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Carters Grove Complaint

Carters Grove Complaint

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Published by Halsey Minor
Litigation Filed Against Colonial Williamsburg for Dumping Toxic Chemicals on Carters Grove
Litigation Filed Against Colonial Williamsburg for Dumping Toxic Chemicals on Carters Grove

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Categories:Types, Business/Law
Published by: Halsey Minor on Mar 29, 2013
Copyright:Attribution Non-commercial

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07/31/2013

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DOCS_SF:76973.11 33801-002
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COMPLAINT REGARDING OBJECTION TOCLAIM FILED BY THE COLONIAL WILLIAMSBURGFOUNDATION AND COUNTERCLAIMS
Richard M. Pachulski (CA Bar No. 90073)Debra I. Grassgreen (CA Bar No. 169978)Gail S. Greenwood (CA Bar No. 169939)John W. Lucas (CA Bar No. 271038)PACHULSKI STANG ZIEHL & JONES LLP150 California Street, 15th FloorSan Francisco, California 94111-4500Telephone: 415/263-7000Facsimile: 415/263-7010E-mail: rpachulski@pszjlaw.comdgrassgreen@pszjlaw.comggreenwood@pszjlaw.com jlucas@pszjlaw.comAttorneys for Carter’s Grove, LLCDebtor and Debtor in PossessionStephen J. DarmodyFOLEY & LARDNER, LLP2 South Biscayne Boulevard, Suite 1900Miami, Florida 33131Telephone: 305-482-8427Facsimile: 305-482-8600E-mail: SDarmody@foley.comPROPOSED Special Litigation Counselfor Carter’s Grove, LLCDebtor and Debtor in Possession
UNITED STATES BANKRUPTCY COURTNORTHERN DISTRICT OF CALIFORNIASAN FRANCISCO DIVISION
In re:
CARTER’S GROVE, LLC, 
Debtor.Case No.: 11-30554 (TEC)Chapter 11
CARTER’S GROVE, LLC, 
Plaintiff,v.
THE COLONIAL WILLIAMSBURGFOUNDATION
,Defendant.Adv. Proc. No.: 11-_________ (TEC)
COMPLAINT REGARDING:(A) OBJECTION TO CLAIM FILED BYTHE COLONIAL WILLIAMSBURGFOUNDATION, (B) COUNTERCLAIMSFOR (I) FRAUDULENT CONCEALMENT, (II) COST RECOVERY UNDER CERCLA, AND (III) DECLARATORY JUDGMENT[JURY TRIAL REQUESTED]
Carter’s Grove, LLC, the debtor-in-possession and plaintiff herein (“Plaintiff”) alleges asfollows:
PRELIMINARY STATEMENT
1. Plaintiff is the assignee of a purchase agreement pursuant to which it acquired anhistoric property known as Carter’s Grove which is located in Williamsburg, Virginia. Defendant,the Colonial Williamsburg Foundation (“CWF”), was the seller of the property.
 
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DOCS_SF:76973.11 33801-002
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COMPLAINT REGARDING OBJECTION TOCLAIM FILED BY THE COLONIAL WILLIAMSBURGFOUNDATION AND COUNTERCLAIMS
2. The price to purchase Carter’s Grove was $5 million in cash, and a promissory notein favor of CWF in the amount of $10,300,000, payable in installments through January 15, 2011.CWF contends that Plaintiff defaulted under the promissory note and filed a proof of claim in thealleged secured amount of $4,078,156.98 (the “Claim”).3. Plaintiff objects to the Claim, and asserts affirmative causes of action for recoveryagainst CWF, on the grounds that CWF knew of, but failed to disclose and actively concealed,significant defects in the property. Among other things, CWF knew of and actively concealedlong-term and pervasive moisture, water damage and mold in the historic Mansion on the property,and concealed the disposal of refuse and other debris on the facility from which hazardoussubstances are now being released. As more fully set forth below, Plaintiff is informed andbelieves that CWF knew of these defects and intentionally concealed them in an effort to misleadthe buyer and sell Carter’s Grove at a grossly inflated price.
PARTIES
4. On February 14, 2011 (the “Petition Date”), Plaintiff filed its voluntary petition forrelief under chapter 11 of the United States Bankruptcy Code in the above-referenced case (the“Bankruptcy Case”). Plaintiff continues to operate its business and manage its affairs as debtor-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.5. Plaintiff is a Virginia limited liability company formed on or about December 10,2007 to hold title to an historic property acquired by Halsey M. Minor (“Mr. Minor”), a longtimeSan Francisco resident.6. Plaintiff is informed and believes that The Colonial Williamsburg Foundation(“CWF”) is a non-stock, non-profit Virginia corporation.
JURISDICTION AND VENUE
7. This Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§157 and 1334(b), and 42 U.S.C. § 9613(b).8. Certain of the counts in this Complaint are core under 28 U.S.C. § 157(b)(2)(A), (B),(C), and (O) (Counts 1, 2, 3, and 4) and the remaining counts are non-core (Counts 5 and 6).
 
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3
COMPLAINT REGARDING OBJECTION TOCLAIM FILED BY THE COLONIAL WILLIAMSBURGFOUNDATION AND COUNTERCLAIMS
9. This adversary proceeding is brought pursuant to 11 U.S.C. §§ 502 and Rules3007(a)-(b) and 7001 of the Federal Rules of Bankruptcy Procedure.10. Venue lies in the United States Bankruptcy Court, District of Northern California,pursuant to 28 U.S.C. §§ 1408 and 1409(a).11. CWF is subject to the jurisdiction of this Court.12. A copy of this Complaint has been provided to the Attorney General of the UnitedStates and to the Administrator of the Environmental Protection Agency (“EPA”), as required bysection 113(
l
) of CERCLA, 42 U.S.C. § 9613(
l
).
GENERAL ALLEGATIONS
13. On or about October 22, 2007, the Halsey McLean Minor Revocable Trust 11304(the “Minor Trust”) and CWF entered into a contract for the purchase and sale of an historicproperty known as Carter’s Grove consisting of approximately 475 acres (the “Grounds” or the“Facility”), a three-story mansion built in approximately 1725 (the “Mansion”), and relatedbuildings (the Grounds, the Mansion, and related buildings are collectively referred to as “Carter’sGrove”). The Minor Trust purchased Carter’s Grove from CWF for an initial purchase price of $15,500,000, as subsequently amended (the “Sale”), subject to the terms of a promissory notesecured by a deed of trust on Carter’s Grove in favor of CWF.14. On or about December 7, 2007, pursuant to an amendment to the Sale contract, thepurchase price for Carter’s Grove was reduced to $15,300,000 in consideration for prospectiverepairs to the roof of the Mansion. The agreed purchase price was payable as $5,000,000 cash anda promissory note in the amount of $10,300,000 (the “Note”) payable in six consecutive semi-annual installments of $1,766,666.67 beginning on July 15, 2008 and extending through January15, 2011.15. The Minor Trust is the named purchaser of Carter’s Grove. The purchase agreementwas assigned to Plaintiff with the consent of CWF at or about the time of the Sale. The solemember of Plaintiff is the Minor Trust. Mr. Minor is the trustee of the Minor Trust and thedesignated manager of Plaintiff.

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