UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

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1 UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION IN RE: NEVERTELL FARM KENTUCKY V, LLC, Debtor. Chapter 11 Case No Judge Jerry A. Funk EMERGENCY MOTION (A) FOR RELIEF FROM THE AUTOMATIC STAY AND ORDER ABANDONING PROPERTY AND (B) FOR A HEARING ON SHORTENED AND/OR LIMITED NOTICE Comes Stone Wall Acquisition, LLC, ultimate assignee of Harleysville National Bank ( SWA ), by and through counsel, pursuant to Sections 105, 362 and 554 of Title 11 of the United States Code (the Bankruptcy Code ), and Rule 4001 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and respectfully moves this Court for an order (i) granting SWA relief from the automatic stay afforded the debtor and debtor-in-possession, Nevertell Farm Kentucky V, LLC, as more fully set forth herein; and (ii) abandoning certain property of Nevertell Farm Kentucky V, LLC as burdensome and of inconsequential value to the estate. In support of this motion (the Motion ), SWA respectfully represents as follows: BACKGROUND 1. On July 25, 2010 (the Petition Date ), Nevertell Farm Kentucky V, LLC ( Nevertell or the Debtor ) filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. The Debtor is an affiliate of 2 other entities (collectively, the Debtors ) who are also Debtors in the following Chapter 11 bankruptcy cases pending in this district: A. In re Stone*Wall Farm Stallions IV, LLC Case No ; and

2 B. In re Stone*Wall Farm Stallions XI, LLC Case No Furthermore, additional affiliates of the Debtors are also Debtors in separate Chapter 11 bankruptcy cases filed on July 20, 2010 which are pending in the United States Bankruptcy Court for the Eastern District of Kentucky: A. In re Stone*Wall Farm Stallions I, LLC Case No ; B. In re Stone*Wall Farm Stallions VII, LLC Case No ; C. In re Stone*Wall Farm Stallions Racing Division I, LLC Case No ; D. In re Malandrin, LLC Case No ; and E. In re Hotcopri, LLC Case No Since the Petition Date, the Debtors have continued in possession of their property and have continued to operate and manage their businesses, as debtors in possession, pursuant to Sections 1107 and 1108 of the Bankruptcy Code. 4. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). 5. According to Debtors, venue of the instant case is proper in this District pursuant to 28 U.S.C. 1408(2) because the Debtor s affiliate, Stone*Wall Farm Stallions XI, LLC, a Debtor in a case pending in this District under Chapter 11 of the Bankruptcy Code, Case No , has its principal and believed to be sole asset, a stallion named Da Stoops located in this District. No other basis exists that would support venue of either of the other Debtors cases in this District. On August 2, 2010, SWA filed a Motion to Transfer Venue of the Debtors cases to the United States Bankruptcy Court for the Eastern District of Kentucky where substantially all of the Debtors assets are located. 2

3 6. No request has been made for the appointment of a trustee or examiner and no Committee of Unsecured Creditors has been formed. THE HARLEYSVILLE NATIONAL BANK LOAN / ASSIGNMENT 7. In or about June 2006 and pursuant to numerous loan documents among the parties, Harleysville National Bank and Trust Company ( HNB ) loaned to Overall Thoroughbreds, LLC, a non-debtor affiliate of the Debtors, the principal sum of $17,000,000 (the Loan ). Copies of relevant documents evidencing the Loan are attached hereto collectively as Exhibit A and are incorporated herein by reference. 8. The Loan is partially secured by a Mortgage, Assignment of Rents and Leases and Security Agreement dated June 23, 2006 (the Mortgage ) executed and delivered to HNB by Nevertell and Audrey Haisfield and Richard Haisfield, husband and wife, covering certain parcels of real property and fixtures and attachments thereon located in Woodford County, Kentucky as more fully described in the Mortgage (collectively, the Property ). The Mortgage was lodged of record in the office of the Woodford County, Kentucky Clerk on June 26, 2006 in Mortgage Book 525, Page 126. A recorded copy of the Mortgage is attached hereto as Exhibit B and incorporated herein by reference. 9. The Loan is further partially secured by a Security Agreement dated June 23, 2006 executed and delivered to HNB by Nevertell (the Nevertell Security Agreement ), in which the Debtor granted to HNB a security interest in all of the Debtor s assets, as more fully set forth in the Nevertell Security Agreement (the Nevertell Collateral ). HNB s interest in the Nevertell Collateral was properly perfected by the filing of a UCC-1 Financing Statement in the Office of the Secretary of State of the Commonwealth of Kentucky on June 26, 2006 as File No. 3

4 Copies of the Nevertell Security Agreement and related financing statement are attached hereto collectively as Exhibit C and are incorporated by reference herein. 10. The Loan is further secured by a Guaranty (Suretyship) Agreement executed and delivered to HNB by the Debtor on June 23, 2006, in which the Debtor unconditionally guaranteed to HNB the full and timely repayment of all sums due under the Loan. 11. In or about June, 2009, HNB notified the Debtors that the Loan was in default and that the entire balance of principal and interest due under the Loan was then presently due and owing. Thereafter, HNB filed a lawsuit against the Debtor and others, in the Circuit Court of Woodford County, Kentucky, seeking, among other things, foreclosure of its interest in the Property and replevin of the Nevertell Collateral (the Kentucky Action ). 12. In November, 2009, HNB further filled a suit in the United States District Court for Eastern District of Pennsylvania (the Pennsylvania Action ) against, among others, Nevertell, seeking money damages in connection with the defendants breach of various loan, security and guaranty agreements. The Debtors filed for bankruptcy within 48 hours of the July 26, 2010 trial date for the Pennsylvania Action. On July 27, 2010, the judge presiding over the Pennsylvania action approved a stipulation whereby the Defendants agreed that judgments in the amount of $16,124, would be entered against various non-debtor Defendants. 13. As of July 27, 2008, Nevertell is similarly indebted to SWA in the amount of in the amount of $16,124, Subsequent to the filing of the Kentucky Lawsuit, in or about June 2010, First Niagara Bank, N.A., successor-by-merger to HNB, assigned all its right, title and interest in the Loan and all relating loan documents to Cincinnati Capital Corporation, who subsequently assigned such interest(s) to SWA. 4

5 BASIS FOR REQUESTED RELIEF 15. Section 362(d) of the Bankruptcy Code provides in relevant part: 11 U.S.C. Section 362(d). (d) On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under [Section 362(a) of the Bankruptcy Code] (1) for cause, including the lack of adequate protection of an interest in property of such party in interest; (2) with respect to a stay of an act against property under [Section 362(a) of the Bankruptcy Code], if (A) the debtor does not have an equity in such property; and (B) such property is not necessary to an effective reorganization. 16. SWA is entitled to relief from the automatic stay pursuant to 11 U.S.C. 362(d)(2), as the Debtor has no equity in the Property or Nevertell Collateral, and neither the Property nor the Nevertell Collateral are necessary to an effective reorganization. 17. Pursuant to 11 U.S.C. 362(g), SWA bears the burden of proving that the Debtor has no equity in the Nevertell Collateral, while the Debtor bears the burden of proof on all remaining issues. 18. Pursuant to the Judgment entered by the Court in the Pennsylvania Action, and according to the records of SWA, Overall Thoroughbreds, LLC and Audrey Haisfield are jointly and severally indebted to SWA in the amount of $16,142, as of July 28, 2010, plus accruing interest, attorneys fees and costs (the Debt ). The Debt is secured by the Property, the Nevertell Collateral and other collateral. 19. Upon information and belief, and based upon an appraisal of the Property as of July 30, 2009, the Property is worth approximately $11,250, A copy of the appraisal dated as of July 30, 2009 will be filed separately as a supplement hereto and is incorporated 5

6 herein by reference. Since the amount of the Debt is $16,142, and the value of the Property is, at most, only $11,250,000.00, there is clearly no equity in the Property Additionally, the Property and Nevertell Collateral are not necessary to an effective reorganization. The Debtor indicated in its Summary of Case [Docket No. 18, 3] that the Debtors operations no longer include the breeding business (for which the Property and Nevertell Collateral was utilized) but, rather, the Debtors businesses now focus on the stallion side of the breeding business. The stallions which form the basis for the stallion side of the breeding business are the stallions named Da Stoops and Value Plus which are believed to be located in Ocala, Florida on property owned by Stone*Wall Farm Ocala, LLC. This is consistent with the recent statement made by counsel for an affiliate of the Debtors on July 20, 2010 to writers for Blood-Horse Publications that [T]he Haisfields are planning to relocate all of their breeding operations to a farm they own in Ocala, Florida. See Exhibit E. 21. Clearly, based on statements made for and on behalf of the Debtors and/or the Debtors affiliates, the Debtors have ceased operations at the Property or do not intend to continue operations at the Property. Consequently, the Property and the Nevertell Collateral, which consists almost entirely of fixtures and other personal property located on the Property, are not necessary to an effective reorganization. 22. Furthermore, SWA was recently informed on August 12, 2010 that the Debtors insurance coverage applicable to the Property had been cancelled sometime in July 2010 and had not been renewed. Upon information and belief, the Debtors currently have no insurance covering the Property. 1 Based on recent appraisals of the Property, Nevertell Collateral and two (2) stallions Da Stoops and Value Plus, the Loan is undersecured by in excess of $4,377, Copies of the recent appraisals of Da Stoops and Value Plus are attached hereto as Exhibit D and incorporated by reference herein. 6

7 23. Because the Debtors have no equity in the Property and Nevertell Collateral, the Property and Nevertell Collateral are not necessary to an effective reorganization, and due to the lack of insurance covering the Property, SWA respectfully requests that this Court enter an Order (i) granting it relief from the automatic stay afforded the Debtor pursuant to 11 U.S.C. 362(a); (ii) abandoning the Property and Nevertell Collateral pursuant to 11 U.S.C. 554(a) and/or (b) as burdensome and of inconsequential value to the Debtor s estate; and (iii) authorizing SWA to take any and all actions to enforce its rights with respect to the Property and Nevertell Collateral, including, but not limited to, pursuing its claims in the Kentucky Action for foreclosure and replevin. 24. SWA further requests that this Court waive the provisions of Rule 4001(a)(3) of the Bankruptcy Rules so that any order of this Court granting the relief requested herein may be effective immediately upon entry thereof. REQUEST FOR AN EXPEDITED HEARING 25. SWA further requests an expedited hearing on this Motion, with shortened and limited notice, to be held on or before August 27, In support of such request, SWA states that due to lack of insurance covering the Property, SWA will suffer immediate and irreparable harm if the instant motion is not heard on an expedited basis and relief from the automatic stay be granted immediately to enable SWA to protect and preserve the Property. 27. Therefore, given the potential prejudice to SWA if the Motion is not heard on an emergency basis, SWA respectfully requests that the Court schedule an expedited hearing on the Motion to be held on or before August 27, 2010, and heard in conjunction with separate motions 7

8 for relief from the automatic stay filed by SWA contemporaneously herewith in regards to stallions owned by the Debtors named Da Stoops and Value Plus. WHEREFORE, Stone Wall Acquisition, LLC respectfully prays that this Court enter an order (i) granting it relief from the automatic stay with respect to the Property and Nevertell Collateral pursuant to 11 U.S.C. 362(d)(2); (ii) abandoning the Property and Nevertell Collateral pursuant to 11 U.S.C. 554(a) and/or (b) as burdensome and of inconsequential value to the Debtor s estate; and (iii) authorizing SWA to take any and all actions to enforce its rights with respect to the Property and Nevertell Collateral, including, but not limited to, pursuing its claims in the Kentucky Action for foreclosure and replevin; (iv) waiving the provisions of Rule 4001(a)(3) of the Bankruptcy Rules; and (v) granting SWA such other and further relief as may be appropriate under the circumstances. Dated: August 15, Respectfully submitted, FROST BROWN TODD LLC /s/ Ellen M. Sharp Ellen M. Sharp, Esq. Florida Bar No West Main Street, Suite 2800 Lexington, Kentucky Tel: (859) Fax: (859) esharp@fbtlaw.com -and- Martin B. Tucker, Esq. 250 West Main Street, Suite 2800 Lexington, Kentucky Tel: (859) Fax: (859) mtucker@fbtlaw.com Attorneys for Creditor, Stone Wall Acquisition, LLC 8

9 CERTIFICATE OF SERVICE I hereby certify that a true and accurate copy of the foregoing was served on this the 15th day of August via this Court s CM/ECF noticing system on all parties receiving electronic notice in this case, and via regular U.S. Mail, postage pre-paid, upon the parties listed on the attached mailing matrix. /s/ Ellen M. Sharp 9

10 Label Matrix for local noticing NeverTell Farm Kentucky V, LLC United States Bankruptcy Court 113A Midway Road 300 North Hogan Street Suite Case 3:10-bk JAF Versailles, KY Jacksonville, FL Middle District of Florida Jacksonville Mon Aug 2 16:47:15 EDT 2010 AM Leonard Audrey Haisfield Cables Home Furnishings PO Box North Lake Way PO Box 427 Piqua, OH Palm Beach, FL Versailles, KY Chrysler Financial Cinncinati Capital Corp Eric S. Golden PO Box Montgomery Rd Burr & Forman LLP Louisville, KY Cincinnati, OH South Orange Avenue Suite 200 Orlando, FL Farm Plan First Insurance Funding Corp Florida Dept. of Revenue PO Box 4450 PO Box Bankruptcy Unit Carol Stream, IL Chicago, IL P.O. Box 6668 Tallahassee, FL (p)internal REVENUE SERVICE Lowe s Business Account NeverTell Farm Kentucky V, LLC 3204 Midway R CENTRALIZED INSOLVENCY OPERATIONS PO Box Versailles, KY PO BOX Atlanta, GA PHILADELPHIA PA Overall Thoroughbreds, LLC 3204 Midway Rd Secretary of the Treasury Stone*Wall Farm Stallions IV 3024 Midway Rd Versailles, KY th & Pennsylvania Ave., NW Versailles, KY Washington, DC The Farm Clinic, Inc. Tractor Supply Company U.S. Securities & Exchange Commission 932 Robinson Street PO Box Reorganization Branch, Atlanta West Lafayette, IN Des Moines, IA Lenox Rd., NE, Ste Atlanta, GA United States Attorney United States Trustee - JAX 11 Woodford County Clerk 300 North Hogan St Suite W Central Blvd, Suite South Main Street Jacksonville, FL Orlando, FL Versailles, KY Woodford Excavation PO Box 122 Versailles, KY Eric S Golden Burr & Forman LLP 450 South Orange Avenue Suite 200 Orlando, FL The preferred mailing address (p) above has been substituted for the following entity/entities as so specified by said entity/entities in a Notice of Address filed pursuant to 11 U.S.C. 342(f) and Fed.R.Bank.P (g)(4).

11 Internal Revenue Service PO Box Philadelphia, PA The following recipients may be/have been bypassed for notice due to an undeliverable (u) or duplicate (d) address. (u)richard Haisfield 724 North Lake Way Palm End of Label Matrix Mailable recipients 25 Bypassed recipients 1 Total 26

Case JAD Doc 22 Filed 09/30/16 Entered 09/30/16 16:50:46 Desc Main Document Page 1 of 11

Case JAD Doc 22 Filed 09/30/16 Entered 09/30/16 16:50:46 Desc Main Document Page 1 of 11 Case 16-23458-JAD Doc 22 Filed 09/30/16 Entered 09/30/16 16:50:46 Desc Main Document Page 1 of 11 IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA IN RE: ) Case No. 16-23458-JAD