Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 1 of 9 NOT FOR PUBLICATION In re FINTUBE, LLC, IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA Case No. 17-11274-M Chapter 11 Filed/Docketed Jan 12, 2018 Debtor. ORDER APPROVING PROCEDURES FOR THE SALE OF SUBSTANTIALLY ALL OF THE PROPERTY OF THE DEBTOR S ESTATE BY AUCTION This matter comes before the Court pursuant to the Debtor s Motion for Approval of Procedures for Sale of Substantially All of the Property of the Estate by Auction; Approval of the Form of Notice of the Sale, and Notice of the Sale Hearing and Request that No Notice Hereof Be Required or, In the Alternative, that a Hearing Hereon Be Set On Shortened and Limited Notice, filed November 21, 2017 (Doc. No. 151) ( Sale Procedures Motion ). The Court, having reviewed the Sale Procedures Motion, having conducted a hearing, receiving evidence and statements of counsel, and being otherwise familiar with the matters or record in the above case, FINDS 1. This Court has jurisdiction pursuant to 28 U.S.C. 157(a) and (b)(1) and 1334, LCvR 84.1(a) in the United States District Court for the Northern District of Oklahoma and 11 U.S.C. 105(a). This is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A)(N) and (O). Venue is proper pursuant to 28 U.S.C. 1409(a). 2. Notice of the Sale Procedures Motion is sufficient and in accordance with the Court s Order respecting notice entered November 22, 2017 (Doc. No. 153) as evidenced by the Debtor s Certificate of Service, filed November 27, 2017 (Doc. No. 155) and is sufficient and proper.
Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 2 of 9 3. For good cause otherwise shown, IT IS THEREFORE ORDERED: The following procedures for the sale of substantially all of the remaining property of the Estate pursuant to 11 U.S.C. 363 by auction according to the following procedures ( Sale Procedures ) is APPROVED. 1. At such time as the Debtor receives an acceptable offer to purchase the assets offered for sale (which would consist of substantially all of the remaining assets of the Estate) ( Sale Assets ) in the form of an asset purchase agreement or similar ( Initial Offer ), Debtor will file a motion for approval of the Initial Offer, with the sale to be free and clear of all liens, claims, encumbrances and interests pursuant to 11 U.S.C. 363(b), (d) and (f), subject to higher and better offers to be obtained through written bids and an auction ( Sale Motion ). A Sale Motion conforming to this requirement was filed on January 8, 2018 (Doc. No. 165). 2. Debtor has obtained dates from the Court for a hearing (the Sale Hearing ) to receive higher and better offers from Qualified Bidders (defined below), to consider objections to the Sale Motion, to approve a sale to the highest and best bidder and approve a Backup Bid, and to waive the 14-day stay provided by B.R. 6004(h) and for other related relief. 3. Debtor shall provide notice of the Initial Offer and of the Sale Hearing and all applicable deadlines to all creditors, parties in interest and to all known and prospective purchasers for the Sale Assets in substantially the form attached hereto ( Notice ). 4. Debtor and Debtor s marketing agent, ClearRidge, LLC, may continue to solicit and receive other or higher offers to purchase the Sale Assets from Qualified Bidders. A Qualified Bidder or Qualified Bid would consist of the following: A. An offer, binding if approved by the Court, in the form of an asset purchase agreement or similar agreement substantially in the form of the Initial Offer. 2
Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 3 of 9 Offers must include a black-lined version of such offer comparing it to the Initial Offer. B. Offers must exceed the Initial Offer by at least the amount of any breakup fee and cost reimbursement provided in the Initial Offer, plus $10,000. C. Offers to be accompanied by an earnest money deposit ( Deposit ), in current funds, equal to the same percent of earnest money deposit as provided in the Initial Offer. The Deposit shall be retained in Debtor s counsel s trust account and be subject to the jurisdiction of the Court to be returned to any unsuccessful bidder, except to the Backup Bidder (defined below) with any interest actually earned thereon, within two (2) business days after the entry of a final Order approving the Winning Bid (defined below). D. A party making an offer must be able to demonstrate through audited financial statements or other evidence satisfactory to the Debtor of an ability to close the sale. E. Offers must be received no later than 2 business days prior to the Sale Hearing. F. Parties submitting offers in compliance with the above, including the party submitting the Initial Offer, shall be Qualified Bidders and such offers shall be Qualified Bids. G. Each Qualified Bidder shall be allowed to participate in an auction at the Sale Hearing by appearing in person or through a duly authorized representative. 3
Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 4 of 9 H. Auction procedures shall: Require that any offer be in an amount at least equal to the Initial Offer plus any breakup fee and cost reimbursement provided in the Initial Offer, plus $10,000; Require that the minimum bidding increment thereafter be $10,000. Allow each Qualified Bidder the right to continue to improve its bid at the auction. Require that each increased offer be in the same form and terms, other than price, as the bidder s Qualified Bid. I. At the Sale Hearing, the Debtor may (a) modify the bid procedures or add additional terms and conditions, subject to Court approval; or (b) reject, at any time before the entry of an Order of the Bankruptcy Court approving the Sale Motion, any bid that is (i) inadequate or insufficient, (ii) not in conformity with requirements of the Bankruptcy Court, the bid procedures or the terms and conditions of the sale, or (iii) contrary to the best interests of the Debtor, the Estate or the creditors. IT IS FURTHER ORDERED that the Notice of Sale by Auction of Substantially All of the Assets of the Debtor Free and Clear of All Liens, Claims, Encumbrances and Interests Pursuant to 11 U.S.C. 363; Notice of Opportunity to Bid, Bidding Qualifications and Bidding Procedures; Notice of Setting for a Hearing to Receive Bids and for Approval of Sale, and Deadline to File Objections to the Sale, substantially in the form attached hereto, is approved. DATED this 12th day of January, 2018. BY THE COURT: TERRENCE L. MICHAEL, CHIEF JUDGE UNITED STATES BANKRUPTCY COURT 4
Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 5 of 9 IN THE UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA In re FINTUBE, LLC, Case No. 17-11274-M Chapter 11 Debtor. NOTICE OF SALE BY AUCTION OF SUBSTANTIALLY ALL OF THE ASSETS OF THE DEBTOR FREE AND CLEAR OF ALL LIENS, CLAIMS, ENCUMBRANCES AND INTERESTS PURSUANT TO 11 U.S.C. 363; NOTICE OF OPPORTUNITY TO BID, BIDDING QUALIFICATIONS AND BIDDING PROCEDURES; NOTICE OF SETTING FOR A HEARING TO RECEIVE BIDS AND FOR APPROVAL OF SALE, AND DEADLINE TO FILE OBJECTIONS TO THE SALE PLEASE TAKE NOTICE AS FOLLOWS: On January 8, 2018, Debtor filed the Debtor s Motion for Approval of Sale of Property of the Estate, Including Assumption and Assignment of Executory Contracts, Free and Clear of Liens, Claims, Encumbrances, and Interests; For Approval to Pay a Commission Connection with the Sale at Closing; For Approval to Pay the Allowed Secured Claim of BOKF, N.A. from the Sale Proceeds at Closing; and for Waiver of the Fourteen Day Stay Provided by Bankruptcy Rule 6004(h) ( Sale Motion ), (Doc. No. 165). The Sale Motion generally requests approval of the sale of substantially all of the remaining assets of the Debtor ( Sale Assets ) free and clear of all liens, claims, encumbrances and interests to Kentube Technologies, LLC for a total cash price of $6,100,000 pursuant to an Asset Purchase Agreement, a copy of which is attached to the Sale Motion (the Initial Offer ). The Initial Offer is subject to higher and better offers. Copies of the Sale Motion may be obtained from the Court s website or, at no cost, on request of Counsel for Debtor listed below. Higher and better offers to purchase the Sale Assets will be received by the Debtor and be considered by the Court according to the bidding procedures set forth below.
Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 6 of 9 Important Settings and Deadlines The Court has set February 13, 2018 at 10:00 a.m. for a hearing to be held in Courtroom No. 2, United States Bankruptcy Court, 224 South Boulder, Tulsa, Oklahoma, 74103 ( Sale Hearing ) to: (i) Receive higher or better offers, in writing or by auction at the Sale Hearing, from Qualified Bidders to purchase the Sale Assets, (ii) (iii) Consider any objections to the Sale Motion. Approve the Sale Motion including approval of the sale to the party making the highest and best offer as determined by the Court ( Winning Bid ) and grant other relief required in the Sale Motion. (iv) Approve the second best offer ( Backup Bidder ) to close the sale on the terms of its last offer, in the event the Winning Bid, for any reason, fails to close. In order to be a Qualified Bid, an offer must be in writing and received by the Debtor and ClearRidge, LLC at the addresses shown below no later than close of business on February 9, 2018. The Court has fixed February 7, 2018 as the last date to file objections to the Sale Motion. Sale Hearing and Court Approval At the Sale Hearing, the Court will receive the Debtor s recommendation as to the highest and best offer received from Qualified Bidders prior to the Sale Hearing (the Initial Offer ). The Court will thereafter receive bids, by auction, from Qualified Bidders, seeking to purchase the Sale Assets. At the conclusion of the auction, the Court will consider the Sale Motion, the auction results, and will receive recommendations from the Debtor, BOKF, N.A. and the Official 2
Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 7 of 9 Committee of Unsecured Creditors as to their respective views on the respective offers and as to which offer should be approved. The Court will also consider the objections of any parties to the sale and may at that time enter an Order approving the Sale Motion and the offer determined to be the highest and best offer (the Winning Bid ) and approve a Backup Bidder to close the sale in the event the Winning Bidder fails to close. Bidding Qualifications Parties may submit higher or better offers to purchase the Sale Assets. In order to submit a bid for the Sale Assets, prospective purchasers must: (A) Submit a written offer to Debtor, binding if approved by the Court, in the form of a purchase agreement or similar agreement substantially in the form of the Initial Offer. Offers must include a black-lined version of such offer comparing it to the Initial Offer. Offers must be submitted in writing to the Debtor at: Fintube, LLC 555 W. 41 st St. Tulsa, Oklahoma 74107 with a copy to ClearRidge, LLC at: ClearRidge, LLC 427 S. Boston Avenue. Tulsa, Oklahoma 74103 (B) Offers must exceed the Initial Offer by at least the amount of the breakup fee and cost reimbursement provided in the Initial Offer plus $10,000, that being a total minimum increase over the Initial Offer of $310,000. (C) Offers must be accompanied by an earnest money deposit ( Deposit ), in current funds, equal to the same percent of earnest 3
Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 8 of 9 money deposit as provided in the Initial Offer. The Deposit shall be retained in Debtor s counsel s trust account and be subject to the jurisdiction of the Court to be returned to any unsuccessful bidder within two (2) business days after Court approval of the Winning Bid, except to the Backup Bidder (defined below) with any interest actually earned thereon, within two (2) business days after the entry of a final Order approving the Winning Bid (defined below). (D) A party making an offer must be able to demonstrate through audited financial statements or other evidence satisfactory to the Debtor of an ability to close the sale. (E) Parties submitting offers in compliance with the above shall be Qualified Bidders and such offers shall be Qualified Bids. The party making the Initial Offer shall be a Qualified Bidder. Auction Bidding Procedures Each Qualified Bidder shall be allowed to participate in an auction at the Sale Hearing by appearing in person or through a duly authorized representative. Auction procedures shall include: Bids must be in an amount at least equal to the Initial Offer plus the breakup fee and cost reimbursement provided in the Initial Offer, plus $10,000 (the minimum increased amount over the Initial Offer necessary to be a Qualified Bidder). The minimum bidding increment thereafter will be $10,000. 4
Case 17-11274-M Document 169 Filed in USBC ND/OK on 01/12/18 Page 9 of 9 Each Qualified Bidder shall have the right to continue to improve its bid at the auction. All bids and offers must be in the same form and terms, other than price, as the bidder s Qualified Bid. Debtor s Reservation of Rights at the Auction At the Sale Hearing, the Debtor may (a) modify the bid procedures or add additional terms and conditions, subject to Court approval; or (b) reject, at any time before the entry of an Order of the Bankruptcy Court approving the Sale Motion, any bid that is (i) inadequate or insufficient, (ii) not in conformity with requirements of the Bankruptcy Court, the bid procedures or the terms and conditions of the sale, or (iii) contrary to the best interests of the Debtor, the Estate or the creditors. DATED January, 2018. DOERNER, SAUNDERS, DANIEL & ANDERSON, L.L.P. By: /s/ Sam G. Bratton II Sam G. Bratton II, OBA No. 1086 J. Patrick Mensching, OBA No. 6136 Williams Center Tower II Two West Second St., Suite 700 Tulsa, Oklahoma 74103 Telephone (918) 582-1211 Facsimile (918) 591-5360 sbratton@dsda.com pmensching@dsda.com Counsel for Debtor 5