERYL M. FOLEY, THOMAS WILNER, JANE WILNER, CHARLES JACKSON, MARY JACKSON AND KEVIN B. ALLEN, INDIVIDUALLY AND AS REPRESENTATIVES OF A CERTIFIED CLASS OF MEMBERS, TO TRANSFER VENUE

Cordillera Property Owners Association, Inc. (“CPOA”) and Cordillera Metropolitan

District (the “District”) (collectively, the “Moving Parties”), by their attorneys Sherman &

Howard L.L.C. and Ashby & Geddes, hereby file this Motion to Transfer Venue to Colorado (the

“Motion”). In addition, the Moving Parties join in the Motion Of Cheryl M. Foley, Thomas

Wilner, Jane Wilner, Charles Jackson, Mary Jackson And Kevin B. Allen, Individually And As

Representatives Of A Certified Class Of Members, To Transfer Venue (the “Class Members’

Venue Change Motion”) (Docket No. 69). In support of their Motion, the Moving Parties

respectfully state as follows:

I. SUMMARY OF ARGUMENT

1. The business of The Cordillera Golf Club, LLC (the “Debtor” or “Club”) is

centered upon providing its members the opportunity to play golf at unique and picturesque golf

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courses located in Eagle County, Colorado. Members join the Club for that purpose and for the

enjoyment of the Cordillera lifestyle. Necessarily, Debtor’s product is provided and can be

enjoyed only where the Club and golf courses are physically located -- Eagle County, Colorado.

Further, the success of the Club directly impacts property values throughout the Cordillera

community. Because of the unique and very local nature of the Debtor’s business, a solution to

its current problems should be determined in the Colorado bankruptcy court, where all Cordillera

community members will have a more convenient forum to have their voices heard.

2. Under familiar principles of law governing the venue of bankruptcy cases, the

United States Bankruptcy Court for the District of Colorado is the proper forum for this

bankruptcy case. Pursuant to Section 1412 of Title 28 of the United States Code, transferring the

venue of this bankruptcy case to Colorado would serve both the interests of justice and the

convenience of the parties for the following reasons:

(a)

The primary assets of the Debtor are four golf courses, tennis and fitness facilities, and related amenities, all of which are located in Eagle County, Colorado.

(b)

Although the Debtor has not yet filed its schedules, 54% of the persons included on the mailing matrix filed by the Debtor (2,785 out of a total of 5,144) have Colorado mailing addresses. Only ten (.4%) have Delaware mailing addresses, the 39 th smallest number by state. See Chart attached hereto as Exhibit A.

(c)

Eleven of the 20 largest unsecured creditors on Debtor’s Schedule of the Twenty Largest Unsecured Creditors are from Colorado. None is from Delaware.

(d)

Debtor’s principal place of business -- indeed, its only place of business -- is in Colorado.

(e)

Upon information and belief, Debtor’s principal and sole shareholder resides in Colorado.

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(f)

Debtor’s senior lender, Alpine Bank, is located in Colorado, the loan originated in Colorado and the parties agreed the loan is to be interpreted under Colorado law. Alpine Bank has expressed to the Court its intent to file a motion to transfer venue.

(g)

The two lawsuits in which Debtor is currently involved are both pending in State Court in Colorado; one case was brought by the Debtor in the Colorado District Court in and for Eagle County, Colorado, on May 24, 2011, and the other is a class action brought by Club members in the Colorado District Court in and for Eagle County, Colorado, on June 20, 2011. The class, as certified by the State Court, has approximately 609 members.

(h)

This bankruptcy case is at an early stage and no detriment would occur from a transfer at this point.

(i)

Debtor’s lead bankruptcy counsel is from San Diego and Debtor is seeking to hire a Chief Restructuring Officer based in Sherman Oaks, California.

(j)

The Colorado creditors have a very important interest in having controversies deeply affecting a Colorado community decided by Colorado courts in a location convenient to those affected.

(k)

The only relationship of this case to Delaware is the registration of the Debtor in Delaware.

II. PARTIES, JURISDICTION, AND VENUE

3. On June 26, 2012, the Debtor filed its voluntary chapter 11 bankruptcy petition.

Debtor is a limited liability company formed under the laws of the State of Delaware. Debtor is

authorized to conduct business in the State of Colorado, and is in good standing with the

Colorado Secretary of State.

4. No statutory committees have been formed, and no trustees or examiners have

been appointed.

5. CPOA is a homeowners association and non-profit corporation organized and

operating pursuant to the laws of the State of Colorado. The CPOA has members who,

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collectively, are owed millions of dollars by the Debtor. The CPOA is a defendant in litigation

commenced by the Debtor. The CPOA is affected by the Club’s financial problems.

6. The District is a metropolitan district organized pursuant to C.R.S. 32-1-101, et

seq. The District is a quasi-municipal corporation and political subdivision of the State of

Colorado, with the authority to levy and collect property taxes to defray its expenses. The

District currently is owed $205,311.31 in unpaid 2011 property taxes (payable in 2012 per

Colorado law) by the Debtor.

7. The CPOA and the District are parties in interest in this bankruptcy case.

8. This Court has jurisdiction over this bankruptcy case pursuant to 28 U.S.C.

§ 1334.

9. The only basis for venue of this case in Delaware under 28 U.S.C. § 1408 is

Debtor’s registration in Delaware.

10. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A).

11. The statutory bases for the relief requested in this Motion are 11 U.S.C. § 105(a), 1

28 U.S.C. § 1412, and Fed.R.Bankr.P. 1014.

III. PROCEDURAL HISTORY

12. This bankruptcy case is in its infancy. No substantive orders have been entered

by the Court except for temporary authorization to use cash collateral (Docket No. 44) and this

Court’s denial of Debtor’s attempt to extend the bankruptcy stay to protect Debtor’s principal

and related entities from a pending State Court contempt proceeding. Debtor has filed motions

to retain counsel and a chief restructuring officer, to appoint a claims agent, for continued use of

1 Title 11 shall be referred to as the “Bankruptcy Code.”

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a cash management system, to honor prepetition wage obligations and pay prepetition taxes and

fees, to require utility companies to continue service, and for interim and final orders for use of

cash collateral. The Court entered interim orders on utilities, payment of pre-petition taxes and

fees, and a final order allowing payment of pre-petition wages. A hearing on all the remaining

motions filed by Debtor is scheduled for July 27, 2012.

13. The Debtor also has filed a motion to obtain a priming, post-petition loan. A

hearing is set for July 19, 2012, to consider authorizing the Debtor to enter into the post-petition

loan on an interim basis.

14. The Debtor has stated that it plans to file a motion to approve a sale under Section

363 of the Bankruptcy Code of the Mountain Course, one of the Debtor’s golf courses, at a

public auction. See Declaration of Daniel L. Fitchett, Jr. in Support of Chapter 11 Petitions and

First Day Relief (the “Fitchett Decl.”), ¶ 41. No such motion has yet been filed.

15. Six Club members, representatives of a certified class of club members, have filed

a motion to transfer venue, which has been set for a pre-trial conference on July 12, 2012, at 1

p.m., and for hearing on July 16, 2012, at 10 a.m. See Class Members’ Venue Change Motion.

IV. FACTUAL BACKGROUND 2

Virtually All of Debtor’s Assets, Operations, and Management are in Colorado

16. The assets of the Debtor include three 18-hole golf courses, a short course, 3

tennis centers, fitness facilities, 5 indoor and outdoor pools, a summer camp with clubhouse for

2 The Moving Parties submit the Declaration of Nanette Kuich, President of the Board of Directors of the District, and Lois M. Van Deusen, President of the CPOA, in support of the Motion. The Declarations are attached as Exhibits B and C, respectively. Support for many of the facts that compel a transfer of venue to Colorado is contained in the Fitchett Declaration and first day motions filed by the Debtor. Those facts are not subject to dispute by the Debtor.

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children, and riding, hiking and cross-country ski trails. All of these assets are located in

Colorado. (Fitchett Declaration, ¶7)

17. Debtor’s sole product is a uniquely situated event: the chance to play golf at

courses of special magnificence located in Eagle County, Colorado, close to the homes of

Cordillera members. Everything about this case relates to that particular location in Colorado.

Nothing of any significance in this case relates to Delaware, or any other state.

18. Upon information and belief, the Debtor’s sole shareholder and managing

member, David Wilhelm, resides in Colorado. 3 The Declaration Regarding List of Creditors

Holding 20 Largest Unsecured Claims filed June 26, 2012, with the Petition in this case, states

that it was signed by Wilhelm in “Edwards, Colorado.”

19. Debtor advised this Court that Debtor borrowed $13.7 million from Alpine Bank

secured by liens on assets of the Debtor in June, 2009. (Fitchett Declaration, ¶ 22). Alpine Bank

is located in Vail, Colorado, and Debtor promised to pay the loan at Alpine Bank’s office in Vail,

Colorado (Promissory Note attached at Exhibit B to the Notice of Filing of Appendix to Motion

of the Debtor for Entry of Interim and Final Orders (A) Authorizing Use of Cash Collateral; (B)

Granting Adequate Protection; (C) Scheduling a Final Hearing; and (D) Granting Related Relief

(the “Cash Collateral Motion Appendix”) (Docket No. 11). The loan is governed by Colorado

law. (Cash Collateral Motion Appendix, Exhibit A, Loan Agreement). Alpine and the Debtor

agreed upon the Colorado State Courts in Eagle County, Colorado as the proper venue for

resolution of litigation between them. (Id.)

3 David A. Wilhelm is the manager of CGH Manager, LLC, which is the manager of the Debtor. Wilhelm

describes himself, in litigation he and Debtor initiated in Edwards, Colorado against certain Club members, Cordillera Golf Club et al. v. Cordillera Transition Corporation, et al. No 2011 CV 456 in the District Court for Eagle County, Colorado, as an “adult individual residing in Basalt, Colorado” (Complaint, ¶ 4), which is in Eagle

County.

Plaintiffs’ Initial Disclosures in that litigation show an Edwards, Colorado address for Wilhelm.

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20.

The District is a special district under Colorado law. See C.R.S. § 32-1-101, et

seq. Under Colorado law, "special districts are political subdivisions of the state and are created

as convenient agencies for exercising such of the governmental powers of the state as may be

entrusted to them." See Johnson Homes, Inc. v. Southwest Metropolitan Water and Sanitation

District, 725 P.2d 12, 13 (Colo. Ct. App. 1986); C.R.S. § 32-1-103(20) ("Special district means

any quasi-municipal corporation and political subdivision organized or acting pursuant to the

provisions of this article."). In addition to the provisions of the Special District Act, the District

also is governed by its Amended and Restated Service Plan, which was approved by the Eagle

County Board of County Commissioners on May 3, 2005 (the “Service Plan”).

21. Within the Cordillera community, and pursuant to the Special District Act and the

Service Plan, the District provides, among other things, operation and maintenance of all public

facilities and infrastructure, which includes more than 40 miles of roadway and shoulder, 7,000

acres of property, and associated landscaping, water features, ponds, streetlights and signage. In

addition the District performs snow removal, weed and pest control operations; manages the

community’s recreation programs (other than those operated by the Debtor); provides public

safety services for the community, traffic control, wildlife management, and architectural

guideline compliance. In addition to operating and maintaining the public infrastructure within

Cordillera, the District has incurred significant bond debt to construct the public infrastructure

and currently repays the bond debt, as well as covers it operating expenses, with property taxes

paid by property owners within Cordillera, including the Debtor. See Exhibit B, Kuich

Declaration, ¶ 5.

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22.

The District is owed $205,311.31 in unpaid 2011 property taxes (payable in 2012)

by the Debtor. Under Colorado law, this obligation is secured by a first and prior lien against the

Debtor’s taxable property located within the boundaries of the District, in Eagle County,

Colorado. See id., ¶ 7.

23. The Debtor is one of the two largest taxpayers within the District. In Colorado,

property taxes are paid in arrears. Taxes assessed in 2011 are due and payable in 2012. For

2011 taxes, to be paid in 2012, the Debtor owes the District $205,311.31.

24. 2011 taxes owed to the District by the Debtor were based upon an assessed value

of $2,904,860. In Colorado, commercial property, such as that owned by the Debtor, is assessed

for taxation at 29% of actual value. The Debtor has disputed the assessed value.

25. The CPOA is established pursuant to and governed by the Amended and Restated

Declaration of Protective Covenants, Conditions, and Restrictions for Cordillera, recorded on May 12,

1993 in the real property records of the Eagle County Clerk and Recorder’s Office at Reception No.

504866 (as the same has been amended by the Second Amendment to Declaration of Protective

Covenants, Conditions, and Restrictions for Cordillera, recorded on May 11, 1998 in the real property

records of the Eagle County Clerk and Recorder’s Office at Reception No. 65572, and the Third

Amendment to Declaration of Protective Covenants, Conditions, and Restrictions for Cordillera, recorded

on April 14, 2010 in the real property records of the Eagle County Clerk and Recorder’s Office at

Reception No. 201007045), and the Amended and Restated Bylaws of Cordillera Property Owners

Association, Inc., dated as of, and approved by the Board of Directors, on May 21, 2012. See Exhibit C,

Van Deusen Declaration, ¶ 6. 4

4 Due to their voluminous nature, copies of the documents referenced here are not attached. Copies will be made available upon reasonable request.

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26.

The CPOA performs functions and manages its affairs in a manner similar to property

owners associations in lifestyle communities to enhance the overall quality of life within the community,

to provide programs and facilities for the community, and to preserve property values within the

community. In furtherance of this mission, the CPOA contracts with and provides financial support to the

District in the provision of community operations services, debt retirement, and capital projects;

maintains oversight of the architectural review process within the community; manages a wildfire and

healthy forest initiative; administers a wildlife management program in consultation with the Colorado

Division of Wildlife; operates a ski club at Vail Mountain; manages a community marketing program;

and owns and operates a community center which houses a café and a branch office of the United States

Post Office. The CPOA also has historically provided funding support for the community’s public safety

department, and acquired and subsequently conveyed to the District a large parcel of land abutting the

Eagle River, which currently is maintained as open space for the benefit of the community.

27. The value of properties within the CPOA are significantly impacted by the

success (or lack thereof) of the Club. A significant portion of the CPOA’s revenue comes from a

Real Estate Transfer Assessment (“RETA”) of 2% charged against the sale price of each home

sold in Cordillera. In 2010, there were 44 transactions within Cordillera, resulting in RETA

revenue of $1,345,708. In 2011, the year in which Debtor’s litigation against the CPOA was

commenced, there were 28 transactions within Cordillera, resulting in RETA revenue of

$642,755. In addition, the total actual value of the real estate within Cordillera, as determined by

the Eagle County Assessor’s Office, was $1,433,933,030 in 2010; in 2011, the value dropped to

$1,029,347,630.

28. There is a class-action suit by club members against the Debtor, its principal,

David A. Wilhelm, and certain related entities styled Foley, et al. v. Cordillera Golf Club, LLC,

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et al., District Court, Eagle County, State of Colorado, Case No. 2011CV552 (the "Class

Action"). As the Court is aware, a contempt hearing has been scheduled in that Eagle County,

Colorado, District Court case for July 19, 2012, to determine whether the Defendants violated a

preliminary injunction by using funds in a manner prohibited by the preliminary injunction.

29. The CPOA is one of the defendants in the litigation that the Debtor, its principal,

David A. Wilhelm, and certain related entities commenced in District Court, Eagle County, State

of Colorado styled Cordillera Golf Club, LLC, et al. v. Cordillera Transition Corporation, Inc.,

et al., Case No. 2011-CV-456. In that action, Debtor and the related plaintiffs mischaracterize

the CPOA, its individually named board members, and other community entities and individuals

as the driving force behind the decision of approximately 200 Club members to resign from the

Club. In reality, the Debtor’s own actions, including broken promises and operational failures,

serve as the fount of community outrage and the resignation decisions. The lawsuit is merely a

last ditch effort to manufacture leverage over a community that serves not as the cause of

Debtor’s failures, but the victims of it.

30. It would be a substantial burden for representatives of the CPOA and the District

to travel to Delaware from Colorado if the bankruptcy case were to remain in Delaware. Travel

to Wilmington, Delaware from Eagle County, Colorado takes not less than ten hours. The

District or CPOA would pay for the expenses associated with this travel.

V.

ARGUMENT

31. The convenience of the parties and the interests of justice dictate that venue of

this bankruptcy case should be transferred to the United States Bankruptcy Court for the District

of Colorado. In several recent decisions, Delaware bankruptcy judges have properly transferred

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venue of bankruptcy cases filed in Delaware on facts comparable to those presented in this case.

See In re Rehoboth Hospitality, LP, No. 11-12798 (KG), 2011 WL 5024267 (Bankr. D. Del. Oct.

19, 2011); In re Qualteq, Inc., No. 11-12572 (KJC), 2012 WL 527669, (Bankr. D. Del. Feb. 16,

2012); In re Spanish Peaks Holdings, II, LLC, Case No. 11-13300 (BLS) Memorandum Order

(Bank. D. Del. Jan. 10, 2012). 5

A. The Applicable Statutes

32. Even when venue initially is proper in the court where a debtor files its

bankruptcy case, a bankruptcy court “may transfer a case or proceeding under title 11 to a district

court for another district, in the interest of justice or for the convenience of the parties.” See In

re B.L. of Miami, Inc., 294 B.R. 325, 328 (Bankr. D. Nev. 2003); 28 U.S.C. § 1412; see also

Fed.R.Bankr.P. 1014(a) (“If a petition is filed in the proper district, the court

may transfer the

case to any other district if the court determines that the transfer is in the interest of justice or for

the convenience of the parties.”); see also Innovative Communication, 358 B.R. at 127 (on

motion to transfer venue, “the place of incorporation is not the controlling factor”). 6

33. Venue in Colorado is proper under 28 U.S.C. § 1408 (1) because Colorado is the

location of Debtor’s “principal place of business in the United States [and also its] principal

assets in the United States.”

B. Applicable Case Law Heavily Favors Venue in Colorado

34. Venue motions are decided based upon the specific facts of each case, weighed in

light of the broad purposes of convenience and fairness. See In re Eclair Bakery Ltd., 255 B.R.

5 A copy of the Memorandum Opinion is attached to this Motion as Exhibit D. 6 28 U.S.C. § 1408 authorizes the filing of this bankruptcy case in Delaware because Debtor was formed under the laws of the State of Delaware. See, e.g., In re Innovative Communication Co., 358 B.R. 120, 125 (Bankr. D. Del. 2006) (“Venue is appropriate in the state of incorporation”). Debtor’s registration in Delaware is the only connection of this case with the State of Delaware.

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121, 141 (Bankr. S.D.N.Y. 2000) (interests of justice is “a broad and flexible standard that must

be applied on a case by case basis”); In re Condor Exploration, LLC, 294 B.R. 370, 378 (Bankr.

D. Colo. 2003) (“When considering the interests of justice standard for purposes of determining

whether to transfer the venue of a bankruptcy case, the court applies a broad and flexible

standard, considering whether the transfer of venue will promote the efficient administration of

the estate, judicial economy, timeliness, and fairness.” (citation omitted)).

35. A debtor’s choice of venue is entitled to less consideration where as here, the

choice is “not directly related to the operative, underlying facts of the case.” See Rehoboth, 2011

WL 5024267 at *3.

36. The factors courts often consider when evaluating the convenience of parties are:

(a)

proximity of creditors of every kind to the court;

(b)

proximity of the debtor;

(c)

proximity of witnesses who are necessary to the administration of the estate;

(d)

the location of the debtor’s assets;

(e)

the economic administration of the estate; and

(f)

the necessity for ancillary administration in the event of liquidation.

Innovative Communication, 358 B.R. at 126 (citing In re Commonwealth Oil Refining Co., 596

F.2d 1239, 1247 (5 th Cir. 1979).

37. Bankruptcy courts in the Third Circuit and elsewhere consistently hold that the

venue of a case involving real estate belongs in the state where the real estate is located.

[T]his Court agrees with other courts in this Circuit which have held that “the estate of a real estate partner is most efficiently administered in the district where the principal asset is located.” In re Midland Assocs., 121 B.R. 459, 461 (Bankr. E.D. Pa. 1990) (citing, In re Oklahoma City

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Assoc’s., 98 B.R. 194, 199-200 (Bankr. E.D. Pa. 1989)); see also In re Pavilion Place Associates, 88 B.R. 32, 36 (Bankr. S.D.N.Y. 1988); In re Sundance Corp., 84 B.R. 699, 703 (Bankr. Mont. 1988); In re Nantucket Apartments Associates, 80 B.R. 154, 156 (Bankr. E.D. Mo. 1987). In the context of what is essentially a single asset case, the location of the known improved real estate asset is a particular concern to the Court, especially in the event of a potential liquidation, and the case is “better administered by a court in the district in which it is located.” In re Midland Assoc’s., 121 B.R. at 461.

In re Rehoboth, 2011 WL 5024267 at *5 accord, In re B.L. of Miami, Inc., 294 B.R. 325, 332

(Bankr. D. Nev. 2003) (“Where a debtor’s assets consist solely of real property, as with Debtor

in this case, courts ‘have held that transfer of venue is proper because “[m]atters concerning real

property have always been of local concern and traditionally are decided at the situs of the

property.’“) (citation omitted); In re Pinehaven Assocs., 132 B.R. 982, 989 (Bankr. E.D.N.Y.

1991) (“There is ample authority for the proposition that a real estate case

can be most

efficiently and economically administered in the bankruptcy court closest to its major asset, and

that the Chapter 11 case can best unfold there.”) (string cite omitted); Condor Exploration, 294

B.R. at 379 (noting that venue should be in the jurisdiction where debtor’s oil and gas leases are

located).

38. In Spanish Peaks, Bankruptcy Judge Shannon transferred venue from Delaware to

Montana based on the debtors’ extensive contacts with Montana, a significant number of

Montana creditors and creditors located in states near Montana, the likely sale of real property

located in Montana, and significant litigation in Montana. See Spanish Peaks, Memorandum

Order at pp. 4-5.

39. In Qualteq, Bankruptcy Judge Carey recently granted a motion to transfer venue

in a case with striking similarities to this case. In Qualteq, none of the creditors holding the 30

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largest unsecured claims had Delaware addresses and only 10 out of more than 5000 creditors on

the mailing matrix had Delaware addresses. The debtors’ books and records were kept in Illinois

(except for one subsidiary). Most (82%) of the debtors’ assets were located in Illinois and none

of the debtors’ assets were located in Delaware. Significant litigation was also pending in

Illinois. See Qualteq,2012 WL 527669; see also Rehoboth, 2011 WL 504267 at *3-5

(transferring venue from Delaware to Texas). 7

40. As in Spanish Peaks, Qualteq, and Rehoboth, virtually all of this Debtor’s assets

are located in Colorado, significant litigation is pending in Colorado, none of the creditors listed

on the List of Creditors Holding Twenty Largest Unsecured Claims (the “Top 20 List”) has a

Delaware address, eleven on the Top 20 List have Colorado addresses, five on the Top 20 List

have California addresses, Debtor’s principal is a Colorado resident, Debtor’s only place of

business is in Colorado, and Debtor’s business is conducted in Colorado.

41. Bankruptcy courts also recognize that matters of special concern to a particular

community should be decided by local courts. See, e.g., Condor Exploration, 294 B.R. at 378

(many courts have included as a significant consideration, “a state’s interest in having local

controversies decided within its borders”) (citation omitted); Rehoboth, 2011 WL 5024267 at *4;

Spanish Peaks, Memorandum Order at p.5; cf. Innovative Communication, 358 B.R. at 127

(noting the local public interest in the U.S. Virgin Islands is “great” where the debtors owned

companies that function as the telephone, newspaper, and other public communication vehicles

in the U.S. Virgin Islands).

7 In Qualteq, the debtors' attempt to have the bankruptcy case conducted at a distance from the pending litigation and the debtors' primary activities was soundly rejected: "the Debtors' obvious attempt to 'escape' the forum best suited for administration of the chapter 11 cases should not be condoned." Qualteq, 2012 WL 527669 at *7.

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42.

This case presents a compelling justification for venue in Colorado. Debtor’s

product is the opportunity to play golf at premier golf courses in a unique setting and community

in Eagle County, Colorado, and to enjoy related amenities and the concomitant lifestyle. Unlike

many other types of business, Debtor’s product can be used only where its assets are located, i.e.,

Eagle County, Colorado. Further, the success of the Club has a direct impact on property values

in the Cordillera community. Based on these circumstances, the solution to Debtor’s problems

should be determined in Colorado.

C. Application of Factors in This Case Mandates Transfer of Venue to Colorado

(a)

The Debtor, Its Operations, and Most of Its Creditors are Located in Colorado.

43.

The Debtor’s principal place of business and virtually all of its assets are located

in Colorado, and Debtor’s owner lives in Colorado. Many courts determine a debtor’s principal

place of business based upon an “operational test,” including the location of day-to-day

activities. See Condor Exploration, 294 B.R. at 374. Using an operational test, the Debtor’s

principal place of business is in Colorado.

44. Moreover, 54% of Debtor’s creditors, totaling 2785 of Debtor’s 5145 total

creditors, are listed on Debtor’s Mailing Matrix with Colorado addresses. Ten of the creditors

listed on the Debtor’s Mailing Matrix are shown with Delaware addresses – just 0.4% of them!

Eleven of the 20 largest unsecured creditors listed by Debtor with the Petition are shown with

addresses in Colorado; none are listed in Delaware.

The creditors on this list include some with

claims less than $10,000.00. This list, executed under penalty of perjury by Debtor’s principal, is

indisputably wrong.

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Club members are owed refunds of deposits far in excess of this amount.

15

Many of Debtor’s members should be listed on Debtor’s list of 20 largest creditor, and each of

them owns property in Colorado.

(b)

Proximity of Witnesses Necessary to Administer the Estate Favors Colorado.

45.

Because all of Debtor’s real estate and all other assets are located in Colorado,

and many creditors are located in Colorado, many of the witnesses who will testify concerning

issues important to the administration of the Debtor’s estate are located in Colorado. Indeed, all

of Debtor’s operations and all of its employees and management are in Colorado.

46. The Moving Parties are aware of no witness necessary to the administration of the

estate that is located in Delaware. The Debtor has filed a motion to retain a Chief Restructuring

Officer that is described as being with “a national consulting and accounting firm” and shows a

Sherman Oaks, California address. (Debtor’s Motion for an Order, Pursuant to Sections 105 and

363 of the Bankruptcy Code and Bankruptcy Rule 6003, Authorizing and Approving (I) the

Debtor’s Designation of Alfred H. Siegel as Chief Restructuring Officer, and (II) Retention and

Employment of Crowe Horwath, LLC, Nunc Pro Tunc to the Petition Date (the “CRO Motion”,

Docket No. 8). The proposed Chief Restructuring Officer, Alfred H. Siegel, states that he is “a

Partner at in [sic] the Sherman Oaks office of Crowe Horwath, LLC

located at 15233

Ventura Blvd., 9 th Floor, Sherman Oaks, CA 91403. Crowe has 27 offices throughout the United

States with affiliates worldwide.” (Siegel Declaration, Docket No. 8, ¶1, attached to the CRO

Motion). Debtor is represented by the San Diego, California office of Foley & Lardner LLP, and

has retained Young Conaway Stargatt & Taylor, LLP, as Delaware local counsel. Even so, the

location of Debtor’s professionals is not entitled to significant consideration on a motion to

transfer venue. See Son v. Coal Equity, Inc. (In re Centennial Coal, Inc.), 282 B.R. 140, 146

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(Bankr. D. Del. 2002) (convenience of counsel is not relevant to the determination of whether to

transfer venue).

(c)

The Debtor’s Assets are in Colorado.

47.

As stated above, all of the Debtor’s assets are located in Colorado.

(d)

The Estate can be Administered Most Efficiently in Colorado.

48.

Based on the location of creditors, witnesses, and Debtor’s unique assets (as well

as the substantive law that will govern many of the issues in this bankruptcy case), this

bankruptcy case will be administered most efficiently in Colorado.

(e)

Ancillary Administration.

49.

If the Debtor’s assets were to be liquidated, Colorado would have the “paramount

interest” in the assets. See Innovative Communications, 358 B.R. at 128 n.16. In addition, a

Colorado chapter 7 trustee would more efficiently administer the case than a Delaware chapter 7

trustee. See Condor Exploration, 294 B.R. at 380; see also In re Abacus Broadcasting Corp.,

154 B.R. 682, 684 (Bankr. W.D. Tex. 1993) (in deciding to transfer venue, noting: “Were it

necessary to convert this case to chapter 7, the U.S. Trustee would routinely appoint a panel

trustee in El Paso, but the trustee would then have to administer assets in a city 1,000 miles

away”). Similarly here, if the bankruptcy case were converted to a chapter 7 case for liquidation,

it would be much easier for a Colorado chapter 7 trustee to administer this case and Colorado

would have the paramount interest in the liquidation of a large real estate development located in

Colorado.

{00648619;v1 }

17

D. Based Upon Important Matters of Local Concern to Colorado, This Bankruptcy Case should be Administered by a Colorado Court

50. As already stated, bankruptcy cases involving real estate developments should be

administered in the state where the real estate is located. Bankruptcy cases in which

governmental units have a significant stake are also best administered in the local jurisdiction.

See Condor Exploration, 294 B.R. at 379 (“regulatory agencies, local governmental units and

general-creditor suppliers must play a crucial role in any bankruptcy case”). The District is such

a unit of government and political subdivision with the authority to levy and collect taxes. The

disposition of Debtor’s assets will intimately affect the Cordillera community and the taxing

authorities and other local providers of essential services.

51. The interests of justice favor venue in the jurisdiction whose substantive law

governs the issues in the case. See, e.g., DHP Holdings II Corp. v. The Home Depot, Inc. (In re

DHP Holdings II Corp.), 435 B.R. 264, 275-76 (Bankr. D. Del. 2010) (agreeing that “local

judges are more familiar with the applicable state law”); Pinehaven Assocs., 132 B.R. at 1412

(“this inquiry would include looking into the desirability of having a judge familiar with

applicable law hear and determine issues arising in the case”).

52. In addition, a Colorado bankruptcy judge is better suited to handle a bankruptcy

case for a Debtor such as the Club whose only business activities are in Colorado. The

somewhat colorful language of the court in the Abacus Broadcasting case is highly relevant to

this Motion:

In bankruptcy especially, judicial notice is a jurisprudentially sound thing to do. We do not evaluate cases in splendid isolation from the outside world, nor should we. The enterprise that seeks reorganization must satisfy the court that it is a likely candidate for reorganization, that it has a fighting chance of surviving, even prospering, in the economic

{00648619;v1 }

18

community in which it operates. How much more difficult it is for a judge to make such an evaluation without any personal experience with at least the general tenor of that economic community. What, for example, does a judge in Chicago, or Detroit, or Los Angeles, really know about the survivability of a restaurant on the Riverwalk in San Antonio? What do I know of the prospects of a small manufacturing enterprise in South Los Angeles? Can a judge in Pittsburgh have any real sense of the likelihood of reorganization of an oil drilling venture whose most valuable prospects are horizontal wells to be drilled in the Austin Chalk? What do I really know about the market for commercial boats operating out of Miami harbor? Granted a court cannot premise its decisions just on the ‘gut feel’ for the community (nor should it). It still requires hard evidence, in the form of testimony and the like. But that is not to say that the court’s familiarity with milieu is not highly relevant, for it is. Better, then, that in evaluating a request for transfer of venue, the court take into account the extent to which a judge ‘on the ground’ as it were might more effectively and efficiently (and perhaps even more fairly) administer the case than might a judge far removed from the debtor’s operations.

Abacus Broadcasting, 154 B.R. 682, 685-86 (Bankr. W.D. Tex. 1993).

53. This bankruptcy case involve Colorado real estate, Colorado creditors, and local

issues of particular concern to Colorado. Both the convenience of the parties and the interests of

justice weigh heavily in favor of venue in Colorado.

54. In short, venue of this case should be in Colorado because Colorado has the

“paramount interest” in this bankruptcy case.

55. The CPOA and the District join in the Class Members’ Venue Change Motion.

VI.

CONCLUSION

56. The Moving Parties have easily met their burden to demonstrate that the interests

of justice and the convenience of witnesses favor venue in Colorado. For all of the foregoing

reasons, the venue of this bankruptcy case should be transferred to the Bankruptcy Court for the

District of Colorado.

{00648619;v1 }

19

WHEREFORE, The Moving Parties respectfully request that the Court enter an order

transferring the venue of this bankruptcy case to the United States Bankruptcy Court for the

District of Colorado and for such additional relief as is appropriate.

Dated: July 5, 2012

{00648619;v1 }

ASHBY & GEDDES

/s/ Ricardo Palacio

William P. Bowden (#2553) Ricardo Palacio (#3765)

500 Delaware Avenue, 8th Floor

P.O. Box 1150 Wilmington, DE 19899 Phone : 302-654-1888 Fax : 302-654-2067 E-Mail : rpalacio@ashby-geddes.com

and

SHERMAN & HOWARD L.L.C.

Peter A. Cal

Mark L. Fulford

633 17th Street, Suite 3000

Denver, CO 80202 Phone: 303-297-2900 Fax: 303-298-0940 E-Mail: pcal@shermanhoward.com mfulford@shermanhoward.com

ATTORNEYS FOR CORDILLERA PROPERTY OWNERS ASSOCIATION, INC. AND CORDILLERA METROPOLITAN DISTRICT

20

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

Cordillera Golf Club, LLC, dba The Club at Cordillera.

Debtor.

Chapter 11

Case No.: 12-11893 (CSS)

Hearing Date: July 16, 2012 at 1:00 p.m. (Requested) Objection Deadline: July 11 at 12:00 p.m. (Requested)

NOTICE OF MOTION AND HEARING

PLEASE

TAKE

NOTICE

that

on

July

5,

2012,

Cordillera

Property

Owners

Association, Inc. (“CPOA”) and Cordillera Metropolitan District (the “District”) (collectively,

the “Moving Parties”) filed the Motion of Cordillera Property Owners Association, Inc. and

Cordillera Metropolitan District to Transfer Venue to Colorado and Joinder in the Motion of

Cheryl M. Foley, Thomas Wilner, Jane Wilner, Charles Jackson, Mary Jackson and Kevin B.

Allen, Individually and as Representatives of a Certified Class of Members, to Transfer Venue

(the “Transfer Motion”) with the United States Bankruptcy Court for the District of Delaware,

824 North Market Street, Wilmington, Delaware 19801 (the “Bankruptcy Court”).

PLEASE TAKE FURTHER NOTICE that concurrently with the filing of the Transfer

Motion, the Moving Parties filed the Motion of Cordillera Property Owners Association, Inc.

and Cordillera Metropolitan District Pursuant to Del. Bankr. L.R. 9006-1(e) to Shorten Notice

and Objection Periods Regarding Their Motion to Transfer Venue to Colorado, and to Schedule

a Hearing on Such Venue Motion (the “Motion to Shorten”) with the Bankruptcy Court.

PLEASE TAKE FURTHER NOTICE that pursuant to the Motion to Shorten, the

Moving Parties have requested that the Court enter an order scheduling a hearing on the Transfer

Motion for the hearing currently scheduled for July 16, 2012 at 1:00 p.m. (Prevailing Eastern

Time), with responses and objections due July 11, 2012 at 12:00 p.m. (Prevailing Eastern

{00647658;v1 }

Time).

In accordance with the Local Rules of Practice and Procedure for the United States

Bankruptcy Court of the District of Delaware (the “Local Rules”), the Bankruptcy Court will

rule on the Motion to Shorten without a hearing.

Dated: July 5, 2012

ASHBY & GEDDES, P.A.

/s/ Ricardo Palacio

William P. Bowden (#2553) Ricardo Palacio (#3765) Benjamin W. Keenan (#4724) 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 Telephone: (302) 654-1888 Facsimile: (302) 654-2067 Email: wbowden@ashby-geddes.com rpalacio@ashby-geddes.com bkeenan@ashby-geddes.com

- and -

SHERMAN & HOWARD L.L.C. Peter A. Cal Mark L. Fulford 633 17th Street, Suite 3000 Denver, CO 80202 Phone: 303-297-2900 Fax: 303-298-0940 E-Mail: pcal@shermanhoward.com mfulford@shermanhoward.com

Attorneys for Cordillera Property Owners Association and Cordillera Metropolitan District

{00647658;v1 }

2

{00138624;vl }

EXHIBIT A

Total/creditors

Colorado

Texas

California

Florida

Illinois

New York

Minnesota

Arizona

Pennsylvania

Georgia

Connecticut

Iowa

North Carolina

Ohio

Kansas

Missouri

Michigan

Wisconsin

Oklahoma

Massachusetts

New Jersey

Nebraska

Tennessee

Washington

Utah

Indiana

Maryland

Canada

Nevada

Louisana

Virginia

Oregon

Kentucky

South Carolina

Dlst Of Columbia Idaho Mississippi Delaware Hawaii Vermont Alabama Arkansas New Hampshire New Mexico Maine south Dakota Montana Rhode Island Wyoming Virgin islands West Virginia FPO,AE Alaska Foreign Countries & Unknown Addresses

5144

2785

309

285

237

180

107

87

86

83

59

58

58

56

56

54

54

40

40

37

31

28

26

26

26

23

22

21

20

20

19

19

17

16

16

15

12

11

10

10

9

8

8

7

7

6

6

3

3

3

2

2

1

1

17

{00138624;vl }

EXHIBITB

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:

Cordillera Golf Club, LLC, dba The Club at Cordillera.

Chapter 11

Case No.: 12-11893 (CSS)

Debtor.

DECLARATION OF NANETTE KUICH IN SUPPORT OF MOTION OF CORDILLERA

PROPERTY OWNERS ~~.SOCIATION,lNC. AND CO~I.LLERA METROPOLITAN DISTRICT TO TRANSFER VENUE TO COLORADO

I, Nanette Kuich, declare under penalty of petjury as follows:

1. [ am the President of the Board of Directors of the Cordillera Metropolitan

District (the "District").

I have served as President since May 20 I 0 and have been a

member of

the Board since May 2006. I have personal knowledge of the inf01mation contained in this

Declaration based U:pon:·ainohg other things, my'service as a ·n1ember of the Board ~md President

1'

,o,•••

I

'·'•

'·~~~

.\_··~,

'

,.

of the Board for the District~iny status as an owrier of property within the Cordillera community,

and based upon my review '6f business records of the District. If called upon to testify, I would

testify truthfully to the following facts.

,,,,

2. I submit this Declaration in support of the Motion of Cordillera Property Owners

:

:

I

·,

,,

Association, Inc. and the Cordillera Metropolitan District to Transfer Venue to Colorado.

~

:

;

.

.

.

,.'.

.: '.•

.

.

.

.

• '· · ;3,

· ••·I have·IivetHrrEagle County, Colorado since:Febrlltary 1996. My;residence-in

Cordillera is my sole· residence.

4. The District is a special district under Colorado law. See C.R.S. § 32-1-101, et

seq. (the "Special District Act"). Under Colorado law, "special districts are political

subdivisions of the state and are created as convenient agencies for exercising such of the

governmental powers of the state as may be entrusted to them." See Johnson Homes, Inc. v.

Southwest Metropolitan Water and Sanitation District, 725 P.2d 12, 13 (Colo. Ct. App. 1986);

C.R.S. § 32-1-1 03(20) ("Special district means any quasi-municipal corporation and political

subdivision organized or acting pursuant to the provisions ofthis article.").

In addition to the

provisions ofthe Special District Act, the District also is governed by its Amended and Restated

Service Plan, which was approved by the Eagle County Board of County Commissioners on May

3, 2005 (the "Service Plan").

5. Within the Cordillera community, and pursuant to the Special District Act and the

Service Plan, the District provides, among other things, operation and maintenance of all public

facilities and infrastructure, which includes more than 40 miles of roadway and shoulder, 7,000

acres of property, and associated landscaping, water features, ponds, streetlights and signage.

In

addition, the District performs snow removal, weed and pest control operations; manages the

community's recreation programs (other than those operated by the Debtor); provides public

safety services for the community, traffic control, wildlife management, and architectural

guideline compliance. In addition to operating and maintaining the public infrastructure within

Cordillera, the District has incuned significant bond debt to construct the public infrastructure

and currently repays the bond debt, as well as covers its operating expenses, with property taxes

paid by property owners within Cordillera, including the Debtor.

2

6. The District is authorized by the Special District Act to levy taxes on all taxable

property located within the District's botmdaries, for the purpose of defraying the costs of

government and satisfying the District's outstanding debt obligations. See 32-1-1201, C.R.S.

Under Colorado law, the taxes owed to the District are automatically secured by a first and prior

lien against the Debtor's taxable property located within the District's boundaries. See 32-1-

1202, C.R.S.

7. The Debtor is one of the two largest taxpayers within the District. In Colorado,

O'

I

property taxes are paid in arrears, meaning that the Debtor's 2011 property taxes are actually

paid in 2012. As of the date of this affidavit, the debtor has not yet paid its 2011 taxes (due in

2012) and is in arrears in the amount of $205,311.31.

8. The Debtor's 2011 taxes, payable in 2012, are based upon an assessed value of

$2,904,860. In Colorado, commercial property, such as that of the Debtor, is assessed for tax

purposes at 29% of actual value. The Debtor has disputed the assessed value.

9. The total actual value of the real estate within Cordillera, as determined by the

Eagle County Assessor's Office, was $1,433,933,030 in 2010; in 2011, the value dropped to

$1,029,347,630. The decline in property value impacted the District's credit rating, in a negative

way, and also necessitated an increase in the District's mill levy to generate the tax revenues

necessary to cover the District's debt service and operational obligations.

10. It would be a substantial burden for me and others involved in this matter to travel

to Delaware from Colorado if the bankruptcy case were to remain in Delaware. Travel to

3

Wilmington, Delaware from Eagle Collll'cy'. Colorado takes not less th.an ten bours. Depending

upon what time hearings in Delaware are completed, I may not be able to return to Colorado on

the same day as the hearing.

Under penalty ofpeijury under the laws ofthe United States of .America and pur.;uqnt to

28 U.S.C. § 1746, l certify that the foregoing statements are true and correct to the best of my

lc.tlnwledge. information, and belief.

Executed this~day of July. 2012.

4

true and correct to the best of my lc.tlnwledge. information, and belief. Executed this~ day of

{00138624;vl }

EXHIBITC

UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:

Cordillera Golf Club, LLC, dba The Club at Cordillera.

Debtor.

Chapter 11

Case No.: 12-11893 (CSS)

DECLARATION OF LOIS M. VANDEUSEN IN SUPPORT OF MOTION OF CORDILLERA PROPERTY OWNERS ASSOCIATION, INC. AND CORDILLERA

METROPOLITAN DISTRICT TO TRANSFER VENUE TO COLORADO

I, Lois M. Van Deusen, dechire under penalty of perjury as follows:

1. I am the President of the Cordillera Property Owners Association, Inc. ("CPOA").

I have held this position since September 19, 2011. I have been a member of the Board of the

CPOA since November 16,2009. I have personal knowledge ofthe information contained in

this Declaration based upon, among other things, my service as President and member of the

Board of the CPOA, my status as an owner of property within the Cordillera community, my

status as a resigned member of the Cordillera Golf Club, LLC (the "Debtor" or "Club"), and

based upon my review of business records of the CPOA If called upon to testify, I would testify

truthfully to the following facts.

2. I submit this Declaration in support of the Motion of Cordillera Property Owners

Association, Inc. and Cordillera Metropolitan District to Transfer Venue to Colorado.

3. Eagle County, Colorado has been my primary residence since 2008. I have been a

member of the Club since 2000. I also own a consulting business, LVD Consulting, LLC, that is

registered as a Colorado entity and whose business address is in Colorado.

4. My family's application for membership in the Club was made in Colorado. My

membership agreement with the Debtor is governed by Colorado law. The existence of the Club

and the amenities it offered was a significant factor in our decision to buy property in Colorado.

5. The COPA is established pursuant to and governed by the Amended and Restated

Declaration of Protective Covenants, Conditions, and Restrictions for Cordillera, recorded on

May 12, 1993 in the real property records ofthe Eagle County Clerk and Recorder's Office at

Reception No. 504866 (as the same has been amended by the Second Amendment to Declaration

of Protective Covenants, Conditions, and Restrictions for Cordillera, recorded on May 11, 1998

in the real property records of the Eagle County Clerk and Recorder's Office at Reception No.

65572, and the Third Amendment to Declaration of Protective Covenants, Conditions, and

Restrictions for Cordillera, recorded on Aprill4, 2010 in the real property records ofthe Eagle

County Clerk and Recorder's Office at Reception No. 201007045), and the Amended and

Restated Bylaws of Cordillera Property Owners Association, Inc., dated as of, and approved by

the Board of Directors, on May 21, 2012.

6. All property owners in the Cordillera community in Eagle County, Colorado are

members ofthe CPOA. Not all property owners within the Cordillera community, however, are

Club members. The CPOA has five Directors, all of whom are resigned members of the Club.

7. The CPOA perfonns functions and manages it affairs in a manner similar to

property owners associations in lifestyle communities to enhance the overall quality of life

within the community, to provide programs and facilities for the community, and to preserve

property values within the community. In furtherance of this mission, the CPOA contracts with

2

and provides financial support to the Cordillera Metropolitan District, a political subdivision of

the State, in the provision of community operations services, debt retirement, and capital

projects; maintains oversight of the architectural review process within the community; manages

a wildfire and healthy forest initiative; administers a wildlife management program in

consultation with the Colorado Division of Wildlife; operates a ski club at Vail Mountain;

manages a community marketing program, and owns and operates a community center which

houses a cafe and a branch office of the Unites States Post Office. The CPOA also has

historically provided funding support for the community's public safety department, and

acquired and subsequently conveyed to the Cordillera Metropolitan District a large parcel of land

abutting the Eagle River, which currently is maintained as open space for the benefit of the

corrununity.

8. The CPOA is funded by assessments paid by its property owners. In addition, the

CPOA receives a percentage of the purchase price of all residential properties sold within the

boundaries subject to the CPOA. The CPOA depends on those revenues to maintain the

programs that characterize the Cordillera lifestyle.

9. The CPOA is one of the defendants in the litigation that the Debtor, its principal,

David A. Wilhelm, and certain related entities commenced in District Court, Eagle County, State

of Colorado styled Cordillera Golf Club, LLC, et al. v. Cordillera Transition Corporation, Inc.•

et al., Case No. 2011-CV~456. In that action, Debtor and the related plaintiffs mischaracterize

the CPOA, its individually named board members, and other community entities and individuals

as the driving force behind the decision of approximately 200 Club members to resign from the

3

Club. In reality, the Debtor's own actions, including broken promises and operational failures,

serve as the fount of community outrage and the resignation decisions. The lawsuit is merely a

last ditch effort to manufacture leverage over a community that serves not as the cause of

Debtor's failures, but the victims of it.

10. The value of properties within the CPOA are impacted by the success (or lack

thereof) of the Club. A significant portion of the CPOA's revenue comes from a Real Estate

Transfer Assessment ("RETA") of2% charged against the sales price of each home sold in

Cordillera. In 201 0, there were 44 transactions v.ithin Cordillera, resulting in RETA revenue of

$1,345,708. In 2011, the year in which Debtor's litigation against the CPOA was commenced,

there were 28 transactions within Cordillera, resulting in RETA revenue of$642,755. In

addition, the total actual value of the real estate within Cordillera, as determined by the Eagle

County Assessor's Office, was $1,433,933,030 in 201 0; in 2011, the value dropped to

$1,029,347,630.

11. It would be a substantial burden for me and others involved in this matter to travel

to Delaware from Colorado if the bankruptcy case were to remain in Delaware. Travel to

Wilmington, Delaware from Eagle County, Colorado takes not less than ten hours. Depending

upon what time hearings in Delaware are completed, I and other Colorado residents may not be

able to return to Colorado on the same day as the hearing. The CPOA would pay for the

expenses associated with this travel.

4

Under pena1ty of peljury under the laws of the United States of America and pursllllllt to

28 U.S.C. § 1746, I certify that the foregoing statements are true and correct to the best of my

knowledge, information, and belief.

Executed tbi~yof July, 2012.

5

{00138624;vl }

EXHIBITD

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

Inre:

 

Chapter 7

Spanish Peaks Holdings II, LLC

Case No.ll-13300 (Bl.S)

Debtor.

Inre:

 

Chapter7

Spanish Peaks Lodge,. LLC

Case No.ll-13301 (BLS)

Debtor.

Inre:

Chapter7

The Oub at Spanish Peaks, LLC

Case No. 11-13302 {BLS)

Debtor.

MEMORANDUM ORDER

Upon consideration of the Motion of Secured Creditors for Change of Venue Pursuant to 28 U.S.C. § 1412 (the "Venue Motion"),l and the objections thereto; and after conducting an evidentiary hearing on the Venue Motion; and after due deliberation, the Court hereby FINDS as follows:

1. At issue is whether these three related Chapter 7 bankruptcy cases should remain in this Court, where they have pended since being filed in October 2011, 2 or be transferred to the Bankruptcy Court in

1 Docket Nos. 72, 64, and 84, respectively, in Case Nos. 11-13300, 11-13301, and 11-

13302.

2 There is no dispute that venue is proper in this Court under 28 U.S.C. § 1408. One of

the Debtors (defined below) is a Delaware corporation and the other two Debtors are affiliates of a Delaware corporation. Section 1408, entitled "Venue of Cases Under Ti- tle 11," provides that:

"IA] a case under title 11 may be commenced in the district court for the district (1) in which the domicile, residence, principal place of business in the United States, or principal assets in the United States, of the person

1

Montana, where the Debtors' 3 primary assets, much of their business

operations, and many of their creditors are located. For the reasons ex- plained further below, the Court will transfer these cases to Montana.

2. Before financial troubles caused the Debtors to file for bankrupt-

cy, they were in the process of developing a 5,700 acre, high-end, resi-

dential community in Big Sky, Montana (the "Development"). After the bankruptcy filings, Charles M. Forman was appointed as the Chapter 7

trustee (the "Trustee") to administer the Debtors' estates and to sell the Development to repay the Debtors' creditors.

3. The Movants4 are various engineers, architects, contractors, and

subcontractors who worked on the Development Each Movant has filed construction liens against the Development under Montana law. The Movants have also sued the Debtors (and others) in Montana state court over issues of lien priority and on claims for breach of contract, violation of Montana's Prompt Payment Act, unjust enrichment and quantum meruit. Those actions have been halted for the time being by operation of the automatic stay, which came into effect when the Debt-

ors filed for bankruptcy.

4. All parties agree that 28 U.S.C. § 1412 is the starting point for the

Court's venue transfer analysis. Entitled "Change of Venue/' § 1412 provides that "a district court may transfer a case or proceeding under title 11 to a district court for another district, in the interest of justice or

for the convenience of the parties." See also Fed R. Bankr. P. 1014(a) ("If

or entity that is the subject of such case have been located for the one hundred and eighty days immediately preceding such commencement ; or (2) in which there is pending a case under title 11 concerning such person's affiliate, general partner, or partnership." Because the Debtors' principal assets are in Montana, venue would also be appropri- ate in the District of Montana. 3 The "Debtors" are Spanish Peaks Holdings II, LLC, Spanish Peaks Lodge, LLC, and

The Club at Spanish Peaks, LLC. The former is a Delaware Corporation, the latter two are Montana corporations. 4 The "Movants'' are CIA Inc., Morrison Maierle Inc., Specialty Systems Inc.,

MaCon

Stresscon Inc., Williams Plumbing Heating & Utilities Inc., Ace Electric Inc

Supply Inc., Kenyon-Noble Lumber Company Inc., YMC Inc., and Walker Excavation

Inc.

2

a petition is filed in a proper district,

any other district if the court determines that the transfer is in the inter- est of justice or for the convenience of the parties."). Section 1412 ap- plies in cases, like this one, where venue in a given district is proper under 28 U.S.C. § 1408, as well as in cases that are improperly venued. The party moving for change of venue has the burden of proof by a preponderance of the evidence, and, although the debtor's choice of fo- rum is entitled to great weight initially, In re Enron, 284 B.R. 376, 386 (Bankr. S.D.N.Y. 2002), the decision of whether to transfer venue "is within the court's discretion based on an individualized case-by-case

the case may be transferred to

analysis of convenience and fairnes

Prop., lnc., 136 B.R. 261, 266 (D. Nev. 1991) (stressing that "the determi- nation as to venue is fact-specific"); In re Abacus Broad. Corp., 154 B.R. 682, 685 (Bankr. W.D. Tex. 1993) ("[V]enue does not easily submit to hard and fast rules."). 5. When asked to transfer an entire bankruptcy case-as opposed to a discrete proceeding within a case-courts examine "whether trans- fer of venue will promote the efficient administration of the estate, judi~ cial economy, timeliness and fairness." In re Enron, 284 B.R. at 387; see

also In re Rehoboth Hospitality, No. 11-12798, 2011 WL 5024267, at *3

(Bankr. D. Del. Oct. 19, 2011); In re Centennial Coal, Inc., 282 B.R. 140, 146 (Bankr. D. DeL 2002). Guiding that inquiry are factors such as:

c;;."

Id.; see also In re Consol. Equity

"

The proximity of the debtor to the court;

a

The proximity of creditors of every kind to the court;

a

The proximity of the witnesses necessary to the administra- tion of the estate;

o

The location of the estate's assets;

a

The economical administration of the estate; and

a

The necessity for ancillary administration if liquidation shoutd

result.

1 COLLIER ON BANKRUPTCY ~ 4.05[3)[ii] (Alan N. Resnick & Henry J. Sommer eds., 16th cd. 2011) (citing In re Commom:oealth Oil Ref. OJ., 596

3

F.2d 1239, 1247 (5th Or. 1979), cert. denied, 444 U.S. 1045, 100 S. Ct. 732

(1980)).

6. The Court also agrees with Chief Judge Gross' recent statement

in In Te Rehoboth that

Courts in this Circuit

have held that the estate of a real estate

partnership is most efficiently adm.inistered in the district where the principal asset is located. In the context of what is essentially a

single asset case, the location of the lone improved real estate asset is of particular concern to the Court, especially in the event of a potential liquidation, and the case is better administered by a court in the district in which it is located.

2011 WL 5024267 at *5 (citations and quotation marks omitted). While

the Court acknowledges that these cases do not precisely fit the single

asset model, Chief Judge Gross' comments do have application to the case at bar.

7. After carefully considering the above policies and factors, the

Court finds that the Movants have satisfied their burden to show that

these Chapter 7 cases should be transferred to Montana.

8. First, the Debtors have extensive contacts with Montana. Two of

the three Debtors are Montana corporations. The Development-the

Debtors' primary asset-is located there, and Montana is where the

Debtors do the bulk of their business.

9. Second, a review of the Debtors' schedules shows that a signifi-

cant number of creditors are located either in Montana or in nearby

Western states like California, Oregon, and Utah. Though these claim-

ants may not, even in the aggregate, hold the largest claims against the

estate-that claim appears to belong to a New York City based inves-

tor-the Court must consider the interests of "creditors of every kind"

when evaluating a transfer request. In re Commonmealth Oil, 596 F.2d at

1247.

10. Third, these are Chapter 7 cases primarily involving the sale of

real property located in Montana. Though the record reflects that the

4

Trustee and his professionals have ably managed these cases, it is also clear that the sale process remains in its early stages. For instance, no sale motion has been filed, the Court has not been asked to approve bidding and sale procedures, and the Trustee has not yet moved to re- tain a broker or investment banker in connection with a sale.

11. The Trustee testified credibly and candidly that he is concerned

about the risk of material harm to the estates and to the interests of

creditors if the sale process is delayed on account of a transfer of venue. He further testified that he hoped to move forward with a sale by late spring of this year. However, given where the sale process is at the cur- rent time, the Court does not conclude that transferring venue will ma- terially disrupt the orderly administration and prosecution of these cas- es, or a future sale. Were a sale scheduled to take place imminently, it is likely that the Court's determination today would be different.

12. Finally, the Court notes that these cases may present the pro-

spect of significant litigation involving the claims of the Movants, and

perhaps others. According to the record adduced at the January 7, 2011

hearing on the Venue Motion, that litigation will primarily involve questions of Montana lien and real property law. While this Court could hear those disputes, the Montana Bankruptcy Court is better po- sitioned to do so. See In re Rehoboth, 2011 WL 5024267 at *4 (holding that because "resolution of the issues will require interpretation and appli-

the Texas Bankruptcy Court is

uniquely positioned to determine [them]").

13. The Court is satisfied that the Movants have carried their bur-

den to demonstrate that transferring venue to Montana is in the inter- ests of justice, fair to the parties in interest, and consistent with the effi- cient administration of the estates. However, this Court will retain ju- risdiction to determine allowance of fees, expenses, and compensation for the Trustee and the Trustee's professionals retained in this Court prior to the transfer of venue, unless otherwise ordered by subsequent ruling of this Court or of the Montana Bankruptcy Court.

cation of Texas real property law

5

Accordingly, it is hereby

ORDERED, that the Venue Motion is GRANTED; and it is further

ORDERED, that these cases will be transferred to the United States Bankruptcy Court for the District of Montana, subject to the lim- ited retention of jurisdiction provision contained in ,113 above.

Dated: January 10, 2012

Wilmington, Delaware

BY THE COURT:

6

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re:

Cordillera Golf Club, LLC, dba The Club at Cordillera.

Debtor.

Chapter 11

Case No.: 12-11893 (CSS)

Related Docket

ORDER GRANTING MOTION OF CORDILLERA PROPERTY OWNERS ASSOCIATION, INC. AND CORDILLERA METROPOLITAN DISTRICT TO TRANSFER VENUE TO COLORADO ANDJOINDER IN THE MOTION OF CHERYL M. FOLEY, THOMAS WILNER, JANE WILNER, CHARLES JACKSON, MARY JACKSON AND KEVIN B. ALLEN, INDIVIDUALLY AND AS REPRESENTATIVES OF A CERTIFIED CLASS OF MEMBERS, TO TRANSFER VENUE

Upon consideration of the Motion of Cordillera Property Owners Association, Inc. and

Cordillera Metropolitan District to Transfer Venue to Colorado and Joinder in the Motion of Cheryl M.

Foley, Thomas Wilner, Jane Wilner, Charles Jackson, Mary Jackson and Kevin B. Allen, Individually

and as Representatives of a Certified Class of Members, to Transfer Venue (the “Motion”), and having

considered any objections thereto; and it appearing that due and adequate notice of the Motion has been

given; that it appears that no further or other notice is required; and after due deliberation and sufficient

cause appearing therefor, it is hereby ORDERED that

1. The Motion is GRANTED for the reasons stated on the record and as set forth herein.

2. This Chapter 11 case (including all pending contested matters and adversary proceedings

arising in, arising under or related to this Chapter 11 case) is hereby transferred to the United States

Bankruptcy Court for the District of Colorado, effective immediately.

Dated: July

00648557.1

,

2012

The Honorable Christopher S. Sontchi United States Bankruptcy Court

CERTIFICATE OF SERVICE

I, Ricardo Palacio, hereby certify that, on July 5, 2012, I caused one copy of the foregoing to

be served on counsel below by first class United States mail, postage prepaid, unless otherwise

indicated.

{00074510;vl }

Is/ Ricardo Palacio

Ricardo Palacio (#3765)

Cordillera 2002 Service List

Christopher Celentino, Esq Erika Moribita, Esq. Mikel Bistrow, Esq. Foley & Lardner LLP

402 W. Broadway Suite 2100

San Diego, CA 92101 (Counsel to the Debtor)

HAND DELIVERY Matthew P. Ward, Esq. Ericka F. Johnson, Esq. Womble Carlyle Sandridge & Rice, PLLC

222 Delaware Avenue, Suite 1501

Wilmington, DE 19801 (Northlight Fiancial, LLC)

Harlan W. Robins, Esq. Dickinson Wright PLLC 15 N. 4th Street Columbus, OH 43215 (Northlight Financial LLC)

Melissa Maxman, Esq

Ronald Wick, Esq. Cozen & O'Connor PC

1627 I Street, NW, Suite 1100

Washington, DC 20006 (Cordillera Transition Corporation)

Carl A. Eklund, Esq Ballard Spahr LLP

1225 17th Street, Suite 2300

Denver, CO 80202 (Alpine Bank)

Kristi A. Katsma, Esq. Dickinson Wright PLLC

500 Woodward Avenue, Suite 4000

Detroit, MI 48226 (Northlight Financial LLC)

J064775l;v2}

HAND DELIVERY Michael R. Nestor, Joseph M. Barry Donald J. Bowman, Kenneth J. Enos

Young Conaway Stargatt & Taylor LLP

1000 N. King Street, Rodney Square

Wilmington, DE 19801 (Counsel to the Debtor)

HAND DELIVERY MarkS. Kenney, Esq.

Office of the United States Trustee

844 N. King Street, Suite 2207

Lock Box 35 Wilmington, DE 19801

HAND DELIVERY Damien Tancredi, Esq. Cozen & O'Connor, PC

1201 N. Market Street, Suite 1400

Wilmington, DE 19801 (Cordillera Transition Corporation)

HAND DELIVERY Richard Riley, Esq. Duane Morris LLP

222 Delaware Avenue, Suite 1600

Wilmington, DE 19801

Vincent M. Marriott, III, Esq. Sarah Schindler-Williams, Esq. Ballard Spahr LLP

1735 Market Street, 51st Floor

Philadelphia, PA 19103 (Alpine Bank)

Ron Garfield, Esq

Garfield & Hecht, P.C.

601 East Hyman Avenue

Aspen, CO 81611 (Alpine Bank)

Brad W. Breslau, Esq. Cozen & O'Connor PC 707 17th Street, Suite 3100 Denver, CO 80202 (Cordillera Transition Corporation)

HAND DELIVERY Tobey M. Daluz, Esq.

Joshua E. Zugerman, Esq Ballard Spahr LLP

919 Market Street, II th Floor

Wilmington, DE 19801 (Alpine Bank)

James J. Holman, Esq Duane Morris LLP 30 South 17th Street Philadelphia, PA 19103-4196 (David A. Wilhelm)

Colorado Department of Revenue Attn: Bankruptcy Unit

1375 Sherman Street, Room 1375

Denver, CO 80261-000 I

Colorado Dept. of Labor & Unemployment Attn: Bankruptcy Division P.O. Box 956 Denver, CO 80201-956

Delaware Division of Revenue Attn: Randy R. Weller, MS NO 25

820 French Street, 8th Floor

Wilmington, DE 19801

Internal Revenue Service Insolvency Section

2970 Market Street

PO Box 7346 Philadelphia, PA 19101-7346

Secretary of State

Division of Corporations Franchise Tax Division

401 Federal Street- Suite 4

P.O. Box 898 Dover, DE 19903

J064775l;v2}

Arthur J. Abramowitz, Esq. Cozen & O'Connor PC Liberty View, Suite 300

457 Haddonfield Road

Cherry Hill, NJ 08002 (Cordillera Transition Corporation)

Alpine Bank A Colorado Banking Corporation Attn: President, Officer of Managing Agent

141 E. Meadow Drive, Suite 210

Vail, CO 81657

Colorado Dept. of Labor & Employmen Attn: Bankruptcy Unit

251 East 12th Avenue

Denver, CO 80203-2202

Cordillera Golf Club LLC Attn: Dan White 97 Main Street Suite E202 Edwards, CO 81632

Department of Treasury Internal Revenue Service Ogden, UT 84201-0030

Secretary of Treasury Attn: Officer, Managing Agent or General Agent

820 Silverlakd Blvd., Suite I00

Dover, DE 19904

Securities & Exchange Commission SEC Headquarters

Attn: Office of the General Counsel (Bankruptcy)

100 F Street, NE

Washington, DC 20549

Securities & Exchange Commission

Attn: Office of the General Counsel (Bankruptcy) Centeral Regional Office

1801 California Street, Suite 1500

Denver, CO 80202-2656

Securities & Exchange Commission New York Regional Office Attn: George S. Canellos, Regional Director 3 World Financial Center, Suite 400 New York, NY 10281-1022

U.S. Secretary of Treasury

Attn: Office of the General Counsel (Bankruptcy)

1500 Pennsylvania Avenue, NW

Washington, DC 20220

David Wilhelm 97 Main Street Suite E202 Edwards, CO 81632

Acushnet Company Attn: President, Officer or Managing Agent P.O. Box 88111 Chicago, IL 60695-111 (Top 20 Creditor)

Callaway Golf, Inc. Attn: Joyce P.O. Box 88111 Chicago, IL 60695-111 (Top 20 Creditor)

Ceres Design & Arborscape LLC d/b/a Land Designs by Ellison Attn: President, Officer or Managing Agent P.O. Box2134 Eagle, CO 81631-2134 (Top 20 Creditor)

)064775l;v2}

HAND DELIVERY

Ellen W. Slights, Esq.

Assistant United States Attorney United States Dept. of Justice

1007 Orange Street, Suite 700

POBox2046

Wilmington, DE 19899

US Bank Attn: President, Officer of Managing Agent 34353 Highway 6 Side c-101 Edwards, CO 81632

Acushnet Company Attn: President, Officer or Managing Agent 333 Bridge Street P.O. Box 965 Fairhaven, MA 02719 (Top 20 Creditor)

Aprapahoe Pumping Systems A Division of Jay B. Folk Attn: Jay Folk P.O. Box 3482 Littleton, CO 80161 (Top 20 Creditor)

Centurylink, Inc. Attn: President, Officer or Managing Agent P.O. Box 4300 Carol Stream, IL 60197-4300 (Top 20 Creditor)

Collett Enterprises Inc. Attn: President, Officer or Managing Agent P.O. Box439 Gypsum, CO 81637 (Top 20 Creditor)

Cox, Castle & Nicholson LLP Attn: President, Officer or Managing Agent

2049 Century Park East, 28th Floor

Los Angeles, CO 90007-3284

(Top 20 Creditor)

Colorado Motor Parts Attn: Susan P.O. Box 186 Frisco, CO 80443 (Top 20 Creditor)

CVC Property Owenrs Association Attn: Diane P.O. Box 2787 Edwards, CO 81632 (Top 20 Creditor)

Eagle County Treasurer Attn: President, Officer or Managing Agent P.O. Box470 Eagle, CO 81631 (Top 20 Creditor)

Greenberg Traurig Attn: President, Officer or Managing Agent

5100 Town Center Circle, Suite 400

Boca Raton, FL 33486

(Top 20 Creditor)

LL Johnson Distribution Co. Attn: John Knott

4700 Holly Street

Denver, CO 80216 (Top 20 Creditor)

Taylor Made, Inc.

Taylor Made, Adidas Golf Co. Attn: President Offider or Manging Agent

5545 Fermi Court

Carlsbad, CA 92008-7324

(Top 20 Creditor)

Garry R. Appel Appel & Lucas, PC 1660 17th Street, Suite 200 Denver, CO 80202 (Members of Certified Class)

l0647751;v2}

Dickinson, Prud'Homme, Adams & Ingram

Attn: President Offider or Manging Agent

730 17th Street, Suite 730

Denver, CO 80202-3504

(Top 20 Creditor)

Thomas Genshaft Attn: President, Officer or Managing Agent

39 Boomerang Road

Aspen, CO 81611 (Top 20 Creditor)

Holy Cross Electric Assoc. Inc. Attn: President, Officer or Managing Agent P.O. Drawer 2150 Glenwood Springs, CO 81602-2150 (Top 20 Creditor)

River Centre Development Attn: Dan Siefers

27 Main Street

Edwards, CO 81632 (Top 20 Creditor)

The Rush Family Trust UTD May 8, 1985 Jeffrey L. Rush, Trustee Attn: Evan Stone, Esq.

12348 High Bluff Drive, Suite 100

San Diego, CA 92130

(Top 20 Creditor)

HAND DELIVERY Mark D. Collins

Zachary I. Shapiro Richards Layton & Finger PA One Rodney Square

920 North King Street

Wilmington, DE 19801 (Members of Certified Class)