Case Doc 15 Filed 06/12/17 Entered 06/12/17 16:02:02 Desc Main Document Page 1 of 19

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1 Document Page 1 of 19 UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS (Eastern Division) In re CASHMAN EQUIPMENT CORP., 1 Debtor Chapter 11 Case No DEBTOR S MOTION PURSUANT TO 11 U.S.C. 363(B) AND 105(A) FOR ENTRY OF AN ORDER AUTHORIZING, BUT NOT DIRECTING, DEBTOR TO PAY CERTAIN PREPETITION OBLIGATIONS OWED TO CERTAIN FOREIGN VENDORS Cashman Equipment Corporation (the Debtor or CEC ) requests the entry of an order authorizing, but not directing, the Debtor to pay certain pre-petition foreign vendor claims (collectively the Foreign Vendor Claims ) in the ordinary course of business. The Debtor operates in a specialized industry. In the ordinary course of its business, the Debtor requires specialized goods and services from the certain foreign vendors (collectively the Foreign Vendors ) in order to operate. Absent the ability to pay the Foreign Vendor Claims, the Debtor may not be able to obtain the specialized goods and services post-petition. The continued provision of goods and services by the Foreign Vendors is essential to the continuation of the Debtor s business and the preservation of its assets. The Foreign Vendors are located in jurisdictions in Central America, Africa, and the Middle East. The Debtor believes that all or almost all of the Foreign Vendors do not have a presence in the United States, and therefore may not consider themselves to be subject to the jurisdiction of the Court or the provisions of the Bankruptcy Code that otherwise protect the 1 Joint administration requested. The other debtors in these Chapter 11 cases are Cashman Scrap & Salvage, LLC, Servicio Marina Superior, LLC, Cashman Canada, Inc. and Mystic Adventure Sails, LLC. 1

2 Document Page 2 of 19 Debtor s assets and operations. Absent payment of prepetition obligations, the Foreign Vendors will likely refuse to provide critical services for which there is no other readily available alternative, attempt to assert maritime liens on the Debtor s assets, or otherwise attempt to interfere with the Debtor s operations. In addition to the attendant costs, these actions may significantly impede the Debtor s operations and ability to generate revenues in those foreign countries. In support of this motion, the Debtor avers as follows: JURISDICTION AND VENUE 1. This Court has jurisdiction to consider and determine this motion pursuant to 28 U.S.C This is a core proceeding within the meaning of 28 U.S.C. 157(b). 2. Venue is proper before this Court pursuant to 28 U.S.C and BACKGROUND A. The Chapter 11 Cases 3. On June 9, 2017 (the Petition Date ) the Debtor, filed a petition for relief under Chapter 11 of Title 11 of the United States Code (the Bankruptcy Code ) in the United States Bankruptcy Court for the District of Massachusetts (the Court ). The Debtors continue to operate their businesses and manage their assets as debtors in possession as authorized by sections 1107(a) and 1108 of the Bankruptcy Code. 4. On the Petition Date, Cashman Scrap & Salvage, LLC ( CSS ), Servicio Marina Superior, LLC ( SMS ), Cashman Canada, Inc. ( CCI ), Mystic Adventure Sails, LLC ( Mystic and together with CSS, SMS, CCI and Mystic the Affiliated Debtors ) and the Debtors principal, James M. Cashman ( JM Cashman ), each filed a voluntary petition for relief 2

3 Document Page 3 of 19 under Chapter 11 of the Bankruptcy Code in the Court. The Affiliated Debtors are not requesting the authority to pay any pre-petition claims. 5. Along with this motion, the Debtor has filed motions seeking the authority to use cash collateral, the authority to pay prepetition wages, and to jointly administer its case with the cases of the Affiliated Debtors and JM Cashman. B. The Debtors and Their Businesses. 6. The Debtor and the Affiliated Debtors (collectively the Debtors ) specialize in the charter and sale of ocean going and inland barges and tugboats servicing the marine construction, oil and gas, scrap and salvage and marine remediation industries worldwide. The Debtors have also been involved in heavy marine construction including, among other things, dredging, pile driving, concrete work, pier and dock construction, bridge construction, shore protection and other marine structures, demolition, oil spill and other marine remediation work, and marine salvage work. 7. Beginning with CEC, which was formed in 1995 with a fleet of only ten (10) barges servicing the New England construction industry, the Debtors have expanded and now include a fleet (the Fleet ) of 147 vessels, consisting of forty-one (41) inland/coastal barges, eighty-three (81) ocean going barges, eight (8) tug/push boats, two (2) floating hotels, fourteen (14) sectional construction barges, one (1) three-masted schooner, and various items of general and specialized construction equipment, including cranes and related construction equipment and marine pollution and clean-up equipment. 8. The Fleet includes inland and ocean going barges ranging in size from 120 to 400 feet in length. Nearly seventy-five (75%) of the Fleet barges are less than fourteen (14) years old, and can be retrofitted to accommodate the unique project needs of customers across the 3

4 Document Page 4 of 19 public and private sectors and a variety of industries. CEC is the largest operator of offshore barges in the world. 9. The Debtors provide services in and maintain or have maintained fleets on the U.S. East Coast and Gulf of Mexico, Mexico, Singapore, Australia, the Persian Gulf, West Africa, the Caspian Sea and South and Central America. Due to the size and versatility of the Fleet, the Debtors are able to deploy vessels and service customers across the world. 10. CEC currently has barges based in Africa, Indonesia, Korea, the Middle East, Mexico, Singapore and the states of Louisiana, New Jersey, South Carolina, Virginia, Florida, Massachusetts and New York. CCI s barges are based in Canada. 11. The Debtors current financial issues are due to the unprecedented and prolonged downturn in the oil and gas industry. A substantial portion of the Debtors revenue is derived from the sale and charter of vessels to companies involved in the exploration for and development of oil and gas assets, as well as oil clean up and related petroleum projects. The sharp and sustained decline in the price of oil has resulted in financial workouts and bankruptcy filings for many companies engaged in and associated with the oil and gas industry. 12. The Debtors intend to continue their operations in the ordinary course of business while reducing the size of the Fleet and the related indebtedness through the orderly sale of vessels, in order to restructure their businesses and remaining indebtedness. i. The Debtors Businesses. 13. The Debtors primary source of revenue is the charter and sale of the vessels and equipment in the Fleet, with secondary revenue sources being vessel and equipment sales and its construction contracting business. In recent years, a substantial portion of the Debtors revenue has come from the oil and gas industry. In 2014 and 2015, the Debtors generated consolidated 4

5 Document Page 5 of 19 gross revenue from the charter and sale of vessels of approximately $74.3 and $86.6 million, respectively. In 2016, as a result of the downturn in the oil and gas industry, the consolidated revenue was approximately $44.7 million. 14. The Debtors operations are integrated, with CEC providing administrative functions for each of the Debtors, CSS providing repair and maintenance services for the Fleet, SMS providing tug and tow services and CCI and Mystic owning discrete assets. JM Cashman, the Debtors principal, has over forty (40) years of experience in the marine services and construction business, both offshore and on-shore. In addition to providing management to the Debtors, JM Cashman is responsible for the charter and sale of vessels worldwide. 15. Since the dramatic downturn in the oil and gas industry, the Debtors have taken steps to reduce costs and streamline operations. Among other things, the Debtors have reduced their overhead, have placed their tugs and Mystic s schooner in storage with the intention to sell or enter into long term charters for those vessels, and have substantially reduced their overseas operations 2 pending an improvement in the oil and gas industry. 16. The length of CEC s barge charters run from daily, to monthly, to, in some instances, more than a year, with daily charter rates between $300 and $3,000 per day. Once a barge is on charter, the party chartering the barge covers the costs of operating the barge, including crew costs, dock and harbor fees, pilotage and insurance. The charter and sale of vessels is accomplished by utilizing JM Cashman s extensive industry network. 2 The Debtors integrated operations previously included the operations of various foreign affiliates, including affiliates in Singapore, Mexico and Kazakhstan. The affiliates operations have ceased, and they do not currently have any material assets. These entities have not, therefore, filed Chapter 11 cases. 5

6 Document Page 6 of 19 ii. The Debtors Structure. 17. CEC, a Massachusetts corporation, was formed in 1995 and currently employs twenty (20) people, all of whom are based in the United States. CEC is headquartered in Braintree, Massachusetts, and owns 140 of the vessels in the Fleet, as well as other equipment utilized in its operations. In addition to chartering and managing the Fleet, CEC has provided marine and general (heavy civil) construction services. 18. CSS, a Louisiana limited liability company, was formed in 2003 and currently employs five (5) people, all of whom are based in the United States. CSS operations are located in Louisiana and consist of managing the repair and maintenance yard utilized by CEC to maintain the Fleet. CSS also provides the Debtors with scrapping and salvaging services for vessels and equipment, and provides waterfront facilities for logistical support. 19. SMS, is a Louisiana limited liability company, was formed in 2006 and currently employs two (2) people based in the United States. SMS owns eight (8) tug/push boats in the Fleet. SMS historically provided towing and heavy haul services, primarily to the off shore drilling industry in the Gulf of Mexico and in Southeast Asia. SMS tug/push boats are all currently in storage pending the sale or long term charter of those vessels. 20. CCI is a Canadian corporation that owns and operates four (4) of the barges in the Fleet. Mystic is a Massachusetts limited liability company whose sole asset is an ocean-going three-masted sailing schooner called the Mystic (the Schooner ) that is currently in storage pending the sale or long term charter of the Schooner. The Schooner has operated pleasure cruises across the eastern seaboard. 21. As of the Petition Date, CEC and SMS had borrowed money from twelve (12) banks (collectively the Lenders ) in order to finance the acquisition and construction of new 6

7 Document Page 7 of 19 Fleet vessels, to refinance prior debt, and to support general working capital needs. The aggregate amount asserted to be owed by the Lenders is approximately $142,500,000. All of the Debtors have guaranteed some or all of the Lenders indebtedness. 22. There are liens on some, but not all, of the Debtors vessels. In order to obtain a lien on a flagged vessel, a lender must record a vessel mortgage in the jurisdiction in which the vessel is flagged. 3 A preliminary analysis indicates that there may be as many as seventeen (17) barges that are unencumbered, and the Debtors may own other assets that are unencumbered. The Debtors estimate that the seventeen (17) unencumbered barges have an orderly liquidation value totaling approximately $22,350, In conjunction with obtaining financing, the Debtors obtained appraisals of their vessels (collectively the Appraisals ). Based on the Appraisals, the aggregate fair market value of the assets against which the Lenders assert liens is approximately $357,700,000, and the orderly liquidation value of those assets is approximately $301,300,000. In addition to the unencumbered vessels, there is substantial equity in virtually all of the Lenders collateral pools. 4 FOREIGN VENDORS 24. The Debtor operates in a highly specialized industry that requires it to maintain and develop relationships with certain vendors to supply goods and services on which its operations depend. The loss of these goods and services, even on a temporary basis, may jeopardize the Debtor s ability to continue operating as well as its ability to insure, maintain and repair its assets. To prevent any unexpected or inopportune interruption to the Debtor s business 3 In order to obtain a lien on the charter revenue generated by a flagged vessel, a lender must have a separate grant of the charter revenue a mortgage on the vessel is not, by itself, sufficient to create a lien on the vessels charter revenue. Not all of the Lenders have liens on charter revenue from the vessels against which they assert vessel mortgages. 4 Additional information on the Debtors business and capital structure is set forth in the Affidavit of James Cashman in Support of First Day Motions, filed contemporaneously with this Motion. 7

8 Document Page 8 of 19 during this Chapter 11 case, it is essential that the Debtor maintain its relationship with, and honor its outstanding payment obligations to the Foreign Vendors. 25. To identity the Foreign Vendors, the Debtor analyzed its suppliers and service providers and the needs of its businesses. In examining its vendor relationships, the Debtor considered whether: the vendor is a sole-source or limited-source supplier or service provider; the vendor has the ability to exercise remedies against the Debtor assets or disrupt the Debtor operations; the vendor has the ability to assert a maritime or other statutory lien against the Debtor assets; the vendor provides services that are so vital to the Debtor businesses that even brief disruption would harm the Debtor operations; the Debtor would be able to cost-effectively obtain comparable products or services from alternative sources within a reasonable timeframe; the vendor is able or likely to refuse providing essential supplies or services to the Debtor if prepetition balances are not paid; and the business relationship between the Debtor and the vendor is governed by a long-term contract. 26. Based on these criteria, the Debtor identified a limited roster of [five (5)] Foreign Vendors, a list of whom appear on Exhibit A, along with the amount owed to such vendors according to the Debtor. 5 The Foreign Vendors services generally fall into one or more of the following categories: (a) fleeting vendors; (b) repair vendors; (c) labor vendors; and (d) tug and tow vendors. 5 Although every effort has been made to include on Exhibit A all pre-petition amounts owed to the Foreign Vendors, it is possible that there are invoices for pre-petition services that the Debtor has not yet received. 8

9 Document Page 9 of 19 A. Categories of Foreign Vendors. 27. Fleeting services are services associated with port expenses and the expenses associated with preparing vessels for charter. In the ordinary course of business, the Debtor incurs port expenses such as pilotage, docking masters, mooring, coast guard fees, and harbor dues while vessels are not on charter, and incurs other costs when the vessel is prepared for charter. Two of the Foreign Vendors providing fleeting services are governmental entities that control the only ports in the regions in which the Debtor operates. Absent payment, these Foreign Vendors will likely not provide essential fleeting services for the vessels currently in those regions. As of the Petition Date, the Debtor owed Foreign Vendors approximately $212,000 with respect to fleeting services. 28. The Debtor relies on Foreign Vendors for ordinary course repairs and the provision of spare parts to maintain the Fleet. Absent payment, these Foreign Vendors will likely not provide the essential repair and maintenance services for the vessels. As of the Petition Date, the Debtor owed Foreign Vendors approximately $55,000 in connection with repairs, spare parts, and supplies. 29. The Debtor requires certain Foreign Vendors to provide contract labor in order to maintain and repair the vessels in the Fleet. Absent payment, these Foreign Vendors will likely not provide the essential contract labor that the Debtor requires for the vessels in the Fleet. As of the Petition Date, the Debtor owed Foreign Vendors approximately $42,000 with respect to labor. 30. The Debtor requires services from certain Foreign Venders that provide tug and push boats in order to move the vessels in its Fleet. Absent payment, these Foreign Vendors will likely not provide the essential movement services for the Debtor s fleet. As of the Petition 9

10 Document Page 10 of 19 Date, the Debtor owed Foreign Vendors approximately $21,000 with respect to tug and tow services. 31. If authorized to pay the Foreign Vendor Claims, the Debtor will use commercially reasonable efforts to require the Foreign Vendors to continue to provide supplies or services to the Debtor during this Chapter 11 case consistent with those practices and programs in place prior to the Petition Date, and to waive lien rights it may hold in respect of prepetition obligations that are satisfied by the Debtor s payment. LEGAL BASIS FOR RELIEF REQUESTED A. Sections 363(b) and 105(a) of the Bankruptcy Code Authorize the Payment of Foreign Vendors. 32. Courts have recognized that it is appropriate to authorize the payment of prepetition obligations where necessary to protect and preserve the estate, including an operating business s going-concern value. See In re Boston & Maine Corp., 634 F.2d 1359, 1382 (1st Cir. 1980) (recognizing existence of a judicial power to authorize trustees in reorganization to pay claims... [for] goods or services indispensably necessary to debtors continued operation); see also, In re Lehigh & New England Ry. Co., 657 F.2d 570, 581 (3d Cir. 1981) (quoting In re Penn Cent. Transp. Co., 467 F.2d 100, 102 n.1 (3d Cir. 1972) ( [T]he necessity of payment doctrine... [permits] immediate payment of claims of creditors where those creditors will not supply services or material essential to the conduct of the business until their pre-reorganization claims shall have been paid. ); In re Quality Interiors, Inc., 127 B.R. 391, 396 (Bankr. N.D. Ohio 1991) ( A general practice has developed... where bankruptcy courts permit the payment of certain pre-petition claims, pursuant to 11 U.S.C. 105, where the debtor will be unable to reorganize without such payment. ); In re Ionosphere Clubs, Inc., 98 B.R. 174, 176 (Bankr. S.D.N.Y. 1989) (Rationale for doctrine of necessity is consistent with the paramount goal of Chapter 11, 10

11 Document Page 11 of 19 facilitating the continued operation and rehabilitation of the debtor. ); In re Structurlite Plastics Corp., 86 B.R. 922, 931 (Bankr. S.D. Ohio 1988) ( [A] per se rule proscribing the payment of pre-petition indebtedness may well be too inflexible to permit the effectuation of the rehabilitative purposes of the Code. ). 33. In so doing, these courts acknowledge that several legal theories rooted in Bankruptcy Code sections 105(a) and 363(b) support the payment of prepetition claims as requested here. 34. Courts have relied on Sections 363(b) of the Bankruptcy Code to provide a basis for allowing debtors to make payments to critical pre-petition creditors. Section 363(b)(1) of the Bankruptcy Code provides that, after notice and a hearing, a debtor may use, sell, or lease, other than in the ordinary course of business, property of the estate U.S.C. 363(b)(1). Payment of prepetition obligations may be authorized under this section where a sound business purpose exists for doing so. See Official Comm. of Unsecured Creditors v. Enron Corp. (In re Enron Corp.), 335 B.R. 22, (S.D.N.Y. 2005) (quoting In re Lionel Corp., 722 F.2d 1063, 1071 (2d Cir. 1983)); In re Ionosphere Clubs, Inc., 98 B.R. 174, 175 (Bankr. S.D.N.Y. 1989). 35. The business judgment rule is satisfied where the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company. Official Comm. of Subordinated Bondholders v. Integrated Res., Inc. (In re Integrated Res., Inc.), 147 B.R. 650, 656 (S.D.N.Y. 1992) (quoting Smith v. Van Gorkom, 488 A.2d 858, 872 (Del. 1985)). Where the debtor articulates a reasonable basis for its business decisions (as distinct from a decision made arbitrarily or capriciously), courts will generally not entertain objections to the debtor s conduct. Comm. of Asbestos-Related Litigants v. Johns- Manville Corp. (In re Johns-Manville Corp.), 60 B.R. 612, 616 (Bankr. S.D.N.Y. 1986). 11

12 Document Page 12 of Section 105(a) of the Bankruptcy Code also permits the payment of prepetition claims in appropriate circumstances. Section 105(a) codifies the Court s inherent equitable powers to 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). Under section 105(a), courts may authorize preplan payments of prepetition obligations when essential to the continued operation of a debtor s businesses. See In re Just for Feet, Inc., 242 B.R. 821, 825 (D. Del. 1999); Ionosphere Clubs, 98 B.R. at 176; see also Boston & Maine Corp., 634 F.2d at Here, the payment of the Foreign Vendor Claims is necessary to ensure that the Debtor s operations are not disrupted and to avoid the corresponding decline in the value of its assets attendant to such disruption. Permitting the payment of the Foreign Vendor Claims will preserve the value of the Debtor s estate and its assets, and will therefore provide adequate protection to the parties asserting secured claims in those assets. The Debtor has carefully reviewed its accounts payable and undertaken a process to identify only those vendors essential to ongoing operations. 38. The Debtor has proposed terms for the payment of Foreign Vendors that will permit the Debtor to receive the maximum value for the payment of the Foreign Vendor Claims. 39. To the extent the Foreign Vendor Claims are for goods provided within twenty (20) days of the Petition Date, those claims would constitute administrative priority claims pursuant to Section 503(b)(9). 40. Grounds therefore exist to authorize the payment of the Foreign Vendor Claims under Sections 363(b) and 105(a) of the Bankruptcy Code and under the doctrine of necessity. 12

13 Document Page 13 of 19 RESERVATION OF RIGHTS 41. Nothing contained in this motion is intended to be or shall be construed as (a) an admission as to the validity or priority of any claim against the Debtor, (b) a waiver of the Debtor s right to dispute any claim, or (c) an approval or assumption of any agreement, contract, program, policy, or lease under section 365 of the Bankruptcy Code. If the Court grants the relief sought in this motion, any payment made pursuant to the Court s order is not intended to be and should not be construed as an admission to the validity or priority of any claim or a waiver of the Debtor rights with respect to such claim. FEDERAL RULE OF BANKRUPTCY PROCEDURE 6003(B) IS SATISFIED 42. Federal Rule of Bankruptcy Procedure 6003(b) provides that, to the extent relief is necessary to avoid immediate and irreparable harm, a bankruptcy court may approve a motion to pay all or part of a claim that arose before the filing of the petition prior to twenty-one days after the case is commenced. As described above, obtaining the continued and uninterrupted goods and services provided by the Foreign Vendors is necessary to preserve the Debtor s operations and the value of its assets. The relief requested in this motion is therefore necessary to avoid immediate and irreparable harm and Federal Rule of Bankruptcy Procedure 6003(b) has been satisfied. WAIVER OF FEDERAL RULES OF BANKRUPTCY PROCEDURE 6004(A) AND 6004(H) 43. To implement the relief requested in this motion, the Debtor seeks a waiver of both the notice requirements under Federal Rule of Bankruptcy Procedure 6004(a) and the fourteen (14) day stay of an order authorizing the use, sale, or lease of property under Federal Rule of Bankruptcy Procedure 6004(h). 13

14 Document Page 14 of 19 NOTICE 44. The Debtor will serve this motion and notice of any hearing of such motion upon any known creditor asserting a secured claim against the Debtor, the Debtor s twenty largest unsecured creditors, the Office of the United States Trustee, the Office of the Attorney General of Massachusetts, relevant federal and state taxing authorities and upon any party requesting notice in this proceeding. WHEREFORE, the Debtor request that the Court enter an order, substantially in the form attached as Exhibit B: (a) granting this motion; (b) authorizing, but not directing the Debtor to pay the Foreign Vendor Claims under the terms described in this motion; (c) waiving both the notice requirements under Federal Rule of Bankruptcy Procedure 6004(a) and the fourteen (14) day stay of an order authorizing the use, sale, or lease of property under Federal Rule of Bankruptcy Procedure 6004(h); and (d) granting to the Debtor such other and further relief as may be just and proper. Respectfully submitted, CASHMAN EQUIPMENT CORP., By its proposed counsel, Dated: June 12, 2017 /s/ D. Ethan Jeffery Harold B. Murphy (BBO #362610) D. Ethan Jeffery (BBO #631941) Michael K. O Neil (BBO #658025) Murphy & King, Professional Corporation One Beacon Street, 21st Floor Boston, Massachusetts Telephone: (617) Facsimile: (617) EJeffery@murphyking.com

15 Document Page 15 of 19 IN RE: CASHMAN EQUIPMENT CORP., ET AL. BANKRUPTCY NO (JOINTLY ADMINISTERED) EXHIBIT A TO DEBTOR S MOTION PURSUANT TO 11 U.S.C. 363(B) AND 105(A) FOR ENTRY OF AN ORDER AUTHORIZING, BUT NOT DIRECTING, DEBTOR TO PAY CERTAIN PREPETITION OBLIGATIONS OWED TO CERTAIN FOREIGN VENDORS

16 Document Page 16 of 19 This document is the subject of a motion to impound filed contemporaneously with this motion. Any questions regarding the impoundment of this document may be directed to counsel for the Debtors.

17 Document Page 17 of 19 IN RE: CASHMAN EQUIPMENT CORP., ET AL. BANKRUPTCY NO (JOINTLY ADMINISTERED) EXHIBIT B TO DEBTOR S MOTION PURSUANT TO 11 U.S.C. 363(B) AND 105(A) FOR ENTRY OF AN ORDER AUTHORIZING, BUT NOT DIRECTING, DEBTOR TO PAY CERTAIN PREPETITION OBLIGATIONS OWED TO CERTAIN FOREIGN VENDORS

18 Document Page 18 of 19 UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS (Eastern Division) In re CASHMAN EQUIPMENT CORP., 1 Debtor Chapter 11 Case No ORDER GRANTING DEBTOR S MOTION FOR AN ORDER AUTHORIZING, BUT NOT DIRECTING, THE DEBTOR TO PAY CERTAIN PREPETITION OBLIGATIONS OWED TO CERTAIN FOREIGN VENDORS Upon the Debtor s Motion Pursuant to 11 U.S.C. 363(b) and 105(A) For Entry of an Order Authorizing, but not Directing, Debtor to Pay Certain Prepetition Obligations Owed to Certain Foreign Vendors (the Foreign Vendor Motion ), seeking authority to pay pre-petition obligations to certain foreign vendors identified on Exhibit A to the Foreign Vendor Motion (the Foreign Vendor Claims ); it appearing that notice of the Foreign Vendor Motion was sufficient under the circumstances; and after due deliberation and sufficient cause therefore: THE COURT HEREBY FINDS THAT: A. Capitalized terms not otherwise defined in this order shall have the respective meanings attributed to such terms in the Foreign Vendor Motion. B. The Court has jurisdiction to consider and determine the Foreign Vendor Motion pursuant to 28 U.S.C This is a core proceeding within the meaning of 28 U.S.C. 157(b). Venue is proper before the Court pursuant to 28 U.S.C and Joint administration requested. The other debtors in these Chapter 11 cases are Cashman Scrap & Salvage, LLC, Servicio Marina Superior, LLC, Cashman Canada, Inc. and Mystic Adventure Sails, LLC. 1

19 Document Page 19 of 19 C. Notice of the Foreign Vendor Motion was appropriate given the circumstances. D. No party will be prejudiced by this order. E. The payment of the Foreign Vendor Claims is necessary to ensure that the Debtor s operations are not disrupted and to avoid the corresponding decline in the value of its assets attendant to such disruption. Permitting the payment of the Foreign Vendor Claims will preserve the value of the Debtor s estate and its assets, and will therefore provide adequate protection to the parties asserting secured claims in those assets. F. Good and sufficient cause exists for the entry of this order. NOW THEREFORE, taking into consideration the foregoing findings and all of the evidence before the Court, it is HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS: 1. The Foreign Vendor Motion is granted. 2. The Debtor is authorized, but not directed, to pay the Foreign Vendor Claims upon the terms set forth in the Foreign Vendor Motion. 3. Irrespective of Rules 6004(a) and 6004(h) of the Federal Rules of Bankruptcy Procedure, this order shall be effective immediately upon entry. Dated: UNITED STATES BANKRUPTCY JUDGE 2