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Full title: Statement of and Reservation of Rights (RE: related document(s)713 Motion to Approve Document). Filed by Creditor JP Morgan Chase, N.A. (Lewis, Adam) (Entered: 07/08/2021)

Document posted on Jul 7, 2021 in the bankruptcy, 3 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

1 ADAM A. LEWIS (BAR NO. 88736) ALewis@mofo.com 2 MORRISON & FOERSTER LLP 425 Market Street 3 San Francisco, California 94105-2482 28 1 JP Morgan Chase Bank, N.A. (“Chase”), by and through its undersigned counsel, hereby 2 submits this statement and reservation of rights with respect to the Debtors’ Motion For Order 3 (A) 14 Counsel to Chase (along with counsel to holders of other Non-Investor First-Priority 15 Lender Claims) has been in regular communication with counsel to the Debtors regarding certain16 questions and clarifications with respect to the Motion. Specifically, counsel has 19 clarified that the Debtors intend to pay in full all liens of the bank lenders on the properties sold 20 pursuant to the Motion, and counsel has indicated that such a statement will be made on the 21 record at the hearing on July 9, 2021. 6 Counsel to Chase is currently working with counsel to the Debtors to incorporate certain 7 language into the draft form of order approving the Motion to preserve the rights of holders of 8 Non-Investor First-Priority Lender Claims.

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Document Contents

1 ADAM A. LEWIS (BAR NO. 88736) ALewis@mofo.com 2 MORRISON & FOERSTER LLP 425 Market Street 3 San Francisco, California 94105-2482 Telephone: 415.268.7000 4 MARK A. LIGHTNER (Pro Hac Vice) 5 MLightner@mofo.com MORRISON & FOERSTER LLP 6 250 West 55th Street New York NY 10019-9601 7 Telephone: 212.468.8000 8 Attorneys for Creditor JP MORGAN CHASE, N.A. 9 UNITED STATES BANKRUPTCY COURT 10 NORTHERN DISTRICT OF CALIFORNIA SAN FRANCISCO DIVISION 11 12 In re Case No. 20-30604 13 PROFESSIONAL FINANCIAL (Jointly Administered) 14 INVESTORS, INC., a California corporation; PROFESSIONAL Chapter 11 15 INVESTORS SECURITY FUND, INC., a California corporation, STATEMENT AND RESERVATION 16 OF RIGHTS WITH RESPECT TO Debtor. DEBTORS’ MOTION FOR ORDER 17 (A) APPROVING BID PROCEDURES FOR THE 18 PORTFOLIO SALE OF CERTAIN REAL AND PERSONAL PROPERTY 19 ASSETS; (B) APPROVING RELATED NOTICE PROCEDURES; 20 (C) AUTHORIZING DEBTORS TO ENTER INTO STALKING HORSE 21 AGREEMENT AND APPROVING BREAK-UP FEE; (D) SCHEDULING 22 A SALE HEARING; AND (E) GRANTING CERTAIN RELATED 23 RELIEF [DKT. NO. 713] 24 Date: July 9, 2020 Time: 10:00 a.m. (PT) 25 Place: Hannah L. Blumenstiel Telephonic/Video Only 26 450 Golden Gate Avenue 16th Floor, Courtroom 19 27 San Francisco, CA 94102 28

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1 JP Morgan Chase Bank, N.A. (“Chase”), by and through its undersigned counsel, hereby 2 submits this statement and reservation of rights with respect to the Debtors’ Motion For Order 3 (A) Approving Bid Procedures For The Portfolio Sale Of Certain Real Personal Property Assets4 (B) Approving Related Notice Procedures; (C) Authorizing Debtors to Enter Into Stalking Horse5 Agreement And Approving Break-Up Fee; (D) Scheduling A Sale Hearing; and (E) Granting 6 Certain Related Relief [Docket No. 713] (the “Motion,” and this “Statement”).1 In support of 7 this Statement, Chase respectfully states as follows: 8 Chase holds Non-Investor First-Priority Lender Claims (i.e., bank lender claims, as 9 defined in the Plan) in the amount of approximately $76 million. Chase’s claims are over-10 secured by first-lien deeds of trust on 16 real properties owned by the Debtors, see Stipulation By11 And Between The Plan Proponents And JPMorgan Chase Bank, N.A. Regarding Joint Chapter 112 Plan [Docket No. 617], and 15 of those properties are to be sold as part of the portfolio sale 13 contemplated by the Motion, see Motion, Ex. A, Ex. A-1. 14 Counsel to Chase (along with counsel to holders of other Non-Investor First-Priority 15 Lender Claims) has been in regular communication with counsel to the Debtors regarding certain16 questions and clarifications with respect to the Motion. These clarifications were required in part17 because the Sale Motion, which will ultimately govern many aspects of the Sale (including 18 distribution mechanics), will not be served until August 17, 2021. Specifically, counsel has 19 clarified that the Debtors intend to pay in full all liens of the bank lenders on the properties sold 20 pursuant to the Motion, and counsel has indicated that such a statement will be made on the 21 record at the hearing on July 9, 2021. In addition, counsel has also provided a sales estimate to 22 the bank lenders that reflects a sales price of the real properties to be sold that substantially 23 exceeds the total indebtedness due to the Class 1 Non-Investor First-Priority Lenders on account 24 of such properties. This is consistent with the fact that Chase (and the other holders of Non-25 Investor First-Priority Lender Claims) are substantially over-secured. 26 Notwithstanding these clarifications, which Chase appreciates, Chase reserves all rights 27 1 Terms not defined herein shall have the same meaning as in the Motion. 28

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1 with respect to the Sale, including, but not limited to, the right to object to the Sale Motion, the 2 Sale or any allocation of the proceeds of the Sale, if applicable; to demand that payment of any 3 Non-Investor First-Priority Lender Claim be made on or about the Closing Date from the escrow4 and to credit bid at the Auction to the extent that any of its claims are not otherwise satisfied in 5 full from the proceeds of the Sale on or about the Closing Date. 6 Counsel to Chase is currently working with counsel to the Debtors to incorporate certain 7 language into the draft form of order approving the Motion to preserve the rights of holders of 8 Non-Investor First-Priority Lender Claims. As of the time of this filing those negotiations are 9 ongoing but Chase is hopeful that a resolution can be reached. Chase also reserves the right to 10 address any additional issues raised at the hearing. 11 12 13 Respectfully submitted, 14 Dated: July 8, 2020 ADAM A. LEWIS MARK A. LIGHTNER (Pro Hac Vice) 15 MORRISON & FOERSTER LLP 16 17 By: /s/ Adam A. Lewis 18 ADAM A. LEWIS 19 Attorneys for Creditor JP MORGAN CHASE, N.A. 20 21 22 23 24 25 26 27 28

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