The opinion of the court was delivered by: Hon. Ruben Castillo
AGREED JUDGMENT AND STIPULATION FOR SALE OF PROPERTY
The plaintiff and counter-defendant, Joseph Michael O'Callaghan, in his own person; the defendant and counter- and cross-claimant, the United States of America, by its undersigned counsel; the defendant and cross-defendant, Estate of Alex V. Wasleff, Jr., by its undersigned counsel, and Elm Limited LLC, by its undersigned counsel, agree that this case should be resolved by the entry of judgment that:
1. On April 14, 1983, a delegate of the Secretary of the Treasury made assessments against Alex V. Wasleff, Jr. ("Wasleff") of trust fund recovery penalties under 26 U.S.C. § 6672, for his failure to withhold, account for, and/or pay over the withholding taxes of a corporation for the second and third quarters of 1981, totaling $463,596.00, and sent notice and demand for payment.
2. As of November 15, 1983, Wasleff was indebted to the United States of America in the amount of $497,603.23 for these trust fund recovery penalties, for which notice and demand had been given and for which tax liability Wasleff had failed or refused to satisfy in full. The foregoing assessment remains unpaid. The attached Declaration of IRS Collection Technical Adviser Alexis Porrata supports the sum certain of Wasleff's outstanding tax liabilities. (Exhibit 1, Declaration of Alexis Porrata).
3. Wasleff's failure, neglect, or refusal to pay the trust fund recovery penalties assessed against him following notice of the assessment and demand for payment of the same, gave rise, as of the date of the assessment, to liens in favor of the United States, pursuant to 26 U.S.C. §§ 6321 and 6322, upon all of Wasleff's property and rights to property in an amount equal to the unpaid assessments, plus interest and other accruals permitted by law. These valid and subsisting liens have attached to Wasleff's interest in a parcel of real property commonly known as 6110 North Mozart Street, Chicago, Illinois (the "Mozart Street Property"), title of which was held in an Illinois Land Trust, and its formal description is as follows:
Lot 40 in Krenn and Dato's Addition to North Edgewater, being a Subdivision of the East Half of the Northwest Quarter of Section 1, Township 40 North, Range 13, East of the Third Principal Meridian in Cook County, Illinois. (PIN: 13-01-120-028-0000)
4. The United States' federal tax liens that have attached to Wasleff's interest in the Mozart Street Property shall be enforced, and said property shall be subjected to the payment of Wasleff's tax liabilities and sold under the authority of 26 U.S.C. § 7403 by a receiver appointed by this Court under 26 U.S.C. § 7403(d) (who will be a local real estate agent nominated by the United States in a subsequent motion and compensated at his usual and customary rate), free and clear of the interests of all parties to this action. The net proceeds (after the payment of ordinary and necessary costs of sale, including any property taxes that are already due but have not been purchased by a tax buyer) will be held in escrow to be distributed in accordance with the priorities and claims of the parties as determined by this Court, subject to the agreements of the parties as outlined below.
5. First, Elm Limited, LLC purchased the delinquent property taxes on the Mozart Street Property at the Illinois State Treasurer's Office Annual Tax Sale, and Elm Limited, LLC is therefore subrogated to the liens of the County Clerk of Cook County for these delinquent property taxes. These liens will have priority over the claims of all the parties in this action in an amount equal to the redemption amount, adjusted as follows - in lieu of the penalties on subsequent taxes under state law, Elm Limited, LLC has agreed to accept 1% per month on the amounts of these subsequent taxes from the respective dates of purchase - and this amount will be paid from the net sales proceeds from the sale of the Mozart Street Property.
6. Second, Joseph Michael O'Callaghan's ("O'Callaghan") security interests in the Mozart Street Property, which arose from (a) an assignment by Wasleff of 100% of the beneficial interest in the Illinois Land Trust as collateral for certain unpaid attorney fees, and (b) a mortgage O'Callaghan acquired on the Mozart Street Property from Chrysler First Business Credit Corporation on September 30,1994, have priority over the United States' security interests in the amount negotiated between the United States and O'Callaghan to resolve all of O'Callaghan's current or future claims based on these security interests - as set forth in a separate agreement between the United States and O'Callaghan - and this amount is to be paid to O'Callaghan from the net sales proceeds from the sale of the Mozart Street Property.
7. Third, the United States's tax liens and levies have priority over any remaining claims to the Mozart Street Property, and the remainder of the net sales proceeds from the sale of the Mozart Street Property, with the exception of the payment to the Estate of Alex V. Wasleff, Jr. ("Estate") described below in paragraph 8, shall be paid to the United States for application to Wasleff's outstanding tax liabilities in the manner that the United States determines is in its best interest.
8. Fourth, while any interest the Estate might have in the Mozart Street Property is junior to the claims of both O'Callaghan and the United States (see ECF
98), the United States and the Estate have nevertheless agreed to the payment of certain expenses of the Estate - as set forth in a separate agreement between the United States and the Estate - to be paid from the net sales proceeds from the sale of the Mozart Street Property.
9. Count I of the United States' counter- and cross-claims - seeking to enforce its levies - is dismissed from this action without prejudice.
10. The remaining cross-defendants in this action - (a) the Department of Revenue of the State of Illinois for the use of the ...