Item Id: Kelley01
Case Name: Kelley, John & Dawn
Case Number: 17 30526
Starting Minimum Bid: $250,000
Description: Estate’s 100% interest in a Promissory Note Secured by a Mortgage bearing a 9.00% interest rate per annum. The original note was for the principal amount of $400,000. Since the date of the agreement, a $50,000 payment ($17,950.68 interest and $32,049.32 principal) has been made since signing and recording of the note, leaving a current principal balance of $367,950.68. The promissory note requires that interest only be paid annually on December 1 of each year. The principal amount due under the promissory note may be prepaid without penalty. The unpaid principal balance is required to be paid no later than June 1, 2028. The sale will not include an interest payment of $33,115.56 which will be due and payable to the Trustee on December 1, 2019.
Further information about this note:
Pursuant to a bankruptcy court settlement agreement (Exhibit A) dated June 1, 2018 (Bankruptcy case #17-30526), Erik A. Ahlgren,Trustee; Judy Keeley and the personal representative of the decedent’s of Eugene Kelley agreed to the following:
Judy Keeley executed a secured promissory note (Exhibit B) in favor of the bankruptcy trustee, Erik A. Ahlgren, in the amount of $400,000 bearing an interest rate of 9%. Since the date of the agreement, a $50,000 payment ($17,950.68 interest and $32,049.32 principal) has been made since signing and recording of the note, leaving a current principal balance of $367,950.68.
The promissory note is secured by a mortgage (Exhibit C) on thirteen (13) real estate parcels in Walsh and Pembina County, North Dakota. Those parcels are described in the mortgage payable to Erik A. Ahlgren as Trustee, which was dated March 5, 2019 and recorded in Walsh County on March 13, 2019 as document number 292007 and in Pembina County on April 3, 2019 as document number 255019. Judy Keeley signed the following documents granting further security to the Trustee: (1) A general security agreement (Exhibit D) which is secured by a UCC filing by the Trustee (Exhibit E) and (2) A Notice of Security Interest in American Crystal Units Dated January 8, 2019 (Exhibit F).
As further security, Judy Keeley assigned a mortgage (Exhibit G) to the Trustee on October 25, 2019 and was recorded on January 18, 2019 in the office of the Walsh County recorder document number 291754. This assignment originates from a promissory note in the amount of $400,000 that was signed on May 16, 2013 between John Keeley and Dawn Keeley as mortgagors and Bell Bank fka Bell State and Trust, as mortgagee and was recorded on May 27, 2011 as document number 274355, as amended by that certain Modification of Mortgage, dated July 1, 2015 as recorded in the Office of the County Recorder in and for Walsh County, North Dakota, on July 7, 2015 at document number 284304. This same mortgage was later assigned by Bell Bank fka Bell State and Trust to Eugene Kelley (now deceased) and Judy Keeley by an assignment of mortgage recorded on March 1, 2018 as document number 289746.
The Priority position of the $400,000 promissory note secured by a mortgage signed by Judy Keeley in favor of Trustee, Erik Ahlgren is second (2nd) behind North Star Community Bank as follows:
North Star Community Bank of Grafton, North Dakota, is Judy Keeley’s primary lender, and is in the number one (1) priority position with respect to all of Judy Keeley’s real and personal property.
The mortgages between Judy Keeley and North Star are as follows:
(a) Real estate mortgage, recorded November 16, 2017 as document number 289193 securing a promissory note in the amount of $2,320,000;
(b) Real estate mortgage, recorded November 16, 2017, as document number 289194 securing a promissory note in the amount of $550,000. The mortgage indicates a maximum mortgage amount of $4,350,000;
(c) Real estate mortgage, recorded February 15, 2018, as document number 289691 securing a promissory note in the amount of $600,000. The mortgage indicates a maximum mortgage amount of $4,350,000;
The total amount of the promissory notes secured by the three (3) mortgages (Exhibit H) to North Star Community Credit Union are $3,470,000. Pursuant to the North Star Community Credit Union balance sheet dated February 28, 2019, the balance owed by Judy Keeley to North Star was $3,290,309.
Additional information provided:
Exhibit A – Bankruptcy Court Approved Settlement Agreement
Exhibit B – Secured Promissory Note Dated June 1, 2018
Exhibit C – Real Estate Mortgage Dated March 5, 2019
Exhibit D – Security Agreement Dated March 21, 2019
Exhibit E – UCC Filing Dated April 16, 2019
Exhibit F – Notice of Security Interest in American Crystal Units Dated January 8,2019
Exhibit G – Assignment of Mortgage Dated October 25, 2018
Exhibit H – Three (3) Mortgages to North Star Community Credit Union
Real Estate Tax Statements from Walsh County
Ownership and Encumbrance Reports and Updates
Estimated Market Values Vorachek Farm Appraisal
Trustees Worksheets of Property Values
Trustees Memo Regarding Settlement Agreement
We do not know of any other liens (see above on known liens)
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