smb Doc 8 Filed 09/05/12 Entered 09/05/12 13:35:53 Main Document Pg 1 of 9

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1 Pg 1 of 9 Neil E. Herman Rachel Jaffe Mauceri Patrick D. Fleming MORGAN LEWIS & BOCKIUS LLP 101 Park Avenue New York, New York Telephone: ( Facsimile: ( Proposed Counsel to the Debtors and Debtors in Possession Michael R. Nestor Kenneth J. Enos Andrew L. Magaziner YOUNG CONAWAY STARGATT & TAYLOR, LLP 1270 Avenue of the Americas Suite 2210 New York, New York Telephone: ( Facsimile: ( Proposed Counsel to the Debtors and Debtors in Possession 1 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: JOURNAL REGISTER COMPANY, et al., 2 Debtors. Chapter 11 Case No ( Joint Administration Requested MOTION FOR INTERIM AND FINAL ORDERS AUTHORIZING THE DEBTORS TO PAY PREPETITION SALES AND USE TAXES AND RELATED OBLIGATIONS The above-captioned debtors and debtors-in-possession (collectively, the Debtors, by and through their proposed undersigned counsel, hereby file this Motion (the 1 All parties in interest with inquiries regarding the Motion or Proposed Orders should direct such inquiries to Young Conaway Stargatt & Taylor, LLP. 2 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Journal Register Company (8615, Register Company, Inc. (6548, Chanry Communications Ltd. (3704, Pennysaver Home Distributions Corp. (9476, All Home Distribution Inc. (0624, JR East Holdings, LLC (N/A, Journal Register East, Inc. (8039, Journal Company, Inc. (8220, JRC Media, Inc. (4264, Orange Coast Publishing Co. (7866, St. Louis Sun Publishing Co. (1989, Middletown Acquisition Corp. (3035, JiUS, Inc. (3535, Journal Register Supply, Inc. (6546, Northeast Publishing Company, Inc. (6544, Hometown Newspapers, Inc. (8550, The Goodson Holding Company (2437, Acme Newspapers, Inc. (6478, 21st Century Newspapers, Inc. (6233, Morning Star Publishing Company (2543, Heritage Network Incorporated (6777, Independent Newspapers, Inc. (2264, Voice Communications Corp. (0455, Digital First Media Inc. (0431, Great Lakes Media, Inc. (5920, Up North Publications, Inc. (2784, Greater Detroit Newspaper Network, Inc. (4228, Great Northern Publishing, Inc. (0800, and Saginaw Area Newspapers, Inc. (8444. The mailing address for each of the Debtors is Lower Makefield Corporate Center, 790 Township Road, 3rd Floor, Yardley, PA

2 Pg 2 of 9 Motion for entry of interim and final orders, substantially in the forms attached hereto as Exhibit A (the Proposed Interim Order and Exhibit B (the Proposed Final Order, together with the Proposed Interim Order, the Proposed Orders, respectively, pursuant to 11 U.S.C. 105(a and 363 of title 11 of the United States Code, 11 U.S.C. 101 et seq. (the Bankruptcy Code, authorizing the Debtors to pay certain prepetition sales and use taxes and related obligations. In support of this Motion, the Debtors rely on the Declaration of William J. Higginson in Support of Debtors Chapter 11 Petitions and First Day Motions (the First Day Declaration filed concurrently herewith, and respectfully state as follows: JURISDICTION 1. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. 157 and This matter is a core proceeding pursuant to 28 U.S.C. 157(b. Venue of these cases is proper before this Court pursuant to 28 U.S.C and The statutory bases for the relief requested herein are section 105(a, 363(b, 507(a(8, 541, 1107(a and 1108 of the Bankruptcy Code, Rule 6003 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules, and Rule (a of the Local Bankruptcy Rules for the Southern District of New York (the Local Rules. BACKGROUND 3. On the date hereof (the Petition Date, each of the Debtors filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. 4. The Debtors continue to operate their business and manage their properties as debtors in possession pursuant to sections 1107(a and 1108 of the Bankruptcy Code. No trustee, examiner or official committee of unsecured creditors has been appointed in the Debtors cases. 2

3 Pg 3 of 9 5. The factual background regarding the Debtors, including their business operations, their capital and debt structure, and the events leading to the filing of these bankruptcy cases, is set forth in detail in the First Day Declaration, filed concurrently herewith and fully incorporated herein by reference. RELIEF REQUESTED 6. By this Motion, the Debtors seek entry of the Proposed Orders, pursuant to section 105(a of the Bankruptcy Code, authorizing the payment of certain prepetition sales and use taxes and related obligations owed to various taxing authorities (the Taxing Authorities. 7. The predominance of the Debtors revenue is derived from sales of newspaper and digital advertising, newspaper subscriptions, and single copy newspaper sales all of which are tax exempt in the jurisdictions in which the Debtors operate. However, the Debtors have some commercial printing operations for which, in the ordinary course of business, they are required to collect sales taxes (the Sales Taxes and periodically remit the Sales Taxes to the applicable Taxing Authorities. Typically, Sales Taxes accrue as products are sold, and such taxes are calculated based on a statutory percentage of the sale price. The statutory percentage required to be withheld by each of the Debtors varies by the state and county in which the Debtors operate. The process by which the Debtors remit the Sales Taxes also varies, depending on the nature of the tax and the Taxing Authority to be paid. Most Taxing Authorities require that the Sales Taxes be remitted monthly, whereas others require quarterly or semi-annual remittances. The frequency required by a Taxing Authority is generally dependent upon the level of sales volume within that Taxing Authority s jurisdiction. 8. The Debtors also incur use taxes (the Use Taxes, and together, with the Sales Taxes, the Taxes. The Debtors liability for Use Taxes arises from purchases of fixed 3

4 Pg 4 of 9 assets, supplies, or signage without sales tax. The Debtors production supplies, including newsprint are not subject to use tax. 9. The Debtors traditionally remit payment for the Taxes by mailing physical checks or ACH electronic transfers. As of the Petition Date, the Debtors estimate that approximately $22,000 in Taxes relating to the prepetition period will be due and owing to the Taxing Authorities in the ordinary course of business. The Debtors hereby seek authority to pay all prepetition obligations in respect of the Taxes owed to the Taxing Authorities. 3 In addition, to the extent that any checks, drafts, deposits or transfers issued or initiated by the Debtors on account of Taxes have not cleared as of the Petition Date, the Debtors also seek an order directing banks and other financial institutions to honor and process such payments. BASIS FOR RELIEF A. The Court Should Permit The Debtors, In Their Discretion, To Pay The Taxes 10. Pursuant to section 105(a of the Bankruptcy Code, the court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. 11 U.S.C. 105(a. As set forth below, the Debtors respectfully submit that the relief requested herein is necessary and appropriate to carry out the provisions of the Bankruptcy Code. 11. The Debtors believe that authorization of payment of prepetition amounts to Taxing Authorities is necessary to continue in the ordinary course of business. The ability of the Bankruptcy Court to authorize the payment of prepetition debt when such payment is needed... is not a novel concept. In re Ionosphere Clubs, Inc., 98 B.R. 174, 175 (Bankr. S.D.N.Y. 3 Certain taxes such as income, FICA and Medicare taxes are withheld from the Debtors employees paychecks and remitted by the Debtors payroll administrator to the appropriate federal, state or local taxing authorities. Concurrently with the filing of this Motion, the Debtors also have filed a motion seeking authority to satisfy certain obligations relating to prepetition employee wages and benefits, including obligations with respect to prepetition taxes withheld from employee paychecks but not yet remitted to the applicable taxing authority or other intended recipient. 4

5 Pg 5 of This equitable common law principle was first articulated by the United States Supreme Court in Miltenberger v. Logansport, C & S.W.R. Co., 106 U.S. 286, 1 S.Ct. 140, 27 L.Ed 117 (1882 and is commonly referred to as either the doctrine of necessity or the necessity of payment rule. In re Ionosphere Clubs, Inc., 98 B.R. at Under the doctrine of necessity, a bankruptcy court may exercise its equitable power to authorize a debtor to pay certain critical prepetition claims, where, as here such payment is essential to the debtor s business. See In re Columbia Gas System, 136 B.R. 930, 939 (Bankr. D. Del (citing In re Lehigh & New England Rwy Co., 657 F.2d 570, 581 (3rd Cir (recognizing that if payment of a prepetition claim is essential to the continued operation of [the debtor], payment may be authorized. 13. Payment of the Taxes is critical to the Debtors continued, uninterrupted operations during these chapter 11 cases and the Debtors ability to maximize value for their estates. Nonpayment of these obligations may cause Taxing Authorities to take precipitous action, including, but not limited to, filing liens, preventing the Debtors from conducting business in the applicable jurisdictions, and seeking to lift the automatic stay, all of which would disrupt the Debtors operations and could potentially impose significant costs on the Debtors estates. Moreover, the Taxes are afforded priority status under section 507(a(8 of the Bankruptcy Code, providing further support for the relief requested herein. 14. To the extent that the Debtors have collected Taxes from their customers, such funds are held in trust by the Debtors for the benefit of the Taxing Authorities and do not constitute property of the Debtors estates. See, e.g., Begier v. IRS, 496 U.S. 53 (1990; In re Shank, 792 F.2d 829, 830 (9th Cir (sales taxes required by state law to be collected by sellers from their customers are trust fund taxes; DeChiaro v. New York State Tax Comm n, 5

6 Pg 6 of F.2d 432, (2d Cir (same; In re Am. Int l Airways, Inc., 70 B.R. 102, 103 (Bankr. E.D. Pa (excise and withholding taxes; In re Tap, Inc., 52 B.R. 271, 272 (Bankr. D. Mass (withholding taxes. Accordingly, the Bankruptcy Code does not prohibit a debtor from paying such taxes. 15. Similar relief to that requested herein has been granted by this and other bankruptcy courts in this District. See, e.g., In re Hostess Brands, Inc., Case No (Bankr. S.D.N.Y. Jan. 13, 2012; In re AMR Corp., Case No (Bankr. S.D.N.Y. Dec. 23, 2011; In re Dynegy Holdings LLC, Case No (Bankr. S.D.N.Y. Dec. 6, 2011; In re Borders Group Inc., Case No (Bankr. S.D.N.Y. Mar. 15, 2011; In re The Great Atlantic & Pacific Tea Co., Inc, Case No (Bankr. S.D.N.Y. Jan. 12, 2011; In re InSight Health Servs. Holding Corp., (Bankr. S.D.N.Y. Jan. 4, 2011; In re Blockbuster, Inc., Case No (Bankr. S.D.N.Y. Oct. 20, 2010; In re Innkeepers USA Trust, Case No (Bankr. S.D.N.Y. Aug. 12, 2010; In re NR Liquidation III Co. (f/k/a Neff Corp., Case No (Bankr. S.D.N.Y. June 9, The Debtors respectfully submit that the present circumstances warrant similar relief in these chapter 11 cases. B. The Court Should Authorize The Debtors Banks And Financial Institutions To Honor The Debtors Tax Payments 16. The Debtors also request that the Court authorize the Debtors banks and financial institutions (the Banks, when requested by the Debtors in their sole discretion, to process, honor, and pay any and all checks or electronic fund transfers drawn on the Debtors bank accounts to pay all prepetition obligations described herein, whether such checks or other requests were submitted prior to, or after, the Petition Date. The Debtors further request that all such banks and financial institutions be authorized to rely on the Debtors designation of any particular check or electronic payment request as approved pursuant to this Motion. 6

7 Pg 7 of 9 NECESSITY FOR IMMEDIATE RELIEF 17. Bankruptcy Rule 6003 provides that [e]xcept to the extent that relief is necessary to avoid immediate and irreparable harm, the court shall not, within 21 days after the filing of the petition, grant... (b a motion to use, sell, lease or otherwise incur an obligation regarding property of the estate, including a motion to pay all or part of a claim that arose before the filing of the petition.... If a debtor s prospect of reorganizing is threatened, or swift diminution in value of the debtor s estate is likely absent the granting of the requested relief, immediate and irreparable harm likely exists. See In re Ames Dep t Stores, Inc., 115 B.R. 34, 36 n.2 (Bankr. S.D.N.Y (finding that immediate and irreparable harm exists where loss of the business threatens ability to reorganize. Any delay in paying the obligations relating to the Taxes would be detrimental to the Debtors, their creditors, and their estates. Indeed, the Debtors ability to manage and run their business operations with as little disruption as possible requires, in part, that the Debtors remain in good standing with their taxing obligations. Accordingly, for the reasons set forth herein, the Debtors submit that the requirements of Bankruptcy Rule 6003 have been satisfied. REQUEST FOR WAIVER OF STAY 18. The Debtors further seek a waiver of any stay of the effectiveness of the order approving this Motion. Pursuant to Bankruptcy Rule 6004(h, [a]n order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise. As set forth above, the immediate payment of the Taxes is essential to prevent potentially irreparable damage to the Debtors operations, value and ability to pursue and a sale of substantially all of their assets. Accordingly, 7

8 Pg 8 of 9 the Debtors submit that ample cause exists to justify a waiver of the fourteen-day stay imposed by Bankruptcy Rule 6004(h, to the extent it applies. DEBTORS RESERVATION OF RIGHTS 19. Nothing contained herein is intended or should be construed as an admission as to the validity of any claim against the Debtors, a waiver of the Debtors rights to dispute any claim, or assumption of any contract or lease under section 365 of the Bankruptcy Code. The Debtors expressly reserve their rights to contest any invoice of a Taxing Authority under applicable non-bankruptcy law. Likewise, if this Court grants the relief sought herein, any payment made pursuant to the Court s order is not intended to be and should not be construed as an admission as to the validity of any claim or a waiver of the Debtors rights to dispute such claim subsequently. NOTICE 20. The Debtors shall provide notice of this Motion by facsimile and/or overnight mail to: (i the Office of the United States Trustee for the Southern District of New York, (ii the holders of the fifty (50 largest unsecured claims against the Debtors' estates on a consolidated basis, (iii Otterbourg, Steindler, Houston & Rosen, P.C., counsel to Wells Fargo, N.A.; (iv Akin, Gump, Strauss, Hauer & Feld LLP, counsel for the Tranche A Lenders and Tranche B Lenders, (v Emmet, Marvin & Martin LLP, counsel to the Tranche A Agent and the Tranche B Agent, (vi the Banks, and (vii all entities that have requested notice pursuant to Bankruptcy Rule Due to the urgency of the circumstances surrounding this Motion and the nature of the relief requested herein, the Debtors respectfully submit that further notice of this Motion is neither required nor necessary. 8

9 Pg 9 of 9 CONCLUSION WHEREFORE, the Debtors respectfully request that this Court (a enter the Proposed Interim Order granting the relief requested in the Motion and such other and further relief as may be just and proper and (b schedule a final hearing on the motion within 30 days of the Petition Date or as soon as is otherwise practicable thereafter. Dated: New York, New York September 5, 2012 MORGAN LEWIS & BOCKIUS LLP /s/ Neil E. Herman Neil E. Herman Rachel Jaffe Mauceri Patrick D. Fleming 101 Park Avenue New York, New York Telephone: ( Facsimile: ( and- Michael R. Nestor Kenneth J. Enos Andrew L. Magaziner YOUNG CONAWAY STARGATT & TAYLOR, LLP 1270 Avenue of the Americas Suite 2210 New York, New York Telephone: ( Facsimile: ( Proposed Counsel for Debtors and Debtors-in- Possession 9

10 smb Doc 8-1 Filed 09/05/12 Entered 09/05/12 13:35:53 Exhibit A Pg 1 of 4 EXHIBIT A Proposed Interim Order

11 smb Doc 8-1 Filed 09/05/12 Entered 09/05/12 13:35:53 Exhibit A Pg 2 of 4 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: JOURNAL REGISTER COMPANY, et al., 1 Debtors. Chapter 11 Case No ( Jointly Administered INTERIM ORDER AUTHORIZING THE DEBTORS TO PAY PREPETITION SALES AND USE TAXES AND RELATED OBLIGATIONS Upon the motion (the Motion of the above-captioned debtors and debtors in possession (collectively, the Debtors for entry of interim and final orders authorizing the Debtors to pay prepetition sales and use taxes and related obligations; and upon the First Day Declaration; the Court finding that (i the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, (ii this is a core proceeding pursuant to 28 U.S.C. 157(b(2(A, and (iii notice of the Motion was sufficient under the circumstances and that no other or further notice need be provided; and the Court having determined that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and the Court having determined that the relief sought in the Motion is in the best interests of the Debtors and their 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Journal Register Company (8615, Register Company, Inc. (6548, Chanry Communications Ltd. (3704, Pennysaver Home Distributions Corp. (9476, All Home Distribution Inc. (0624, JR East Holdings, LLC (N/A, Journal Register East, Inc. (8039, Journal Company, Inc. (8220, JRC Media, Inc. (4264, Orange Coast Publishing Co. (7866, St. Louis Sun Publishing Co. (1989, Middletown Acquisition Corp. (3035, JiUS, Inc. (3535, Journal Register Supply, Inc. (6546, Northeast Publishing Company, Inc. (6544, Hometown Newspapers, Inc. (8550, The Goodson Holding Company (2437, Acme Newspapers, Inc. (6478, 21st Century Newspapers, Inc. (6233, Morning Star Publishing Company (2543, Heritage Network Incorporated (6777, Independent Newspapers, Inc. (2264, Voice Communications Corp. (0455, Digital First Media Inc. (0431, Great Lakes Media, Inc. (5920, Up North Publications, Inc. (2784, Greater Detroit Newspaper Network, Inc. (4228, Great Northern Publishing, Inc. (0800, and Saginaw Area Newspapers, Inc. (8444. The mailing address for each of the Debtors is Lower Makefield Corporate Center, 790 Township Road, 3rd Floor, Yardley, PA

12 smb Doc 8-1 Filed 09/05/12 Entered 09/05/12 13:35:53 Exhibit A Pg 3 of 4 estates; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED, ADJUDGED, and DECREED that: 1. The Motion is GRANTED as set forth herein. 2. The Final Hearing shall be held on, 2012 at : a.m./p.m. (ET. Any objections or responses to the Motion shall be filed on or before, 2012 at 4:00 p.m. (ET and served on parties in interest as required by the Local Rules. 3. The Debtors are authorized to remit all prepetition Taxes 2 collected from customers or otherwise incurred in the ordinary course of the Debtors businesses to the Taxing Authorities up to a maximum amount of $22,000; provided, however, that the Debtors shall pay only those amounts due and payable as of the Petition Date and amounts that are or become due and payable between the Petition Date and the date that a Final Order is entered. 4. Each of the Banks is authorized to debit the Debtor s accounts in the ordinary course of business without the need for further order of this Court for: (i all checks drawn on the Debtors accounts which are cashed at such Bank s counters or exchanged for cashier s checks by the payees thereof prior to the Petition Date; (ii all checks or other items deposited in one of Debtors accounts with such Bank prior to the Petition Date which have been dishonored or returned unpaid for any reason, together with any fees and costs in connection therewith, to the same extent the Debtors were responsible for such items prior to the Petition Date; and (iii all undisputed prepetition amounts outstanding as of the date hereof, if any, owed to any Bank as service charges for the maintenance of the Debtors cash management system. 5. Any of the Banks may rely on the representations of the Debtors with respect to whether any check or other payment order drawn or issued by the Debtors prior to the 2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Motion. 2

13 smb Doc 8-1 Filed 09/05/12 Entered 09/05/12 13:35:53 Exhibit A Pg 4 of 4 Petition Date should be honored pursuant to this or any other order of this Court, and such Bank shall not have any liability to any party for relying on such representations by the Debtor as provided for herein. 6. Nothing herein shall impair the Debtors ability to contest, without prejudice, in their sole discretion, the validity and amounts of the Taxes. 7. The requirements set forth in Local Rule (b are satisfied. 8. Bankruptcy Rule 6003(b has been satisfied because the relief requested in the Motion is necessary to avoid immediate and irreparable harm to the Debtors. The requirements of Bankruptcy Rules 6004(a and 6004(h are waived. 9. Notwithstanding any provision in the Bankruptcy Rules to the contrary: (a this Order shall be effective immediately and enforceable upon its entry; (b the Debtors are not subject to any stay in the implementation, enforcement or realization of the relief granted in this Order; and (c the Debtors are authorized and empowered to, and may in their discretion and without further delay, take any action and perform any act necessary to implement and effectuate the terms of this Order. 10. This Court shall retain jurisdiction with respect to any matters, claims, rights or disputes arising from or related to the Motion or the implementation of this Order. Dated: September, 2012 New York, New York United States Bankruptcy Judge 3

14 smb Doc 8-2 Filed 09/05/12 Entered 09/05/12 13:35:53 Exhibit B Pg 1 of 4 Exhibit B Proposed Final Order

15 smb Doc 8-2 Filed 09/05/12 Entered 09/05/12 13:35:53 Exhibit B Pg 2 of 4 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: JOURNAL REGISTER COMPANY, et al., 1 Debtors. Chapter 11 Case No ( Jointly Administered FINAL ORDER AUTHORIZING THE DEBTORS TO PAY PREPETITION SALES AND USE TAXES AND RELATED OBLIGATIONS Upon the motion (the Motion of the above-captioned debtors and debtors in possession (collectively, the Debtors for entry of interim and final orders authorizing the Debtors to pay prepetition sales and use taxes and related obligations; and upon the First Day Declaration; the Court finding that (i the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, (ii this is a core proceeding pursuant to 28 U.S.C. 157(b(2(A, and (iii notice of the Motion was sufficient under the circumstances and that no other or further notice need be provided; and the Court having determined that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and the Court having determined that the relief sought in the Motion is in the best interests of the Debtors and their 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Journal Register Company (8615, Register Company, Inc. (6548, Chanry Communications Ltd. (3704, Pennysaver Home Distributions Corp. (9476, All Home Distribution Inc. (0624, JR East Holdings, LLC (N/A, Journal Register East, Inc. (8039, Journal Company, Inc. (8220, JRC Media, Inc. (4264, Orange Coast Publishing Co. (7866, St. Louis Sun Publishing Co. (1989, Middletown Acquisition Corp. (3035, JiUS, Inc. (3535, Journal Register Supply, Inc. (6546, Northeast Publishing Company, Inc. (6544, Hometown Newspapers, Inc. (8550, The Goodson Holding Company (2437, Acme Newspapers, Inc. (6478, 21st Century Newspapers, Inc. (6233, Morning Star Publishing Company (2543, Heritage Network Incorporated (6777, Independent Newspapers, Inc. (2264, Voice Communications Corp. (0455, Digital First Media Inc. (0431, Great Lakes Media, Inc. (5920, Up North Publications, Inc. (2784, Greater Detroit Newspaper Network, Inc. (4228, Great Northern Publishing, Inc. (0800, and Saginaw Area Newspapers, Inc. (8444. The mailing address for each of the Debtors is Lower Makefield Corporate Center, 790 Township Road, 3rd Floor, Yardley, PA

16 smb Doc 8-2 Filed 09/05/12 Entered 09/05/12 13:35:53 Exhibit B Pg 3 of 4 estates; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED, ADJUDGED, and DECREED that: 1. The Motion is GRANTED as set forth herein. 2. The Debtors are authorized to remit all prepetition Taxes 2 collected from customers or otherwise incurred in the ordinary course of the Debtors businesses to the Taxing Authorities up to a maximum of $22, Each of the Banks is authorized to debit the Debtor s accounts in the ordinary course of business without the need for further order of this Court for: (i all checks drawn on the Debtors accounts which are cashed at such Bank s counters or exchanged for cashier s checks by the payees thereof prior to the Petition Date; (ii all checks or other items deposited in one of Debtors accounts with such Bank prior to the Petition Date which have been dishonored or returned unpaid for any reason, together with any fees and costs in connection therewith, to the same extent the Debtors were responsible for such items prior to the Petition Date; and (iii all undisputed prepetition amounts outstanding as of the date hereof, if any, owed to any Bank as service charges for the maintenance of the Debtors cash management system. 4. Any of the Banks may rely on the representations of the Debtors with respect to whether any check or other payment order drawn or issued by the Debtors prior to the Petition Date should be honored pursuant to this or any other order of this Court, and such Bank shall not have any liability to any party for relying on such representations by the Debtor as provided for herein. 5. Nothing herein shall impair the Debtors ability to contest, without prejudice, in their sole discretion, the validity and amounts of the Taxes. 2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Motion. 2

17 smb Doc 8-2 Filed 09/05/12 Entered 09/05/12 13:35:53 Exhibit B Pg 4 of 4 6. The requirements set forth in Local Rule (b are satisfied. 7. Bankruptcy Rule 6003(b has been satisfied because the relief requested in the Motion is necessary to avoid immediate and irreparable harm to the Debtors. The requirements of Bankruptcy Rules 6004(a and 6004(h are waived. 8. Notwithstanding any provision in the Bankruptcy Rules to the contrary: (a this Order shall be effective immediately and enforceable upon its entry; (b the Debtors are not subject to any stay in the implementation, enforcement or realization of the relief granted in this Order; and (c the Debtors are authorized and empowered to, and may in their discretion and without further delay, take any action and perform any act necessary to implement and effectuate the terms of this Order. 9. This Court shall retain jurisdiction with respect to any matters, claims, rights or disputes arising from or related to the Motion or the implementation of this Order. Dated: September, 2012 New York, New York United States Bankruptcy Judge 3