WL Homes trustee eyes $1.2 million Bank of America, Ayuda settlement

By Lisa Kerner

Charlotte, N.C., July 7 - WL Homes, LLC Chapter 7 trustee George L. Miller asked the court to approve a settlement agreement among the company, Bank of America N.A., Ayuda Management Corp., Carter E. Morgan, Daniel A. Van Ackeren, Beth A. Van Ackeren, Michael J. Gold, Brent R. Toevs and Sondra Toevs, according to a July 7 filing with the U.S. Bankruptcy Court for the District of Delaware.

Under the settlement, Bank of America will pay $1.2 million to the trustee within five days of the settlement's court approval.

Within five days of receipt of the funds, the trustee shall divide the settlement as follows: $1.1 million to Ayuda, $50,000 to the trustee and $50,000.00 to the Berg Hill Greenleaf & Ruscitti, LLP COLTAF Account for the benefit of the homeowners.

The trustee will dismiss all preference actions and claims against Ayuda and Bank of America.

Settlement background

WL Homes and Bank of America are parties to a June 25, 2003 unsecured revolving line of credit agreement. Bank of America filed a proof of claim pursuant to the unsecured revolver for $13,190,517 plus accrued interest of $509,474, as of Sept. 8, 2009, plus additional interest, costs and fees.

In January 2009, Bank of America placed an administrative hold on WL Homes funds because of continuing events of defaults related to the Vista Ridge residential development project in Erie, Colo.

On Feb. 2, 2009, Bank of America set off against and applied $1.2 million in the Vista Ridge account, along with $3,840,902.78 from three other bank accounts.

Ayuda alleged that Vista Ridge construction defect repairs that it performed for WL Homes were covered by an insurance policy issued by Steadfast Insurance Co., a subsidiary of Zurich American Insurance Co., and that Zurich paid WL Homes $1.2 million, which was deposited into the Vista Ridge account for payment to Ayuda.

Ayuda filed a proof of claim for $1,222,672.22 on Oct. 14, 2009.

WL Homes, an Irvine, Calif.-based homebuilder, filed for bankruptcy on Feb. 19, 2009. Its Chapter 11 case number is 09-10571.

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