Capitol First Corp – ‘8-K’ for 1/24/02

On:  Thursday, 1/24/02   ·   For:  1/24/02   ·   Accession #:  1121781-2-8   ·   File #:  0-23450

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Capitol Communities Corp. 1/24/02                      4     16K 
 2: EX-10.42    Order Resolving Motion for Relief From Stay            5     19K 
 3: EX-10.43    Order Permitting Withdrawal of Dismissal Motion        3     11K 
 4: EX-10.44    Order in the Circuit Court of Cook County              1      5K 

8-K   —   Capitol Communities Corp. 1/24/02
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
 Securities Exchange Act of 1934

January 24, 2002
Date of Report
 (Date of Earliest Event Reported)

 CAPITOL COMMUNITIES CORPORATION
(Exact Name of Registrant as Specified in its Charter)

  Nevada                      0-23450                   88-0361144
(State of Incorporation)       (Commission File No.)        (I.R.S. Employer    
                                                             Identification No.)

25550 Hawthorne Boulevard, Suite 207, Torrance, CA 90505
(Address of Principal Executive Offices)

 Registrant's Telephone Number: 310-375-2266

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ITEM 5.      OTHER EVENTS.                                                      

         Resure  Inc.,  Settlement  and Related  Court  Orders.  For  background
relating to this topic, see "ITEM 3. LEGAL  PROCEEDINGS" in the Company's Annual
Report on Form 10-KSB  filed with the  Securities  and  Exchange  Commission  on
January 14, 2001.                                                               

         On December 20, 2001, Capitol  Communities  Corporation's  wholly owned
subsidiary,  Capitol Development of Arkansas, Inc., (the "Operating Subsidiary")
and Nathaniel S. Shapo, the Director of Insurance for the State of Illinois,  in
his Capacity as the Liquidator for Resure, Inc.("Resure"),  reached a settlement
agreement  ("2001  Settlement  Agreement")to  resolve payment on the outstanding
Resure loan evidenced by a first priority  mortgage  against  approximately  701
acres of residential  land located in Maumelle,  Arkansas.  The 2001  Settlement
Agreement resolves the Resure Motions and Competing Plan of Reorganization filed
by Resure with the United States Bankruptcy Code in the United States Bankruptcy
Court, Eastern District of Arkansas (the "Bankruptcy Court").                   

         On July 21, 2000, the Operating  Subsidiary,  which holds substantially
all of the Company's assets, filed a voluntary petition for relief under Chapter
11 of the United States Bankruptcy Code in the Bankruptcy Court. Since then, the
Company has  continued  to operate its business as a  debtor-in-possession,  but
must seek Bankruptcy  approval of the 2001 Settlement  Agreement,  a transaction
outside the ordinary course of business.                                        

         The  Bankruptcy  Court entered an Order  approving the 2001  Settlement
Agreement on December 20, 2001,  and  dismissed  all pending  motions by Resure,
subject to the  Liquidator for Resure  receiving  approval of the agreement from
the Circuit Court of Cook County, Illinois,  Chancery Division (the "Cook County
Court").  The Cook County Court issued an Order  approving  the 2001  Settlement
Agreement on January 9, 2002.                                                   

         The  2001  Settlement   Agreement  requires  Resure  to  forebear  from
collecting  on the Resure  Note or  entering  any  pleadings,  hearings or other
actions for a forbearance period ("Forbearance Period"). This Forbearance Period
shall be through and  including a date (the  "Option A Date") which shall be the
latter of a date (i) February 15, 2002, if the Resure  Liquidator has obtained a
written Order from Cook County  approving the agreement on or before January 15,
2002, or (ii) a date which is one day for each day after January 15, 2002, until
an Order is entered by Cook County;  provided however, that if, on or before six
days prior to the Option A Date,  the  Operating  Subsidiary  elects Option B by
giving Resure written notice,  then the Forbearance  Period shall be through and
including a date which shall be the latter of a date ("Option B Date")(i)  April
15, 2002,  if Resure  Liquidator  has obtained and given notice to the Operating
Subsidiary  of the entry of the Cook County Order prior to January 15, 2002,  or
(ii) a date which is one day for each day after January 15, 2002, until an Order
is entered by Cook County.                                                      

         Under the terms of the  Agreement,  the Liquidator for Resure agrees to
accept  $3,850,000  on or before the Option A Date in full  satisfaction  of all
claims against the Operating Subsidiary.  If the Operating Subsidiary elects the
Option B Date,  a payment of  $3,987,353.95,  plus simple  interest at an annual
rate of nine percent  (9%)  accrued from April 24, 2000,  until the payment date
will be due.                                                                    

         If full  payment  required  under  Option A or Option B, is not  timely
rendered  to  Resure,  the  Operating  Subsidiary  has  agreed to the entry of a
Consent Foreclosure Decree and In Rem Judgment in the Pulaski County Chancery.  

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ITEM 7.      FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c)      Exhibits                                                               

Exhibit No.                                                                     
----------                                                                      

Exhibit 10.42     Order Resolving Motion For Relief from Stay (the 2001 Resure  
Agreement) dated December 20, 2001.         

Exhibit 10.43     Order Permitting Withdrawal of Dismissal Motion dated December
20, 2001.                                   

Exhibit 10.44     Order in the Cook County Court, Illinois In the Matter  of the
       Liquidation of Resure, Inc., dated January 9, 2002.

SIGNATURES

         Pursuant to the  requirements  of the  Securities  and  Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.                             

Dated: January 23, 2002                CAPITOL COMMUNITIES CORPORATION          

                       BY:   /s/ Michael G. Todd
                                  ------------------------
                                 Michael G. Todd
                                           President and Chairman of
                           the Board

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 EXHIBIT INDEX

Exhibit           Description                                                   
-------           -----------                                                   

Exhibit 10.42     Order Resolving Motion For Relief from Stay dated December 20,
                  2001.  The  Order  approves the  2001 Resure Agreement between
                  the Liquidator for Resure and Capitol Development of Arkansas,
Inc.                                        

Exhibit 10.43     Order Permitting Withdrawal of Dismissal Motion dated December
                20, 2001.  Motion is withdrawn by the Liquidator for Resure.

Exhibit 10.44     Order in the Cook County Court, Illinois In the Matter of  the
              of the Liquidation of Resure, Inc., dated January 9, 2002.
                  Liquidator  for Resure's Motion  for Approval  of a Settlement
         and Compromise of a Certain Debt Owing to Resure Inc.

4 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		4/15/02		2
		2/15/02		2
Filed on / For Period End:		1/24/02		1
		1/23/02		3
		1/15/02		2
		1/9/02		2		4
		12/20/01		2		4			4
		1/14/01		2
		7/21/00		2					8-K
		4/24/00		2
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