SANTA ROSA, Calif. — A bankruptcy judge indicated this week that he is likely to approve a liquidation plan for the assets of Copia, the failed Napa, Calif. nonprofit wine museum.

At a hearing here Tuesday, attorneys representing various interests in the case told U.S. District Bankruptcy Judge Alan Jaroslovsky they had come to agreements in principle over outstanding issues.

Agreement on the liquidation plan will allow for the sale of the former downtown Napa wine museum property for the benefit of the holders of $77 million of tax-exempt bonds issued for the nonprofit.

The liquidation plan was jointly proposed by Copia and ACA Financial Guaranty, the insurer of the bonds.

Only one formal objection ­remained, which Jaroslovsky overruled. The judge is expected to sign off on the liquidation plan within the next week or two, once the parties negotiate final language.

The bankruptcy case, which was filed in December, has been marked by twists and turns driven by a small creditor created by a bankruptcy claims trader, Copia Claims LLC, that bought a small piece of Copia’s debt after the bankruptcy.

Copia Claims argued that the defeasance of the original 1999 bond issue that financed Copia was botched when the 2007 refunding bonds were issued, and proposed a plan to file a fraudulent-transfer claim to get the 2007 bondholders the money held in escrow for the 1999 bonds.

The California Infrastructure and Economic Development Bank was the conduit issuer for both deals.

Copia Claims’ attorney, Merle Meyers, told the judge Tuesday said that it had agreed to withdraw its objection because of modifications to the liquidation plan that Copia Claims believes will ensure a separate securities fraud lawsuit can proceed in civil court.

The sole remaining objection came from Copia Claims’ former attorney, the claims trader William McGrane, who objected to language in the liquidation plan assigning to ACA any rights, claims, and causes of actions arising from the bankruptcy case against McGrane “and any other person or entity associated with, affiliated with, or controlled by William McGrane.”

McGrane’s attorney, Christopher Sullivan, argued that such language was unnecessary and should be ­stricken.

“Mr. McGrane can’t be punished unless he’s done something wrong,” Jaroslovsky said. “I’m not sure what Mr. McGrane is worried about.” He overruled McGrane’s objection.

McGrane is the attorney of record for the separate securities fraud lawsuit filed in connection with the case.

Last week he filed a revised complaint in the planned class action, arguing that securities fraud was committed in the defeasance of the Copia bonds and naming the California Infrastructure and Economic Development Bank and bond counsel Orrick, Herrington & Sutcliffe LLP as defendants.

Meanwhile, the Copia property is on the market. At the beginning of October, ACA hired Alvarez & Marsal Real Estate Advisory Services LLC to oversee the sale of the property, which has 17 total acres including the former 78,000 square-foot Copia building.

ACA first retained Alvarez & Marsal in 2008, before Copia even filed for bankruptcy, according to documents filed with the bankruptcy court. The firm sought bidders for the property at that time, receiving a high offer of $37 million, according to the document.

The insurer, in its most recent quarterly financial statement, estimated that it would need a claim reserve in the range of $50 million to $60 million for Copia, a number that will not be recorded on its financial statements until a payment default occurs, which is not expected until 2011 or 2012 because of the bonds’ debt service reserve.

ACA has been operating in runoff mode since the summer of 2008, as part of an agreement brokered by Maryland’s insurance regulator to settle claims related to insured credit-swap policies that went awry after the downgrade of the formerly single-A rated insurer.

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