Case Document 639 Filed in TXSB on 06/10/16 Page 1 of 8

Transcription

1 Case Document 639 Filed in TXSB on 06/10/16 Page 1 of 8 IN THE UNITD STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS CORPUS CHRISTI DIVISON IN RE: Chapter 11 SHERWIN ALUMINA COMPANY, LLC, et al. Case No Debtors Jointly Administered SHERWIN ALUMINA COMPANY, LLC, et al, Contested Matter Movant v. Debtors' Second Omnibus CATERPILLAR FINANCIAL Objection to Claims (doc 628) SERVICES CORPORATION, Respondent Re: Claim No. 132 RESPONSE OF CATERPILLAR FINANCIAL SERVICES CORPORATION TO DEBTORS' SECOND OMNIBUS OBJECTION TO CLAIMS (doc 628) TO THE HONORABLE DAVID R. JONES CHIEF UNITED STATES BANKRUPTCY JUDGE: Comes now Caterpillar Financial Services Corporation ("Caterpillar Financial" and files its Response to Debtors' Second Omnibus Objection to Claims (doc 628, the "Claim Objection") and respectfully represents: Background 1. On January 11, 2016, Sherwin Alumina Company, LLC ("Debtor") filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code with this Court and continues as a debtor in possession at this time. 2. On February 10, 2016, the Court entered an Order Establishing Bar Date which set March 11, 2016 as the deadline for filing proofs of claim (doc 248). Response of Caterpillar Financial Services Corporation to Debtors' Second Omnibus Objection to Claims Page 1

2 Case Document 639 Filed in TXSB on 06/10/16 Page 2 of 8 3. On March 8, 2016, Caterpillar Financial filed a Proof of Claim in this case (Claim No. 132, the "Caterpillar Financial Claim", copy attached). 4. The Caterpillar Claim was timely filed and is supported by attached copies of documents signed by the Debtor to prove the debt. Debtors Objection to Caterpillar Financial Claim 5. The Debtors objections to the Caterpillar Financial Claim are as follows (see doc 628-1, page 5): This Disputed Claim asserts a contingent claim for potential future claims related to the future assumption or rejection of an executory contract or unexpired lease that the Debtors have not yet assumed. This Disputed claim asserts amounts payable for post-petition goods and services, if such services are administrative expenses, such amounts have been budgeted to be paid out of cash prior to emergence date. Factual Basis to Support the Claim 6. Caterpillar Financial holds an unexpired lease of twenty-five units of Caterpillar Equipment described as follows (the "Caterpillar Equipment"): 2014 Caterpillar 924K WHEEL LOADER S/N PWR Caterpillar 938K WHEEL LOADER S/N SWL Caterpillar 416FST BACKHOE LOADER S/N KSF Caterpillar 301.4C HYDRAULIC EXCAVATOR S/N LJK Caterpillar 272D SKID STEER LOADER S/N B5W Caterpillar 226B3 SKID STEER LOADER S/N MWD Caterpillar 924K WHEEL LOADER S/N PWR Caterpillar 924K WHEEL LOADER S/N PWR Caterpillar 924K WHEEL LOADER S/N PWR Caterpillar 301.4C HYDRAULIC EXCAVATOR S/N LJK Caterpillar 272D SKID STEER LOADER S/N B5W Caterpillar 272D SKID STEER LOADER S/N B5W Caterpillar 226B3 SKID STEER LOADER S/N MWD Caterpillar 226B3 SKID STEER LOADER S/N MWD06043 Response of Caterpillar Financial Services Corporation to Debtors' Second Omnibus Objection to Claims Page 2

3 Case Document 639 Filed in TXSB on 06/10/16 Page 3 of Caterpillar 226B3 SKID STEER LOADER S/N MWD Caterpillar 226B3 SKID STEER LOADER S/N MWD Caterpillar 226B3 SKID STEER LOADER S/N MWD Caterpillar 980K WHEEL LOADER S/N W7K Caterpillar 980K WHEEL LOADER S/N W7K Caterpillar 312EL HYDRAULIC EXCAVATOR S/N MJD Caterpillar 312EL HYDRAULIC EXCAVATOR S/N MJD Caterpillar 312EL HYDRAULIC EXCAVATOR S/N MJD Caterpillar 324EL HYDRAULIC EXCAVATOR S/N PNW Caterpillar 226B3 SKID STEER LOADER S/N MWD Caterpillar 226B3 SKID STEER LOADER S/N MWD On or about December 30, 2013, Caterpillar Financial as Lessor and Sherwin Alumnina Company, LLC as Lessee made and signed a written Lease of the Caterpillar Equipment for a term of 60 months beginning on January 1, 2014 for the agreed monthly rent of $48, per month payable on the last day of each month for the term of the Lease (the "Lease"), a true copy of which is attached hereto, incorporated herein by reference, and marked Caterpillar Exhibit Caterpillar Financial's rights in the Caterpillar Equipment were perfected by filing of UCC-1 Financing Statements with the Secretary of State of Delaware, true copies of which are attached hereto, incorporated herein by reference, and marked Caterpillar Exhibit The Lease is a true lease governed by Article 2A of the Uniform Commercial Code and is not a disguised security agreement. 10. Caterpillar Financial filed its proof of claim in this case in the amount of $2,352, as a holder of an unexpired lease of the Caterpillar Equipment, claim number The Debtor paid rent called for by the Lease to Caterpillar Financial through December 31, Pre-petition arrears consist of only the daily pro rata rent for the 10 days from January until the date of the Debtors' petition, January 11, The total prepetition cure amount is: $15, Response of Caterpillar Financial Services Corporation to Debtors' Second Omnibus Objection to Claims Page 3

4 Case Document 639 Filed in TXSB on 06/10/16 Page 4 of The Caterpillar Equipment remains in the Debtors' possession as of the date of this Response, and the Debtor is continuing to use and operate the Caterpillar Equipment. 13. As of the date of this Response, the Debtor has made the following post-petition rental payments to Caterpillar Financial: Payments Date Paid Amount Check /7/2016 $32, Check /14/2016 $48, Check /21/2016 $96, /25/2016 $48, Total: $225, Legal Basis to Support the Claim 14. The Debtor has not assumed or rejected the Lease, as of the date of this Response. 15. If the Debtor elects to assume the Lease, then the Debtor must assume the entire unexpired Lease without modification and pay the Lease according to its terms. 16. Section 365(b)(1) of the Bankruptcy Code provides that the Debtor may assume or reject the unexpired Lease only if the Debtor cures all default and provides adequate assurance of future performance. Richmond Lasing Co. v. Capital Bank, N.A., 762 F.2d. 1303, 1311 (5th Cri. 1985). 17. Section 365(f)(2) of the Bankruptcy Code provides that the Debtor may not assign the Lease and the proposed buyer of the Debtors' assets may not acquire the rights of the Debtor in the leased Caterpillar Equipment, as contemplated by the Debtors' proposed Plan of Reorganization, unless the unexpired portion of the Lease is assumed and the cure amount is paid. 18. If the Debtor elects to reject the Lease, then Caterpillar Financial will be entitled to an unsecured claim for rejection of the Lease under Sections 502(g) and 365(g) of the Bankruptcy Code, and to an administrative priority claim under Sections 503(b) and 365(f)(2) of Response of Caterpillar Financial Services Corporation to Debtors' Second Omnibus Objection to Claims Page 4

5 Case Document 639 Filed in TXSB on 06/10/16 Page 5 of 8 the Bankruptcy Code for the amount of the rent at the rate specified in the Lease from and after sixty days after the date of the Debtors' petition until the date on which the Debtor rejects the Lease. 19. Section 365(g) of the Bankruptcy Code provides that a rejection of an unexpired lease constitutes a breach of the lease, and 502(g) provides that a claim arising from the rejection of an unexpired lease shall be determined, and shall be allowed under subsection (a), (b) or (c) or disallowed under subsection (d) or (e) of Section 502 the same as if such claim had arisen before the date of the filing of the petition. 20. Regardless of whether the Lease is assumed or rejected, Caterpillar Financial is entitled to an administrative priority claim for administrative rent for the Debtors post-petiton use and operation of the Caterpillar Equipment. 21. Section 365(d)(4) of the Bankruptcy Code provides that the Debtor "...shall timely perform all of the obligations of the debtor,... first arising from or after 60 days after the order for relief in a case under chapter 11 of this title under an unexpired lease of personal property...". 22. Caterpillar Financial is entitled to an administrative priority claim under Section 503 of the Bankruptcy Code for administrative rent for the Debtor's post-petition use of the Caterpillar Equipment in the amount of the rent contractually agreed to be paid by the Debtor in the pre-petition Lease. Matter of Braniff Airways, Inc., 783 F.2d. 1283, (5th Cir. 1986). The amount of the administrative priority rent is at the rate specified in the Lease from and after sixty days after the date of the Debtor's petition until the date on which the debtor rejects the Lease. In re Magnolia Gas co., L.L.C., 255 B.R. 900, (Bankr. W.D.Okla. 2000); In re Eastern Agri-Systems, Inc., 258 B.R. 352, (Bankr. E.D.N.C. 2000). Response of Caterpillar Financial Services Corporation to Debtors' Second Omnibus Objection to Claims Page 5

6 Case Document 639 Filed in TXSB on 06/10/16 Page 6 of 8 Declaration of Cynthia Lyons 23. This Response is supported by the attached exhibits and by the Declaration of Cynthia Lyons attached hereto. Contact Information 24. The name, address, telephone number and address of the attorney for Caterpillar Financial to whom the attorneys for the Debtors should serve a reply to the Response is: John Mayer Ross, Banks, May, Cron & Cavin, P.C San Felipe, Suite 550 Houston, TX Phone jmayer@rossbanks.com 25. The name, address, telephone number and address of the party with authority to reconcile, settle, or otherwise resolve the objection on the claimants' behalf is: Tracie K. Shockley Corporate Counsel Caterpillar Financial Services Corporation 2120 West End Avenue Nashville, TN Phone traicie.shockley@cat.com Caterpillar Financial requests that all negotiations be communicated to it attorney of record John Mayer. Response of Caterpillar Financial Services Corporation to Debtors' Second Omnibus Objection to Claims Page 6

7 Case Document 639 Filed in TXSB on 06/10/16 Page 7 of 8 Prayer Wherefore, premises considered, Caterpillar Financial Services Corporation prays that the Debtors' objection to Caterpillar Financial Claim Number 132 be denied. Respectfully submitted, ROSS, BANKS, MAY, CRON & CAVIN, P.C. By: John Mayer Southern District of Texas Number Texas Bar Number San Felipe, Suite 550 Houston, Texas Phone Fax jmayer@rossbanks.com Attorneys for Caterpillar Financial Services Corporation CERTIFICATE OF SERVICE I certify that I served true copies of this document and all attachments upon all persons who have entered an appearance in this case electronically by means of the Court's CM/ECF system, and also to the following persons and parties by to the following addresses: Kirkland & Ellis LLP Attn: Joshhua A. Sussberg 601 Lexington Avenue New York, New York Attorneys for Debtors Kirkland & Ellis LLP Attn: Gregory F. Pesce Attn: James H. M. Sprayregen 300 North LaSalle Chicago, Illinois Attorneys for Debtors Joshua.sussberg@kirkland.com gregory.pesce@kirkland.com james.sprayregan@kirkland.com Response of Caterpillar Financial Services Corporation to Debtors' Second Omnibus Objection to Claims Page 7

8 Case Document 639 Filed in TXSB on 06/10/16 Page 8 of 8 Zack A. Clement Zack A. Clement PLLC 3753 Drummond Houston, Texas Attorney for Debtors Curtis, Mallet-Prevost, Colt & Mosle LLP Attn: Steven J. Reisman 101 Park Avenue New York, New York Attorneys for Prepetition Secured Credit Facility zack.clement@icloud.com sreisman@curtis.com Andrews Kurth LLP Attn: Ashley Gargour ashleygargour@andrewskurty.com Attn: Timothy S. McConn timmcconn@andrewskurth.com Attn: Robin Russell rrussell@andrewskurth.com 600 Travis, Suite 4200 Houston, TX Attorneys for the Official Creditors Committee Jordan Hyden Womble Culbreth & Holzer PC Attn: Nathaniel Peter Holzer Attn: Shelby A. Jordan 500 N Shoreline Dr., Suite 900 Corpus Christi, TX Attorneys for Glencore, Ltd. and Commodity Funding, LLC United States Trustee Region 7 Attn: Stephen Douglas Statham 606 North Carancahua Street, Suite 1107 Corpus Christi, Texas Attorney for the U.S. Trustee pholzer@jhwclaw.com sjordan@jhwclaw.com stephen.statham@usdoj.gov This service was completed on June 10, John Mayer Response of Caterpillar Financial Services Corporation to Debtors' Second Omnibus Objection to Claims Page 8

9 Case Document Filed in TXSB on 06/10/16 Page 1 of 7

10 Case Document Filed in TXSB on 06/10/16 Page 2 of 7

11 Case Document Filed in TXSB on 06/10/16 Page 3 of 7

12 Case Document Filed in TXSB on 06/10/16 Page 4 of 7 Basis of Claim This proof of claim is filed at this time in order to comply with the claims bar date of March 11, 2016 set by the Court in the Order Setting the Bar Date for Filing Proofs of Claim (doc 248) entered on February 10, Caterpillar Financial Services Corporation is the holder of an unexpired equipment lease with the Debtor Sherwin Alumina Company, LLC. As of the date of this proof of claim, the Debtor has not made an election of whether to assume or reject the unexpired lease, and the deadline for the Debtor to make that election has not expired and will not expire prior to the claims bar date. Exhibits This proof of claim is supported by the following exhibits, true copies of which are attached to and filed with this proof of claim: Exhibit 1 Purchase Agreement Exhibit 2 Tax Lease Exhibit 3 Financing Statement Exhibit 4 Construction Equipment Application Survey Exhibit 5 Open Payments and History Equipment Lease Exhibit 2 - Tax Lease is a true finance lease governed by Article 2A of the Uniform Code and Section 365 of the Bankruptcy Code, not a security agreement. Leased equipment is 25 units of Caterpillar equipment. Term is 60 months from 1/1/2013 to 12/31/ months have expired and 36 months remain unexpired as of the petition date. Monthly rent is $48, per month. There are no additional charges for taxes or insurance. Equipment The leased equipment is described as follows: Caterpillar 924K WHEEL LOADER S/N PWR02218 Caterpillar 938K WHEEL LOADER S/N SWL Caterpillar 416FST BACKHOE LOADER S/N KSF00967 Caterpillar 301.4C HYDRAULIC EXCAVATOR S/N LJK01074 Caterpillar 272D SKID STEER LOADER S/N B5W00318 Caterpillar 226B3 SKID STEER LOADER S/N MWD05774 Caterpillar 924K WHEEL LOADER S/N PWR02336 Caterpillar 924K WHEEL LOADER S/N PWR02358

13 Case Document Filed in TXSB on 06/10/16 Page 5 of 7 Caterpillar 924K WHEEL LOADER S/N PWR02360 Caterpillar 301.4C HYDRAULIC EXCAVATOR S/N LJK01069 Caterpillar 272D SKID STEER LOADER S/N B5W00368 Caterpillar 272D SKID STEER LOADER S/N B5W00319 Caterpillar 226B3 SKID STEER LOADER S/N MWD06069 Caterpillar 226B3 SKID STEER LOADER S/N MWD06043 Caterpillar 226B3 SKID STEER LOADER S/N MWD06044 Caterpillar 226B3 SKID STEER LOADER S/N MWD06063 Caterpillar 226B3 SKID STEER LOADER S/N MWD06066 Caterpillar 980K WHEEL LOADER S/N W7K01757 Caterpillar 980K WHEEL LOADER S/N W7K01806 Caterpillar 312EL HYDRAULIC EXCAVATOR S/N MJD00740 Caterpillar 312EL HYDRAULIC EXCAVATOR S/N MJD00739 Caterpillar 312EL HYDRAULIC EXCAVATOR S/N MJD00741 Caterpillar 324EL HYDRAULIC EXCAVATOR S/N PNW01211 Caterpillar 226B3 SKID STEER LOADER S/N MWD06123 Caterpillar 226B3 SKID STEER LOADER S/N MWD05794 Status of Payment of Rent As of the date of the bankruptcy petition, 1/11/2016, rent was paid through 12/31/2015. There are no pre-petition arrears. Post-petition rent is due and unpaid for the months of January and February 2016 in the amount of $48, per month. Rent will continue to accrue in the amount of $48, per month in the future. Under Section 365(5) of the Bankruptcy Code, the Debtor has a sixty day grace period from the date of the filing of the petition during which the Debtor is not required to pay rent. But, whether or not the debtor makes an election to assume or reject the unexpired portion of the lease, Section 365(5) requires that the debtor must pay all rent arising from or after 60 days after the date of the filing of the Chapter 11 petition. Status of Debtor s Assumption or Rejection As of the date of this proof of claim, the Debtor has not made an election of whether to assume or to reject the unexpired term of the Lease. The Lease is a single contract, and must be assumed or rejected in total, and the Debtor does not have the option to assume the Lease as to some of the equipment and reject the lease as to other of the equipment.

14 Case Document Filed in TXSB on 06/10/16 Page 6 of 7 Amount of Claim Total payoff balance is the sum of $2,352, The amount of post-petition arrears is $48, per month from January 11, 2016, the petition date. Priority Claim The amount entitled to priority under Section 503(b)(1) as administrative rent is $48, per month from the petition date, January 11, ROSS, BANKS, MAY, CRON & CAVIN, P.C. By: John Mayer Texas Bar Number Southern District Number San Felipe, Suite 550 Houston, Texas Phone Fax jmayer@rossbanks.com Attorney for Claimant Caterpillar Financial Services Corporation Certificate of Service I certify that I served true copies of this proof of claim together with copies of Exhibits 1 through 5 by mailing same properly addressed and postage prepaid to the Debtors, the Debtors attorneys of record, the proposed buyer and its attorney to the following addresses: Debtors: Sherwin Alumina Company, LLC Sherwin Pipeline, Inc Highway 361 Gregory, TX 78359

15 Case Document Filed in TXSB on 06/10/16 Page 7 of 7 Debtors Attorneys: Zack A. Clement Zack A. Clement PLLC 3753 Drummond Houston, TX James H. M. Sprayregan, P.C. Gregory F. Pesce Kirkland & Ellis LLP Kirkland & Ellis International LLP 300 North LaSalle Chicago, IL Joshua A. Sussberg, P.C. Kirkland & Ellis LLP Kirkland & Ellis International LLP 601 Lexington Avenue New York, NY Proposed Buyer: Glencore Ltd. Attn: Andy Smith Three Stamford Plaza 301 Tresser Blvd. Stamford, CT Attorney for Proposed Buyer: Steven J. Reisman Curtis, Mallet-Prevost, Colt & Mosle LLP 101 Park Avenue New York, NY This service was completed on March 8, John Mayer

16 Case Document Filed in TXSB on 06/10/16 Page 1 of 4

17 Case Document Filed in TXSB on 06/10/16 Page 2 of 4

18 Case Document Filed in TXSB on 06/10/16 Page 3 of 4

19 Case Document Filed in TXSB on 06/10/16 Page 4 of 4

20 Case Document Filed in TXSB on 06/10/16 Page 1 of 10

21 Case Document Filed in TXSB on 06/10/16 Page 2 of 10

22 Case Document Filed in TXSB on 06/10/16 Page 3 of 10

23 Case Document Filed in TXSB on 06/10/16 Page 4 of 10

24 Case Document Filed in TXSB on 06/10/16 Page 5 of 10

25 Case Document Filed in TXSB on 06/10/16 Page 6 of 10

26 Case Document Filed in TXSB on 06/10/16 Page 7 of 10

27 Case Document Filed in TXSB on 06/10/16 Page 8 of 10

28 Case Document Filed in TXSB on 06/10/16 Page 9 of 10

29 Case Document Filed in TXSB on 06/10/16 Page 10 of 10

30 Case Document Filed in TXSB on 06/10/16 Page 1 of 25

31 Case Document Filed in TXSB on 06/10/16 Page 2 of 25

32 Case Document Filed in TXSB on 06/10/16 Page 3 of 25

33 Case Document Filed in TXSB on 06/10/16 Page 4 of 25

34 Case Document Filed in TXSB on 06/10/16 Page 5 of 25

35 Case Document Filed in TXSB on 06/10/16 Page 6 of 25

36 Case Document Filed in TXSB on 06/10/16 Page 7 of 25

37 Case Document Filed in TXSB on 06/10/16 Page 8 of 25

38 Case Document Filed in TXSB on 06/10/16 Page 9 of 25

39 Case Document Filed in TXSB on 06/10/16 Page 10 of 25

40 Case Document Filed in TXSB on 06/10/16 Page 11 of 25

41 Case Document Filed in TXSB on 06/10/16 Page 12 of 25

42 Case Document Filed in TXSB on 06/10/16 Page 13 of 25

43 Case Document Filed in TXSB on 06/10/16 Page 14 of 25

44 Case Document Filed in TXSB on 06/10/16 Page 15 of 25

45 Case Document Filed in TXSB on 06/10/16 Page 16 of 25

46 Case Document Filed in TXSB on 06/10/16 Page 17 of 25

47 Case Document Filed in TXSB on 06/10/16 Page 18 of 25

48 Case Document Filed in TXSB on 06/10/16 Page 19 of 25

49 Case Document Filed in TXSB on 06/10/16 Page 20 of 25

50 Case Document Filed in TXSB on 06/10/16 Page 21 of 25

51 Case Document Filed in TXSB on 06/10/16 Page 22 of 25

52 Case Document Filed in TXSB on 06/10/16 Page 23 of 25

53 Case Document Filed in TXSB on 06/10/16 Page 24 of 25

54 Case Document Filed in TXSB on 06/10/16 Page 25 of 25

55 Case Document Filed in TXSB on 06/10/16 Page 1 of 1 IN THE UNITD STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS CORPUS CHRISTI DIVISON IN RE: Chapter 11 SHERWIN ALUMINA COMPANY, LLC, et al. Case No Debtors Jointly Administered SHERWIN ALUMINA COMPANY, LLC, et al, Contested Matter Movant v. Debtors' Second Omnibus CATERPILLAR FINANCIAL Objection to Claims (doc 628) SERVICES CORPORATION, Respondent Re: Claim No. 132 ORDER The Debtor s Second Omnibus Objection to Claims (doc 628) as to Claim Number 132 filed by Caterpillar Financial Services Corporation is denied. Signed on: David R. Jones United States Bankruptcy Judge