Summary of 1/29 Omnibus Hearing

On January 29, 2007, the Court held an omnibus hearing addressing several applications/motions:

1. Final Hearing authorizing Debtors to obtain credit from Plainfield Special Situations Master Fund Limited (“Plainfield”): The Court granted the final order authorizing the Debtors to incur post-petition secured indebtedness pursuant to a $5,000,000 line of credit extended by Plainfield. The Debtors shall use the $5,000,000 loan for (i) budgeted operating and other expenses; (ii) the repayment in full of Bear Stearns under the Bear Stearns DIP Facility and the Final Order; (iii) the funding of an Interest Reserve Account in the initial amount f $300,000, and, upon application and depletion of the Initial Reserve Account pursuant to the Credit Agreement, to replenish the Interest Reserve Account to the amount of $250,000; (iv) the fees of the US Trustee; (v) the fees of the Clerk of this Court; and (vi) the fees and expenses related to the Facility. To secure prompt payment and performance of the loan, Plainfield was granted a valid and perfected first priority security interest and lien on all assets of the Debtors of whatever nature that was not encumbered as of the Petition Date. In addition, Plainfield has a junior perfected lien and security interest in all of the Debtors collateral already encumbered by a valid, perfected and unavoidable lien. Kara at Mt. Arlington I, LLC is not a party to this loan and they do not have authority to borrow from Plainfield and Plainfield does not take a lien on property of Kara at Mt. Arlington I, LLC.

2. Motion to extend exclusivity period for filing a Chapter 11 plan and disclosure statement: The Court granted the motion and extended the Debtors’ exclusive period to file a Chapter 11 plan for 60 days with respect to each Debtor.

3. Motion to reject certain corporate leases with ATC Real Estate Development, Corp.: The Court granted the motion to reject suites 101N, 202N, 303N, and 215S. The Court also extended the time to assume or reject the corporate leases for suites 237S and 235S for 90 days to April 11, 2007

4. Summary Judgment motion to determine status of Debtors as “single asset real estate” entities: With the consent of all parties, the Court adjourned the hearing until February 5, 2007.

5. Motion to extend date by which Debtors must file plans of reorganization: The motion was adjourned until February 5, 2007 and is related to the resolution of the "single asset real estate" issues.

6. Adam and Emily Pearlman’s motion for an Order terminating contract: The parties will be submitting a consent order resolving the Motion.

7. Jane Napoletano’s motion for an Order terminating contract and providing a lien on the interest of the real property: The parties will be submitting a consent order resolving the Motion.

8. Valerie Fields and Natalie Meisenberg’s motion for relief from the automatic stay in order to obtain a refund of deposit monies and continue State Court litigation regarding purchase of 197 Melanie Way, Manahawkin, NJ: The parties will be submitting a consent order resolving the Motion.

9. Pamela Imbimbo’s motion to reject and void the executory contract of sale of real estate: The Court granted this motion and declared the executory contract of sale between Pamela R. Imbimbo and Horizons at Woods Landing, LLC as to real property located at 76 Jumping Brook Drive, Lakewood, New Jersey rejected and void. The Debtors did not object to Pamela Imbimbo’s motion to terminate the contract but reserved their right to pursue any damage claims they may have in the event they cannot realize an equal or greater purchase price for the home.

10. Joseph Iavarone’s motion for relief from the stay to continue with pending personal injury suit: The parties entered into a consent order granting relief from the automatic stay for the sole purpose of pursuing the action in the Superior Court of New Jersey against the Debtors for the sole purpose of establishing the Debtors’ liability in order to recover against the Debtors’ liability insurance proceeds.

The next hearing date is scheduled for February 5, 2007 at 1:00 pm in Trenton, New Jersey.

Summary of 1/22 Omnibus Hearing

On January 22, 2007, the Court held a hearing addressing the following items:

1. Motion for relief from stay to resume personal injury case of Stephen Green: On January 18, 2007, the parties entered into a consent order granting relief from the automatic stay to permit the plaintiff, Stephen Green, to pursue an action in the Superior Court of New Jersey for the sole purpose of establishing the Debtors' liability in order to recover from the Debtors' liability insurance proceeds.

2. Motion for an Order terminating contract and providing a lien on the interest of the real property in favor of Jane Napoletano: The motion was adjourned until January 29, 2007.

3. Motion for relief from the automatic stay in order to obtain a refund of deposit monies and continue State Court litigation for Valerie Fields's and Natalie Meisenberg's purchase of 197 Melanie Way, Manahawkin, NJ: The motion was adjourned until January 29, 2007.

4. Objections to application for retention of DJM Asset Management, LLC and Sheldon Good & Company as exclusive real estate consultant: Over the objections of the creditors, the Court granted the order approving the retention of DJM Asset Management, LLC and Sheldon Good & Company with modifications made to the Agreement for Services.

5. Motion to Extend Exclusivity Period for Filing a Chapter 11 Plan and Disclosure Statement: The motion was adjourned.

6. Motion for termination of Seoung and Donna Baik's contract: The evidentiary hearing on adequate assurance of performance and the ability of the Debtors to assume the contract was set for February 7, 2007.

7. Final Hearings authorizing Debtors to incur post-petition secured indebtedness for the purpose of winterizing the Debtors' estates: The Debtors have entered into consent agreements with various lenders to secure financing to winterize units on a development-by-development basis. Final hearings on the Debtors' interim order authorizing the Debtors to incur post-petition secured indebtedness from Credit Suisse for the purpose of winterizing Buckley Estates and the interim order authorizing Debtors to incur post-petition secured indebtedness from Amboy National Bank for the purpose of winterizing Kara at Crine West, LLC and Horizons at Birch Hill, LLC were scheduled for January 22, 2007.

a) Final and amended order authorizing Debtor to incur post-petition secured indebtedness from Credit Suisse for the purpose of winterizing Buckley Estates: The Court granted this motion authorizing the Debtors to incur up to $110,612 to winterize the Buckley property. Credit Suisse has a first priority lien on the Buckley property to the extent of the winterization advances and shall be repaid, with interest, prior to the payment of any other liens on the property, except for municipal taxes and assessments.

b) Final order authorizing Debtors to incur post-petition secured indebtedness from Amboy National Bank for the purpose of winterizing Kara at Crine West, LLC and Horizons at Birch Hill, LLC: The Court granted this motion authorizing Crine West, LLC to incur $71,199 for the purposes of winterizing the property at Crine West and authorizing Birch Hill, LLC to incur $10,306 for the purposes of winterizing the property at Birch Hill. Amboy National Bank has a first priority lien on the Crine West and Birch Hill property to the extent of the winterization advances and the loans shall be repaid, with interest, prior to the payment of any other liens on the property, except for municipal taxes and assessments.

The next hearing date is scheduled for January 29, 2007 at 1:00 pm in Trenton, New Jersey.

Summary of 1/16 Omnibus Hearing

On January 16, 2007, the Court held a hearing addressing the following motions:

1. Motion for Relief from Stay filed by Township of Hamilton (Atlantic County): The Township of Hamilton requested relief from the stay because the Debtors have failed to remain current on post-petition real estate tax liabilities. This motion has been rescheduled to be heard on February 5, 2007.

2. Motion for Authority to Obtain Credit from Plainfield Special Situations Master Fund, Ltd.: An interim order granting the post-petition financing was granted by the Court. The interim order granted the Debtors the right to incur indebtedness up to $2,600,000. The proceeds of the indebtedness shall be used for the following: (i) budgeted operating and other expenses through the final hearing; (ii) the repayment in full of the Bear Stearns DIP loan; (iii) all amounts owed to Bear Stearns related to the DIP loan; (iv) the funding of an Interest Reserve Account in the amount of $300,000; (v) the fees of the US Trustee; (vi) the fees of the Clerk of the Court; and (vii) all fees related to this DIP Facility. The final hearing has been scheduled for January 29, 2007 at 2:00 pm.

3. Motion to Sell Certain Assets of Woodland Estates at North Edison, LLC: The Court granted the Auction Procedures portion of the motion to sell the assets of Woodland Estates at North Edison. Pursuant to the Auction Procedures, Woodland Estates by Fenix, LLC is the stalking horse bidder. Any competing bids must be submitted no later that February 26, 2007 at 5:00 pm (EST) and in an amount equal to or greater than $11,696,186.58. If at least one competing bid is timely submitted, an Auction will be conducted on March 1, 2007 at 10:00 am. A final hearing to approve the results of the Sale and Auction has been scheduled for March 6, 2007 at 10:00 am.

4. Motion to Sell Certain Assets of Kara at Monroe, LLC: The Court granted the Auction Procedures portion of the motion to sell the assets of Kara at Monroe, LLC. Pursuant to the Auction Procedures, Parkmeadow Estates by Fenix, LLC is the stalking horse bidder. Any competing bids must be submitted no later that February 26, 2007 at 5:00 pm (EST) and in an amount equal to or greater than $2,890,005.03. If at least one competing bid is timely submitted, an Auction will be conducted on March 1, 2007 at 10:00 am. A final hearing to approve the results of the Sale and Auction has been scheduled for March 6, 2007 at 10:00 am.

The next omnibus hearing date is scheduled for January 22, 2007 at 1:00 pm in Trenton, New Jersey.

Summary of 1/8 Omnibus Hearing

On January 8, 2007, the Court held an omnibus hearing on several motions and applications. A brief summary of the Court's rulings are listed below:

Application For Retention of Professional Sullivan and Company Inc. as Financial Advisor to the Debtor: Motion withdrawn by Sullivan without prejudice to file a different application with the Court.

Motion to Compel Debtor to Assume or Reject Executory Contracts and for Injunctive Relief Filed by Eric H. Lindenman on behalf of Bond Safeguard Insurance Co., Lexon Insurance Co.: Adjourned to February 5, 2007

Cross Motion re: For an Order Pursuant to 11 U.S.C 1112(b) Converting Debtors' Cases to Cases Under Chapter 7 of the Code by North Fork Bank: Adjourned to February 5, 2007

Motion to Compel Immediate Assumption or Rejection of Executory Contract for Sale of Real Estate Filed by Steven R. Neuner on behalf of Peter Tiano: Denied in part; Debtors directed to make decision on assumption or rejection by February 20, 2007

Motion for Relief from Stay re: To Continue With Arbitration by Gosline Nissen Fire Protection: Resolved by Consent Order allowing arbitration to proceed without any binding effect on Debtors’ estates

Motion for Joint Administration for the following cases: 06-21512; 06 21513; 06-22341: Granted; order to be entered by the Court

Motion for Relief from Stay re: To Proceed With Civil Trial on PI action by Rosenberg, Kirby & Cahill on behalf of David Harak: Resolved by Consent Order permitting claimant to proceed against insurance policy solely with no impact on the Debtors' estates.

Application re: Authorizing Debtor to Pay Expense Reimbursement Fees with Respect to Securing Construction Financing Facility: Adjourned to February 5, 2007

Motion to Sell Four Real Estate Developments: Bid Procedures portion of Motion granted with revised order to be submitted with new dates on auction, hearing to approve the sale

Motion to Sell Third Group of Designated Homes: Granted; order to be entered by the Court

Motion re: Abstention and Relief from Stay Filed by Joseph Albanese on behalf of Guttman Family Trust, LLC: Denied in part; hearing adjourned to February 20, 2007 with Debtors to make decision to assume or reject by February 13, 2007

Motion for Authority to Obtain Credit Under Section 364(b) Rule 4001(c) or (d): Granted; consent orders to be submitted with each secured lender with amounts to be in line with previously approved DIP budget

Debtors’ Motion to incur post-petition debt for winterization and completion of construction of Kara at Enclave II, LLC: Revised Interim Order entered; final hearing on construction portion granted; order to be entered by Court

Barry Rosengarten’s Motion for Reconsideration of the Court’s order authorizing the sale of real property located at 11 Marissa Court, Middletown, New Jersey: Denied

Motion to Approve Bid Procedures for Sale of Real Estate Developments

Sale of Two Real Estate Developments: Kara at Monroe, LLC and Woodland Estates at North Edison, LLC

On January 3, 2007, the Debtors filed separate motions to (a) approve auction procedures; (b) approving form and manner of notice of sale; (c) scheduling auction and final hearing on approval of sale; (d) authorizing sale of certain assets free and clear of all liens, claims, interests and encumbrances not specifically assumed; (e) approving agreement of sale and assumption and assignment of other agreements related thereto; (f) authorizing consummation of all transactions contemplated by such agreements; (g) and granting related relief for the sale of two developments, Kara at Monroe, LLC ("Monroe") and Woodland Estates at North Edison, LLC ("Woodland") (collectively, referred to as "Motions to Approve Auction Procedures").

In anticipation of the proposed auctions, the Debtors have entered into a "stalking horse" agreement with Parkmeadow Estates by Fenix, LLC ("Fenix") to purchase the Monroe and Woodland developments. Under the Agreement of Sale between Monroe and Fenix, Fenix has agreed to assume all liabilities of Monroe, approximately $2.3 million, and pay $400,000 in cash for the right to complete the development at Monroe. Under the Agreement of Sale between Woodland and Fenix, Fenix has agreed to assume all liabilities of Woodland, approximately $11.5 million, and pay $100,000 in cash for the right to complete the development at Woodland (collectively, the "Agreement of Sales").

The Agreement of Sales are subject to competing offers accepted in accordance with the procedures set forth in the Motions to Approve Auction Procedures. Pursuant to the terms of the Motions to Approve Auction Procedures, all competing bids must be submitted by January 17, 2007 and the auctions are scheduled for January 19, 2007. The Debtors will announce the successful bidders for each development at the conclusion of the auction on January 19, 2007 and the final hearing for court approval of the results of the auction is requested to be scheduled for January 22, 2007 .

The Motions to Approve Auction Procedures were filed on shortened time with the Court entering an order scheduling them to be heard on January 16, 2007 at 10:00 am. As a consequence, it is likely that some of the dates concerning the bid procedures, if approved by the Court, will need to amended.