8.6. HANDOUTS 04-04-2016 - Laserfiche WebLink

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CAMPBELL FU�TUTSON April 4, 2016 Mr. Calvin Partner, City Administrator City of Elk River 13065 Orono Parkway Elk River, Minnesota 55330 Re. Pinewood Golf Course/ Krause Stipulation of Settlement Dear Mr. Partner: Attached is the Stipulation of Settlement signed by Mr. Krause for consideration by the Council, This matter is scheduled for trial commencing tomorrow, April 5. The settlement provides for payment of $1,550,000.00 to the Krauses in exchange for the conveyance of fee title of the property to the City and the dismissal of the p . lawsuit seeking a judgment for damages against the City. By way of background, the City purchased the golf course property in 2006 for $1.8 Million. The purchase was on a contract for deed, with the principal balloon payment and last annual interest payment totaling approximately $1,5 Million due in April of 2013. In light of the dramatic decrease in property values that had occurred since 2006, the City attempted to negotiate a reduced payoff amount at that time, Mr. Krause refused and commenced this lawsuit in June of 2013 seeking a court order requiring the City to perform, damages, interest and attorney's fees. The matter has been in litigation since that time. Our law firm was assigned by the City's insurer, the League of Minnesota Insurance Trust, to defend the City. After a series of pretrial orders by the judge and an appeal by the City to the Court of Appeals as mentioned above, the matter is scheduled for trial commencing tomorrow. As a result of the judge's pretrial orders, most of the issues have already been decided. If the City proceeds to trial tomorrow, the City will be facing a situation where a judgment will be entered against the City in an amount between $1.2 Million and $1.5 Million, with the Krauses having the right to cancel the 186462v]