Monday, March 12, 2007

Summary of 2/20 Hearing

On February 20, 2007, the Court held a hearing addressing the following items:

1. Bond Safeguard Insurance Co. and Lexon Insurance Co.’s Motion to Compel Debtor to Assume or Reject Executory Contracts and for Injunctive Relief: This motion was adjourned until March 19, 2007.

2. Motion to Compel Immediate Assumption or Rejection of Executory Contract on behalf of Peter Tiano: The parties entered into a consent order: 1) terminating the contract for purchase of real estate between Horizons at Woods Landing, LLC and Peter Tiano; and 2) vacating the automatic stay to allow Peter Tiano to proceed against the bonding company.

3. Motion for Relief from Stay filed by Guttman Family Trust, LLC: This motion was adjourned until March 5, 2007.

4. Motion to Reconsider Order Denying Payment of Pre-Petition Expenses and Wages: The Court granted this motion, in part, and entered an Order authorizing the Debtors to pay pre-petition wages, salaries and expenses to certain non-insider employees and to accrue unused vacation and sick time for the non-insider employees.

5. Motion for Relief from Stay to Terminate Contract to Purchase 51 Azalea Court, Old Bridge, New Jersey filed by Edmond Ying: The parties entered into a consent order terminating the contract of sale and granting the purchaser relief from the automatic stay to pursue any and all claims against the bonding company.

6. Motion for Temporary Increase in Salespeople’s Salaries: The Court granted this motion. The remaining salespeople at Kara Birbach Geller shall be paid at the rate of $75,000 per year until June 1, 2007. In addition, Mr. Thomas Jablonski, the Vice President of Sales and Marketing at Kara Birbach Geller, shall be paid $100,000 per year plus $2,000 for every home sold by the Debtors with a cap of $400,000 on the maximum total compensation Mr. Jablonski can receive.

8. Kara Homes at Enclave II, LLC Re-Notice of Certain Contractors re: Lien Claims: Consent order to be submitted.

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