Source: http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0
Timestamp: 2017-04-29 12:54:40
Document Index: 82216927

Matched Legal Cases: ['§ 105', '§ 105', '§ 362', '§ 157', '§ 157', '§ 1408', '§ 105', '§ 363', '§ 365']

Debtors' Verified Motion Pursuant to 11 U.S.C Sections 105(a), 363(b) and 365, Fed.R.Bankr.P.2002(a)(2), 6004 & 6006 & MLBR 2002-5 & 6004-1 For Order..... | In Re: Archie's Oil Services, Inc., et al. | David Barrett - JDSupra
In Re: Archie's Oil Services, Inc., et al.Debtors' Verified Motion Pursuant to 11 U.S.C Sections 105(a), 363(b) and 365, Fed.R.Bankr.P.2002(a)(2), 6004 & 6006 & MLBR 2002-5 & 6004-1 For Order.....
This is DEBTORS' VERIFIED MOTION PURSUANT TO 11 U.S.C SECTIONS 105(a), 363(b) AND 365, FED. R. BANKR.P. 2002(a) (2), 6004 AND 6006 AND MLBR 2002-5 AND 6004-1 FOR ORDER (A) APPROVING THE SALE OF ALL OR SUBSTANTIALLY ALL OF THE DEBTORS' ASSETS, FREE OF LIENS, CLAIMS, INTERESTS AND ENCUMBRANCES, (B) APPROVING ASSUMPTION AND ASSIGNMENT OF UNEXPIRED LEASES AND EXECUTORY CONTRACTS, AND (C) APPROVING BIDDING PROCEDURES AND AUTHORIZING DEBTORS TO SOLICIT HIGHER AND BETTER OFFERS PURSUANT TO PROPOSED NOTICE OF SALE.
Download PDF UNITED STATES BANKRITPTCY COURT DISTRICT OF MASSACITUSETTS EASTERN DTVISION In re: ARCHIE'S OIL SERVICES, INC., Debtor. ln re: ARCHIE'S AND KEN'S OIL AND I{EATING SERVICE, INC., Debtor. In re: KEN'S OIL AND I{EATING SERVICES, INC.. Chapter 7 Case No. 08-15275-JNF Chapter 7 CaseN o. 08-15276-JNF Chapter 7 CaseN o, 08-15280-JNF ))))) _) )))))) _))))))) DEBTORS'VERIFIED MOTION PIIRSUANT TO 11 U'S'C' $$ 105(a)' 363(b) AI\D 36s' FED. R BAI\IKR P. 2002(aX2),6004A ND 6006A ND MLBR 2002-5 AI\[D 6004-1 FOR ORDER (A) APPROVINi iis S.un OF ALL OR SUBSTAI\1TIALLY ALL OF Tm DEBToRS, ASSETS, F'REE or r,IEN.s, CLAIMS,INTERESTS AND ENCIIMBRAIICES' (B) AppROVINC a,SSUilrTION Ami SSfCrVn'fnNT OF UNE)GIRED LEASES AI\1D E)GCUTSRY CONTRACTS, AND iCl,lppnOVIN-G BIDDING PROCEDSRES AND AUTHORIZING DEBTORS TOSbLICIT IIIGIIER AIID BETTER OFFERS Pursuantto I I U.S.C.$ $ 105(a)3, 63(b)a nd3 65,F ed.R . Bank' P'2002(a)(2), 6004 and 6006 andM LBR 2002-5and6 004-1A, rchie'sO il Services,Inc(". Archie's"), Arohie's and Ken's Oil and HeatingS ervices,lnc(. ..A&K',), andK en,so il & HeatingS ervices,Inc. (..Ken's,''a ndc ollectivelyw ith Archie,sa ndA &K the ..Debtors,'t)h e debtorsin the above-captioned chapter1 l casesh erebym ovet his Court for entrY of orders: (a) authorizinga nda pprovingt he saleo f the Debtors'B usinessA ssets (as hereinafter a"f-"Jl a"eea na ciear of-att liens, claims,e ncumbranceasn d other interestst o the person who submitst he highesta nOU esto ffer for the Debtors'B usinessA ssets (the "Buyer"); (b) authorizingth e assumptiono f certaine xecutoryc ontractsa ndu nexpired leasesin connectionw ith the saleo f the BusinessA ssetsa nd the assignmenot f suchc ontractsa nd leasesto Buyer pursuantto section3 65 of the BankruptcyC ode; UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS EASTERN DIVISION In re: Chapter 7 ARCHIE'S OIL SERVICES, INC., Case No. 08-15275-JNF Debtor. In re: Chapter 7 ARCHIE'S AND KEN'S OIL AND HEATING SERVICE, INC., Case No. 08-15276-JNF Debtor. In re: Chapter 7 KEN'S OIL AND HEATING SERVICES, INC., Case No. 08-15280-JNF Debtor. DEBTORS' VERDJIED MOTION PURSUANT TO 11 U.S.C. §§ 105(a), 363(b) AND 365, FED. R. BANKR. P. 2002(a)(2), 6004 AND 6006 AND MLBR 2002-5 AND 6004-1 FOR ORDER (A) APPROVING THE SALE OF ALL OR SUBSTANTIALLY ALL OF THE DEBTORS' ASSETS, FREE OF LDJNS, CLAIMS, INTERESTS AND ENCUMBRANCES, (B) APPROVING ASSUMPTION AND ASSIGNMENT OF UNEXPUIED LEASES AND EXECUTORY CONTRACTS, AND (C) APPROVING BIDDING PROCEDURES AND AUTHORIZING DEBTORS TO SOLICIT HIGHER AND BETTER OFFERS PURSUANT TO PROPOSED NOTICE OF SALE Pursuant to 11 U.S.C. §§ 105(a), 363(b) and 365, Fed. R. Bankr. P. 2002(a)(2), 6004 and 6006 and MLBR 2002-5 and 6004-1, Archie's Oil Services, Inc. ("Archie's'"), Archie's and Ken's Oil and Heating Services, Inc. ("A&K"), and Ken's Oil & Heating Services, Inc. ("Ken's," and collectively with Archie's and A&K, the "Debtors") the debtors in the above-captioned chapter 11 cases hereby move this Court for entry of orders: (a) authorizing and approving the sale of the Debtors' Business Assets (as hereinafter defined) free and clear of all liens, claims, encumbrances and other interests to the person who submits the highest and best offer for the Debtors' Business Assets (the "Buyer"); (b) authorizing the assumption of certain executory contracts and unexpired leases in connection with the sale of the Business Assets and the assignment of such contracts and leases to Buyer pursuant to section 365 of the Bankruptcy Code; 1 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0(c) approvingbiddingprocedures;and (d) approvingt he form and mannero f noticeo f the proposeds alean d bidding procedures, subsantillg in the form attachedh eretoa sE xhibit A (the ''Notisg-afSal9"). ln supporto f this motion( the "SaleM otion"), the Debtorsr espectfullys tatea sf ollows: BACKGROT'NI) A. Histon of Debtors l. Archie's Oil Services,lnc.( "Archie's") hasb eena leadings uppliero f home-heatinogi l andr elateds ervicesi n the SoutheasternM assachusettrse sidentiala nd commercialh eatingm arketsf or manyy ears incei ts inceptioni n December1 966' 2. During the 2001h eatingo il seasona, n oil deliveryd river left his truck unaffendewd hile it wasb eingf illed with oil at the propeltyl ocateda t 140H owardS t. Brockton,M A. Approximately 1,100g allonso f homeh eatingo il spilledi nto ttreg rounda nds eepedin to a local creekb ehindt he properly. 3. This unfornrnatea ccidentr esultedin a spill which generateda pproximately$ l million of environmentacl leanupe xp€nsesa t the contaminateds ite. As a result, Archie's operationalc ashf low was drained and it began to incur debt in order to maintain ongoing operations. 4. Meanwhile,t he companyh add ifFrcultyo btainingn ecessarfyin ancingd uet o a concurrent 2l-E issueo n the site. 5. As a resulto f all of the above,M r. Arthur Alden, fuchie's foundera ndp resident suffereda dverseh ealthe ffectsa ndf ound it increasinglyd iffrcult to focuso n the day+o-dayb usiness operationsD. uring summer, 2007A, rchie's negotiatedw ith Ken's Oil andH eatingS ervice,lnc. (..@.3"), to form ajoint venture. This venturec reatedc ertains ynergiesw, herebyK en's was aggressivelmy arketingt he home-heatingo il discounmt arketp lace,a ndA rchie's continuedto service higher-endm argina ccounts.A rchie's customebr asei ncreasedfr om 1,500c ustomersto 2,500c ustomers a result of this venture. (c) approving bidding procedures; and (d) approving the form and manner of notice of the proposed sale and bidding procedures, substantially in the form attached hereto as Exhibit A (the "Notice of Sale"). In support of this motion (the "Sale Motion"), the Debtors respectfully state as follows: BACKGROUND A, History of Debtors 1. Archie's Oil Services, Inc. ("Archie's") has been a leading supplier of home-heating oil and related services in the Southeastern Massachusetts residential and commercial heating markets for many year since its inception in December 1966. 2. During the 2001 heating oil season, an oil delivery driver let his truck unattended while it was being filled with oil at the property located at 140 Howard St. Brockton, MA. Approximately 1,100 gallons of home heating oil spilled into the ground and seeped into a local creek behind the property.3. This unfortunate accident resulted in a spill which generated approximately $1 million of environmental cleanup expenses at the contaminated site. As a result, Archie's operational cash low was drained and it began to incur debt in order to maintain ongoing operations. 4. Meanwhile, the company had difficulty obtaining necessary financing due to a concurrent 21-E issue on the site. 5. As a result of all of the above, Mr. Arthur Alden, Archie's founder and president, suffered adverse health effects and found it increasingly difficult to focus on the day-to-day business operations. During 2007, Archie's negotiated with Ken's Oil and Heating Service, Inc. ("Ken's"), a joint venture. This venture created certain synergies, whereby Ken's was aggressively marketing the home-heating oil discount market place, and Archie's continued to service higher-end margin accounts. Archie's customer base increased from 1,500 customers to 2,500 customers as a result of this 2 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0B. Events Leadins to Bankruntcv 6. Neverttrelessin, late2 007a nde arly2 008,A rchie'sc ontinuedto experience cash flow problemso n accounot f the oil spill. However,f uchie's (alongw ith Ken's andt he joint venture's)c ash flow problems became further sbained as a result of the enerry crisis that took shape during the 2007-200gh ome-heatingo il season.[ t becamei ncreasinglye xpensiveto purchaseo il for resalea ndt he Debtorsc ould not generatee noughc ashf low on a daily basist o pay for the vast amountso f oil that their customerdse mandedT. he Debtorsn eeded$ 30,000to $50,000p er day in ordert o supplyi ts existing customersa,n d,b ecauseth e Debtorse xtended3 0 day-creditto customersn, ot enoughc ashf low was generateodn a daily basist o purchaseo il. C. PrePetition Loan Agreements j. prior to the PetitionD ate,R ocklandT rustC ompany( "Rockland")l oanedf undst o Archie'sp ursuantto (i) the CommerciaPl romissoryN ote datedA pril; 20,2004i n the originalp rincipal amounot f $500,000L, oanN o 3 10370500(* FirstN ote"), (ii) the PromissoryN ote datedM arch I I , 2005 in the originalp rincipala mounto f up to $I 50,000( "SecondN ote." andc ollectivelyw ith FirstN ote,t he .. ,,). July ZI,2008,Archie's owedR ocklandn o lesst han$ 604.819.82(t he" lndebtedness"),1 consistingo f: Principal lnterest Other Fees and Penalties TOTALS 8. First Note $443,360.46 $9,606.33 $11 ,39.11 5 $464,357.94 Second Note $116,883.13 $16,177.28 s7,401.47 $140,461.88 TOTALS $s60r43.s9 $25,783.61 $18,792.62 $604,819.82 ln conneotionw ith Archie's obligationsto Rocklandt,h e principalso f Archie's, including,w ithout limitation, Mr. Alden, executeda Guarantyd atedA pril 20,2004 (the "Guaranty"). , Rocklande xpresslyr eseryesa ll of its rights, remediesa nd claims undert he Loan Documentsa nda ny and all otherd ocumentsa nd agieementsb y and betwien Rocklanda nda ny of the Debtorsa nd undera pplicablel aw, io"tuaiog, without limitation, claims for amounts arising on account of legal and related fees incurred in .o*..doo with enforcement of and/or collection under the Loan Documents, both prior to and after the Petition Date. B. Events Leading to Bankruptcy 6. Nevertheless, in late 2007 and early 2008, Archie's continued to experience cash low problems on account of the oil spill. However, Archie's (along with Ken's and the joint venture's) cash flow problems became further strained as a result of the energy crisis that took shape during the 2007-2008 home-heating oil season. It became increasingly expensive to purchase oil for resale and the Debtors could not generate enough cash flow on a daily basis to pay for the vast amounts of oil that their customers demanded. The Debtors needed $30,000 to $50,000 per day in order to supply its existing customers, and, because the Debtors extended 30 day-credit to customers, not enough cash low was generated on a daily basis to purchase oil. C. Prepetition Loan Agreements 7. Prior to the Petition Date, Rockland Trust Company ("Rockland") loaned funds to Archie's pursuant to (i) the Commercial Promissory Note dated April; 20, 2004 in the original principal amount of $500,000, Loan No 310370500 ("First Note"), (ii) the Promissory Note dated March 11, 2005 in the original principal amount of up to $150,000 ("Second Note," and collectively with First Note, the "Notes"). As of 21, 2008, owed Rockland no less than $604,819.82 (the "Indebtedness"),' consisting of: First Note Second Note TOTALS Principal $443,360.46 $116,883.13 $560,243.59 Interest $9,606.33 $16,177.28 $25,783.61 Other Fees and Penalties $11,391.15 $7,401.47 $18,792,62 TOTALS $464357.94 $140,461.88 $604,819.82 8. In connection with Archie's obligations to Rockland, the principals of Archie's, including, without Alden, executed a Guaranty dated April 20, 2004 (the "Guaranty") 1 Rockland expressly reserves all of its rights, remedies and claims under the Loan Documents and all other adnoyc uamndents and agreements by and between Rockland and any of the Debtors and under ainpcplulidcainbgle, wlaitwh,out limitation, Rockland's for amounts arising on account of legal and related fees cinocnunrerecdti oinn with enforcement of and/or collection under the Loan Documents, both prior to and ater the PDaetteit.ion 3 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0g. ln order to secure its obligations under the Notes, Archie's executed certain mortgages and securitya greements(c ollectively, the "secuilv Agreements,"a nd togetherw ith the Notes andt he Guarantyt,h e ,.LoanD ocuments")g rantings ecurityi ntereststo Rocklandi n substantiallya ll of its asses including without limitation, Archie's real property (the "Real Property") and any and all of its accounts, inventory,e quipmen! generali ntangibles,c ontractr ights, securitiesa nd any and all proceedsth ereof (collectively, the "Erynal .P[qpegt" and together with the Real Property, the "Collateral"). The SecurityA greementcso nsisto f: (i) a SecurityA greemendt atedA pril 20,2004,w hich hasb eend uly perfectedb y recordinga UCC FinancingS tatemenitn the Offrce of the Secretaryo f Statef or the Commonwealtohf Massachusett(sii,) a SecurityA greemendt atedM arch 11,2 005,w hich hasb eend uly perfectedb y recordinga UCC FinancingS tatemenitn the Offrceo f the Secretaryo f Statef or the Commonwealtohf Massachusett(sii,i ) a Mortgagea ndS ecurityA greemendt atedA pril 20,2004a copy of which is recordedin the PlymouthC ountyR egisbryo f Deedsa t Book 27993,P age3 , and( iv) an Assignmenot f Leasesa ndR entsd atedA pril 20,2004,ac opyo f which is recordedin the Plymouth County Registry of Deeds at Book 27993,Page22. True and correct copies of all of the Loan Documents are attacheda s exhibits to the RocklandR elief Motion (hereinafterd efined)a nd are incorporatedh erein by reference. 10. Prior to the Petition Date, Archie's was in default under the terms of the Loan Documentsa,n dR ocklandc ommoncedfo reclosurep roceedingusp ont he collaterals ecuringA rchie's obligationsu ndert he Loan Documents.A s a resulto f the Debtors'c hapter7 bankruptcyp etitions, Rockland was unable to proceed with its foreclosure sales. D. Other PrePetition Liens 11. The Debtorsa reu nawareo f any additionalli enso n or securityi nterestsin their propertieso, thert han:( i) a municipall ien certificateis suedo n February2 2,20A8,i ndicatingo utstanding reale stateta xeso n the RealP roperty;a nd( ii) an executiono f a judgmento btainedb y GlobalC ompanies, thatw asr ecordeda gainst he RealP ropertyo n June1 6' 2008. 4 9. In order to secure its obligations under the Notes, Archie's executed certain mortgages and security agreements (collectively, the "Security Agreements," and together with the Notes and the Guaranty, the "Loan Documents") granting security interests to Rockland in substantially all of its assets including, without limitation, Archie's "Property") and any and all of its accounts, inventory, equipment, general intangibles, contract rights, securities and any and all proceeds thereof (collectively, the "Personal Property," and together with the Real Property, the "Collateral"). The Security Agreements consist of: (i) a Security Agreement dated April 20, 2004, which has been duly perfected by recording a UCC Financing Statement in the Office of the Secretary of State for the Commonwealth of Massachusetts, (ii) a Security Agreement dated March 11, 2005, which has been duly perfected by recording a UCC Financing Statement in the Office of the Secretary of State for the Commonwealth of Massachusetts, (iii) a Mortgage and Security Agreement dated April 20, 2004 a copy of which is recorded in the Plymouth County Registry of Deeds at Book 27993, Page 3, and (iv) an Assignment of Leases and Rents dated April 20,2004, a copy of which is recorded in the Plymouth County Registry of Deeds at Book 27993, Page 22. True and correct copies of all of the Loan Documents are attached as exhibits to the Rockland Relief Motion (hereinater deined) and are incorporated herein by reference. 10. Prior to the Petition Archie's under the terms of the Loan Documents, and Rockland commenced foreclosure proceedings upon the collateral securing Archie's obligations under the Loan Documents. As result of Debtors' chapter 7 bankruptcy petitions, Rockland was unable to proceed with D. Other Prepetition 11. The Debtors are unaware of any additional liens on or security interests in their properties, other than: (i) a municipal lien certificate issued on February 22, 2008, indicating outstanding real estate taxes on the Real Property; and (ii) an execution of a judgment obtained by Global Companies, LLC, that was recorded against the Real Property on June 16, 2008. 4 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0E. Postoetition Events lZ. On July 18, 2008 (the "Petition Date"), the Debtors filed voluntary petitions for relief under chapter 7 of the Bankruptcy Code. 13. On July 24,2}08,Rocklandf iled the EmergencyV erified Motion of RocklandT rust Companyfo r Relief from AutomaticS tay,P ursuantto 11U .S.C.$ $ 362(dxl) and( 2)' Fed.R . Bankr. p. 4001a nd9 014,a ndM LBR 4001-1,t o Forecloseo n its Collatera(l the" RocklandR eliefM otion") and this Courts cheduleda hearingt hereont o be heldo n July 30, 2008' 14. On July 25,20}8,each of the Debtors file the Debtor's Motion to Convert Chapter 7 Caset o AnotherC hapter( the "ConversionM otion"). 15. On July 30, 2008,t his Courth eldt he hearingo n the RocklandR eliefM otion and,b ased on representationosf counselo f the Debtorsa nd of Rockland,t he Court grantedR ocklandr elief from the automatic stay. 16. Thereafter,t he Debtorsa nd Rocklandr eacheda n agreemenrte gardingt he dispositiono f the Debtors'a ssetsa, ndR ockland'sc ollateralp, ursuantto a going-concernsa leu nders ection3 63o f the BankruptcyC ode. Rocklanda greedto supporth e Debtors'C onversionM otion, to consentto the Debtors'u seo f its oashc ollaterala ndt o providea dditionafl inancing, i f necessaryin, exchangefo r the Debtors'c ommitrnentt o sell all or substantiallya ll of its assetsth rougha court-approvedb ankruptcys ale, with sale to close on or before August 29,2008. 17. On August 1, 2008, t he Debtorsf iled thelssented-ToE mergencyM otionfor Emergency Hearing Regoding Debtors' Motion to Convert Chapter 7 Cases to Chapter I I Cctses. This Sale Motion is conditioned upon the approval of the Conversion Motion no later than the date of approval of this Sale Motion.18. As set forth in the Debtors' Motionfor Interim ond Final Orders: (A) Authorizing to Postpetition Secured Financtng and to Utilize Cash Collateral, (B) GrantingAdequate md (C) Scheduting Final Hearing(the "Cash Collateral and DIP Motion"), filed contemporansouslhyo rewith,t he Dobtorsh aven egotiatodw ith Rocklandr egardingt he continuedu seo f E. Postpetition Events 12. On July 18, 2008 (the "Petition Date"), the Debtors filed voluntary petitions for relief under chapter 7 of the Bankruptcy Code. 13. On July 24, 2008, Rockland filed the Emergency Verified Motion of Rockland Trust Company for Relief rom the Automatic Stay, Pursuant to 11 U.C. §§ 362(d)(1) and (2), Fed. R. Bankr. P. 4001 and 9014, and MLBR 4001-1, to Foreclose on its Collateral (the "Rockland Relief Motion") and this Court scheduled a hearing thereon to be held on July 30, 2008. 14. On July 25, 2008, each of the Debtors file the Debtor's Motion to Convert Chapter 7 Case to Another Chapter (the "Conversion Motion"). 15. On July 30, 2008, this Court held the hearing on the Rockland Relief Motion and, based on representations of counsel of the Debtors and of Rockland, the Court granted Rockland relief from the automatic stay. 16. Thereater, the Debtors and Rockland reached an agreement regarding the disposition of the Debtors' assets, and Rockland's collateral, pursuant to a going-concern sale under section 363 of the Bankruptcy Code. Rockland agreed to support the Debtors' Conversion Motion, to consent to the Debtors' use of its cash collateral and to provide additional if necessary, in exchange for the Debtors' commitment to substantially all of its assets through a court-approved bankruptcy sale, with such sale to close on or before August 29, 2008. 17. On August the Debtors the Assented-To Emergency Motion for Emergency Hearing Regarding Debtors' to Convert Chapter 7 to Chapter 11 Cases. This Sale Motion is conditioned upon the approval of the Motion later than the date of approval of this Sale Motion. 18. forth in Debtors' Motion for Interim and Final Orders: (A) Authorizing Debtors to Obtain Postpetition Financing and to Utilize Cash Collateral, (B) Granting Adequate Protection, and (C) Scheduling Final Hearing (the "Cash Collateral and DIP Motion"), iled contemporaneously herewith, the Debtors have negotiated with Rockland regarding the continued use of 5 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0cash collateral and the extension of credit to market and prepare for the sale of all of the Debtors' businessa ssets(t he ..EugingsgAg!gtg").T he BusinessA ssetsc onsisto f atl of the Debtors' assetsa rising in connectionw ith the Debtors' operationsa ndm anagemenot f the heatingo il and related services businessi,n cluding, without limitation, its accountsr eceivable,g enerali ntangibles,c ustomerl ists, goodwill, equipmen! real property, fxtures, chattel paper' contract rights, inventory' vehicles and any and all othera ssetsw, hethere xpresslym entionedh erein,i n which Rocklandh olds a securityi nterest' Marketins Efforts 19. Overt he courseo f the pasts everayl ears,A rchie'sh asr eceivedn umerouso fferst o purchasteh e business.M r. Alden, basedo n his experiencein runningA rchie's for overf orty years,h as extensivek nowledgeo f the heatingo il andr elateds ervicesin dustryi n the Massachusetmtsa rket,a ndh as identifieda ll of the entitiesa nd personsw ho may be interestedin purchasingt he Debtors' assetso n a going-concernb asis. Mr. Alden hasn otified thesee ntitiesa nd personso f the prospectives aleo f the Debtors. Becauseo f the natureo f the heatinga nd oil businesst,h e uniquen atureo f the assetsp roposedto be sold,a ndt he value of the assetss temmingf rom their "going-concern"n ature,M r. Alden believest hat it is unlikely that any partieso ther than thosew hich he hasi dentified would be interestedin presenting bids. 20. Rockland,i n its preparationfo r its foreclosurep roceedingse,n gagedT acticalS olutions, LLC (,.Tgcti9e!")t,o providea nalysisr egardingth e Debtors'b usinessesT. he Debtorsa ndT acticals hall coordinateto identif all partiest hat may be interestedin purchasingth e BusinessA ssetsa nds hall provides uchp artiesw ith the Notice of Salea nda ccessto any due diligencew hich is reasonably requested. The Pronosed Sale Zl. The Debtorsh aven ot yet identifieda stalkingh orseb iddera ndp roposesto selecta stalkingh orseb idderf rom the submissiono f bidsd ueo n or beforeA ugust 13' 2005. ZZ. The Debtorsi ntendt o solicito ffersf or the purchasea nds aleo f someo r all of their BusinesAss setsT. heD ebtordso n oti ntendto accepatn yc onditionosr contingenciions a nys ucho ffors cash collateral and the extension of credit to market and prepare for the sale of all of the Debtors' business assets (the "Business Assets"). The Business Assets consist of all of the Debtors' assets arising in connection with the Debtors' operations and management of the heating oil and related services business, including, without limitation, its accounts receivable, general intangibles, customer lists, goodwill, equipment, real property, fixtures, chattel paper, contract rights, inventory, vehicles and any and all other assets, whether expressly mentioned herein, in which Rockland holds a security interest. Marketing Efforts 19. Over the course of the past several years, Archie's has received numerous offers to purchase the business. Mr. Alden, based on his experience in running Archie's for over forty years, has extensive knowledge of the heating oil and related services industry in the Massachusetts market, and has identified all of the entities and persons who may be interested in purchasing the Debtors' assets on a going-concern basis. Mr. Alden has notified these entities and persons of the prospective sale of the Debtors. Because of the nature of the heating and oil business, the unique nature of the assets proposed to be sold, and the value of the assets stemming from their "going-concern" nature, Mr. Alden believes that it is unlikely that any parties other than those which he has identiied would be interested in presenting bids. 20. Rockland, in its preparation for its foreclosure proceedings, engaged Tactical Solutions, LLC ("Tactical"), to provide analysis regarding the Debtors' businesses. The Debtors and Tactical shall coordinate to identify parties that may be interested in purchasing the Business Assets and shall provide such parties with the Notice of Sale and access to any due diligence which is reasonably requested. The Proposed Sale 21. The Debtors have not yet identiied a stalking horse bidder and proposes to select a stalking horse bidder from submission of bids due on or before August 13, 2005. 22. Debtors intend to solicit offers for the purchase and sale of some or all of their Business Assets. The Debtors do not intend to accept any conditions or contingencies in any such offers 6 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0with respect o the saleo f the BusinessA ssetse xcept: (a) materiala dversec hangec onditions;a nd (b) the BankruptcyC ourt'se ntryo fan ordera pprovingth e sale. 23. The Debtorse xpectt o sell the BusinessA ssetsa s a going-concernp ursuantt o the proposeds ale. Notwithstandingt he foregoing,t he Debtorss hall acceptb ids for portionso f the Business Assetsa nd,i n suchi nstancest,h e bidder must identiff the typeso f the BusinessA ssetsw hich it seeksto purchas(ee .g.,t he customerc ontractst,h e accountsre ceivablet,h e equipmen!t he realp roperty,e tc.)a nd the values that the bidder ascribes to each category of assets. The Debtors expressly reserve the right, subjectto the consenot f Rockland,t o sell the BusinessA ssetst o moret hano neb idder,i n the eventt hat multipleb idderss eekd ifferentt ypeso r categorieos f assets. 24. The proceedso f the proposeds ales hallb e depositedw ith Rocklandf or applicationto all amountso wedt o Rocklanda nd,w ithin five (5) businessd ayso f the SaleC losingD ate,R ocklands hall returna ny salep roceedsto the extentt hat they exceedt he amountso wed by any of the Debtorst o Rockland under or in connection with any pre-and/or post-petition financing agreements' ZS. Notwithstandinga nythingt o the confraryh ereino r in the Notice of Sale,a t anyt ime prior to or duringt he Auction,R ocklandm ay submita creditb id for any or all of the BusinessA ssetsu p to and includingt he outstandinga mountso wedb y the Debtorso, r any of them,t o Rocklandu ndero r in connectionw ith the pre-andp ost-petitionlo ana greementsB. y way of examplet,h e maximuma mounto f Rockland'sc redit bid shall be the sum of: (i) the outstandinga mountso wed to Rocklandu ndert he Loan Agreements(i ncluding, without limitation, amountso wedo n accounto f reasonablec ollectiona nd legal feesa nde xpenses)a; nd (ii) the outstandinga mountso wedt o Rocklando n accounto f any financingo r relatedf inancialc oncession(sin cludingt he useo f cashc ollateral)p rovidedb y Rocklandt o the Debtors after Sale Free of Claims and Interests Excepta se xpresslys etf orth herein, t he Debtorss eekt o sell the BusinessA ssetsf reea nd clearo f interests( exceptedf or permittede neumbrancess,u cha s varioust elephonec, able televisiona ndt elecommunicationss, ewera nd utility easoments). with respect to the sale of the Business Assets except: (a) material adverse change conditions; and (b) the Bankruptcy Court's entry of an order approving the sale. 23. The Debtors expect to sell the Business Assets as a going-concern pursuant to the proposed sale. Notwithstanding the foregoing, the Debtors shall accept bids for portions of the Business Assets and, in such instances, the bidder must identify the types of the Business Assets which it seeks to purchase (e.g., the customer contracts, the accounts receivable, the equipment, the real property, etc.) and the values that the bidder ascribes to each category of assets. The Debtors expressly reserve the right, subject to the consent of Rockland, to sell the Business Assets to more than one bidder, in the event that multiple bidders seek different types or categories of 24. The proceeds of the proposed sale shall be deposited with Rockland for application to all amounts owed to Rockland and, within ive (5) business days of the Sale Closing Date, Rockland shall return any sale proceeds to the extent that they exceed the amounts owed by any of the Debtors to Rockland under or in connection with any pre-and/post-petition financing agreements. 25. Notwithstanding anything to contrary herein or in the Notice of Sale, at any time prior to or during the Auction, Rockland may submit a credit bid for any or all of the Business Assets up to and including the outstanding amounts owed by the Debtors, or any of them, to Rockland under or in connection with the pre-and post-petition loan agreements. By way of example, the maximum amount of Rockland's credit bid of: (i) outstanding amounts owed to Rockland under the Loan Agreements (including, without amounts owed on account of reasonable collection and legal fees and expenses); and (ii) the outstanding amounts owed to Rockland on account of any financing or related financial concessions (including the use of cash collateral) provided by Rockland to the Debtors ater the Conversion Date. Free of Claims and Interests 26. Except as expressly set forth the Debtors seek to sell the Business Assets free and clear of claims and interests (excepted for permitted encumbrances, such as various telephone, cable television and telecommunications, sewer and easements). 7 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa027. Based upon the title search complete on or around March 7, 2008, a copy of which is attachedh eretoa s @E the Debtorsb elievet hat all suchc laims and interests (other than the claims of taxing authorities) are junior to the lien of Rockland' 2g. Thus, exceptingo nly (i) permittede ncumbranceasn d (ii) liens securingc laims for delinquentr eal estatet axes( which will be paid in full andd ischargeda t the closing of sale,i f the Real Property is sold), the Business Assets, including the Real Property, shall be sold free and clear of all claims and interests. Zg. The Debtorsa nticipateth att he Buyerw ill seekt o assumec ertaine xecutoryc ontracts and/oru nexpiredl easesin connectionw ith the purohaseo f the BusinessA ssets. The Debtorsw ill assume and assign to Buyer any executory contracts and/or unexpired leases (collectively, the "Asgi$ed Contracts"), as such contacts and/or leases are identified by the Buyer in its offer' The Buyer is obligatedf or any cure paymentso n accounto f the assumptiona nd assignmenot f the AssignedC ontracts, andi twill providea dequatea ssurancoef futurep erformancoef its obligationsu ndera ny Assigned Contracts. Contemplated Timine of Auction and Sale 30. The Debtorsb elievet hat the salep riceo f the BusinessA ssetsc anb e maximizedb y solicitingh ighera ndb ettero fferst hrougha bankuptcya uctionp rocessb ut timed so ast o permita sale closing before the end of August. The Debtors lack the financial ability and financing to continue operationsa fter August 29,2008. More important,b ecauseth e heatingo il industry is cyclical andi ts busiests easona risesd uring the fall and winter months,i t is crucial that the salet ransactionc losea s soon asp ossiblei,n ordert o providet he buyero f the BusinessA ssetss ufficientt ime to preparefo r the 27. Based upon the title search complete on or around March 7, 2008, a copy of which is attached hereto as Exhibit B, the Debtors believe that all such claims and interests (other than the claims of taxing authorities) are junior to the lien of Rockland. 28. Thus, excepting only (i) permitted encumbrances and (ii) liens securing claims for delinquent real estate taxes (which will be paid in full and discharged at the closing of sale, if the Real Property is sold), the Business Assets, including the Real Property, shall be sold free and clear of all claims and interests. Assumption and Assignment of Executory Contracts and/or Unexpired Leases 29. The Debtors anticipate that the Buyer will seek to assume certain executory contracts and/or unexpired leases in connection with the purchase of the Business Assets. The Debtors will assume and assign to Buyer any executory contracts and/or unexpired leases (collectively, the "Assigned Contracts"), as such contracts and/or leases are identiied by the Buyer in its offer. The Buyer is obligated for any cure payments on account of the assumption and assignment of the Assigned Contracts, and it will provide adequate assurance of future performance of its obligations under any Assigned Contracts. Contemplated Timing of Auction and Sale 30. The Debtors believe that the sale price of the Business Assets can be maximized by soliciting higher and better offers through a bankruptcy auction process but timed so as to permit a sale closing before the end of August. The Debtors lack the financial ability and financing to continue operations ater August 29, 2008. More important, because the heating oil industry is cyclical and its busiest season arises duing the fall and winter months, it is crucial that the sale transaction close as soon as possible, in order to provide the buyer of the Business Assets sufficient time to prepare for the 8 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0upcoming seasons. Accordingly, the Debtors propose the following deadlines with respect to the proposeds aleo f the BusinessA ssets:2 (a) Deadlinet o Submit Bids for Purohaseo f BusinessA ssets (b) Notice of Selection of Stalking Horse (if any) (c) SealedB id Auction andS aleH earing (d) Sale Closing Date Alternatives to the Sale 31. The principala lternativeto the salei s continuationo f foreclosure proceedingbsy Rockland.T he Debtorsb elievet hat a foreclosures alew ill yield significantly diminishedp roceedfso r Rocklanda ndc oncomitantly,f or the Debtors' estates( if any). Accordingly, proceeding with a sale processs houldn ot increasem easurablya ny administrativeo bligation on the estatea nd should yield significant benefis for the Debtors' estates' 32. The Courth asj urisdictiont o considetrh is matterp ursuantto 28 U.S.C.$ $ 157 and 1334' Thisi s a corep roceedinpgu rsuantto 28 U.S.C.$ 157.V enuei s properp ursuantto 28 U'S'C' $$ 1408 and 1409.T he statutoryp redicatesfo r the relief soughth ereina re 1I U'S.C' $$ 105(a)' 363 and 365' Fed.R . Banla.P . 6004,6006a, nd9 019a ndM LBR 6004-1' Relief Requested 33. By this Motion, the Debtorsr equeste ntry of two separateo rders,t o be considereda t two successiveh earings. 34. FirsL the Debtor requeststh at the Court entera n order substantiallyi n the form of Exhibit C attachedh ereto( the "ProceduresO rder"): (i) approvingn otice of the Bid Procedures Hearing 2 The Debton respectfullyr equestt hat this Court scheduleS ealedB id Auction, if necessarya, ndt he SaleH earing for August 18,2 008 or * tooo as practicablyt hereafter,a s this Court's schedulew ould permit' August 13,2008 August 15,2008 August 18,2008 August 29,2008 RELIEF REOIIESTED AND BASIS TIIEREFOR Jurisdiction 9 upcoming seasons. Accordingly, the Debtors propose the following deadlines with respect to the proposed sale of the Business Assets:2 (a) Deadline to Submit Bids for Purchase of Business Assets August 13, 2008 (b) Notice of Selection of Stalking Horse (if any) August 15, 2008 (c) Sealed Bid Auction and Sale Hearing August 18, 2008 (d) Sale Closing Date August 29,2008 Alternatives to the Sale 31. The principal alternative to the sale is continuation of foreclosure proceedings by Rockland. The Debtors believe that a foreclosure sale will yield signiicantly diminished proceeds for Rockland and concomitantly, for the Debtors' estates (if any). Accordingly, proceeding with a sale process should not increase measurably any administrative obligation on the estate and should yield significant benefits for the Debtors' estates. RELIEF REQUESTED AND BASIS THEREFOR Jurisdiction 32. The Court has jurisdiction to consider this matter pursuant to 28 U.S.C. §§ 157 and 1334 This is a core proceeding pursuant to 28 U.S.C. § 157. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory predicates for the relief sought herein are 11 U.S.C. §§ 105(a), 363 and 365, Fed. R. Bankr. P. 6004, 6006, and 9019 and MLBR 6004-1. Relief Requested 33. By this Motion, the Debtors request entry of two separate orders, to be considered at two successive hearings. First, the Debtor requests that the Court enter an order substantially in the form of Exhibit attached hereto (the "Procedures Order"): (i) approving notice of the Bid Procedures Hearing 2 The Debtors respectfully request that this Court schedule Sealed Bid Auction, if necessary, and the Sale for AHuegaurisntg 18,2008 or as soon as practicably thereater, as this Court's schedule would permit. 9 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0andt he mattersh earda nd consideredb y the Courtt hereina sp roper,t imely, adequate and sufficient noticeu ndert he circumstances(;i i) approvingt he Notice of Sales ubstantiallyi n the form attached hereto asE @including approvingt he bidding procedures(t he "Bid Procedures"), as setf orth therein, and( iv) waivingt he 10-days tayr equiremenot f Fed.R . Bankr.P . 6004G). 35. Secondt,h e Debtorsr equeset ntryo f an order,t o be subsequentlfyil ed with this Court upont he selectiono f a stalkingh orseb idder,( the 'oSaleO rder"): (i) approvingn oticeo f the proposeds ale of the BusinessA ssetst,h e biddingp roceduresth, e objectionp erioda ndt he SaleH earinga sp roper' timely, adequatea nd sufficient notice undert he circumstances(,ii ) approvinga nd authorizingt he proposeds aleo f the BusinessA ssetst o the Buyerp ursuantto the BiddingP rocedures(,ii i) approvinga nd authorizingt he assumptiona nd assignmenot f the Assigned Contractst o be hansferredt o the Buyer,a nd (v) waivingt he 10-days tayr equiremenot f Fed.R . Bankf.P . 600a(g)a nd6 006(d). Bid Procedures 36. The Debtorsr equesth at the Courta pproveth e following Bid Proceduresw, hicha res et forth fully Notice of Sale:3 (a) To be a Qualified Bid, such bid must' (i) be in writing and irrevocable; (ii) be receivedb y the Debtorsn o latert hanA ugust 13,2 008,a nds ervedo n the Debtors and Rockland in the manner set forlh in the Notice of Sale; (iii) be accompaniebdy a deposite qualt o no lesst han l0% of the proposedp urchase price, such deposit to be either in the form of a certified bank check or a wire transfer,d eliveredp rior to the Bid Deadlinet o the undersignedc ounself or the Debtors; (iv) not be conditionedu pon any contingenoies(s uoha s,w ithout limitation any due diligence investigation, t he receipto f financing' or any boardo f directors, shareholderso r other entity approval)e xceptf or: (a) material adversec hange; and (b) entry of an order approvingt he salei n mutually agreeablefo rm and substance; (v) includee videnceo f financialw herewithatlo consummatteh e purchasein, cluding (as applicable)t he assumptiona nd assignmenot f any unexpiredl easesto be acquiredh ereunder; 3 Capitalizndte rrrs usedi n this SaleM otion which are not otherwised efined shall have the meaningsa scribedto them in the Notice of Sale. l0 and the matters heard and considered by the Court therein as proper, timely, adequate and suficient notice under the circumstances; (ii) approving the Notice of Sale substantially in the form attached hereto as Exhibit A, including approving the bidding procedures (the "Bid Procedures"), as set forth therein, and (iv) waiving the 10-day stay requirement of Fed. R. Bankr. P. 6004(g). 35. Second, the Debtors request entry of an order, to be subsequently iled with this Court upon the selection of a stalking horse bidder, (the "Sale Order"): (i) approving notice of the proposed sale of the Business Assets, the bidding procedures, the objection period and the Sale Hearing as proper, timely, adequate and sufficient notice under the circumstances, (ii) approving and authorizing the proposed sale of the Business Assets to the Buyer pursuant to the Bidding Procedures, (iii) approving and authorizing the assumption and assignment of the Assigned Contracts to be transferred to the Buyer, and (v) waiving the 10-day stay requirement of Fed. R. Bankr. P. 6004(g) and 6006(d). Bid Procedures 36. The Debtors request that the Court approve the following Bid Procedures, which are set foth more fully in the Notice 3 (a) To be a Qualiied such bid must, (i) be in writing irrevocable; (ii) be received by the Debtors no later than August 13, 2008, and served on the Debtors and Rockland in the manner set forth in the Notice of Sale; (iii) be accompanied by a deposit equal to no less than 10% of the proposed purchase price, such deposit to be either in the form of a certiied bank check or a wire transfer, delivered prior to the Bid Deadline to the undersigned counsel for the Debtors; (iv) not be conditioned upon any contingencies (such as, without limitation any due diligence the receipt of inancing, or any board of directors, shareholders or other entity approval) except for: (a) material adverse change; and (b) entry an approving the sale in mutually agreeable form and substance; (include evidence of inancial wherewithal to consummate the purchase, including applicable) the assumption and assignment of any unexpired leases to be acquired hereunder; 3 Capitalized terms used in this Sale Motion which are not otherwise defined shall have the meanings themas icnr itbheed N tootice of Sale. 10 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0(vD disclose the identity of the bidder's organization, including confirmation that its bid is made as principal for the bidder;s account and, if not, the basis upon which the bidder is acting and the identities of all other participants (if any); and (vir) otherwisec omply with the Bidding Proceduress et forth in the Notice of Sale. (b) The Courth old a sealedb id auctioni n openC ourto n August 18,2 008o r sucho therd ate asi soon as practicably thereafter as is convenient for the Courf at which time the Court approve the sale of theB usinessA ssetst o the highestb idder. Argument 37. Section3 63(bXl) of the BankruptcyC odep rovidest hat a trustee,a ftern oticea nda hearingm ay sell,o thert han in the ordinaryc ourseo f businessp, ropertyo f the estatew, hena sound businespsu rposjeu stifiess ucha ction. l1 U.S.C.$ 363(bXl);l n re Aerovox Inc.,2 69B .R.7 4,80 (Banlc.D . Mass.2 00I ) (FeeneyJ, .); compareln re Lionel Corp., 722F . 2d 10 63, I 070-7| (2d Cir. 1983). Oneo f the more importantf actorst o be consideredin a saleo f substantiallya ll assetso f a debtoru nder section3 63(b)i s whethert he valueo f the assetsa rei ncreasingo r decreasingin value. Lionel.7 22F.2da t 1070a; ccordIn re Boogaarot f Florida-ln c., l7 B.R.4 80,4 83-84( Bankr.S .D.F la. 1981)( "Wherea, s here,t hev alueo f the assetsis rapidly deoeasinga ndt he festateis ] sufferingc ontinuingl osses, liquidationo f assetsp rior to the proposaal ndc onfirmationo f plan] may be desirableb ecauseit will ultimatelyi ncreaseth e amountsd istributedto creditorsa fter[ a plan is] confirmed"). I, IT IS A REASONABLE EXERCISE OF THE DEBTORS'BU'SINE^'S JADGMENT TO SELL THE BUSINESS ASSETS 38. A debtor'sb usinessd ecisiont o sell its assetso thert hani n the ordinaryc ourseo fbusiness ..shouldb e approvedb y the court unlessi t is shownt o be so manifestlyu nreasonableth at it could not be basedo n soundb usinesjsu dgment,b ut only badf aith,o r whim or caprice". ln re CadkeyC orp.,3 17B .R. lg,ZZ-23 @. Mass. 2004),citing ln re Aerovox,269 B.R. at 80 (internal citation omitted). Fed. R. Bankr.p . Rule6 004p rovidest hat the saleo f propertyo utsideth e ordinaryc ourseo f businessm ayt ake by private sale. Fed. R. Bankr. P. 6004(0(l)' Here, t he Debtors'd ecisiont o sell their assetsis supportedb y soundb usinesjsu dgment. BusinessA ssets,o r a substantiapl ortion of them,a re encumberedb y the liens of Rockland,w hich, in its own righq may pursue a foroclosure sale of ttle collateral at its convenienoe. Rockland has agreed to l l (vi) disclose the identity of the bidder's organization, including conirmation that its bid is made as principal for the bidder's account and, if not, the basis upon which the bidder is acting and the identities of all other participants (if any); and (vii) otherwise comply with the Bidding Procedures set forth in the Notice of Sale. (b) The Court hold a sealed bid auction in open Court on August 18, 2008 or such other date as soon as practicably thereater as is convenient for the Court, at which time the Court approve the sale of the Business Assets to the highest bidder. Argument 37. Section 363(b)(1) of the Bankruptcy Code provides that a trustee, ater notice and a hearing, may sell, other than in the ordinary course of business, property of the estate, when a sound business purpose justiies such action. 11 U.S.C. § 363(b)(1); In re Aerovox, Inc., 269 B.R. 74, 80 (Bankr. D. Mass. 2001) (Feeney, J.); compare In re Lionel Corp., 722 F.2d 1063, 1070-71 (2dCir. 1983). One of the more important factors to be considered in a sale of substantially all assets of a debtor under section 363(b) is whether the value of the assets are increasing or decreasing in value. Lionel, 722 F.2d at 1070: accord In re Boogaart of Florida, Inc., 17 B.R. 480, 483-84 (Bankr. S.D. Fla. 1981) ("Where, as here, the value of the assets is rapidly decreasing and the [estate is] suffering continuing losses, liquidation of assets prior to the proposal and conirmation of [a plan] may be desirable because it will ultimately increase the amounts distributed to creditors ater [a plan is] confirmed"). /. IT IS A REASONABLE EXERCISE OF THE DEBTORS' BUSINESS JUDGMENT TO SELL THE 38. A debtor's business decision to assets other than in the ordinary course of business "should be approved by the court unless it shown to be so manifestly unreasonable that it could not be based on sound business judgment, but only bad faith, or whim or caprice". In re Cadkev Corp., 317 B.R. 19, 22-23 (D. Mass. 2004), citing In re Aerovox, B.R. at 80 (internal citation omitted). Fed. R. Bankr. P. Rule 6004 provides that sale of property outside the ordinary course of business may take place by private sale. R. Bankr. f)(1). 39. the Debtors' decision to sell their assets is supported by sound business judgment. The Business Assets, or a substantial portion of them, are encumbered by the liens of Rockland, which, in its own ight, may pursue a foreclosure sale the at its convenience. Rockland has agreed to 11 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0postponeth e foreclosures aleb asedo n the Debtors' andR ockland'sa greement to proceed with a goingconcerns aleo f the Debtors,b usinesses.I f the proposeds aleg eneratess ufficient proceedsto satisff the arnountso wedb y the Debtors,o r any of them,t o Rocklandu ndero r in connection with any pre-and postpetition financinga greementst,h e remainingp roceedss hall inure the benefit of the Debtors' creditorsa nd their estates. A. THE SALE IS PROPOSED IN GOOD FAITH 40. Courtsh avea lsor equiredt hatt he salep riceb e reasonablaen dt hat the saler esultf rom arm,sl ength,g oodf aith negotiationsw ith the buyer. See.e .g.,l n re AbbottsD airieso f Pa..7 88F .2d 143' 147-50(3dc ir. 19g6).N eithert he Debtorsn or their principalss hallp urchaseth e BusinessA ssetsa, nd accordingly,t he proposeds aled oesn ot constitutea n attempto r schemeb y the Debtorst o retain control of their businessa t the expenseo f their creditors. Thus,t he contemplatedtr ansactionsd o not amountt o a consolidationm, ergero r defacto mergero f the Debtorsa ndB uyer. ill. THE BIDDING PROCEDURES ARE FAIR 4l. The Bidding Proceduresse tf orth in theN oticea rei ntrinsicallyf air to all partiesa nda re designedto permitt he Debtors'e statesa, sw ell asR ocklandt,o obtaint he benefito f the bestp ossible price for the sale of the Business Assets. The Debtors are confident that the winning bid that emerges from processw ill be the highesta ndb estb id reasonabloy btainablefo r the BusinessA ssets' Accordinglyt,h e Debtorsr espectfullys ubmitt hatt he proposeds aleo f the BusinessA ssetsis entirely consistenwt ith guidelinesa doptedb y the courts,a ndt hat a prompt salei s in the best interesto f the Debtors'c reditorsa ndt heir estatesa nd will maximizet he amountt hat the estatesm ay realiznf or the valueo fthe BusinessA ssets. V. THE DEBTOR CAN SELL THE BASINESS ASSETS FREE AND CLEAR 42. Section3 63(0 of the BankruptcyC odep rovidesth at -Thet rusteem ay sell propertyu nders ubsectio(nb ) or (c) of this sectionf ree andc learo f any interest in such property of an entity other than the estate, only if -(1) applicable nonbankruptcy law pennits sale of such property free and clear of such interest; t2 postpone the foreclosure sale based on the Debtors' and Rockland's agreement to proceed with a goingconcern sale of the Debtors' businesses. If the proposed sale generates suficient proceeds to satisfy the amounts owed by the Debtors, or any of them, to Rockland under or in connection with any pre-and postpetition financing agreements, the remaining proceeds shall inure the beneit of the Debtors' creditors and their estates. //. THE SALE IS PROPOSED IN GOOD FAITH 40. Courts have also required that the sale price be reasonable and that the sale result from arm's length, good faith negotiations with the buyer. See, e.g.. In re Abbotts Dairies of Pa., 788 F.2d 143, 147-50 (3d Cir. 1986). Neither the Debtors nor their principals shall purchase the Business Assets, and accordingly, the proposed sale does not constitute an attempt or scheme by the Debtors to retain control of their business at the expense of their creditors. Thus, the contemplated transactions do not amount to a consolidation, merger or de facto merger of the Debtors and Buyer. ///. THE BIDDING PROCEDURES ARE FAIR 41. The Bidding Procedures set forth in the Notice are intrinsically fair to all parties and are designed to permit the Debtors' estates, as well as Rockland, to obtain the beneit of the best possible price for the sale of the Business Assets. The Debtors are confident that the winning bid that emerges rom this process will highest and best bid reasonably obtainable for the Business Assets. Accordingly, the Debtors respectfully submit that the proposed sale of the Business Assets is entirely consistent with guidelines adopted by the courts, and that a prompt sale is in the best interest of the Debtors' creditors and their estates and will maximize the amount that the estates may realize for the value of the Business Assets. IV. THE DEBTOR CAN SELL THE BUSINESS ASSETS FREE AND CLEAR Section 363(f) Bankruptcy Code provides that -The trustee may sell property under subsection (b) or (c) of this section ree and clear of any interest in such property of an entity other than the estate, only if-law permits sale of such property ree and clear of such interest; 12 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0(2) such entity consents; (3) such interest is a lien and the price at which such property is to be sold is greater than the aggregateva lueo fall lienso n suchp roperty; (4) such interest is in bona fide dispute; or (5) suche ntity could be compelledi,n a legalo r equitablep roceedingt'o accepta money satisfactiono f suchi nterest. 43. Rocklandh asc onsentedto the proposeds alep ursuanat ndt he satisfactiono f its liens from the sale proceeds. Except as set forth on E4!!!j!} the Debtors are unaware of any other parties allegingl iens and/ors ecurity interestsi n the BusinessA ssets. The Debtorse xpresslyr eservet he right to challengeth e validity, priority andp erfectiono f suchju nior interestsb, ut for purposeso f this Motion, observeso nly that eachs uch interesti s reduciblet o a claim, albeit an unsecuredo ne at best. Consequentlyt,h e BusinessA ssetsm ay be sold free and clear of suchi nterests( exceptf or permitted encumbrancepsu) rsuantto seotion3 63(0(5)( andp erhapso therwise).S eel n re HaskellL .P', 321B .R. l, 9 (Bankr.D . Mass.2 005)( FeeneyJ, .) ("The focuso f $ 365(0(5) i s on whethert he interestis reducibleto a claim");a ccordIn re HealthcoIn t'I. lnc., 174B .R. 174,176( Bankr.D . Mass.1 994)( likeninga proceedingu nders ection3 63(0(5)t o a sectionl l29(b)(2) "cramdown"p roceeding). Assumption Assisnment of Unexpired Leases and Executorv Contracts Il ast he Debtorsa nticipatet,h e saleo f the BusinessA ssetsi ncludesa ssumptiona nd assignmenot f unexpiredl easesa nd/executoryc onfacts, the Debtorss hall requestt hat the Court determineth e curer equiredu nders ection3 65(0 (if any) a nd,i f applicablew, hethert he Buyerh as demonsfiateadd equatea ssurancoef futurep erformanceu nders ection3 65(f{2) of the BankruptcyC ode. The Debtorsa nticipatet hat thosel easesa nd contracts( if any) not assumeda nd assignedp ursuant o the salew ill rejectedu ndera ny subsequenptl ano f liquidation. Waiver of 10 Dav Stav Inasmucha st he Debtorsb elievet hat a prompts aleo f the BusinessA ssetsis necessartyo ensuret hat the marketp rice of the BusinessA ssetsi s maximizeda nd to protectt he interestso f the Debtont,h eire stateas,n da ll othepr artiesin interest!h eD ebtorrse spectfulslyu bmitth att hereis good 13 (2) such entity consents; (3) such interest is a lien and the pice at which such property is to be sold is greater than the aggregate value of all liens on such property; (4) such interest is in bona ide dispute; or (5) such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest. 43. Rockland has consented to the proposed sale pursuant and the satisfaction of its liens rom the sale proceeds. Except as set forth on Exhibit B, unaware of any other parties alleging liens and/or security interests in the Business Assets. The Debtors expressly reserve the right to challenge the validity, priority and perfection of such junior interests, but for purposes of this Motion, observes only that each such interest is reducible to a claim, unsecured one at best. Consequently, the Business Assets may be sold ree and clear of such interests (except for permitted encumbrances) pursuant to section 363(f)(5) (and perhaps otherwise). See In re Haskell L.P., 321 B.R. 1, 9 (Bankr. D. Mass. 2005) (Feeney, J.) ("The focus of § 365(f)(is whether the interest is reducible to a claim"); accord In re Healthco Int'l, Inc., 174 B.174, 176 (Bankr. D. Mass. 1994) (likening a proceeding under section 363(f)(5) to a section 1129(b)(2) "cramdown" proceeding). Assumption and Assignment of Unexpired and Executory Contracts 44. If, as the Debtors anticipate, the sale of Business Assets includes assumption and assignment of unexpired leases and/or executory contracts, the Debtors shall request that the Court determine the cure required under section 365(f) (if and, if applicable, whether the Buyer has demonstrated adequate assurance of future performance under section 365(f)(2) of the Bankruptcy Code. The Debtors anticipate that those leases and contracts (if assumed and assigned pursuant to the sale will be rejected under any subsequent plan of liquidation. Day Stay 45. Inasmuch as the Debtors believe that prompt sale of the Business Assets is necessary to ensure that the market price of Business Assets is maximized and to protect the interests of the Debtors, their estates, and all other parties in interest, the Debtors respectfully submit that there is good 13 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0cause to waive the lgday stay insofar as the stay may be otherwisea pplicablet o the ProceduresO rder and the Sale Order pursuant to Fed' R' Banl<r' P' 600aG) and 6006(d)' CONCLUSION WHEREFoRE,t he Debtorsr espectfullyr equestt hat this Court entera n Order (substantially in the form attachedh eretoa s Exhibit C): (a) approvingn otice of the Bid ProceduresH earinga ndt he mattersh earda nd consideredb y the Court thereina s proper, timely, adequatea nd sufficient undert he ciroumstanoes(b; ) approvingt he Notice of Sales ubstantially in the form attached hereto as Exhibit A' includinga pprovingt he Bidding proceduress etf orth therein;( c) waiving the l0-day stay requirement of Fed. R. Bankr. P. 600aG); and (d) granting such other and fiuther relief as is just and proper' August 4, 2008 RespectfullY submittod, ARCHIE'SO IL SERVICESI,N C., ARCHIE'S AND KEN'S OIL AND HEATING SERVICE,INC'a, nd KEN'S OIL AND HEATING SERVICES, hIC. DavidB arret(t8 B0#6653 8 7) Hulien & Banett LLC 62M ainS treeSt uit€2 01 KingstonM, A 02364 (s77) 473-78s2 HulienBarrett@gmcaoiml. By theirattorneY,s, /s/David A. Banett t4 cause to waive the 10-day stay insofar as the stay may be otherwise applicable to the Procedures Order and the Sale Order pursuant to Fed. R. Bankr. P. 6004(g) and 6006(d). CONCLUSION WHEREFORE, the Debtors respectfully request that this Court enter an Order (substantially in the form attached hereto as Exhibit C): (a) approving notice of the Bid Procedures Hearing and the matters heard and considered by the Court therein as proper, timely, adequate and sufficient under the circumstances; (b) approving the Notice of Sale substantially in the form attached hereto as Exhibit A, including approving the Bidding Procedures set forth therein; (c) waiving the 10-day stay requirement of Fed. R. Bankr. P. 6004(g); and (d) granting such other and further relief as is just and proper. August 4, 2008 Respectfully submitted, ARCHIE'S OIL SERVICES, INC., ARCHIE'S AND KEN'S OIL AND HEATING SERVICE, INC., and KEN'S OIL AND HEATING SERVICES, INC By their attorneys, t: /s/David A. Barrett David Barrett (BBO#665387) Hulien & Barrett LLC 62 Main Street Suite 201 Kingston, MA 02364 (877)473-7852 HulienBarrett@gmail.com 14 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0vsn$!€*Tm!$ qf dsr*tllt A[#sN' *t LY n&Pxg$Er*TATIVO[ r TBg I, AfthurA lden,a duly authsrizsdre presentatiovfe t heS ebtorsh. aver eviewedth ea llegationosf thii$S ebM;ion andh erebyv irify that.t o theb esto f rny knowl$dgein, forrnationa ndb elief.a ftera retsonshlea ndd iligenti nuistigationt.h osef actuaal llegationasr ph 'uea nda ccurate' Datd; Auausti, 2008 t 5 VERIFICATION OF ARTHUR ALDEN, 1)1 1 Y AUTHORIZED REPRESENTATIVE OF 1HI DEBTORS, TO CERTAIN F ACTUAL ALLEGATIONS HEREIN 1. Arthur Alden, a duly authorized representative of the Debtors, have reviewed the allegations of ihis Sale Motion and hereby verify that, to the best of my knowledge, information and belief, alter a reasonable and diligent investigation, those factual allegations are true and accurate. Dated August 1, 2008 Arthur Alden President. Archie's Oil Company 15 Document hosted at http://www.jdsupra.com/post/documentViewer.aspx?fid=22dd307a-be4b-4740-a5da-2bfb321aaaa0