UNITED STATES BANKRUPTCY COURT FOR THE - Bankrupt.com

UNITED STATES BANKRUPTCY COURT FOR THE - Bankrupt.com

No. 1:17-bk-00608 Doc 37 Filed 06/16/17 Entered 06/16/17 15:57:26 Page 1 of 7 UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF WEST VI...

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UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF WEST VIRGINIA IN RE:

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PIN OAK PROPERTIES, LLC Debtor.

CASE NO.: 17-bk-00608 CHAPTER 11

MOTION FOR ORDER AUTHORIZING THE DEBTOR’S USE OF CASH COLLATERAL TO THE HONORABLE PATRICK M. FLATLEY, U.S. BANKRUPTCY JUDGE: 1.

Debtor is the debtor in possession. It commenced its case on June 7,

2017, by filing a petition for relief under Chapter 11, Title 11 of the United States Code. 2.

Debtor was formed in State of West Virginia to own and operate as Pin

Oak Properties, LLC, and is the sole owner of Pin Oak Properties, LLC. 3.

Debtor’s major source of funds with which to operate is from rental income

from leased property of the Middletown Mall located at 9429 W Mill St, White Hall, Marion County, West Virginia 26554. 4.

As of January 30, 2012, Debtor’s major assets had the following

approximate value: Real Estate:

$18,000,000.00

General Acquisitions, LLC currently holds a security interests through a Third Restated Modification Agreement dated September 30, 2016, pursuant to a December 22, 2005, A Purchase Money Credit Line Deed of Trust and Security Agreement in favor and to secure Branch, Banking and Trust Company (BB&T) on 29.64 acres, 0.637 acres, and 0.944 acres of real estate located at and comprising the Middletown Mall in

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General Acquisitions also holds an

Assignment of Leases and Rents from the Middletown Mall that it acquired from BB&T. 5.

The Middletown Mall is leased to twenty-two (22) tenants at different rental

rates payable per calendar month (Rental Income). 6.

Since January 2017, General Acquisitions has been receiving the Rental

Income from the tenants at the Middletown Mall pursuant to the Assignment of Leases and Rents. 7.

Prior to the Debtor filing its bankruptcy petition General Acquisitions had

noticed the Debtor that it was in default of the secured loan agreement and had scheduled a June 8, 2017, foreclosure date. 8.

Based on information provided by the Debtor the anticipated Rental

Income collections per calendar month from tenants (if paid on time) at the Middletown Mall are approximately One Hundred Twenty-Two Thousand Nine Hundred Ninety-two Dollars ($122,992.00). It is the Debtor’s position that this Rental Income is the cash collateral requested in this Motion. 9.

Based on information provided by the Debtor, its anticipated average

monthly expenses range from One Hundred Seven Thousand Five Hundred Ninety-Six Dollars ($107,596.00) to One Hundred Fifteen Thousand Ninety-Six Dollars ($115,096.00) which includes an Eighty-Thousand Eight Hundred and Eight Dollar ($80,808.00) payment to General Acquisitions based on an 8.06% interest rate. 10.

With General Acquisitions receiving the Rental Income from the

Middletown Mall tenants it is extremely difficult for the Debtor to meet its related financial obligations consistent with operating in the ordinary court of business, i.e.

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employee payroll, federal and state taxes, utilities, maintenance and supervision of the Middletown Mall property, unemployment compensation, and workers’ compensation insurance. 11.

If the Debtor is unable to receive and use the Rental Income as cash

collateral during this bankruptcy to pay its financial obligations in the ordinary course of business it could be forced to terminate its operations. In short, without use of the cash collateral, the Debtor's ability to reorganize would be severely and adversely affected and its estate could suffer immediate, and irreparable injury within the meaning of the Bankruptcy Code 4001(b)(2). 12.

A debtor in possession is authorized to use cash collateral in the ordinary

course of its business operations under Sections 363(c)(2) and 1107 of the Bankruptcy Code, provided that upon a request of a party that has an interest in the cash collateral, the Court shall condition such use as is necessary to provide adequate protection of such interest. 13.

If necessary the Debtor seeks to provide General Acquisitions with

adequate protection of their interest through the cash collateral as collected from the Rental Income in accordance with 11 U.S.C. §§ 361 and 363. 14.

On June 7, 2017, and June 15, 2017, Debtor’s counsel had telephone

conversations with attorneys for General Acquisitions expressing the Debtor’s understanding that adequate protection payments may be required for the Debtor to receive the Rental Income as cash collateral and to confirm any adequate protection payment amount that would be required.

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At the time of the filing of this motion, Debtor’s counsel has not received

an adequate protection payment amount from General Acquisitions for purposes of this motion and potentially an agreed order permitting the use of the cash collateral. However, based on upcoming ordinary course of business expenses of the Debtor it filed this Motion to move this issue forward before the Court. WHEREFORE, Debtor requests that this Court enter an Order:

1.

Authoring the Debtor to use the Rental Income generated by the

Middletown Malls’ tenant’s lease payments as cash collateral as follows: a.

for payment of the Debtor’s business expenses arising in the

ordinary course of business, up to and including, employee payroll, federal and state taxes, utilities, maintenance and supervision of the Middletown Mall property, unemployment compensation, and workers’ compensation insurance.

b.

for payment of adequate protection in accordance with 11 U.S.C.

§§ 361 and 363 as required by any subsequent Court order. 2.

Granting such other relief as is appropriate.

DATED: June 16, 2017

GIANOLA, BARNUM, BECHTEL & JECKLIN, L.C. s/ David M. Jecklin David M. Jecklin, Esquire W.V. Bar No. 9678 Gianola, Barnum, Bechtel & Jecklin, L.C. 1714 Mileground Morgantown, WV 26505 304-291-6300

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CERTIFICATE OF SERVICE I, David M. Jecklin, certify that I served the foregoing Motion for Order Authorizing Use of Cash Collateral upon the parties listed below, by e-filing or mailing a true copy by United States First Class Mail, postage prepaid, this 16th day of June 2017. Aaron's 56319 National Road Bridgeport, OH 43912

Deep Valley, LLC 24 Arrow Lane Mannington, WV 26582

Advance Refrigeration, Inc. 689 Fairchance Road Morgantown, WV 26508

Diane's Hallmark 9357 Middletown Mall Fairmont, WV 26554

BB&T 127 W Webster Street Whiteville, NC 28472

Dietrich Steve Fansler 3120 Fairway Drive Morgantown, WV 26508

Bioscript Infusion Services, LLC 100 Clearbrook Road, 3rd Fl Elmsford, NY 10523

Michael R. Proctor, Esq. David M. Thomas, Esq. Dinsmore & Shohl, LLP 215 Don Knotts Blvd., Suite 310 Morgantown, WV 26501

City Neon, Inc. c/o Michael L. Solomon Solomon & Solomon 330 Chestnut Street Morgantown, WV 26505

Dolgencorp, LLC Attn: Director of Lease Renewals Re: Store #900 100 Mission Ridge Goodlettsville, TN 37072

City of Fairmont P.O. Box 182304 Columbus, OH 43218

Don Burrito of Fairmont, Inc. Attn: Francisco Guerrero 57 Norway Loop Road Fairmont, WV 26554

Clear Mountain Bank P.O. Box 205 Bruceton Mills, WV 26525

FK Everest, Inc 140 Business, Park Dr, Fairmont, WV 26554

CW Stickley 69 Middletown Road White Hall, WV 26554 D & S Collectibles 9479 Middletown Mall White Hall, WV 26554

G.S.A. U.S.G.S.A. The Strawbridge's Building 20 North Eight Street Philadelphia, PA 19107

D&M Properties, LLC c/o Martin A. Burdoff 21 New England Circle Fairmont, WV 26554

General Acquistions, LLC 6200 Mid Atlantic Drive Morgantown, WV 26508

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Gianola, Barnum, Bechtel & Jecklin, LC 1714 Mileground Morgantown, WV 26505

R.D. Wilson Sons & Company P.O. Box 1486 Clarksburg, WV 26301

Hardee's 7490 Clubhouse Rd. Boulder, CO 80301

RDR Properties 6200 Mid Atlantic Drive Morgantown, WV 26508

High Life Lounge 9723 Mall Loop White Hall, WV 26554

Robert L. Shuman, Esq. Reeder & Shuman 256 High Street Morgantown, WV 26507

Internal Revenue Service P.O. Box 145595 Cincinnati, OH 45250

Regis Corp 7201 Metro Boulevard Minneapolis, MN 55439

Jackson Kelly, PLLC P.O. Box 553 Charleston, WV 25322

Rosso Roofing 121 Railroad Street Uniontown, PA 15401

Lee's Drywall 243 Hidden Meadow Lane Swanton, MD 21561

Security Systems of America 500 Admore Blvd Pittsburgh, PA 15221

K.B. & B. Associates, Inc. dba Mattress Warehouse Legal Deptartment 2982 Winfield Road Winfield, WV 25213

SNS Foods, Inc. Attn: Tom Jamieson 107 Regency Drive Uniontown, PA 15401

Marion County Sheriff Tax Office 200 Jackson St 101 Fairmont, WV 26555

Northern Air P.O. Box 4205 Lynchburg, VA 24502

Master Cuts #4926 7201 Metro Boulevard Minneapolis, MN 55439

State of WV Tax Dept. P.O. Box 2745 Charleston, WV 25330

Mercantile Realty, Inc. Chelsae Richmond Robinson & McElwee, PLLC P.O. Box 1791 Charleston, WV 25326

Subway Store No. 11204 9547 Middletown Mall Fairmont, WV 26554 The Jewelers Bench 9329 Middletown Mall Fairmont, WV 26554

Morgantown Security & Fire P.O. Box 645353 Pittsburgh, PA 15264

Town of White Hall 3 Timrod Dr, Fairmont Fairmont, WV 26554

Peoples Gas P.O. Box 645345 Pittsburgh, PA 15264

Travelers P.O. Box 361136 Columbus, OH 43236

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United States of America Baltimore Dist. U.S. Army Engineer Dist. City Crescent Building Seventh Floor, Ste 7600 Baltimore, MD 21201

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West Virginia State Tax Department Bankruptcy Division P.O. Box 766 Charleston, WV 25323 WorkForce WV Legal Section 112 California Avenue Charleston, WV 25305

Water Warner & Harris P.O. Box 1716 Clarksburg, WV 26302

WV Insurance Commissioner P.O. Box 50540 Charleston, WV 25305 WV Unemployment Compensation Div. P.O. Box 2573 Charleston, WV 25301

s/ David M. Jecklin David M. Jecklin, Esquire W.V. Bar No. 9678 Gianola, Barnum, Bechtel & Jecklin, L.C. 1714 Mileground Morgantown, WV 26505 304-291-6300

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