Opinion ID: 202705
Heading Depth: 2
Heading Rank: 2

Heading: The Receivership Proceedings

Text: 10 GVI filed two claims with the SBA Receiver: an equitable claim asking for immediate possession of the unsold timeshare units and a monetary claim asking for $1,450,760 for unpaid rent, taxes, unemployment insurance contributions, and associated costs, interest, and penalties. The Receiver recommended denying the equitable claim and granting the monetary claim to the extent of $430,421.84. The Receiver found that the remainder of GVI's monetary claim was either not supported by evidence that met requirements set forth in the Notice to Creditors, or that the claim covered time during which neither Fairway nor Legend were in possession of the resort. 11 At a preliminary hearing on the Receiver's Report, held on February 16, 2005, the district court stated the procedure for making objections: 12 Any objectors should file their materials within 30 days as the order provides. The Receiver will have 30 days to respond. And then when I have that material, I will make a determination of whether I can decide those matters on the papers or whether a bench trial is necessary. And I will reserve decision on that until I see those papers. 13 After GVI stated that it would raise the issue of abstention, the court responded: 14 I think [GVI] should put forth all of its contentions in the objection, and then [the Receiver will] respond to it, and then I'll decide whether I'm going to have a hearing separately on that question of abstention or not. 15 GVI filed an objection to the Receiver's Report and Recommendation, suggesting that the court abstain from deciding whether GVI was in actual possession of the unsold timeshare units, and in the alternative, arguing that GVI was in actual possession of the unsold timeshare units, and thus would be entitled to judgment on its equitable claim. GVI's objection also stated that it was entitled to an additional $120,000 on its monetary claim, of which it identified approximately $59,000 as being undisputed. 16 At a hearing on the objection on July 12, 2005, the court asked GVI if it wanted to present any evidence, any testimonial evidence. GVI responded, Not in addition to what's already been submitted, your Honor, that's correct. GVI then proceeded to state that only its monetary claim was properly before the court because the district court lacked jurisdiction over its equitable claim for possession of the unsold timeshare units. The court responded, I thought everything was before the court. I have jurisdiction over the whole works. GVI then argued that the court lacked jurisdiction because the court had jurisdiction only over assets possessed by Fairway, and that Fairway did not possess the Resort. The court responded, That's a question I will have to decide, not the Territorial Court of the Virgin Islands. I have exclusive jurisdiction of this matter. I've already ruled that. I denied the lifting of the stay. The court then explained: 17 I have taken exclusive jurisdiction of this matter and any property that the Receiver claims that belongs to Fairway. And you want to contest that? Fine. That's what I'm here to hear. . . . I will make a decision as to whether the receiver owns those 1400 units of timeshares, not the Territorial Court of the Virgin Islands. . . . Now, if you say its not before me today, then we'll put it before me at some later time, but I considered it before me today. I considered that I would hear arguments on those issues, all those issues today. And I'm prepared to take it under advisement and write a written opinion about this Court's jurisdiction, the question of abstention, the question of title, the question of forfeiture of the ground lease, the power of the governor to enter into a settlement stipulation which transferred title to the tenants association, all the issues in this case. I'm prepared to decide them all. After a brief colloquy, GVI responded: 18 [T]o the extent that you believe jurisdiction exists over a possession issue and claim, it's our understanding that we would have the opportunity to participate in a plenary hearing on that issue. 19 The court answered, I thought it was before me now. The Receiver denied your equitable claim. So that matter is before me unless you're waiving it. Both GVI and the Receiver proceeded to make their arguments regarding jurisdiction, abstention, and the substantive question of whether or not GVI was in possession of the unsold timeshare units. After both parties made their arguments, GVI stated, The issue of whether there exists a timeshare interest that the receiver has title to is clearly one that's entitled to a plenary hearing, whether it's something that is effectively resolved in the territorial court or here. The court asked, What do you mean by that, plenary hearing? GVI answered: 20 Well, [the Receiver] take[s] the position that they actually have title in this mortgage leasehold interest, which we say doesn't exist anymore. So clearly there's a conflict there. To the extent that they claim this title exists, that's an issue that would have to be fully litigated. The court responded: 21 I gave you an opportunity to litigate it here today. You were advised that if you had any evidence to present on any of these issues, you present it today. GVI then stated: 22 My understanding, and this was going to the last point, so maybe I misunderstood you earlier. In an earlier proceeding before your Honor, you indicated that there would be a full and fair opportunity to address the concerns of [GVI], you know, to the extent that evidence needs to be presented at a full hearing, and I was articulating earlier that [there are] logistical difficult[ies in bringing witnesses.] . . . I was under the impression that once you determined whether there was jurisdiction here, which you said you were going to make that determination, that we would be given the opportunity to have that hearing at another time. 23 The court responded, Well, your impression is wrong. I set aside two days to take testimony here starting today and tomorrow. . . . My order from the bench was clear that when I was going to hear this matter, I would hear any evidence you had to present on any of these issues. GVI then conceded that, what we're talking about here and now, your Honor, are issues of law. . . . [A]ll of the issues that are before your Honor in any event really are issues of law that are based upon the record that is before you, that are contained in our briefs. The court then stated, You had an opportunity to present any evidence you wanted to present today. You didn't choose to do so. So I'm taking this case under advisement. 24 On June 8, 2006, the court issued a written decision affirming its jurisdiction over the unsold timeshare units and rejecting GVI's arguments for abstention, its equitable claim for possession, and its request for a higher monetary claim. The court then affirmed and accepted the Receiver's Report and Recommendation with respect to GVI's claims. GVI now appeals.