Bankruptcy Status Conference Oct. 25, 2018

A status conference in the GOMO bankruptcy proceeding was held by Judge David Jones Thursday afternoon, October 25, 2018. Counsel for GOMO, the Creditor Committee and the United States Trustee were present.

GOMO counsel Johnie Patterson reviewed the actions that had taken place since the last appearance before the Court in August, including publication of the results of the GO Reform committee survey results, the holding of two town hall meetings, and multiple additional meetings between GOMO Board members and the Creditor Committee members.
Mr. Patterson also outlined the position of GOMO regarding the way forward, and noted the areas where the Creditor Committee disagreed. Mr. Rubio, counsel for the Creditor Committee, restated the position of the Creditor Committee from his perspective.
Mr. Patterson set out the general approach that GOMO sees for the conclusion of the bankruptcy proceeding, including presentation of a plan of reorganization that results in a order from the court effectively curing the formation defect present in GOMO, and representing that certain bylaw and deed restriction changes would be pursued after the plan is confirmed. Combination with Garden Oaks Civic Club may be part of the plan.
Judge Jones rendered several times his disapproval of the concept of transfer fee funding of homeowner association activities.
Collection of Transfer Fees remains on hold through December 20, 2018.
The Court also permitted resident comments, and heard statements from two residents.
The Court determined that GOMO should prepare and present a disclosure statement and plan by December 20. While the plan was not required to be a joint plan, he asked GOMO counsel to keep Creditor Committee counsel informed as the plan is prepared, and to consider his input, which Mr. Patterson indicated he would do.
The two counsel were charged with drawing up an appropriate order reflecting the results of this hearing and presenting it to the judge.
The pending GOMO motion to remove several Creditor Committee members was held in abeyance until the December hearing, unless counsel for the United States Trustee advises the Court and the parties otherwise.

Special Meeting to Fill Section 5 Director Vacancy

A Special Meeting will be held November 16, 2016 at the Garden Oaks Professional Building for the purpose of filling the vacant Director Position in Section 5. The position, previously held by Chavonne Slovak, has one year remaining on its term. The Special Meeting will be held at 6:30 PM at the Garden Oaks Professional Building (4001 N. Shepherd RD. suite 216) prior to the regularly scheduled GOMO Plan Review and Business Meetings. Members of Section 5 wishing to run for this position are urged to contact a GOMO Director or the Office Manager to make their interest known.

2016 Annual Meeting Director Election

At the Annual Meeting, the following Directors were elected:

Section 1: Michael Taylor
Section 2: Sue Schmidt
Section 3 (1 yr. term): Susan Kostelecky
Section 3 (3 yr. term): Frances Schwartz
Section 5: Coley Groth

GOMO Can No Longer Fund Constable Patrols and Neighborhood Beautification

GOMO reviewed and adopted a budget for 2017 at its business meeting held August 17th. Major changes from prior year’s budgets include the elimination of spending of “Surplus Funds” as required by the bylaws for FY 2016-2017. These funds have been used for neighborhood related items such as Constable Patrols and Neighborhood Beautification. In practical terms, this means that next year Garden Oaks will lose the two Constable Patrols funded by GOMO (cost $153,500) and Beautification funding (cost $20,000). These steps were taken as a result of the outcome of the Section 3 garage lawsuit. While the lawsuit found GOMO to be improperly formed only with respect to the homeowners in the lawsuit, out of an abundance of caution, GOMO decided to place all transfer fees and other income received after the judgment date, June 8, 2016, into a separate account. GOMO appealed the ruling and is confident that the appeal will establish that GOMO was and is properly formed and that it has the authority to enforce Deed Restrictions and collect Transfer Fees. However, until such time, GOMO will limit spending to deed restriction enforcement and operating expenses. Due to its contractual obligations with Harris County, GOMO will continue to fund the two Constable Patrols until February 28, 2017.