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In re Salander

United States District Court, S.D. New York

December 27, 2013


Page 560

For Appellant: Andrew B. Helfand, Jacob Ginsburg, Helfand & Helfand, New York, New York.

For Appellee First Republic Bank: J. Christopher Shore, Julie M. Winters, White & Case LLP, New York, New York.


Page 561



Before the Court are two related appeals of Wells Fargo Bank, National Association f/k/a Wachovia Bank, N.A. (" Wells Fargo" ). (Nos. 13-CV-2356, 13-CV-2357.) First, Wells Fargo appeals from the Bankruptcy Court's May 24, 2012 Consent Order Holding Debtor Julie D. Salander in Contempt (the " Consent Order" ). (WF Mem. ¶ 1.)[1] Wells Fargo also appeals from the Bankruptcy Court's June 8, 2012 Memorandum Decision and June 15, 2012 Order (collectively, the " 2012 Memorandum

Page 562

Decision and Order" ) prohibiting Wells Fargo from asserting a forgery claim, or any other claims belonging to the Debtors' estate, in state court. ( Id.) For the reasons that follow, the appeal of the Consent Order is DISMISSED and the 2012 Memorandum Decision and Order is AFFIRMED.

I. Background

I set forth only the facts relevant to the disposition of these matters below.[2]

A. Mortgages and Bankruptcy Proceedings

On February 27, 2003, Lawrence Salander and his wife, Julie Salander (" Ms. Salander" or " Debtor" ) (collectively, the " Debtors" ), executed a note in favor of First Republic Bank (" First Republic" ) (the " FRB Note" ) in the sum of $1,400,000 plus interest, as well as a mortgage (the " FRB Mortgage" ), which secured their obligations under the FRB note. (FRB Mem. 3.)[3] The FRB Mortgage, which was recorded on May 13, 2003, gave First Republic a first priority mortgage on the Debtors' Millbrook, New York property (the " Millbrook Property" ). ( Id.)

Using the same Millbrook Property as collateral, on December 14, 2005, the Debtors obtained a mortgage loan from Wells Fargo, which was recorded on March 16, 2006, and another on January 19, 2007, which was recorded on February 9, 2007. ( Id.)

Page 563

On November 2, 2007, the Debtors filed a joint petition for relief under Chapter 11 of the United States Bankruptcy Code. ( Id. at 4.) On April 17, 2008, the bankruptcy case was converted to Chapter 7, and on April 18, 2008, the Bankruptcy Court appointed a Chapter 7 trustee (the " Trustee" ). ( Id.) On October 31, 2008, a meeting of creditors was held pursuant to 11 U.S.C. § 341; the Debtors, Debtors' counsel, the Trustee, and counsel for First Republic attended. (WF Mem. ¶ 28.) At this meeting, the Trustee examined Ms. Salander and showed her several First Republic documents bearing a signature purporting to be Ms. Salander's -- apparently none relating directly to the FRB Mortgage on the Millbrook Property, but several relating to other loans from First Republic -- which she denied signing. ( Id. ¶ ¶ 29-32.)

B. Settlement Agreement

First Republic filed a proof of claim against the Debtors in the amount of $46,067,000, arising from the Millbrook Property mortgage and myriad other instruments, and asserting a security interest in all the personal property and assets owned by the Debtors and several of their businesses, as well as the Millbrook Property and real property located in Manhattan. (FRB Mem. 4.) After extensive negotiations, however, the parties settled, and on October 21, 2009, the Bankruptcy Court entered an order (" Settlement Order" ) approving the settlement agreement (the " Settlement Agreement" ) between First Republic and the Trustee of the Debtors' estate. (WF Mem. ¶ 42.) Although Wells Fargo had filed an objection to the Motion to Approve the Settlement Agreement in which it argued that there was insufficient disclosure, ( see id . ¶ ¶ 36-37), that objection was withdrawn prior to issuance of the Settlement Order, ( id. ¶ 36; FRB Mem. 5).

As part of the Settlement Agreement, First Republic agreed to reduce its claim and narrow the scope of its security interests in the estate's property. (FRB Mem. 5.) In exchange, the Trustee, on behalf of the Debtors, released any and all claims against First Republic " arising from or related to the Estate." ( Id.) In particular, the Settlement Agreement:

Resolve[d] all claims, demands and causes of action that may be or have been asserted, directly or indirectly, against First Republic by the [Debtors], the Trustee and the Estate . . . and releases, discharges and acquits First Republic . . . from any and all claims . . . of any kind, character, or nature whatsoever whether known or unknown, foreseen or unforeseen, liquidated or unliquidated, fixed or contingent, . . . in law, at ...

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