Pg 1 of 8 One Bryant Park New York, New York 10036 Tel: (212) 872-1000 Fax: (212) 872-1002 Lisa G. Beckerman Rachel Ehrlich Albanese Michael P. Cooley 1333 New Hampshire Avenue, N.W. Washington, DC 20036 Tel: (202) 887-4000 Fax: (202) 887-4288 Scott L. Alberino (Admitted Pro Hac Vice) Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Presentment Date: February 3, 2014 at 2:00 pm Objection Deadline: February 3, 2014 at 10:00 am In re: METRO AFFILIATES, INC., et al., 1 Debtors. Chapter 11 Case No. 13-13591 (SHL) Jointly Administered NOTICE OF PRESENTMENT OF STIPULATION AND AGREED ORDER RESOLVING OBJECTION OF ABC BUS LEASING, INC., AND AFFILIATES TO DEBTORS NOTICE OF MISCELLANEOUS ASSET SALE (ACADEMY EXPRESS, LLC) 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal taxpayer identification number, are: 180 Jamaica Corp. (7630); Amboy Bus Co., Inc. (2363); Atlantic Escorts, Inc. (8870); Atlantic Express Coachways, Inc. (2867); Atlantic Express New England, Inc. (4060); Atlantic Express of California, Inc. (5595); Atlantic Express of Illinois, Inc. (5759); Atlantic Express of LA, Inc. (1639); Atlantic Express of Missouri, Inc. (3116); Atlantic Express of New Jersey, Inc. (8504); Atlantic Express of Pennsylvania, Inc. (0330); Atlantic Express Transportation Corp. (4567); Atlantic Queens Bus Corp. (0276); Atlantic Paratrans of NYC, Inc. (1114); Atlantic Paratrans, Inc. (3789); Atlantic Transit, Corp. (5121); Atlantic-Hudson, Inc. (3439); Block 7932, Inc. (3439); Brookfield Transit, Inc. (8247); Courtesy Bus Co., Inc. (5239); Fiore Bus Service, Inc. (1233); Groom Transportation, Inc. (7208); G.V.D. Leasing, Inc. (0595); James McCarty Limo Services, Inc. (8592); Jersey Business Land Co. Inc. (3850); K. Corr, Inc. (4233); Merit Transportation Corp. (8248); Metro Affiliates, Inc. (0142); Metropolitan Escort Service, Inc. (9197); Midway Leasing, Inc. (7793); R. Fiore Bus Service, Inc. (3609); Raybern Bus Service, Inc. (9412); Raybern Capital Corp. (6990); Raybern Equity Corp. (3830); Robert L. McCarthy & Son, Inc. (4617); Staten Island Bus, Inc. (6818); Temporary Transit Service, Inc. (0973); Atlantic Express of Upstate New York Inc. (1570); Transcomm, Inc. (4493); and Winsale, Inc. (2710). The Debtors service address at Metro Affiliates, Inc. s corporate headquarters is 7 North Street, Staten Island, NY 10302. 1
Pg 2 of 8 PLEASE TAKE NOTICE that the undersigned will present the annexed Stipulation and Agreed Order Resolving Objection of ABC Bus Leasing, Inc., and Affiliates to Debtors Notice of Miscellaneous Asset Sale (Academy Express, LLC) (the Proposed Stipulation ) for signature to the Honorable Sean H. Lane, United States Bankruptcy Judge, on February 3, 2014, at 2:00 pm prevailing Eastern Time. PLEASE TAKE FURTHER NOTICE that objections, if any, to the Proposed Stipulation must be made in writing and received by chambers of the Honorable Sean H. Lane, United States Bankruptcy Judge, United States Bankruptcy Court for the Southern District of New York, One Bowling Green, New York, New York 10004 and shall be filed with the Court of the Bankruptcy Court and served in accordance with the Order Pursuant to 11 U.S.C. 105(a) and (d) and Bankruptcy Rules 1015(c), 2002(m), and 9007 Implementing Certain Notice and Case Management Procedures, entered on November 13, 2013 (the Case Management Order ) [ECF No. 65] no later than 10:00 am prevailing Eastern Time on February 3, 2014 (the Objection Deadline ). Unless objections are received by that time, the Proposed Stipulation may be signed and entered without a hearing. PLEASE TAKE FURTHER NOTICE that if any response or objection to the Proposed Stipulation is timely filed by the Objection Deadline, a hearing will be scheduled before the Honorable Sean H. Lane, United States Bankruptcy Judge, Courtroom 701, United States Bankruptcy Court, One Bowling Green, New York, New York 10004. 2
Pg 3 of 8 New York, NY Dated: January 30, 2014 /s/ Lisa G. Beckerman One Bryant Park New York, New York 10036 Tel: (212) 872-1000 Fax: (212) 872-1002 Lisa G. Beckerman Rachel Ehrlich Albanese Michael P. Cooley 1333 New Hampshire Avenue, N.W. Washington, DC 20036 Tel: (202) 887-4000 Fax: (202) 887-4288 Scott L. Alberino Counsel to the Debtors and Debtors in Possession 3
Pg 4 of 8 One Bryant Park New York, New York 10036 Tel: (212) 872-1000 Fax: (212) 872-1002 Lisa G. Beckerman Rachel Ehrlich Albanese Michael P. Cooley 1333 New Hampshire Avenue, N.W. Washington, DC 20036 Tel: (202) 887-4000 Fax: (202) 887-4288 Scott L. Alberino (Admitted Pro Hac Vice) Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: METRO AFFILIATES, INC., et al., 1 Debtors. Chapter 11 Case No. 13-13591 (SHL) Jointly Administered STIPULATION AND AGREED ORDER RESOLVING OBJECTION OF ABC BUS LEASING, INC., AND AFFILIATES TO DEBTORS NOTICE OF MISCELLANEOUS ASSET SALE (ACADEMY EXPRESS, LLC) 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal taxpayer identification number, are: 180 Jamaica Corp. (7630); Amboy Bus Co., Inc. (2363); Atlantic Escorts, Inc. (8870); Atlantic Express Coachways, Inc. (2867); Atlantic Express New England, Inc. (4060); Atlantic Express of California, Inc. (5595); Atlantic Express of Illinois, Inc. (5759); Atlantic Express of LA, Inc. (1639); Atlantic Express of Missouri, Inc. (3116); Atlantic Express of New Jersey, Inc. (8504); Atlantic Express of Pennsylvania, Inc. (0330); Atlantic Express Transportation Corp. (4567); Atlantic Queens Bus Corp. (0276); Atlantic Paratrans of NYC, Inc. (1114); Atlantic Paratrans, Inc. (3789); Atlantic Transit, Corp. (5121); Atlantic-Hudson, Inc. (3439); Block 7932, Inc. (3439); Brookfield Transit, Inc. (8247); Courtesy Bus Co., Inc. (5239); Fiore Bus Service, Inc. (1233); Groom Transportation, Inc. (7208); G.V.D. Leasing, Inc. (0595); James McCarty Limo Services, Inc. (8592); Jersey Business Land Co. Inc. (3850); K. Corr, Inc. (4233); Merit Transportation Corp. (8248); Metro Affiliates, Inc. (0142); Metropolitan Escort Service, Inc. (9197); Midway Leasing, Inc. (7793); R. Fiore Bus Service, Inc. (3609); Raybern Bus Service, Inc. (9412); Raybern Capital Corp. (6990); Raybern Equity Corp. (3830); Robert L. McCarthy & Son, Inc. (4617); Staten Island Bus, Inc. (6818); Temporary Transit Service, Inc. (0973); Atlantic Express of Upstate New York Inc. (1570); Transcomm, Inc. (4493); and Winsale, Inc. (2710). The Debtors service address at Metro Affiliates, Inc. s corporate headquarters is 7 North Street, Staten Island, NY 10302. 1
Pg 5 of 8 This Stipulation is entered into as of January 30, 2014 by and among Metro Affiliates, Inc. and the other debtors and debtors in possession in the above-captioned chapter 11 cases (collectively, the Debtors ), and ABC Bus Leasing, Inc. and certain of its affiliates ( ABC Bus and, together with the Debtors, the Parties ). The Parties hereby stipulate and agree as follows: RECITALS WHEREAS, Atlantic Express Coachways, Inc. ( AECI ) and ABC Bus were parties to forty-six (46) Operating Leases (the Vehicle Leases ) pursuant to which AECI leased vehicles (the Vehicles ) from ABC Bus; WHEREAS, each of the Debtors filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the Bankruptcy Code ) 2 on November 4, 2013; and WHEREAS, the Office of the United States Trustee appointed an official committee of unsecured creditors of the Debtors (the Committee ) on November 13, 2013; and WHEREAS, pursuant to 365(a), the Debtors rejected 11 Vehicle Leases (the Rejected Leases ) pursuant to the Order Granting Fourth Omnnibus Motion for Entry of an Order Authorizing the Debtors to Reject Certain Executory Contracts and Unexpired Leases Effective as of January 14, 2014 [ECF N. 623] (the Rejection Order ); and WHEREAS, ABC Bus is currently holding security deposits in the aggregate amount of $550,000.00 associated with the Rejected Leases (the Rejected Lease Deposits ); and WHEREAS, during the course the Chapter 11 cases, the term of the Vehicle Lease for the Vehicle identified by VIN YE2CC18BX72047217 (the Buyout Vehicle ) matured and the Debtors exercised their buyout right with respect to the Buyout Vehicle; and 2 Unless otherwise noted, section ( ) references are to the Bankruptcy Code. 2
Pg 6 of 8 WHEREAS, ABC Bus is currently holding a security deposit in the aggregate amount of $20,000 associated with the Buyout Vehicle (the Buyout Vehicle Deposit ); and WHEREAS, on January 13, 2014, the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court ) entered an order approving the Debtors Motion (the Motion ) for an Order Approving Expedited Procedures for the Sale or Transfer of Miscellaneous Assets [ECF No. 609] (the Procedures Order ), whereby the Bankruptcy Court approved certain procedures permitting the Debtors to sell or transfer certain assets (the Miscellaneous Assets ) in an efficient and cost-effective manner; and WHEREAS, on January 14, 2014, the Debtors filed a Notice of Miscellaneous Asset Sale (Academy Express) [ECF No. 626] (the Sale Notice ) pursuant to which the Debtors propose to sell or transfer or, where applicable, to assume and assign to Academy Express, LLC ( Academy ) thirty-four (34) Vehicle Leases for Vehicles as identified on Schedule 1 to the Sale Notice; and WHEREAS, on January 22, 2014, ABC Bus filed an objection [ECF No. 669] (the Objection ) to the Sale Notice, in which ABC Bus estimates that it has a claim for damages arising from the rejection of the Rejected Leases in excess of $1,016,349.00 (the Rejection Damages Claim ); and WHEREAS, ABC Bus further asserts in the Objection that, pursuant to 553 and the terms of the Vehicle Leases, ABC Bus has the right to setoff any such Rejection Damages Claim against the Rejected Lease Deposits, the Buyout Vehicle Deposit, and any security deposits corresponding to those Vehicle Leases proposed to be assumed and assigned to Academy in connection with the transactions described in the Sale Notice (each, an Assigned Deposit ), which Assigned Deposits total $1,303,700.00 in the aggregate; and 3
Pg 7 of 8 WHEREAS, the parties have conferred and agreed to resolve the Objection on the terms set forth herein; NOW, THEREFORE, to avoid the delay, cost, and uncertainty of litigation, the Parties agree as follows, subject to Court approval: AGREEMENT 1. Pursuant to 553(a) and the terms of the Vehicle Leases, ABC Bus shall be and hereby is authorized to setoff the Rejected Lease Deposits and the Buyout Vehicle Deposit against the Rejection Damages Claim once such claim has been allowed; provided, however, that any such setoff shall not be permitted to exceed the allowed amount of the Rejection Damages Claim. 2. ABC Bus shall not setoff any allowed Rejection Damages Claim or any other allowed claim that it may have against the Debtors against any Assigned Deposit. All Assigned Deposits shall remain with the corresponding Vehicle Leases and shall be applied, if at all, in accordance with the terms of the Vehicle Leases from and after their assumption and assignment to Academy. 3. Except as otherwise set forth herein, the Debtors and the Committee reserve all rights as to the Rejection Damages Claim and any other claims that ABC Bus may assert against the Debtors, including the right to object to the allowance of the Rejection Damages Claim or any other claim that ABC Bus may assert against the Debtors 4. Immediately upon the date that this Stipulation is So Ordered by the Court, the Objection shall be deemed resolved and withdrawn subject to the terms of the Stipulation, and the Debtors may proceed to consummate the transactions described in the Sale Notice. 4
Pg 8 of 8 5. All time periods set forth in this Stipulation shall be calculated in accordance with Fed. R. Bankr. P. 9006(a). 6. The Debtors are authorized and empowered to take all actions they deem necessary to implement the terms of this Stipulation. Dated: New York, New York January 30, 2014 METRO AFFILIATES, INC. for itself and each of its Debtor affiliates ABC BUS LEASING, INC., AND ITS AFFILIATES By: /s/ Lisa G. Beckerman AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York 10036 Tel: (212) 872-1000 Fax: (212) 872-1002 Lisa G. Beckerman Rachel Ehrlich Albanese Michael P. Cooley Counsel to the Debtors and Debtors in Possession By: /s/ Glenn C. Thompson FOX ROTHSCHILD LLP 75 Eisenhower Parkway, Suite 200 Roseland, NJ 07068 Tel: (973) 992-4800 Fax: (973) 992-9125 Richard M. Meth HAMILTON STEPHENS STEELE + MARTIN, PLLC Charlotte Plaza, Suite 2020 201 South College Street Charlotte, North Carolina 28244-2020 Tel: (704) 227-1057 Glenn C. Thompson Counsel to ABC Bus Leasing, Inc., and its affiliates 5