THIRD STIPULATION AND CONSENT ORDER EXTENDING INTERIM AGREEMENT FOR THE USE OF CASH COLLATERAL, AUTHORIZING DEBTOR TO USE CASH COLLATERAL AND GRANTING ADEQUATE PROTECTION THROUGH MARCH 13, 2013
NANCY V. ALQUIST, Bankruptcy Judge.
This matter originally came before the Court on the Emergency Motion for Authority to Use Cash Collateral and Grant Adequate Protection therefore (the "Motion") (Docket Number 15, filed on November 19, 2012) filed by Phoenix Garden LLC (the "Debtor"), concerning the Debtor's use of cash collateral of One West Bank, FSB (the "Secured Creditor"). On November 21, 2012, the Court entered a Consent Order Approving Interim Agreement for Use of Cash Collateral, Authorizing Debtor to Use Cash Collateral and Granting Adequate Protection (the "Interim Order") (Docket Number 19). The Interim Order covered the period from filing through December 19, 2012.
On December 20, 2012, the Court entered a Consent Order Approving Interim Agreement for Use of Cash Collateral, Authorizing Debtor to Use Cash Collateral and Granting Adequate Protection Through February 14, 2013 (the "Second Interim Order") (Docket Number 28). The Second Interim Order covered the period from filing through February 14, 2013.
The Debtor has a continuing need to use Cash Collateral to fund the operation of its business. To allow for the continued use of Cash Collateral, the Debtor and the Secured Creditor desire to enter into this Third Stipulation and Consent Order Extending Interim Agreement for Use of Cash Collateral, Authorizing Debtor to Use Cash Collateral and Granting Adequate Protection (through March 13, 2013) (the "Third Order"). Except as set forth below, all terms set forth in the Interim Order and the Second Interim Order are hereby incorporated by reference into the Extension Order and shall remain in full force and effect through and including March 13, 2013. Except as expressly provided herein, no terms of the Interim Order are amended, or otherwise nullified.
The Debtor and the Secured Creditor hereby STIPULATE and AGREE as follows:
A. The Debtor filed its petition for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") on October 3, 2012 (the "Petition Date"). Pursuant to sections 1107 and 1108 of the Bankruptcy Code, the Debtor remains in possession of its assets and has continued the operation and management of its business as a Debtor-in-Possession.
B. This Court has jurisdiction over the Motion pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. §§1557(b)(2)(a), (G), (M), and (O), involving matters concerning the use of cash collateral under section 363 of the Bankruptcy Code. Venue is proper in this district pursuant to 28 U.S.C. § 408.
C. The Debtor owns and operates two (2) apartment complexes in Baltimore, one known as Oakford Apartments, 3801-3815 Oakford Avenue, Baltimore, Maryland 21215 and the other known as the Denmore Apartments, 5018-5032 Denmore Avenue, Baltimore, Maryland 21215 collectively known as (the "Properties").
D. The Debtor represents that it requires the use of Cash Collateral and that the need for use of Cash Collateral is immediate and urgent. The Debtor further represents that the projected budget (the "Budget"), attached as Exhibit A, fairly and accurately states the Debtor's cash requirements for the period from February 14, 2013 through March 13, 2013 (the "Specified Period") and that without the use of Cash Collateral during the Specified Period for the uses and purposes specified, serious and irreparable harm to the Debtor and its estate will likely occur.
E. The Debtor further represents that the relief requested in the Motion is necessary, essential, and appropriate for the continued operation of the Debtor's business and to preserve the value of its assets.
F. The Secured Creditor and the Debtor have negotiated at arm's length and in good faith regarding the Debtor's use of Cash Collateral to fund the continued operation of the Debtor's businesses. The Secured Creditor has agreed to permit the Debtor to use its Cash Collateral for the Specified Period.
G. Good and sufficient cause has been shown that the entry of the Extension Order is in the best interests of the Debtor and its estate. Among other things, the entry of this Third Order will minimize the disruption to the Debtor's business operations and will preserve the value of the Debtor's estate.
H. The terms and conditions governing the Debtor's use of Cash Collateral are fair and reasonable under the circumstances and reflect the Debtor's exercise of prudent business judgment consistent with their fiduciary duties.
I. Notice of the Third Order has been given to all persons known to claim an interest and the Cash Collateral affected by the Motion, including (i) the Office of the United States Trustee, (ii) the creditors holding the twenty (20) largest unsecured claims against the Debtor, (iii) the Secured Creditor.
J. Debtor has further stipulated and agreed that any funds received from the managing member of the Debtor to cover cash shortfalls, Exhibit A, shall be conclusively treated as contributions of capital and not as loans.
Upon the foregoing, the Court FINDS that: (a) adequate and sufficient notice of the Third Order has been given in accordance with the Interim Order and the provisions of sections 102, 105, 361 and 363 of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure, (b) the Secured Creditor and the Debtor have agreed to the terms of the Third Order pursuant to Fed. R. Bankr. P. 4001(d) as a resolution of the issues raised by the Motion, and (c) no further notice relating to this proceeding is necessary or required.
Further, on the basis of and consistent with the foregoing, and good cause appearing to the Court:
IT IS HEREBY ORDERED that:
1. Authorization to Use Cash Collateral. The Debtor is authorized to use Cash Collateral during the Specified Period, in the amount, at times, and for the purposes set forth in the Budget, subject to a five percent (5%) overall variance in the cumulative expenditures set forth in the Budget for the Specified Period. The Debtor shall use Cash Collateral only during the Specified Period. The Debtor is prohibited from making any expenditures or disbursements except as specifically itemized in the Budget or as hereafter expressly authorized by the Secured Creditor, or as hereafter expressly authorized by an Order of this Court entered after the notice to the Secured Creditor and an opportunity for a hearing.
2. Adequate Protection Payments to Secured Creditor. As further adequate protection for the Senior Creditor during the Specified Period: the Debtor shall make a payment to the Secured Creditor; (a) in the amount of $33,306.56 on or before March 12, 2013. In the event that any funds are contributed by the managing member, those funds contributed shall be treated as contributions to capital and not as loans.
3. Notice of Entry of Third Order. Within two (2) business days of the entry of this Third Order, the Debtor shall serve notice of entry of this Third Order together with a copy of this Third Order, on: (a) the parties having been given notice of the hearing on the Interim Order; (b) the counsel for the Secured Creditor; (c) to the twenty (20) largest unsecured trade creditors of the Debtor, (d) the Office of the United States Trustee, and (e) any other person which has filed a request for notice with the Court. The notice shall state that any party-in-interest objecting to the entry of a final order on the Motion or this Third Order shall file a written objection with the Clerk of the United States Bankruptcy Court for the District of Maryland (Baltimore Division) within the deadline set by this Court and contemporaneously serve the objection on counsel to the Debtor, counsel to the Secured Creditor and the Office of the United States Trustee.
4. Further Extensions of Extension Order. Extensions of this Extension Order shall be permitted without a hearing subject to notice and no objection being raised.
SO ORDERED
