Evergreen sale heads to arbitration

It appears that at least incremental progress is being made in a fight playing out in courts on both coasts over the sale of twin buildings on the former Evergreen International Aviation campus to Jackson Family Wines. An arbitration hearing has been scheduled for Dec. 11 to settle the matter.

At issue is whether Alfred Giuliano, trustee in the bankruptcy of Evergreen International Airlines that is being adjudicated in U.S. District Court in Delaware, has a legal obligation to provide an easement to a landlocked parcel lying behind the two parcels Jackson is trying to buy. Jackson and Giuliano deny any such obligation, and Jackson has threatened to pull out of the entire deal if it is forced to provide an easement without compensation.

But the buyer of the landlocked parcel — Rhodium Loan Servicing Inc., which outbid Jackson for it — argues Giuliano was party to a settlement agreement in bankruptcy proceedings of Evergreen Vintage Aircraft in Oregon, that included provision for such an easement. It accused him of attempting to renege now that Jackson has raised objections.

In its filing, Rhodium maintained Giuliano had an obligation, in the auction where Jackson emerged as the winning bidder, to disclose the easement obligation stemming from the settlement agreement. “He apparently did not do so,” but that should not be controlling, it argued.
For several days after the auction was completed, Giuliano continued to assure Rhodium that it would be getting an easement providing access, the company maintained.

Jackson said it was advised of no such encumbrance. It said it would be willing to negotiate access at a fair market price, but not to provide one at no charge.

On Nov. 17, Delaware bankruptcy Judge Mary Walrath denied a motion from Giuliano to approve sale of the two buildings to Jackson free and clear of all liens and other encumbrances. On Nov. 25, her Oregon counterpart, Judge Randall Dunn, who is presiding over the bankruptcy of EIA’s Evergreen Vintage Aircraft subsidiary, refused to consider a motion from Rhodium to order provision of the easement under terms of the settlement agreement, because of the pending arbitration hearing.

Binding arbitration has been scheduled for December 11 before Judge Elizabeth Perris, who brokered the original settlement agreement.

In the Delaware court, Jackson asked Judge Mary Walrath to compel Rhodium to produce evidence to support its argument.

Rhodium objected, arguing that amounted to “an abuse of Rule 2004” and “harassment of the non-debtors parties Jackson Family seeks to burden with board discovery requests and examinations.” And it prevailed.

Meanwhile, Walrath approved sale of three other elements of the Evergreen campus, at 3850, 3930 and 3950 Three Mile Lane, to Kit Johnston Farms of Dayton for $3 million. Her Nov. 24 order granted them free and clear of any liens or obligations.

Johnston was one of the bidders losing out to Jackson for the two buildings still enmeshed in litigation.

In a development unrelated to the dispute with Jackson Family Wines, on Nov. 30, Evergreen Vintage Aircraft filed an objection with Dunn to a claim submitted by Yamhill County for $1.8 million in back property taxes. 

EVA’s attorney, Nicholas Henderson, said the county had already been paid $481,624 on one account and $18,401 on another. He said the new claim is for real and personal property in which Evergreen Vintage never had any equity or interest, and should therefore be denied.

A hearing on the county claim has been scheduled for Dec. 9.