new century liquidating trust files emergency motion re plan injunction

8/6/2019 NEW CENTURY LIQUIDATING TRUST FILES EMERGENCY MOTION RE PLAN INJUNCTION

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File a Motion:

07-10416-KJC New Century TRS Holdings, Inc.

U.S. Bankruptcy Court

District of Delaware

Notice of Electronic Filing

The following transaction was received from Alan Michael Root entered on 5/18/2011 at 4:44 PM EDT and filed on 5/18/2011

Docket Text:Emergency Motion to Approve// The New Century Liquidating Trust's Emergency Motion to (I) Enforce the Modified Confirmation Order as it Relates to the Plan Injunctionand (II) Clarify the Global Relief Stay Order Dated September 3, 2008 Filed by New Century Liquidating Trust. (Attachments: # (1) Notice # (2) Exhibit A# (3) Exhibit B#(4) Exhibit C# (5) Exhibit D# (6) Exhibit E# (7) Exhibit F# (8) Proposed Form of Order) (Root, Alan)

The following document(s) are associated with this transaction:

07-10416-KJC Notice will be electronically mailed to:

Type: bk Chapter: 11 v Office: 1 (Delaware)

Assets: y Judge: KJC

Case Flag: APPEAL, MEGA, LEAD, CLMSAGNT, Sealed Doc(s), CONFIRMED

Case Name: New Century TRS Holdings, Inc.

Case Number: 07-10416-KJC

Document Number:10483

Document description:Main DocumentOriginal filename:C:\fakepath\NC- Motion to Enforce Plan Injunction _final version.pdf

Electronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-0][107b4f37c60db235a0d032cd0c5b12351ee57047f327f951e7be19f1ebd813be567c14b19e10f8927d8fbc13141d7cb7d5170f8e2f5371437a921b9364269c67]]Document description:NoticeOriginal filename:C:\fakepath\NC - Notice of Motion to Enforce Plan Injunction.pdfElectronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-1][0a74b635b3d1324364a64a737598afcff0bc3416edf0e18f8a65e9c919ff61718081b0082ce12eacb240c0f0d659d93c053537498b4ad42c7180bc1383422851]]Document description:Exhibit AOriginal filename:C:\fakepath\Exhibit A - Settlement Agreement.pdfElectronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-2][7480c5db6fcb1f04ef1c29461c64968c503c2cb5d2d4a5da9eb44e89a545a34380020e03b854d071b5b41f2cf49da0571791a64a22bf6eefd303d8e2508b50a9]]Document description:Exhibit BOriginal filename:C:\fakepath\Exhibit B - Marks April 12, 2011 letter.pdfElectronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-3][92df5a2d6e662e0c6b011fe65fea9e60f851e63bfd4e7ad6bb52dc2e2f0d39671d1ef2fbb12b9e9611c8bc715e951856fdda7f97be20be80005d8d9af028a39f]]Document description:Exhibit COriginal filename:C:\fakepath\Exhibit C - Second Amended Complaint - CA.PDFElectronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-4][98d974f4e6fea9a972808ae15a0f65d429eda42959b552be022d7b4a1c8b50b1fcaa279254137a5762862c7323104ac89938c9c251b48fb5e1f5db44f7d77cfb]]Document description:Exhibit DOriginal filename:C:\fakepath\Exhibit D - Trust Letter Dated May 12, 2011.pdfElectronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-5][68dad6ab289e2ec5525a73ddb16748e9df2febf5049439c3733de2805e83160202678c0e8a723aedb7c9c1caa71b59e483626f3d4abf90c08300d8a96f78313c]]Document description:Exhibit EOriginal filename:C:\fakepath\Exhibit E - Email from Leslie Marks Dated May 12, 2011.pdfElectronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-6][1835541591e7a13376cc94002e5aa2401efe58703a7b9bf3fa74752aebb73bc0f9238001a4de79cfade2e1d50ce4e377a908a12f64fb53a0e0ca7085af8d96f0]]Document description:Exhibit FOriginal filename:C:\fakepath\Exhibit F - Pages 1 - 6 and 59 - 63 from Court Transcript - 5.10.11 hearing.pdfElectronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-7][53cd8b9e3389c68ad3581da047ecdfe513a52d6e2638e6ebe7136da1f1200927b8b98f0374f97af98c2310192f69d6caf8a932b36bf9db172e9073dc3fcdfadf]]Document description:Proposed Form of OrderOriginal filename:C:\fakepath\NC - Order Enjoining Marks _final version _2_.pdfElectronic document Stamp:[STAMP bkecfStamp_ID=983460418 [Date=5/18/2011] [FileNumber=9665100-8][71677d3e134e34f6bb95a99864207038fc5ea99625cfaf0547109bace920197fc3c7b795e4a67902668306e479ee0f35211760f998add07e683fdc16c18d1a0f]]

Page 1 of 28Internal CM/ECF Live Database

5/18/2011https://ecf.deb.uscourts.gov/cgi-bin/Dispatch.pl?884886210134727


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Kenneth E. Aaron on behalf of Creditor National City Commercial Capital Company, [email protected], [email protected]

David G. Aelvoet on behalf of Creditor Bexar [email protected]

Justin R. Alberto on behalf of Defendant United Healthcare Insurance [email protected], [email protected],[email protected];[email protected],[email protected],[email protected]

Elihu Ezekiel Allinson, III on behalf of Creditor Town Park Renaissance, [email protected], [email protected];[email protected];[email protected]

Heather Lynn Anderson on behalf of Creditor New Jersey Division of [email protected]

Daniel K. Astin on behalf of Attorney Fox Rothschild [email protected], [email protected];[email protected];[email protected]

Daniel K. Astin on behalf of Defendant Positive Software Solutions, [email protected]

Mary E. Augustine on behalf of Defendant Opus Solutions, [email protected]

Mary E. Augustine on behalf of Defendant Opus Solutions, [email protected]

Robert T. Aulgur on behalf of Creditor Fidelity [email protected]

Matthew P. Austria on behalf of Defendant Bryan Enterprises, Inc. d/b/a Bryan [email protected]

David G. Baker on behalf of Creditor Diane [email protected]

Elizabeth Banda Calvo on behalf of Creditor Arlington [email protected], [email protected]

John T Banks on behalf of Interested Party Hidalgo [email protected]

Richard A. Barkasy on behalf of Defendant Canon Financial Services, [email protected]

Robert R. Barnes on behalf of Defendant Allen Matkins, Leck, Gamble, Mallory & Matsis, [email protected]

Thomas D.H. Barnett on behalf of Creditor LaSalle Bank National Association, as Trustee

[email protected], [email protected];[email protected];[email protected];[email protected]

Richard Michael Beck on behalf of Defendant WELLS FARGO BANK N.A. a/k/a WELLS FARGO ITS, as trustee of the trust formed under the New Century FinancialCorporation Supplemental Benefit and Deferred Compensation Trust [email protected], [email protected]

Doreen H. Becker on behalf of Creditor Novastar Mortgage, [email protected]

Richard D. Becker on behalf of Interested Party Regions [email protected]

Steven N. Berger on behalf of Defendant Fusion Marketing Partners LLC n/k/a Fusion Contact Centers [email protected], [email protected]

Don A. Beskrone on behalf of Creditor S. William [email protected]

Ian Connor Bifferato on behalf of Attorney Bifferato LLC

[email protected], [email protected]

Karen C Bifferato on behalf of Creditor Washington Mutual [email protected]

Joseph J. Bodnar on behalf of Creditor Mark [email protected], [email protected]

Joseph Bodnar on behalf of Plaintiff Alan M. Jacobs, as Liquidating Trustee, of the New Century Liquidating [email protected]

Hilary B Bonial on behalf of Creditor CitiMortgage, [email protected]

William Pierce Bowden on behalf of Plaintiff UBS Real Estate Securities [email protected]

Page 2 of 28Internal CM/ECF Live Database

5/18/2011https://ecf.deb.uscourts.gov/cgi-bin/Dispatch.pl?884886210134727


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130566.01600/40195156v.1

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

IN RE:

NEW CENTURY TRS HOLDINGS, INC., etal., a Delaware Corporation,

Debtors.1

Chapter 11

Case No. 07-10416 (KJC)

Hearing Date: TBD; Expedited Consideration Requested

Objection Deadline: TBD; Expedited Consideration Requested

NOTICE OF THE NEW CENTURY LIQUIDATING TRUSTS EMERGENCY

MOTION TO (I) ENFORCE THE MODIFIED CONFIRMATION ORDER AS IT

RELATES TO THE PLAN INJUNCTION AND (II) CLARIFY THE

GLOBAL RELIEF STAY ORDER DATED SEPTEMBER 3, 2008

TO: Parties required to receive notice pursuant to Del. Bankr. LR 2002-1.

Alan M. Jacobs, in his capacity as Liquidating Trustee to the New Century Liquidating

Trust (the Trust), by and through his undersigned counsel filed theNew Century Liquidating

Trusts Emergency Motion to (I) Enforce the Modified Confirmation Order as it Relates to the

Plan Injunction and (II) Clarify the Global Relief Stay Order Dated September 3, 2008 (the

Injunction Motion) with the United States Bankruptcy Court for the District of Delaware, 824

Market Street, Wilmington, Delaware 19801 (the Bankruptcy Court). Copies of the Injunction

Motion are available upon written request to the undersigned.

1

The pre-confirmation Debtors were the following entities: New Century Financial Corporation (f/k/a New

Century REIT, Inc.), a Maryland corporation; New Century TRS Holdings, Inc. (f/k/a new Century Financial

Corporation), a Delaware corporation; New Century Mortgage Corporation (f/k/a JBE Mortgage) (d/b/a NCMCMortgage Corporate, New Century Corporation, New Century Mortgage Ventures, LLC), a California corporation;

NC Capital Corporation, a California corporation; Home123 Corporation (f/k/a The Anyloan Corporation,

1800anyloan.com, Anyloan.com), a California corporation; New Century Credit Corporation (f/k/a Worth Funding

Incorporated), a California corporation; NC Asset Holding, L.P. (f/k/a NC Residual II Corporation), a Delaware

limited partnership; NC Residual III Corporation, a Delaware corporation; NC Residual IV Corporation, a Delaware

corporation; New Century R.E.O. Corp., a California corporation; New Century R.E.O. II Corp., a California

corporation; New Century R.E.O. III Corp., a California corporation; New Century Mortgage Ventures, LLC (d/b/a

Summit Resort Lending, Total Mortgage Resource, Select Mortgage Group, Monticello Mortgage Services, Ad

Astra Mortgage, Midwest Home Mortgage, TRATS Financial Services, Elite Financial Services, Buyers Advantage

Mortgage), a Delaware limited liability company; NC Deltex, LLC, a Delaware limited liability company; NCoral,

L.P., a Delaware limited partnership; and New Century Warehouse Corporation, a California corporation.


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130566.01600/40195156v.1

-2-

The Trust has contemporaneously herewith filed a motion to shorten notice with respect

to the Injunction Motion (the Motion to Shorten Notice). If granted, the Motion to Shorten

Notice will schedule an expedited hearing on the Injunction Motion for May 24, 2011 or at the

earliest convenience of the Bankruptcy Court (the Hearing) and will schedule an objection

deadline for the Injunction Motion consistent with the Hearing. Upon entry of an order

regarding the Motion to Shorten Notice, the Trust will serve the same on parties receiving this

notice to provide them with notice of the Hearing and objection deadline for the Injunction

Motion.

IF NO OBJECTIONS ARE TIMELY FILED AND SERVED IN ACCORDANCE

WITH THIS NOTICE, THE BANKRUPTCY COURT MAY GRANT THE RELIEF

REQUESTED BY THE INJUNCTION MOTION WITHOUT FURTHER NOTICE OR

HEARING.

Dated: May 18, 2011

BLANK ROME LLP

/s/ Alan M. Root

David W. Carickhoff (No. 3715)Alan M. Root (No. 5427)

1201 North Market Street, Suite 800

Wilmington, DE 19801

Telephone: (302) 425-6400Facsimile: (302) 425-6464

-and-

HAHN & HESSEN, LLP

Mark S. Indelicato, Esq.Edward L. Schnitzer, Esq.488 Madison Avenue

New York, NY 10022

Telephone: (212) 478-7200

Facsimile: (212) 478-7400

Co-Counsel to the New Century Liquidating

Trust


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130566.01600/40195182v.1



IN RE:

NEW CENTURY TRS HOLDINGS, INC., etal., a Delaware Corporation,

Debtors.1

Chapter 11

Case No. 07-10416 (KJC)

THE NEW CENTURY LIQUIDATING TRUSTS EMERGENCY MOTION

TO (I) ENFORCE THE MODIFIED CONFIRMATION ORDER AS IT RELATES

TO THE PLAN INJUNCTION AND (II) CLARIFY THE


Alan M. Jacobs, in his capacity as Liquidating Trustee to the New Century Liquidating

Trust (the Trust), by and through his undersigned counsel, hereby moves this Court (the

Motion) for an order (I) enjoining Ms. Leslie Barnes Marks (Marks) from pursuing the

California Action (defined below) to the extent such action is in violation of the Modified Plan,

Modified Confirmation Order and Bankruptcy Code and (II) clarifying the terms of the Global

Relief Stay Order, and represents as follows:

1 The pre-confirmation Debtors were the following entities: New Century Financial Corporation (f/k/a NewCentury REIT, Inc.), a Maryland corporation; New Century TRS Holdings, Inc. (f/k/a new Century FinancialCorporation), a Delaware corporation; New Century Mortgage Corporation (f/k/a JBE Mortgage) (d/b/a NCMCMortgage Corporate, New Century Corporation, New Century Mortgage Ventures, LLC), a Californiacorporation; NC Capital Corporation, a California corporation; Home123 Corporation (f/k/a The AnyloanCorporation, 1800anyloan.com, Anyloan.com), a California corporation; New Century Credit Corporation (f/k/aWorth Funding Incorporated), a California corporation; NC Asset Holding, L.P. (f/k/a NC Residual IICorporation), a Delaware limited partnership; NC Residual III Corporation, a Delaware corporation; NCResidual IV Corporation, a Delaware corporation; New Century R.E.O. Corp., a California corporation; NewCentury R.E.O. II Corp., a California corporation; New Century R.E.O. III Corp., a California corporation; NewCentury Mortgage Ventures, LLC (d/b/a Summit Resort Lending, Total Mortgage Resource, Select MortgageGroup, Monticello Mortgage Services, Ad Astra Mortgage, Midwest Home Mortgage, TRATS FinancialServices, Elite Financial Services, Buyers Advantage Mortgage), a Delaware limited liability company; NCDeltex, LLC, a Delaware limited liability company; NCoral, L.P., a Delaware limited partnership; and NewCentury Warehouse Corporation, a California corporation.


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2130566.01600/40195182v.1

JURISDICTION AND VENUE

1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and1334. Venue of these cases and this Motion in this District is proper pursuant to 28 U.S.C.

1408 and 1409. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2).

BACKGROUND

2. On March 29, 2006, Debtor Home123 Corporation (Home123) funded andoriginated a loan to Marks in the amount of $495,000.00 (the 2006 Loan). The 2006 Loan was

Markss fourth cash-out refinance on her primary owner occupied residence located at 3099

Suter Street, Oakland, CA 94602 (the Property).

3. On June 26, 2006, approximately three months after Home123 originated the2006 Loan, Marks filed a complaint in the Superior Court of the State of California, County of

Alameda (Case No. RG06276972) against, among others, Home 123 and Debtor New Century

Mortgage Corporation (as subsequently amended, the 2006 Complaint). In the 2006

Complaint, Marks alleged intentional fraudulent misrepresentation and negligence; breach of the

implied covenant of good faith and fair dealing; mortgage loan fraud; and violation of the City of

Oakland predatory lending laws.

4. As a result of the filing of the 2006 Complaint, Debtors retained the 2006 Loanand did not seek to sell or securitize the 2006 Loan, but retained it on a warehouse line of credit.

Specifically, on July 13, 2006, after the Debtors were unable to sell or securitize the 2006 Loan,

the 2006 Loan was part of a collateral package pledged to DB Structured Products, Inc. (DB)

pursuant to the Master Repurchase Agreement with DB dated as of April 14, 2006 (the MRA).

The 2006 Loan remained subject to the DB line until it was seized by DB on March 30, 2007,

when New Century was unable to pay the approximately $200,000 million in estimated

aggregate repurchase obligations owed under the MRA.


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5. On April 2, 2007, the 2006 Loan was service released to Ocwen Loan Servicing atthe direction of DB. On the same date, the Debtors filed petitions for relief under chapter 11 of

title 11 of the United States Code (the Bankruptcy Code).

6. On September 30, 2009, the Trustee filed the Modified Second Amended JointChapter 11 Plan of Liquidation, Dated as of September 30, 2009 (the Modified Plan). On that

same date, the Trust filed the Motion of the Trustee for an Order (I) Establishing Procedures for

Limited Solicitation and the Tabulation of Votes to Accept or Reject the Modified Plan; (II)

Approving Proposed Disclosure Statement for Modifications to the Plan; (III) Scheduling a

Hearing on Confirmation of the Modified Plan and Approving Related Notice Procedures; and

(IV) Confirming the Modified Plan.

7. On November 20, 2009, the Bankruptcy Court entered an order confirming theModified Plan (the Modified Confirmation Order) .

8. On December 1, 2009 (the Modified Effective Date), the Modified Plan becameeffective.

GLOBAL RELIEF STAY ORDER

9. On September 3, 2008, the Court entered the Amended Order Terminating theAutomatic Stay under Section 362(a) of the Bankruptcy Code to Permit the Commencement or

Continuation of Any Act to Exercise Any Rights and Remedies Upon Interests in Real Property

[D.I. 8892] (the Global Relief Stay Order). The Global Relief Stay Order provides relief from

the automatic stay for parties to exercise any applicable rights and remedies against real property

under non-bankruptcy law.

MARKS ADVERSARY PROCEEDING


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10. On March 24, 2009, a complaint (the Adversary Complaint) institutingadversary proceeding 09-50244 (KJC) (the Marks Proceeding) was served and filed by Marks

against the Debtors, which asserted the following causes of action: (i) Fraudulent Conveyance,

(ii) Violation of Chapter 11 of the Bankruptcy Code, (iii) Fraudulent Misrepresentation and

Negligence, (iv) Violation Truth-in-Lending Act 15 U.S.C. 1601 et seq., (v) Violation of

Business and Professions Code Section 17200, et seq. (vi) Violations of RESPA, and (vii) Quiet

Title to Real Property Against All Defendants.

11. In an effort to resolve the dispute between Marks and the Trust, the Trust agreed,pursuant to the terms of a settlement agreement dated August 23, 2010 (the Settlement

Agreement), to make a payment to Marks in the amount of $80,000.00 (the Settlement Sum)

in exchange for a release of all claims, damages, actions, suits, causes of action, rights, liens,

demands, obligations and/or liabilities, and in full and final settlement of all claims Marks had

against the Trust and the Debtors. A true and complete copy of the Settlement Agreement is

attached hereto as Exhibit A.

12. On September 2, 2010, after the Trust fulfilled its obligations under theSettlement Agreement, Marks filed a Notice of Dismissal of the Adversary Proceeding [Adv.

D.I. 52]. On the same day, the Marks Proceeding was closed.

13. On October 19, 2010, Marks filed the Request for Stay of Dismissal and StatusConference Statement [Adv. D.I. 53] (the Request for Stay), whereby Marks requested a stay

of dismissal of the Adversary Proceeding based on her claim that the Trust violated the

Settlement Agreement.


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14. On the same day, the Trust filed its Response to Leslie Marks' Request for theStay of Dismissal and Status Conference Statement [Adv. D.I. 54] (Response to Request for

Stay), whereby the Trust responded to Marks allegations set forth in the Request for Stay.

15. On November 1, 2010, Marks filed the Ex Parte Application for TemporaryRestraining Order and Preliminary Injunction [Adv. D.I. 56] (the TRO Application, and

together with the Request for Stay, the Marks Requests), whereby Marks requested a

temporary restraining order and preliminary injunction to prevent, inter alia, any party from

initiating foreclosure procedures or unlawful detainer procedures of any kind with relation to

Plaintiffs primary residence commonly known as 3099 Suter Street, Oakland, CA 94602.

16. On December 14, 2010, the Trust filed its Response to Leslie Marks Ex ParteApplication for Temporary Restraining Order and Preliminary Injunctions [Adv. D.I. 63] (the

Response to TRO Application), whereby the Trust responded to the relief sought in Marks

TRO Application.

17. On, February 24, 2011, an evidentiary hearing to consider the Marks Requestswas held before the Court.

18. On May 10, 2011, a status conference (the Status Conference) was held beforethe Court with respect to the Marks Proceeding. At the conclusion of the Status Conference, the

Court entered an Order denying the Marks Requests and ordering that the Marks Proceeding be

closed [Adv. D.I. 95] (the Marks Order). In connection with the Marks Order, the Court also

issued a memorandum opinion [Adv. D.I. 94] (the Memorandum) setting forth the factual and

legal reasons why the Court denied the Marks Requests. In the Memorandum, the Court held

that the record did not support a finding that the Trust failed to comply with the terms of the

Settlement Agreement.


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19. The Marks Proceeding was again closed on May 11, 2011.20. On May 16, 2011, Marks served the Motion for Reconsideration of May 10, 2011

Order and Request for Clarification of the 2008 Blanket Order for Relief from Stay (the Motion

for Reconsideration).

THE CALIFORNIA ACTION

21. On March 28, 2011, the United States District Court for the District of Hawaiiissued an opinion in Uy v. Wells Fargo Bank, N.A., et al., 2011 U.S. Dist. LEXIS, (March 28,

2011, D. Hawaii). In Uy, the plaintiff filed a complaint against Wells Fargo Bank, N.A., as

Trustee for Carrington Mortgage Loan Trust (Wells Fargo), NCMC, and Mortgage Electronic

Registration Systems (MERS), alleging fraud in connection with a pre-petition loan

transaction. The complaint sought both injunctive and monetary relief against the defendants,

including NCMC. In connection with Wells Fargos motion for summary judgment, the Court

requested briefing as to whether [the Debtors] bankruptcy affects the Courts ability to now

rule on the instant motion. Id. at *3 (citing 11 U.S.C. 362(a)). The court held that, in light of

the Global Relief Stay Order, New Centurys bankruptcy has not prevented Plaintiff from

serving New Century with the Complaint or otherwise pursuing its claims against this

defendant. Id. at *52

22. On April 12, 2011, Marks submitted a letter to the Court regarding the GlobalRelief Stay Order, a true and complete copy of which is attached hereto as Exhibit B (the

Marks Letter). In the Marks Letter, Marks states that the Global Relief Stay Order grants relief

from the automatic stay and Plan injunction to all parties with real property claims against New

2 In Uy, the Court observed that the docket indicates that New Century and MERS have not been served with asummons and a copy of the Complaint. The Court will issue a separate Order to Show Cause why the claimsagainst those defendants should not be dismissed without prejudice pursuant to Fed. R. Civ. P. 4(m). Id. at *2-3.


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Century/Home 123[, and the] allegations of fraud could have been addressed in

California[as the] Trust has no protection of the Automatic Stay as it related to my property,

which is residential real estate.

23. Subsequently, on April 25, 2011, Marks filed the Second Amended VerifiedComplaint for Damages (the Second Amended Complaint) in the action captioned Leslie

Marks v. Trenor Askew, et al. (Case No. RG 10546853) pending in the Alameda County

Superior Court (the California Action). The Second Amended Complaint names the Trust as a

defendant in the California Action. A true and complete copy of the Second Amended

Complaint is attached hereto as Exhibit C.

24. The Second Amended Complaint seeks monetary damages against the nameddefendants, including the Trust.

25. On May 12, 2011, following the Marks Order and Memorandum, the Trust sentMarks a letter (the Trust Letter) requesting that she amend the Second Amended Complaint to

make it clear that Marks is in no way seeking any monetary relief against the Trust in the

California Action and is only naming the Trust as a nominal defendant in an effort to remove the

Debtors name from the title to the Property. The Trust also advised Marks that if the Second

Amended Complaint was not modified as requested therein, and as required by the Bankruptcy

Code, Modified Confirmation Order, Global Relief Stay Order and Settlement Agreement, by the

end of the day on May 16, 2011, the Trust would have no choice but to bring this matter to the

attention of the Court. A true and complete copy of the Trust Letter is attached hereto as Exhibit

D.

26. On that same day, in response to the Trust Letter, Marks advised counsel to theTrust by e-mail that she has no intention of releasing the Trust in these matters. I continue to


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suffer Manifest injustice at the hands of the trust and its counsel. And I stand by my decisions to

that regard. A true and complete copy of Marks May 12, 2011 e-mail (the Marks Email) is

attached hereto as Exhibit E. The Marks Email combined with the Motion for Reconsideration

make clear that Marks has no intention of withdrawing the Second Amended Complaint to the

extent it seeks damages against the Trust.

MARKS BANKRUPTCY PROCEEDING

27. On March 23, 2011, Marks filed for relief under chapter 13 of the BankruptcyCode. Marks chapter 13 case is pending in the United States Bankruptcy Court for the Northern

District of California, Case No. 11-43140 (the Marks Bankruptcy).

RELIEF REQUESTED

I. The Marks Bankruptcy Does Not Stay the Relief Sought by the Trust28. As a preliminary matter, despite the Marks Bankruptcy, the Trust may pursue the

relief requested herein. Pursuant to section 362(a) of the Bankruptcy Code, the filing of a

bankruptcy petition operates as a stay, applicable to all entities, of (1) the commencement or

continuation, including the issuance or employment of process, of a judicial, administrative, or

other action or proceeding against the debtorthat was or could have been commenced before the

commencement of the case under this title, or to recover a claim against the debtor that arose

before the commencement of the case under this title. 11 U.S.C. 362(b) (emphasis added).

29. Accordingly, the automatic stay is inapplicable to defensive actions taken by adefendant in an action commenced by a debtor. See Gordon v. Whitmore (In re Merrick), 175,

B.R. 333, 336 (9th Cir. B.A.P. 1994) (holding that defensive action taken by defendants in state

court lawsuit commenced by a debtor does not violate the automatic stay); see also White v. City

of Santee (In re White), 186 B.R. 700, 703 (9th Cir. B.A.P. 1995) (finding no case that supports


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the proposition that the automatic stay prevents a defendant to continuing [sic] to defend against

a pre-bankruptcy lawsuit. To the contrary, there is substantial authority that the stay is

inapplicable to postpetition defensive action in a prepetition suit brought by the debtor.); Carley

Capital Group v. Firemans Fund Ins. Co., 889 F.2d 1126, 1127 (D.C. Cir. 1989); Martin-

Trigona v. Champion Federal Savings and Loan Assn, 892 F.2d 575 (7th Cir. 1989); In re Berry

Estates, 812 F.2d 67, 71 (2d Cir. 1987); Freeman v. Commissioner of Internal Revenue, 799 F.2d

1091, 1092-93 (5th Cir. 1986); Cathey v. Johns-Manville Sales Corp., 711 F.2d 60, 61 (6th Cir.

1983); Assn of St. Croix Condominium Owners v. St. Croix Hotel Corp., 682 F.2d 446, 448 (3d

Cir. 1982) As the Eighth Circuit Court pointed out in Brown v. United States, there is no policy

of preventing persons whom the bankrupt has sued from protecting their legal rights. 949 F.2d

1007, 1010 (8th Cir. 1991) (citations omitted).

30. Therefore, as the California Action was initiated by Marks, and because the Trustmerely seeks to enforce its legal rights in a defensive manner, an injunction of the California

Action to the extent it is in violation of the Modified Confirmation Order does not violate section

362(a) of the Bankruptcy Code.

II. Marks is Enjoined from Pursuing the Trust in the California Action by theModified Confirmation Order.

31. Marks is enjoined from pursuing the Trust or any of the Debtors in the CaliforniaAction pursuant to the Modified Confirmation Order and section 362(a) of the Bankruptcy Code.

The Modified Confirmation Order provides that:

all Persons and entities who have held, currently hold, or may holdClaims against or interests in the Debtors or the Estates that aroseprior to the Modified Effective Date . . .are permanently enjoinedfrom (i) commencing or continuing in any manner, directly orindirectly, any action or other proceeding against any ProtectedParty or any property of any Protected Party.


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Modified Confirmation Order at 9. The term Protected Party is defined in the Modified Plan

as any of the Liquidating Trustee (including in his capacity as Plan Administrator and sole

officer and director of the Debtors), the Estates, the Liquidating Trust, Reorganized Access

Lending, and the Plan Advisory Committee, each in their respective capacities. Modified Plan

at 23.

32. Additionally, the Modified Confirmation Order provides that:all injunctions or stays provided for in the Chapter 11 Cases byorders of the Court, under sections 105 or 362 of the BankruptcyCode, the Modified Plan, or otherwise, and extant on the ModifiedConfirmation Date, shall remain in full force and effect until the

later of (x) the entry of the Final Decree or (y) the dissolution ofthe Liquidating Trust. In accordance therewith, and withoutlimiting the foregoing, until the later of (i) entry of the FinalDecree or (ii) the dissolution of the Liquidating Trust, all Personsor entities (except as provided in section 362(b) of the BankruptcyCode) are stayed from (i) commencement or continuation of a judicial, administrative, or other action or proceeding, includingthe employment of service of process against the Debtors that wasor could have been commenced prior to the Petition Date, or torecover a claim against the Debtor that arose prior to the PetitionDate.

Modified Confirmation Order, 10.

33. Marks commenced the California Action against the Trust on April 16, 2011, afterthe Modified Effective Date and after she commenced the Marks Bankruptcy. Moreover, the

claims asserted in the California Action against the Trust relate to the transactions and

allegations in connection with the 2006 Loan. As stated above, by April 2, 2007, the Debtors no

longer owned or serviced the 2006 Loan. Accordingly, any alleged actions taken by the Debtors

in connection with the 2006 Loan could only have occurred prior to the Petition Date. Finally, a

Final Decree in these cases has not been entered by the Court and the Liquidating Trust has not

been dissolved. Accordingly, the Trust requests an Order enjoining Marks from continuing the


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11130566.01600/40195182v.1

California Action in direct contravention to the Modified Confirmation Order and section 362(a)

of the Bankruptcy Code.

III. The Global Relief Stay Order Does Not Permit Marks to Seek Relief Against theTrust in the California Action

34. Moreover, the Global Relief Stay Order does not permit Marks to seek any reliefagainst the Trust in the California Action. The Global Relief Stay Order provides that:

Pursuant to 11 U.S.C. 362(d), to the extent that the automaticstay and/or any injunctions may otherwise be applicable, any partyis hereby granted relief from the automatic stay and suchinjunction(s), and the automatic stay and such injunction(s) areterminated, with respect to any interest in real property which maynow be or some time in the past have been deemed to be property

of one or more of the Debtors or the Trust (Real Property). Any party is hereby permitted to exercise its rights, if any, under

applicable non-bankruptcy law against any Real Property,including but not limited to the foreclose of any mortgage, deed oftrust, or other interest or encumbrance thereupon.

Global Relief Stay Order, 2 (emphasis added). Accordingly, the Global Relief Stay Order

merely provides relief from the automatic stay for parties to exercise any applicable rights and

remedies against real property under non-bankruptcy law and notrelief from the stay to permit

parties to seek monetary relief against the Trust (or other Protected Party) in contravention of the

Modified Confirmation Order and section 362(a) of the Bankruptcy Code.

35. However, as stated in the Marks Letter and Motion for Reconsideration, Marksbelieves the Global Relief Stay Order grants relief from the automatic stay and Plan injunction

to all parties with real property claims against New Century/Home 123[, and the] allegations

of fraud could have been addressed in California[as the] Trust has no protection of the

Automatic Stay as it related to my property, which is residential real estate. Marks Letter at 1.


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In fact, even after the Courts cautionary remarks at the Status Conference3, Marks maintains

that failure to advise me of the 2008 blanket order for Relief from Stay prior to 2009 when I

filed my adversary complaint, is evidence of clear violation of the settlement agreement and the

bad faith acts of the trust as alleged. Marks Email; see also Motion for Reconsideration at 2.

Accordingly, as clearly stated in the Marks Email, she has absolutely no intention of releasing

the Trust in these matters[and] stand[s] by [her] decisions to that regard.

36. While the Trust does not believe the Global Relief Stay Order is ambiguous, atleast one court, in dicta, has interpreted the Global Relief Stay Order to permit a state court

plaintiff to pursue its claims for injunctive and monetary relief against Debtor New Century

Mortgage Corporation. See Uy v. Wells Fargo Bank, N.A., et al., 2011 U.S. Dist. LEXIS, at *5

(D. Hawaii, March 28, 2011). As detailed above, in Uy, the court held that, in light of the Global

Relief Stay Order, New Centurys bankruptcy has not prevented Plaintiff from serving New

Century with the Complaint or otherwise pursuing its claims against this defendant. Id. Marks

references Uy as support for her unrelenting position that she may seek monetary relief against

the Trust in the California Action, and that the Trusts failure to provide Marks with the Global

Relief Stay Order resulted in SEVERAL years of litigating matters that should have been

resolved in 2007. The Trust FAILED to provide Marks with this information and as Marks

properly alleges, the settlement agreement was based upon fraudulent statement of the Trust and

its Counsel. Motion for Reconsideration, at 2.

37. Accordingly, in order to address Marks continuing claims against the Trust andits counsel, the Trust requests an order from this Court clarifying the Global Relief Stay Order

3 At the Status Conference, the Court instructed Marks that to the extent that you or anyone else takes actions inviolation of the plan injunction, there are consequences. Now, I dont know whether what you have done did ordidnt but, I will tell you, if its based upon an interpretation of the order that youre referring to, you might wishto consult counsel in that connection before proceeding further. Status Conference Transcript, at 63, lines 4-10. A true copy of the relevant portion of the Status Conference Transcript is attached hereto as Exhibit F.


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and affirming that such Order merely permits Marks to name the Trust and/or Debtors nominally

in the California Action for the purposes of removing the Debtors from the title to the Property,

and does not permit Marks to seek monetary relief against the Debtors or Trust in contravention

of the Modified Confirmation Order and Bankruptcy Code.

IV. The Settlement Agreement Prohibits Marks from Pursuing the California Action asit Relates to the Trust

38. The Trust and Marks entered into the Settlement Agreement in full and finalsatisfaction of all claims Marks had against the Trust and the Debtors. The Settlement

Agreement clearly provides that upon Marks receipt of a fully executed copy of the Settlement

Agreement and the Settlement Sum, Marks releases, acquits and discharges the Debtors, the

Trust, the Trustee, the Plan Advisory Committee (the PAC as defined in the Plan), their

respective retained professionals, and their respective successors and assigns, of and from any

and all claims, damages, actions, suits, causes of action, rights, liens, demands, obligations

and/or liabilities.

39. On or about August 24, 2010, Marks received a fully executed copy of theSettlement Agreement, she received the $80,000.00 Settlement Sum from the Trust, she

negotiated the payment, and the Trust thus fulfilled its obligations under the Settlement

Agreement. Moreover, in the Memorandum supporting its denial of the Marks Requests, the

Court specifically held that Marks has not proven that Trustee violated the terms of the

Settlement Agreement. Memorandum, at 8.

40. Accordingly, under the plain language of the valid and enforceable SettlementAgreement, Marks released the Trust from any and all actions brought by Marks, including the

California Action.


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CONCLUSION

WHEREFORE, the Trust respectfully requests that the Court enter an order (I) enjoining

Marks from seeking affirmative relief against the Trust in the California Action, (II) clarifying

the terms of the Global Relief Stay Order, and (III) granting such other further relief as it deems

just and proper.4

Dated: May 18, 2011

BLANK ROME LLP

/s/ Alan M. Root

David W. Carickhoff (No. 3715)Alan M. Root (No. 5427)1201 North Market Street, Suite 800Wilmington, DE 19801Telephone: (302) 425-6400Facsimile: (302) 425-6464

-and-

HAHN & HESSEN, LLP

Mark S. Indelicato, Esq.Edward L. Schnitzer, Esq.488 Madison AvenueNew York, NY 10022Telephone: (212) 478-7200Facsimile: (212) 478-7400

Co-Counsel to the New Century Liquidating

Trust

4 Given the Marks Bankruptcy, the Trust is not seeking sanctions at this time; however, the Trust reserves itsright to ask the Court to consider such action after it has been granted relief from the stay in the MarksBankruptcy.


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130566.01600/40195186v.1



IN RE:

NEW CENTURY TRS HOLDINGS, INC.,et

al., a Delaware Corporation,

Debtors.1

Chapter 11

Case No. 07-10416 (KJC)

Re: D.I. ___

ORDER GRANTING THE NEW CENTURY LIQUIDATING TRUSTS EMERGENCY

MOTION TO (I) ENFORCE THE MODIFIED CONFIRMATION ORDER AS IT

RELATES TO THE PLAN INJUNCTION AND (II) CLARIFY THE


Upon the Motion of Alan M. Jacobs, in his capacity as Liquidating Trustee to the New

Century Liquidating Trust (the Trust), by and through his counsel, to (I) Enforce the Modified

Confirmation Order as it Relates to the Plan Injunction and (II) Clarify the Global Relief Stay

Order dated September 3, 2008 (the Motion); and it appearing that notice of the Motion was

proper and sufficient under the particular circumstances and that no other or further notice need

be given; and the Court having held a hearing to consider the Motion and any objections or

responses thereto; and any such objections being overruled by this Order; and this Court having

determined that granting the relief requested in the Motion is in the best interest of the Trust, its

1 The pre-confirmation Debtors were the following entities: New Century Financial Corporation (f/k/a New

Century REIT, Inc.), a Maryland corporation; New Century TRS Holdings, Inc. (f/k/a new Century Financial

Corporation), a Delaware corporation; New Century Mortgage Corporation (f/k/a JBE Mortgage) (d/b/a NCMC

Mortgage Corporate, New Century Corporation, New Century Mortgage Ventures, LLC), a California

corporation; NC Capital Corporation, a California corporation; Home123 Corporation (f/k/a The Anyloan

Corporation, 1800anyloan.com, Anyloan.com), a California corporation; New Century Credit Corporation (f/k/a

Worth Funding Incorporated), a California corporation; NC Asset Holding, L.P. (f/k/a NC Residual II

Corporation), a Delaware limited partnership; NC Residual III Corporation, a Delaware corporation; NC

Residual IV Corporation, a Delaware corporation; New Century R.E.O. Corp., a California corporation; New

Century R.E.O. II Corp., a California corporation; New Century R.E.O. III Corp., a California corporation; New

Century Mortgage Ventures, LLC (d/b/a Summit Resort Lending, Total Mortgage Resource, Select Mortgage

Group, Monticello Mortgage Services, Ad Astra Mortgage, Midwest Home Mortgage, TRATS Financial

Services, Elite Financial Services, Buyers Advantage Mortgage), a Delaware limited liability company; NC

Deltex, LLC, a Delaware limited liability company; NCoral, L.P., a Delaware limited partnership; and New

Century Warehouse Corporation, a California corporation.


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130566.01600/40195186v.1

beneficiaries, creditors and interest holders; and after due deliberation thereon; and good and

sufficient cause appearing therefore,

IT IS HEREBY FOUND THAT:

A. Capitalized terms not otherwise defined in this Order shall have themeanings ascribed to such terms in the Motion;

B. Marks was properly and timely served with a copy of the Motion and hasbeen afforded reasonable opportunity to respond or to be heard regarding the relief requested in

the Motion;

C.

The relief requested in the Motion is in the best interests of the Trust, its

beneficiaries, creditors and other parties in interest;

D. The Motion is a core proceeding under 28 U.S.C. 157(b).IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:

1. The relief sought in the Motion is GRANTED for the reasons set forth onthe record of the hearing and as set forth herein.

2. The claims/causes of action asserted by Marks in the Second AmendedComplaint in the California Action seeking monetary damages against the Trust or the Debtors is

in violation of the Modified Confirmation Order and Bankruptcy Code.

3. To the extent that Marks seeks monetary damages against the Trust or theDebtors in the California Action, she is hereby enjoined from pursuing such relief under the

terms of the Modified Confirmation Order and Bankruptcy Code.

4. The Global Relief Stay Order was not intended to, nor does it, grant anyparty relief from the automatic stay under section 362(a) of the Bankruptcy Code or the

provisions of the Modified Confirmation Order to proceed with direct actions against any of the


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Debtors, the Trust or the Liquidating Trustee; the Global Relief Stay Order was entered solely to

provide a mechanism for parties to name the Debtors nominally so as to commence foreclosure

proceedings or otherwise clear title to real property.

5. The Global Relief Stay Order only permits Marks to name the Trust and/orDebtors nominally in the California Action for the purposes of removing the Debtors from the

title to the Property, and does not permit Marks to seek monetary relief against the Debtors or

Trust in contravention of the Modified Confirmation Order and Bankruptcy Code.

Dated: May __, 2011Wilmington, Delaware

______________________________________The Honorable Kevin J. Carey

Chief United States Bankruptcy Judge

new century liquidating trust files emergency motion re plan injunction

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