FirstCity Liquidating Trust Motion for Summary Judgment Denied
PR NEWSWIRE - February 12, 2001 08:50
HOUSTON, Feb 12, 2001 /PRNewswire via COMTEX/ -- FirstCity Liquidating Trust (OTC Bulletin Board: FCFCL and FCFCZ) today announced that it has been advised that Federal Magistrate Judge Nancy K. Johnson issued a recommendation in the case involving the dispute between UIDC Management and two entities owned by FirstCity Liquidating Trust ("the Trust Entities"). The dispute involves the Trust Entities' 67% ownership interest in a partnership, which owns First City Tower, a Class "A" office building in downtown Houston.
The magistrate recommended to Federal District Judge Sim Lake, that the Trust Entities' motion for summary judgment be denied and that UIDC entities' motion for summary judgment be granted in part and denied in part. Specifically, the magistrate's recommendation is that, as a matter of law, UIDC had properly exercised its right of first refusal to purchase the 67% interest in May of 1997. She further recommended that UIDC's summary judgment motion be denied as it pertains to questions of whether UIDC is prevented from enforcing that right now because of alleged breaches of the resulting option agreement, or because UIDC is estopped from specific performance based upon their refusal to buy the interest when given the chance in October of 1997. These latter questions will be subject to further discovery and potentially to a trial by jury. The magistrate's recommendation is not effective unless adopted by Judge Lake.
Management of FirstCity Liquidating Trust strongly disagrees with the magistrate's recommendation to deny its motion for summary judgment and will file objections with Judge Lake. Even if the magistrate's recommendation is adopted, issues remain to be tried concerning whether the UIDC entities are nevertheless barred from enforcing their option to acquire the 67% partnership interest (a) because of alleged breaches of that agreement, and (b) because UIDC declined to purchase the partnership interests when subsequently offered them in October, 1997 at a price even more favorable than that offered in May, 1997. Finally, even if the Trust Entities were not successful on either of these trial points, there will remain equitable questions pertaining to the precise terms upon which UIDC's acquisition of the partnership interest may be ordered by the court, given all the pertinent circumstances.
Both UIDC and the Trust Entities have until February 21, 2001 to file objections to the magistrate's recommendation. |
