UNITED STATES BANKRUPTCY COURT Southern District of Georgia

Transcription

1 Case: SDB Doc#:397 Filed:10/02/18 Entered:10/02/18 16:02:51 Page:1 of 1 UNITED STATES BANKRUPTCY COURT Southern District of Georgia In the matter of: Chapter 11 Fibrant, LLC, et al 1 Case No SDB Debtors. Jointly Administered NOTICE OF EXPEDITED HEARING Notice is given that an Expedited Hearing will be held on: October 15, 2018, at 10:00 AM Federal Justice Center, Plaza Bldg, 600 James Brown Blvd (9 th St, Augusta, GA to consider and act upon the following: Debtors Second Motion for Entry of an Order Extending the Exclusivity Periods During Which Only the Debtors May File a Plan and Solicit Acceptances Thereof filed on October 1, (SEE ATTACHED MOTION WITH EXHIBIT A Dated October 2, 2018 B 33 [Rev. 05/12] Lucinda Rauback, CLERK United States Bankruptcy Court Federal Justice Center 600 James Brown Blvd P.O. Box 1487 Augusta, GA The Debtors in these Chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number (if any, are: Fibrant, LLC (6694; Evergreen Nylon Recycling, LLC (7625; Fibrant South Center, LLC (8270; and Georgia Monomers Company, LLC (0042.

2 Page:1 of IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF GEORGIA AUGUSTA DIVISION In re: Chapter 11 FIBRANT, LLC, et al., 1 Case No (SDB Debtors. Jointly Administered SECOND MOTION FOR ENTRY OF AN ORDER EXTENDING THE EXCLUSIVITY PERIODS DURING WHICH ONLY THE DEBTORS MAY FILE A PLAN AND SOLICIT ACCEPTANCES THEREOF Fibrant, LLC ( Fibrant and its affiliated debtors-in-possession (the Debtors, by and through their undersigned counsel, hereby file this Second Motion for Entry of an Order Extending the Exclusivity Periods During Which Only the Debtors May File a Plan and Solicit Acceptances Thereof (the Motion. In support of this Motion, the Debtors respectfully state as follows: JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. 34. Consideration of this Motion is a core proceeding pursuant to 28 U.S.C. 157(b. Venue of this proceeding is proper before this Court pursuant to 28 U.S.C and The statutory predicate for the relief requested herein is section 1121 of title 11 of the United States Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code. 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Fibrant, LLC (6694; Evergreen Nylon Recycling, LLC (7625; Fibrant South Center, LLC (8270; and Georgia Monomers Company, LLC (0042.

3 Page:2 of BACKGROUND 3. On February 23, 2018 (the Petition Date, the Debtors filed voluntary petitions with the Court under chapter 11 of the Bankruptcy Code. 4. The factual background relating to the Debtors commencement of these cases is set forth in detail in the Declaration of David Leach in Support of First-Day Motions and Applications (the First-Day Declaration, filed on the Petition Date and incorporated herein by reference. 5. The Debtors have continued in possession of their properties and continue to manage their business as debtors-in-possession pursuant to Sections 1107(a and 1108 of the Bankruptcy Code. 6. An official committee of unsecured creditors (the Committee was appointed on March 16, As of the date of this filing, no request for the appointment of a trustee or examiner has been made. RELIEF REQUESTED 7. The Debtors first extension of the 120-day and 180-day exclusivity periods set forth in Section 1121(b of the Bankruptcy Code (the Exclusivity Period expire on October 21, 2018, and December 20, 2018, respectively. By this Motion, the Debtors respectfully request the entry of an order, substantially in the form of Exhibit A attached hereto, extending the Exclusivity Period by 120 days. A 120-day extension would extend the periods of time during which only the Debtors may propose and file a plan and solicit acceptances thereof through and including, February 18, 2019, and April 19, 2019, respectively. These dates will not exceed the outside limits set forth in Bankruptcy Code section 1121(d(2. -2-

4 Page:3 of BASIS FOR RELIEF 8. The Bankruptcy Code affords a debtor a period of exclusivity during which only the debtor may file a plan of reorganization and solicit acceptances thereof. This exclusivity period provides a debtor an opportunity to develop and solicit acceptances of its plan without the disruption that could be caused by the filing of competing plans of reorganization by non-debtor parties. Section 1121(b of the Bankruptcy Code provides that a debtor has the exclusive right to file a plan for an initial period of 120 days after the commencement of its chapter 11 case. Section 1121(c(3 of the Bankruptcy Code provides that if a debtor files a plan within the 120- day initial period under section 1121(b, the debtor has 180 days after the commencement of the chapter 11 case within which to solicit and obtain acceptances of its plan, during which time competing plans may not be filed by any party in interest. 9. Under Section 1121(d(1 of the Bankruptcy Code, a bankruptcy court may increase the initial exclusivity periods for cause: [o]n request of a party in interest made within the respective periods specified in subsections (b and (c of this section and after notice and a hearing, the court may for cause... increase the 120-day period or the 180-day period referred to in this section. 10. Section 1121(d(2 of the Bankruptcy Code provides an outside limit to the Court s discretion to extend exclusivity: (A The [deadline for filing a plan] may not be extended beyond a date that is 18 months after the date of the order for relief under this chapter. (B The [deadline for obtaining plan acceptance] may not be extended beyond a date that is 20 months after the date of the order for relief under this chapter. 11. The decision to grant an extension of the Debtors Exclusivity Period is within the Court s sound discretion. See In re Gibson & Cushman Dredging Corp., 101 B.R. 405, 409 (E.D.N.Y Section 1121(d provides that such extensions may be granted for cause. -3-

5 Page:4 of Although it is not defined in the Bankruptcy Code, the cause standard has been interpreted as a general standard that allows the Bankruptcy Court maximum flexibility to suit various types of reorganization proceedings. Id. (internal quotation marks omitted; see also Gaines v. Perkins (In re Perkins, 71 B.R. 294, 297 (W.D. Tenn (stating that the hallmark of section 1121(d is flexibility. 12. Courts have developed the following non-exclusive list of factors to consider in determining whether cause exists to extend a debtor s exclusivity periods: a. the size and complexity of the case, b. the necessity of sufficient time to negotiate and prepare adequate information, c. the existence of good faith progress toward reorganization, d. whether the debtor is paying its debts as they come due, e. whether the debtor has demonstrated reasonable prospects for filing a viable plan, f. whether the debtor has made progress negotiating with creditors, g. the length of time the case has been pending, h. whether the debtor is seeking an extension to pressure creditors, and i. whether unresolved contingencies exist. Sportsman s Link, Inc. v. USPG Portfolio Two, LLC (In re Sportsman s Link, Case No , 2007 Bankr. LEXIS 4739, at *6 *7 (Bankr. S.D. Ga. Dec. 3, 2007; In re Serv. Merch. Co., Inc., 256 B.R. 744, 751 (M.D. Tenn When a court considers the enumerated factors in deciding whether to extend the exclusivity periods, it is not limited to the task of counting factors. In re Dow Corning Corp., 208 B.R. 661, 669 (Bankr. E.D. Mich Sometimes certain factors are more relevant, important or persuasive than others, and sometimes one or more factors determine the particular result. Id. these cases.. An evaluation of the factors above supports extending the Exclusivity Period in -4-

6 Page:5 of A. These Cases are Large and Complex. 14. Both Congress and the courts have recognized that the size and complexity of a debtor s case alone may constitute cause for extension of a debtor s exclusivity period to file a plan and solicit acceptances of such a plan: if an unusually large company were to seek reorganization under chapter 11, the court would probably need to extend the time in order to allow the debtor to reach an agreement.... H.R. Rep. No , at 232 (1977, reprinted in 1978 U.S.C.C.A.N. 5963, These are large and complex cases. As of the Petition Date, the Debtors owed more than $20,000, in trade debts and have large, but unliquidated, environmental liabilities. The Debtors were faced with the operational challenges of decommissioning a large chemical manufacturing plant and releasing virtually all their work force, while continuing to ship remaining ammonium sulfate inventory and investigate past environmental contamination. The size and complexity of these cases supports the extension of the Exclusivity Period. B. The Debtors Need Additional Time to Negotiate the Parameters of a Plan and Prepare a Plan and Disclosure Statement. 16. Since the Petition Date, the Debtors have accomplished a significant amount. The Debtors are negotiating with various parties, including ChemicaInvest Holding, B.V. ( ChemicaInvest, the Committee and the Georgia Environmental Protection Division ( Georgia EPD, regarding a potential plan that would result in significant payments to unsecured creditors and continued remediation of the environmental contaminants affecting the property of the Debtors. To date, these discussions have been highly productive; among other reasons, the Georgia EPD has an obvious interest in the plan s goal of remediating the environmental contaminants affecting the Debtors property. Because governmental approval is a central provision of a proposed plan, the Debtors need to expand the negotiations to include the -5-

7 Page:6 of United States Environmental Protection Agency ( EPA and these expanded negotiations will need additional time. C. The Debtors Have Made Significant Progress in Resolving the Issues Facing their Estates. 17. As described in the foregoing paragraphs, the Debtors have made significant progress in resolving the issues facing their estates. They sold and shipped all remaining ammonium sulfate inventory, implemented significant workforce reductions, and obtained a post-petition loan commitment from ChemicaInvest. As part of their progress, the Debtors have maintained an open, ongoing, dialogue with ChemicaInvest, Georgia EPD and the Committee, and are working to determine the best approach for addressing the environmental contamination of the Debtors property. D. The Debtors are Paying Their Post-Petition Debts as they Become Due. 18. As reflected in the Debtors monthly operating reports, the Debtors have been paying their post-petition bills as they come due. E. The Debtors Have Demonstrated Reasonable Prospects for Filing a Viable Plan. 19. The Debtors have already made extensive progress in laying the groundwork necessary for a successful plan. Based on the progress in these cases to date, the Debtors believe that their prospects for ultimately proposing and filing a viable plan are favorable, though the presence of government entities means the process must be deliberative to a certain extent. F. The Debtors Have Made Progress Negotiating with Creditors. 20. During these cases, the Debtors have made significant progress negotiating with the Committee, Georgia EPD and ChemicaInvest. The Debtors have negotiated and continue to negotiate in good faith with all of their major constituencies. -6-

8 Page:7 of G. This Case Has Not Been Pending for a Substantial Length of Time. 21. This is the Debtors second request for an extension of the Exclusivity Period. Considering the issues facing the Debtors at the start of these cases, the Debtors believe they have made considerable progress to date in developing critical components necessary for successful chapter 11 cases. The Debtors submit that based on the issues involved in these cases, the first extension of the 120-day Exclusivity Period is insufficient time within which to negotiate, draft, and propose a consensual chapter 11 plan. H. The Debtors Are Not Seeking an Extension in Order to Pressure Creditors. 22. The Debtors are not seeking to hide out in chapter 11 for the purpose of pressuring their creditors. To the contrary, the Debtors are diligently working with all constituencies to reach a consensual resolution of the cases. The Debtors, the Committee, the Georgia EPD and ChemicaInvest have made significant progress in bridging the gaps appearing at the beginning of the cases, and the extension of exclusivity is not intended to leverage down any constituency. 23. Moreover, an extension of the Exclusivity Period will not prejudice any of the Debtors creditors. Any party-in-interest can move this Court, on appropriate notice, to reduce the exclusivity periods for cause shown. See 11 U.S.C. 1121(d. This statutory remedy should be more than sufficient to protect the claims of any creditors from any undue delay on the part of the Debtors. I. There are Unresolved Contingencies. 24. As discussed above, the process of developing the best approach for addressing environmental remediation of the plant site is still underway. The Debtors are optimistic that they will be able to negotiate and confirm a plan even though this issue is still outstanding. However, the current proposed approach for addressing the Debtors environmental issues does -7-

9 Page:8 of not yet have the support of all key stakeholders and, like all of the other relevant factors discussed above, weighs in favor of extending exclusivity. 25. For the reasons set forth above, the Debtors submit that the relevant factors weigh in favor of extending exclusivity in these cases. NOTICE 26. Notice of this Motion has been provided to the parties on the Master Service List. In light of the nature of the relief requested, the Debtors submit that no further notice is necessary. CONCLUSION WHEREFORE, the Debtors respectfully requests that this Court: (a enter an order in the form attached hereto as Exhibit A extending the periods of time during which only the Debtors may propose and file a plan and solicit acceptances thereof through and including February 18, 2019 and April 19, 2019, respectively; and (b grant the Debtors such other and further relief as is just and proper. -8-

10 Page:9 of Dated: October 1, 2018 Augusta, Georgia Respectfully submitted, KING & SPALDING LLP /s/ Sarah L. Primrose Paul K. Ferdinands Georgia Bar No Jonathan W. Jordan Georgia Bar No Sarah L. Primrose Georgia Bar No Peachtree Street Atlanta, Georgia Telephone: ( Facsimile: ( and KLOSINSKI OVERSTREET, LLP James C. Overstreet Jr. Georgia Bar No Augusta West Parkway Augusta, GA Telephone: ( Facsimile: ( COUNSEL FOR THE DEBTORS-IN-POSSESSION -9-

11 Page:10 of EXHIBIT A Proposed Order

12 Page:11 of IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF GEORGIA AUGUSTA DIVISION In re: Chapter 11 FIBRANT, LLC, et al., 1 Case No Debtors. Jointly Administered ORDER GRANTING SECOND MOTION FOR ENTRY OF AN ORDER EXTENDING THE EXCLUSIVITY PERIODS DURING WHICH DEBTORS MAY FILE A PLAN AND SOLICIT ACCEPTANCES This matter is before the Court on the Second Motion for Entry of an Order Extending the Exclusivity Periods During Which Only the Debtors May File a Plan and Solicit Acceptances Thereof (the Motion of Fibrant, LLC and its affiliated debtors-in-possession (the Debtors. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion. 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number are: Fibrant, LLC (6694; Evergreen Nylon Recycling, LLC (7625; Fibrant South Center, LLC (8270; and Georgia Monomers Company, LLC (0042.

13 Page:12 of The Court has considered the Motion and the matters reflected in the record of the hearing held on the Motion on [ ], It appears that the Court has jurisdiction over this proceeding; that this is a core proceeding; that notice of the Motion has been given to the parties on the Master Service List established in these cases; that no further notice is necessary; that the relief sought in the Motion is in the best interests of the Debtors, their estates, and their creditors; and that good and sufficient cause exists for such relief. Accordingly, it is hereby ORDERED as follows: 1. The Motion [Docket No. ] is GRANTED. 2. The time period set forth in section 1121(b and (c(2 of the Bankruptcy Code during which only the Debtors may file a chapter 11 plan is extended through and including February 18, The time period set forth in section 1121(c(3 of the Bankruptcy Code during which the Debtors exclusive right to file a plan continues in effect in order to permit the Debtors to obtain acceptances for a plan is extended through and including April 19, Nothing in this Order shall prejudice the Debtors right to seek further extensions of the exclusivity periods pursuant to section 1121(d of the Bankruptcy Code. 5. The Court shall retain jurisdiction to hear and determine all matters arising from the implementation of this Order. 6. Counsel for the Debtors are directed to serve a copy of this Order on all parties on the Master Service List within three days of the entry of this Order and file a certificate of service with the Clerk of the Court. [END OF DOCUMENT]

14 Page: of Prepared and presented by: KING & SPALDING LLP /s/ Sarah L. Primrose Paul K. Ferdinands Georgia Bar No Jonathan W. Jordan Georgia Bar No Sarah L. Primrose Georgia Bar No Peachtree Street Atlanta, Georgia Telephone: ( Facsimile: ( and KLOSINSKI OVERSTREET, LLP James C. Overstreet Jr. Georgia Bar No Augusta West Parkway Augusta, GA Telephone: ( Facsimile: ( COUNSEL FOR THE DEBTORS-IN-POSSESSION