Bankruptcy court delays confirmation of Oldenburg reorganization plan

FORT COLLINS — U.S. Bankruptcy Court Judge Joseph Rosania will not confirm the reorganization plan — the fourth — filed by Sandra and Lee Oldenburg. Instead, he decided Thursday to place the bankruptcy on hold until after civil, and potentially criminal, matters are resolved.

The Oldenburgs, who live in Johnstown, filed for Chapter 13 bankruptcy protection in August 2023. Lee Oldenburg is a teacher in the Windsor school district, and Sandra Oldenburg is the former co-owner of a property management company based in Fort Collins.

Carlson Farms Homeowners Association filed an adversary court case, claiming that hundreds of thousands of dollars were missing from HOA bank accounts, accounts that Sandra Oldenburg managed.

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Subsequently, other HOAs managed by Oldenburg and her company, NoCo Real Estate Solutions Inc., which has done business as Poudre Property Services, also reported the potential of missing money or at least the inability to get an accounting of their affairs.

Thursday, attorney Rob Cohen, who represents Carlson Farms, said that the HOA continues to object on the basis of feasibility of the repayment plan and whether the bankruptcy was filed in good faith. 

“I’m getting calls from other HOAs who were not noticed” (on the bankruptcy proceedings.) Cohen said one of them, Rolling Hills HOA, claims to be owed more than $141,000, which is not listed in the bankruptcy as a creditor.

A civil case on the Carlson Farms complaint is scheduled for October, and if Carlson is successful, “if the confirmation is approved, then Carlson Farms would not be able to collect for five years,” he said.

Cohen said he has not had an opportunity to conduct discovery in the case, but he has conducted some tracing. 

“Some funds were transferred to the spouse’s father,” he said, which has meant that the civil case was expanded to include another defendant.

Cohen also said that a criminal investigation is ongoing and “that adds another level of complication.”

David Serafin, attorney for the Oldenburgs, said he was not aware of the status of the criminal investigation other than he thought no charges had been brought at this point. 

Serafin told the court that he needed to amend Schedule D of the reorganization plan to add the Rolling Hills unsecured claim.

Rosania, in leading up to his decision to delay confirming the plan, said that the case presents “a lot of moving parts” and that “waiting for the state court makes sense.”

He said that if other HOAs have claims, they need to file a proof of claim with the bankruptcy court, and they would need to hire legal counsel to file motions asking the court to accept the late claims because claim filings were due no later than Nov. 6, 2023.

Dee Anne Menzies, president of the Rolling Hills Ranch Patio II HOA, and Diane Morris, representing the Rolling Hills Ranch Master HOA, said they have claims but lacked the ability to pay an attorney “because our money is gone.” 

“We are cooperating with a detective on the criminal side,” Menzies said.

As many as 13 HOAs have become aware of the bankruptcy action, and 10 of them are cooperating on the potential criminal side, she said..

Rosania said that he had “serious concerns” about the case and had considered dismissing the bankruptcy but instead would stay the confirmation until after the civil, and potentially criminal, actions are resolved.

The judge said that the bankruptcy plan as outlined would allow repayment of about $50,000 in overdue income taxes, but any unsecured creditors would have to wait at least four years to see any repayment. He noted there were unsecured claims of $1.7 million, including $1.2 million from Carlson Farms, and an unknown amount from other creditors who had not filed claims because they were not aware of the bankruptcy case deadlines.

He said the plan permits payment of “less than .02%” of existing unsecured claims, an amount that would be reduced by attorney fees.

“I disagree with the debtors’ counsel that this is the debtors trying to save their house and pay income taxes,” the judge said.

An email sent to Serafin was not acknowledged prior to publication time.

The cases are:

Carlson Farms Homeowners Association vs. NoCo Real Estate Solutions Inc. and Sandra Oldenburg, case number 2023cv30125 filed Feb. 17, 2023, in Larimer County District Court.

Sandra Oldenburg and Lee Oldenburg, Chapter 13 bankruptcy, case number 2023-13858, filed Aug. 28, 2023, in U.S. Bankruptcy Court for the District of Colorado.