When the end of 2018 comes upon us, it appears as though the saga of the Garden Oaks Maintenance Organization’s (GOMO) bankruptcy proceedings will remain ongoing, as the process appears to have been extended through close to Christmas time.
During a status hearing in a downtown Houston courthouse Oct. 25, GOMO counsel Johnie Patterson presented a plan of reorganization that, if approved, GOMO believes would result in an order from the court effectively curing the formation defect present in GOMO, and representing that certain bylaw and deed restriction changes be pursued after the plan is confirmed. This runs in contrast to the Creditors’ Committee’s plans to essentially eliminate transfer fees and form an entirely new entity.
Judge David Jones, however, spoke several times on his disapproval of any plan that includes transfer fees as a means of funding any activities from a homeowner’s association. The Court later determined that GOMO must prepare and present an alternative disclosure statement and plan by Dec. 20 – one without transfer fees as a crucial tent pole.
While it is not required to be a joint plan, Jones requested that Patterson keep Creditor Committee counsel Rubio informed as the plan is prepared, and to consider his input. Jones gave Patterson and GOMO a deadline of Dec. 14 to come up with a preliminary plan to present to the Creditors Committee and Jones himself before the hearing Dec. 20 which would review the aforementioned plan.
In essence, that week would be used to decide whether the plan presented would be viable enough to take out to creditors for a vote, as well as take it out to everyone in the neighborhood. Judge Jones would also test it against several bankruptcy codes.
Any transition to a position without a transfer fee would necessitate petitioning the neighborhood for either an amendment to the deed restriction, or one for an entirely new entity. In the meantime, collection of transfer fees remains on hold through the hearing Dec. 20, as the result of a previous hearing Sept. 22.