Revised Bankruptcy Plan:

GOMO has revised its plan which will be the basis for its starting point in a joint negotiation with the Creditor Committee or possibly a separate plan to be resubmitted and voted upon by the neighborhood.  These are general principles and subject to revision after potential negotiations with the Creditor Committee.

• A flat, simple Transfer fee of $1500.
  This will be assessed on future, and not current, property owners and will include a reasonable adjustment mechanism so it may be lowered or raised based on future needs of the neighborhood.  Discontinue the current 0.75% assessment of sold property metric which is the basis of the current transfer fee.  Abandon the prior contemplated $80 annual fee proposal.  Current property owners will not pay any fees.  The judge was adamant that GOMO include a mandatory annual fee in its earlier plan.  However, with the voting results in hand, we are comfortable standing up to the judge and recommending a transfer fee on future property owners be maintained, but significantly lowered, and improve the method so as to address the concerns of residents regarding ability to adjust in the future.

• Maximize money returned to Creditors.

After attorney’s fees are paid, post-petition fees returned, and 1 year reserve of operating expenses for future HOA are set aside,100% of remaining funds will be returned to creditors.  It is our objective to ensure our plan maximizes the funds returned to creditors.

• Updated Deed Restrictions and Bylaws.

Neighbors, we need these updates.  Some of the current restrictions are untenable and must be revised/updated.  On this point there is very little disagreement. There must be a reasonable amendment process, sorely lacking in the current DRs, to allow the DRs to evolve moving forward.  Had a workable and reasonable amendment mechanism been in place, the neighborhood could have easily voted years ago whether it wanted to amend or remove certain restrictions that weren’t equitably established and enforced through all sections of GO. The existing method requiring an affirmative vote of 67% of all neighbors is too high a threshold and a difficult task which is why the DRs have not been updated.  The GOMO Board strongly advocates capitalizing on this opportunity to update and revise our DRs and bylaws under the protection of and as part of the bankruptcy case to more easily ensure and facilitate a timely passage.

• Fix GOMO Formation Defect.

• GOMO leadership resigns upon plan confirmation.

The new HOA Board elected after bankruptcy is completed will consider the benefits of 3^rdparty professional management for Deed Restriction enforcement.  It is the GOMO Board’s belief that ensuring a professional, objective process for DR enforcement would allow the neighborhood to move forward with greater confidence, but feedback at prior Townhalls and the voting results suggest this is not the most pressing priority for the neighborhood.

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.