A federal judge has ruled that that the 1980 lease for the Dededo Pay-Less property does in fact go hand in hand with the multimillion-dollar bankruptcy auction sale.
Meanwhile a pre-Christmas bid by one of Guam’s largest contractors to purchase Ada’s Professional and Commercial Center may yet be accepted.
Judge Robert J. Faris of the Bankruptcy Court of Guam on Jan. 3 granted Payless Supermarkets Inc.’s motion for clarification of the order that authorized the sale after competitive bidding.
Faris ruled the order was not ambiguous and was not intended to result in the termination of Payless Supermarket’s 1980 lease of the property. “The 1980 Dededo market lease between the debtor [Ada’s Inc.] and Payless Supermarkets did not terminate at the closing of the sale of the property from the debtor to Guam Tumon Co. LLC; and it continues in full force and effect.”
Jae Seung Park president of Guam Tumon Co. had argued through his attorney Richard A. Pipes principal partner of the law office of Richard A. Pipes; that when he purchased the Dededo Pay-Less property the lease was null and void and would terminate with the closing of the sale.
George M. Butler partner in Butler Telford Butler and Chapter 11 bankruptcy trustee for Ada’s Inc.; closed the sale of the Dededo Pay-Less property for $2.4 million on Nov. 24. He had maintained that the lease would not expire when the property was transferred.
Prior to the Oct. 1 auction of the property a new lease was negotiated that took effect Jan. 1. Under the new terms Payless would pay rent equal to 2% of the store’s gross sales with the first payment of percentage rents to start in February. It is estimated that the new lease will bring Park close to $26 000 a month in rent.
The sale of other lucrative properties in the Ada’s Inc. inventory appears to be imminent as Butler has asked for court approval to sell buildings A through F of Ada’s Commercial Center to satisfy loans held by First Hawaiian bank.
On Dec. 23 Perez Bros. Inc. made a 24-hour-only offer to purchase the complete center for $4.5 million. That offer price included the purchase price for Building A which secured First Hawaiian’s bank loan note No. 42 for $500 000; and the purchase price for buildings B C D and F which secured First Hawaiian’s bank loan note No. 59 for $4 million.
Greg D. Perez president of Perez Bros. wrote in his company’s offer to Butler that the offer would expire Dec. 24 at 5 p.m.
Butler asked the court for approval to sell the property to Perez Bros. Inc. The purchase price offered exceeds the last appraised value completed by Mark F. Gruber president and chief appraiser of Micronesian Appraisal Associates on Nov. 28 2003. Gruber appraised Building A at $400 000 and buildings B through F at $3 million.
On June 14 Butler and First Hawaiian stipulated to a lifting of a stay against the sale of the property which included a 90-day joint marketing period prior to initiation of foreclosure. That marketing period commenced Aug. 27 and foreclosure action by the bank that had been planned for Dec. 30 was rescheduled to Feb. 15 in light of the Perez offer.
Perez Bros. gave a cashier’s check in the amount of $80 000. This represents 2% of the offered purchase price and was accepted by Butler and deposited into the collateralized account that he oversees.
First Hawaiian accepted the offer by Perez Bros. and a hearing for approval of the sale was scheduled for Jan. 28.
Butler must entertain other purchase offers until the court confirms the sale. However if a higher acceptable offer is received Perez Bros. Inc. will be given final refusal rights and if they make a higher offer the court will be asked to accept it without further bidding. MBJ