August 13, 2018 – The Maricopa County Treasurer (“MCT”) filed an objection to the Debtors’ motion for authority to conduct store closing sales [Docket No. 16], citing failure of the Debtors to provide for certain tax payments. The objection [Docket No. 150] asserts, “MCT objects to the sale of the furniture, fixtures and equipment (‘FF&E’), because the Motion fails to provide for payment of the personal property taxes, including any interest, from the sale proceeds of the FF&E related to the closing store(s) in Maricopa County. The Motion seeks authorization for the Agent to sell the FF&E at each closing location. Alternatively, the FF&E may be moved to another store location or abandoned. The affirmative duties of the Merchant include paying all taxes relating to the Stores and collecting all sales taxes and paying them to the appropriate taxing authorities, but the Motion fails to provide for payment of the personal property taxes or is unclear as to who will pay the taxes. The Letter Agreement Governing Inventory Disposition (the ‘Agreement’) dated August 5, 2018 between the Agent and Merchant/Debtor provides that the Merchant shall be responsible for all reasonable costs and expenses incurred by Agent in connection with the sale of the FF&E. Further, the Agent is required to remit to Merchant all gross proceeds from the sale of FF&E on a weekly basis and Agent’s fees and all FF&E costs and expenses then incurred shall be paid within seven (7) days after each such weekly reconciliation. MCT requests that the personal property taxes on any of the Closing Stores in Maricopa County be paid in full, including interest, from the sale proceeds within seven (7) days from the sale of the property or no later than seven (7) days after the sale termination date….MCT requests that Debtors provide notice to MCT of any abandonment of property including a list and/or description of the property abandoned. Any property that is abandoned remains subject to the tax liens.”
August 13, 2018 - Mountain Crane Service filed with the Court an Amended Plan of Reorganization [Docket No. 442] and related Disclosure Statement [Docket No. 443]. The two filings are largely unchanged from earlier versions. One change redlined in the new filings relates to changes to Clause 3.3.5 “Creation and Disbursement of the Distribution Fund” which notes that the “Distribution Fund” will be in an aggregate principal amount of $8 million and that quarterly distributions to the Distribution Fund will be in an amount of $200,000; these amounts had been previously disclosed as $9 million and $225,000, respectively. According to the Disclosure Statement, “As more particularly specified in sections 5.5 and 5.6 of the Plan, the Debtor shall set aside, segregate and distribute funds in the aggregate amount of $8,000,000, (i.e., the “Distribution Fund” or the “Distribution Fund Amount”) to be paid to the holders of Administrative Claims, Unclassified Priority Claims, Class 1 Priority Claims and Class 2 General Unsecured Claims, Subordinated Claims, Subordinated § 510 Claims, and the canceled Equity Interests.
August 13, 2018 – The United States Securities and Exchange Commission (“SEC”) filed an objection [Docket No. 315] to Red Mountain Resources’ Disclosure Statement [Docket No. 308] and Second Amended Joint Plan of Reorganization [Docket No. 307] citing concerns over the adequacy of information contained in the Disclosure Statement. The objection asserts, “The SEC objects to approval of the Disclosure Statement because the Disclosure Statement fails to contain adequate information to permit creditors and shareholders to make an informed judgment about the Plan. Moreover, it describes a Plan that cannot be confirmed pursuant to Sections 524(e), 1145, and 1129(a)(1) of the Bankruptcy Code. The Plan contains an exculpation provision that provides for a release of non-debtor third party liability in contravention of Section 524(e) of the Bankruptcy Code and applicable Fifth Circuit law. Such releases have special significance for public investors because they allow non-debtors to benefit from a debtor’s bankruptcy by effectively obtaining their own discharges with respect to past wrongdoing, including violations of the federal securities laws or breaches of fiduciary duty.”
August 13, 2018 – Cenveo filed with the Court a Fourth Supplement to its Plan Supplement [Docket No. 655]. The supplement contains the following documents: (i) Exhibit A: Amended Identity of the Members of the Reorganized Cenveo and (ii) Exhibit A-1: A comparison showing changes to the Identity of the Members of the Reorganized Cenveo Board and Executive Management for Reorganized Cenveo filed on July 3, 2018.
August 13, 2018 – Orianna Health Systems’ creditor OHI Asset RO filed with the Court an objection to the “May Monthly Statements” for allowance and payment of fees and expenses filed by each of Pepper Hamilton; CohnReznick; and Norton Rose Fulbright, collectively, the “Committee Professionals” [Docket No. 825]. The creditor asserts, “Pursuant to decretal paragraphs g and h of the Order Establishing Procedures for Interim Compensation and Reimbursement of Professionals [Docket No. 262], any ‘Professional’ that fails to file a ‘Monthly Fee Application’ or an ‘Interim Fee Application Request’ when due or permitted will be ineligible to receive further interim payments of fees or expenses under the Compensation Procedures until such time as a Monthly Fee Application or Interim Fee Application Request is submitted by the Professional. The first ‘Interim Fee Period’ closed on May 31, 2018, and each ‘Professional must file and serve its first Interim Fee Application Request on or before July 16, 2018.’ To date, none of the Committee Professionals have filed a first ‘Interim Fee Application Request.’ The Omega Entities therefore object to the payment of any portion of each Committee Professional’s May Fees and Expenses until such Committee Professional files the required fee applications….To the extent the Committee Professionals’ May Fees and Expenses exceed the caps imposed by the Approved Budgets for May, 2018, such fees and expenses cannot be paid at this time….This objection pertains to requests for interim payment and interim allowance of fees and expenses.”