California Debt and Investment Advisory Commission

Draw on Reserve or Default Report

Roddy Ranch Public Financing Authority Marks-Roos Community Facilities Districts

This report is based on unaudited information reported to the California Debt and Investment Advisory Commission pursuant to Government Code Section 53359.5(c) from sources considered to be reliable. The Commission is not liable for inadvertent errors or omissions that are reported as part of these reports.

Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase I Master Planned Community, Series A
Original Sale Date:  9/18/1998
CDIAC Number:  98-1695
Type of Event:  Default
Date of Event:  5/17/2002
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
STATUS REPORT CONCERNING THE RODDY RANCH PUBLIC FINANCING AUTHORITY 1998 SERIES A, $12,600,000 CERTIFICATES OF PARTICIPATION

JP Morgan Chase Bank ("JP Morgan"), formerly known as The Chase Manhattan Bank (the "Trustee"), is the successor indenture trustee to Dai-Ichi Kangyo Trust Company of New York (the "Original Trustee") under an Indenture of Trust (the "Indenture") between the Roddy Ranch Public Financing Authority (the "Authority") and the Original Trustee, dated as of September 15, 1998. JP Morgan is also the successor indenture trustee under two additional indentures between the Authority and the Original Trustee: (i) the indenture dated as of November 18, 1998 (1998 Series B Revenue Bonds) and (ii) the indenture dated as of September 20, 1999 (1999 Series A Certificates of Participation), (collectively, the "Additional Indentures"). The Trustee declared the Authority in default under the Indenture and the Additional Indentures (collectively, the "Indentures") for the Certificates and Bonds (collectively, the "Bonds") by sending notices of default on April 18, 2001. The Trustee conducted a Bondholders' meeting on June 20, 2001. This Status Report supplements the notices and discussions at such meeting and the Trustee's prior status reports:

The report status is the same as provided under 98 1971.

The Trustee is holding funds and accounts from the issuance of the 1998 Series A Certificates of Participation aggregating the sum of $35,769.71, an amount insufficient to pay the past due payments of interest and principal on the 1998 Series A Certificates of Participation. The Indenture provides at Section 6.14(A) that "all of the Trustee's . . . rights to payment . . . shall constitute a prior claim against all Revenues and all Funds ... and that the Trustee shall be entitled to apply all amounts available to it from the Revenues and the Funds (other than the Rebate Fund) to the payment of any unpaid Trustee Expenses prior to the application of any such Revenues or amounts in such Funds....". The Trustee has had to engage litigation, restructuring and tax counsel and financial advisors in order to represent your interests. The Trustee intends to use these funds to pay the fees and expenses of its counsel and financial advisors

Date Received:   5/17/2002
Date posted to this website:   Tuesday, June 18, 2002


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase I Master Planned Community, Series B
Original Sale Date:  11/18/1998
CDIAC Number:  98-1971
Type of Event:  Default
Date of Event:  5/17/2002
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
STATUS REPORT CONCERNING THE RODDY RANCH PUBLIC FINANCING AUTHORITY 1998 SERIES B, $13,750,000 REVENUE BONDS

JP Morgan Chase Bank ("JP Morgan"), formerly known as The Chase Manhattan Bank (the "Trustee"), is the successor indenture trustee to Dai-Ichi Kangyo Trust Company of New York (the "Original Trustee") under an Indenture of Trust (the "Indenture") between the Roddy Ranch Public Financing Authority (the "Authority") and the Original Trustee, dated as of November 18, 1998. JP Morgan is also the successor indenture trustee under two additional indentures between the Authority and the original Trustee: (i) the indenture dated as of September 15, 1998 (1998 Series A Certificates of Participation) and (ii) the indenture dated as of September 20, 1999 (1999 Series A Certificate of Participation), (collectively, the "Additional Indentures"). The Trustee declared the Authority in default under the Indenture and the Additional Indentures (collectively, the "Indentures") for the Certificates and Bonds (collectively, the "Bonds") by sending notices of default an April 18, 2001. The Trustee conducted a Bondholders' meeting on June 21, 2001. This Status Report supplements the notices and discussions at such meeting and the Trustee's prior status reports:

(1) The Authority failed to defend its interests or prosecute any remedies provided under the Indentures, having had its board effectively taken over by representatives of the developer Roddy Ranch, LLC (the "Developer").

(2) The Developer filed an action in the Contra Costa County Superior Court against the Authority, the underwriter, Pacific Genesis Group, Inc., and other participants in the financing (the "Developer Action") -- but not the Trustee -- to seek a cancellation of the transfer to the Authority of (a) 228 acres of public golf course property and (b) 815 acres of public open space property, (collectively, the "Properties").

(3) On October 2, 2001, the Developer obtained from the board of the Authority a stipulation to judgment (the "Stipulated Judgment") in the Developer Action returning the Properties to the Developer. The Authority, over the written objections of the Trustee, transferred the Properties the Authority on October 30, 2001.

(4) The Developer and Trustee entered into stipulations and orders filed in the Developer Action in which the Developer agreed to not dispose of or encumber the Properties without notice to the Trustee, which the Trustee recorded against the Properties (the "Recorded Stipulations"). However, the Developer breached these Recorded Stipulations by recording additional encumbrances against the Properties.

(5) The Court ruled in favor of the Trustee on the Trustee's motion, granting intervention in the Developer Action and setting aside the Stipulated Judgment. However, the formal order has not been entered.

(6) A senior deed of trust on the Security Property in the asserted principal amount of approximately $5.6 million has initiated a foreclosure which, if it proceeds to sale, would extinguish the lien securing payment of the Bonds.

(7) The Developer has advised the Trustee that the Internal Revenue Service is investigating the issuance of the Bonds and is considering action to revoke the tax exclusion on the Bonds, and an IRS official has verbally confirmed that this is the case.

(8) The Developer has indicated that it intends to file a Chapter 11 case and to file a plan to reclassify the Bonds as taxable with respect to interest going forward and reallocate certain previous payments of interest to principal. The Developer has indicated that it intends to seek the consent of the holders to any restructuring, rather than seeking to restructure the Bonds over the holders' objection.

(9) We are attempting to negotiate a favorable treatment for the Bonds in the Developer's Chapter 11 plan. We met with the Developer's counsel, including its proposed Chapter 11 counsel, on April 4, 2002, and we are continuing to communicate with the Developer's Chapter 11 counsel on an ongoing basis. Although Trustee's counsel is taking the lead in this negotiation, any restructuring of the Bonds or recharacterization of the Bonds for federal income tax purposes will either be based on the holders' vote approving the modification in accordance with the Indentures and Chapter 11 law. We anticipate that you will be receiving a written solicitation from the Developer in its bankruptcy case requesting your vote in favor of the restructuring proposal, and while we are attempting to induce the Developer to make an acceptable proposal, we are not at this point making a recommendation. We are also negotiating with the IRS to structure a resolution of its concerns over the income tax exclusion on the Bonds in the context of the restructuring of the Bonds through the Chapter 11 process.

The Trustee is holding funds and accounts from the issuance of the 1998 Series B Revenue Bonds aggregating the sum of $114,375.73, an amount insufficient to pay the past due payments of interest and principal on the 1998 Series B Revenue Bonds. The Indenture provides at Section 5.15(A) that "all of the Trustee's . . . rights to payment . . . shall constitute a prior claim against all Revenues and all Funds ... and that the Trustee shall be entitled to apply all amounts available to it from the Revenues and the Funds (other than the Rebate Fund) to the payment of any unpaid Trustee Expenses prior to the application of any such Revenues or amounts in such Funds....". The Trustee has had to engage litigation, restructuring and tax counsel and financial advisors in order to represent your interests. The Trustee intends to use these funds to pay the fees and expenses of its counsel and financial advisors.

If you have any questions you may contact Mr. F.J. Grippo of JP Morgan Chase Bank, Institutional Trust Services, at 450 West 33rd Street, New York, New York 10001 (email at frank.grippo@jpmorgan.com), or William H. Kiekhofer, Esq. of Mayer, Brown, Rowe & Maw, counsel to the Trustee, 350 South Grand Avenue, 25th Floor, Los Angeles, California 90071-1503 (email at wkiekhofer@mayerbrownrowe.com)

Date Received:   5/17/2002
Date posted to this website:   Tuesday, June 18, 2002


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase Il Master Planned Community, Series A
Original Sale Date:  9/20/1999
CDIAC Number:  99-1769
Type of Event:  Default
Date of Event:  5/17/2002
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
STATUS REPORT CONCERNING THE RODDY RANCH PUBLIC FINANCING AUTHORITY 1999 SERIES A, $6,000,000 CERTIFICATES OF PARTICIPATION

JP Morgan Chase Bank ("JP Morgan"), formerly known as The Chase Manhattan Bank (the "Trustee"), is the successor indenture trustee to Dai-Ichi Kangyo Trust Company of New York (the "Original Trustee") under an Indenture of Trust (the "Indenture") between the Roddy Ranch Public Financing Authority (the "Authority") and the Original Trustee, dated as of September 20, 1999. JP Morgan is also the successor indenture trustee under two additional indentures between the Authority and the Original Trustee: (i) the indenture dated as of September 15, 1998 (1998 Series A Certificates of Participation) and (ii) the indenture dated as of November 18, 1998 (1998 Series B Revenue Bonds), (collectively, the "Additional Indentures"). The Trustee declared the Authority in default under the Indenture and the Additional Indentures (collectively, the "Indentures") for the Certificates and Bonds (collectively, the "Bonds") by sending notices of default on April 18, 2001. The Trustee conducted a Bondholders' meeting on June 20, 2001. This Status Report supplements the notices and discussions at such meeting and the Trustee's prior status reports:

The report status is the same as provided under 98 1971.

The Trustee is holding funds and accounts from the issuance of the 1999 Series A Certificates of Participation aggregating the sum of $183,561.30, an amount insufficient to pay the past due payments of interest and principal on the 1999 Series A Certificates of Participation. The Indenture provides at Section 7.13(A) that "all of the Trustee's . . . rights to payment . . . shall constitute a prior claim against all Revenues and all Funds ... and that the Trustee shall be entitled to apply all amounts available to it from the Revenues and the Funds (other than the Rebate Fund) to the payment of any unpaid Trustee Expenses prior to the application of any such Revenues or amounts in such Funds....". The Trustee has had to engage litigation, restructuring and tax counsel and financial advisors in order to represent your interests. The Trustee intends to use these funds to pay the fees and expenses of its counsel and financial advisors

Date Received:   5/17/2002
Date posted to this website:   Tuesday, June 18, 2002


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase I Master Planned Community, Series B
Original Sale Date:  9/18/1998
CDIAC Number:  98-1695
Type of Event:  Default
Date of Event:  3/14/2002
Contact:  Frank J. Grippo
Phone Number:  

Comments:  

STATUS REPORT CONCERNING THE RODDY RANCH PUBLIC FINANCING AUTHORITY
1998 SERIES A $10,750,000 CERTIFICATES OF PARTICIPATION

JPMorgan Chase Bank ("JPMorgan"), formerly known as The Chase Manhattan Bank (the "Trustee"), is the successor indenture trustee to Dai-Ichi Kangyo Trust Company of New York (the "Original Trustee") under an Indenture of Trust (the "Indenture") between the Roddy Ranch Public Financing Authority (the "Authority") and the Original Trustee, dated as of September 15, 1998. JPMorgan is also the successor indenture trustee under two additional indentures between the Authority and the Original Trustee: (i) the indenture dated as of November 18, 1998 (1998 Series B Revenue Bonds) and (ii) the indenture dated as of September 20, 1999 (1999 Series A Certificates of Participation), (collectively, the "Additional Indentures"). Defaults were declared against the Authority under the Indenture and the Additional Indentures (collectively, the "Indentures") for the Certificates and Bonds (collectively, the "Bonds") after sending notices of default on April 18, 2001. After the events of default under the Indentures were triggered, a Bondholders' meeting was held on June 20, 2001. Since the meeting, the following events have occurred:

See information provided under 99 1769.

Date Received:   3/18/2002
Date posted to this website:   Tuesday, April 23, 2002


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase I Master Planned Community, Series B
Original Sale Date:  11/18/1998
CDIAC Number:  98-1971
Type of Event:  Default
Date of Event:  3/14/2002
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
STATUS REPORT CONCERNING THE RODDY RANCH PUBLIC FINANCING AUTHORITY 1998 SERIES B $13,750,000 REVENUE BONDS

JPMorgan Chase Bank ("JPMorgan"), formerly known as The Chase Manhattan Bank (the "Trustee"), is the successor indenture trustee to Dai-Ichi Kangyo Trust Company of New York (the "Original Trustee") under an Indenture of Trust (the "Indenture") between the Roddy Ranch Public Financing Authority (the "Authority") and the Original Trustee, dated as of November 18, 1998. JPMorgan is also the successor indenture trustee under two additional indentures between the Authority and the Original Trustee: (i) the indenture dated as of September 15, 1998 (1998 Series A Certificates of Participation) and (ii) the indenture dated as of September 20, 1999 (1999 Series A Certificates of Participation), (collectively, the "Additional Indentures"). Defaults were declared against the Authority under the Indenture and the Additional Indentures (collectively, the "Indentures") for the Certificates and Bonds (collectively, the "Bonds") after sending notices of default on April 18, 2001. After the events of default under the Indentures were triggered, a Bondholders' meeting was held on June 21, 2001. Since the meeting, the following events have occurred:

See information provided under 99 1769.

Date Received:   3/14/2002
Date posted to this website:   Tuesday, April 23, 2002


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase Il Master Planned Community, Series A
Original Sale Date:  9/20/1999
CDIAC Number:  99-1769
Type of Event:  Default
Date of Event:  3/14/2002
Contact:  Frank J. Grippo
Phone Number:  

Comments:  

STATUS REPORT CONCERNING THE RODDY RANCH PUBLIC FINANCING AUTHORITY
1999 SERIES A $5,400,000 CERTIFICATES OF PARTICIPATION

JPMorgan Chase Bank ("JPMorgan"), formerly known as The Chase Manhattan Bank (the "Trustee"), is the successor indenture trustee to Dai-Ichi Kangyo Trust Company of New York (the "Original Trustee") under an Indenture of Trust (the "Indenture") between the Roddy Ranch Public Financing Authority (the "Authority") and the Original Trustee, dated as of September 20, 1999. JPMorgan is also the successor indenture trustee under two additional indentures between the Authority and the Original Trustee: (i) the indenture dated as of September 15, 1998 (1998 Series A Certificates of Participation) and (ii) the indenture dated as of November 18, 1998 (1998 Series B Revenue Bonds), (collectively, the "Additional Indentures"). Defaults were declared against the Authority under the Indenture and the Additional Indentures (collectively, the "Indentures") for the Certificates and Bonds (collectively, the "Bonds") after sending notices of default on April 18, 2001. After the events of default under the Indentures were triggered, a Bondholders' meeting was held on June 20, 2001. Since the meeting, the following events have occurred:

  1. The Authority failed to defend its interests or prosecute any remedies provided under the Indentures.
  2. The development entitlements contemplated in the financings has been lost because the Roddy Ranch Master Planned Community Project (the ''Project'') had been placed outside the urban growth boundary by the Contra Costa County Board of Supervisors, and litigation on this issue was decided adversely to Roddy Ranch, LLC (the "Developer").
  3. Pacific Genesis Group, the underwriter for the issuance of the Bonds, had its securities license revoked, eliminating refunding as an exit strategy.
  4. The Developer has publicly asserted in filings with Bloomberg and other information repositories that the Authority's liens on the property were defective, that the Bonds were not tax exempt, and that the Developer had been fraudulently induced to participate in the bond financing to convey certain properties, the Public Golf Course and the Open Space (collectively, the "Properties"), to the Authority.
  5. The Developer made a restructuring proposal on September 6, 2001. The proposal contemplated a subordination of the Bonds to more than $ 10 million of additional senior indebtedness, with no restriction on the expenditures thereof, and provided for no additional equity infusion by the Developer.
  6. The Developer filed an action in the Contra Costa County Superior Court against the Authority, the Underwriter, and other participants in the financing (the "Developer Action") -- but not the Trustee -- to seek a cancellation of the transfer of the Properties to the Authority. At a meeting of the Authority's Board held on October 2, 2001, the Developer obtained approval of a stipulation to judgment (the "Stipulated Judgment") in the Developer Action, over the objection of the Trustee, canceling the conveyance of the Properties to the Authority thereby returning the Properties to the Developer. The Authority, over the written objections of the Trustee, transferred the Properties to the Authority on October 30, 2001.
  7. On November 2, 2001, the Trustee filed an application to intervene in the Developer Action and to rescind the Stipulated Judgment and to compel the Authority to commence foreclosure of the development property (the "Application"). The judge deferred his ruling on the Application. Prior to setting another date for a hearing on the Application, the Developer and Trustee entered into stipulations and orders filed in the Developer Action in which the Developer agreed to not dispose of or encumber the Properties without notice to the Trustee, which the Trustee recorded against the Properties (the "Recorded Stipulations"). The Trustee agreed to the stipulations based on the representation that the Developer would submit an additional restructuring proposal. The stipulations were signed by the Court on November 14, 2001.
  8. Despite the Developer's promises, no restructuring proposals were made by the Developer. On January 14, 2002, the Trustee renewed its motion to intervene in the Developer Action and to Set Aside the Stipulated Judgment. The Court issued a Tentative Ruling in favor of the Trustee's Motion, granting intervention and setting aside the Stipulated Judgment. The matter was initially heard on February 8, 2002, and was continued to March 8, 2002, at the request of the Developer to brief an additional argument.

If you have any questions you may contact Mr. F.J. Grippo of JPMorgan Chase Bank, Institutional Trust Services, at 450 West 33rd Street, New York, New York 10001 (emai1 at frank.grippo@jpmorgan.com), or William H. Kiekhofer, Esq. of Mayer, Brown, Rowe & Maw, counsel to the Trustee, 350 South Grand Avenue, 25th Floor, Los Angeles, California 90071-1503 (email at wkiekhofer@mayerbrownrowe.com).

JPMorgan Chase Bank, formerly known as THE CHASE MANHATTAN BANK, as Successor Indenture Trustee

Dated: March 4, 2002

Date Received:   3/14/2002
Date posted to this website:   Tuesday, April 23, 2002


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase I Master Planned Community, Series B
Original Sale Date:  11/18/1998
CDIAC Number:  98-1971
Type of Event:  Draw on Reserves
Date of Event:  10/15/2001
Amount Withdrawn:  $466,200.26
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
The interest payment due under the indenture on October 15, 2001 in the amount of $466,562.50 was paid in full. The interest was paid from the reserve fund. After payment of the interest, there is a balance of $87,440.53 remaining in the Reserve Fund. The Authority has failed to replenish the Reserve Fund to the level of the Reserve Requirements under the Indenture

Date Received:   11/3/2001
Date posted to this website:   Thursday, January 03, 2002


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase I Master Planned Community, Series B
Original Sale Date:  11/18/1998
CDIAC Number:  98-1971
Type of Event:  Draw on Reserves
Date of Event:  10/15/2001
Amount Withdrawn:  $466,200.26
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
Due to inadequate funds on deposit in the Revenue Fund, interest payment on the 1998 Series B Bonds was not made, and is outstanding under the Indenture. Notification is hereby given, pursuant to Section 5.12(A) of the Indenture, of the proposed withdrawal of funds from the Reserve Fund

Date Received:   10/10/2001
Date posted to this website:   Monday, October 29, 2001


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase I Master Planned Community, Series A
Original Sale Date:  9/18/1998
CDIAC Number:  98-1695
Type of Event:  Default
Date of Event:  2/15/2001
Amount of Default:  
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
An aggregate principal amount of $11,350,000 of Certificates is currently outstanding since the last payment, exclusive of interest and expenses of the Trustee.

In February 2001, Chase acquired a substantial portion of the corporate trust portfolio of the Original Trustee. As a consequence, Chase has succeeded the Original Trustee.

The Authority did not make the interest payment due under the Indenture which was due on February 15, 2001. As required under the Indenture, the trustee withdrew certain amounts from various funds, including the Reserve Fund, to pay the principal and interest payment owing under the indenture. The Indenture further requires that there must be a minimum balance maintained in the Reserve Fund, known as the Reserve Requirement.

The Trustee sent a letter to the Authority on or about April 18, 2001 demanding, among other things, that the Authority replenish the Reserve Fund to meet the Reserve Requirement by no later than May 18, 2001. The Developer responded to the Trustee's letter on or about April 26, 2001 and asserted, among other things, that it disputes the Authority is obligated to replenish the Reserve Fund. Further, the Developer (through its counsel) has orally informed the Trustee (through its counsel) that it does not intend to further replenish the Reserve Fund. The Trustee believes, and the Developer disputes, that this will constitute an Event of Default under the Indenture.

Chase as Successor Indenture Trustee is calling a "Holders Meeting" because of the Authority's failure to replenish the Reserve Fund to the level of the Reserve Requirement, and the Event of Default that will therefore ensure

Date Received:   5/29/2001
Date posted to this website:   Monday, July 02, 2001


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase I Master Planned Community, Series B
Original Sale Date:  11/18/1998
CDIAC Number:  98-1971
Type of Event:  Default
Date of Event:  4/15/2001
Amount of Default:  
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
An aggregate principal amount of $12,375,000 of bonds is currently outstanding, exclusive of interest and expenses of the Trustee. In February 2001, Chase acquired a substantial portion of the corporate trust portfolio of the Original Trustee. As a consequence, Chase has succeeded the Original Trustee.

The Authority did not make the October 15, 2000 interest payment due under the Indenture. As required under the Indenture, the Trustee withdrew certain amounts from various funds, including the Reserve Fund, to pay the principal and interest payment owing under the indenture. The Indenture further requires that there must be a minimum balance maintained in the Reserve Fund, known as the Reserve Requirement. After the withdrawal of the Reserve Requirement from the Reserve Fund, this left a deficiency relative to the Reserve Requirement. Thereafter, the Authority delivered funds to the Original Trustee, which were insufficient to meet the Reserve Requirement. Moreover, there was an interest payment due on April 15, 2001, which the Authority also failed to pay. The Trustee paid the April 15, 2001, interest payment, further depleting the balances of the various funds.

The Trustee sent a letter to the Authority on or about April 18, 2001 demanding, among other things, that the Authority replenish the Reserve Fund to meet the Reserve Requirement by no later than May 18, 2001. The Developer responded that it disputes the Authority is obligated replenish the Reserve Fund. Further, the Developer (through its counsel) has orally informed the Trustee (through its counsel) that it does not intend to further replenish the Reserve Fund or the Revenue Fund. The Trustee believes, and the Developer disputes, that this will constitute an Event of Default under the Indenture.

Chase as Successor Indenture Trustee is calling a "Holders Meeting" because of the Authority's failure to replenish the Reserve Fund to the level of the Reserve Requirement, and the Event of Default that will therefore ensure.

Date Received:   5/29/2001
Date posted to this website:   Monday, July 02, 2001


Issuer:  Roddy Ranch Public Financing Authority
County:  Contra Costa
Project:  Golf Course Phase II Master Planned Community, Series A
Original Sale Date:  11/18/1998
CDIAC Number:  99-1769
Type of Event:  Default
Date of Event:  10/15/2001
Amount of Default:  
Contact:  Frank J. Grippo
Phone Number:  

Comments:  
An aggregate principal amount of $5,400,000 of Certificates is currently outstanding since the last payment, exclusive of interest and expenses of the Trustee.

In February 2001, Chase acquired a substantial portion of the corporate trust portfolio of the Original Trustee. As a consequence, Chase has succeeded the Original Trustee.

The Authority did not make the principal and interest payment due under the Indenture which was due October 15, 2001. As required under the Indenture, the original trustee withdrew certain amounts from various funds, including the Reserve Fund, to pay the principal and interest payment owing under the indenture. The Indenture further requires that there must be a minimum balance maintained in the Reserve Fund, known as the Reserve Requirement. After withdrawal of the Reserve Requirement a deficiency was left. Thereafter, the Authority delivered funds to the Original Trustee, which were insufficient to meet the Reserve Requirement. Moreover, there was an interest payment due on April 15, 2001, which the Authority also failed to pay. The Trustee paid the April 15, 2001 interest payment, further depleting the balances in various funds, including the Reserve Fund.

The Trustee sent a letter to the Authority on or about April 18, 2001 demanding, among other things, that the Authority deliver funds sufficient to meet the Reserve Requirement by no later than May 18, 2001. In response, the Developer disputes the Authority is obligated to replenish the Reserve Fund. Further, the Developer (through its counsel) has orally informed the Trustee (through its counsel) that it does not intend to further replenish the Reserve Fund or the Revenue Fund. The Trustee believes, and the Developer disputes, that this will constitute an Event of Default under the Indenture.

Chase as Successor Indenture Trustee is calling a "Holders Meeting" because of the Authority's failure to replenish the Reserve Fund to the level of the Reserve Requirement, and the Event of Default that will therefore ensure

Date Received:   5/29/2001
Date posted to this website:   Monday, July 02, 2001