Source: https://www.scribd.com/document/113452402/10000017252
Timestamp: 2019-02-22 21:06:52
Document Index: 31951020

Matched Legal Cases: ['§ 157', '§ 1408', '§ 363', '§ 363', '§ 102', '§ 1102']

10000017252 | Bankruptcy | Bankruptcy In The United States
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UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
In re: PEREGRINE FINANCIAL GROUP, INC., ) ) ) ) ) ) ) ) Chapter 7 Case No. 12-27488 Honorable Judge Carol A. Doyle Hearing Date: August 21, 2012 Hearing Time: 10:00 a.m.
NOTICE OF MOTION PLEASE TAKE NOTICE that on August 21, 2012 at 10:00 a.m., the undersigned shall appear before the Honorable Carol A. Doyle, United States Bankruptcy Judge for the United States Bankruptcy Court, Northern District of Illinois, Eastern Division, in Courtroom 742 of the Dirksen Federal Building, 219 South Dearborn Street, Chicago, Illinois 60604, and then and there present the TRUSTEE’S MOTION FOR ENTRY OF AN ORDER ESTABLISHING PROCEDURES FOR DE MINIMIS ASSET SALES AND ABANDONMENT OF DE MINIMIS ASSETS, at which time you may appear and be heard. Dated: August 14, 2012 Respectfully submitted, Ira Bodenstein, not personally, but as chapter 7 trustee for the estate of Peregrine Financial Group, Inc. By: Robert M. Fishman (#3124316) Salvatore Barbatano (#0109681) Kimberly Bacher (#6285677) Shaw Gussis Fishman Glantz Wolfson & Towbin LLC 321 North Clark Street, Suite 800 Chicago, IL 60654 Phone: (312) 541-0151 Fax: (312) 980-3888 /s/ Kimberly Bacher One of his proposed attorneys
{10403-001 MOT A0324526.DOC 2}
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Kimberly Bacher certifies that she caused to be served a true copy of the above and foregoing NOTICE OF MOTION and TRUSTEE’S MOTION FOR ENTRY OF AN ORDER ESTABLISHING PROCEDURES FOR DE MINIMIS ASSET SALES AND ABANDONMENT OF DE MINIMIS ASSETS upon the attached ECF Electronic Mail Notice List and Service List in the manner so indicated on this 14th day of August, 2012. /s/ Kimberly Bacher Mailing Information for Case 12-27488 Electronic Mail Notice List The following is the list of parties who are currently on the list to receive email notice/service for this case.
Kimberly A Bacher kbacher@shawgussis.com Salvatore A Barbatano sbarbatano@shawgussis.com, jhampton@shawgussis.com Lawrence M. Benjamin lbenjamin@ngelaw.com, rwills@ngelaw.com Stephen T. Bobo sbobo@reedsmith.com Ira Bodenstein iratrustee@shawgussis.com, IL29@ecfcbis.com;sdelamora@shawgussis.com David E Cohen davidecohen@lawcohen.com Brooke E Conner bconner@vedderprice.com, ecfdocket@vedderprice.com;ecarlson@vedderprice.com Michael M. Eidelman meidelman@vedderprice.com, ecfdocket@vedderprice.com Robert M Fishman rfishman@shawgussis.com Ava Gould agould@cftc.gov Joshua M Grenard jgrenard@mayerbrown.com, courtnotification@mayerbrown.com Allen J Guon aguon@shawgussis.com, sdelamora@shawgussis.com John W Guzzardo jguzzardo@shawgussis.com, mcarter@shawgussis.com Stephanie K. Hor-Chen shor@vedderprice.com, ecfdocket@vedderprice.com Thomas S Kiriakos tkiriakos@mayerbrown.com, Courtnotification@mayerbrown.com Vincent E. Lazar vlazar@jenner.com, lyap@jenner.com;mmatlock@jenner.com;docketing@jenner.com Randall M Lending rlending@vedderprice.com, trobinson@vedderprice.com;ecfdocket@vedderprice.com Jennifer M. Muchoney jmuchoney@pfgbest.com Mark L Radtke mradtke@shawgussis.com Richard A. Saldinger rsaldinger@shawgussis.com Jessica M Scheller jscheller@shawgussis.com Sean T Scott stscott@mayerbrown.com Scott A Semenek scott.semenek@faegrebd.com, melanie.senesac@faegrebd.com Anne W Stukes astukes@cftc.gov William W Thorsness wthorsness@vedderprice.com, ecfdocket@vedderprice.com Thomas C. Wolford twolford@ngelaw.com
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Stephen Mertz Michael Stewart Faegre Baker Daniels LLP 90 South 7th St., Ste. 2200 Minneapolis, MN 55402 stephen.mertz@faegrebd.com Michael.stewart@faegrebd.com
Via Electronic Mail Gilbert B. Weisman Becket & Lee LLP 16 General Warren Blvd. Malvern, PA 19355 Notices@becket-lee.com Rosemary Hollinger rhollinger@cftc.gov Robert W. Wasserman rwasserman@cftc.gov Scott Williamson swilliamson@cftc.gov
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TRUSTEE’S MOTION FOR ENTRY OF AN ORDER ESTABLISHING PROCEDURES FOR DE MINIMIS ASSET SALES AND ABANDONMENT OF DE MINIMIS ASSETS Ira Bodenstein, not personally, but as chapter 7 trustee (the “Trustee”) for the estate of Peregrine Financial Group, Inc. d/b/a PFG Best (the “Debtor”), hereby moves (the “Motion”)for entry of an order substantially in the form filed with this Motion, establishing procedures by which the Trustee may sell or abandon certain assets of limited value in the above-captioned case. In support of the Motion, the Trustee respectfully states as follows: INTRODUCTION A. Background 1. On July 10, 2012 (“Petition Date”), the Debtor filed a voluntary petition for relief
relief requested herein pursuant to 28 U.S.C. §§ 157 and 1334 and Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. Venue is proper in
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this District pursuant to 28 U.S.C. §§ 1408 and 1409. 3. Prior to the Petition Date, the United States Commodity Futures Trading
Commission (“CFTC”) filed a lawsuit in the United States District Court for the Northern District of Illinois (“District Court”) alleging that the Debtor and its founder, Russell Wasendorf Sr., committed fraud, customer-funds violations and made false statements (“Lawsuit”). In connection with the Lawsuit, on July 10, 2012, the District Court entered an Order Appointing a Temporary Receiver. Shortly thereafter, the Debtor commenced the Case – commodity broker liquidation under subchapter IV of chapter 7 of the Bankruptcy Code. 4. The Trustee seeks authority to sell or abandon personal property, including, but
not limited to, furniture, fixtures, equipment and vehicles (collectively, “De Minimis Assets,” and each a “De Minimis Asset”). Allowing the Trustee to sell or abandon De Minimis Assets pursuant to certain proposed procedures set forth below will eliminate the cost of maintaining and storing nonessential property and generating costs to the detriment of the Debtor’s estate. B. De Minimis Asset Sale Procedures 5. The Trustee proposes to use the following procedures (the “De Minimis Asset
Sale Procedures”) for the sale of De Minimis Assets involving total consideration of $50,000 or less: i. Without further notice or Court approval, the Trustee may sell De Minimis Assets (“De Minimis Sales”) for $50,000 or less in total consideration or value in one or a series of related transactions provided: (A) the sale does not involve the assumption and assignment of any executory contracts, and (B) no known parties hold or assert liens or other interests in the assets that are subject of the sale. ii. De Minimis Sales will be deemed final and fully authorized by the Court and free and clear of all liens, claims, mortgages, encumbrances and other interests pursuant to section 363(f) of the Bankruptcy Code.
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iii. Within 45 days after the end of each quarter, provided there have been De Minimis Sales during such quarter, the Trustee will file a report with the Court itemizing the assets sold and consideration received for each De Minimis Sale completed during such quarter. C. De Minimis Asset Abandonment Procedures 6. The Trustee proposes to abandon certain De Minimis Assets under the following
procedures (the “Abandonment Procedures”): i. If the estimated fair market value of the assets to be abandoned is equal to or less than $25,000, the Trustee proposes to provide notice of the abandonment to only those parties in interests, if any, (i) asserting a lien, claim or encumbrances on the relevant De Minimis Asset(s) of the abandonment, or (ii) the non-debtor parties to a lease where the De Minimis Asset is located. ii. If the estimated fair value of the assets to be abandoned exceeds $25,000 but is less than $50,000, the Trustee shall also serve written notice of such abandonment on the CMECF service list in this case. Such notice will contain a general description of the De Minimis Assets to be abandoned. If the Trustee does not receive any objections to the property abandonment within seven calendar days of the CMECF service list’s receipt of such notice, the Trustee may immediately proceed with the abandonment. If an objection is received within such period that cannot be resolved, the Trustee will not abandon such De Minimis Assets except upon withdrawal of such written objection or further order of the Court after notice and a hearing.
RELIEF REQUESTED 7. By this Motion, the Trustee seeks approval of the proposed De Minimis Asset
Sale Procedures and the Abandonment Procedures. The De Minimis Asset Sale Procedures and the Abandonment Procedures will facilitate expeditious and cost-effective liquidation of the Debtor’s estate.
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BASIS FOR RELIEF A. The Sale of De Minimis Assets Under the Proposed De Minimis Asset Sale Procedures Is Within the Trustee’s Business Judgment 8. Section 363(b)(1) of the Bankruptcy Code provides, in relevant part, that “[t]he
trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate . . .” 11 U.S.C. § 363(b)(1). The use, sale, or lease of property of the estate, other than in the ordinary course of business, is authorized when there is an "articulated business justification" for the action to be taken. See Fulton State Bank v. Schipper (In re Schipper), 933 F .2d 513, 515 (7th Cir. 1991). 9. By reducing the costs of selling relatively immaterial or de minimis non-core
assets, the De Minimis Asset Sale Procedures will maximize the net value realized from such sales. Accordingly, the sale of property under the proposed De Minimis Asset Sale Procedures is an exercise of the Trustee’s sound business judgment and is in the best interests of the Debtor’s estate and its creditors. The proposed De Minimis Asset Sale Procedures are the most efficient and cost- effective means of maximizing value and avoiding unnecessary administrative costs. B. Approval of Proposed Sales on Shortened and Limited Notice Is Appropriate 10. The notice and hearing requirements contained in §§ 363(b)(1) and 554(a) are
satisfied if appropriate notice and an opportunity for hearing are provided in light of the particular circumstances. See 11 U.S.C. § 102(1)(A) (defining “after notice and a hearing” to mean “such notice as is appropriate in the particular circumstances, and such opportunity for a hearing as is appropriate in the particular circumstances”). 11. Generally, Bankruptcy Rules 2002(a)(2) and 2002(i) require trustees to provide a
minimum of 20 days' notice by mail of proposed sales of property outside the ordinary course of business to "the debtor, the trustee, all creditors and indenture trustee" as well as any committee
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appointed under § 1102 of the Bankruptcy Code. See Fed.R.Bankr.P. 2002(a)(2), 2002(a)(i). Courts are authorized to shorten the 20-day notice period generally applicable to asset sales, or to direct another method of giving notice, upon a showing of “cause.” See Bankruptcy Rule 2002(a)(2). C. This Court and Others Have Approved Similar Procedures 12. In light of the demonstrable benefits of streamlined procedures to sell small assets
and the legal justifications described above, courts in this District have approved procedures similar to the De Minimis Asset Sale Procedures and Abandonment Procedures in other large cases. See, e.g., In re Sentinel Algmt. Group, Inc., No. 07-14987 (JHS) (Mar. 27, 2008) (authorizing sale and abandonment of de minimis assets); In re Neumann Homes, Inc., No. 0720412 (ERW) (Nov. 28, 2007) (authorizing sales up to $50,000 with limited notice and sales up to $500,000 pursuant to expedited notice procedures); In re UAL Corp., No. 02-48191 (ERW) (Jan. 17, 2003) (authorizing sales up to $15 million); In re Kmart Corp., No. 02-02474 (SPS) (Aug. 29, 2002) (authorizing sales of de mimimis assets up to $2 million). 13. As this Court and others have recognized, the usual process of obtaining Court
approval of each De Minimis Sale and abandonment of any De Minimis Asset (a) would impose unnecessary administrative burdens on the Court and usurp valuable Court time at hearings; (b) would create costs to the Debtor’s estate that may undermine or eliminate the economic benefits of the underlying transactions; and (c) in some instances may hinder the Trustee’s ability to take advantage of sale opportunities that are available only for a limited time. Instead, the De Minimis Asset Sale Procedures and Abandonment Procedures will expedite the flow of cash into the estate, save the Debtor’s estate interim holding or storage costs, eliminate certain administrative costs and expedite the sale or abandonment of De Minimis Assets. Accordingly,
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the Trustee requests that the Court approve the proposed De Minimis Asset Sale Procedures and the Abandonment Procedures. E. Waiver of Bankruptcy Rule 6004(h) 14. Rule 6004(h) of the Bankruptcy Rules provides that an “order authorizing the use,
sale, or lease of property . . . is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise.” The Trustee requests that any order approving the relief requested herein be effective immediately by providing that the 14-day stays under Bankruptcy Rule 6004(h) be waived. WHEREFORE, for the reasons set forth herein, the Trustee respectfully requests that the Court enter an order, substantially in the form filed with this Motion, establishing the De Minimis Asset Sale Procedures and Abandonment Procedures and granting such other and further relief as is just and proper. Dated: August 14, 2012 Respectfully submitted, Ira Bodenstein, not personally, but as chapter 7 trustee for the estate of Peregrine Financial Group, Inc. By: /s/ Kimberly Bacher One of his proposed attorneys
Case 12-27488 Doc 100-1 Filed 08/14/12 Entered 08/14/12 09:21:18 Desc Proposed Order Approving Procedures for Sale and Abandonment of De Minimis Asset Page 1 of 1
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