The following is a transcript of a letter dated October 5, 2001, from W. Steve Smith, P.C., 5701 Memorial Drive, Houston, Texas 77007 to:
Allen, Vaughn, Cobb & Hood
Post Office Drawer 4108
Gulfport, Mississippi 39502
(by facsimile 228-864-4852)
McPhail Enterprises
Number 2 Shady Lane
Hattiesburg, Mississippi 39402
(by facsimile 601-579-2900)
Mr. Samir J. Foteh
McGinnis, Lochridge & Kilgore, L. L. P.
1221 McKinney Street, Suite 3200
Houston, Texas 77010
(by facsimile 713-615-8585)
from a copy of the letter faxed from Kim S. Pylinski to Sandy Stewart and posted in the Club House at Mississippi Pines Park.
Re: The Buffalo Corporation, Debtor
Case No. 99-40876-H4-7
Dear Gentlemen:
A buyer for Country Creek, Mississippi Pines, and Scenic Trails is unwilling to proceed until the Mississippi Real Estate Commission removes membership parks from the rules and regulations pertaining to timeshare ownership and/or substantially modifies the applicable rules and regulations as they relate to membership parks. I have been in touch with the counsel for the Commission and am of the belief that that will be accomplished but not before year-end. Another impediment to closing this sale is the necessity of trying a case against Intrepid L.L.C. later this month to void a tax deed upon Country Creek resulting from a 1998 tax sale for 1997 taxes.
Upon my appointment, we coordinated with the clerks in each of the four counties and ascertained that Scenic Trails had been redeemed from a 1997 tax sale by the Debtor, that Country Creek had not been sold for a 1997 tax sale, and obtained information on the 1997 through 1999 taxes due on Country Creek, and that Mississippi Pines and Okatoma River had been sold for 1997 taxes. The estate timely redeemed the Mississippi Pines and Okatoma River properties.
As it turns out, the information for Country Creek was wrong. Intrepid did buy the property in 1998 and in November of 2000, sought relief from the bankruptcy stay for issuance of a tax deed cutting off the interest of the Debtor. Our research indicates that we should prevail, voiding the tax deed, because, but for the representation of the taxing authority that no sale had occurred, I stood ready, willing, and able to redeem the property.
Based upon that, I had obtained a verbal commitment from the prospective purchaser to operate the three parks pending a sale. This was necessitated because collections have fallen so precipitously the last six months. I believe I am at fault for that decline – to pump up spirits I introduced the membership to the prospective purchaser. Members are now withholding dues’ payments in the belief that this purchaser will lower dues and/or until the new purchaser arrives, there is always the risk of failure, so why pay dues? The latter has become a self-fulfilling prophecy. At any rate, the purchaser is now unwilling to assume operations until the regulations are changed. He is concerned that he may make no sales and that there is significant liability should he assume the mantle of ownership or even operations at this time.
Without assistance from the mortgagees, I am unable to continue. This inability is in spite of significant efforts on the part of Trustee, his counsel, and his accountant who/which have underwritten over $200,000.00 in fees and expenses incurred to date. Therefore, unless you step forward to underwrite the costs of operations while I attempt to defeat Intrepid and effect a change in the rules and regulations, I shall pay the park managers and assistants plus Sandy Stewart through October 15, 2001, pay what bills I now have, and inform the utilities, vendors, etc., of my immediate abandonment of the parks. You will then be in a position to foreclose your liens.
If you wish to discuss this matter, please call me before Wednesday, October 10, 2001.
Sincerely
W. Steve Smith, P.C.
Blanche A. Duett (firm)
Sandy Stewart (fax)
Lanette Hill (fax)
Kathy Ladner (fax)
Don Burr (fax)
Bobby Smith (fax)