shl Doc 275 Filed 07/12/18 Entered 07/12/18 19:05:46 Main Document Pg 1 of 10

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1 Pg 1 of 10 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re FIRESTAR DIAMOND, INC., et al., Debtors. Chapter 11 Case No (SHL) (Jointly Administered) EXAMINER S MOTION FOR AN ORDER SHORTENING NOTICE PERIOD FOR HEARING ON MOTION TO MODIFY ORDER APPOINTING EXAMINER John C. Carney, the duly appointed examiner (the Examiner ) for the jointly administered chapter 11 bankruptcy estates of Firestar Diamond, Inc., A. Jaffe, Inc., and Fantasy, Inc. et al. (the Debtors ), by and through his undersigned counsel, hereby respectfully submits this motion under Rule 9006 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ) and Rule of the Local Bankruptcy Rules for the Southern District of New York ( Local Rules ), for an Order, substantially in the form annexed hereto as Exhibit A, scheduling on shortened notice a hearing to approve the Examiner s motion seeking entry of an order pursuant to 11 U.S.C. 1104(c) modifying this Court s April 13, 2018 Order Pursuant to 11 U.S.C. 1104(c) Directing the Appointment of Examiner (ECF Docket No. 103) (the Modification Motion ). In support of this motion, the Examiner relies upon the Declaration of Jorian Rose, annexed hereto as Exhibit B, and respectfully submits as follows: JURISDICTION & VENUE 1. The Court has jurisdiction over this matter under 28 U.S.C This is a core proceeding under 28 U.S.C. 157(b) in which the Court may constitutionally enter a final order, and the Examiner consents to the entry of a final order by the Court. Venue is proper under 28 U.S.C and This Motion is made under Bankruptcy Rule 9006 and Local Rule

2 Pg 2 of 10 BACKGROUND 3. On or about February 26, 2018, the Debtors filed voluntary petitions for relief pursuant to chapter 11 of title 11 of the United States Code (the Bankruptcy Code ), and the Court entered an order on March 9, 2018 authorizing the joint administration of the Debtors bankruptcy cases. 4. A few weeks thereafter, on March 30, 2018, the Office of the United States Trustee (the UST ) filed a motion seeking the appointment of an examiner in the Debtors cases (the Examiner Motion ) (ECF Docket No. 87) in connection with various allegations of wrongdoing and fraud in the Debtors business operations. After consideration of the Examiner Motion, the Court granted the UST s request pursuant to court order dated April 13, 2018 (the Examiner Order ) (ECF Docket No. 103). 5. On April 20, 2018, the Court entered the Order Approving Appointment of Examiner, and John J. Carney, Esq. was appointed as examiner in the Debtors cases (ECF No. 118). 6. Pursuant to the terms of the Examiner Order, the Examiner is directed to investigate the circumstances surrounding the alleged fraud involving the individual known as Nirav Modi, certain persons or entities affiliated with Nirav Modi (the Modi Entities ) and certain employees of Punjab National Bank, and provide a report to the Court regarding the Examiner s findings on the issues set forth in the Examiner Order. 7. Subsequent to the Examiner s appointment, and the commencement of his investigation, on June 14, 2018, Richard Levin, Esq. was appointed as the chapter 11 trustee of the Debtors cases pursuant to motions filed by both Punjab National Bank and the UST. After the Trustee s appointment, the Examiner and the Trustee conferred regarding the most 2

3 Pg 3 of 10 appropriate division of duties and responsibilities with the goal of benefit to the estates and avoiding duplication of work. 8. As the deadline for the Examiner s report is approaching, and given the benefit of clarity as to the scope of the Examiner s investigation, time is of the essence for the scope of the Examiner s investigation to be clearly defined. As such, the Examiner moves for a hearing on shortened notice for the Court to consider the Examiner s motion modifying the scope of the Examiner s duties in these cases. RELIEF REQUESTED 9. By this Motion, the Examiner requests an order under Bankruptcy Rule 9006(c)(1) and Rule of the Local Bankruptcy Rules for the Southern District of New York shortening the 14-day notice period under Rule of the Local Bankruptcy Rules for the Southern District of New York; setting a hearing on the Modification Motion; setting the deadline to submit any objections or other responses to the Modification Motion five (5) calendar days before the hearing date; and setting the deadline to file any reply in support of the Sale Motion two (2) calendar days before the hearing date. BASIS FOR RELIEF REQUESTED 10. Bankruptcy Rule 9006(c)(1) provides that when an act is required or allowed to be done at or within a specified time..., the court for cause shown may in its discretion with or without motion or notice order the period reduced. Fed. R. Bankr. P. 9006(c)(1). 11. The Examiner respectfully submits that cause exists to reduce the normal notice period here. 12. As set forth in the Declaration of Jorian Rose, given the time constraints on the Examiner to prepare and provide a report to the Court, and the current roles of both the Trustee 3

4 Pg 4 of 10 and the Examiner in this case, an order modifying the scope of the Examiner s duties would provide greater clarity to the parties and facilitate the completion of the Examiner s investigation and the delivery of his report. Notice 13. The Examiner proposes to serve this Motion to: (a) the Office of the United States Trustee; (b) counsel to the Trustee; (c) counsel to the Debtors; (d) counsel to Israel Discount Bank of New York; (e) counsel to HSBC Bank USA, National Association; and (f) counsel to Punjab National Bank. 14. The Examiner submits that, in light of the nature of the relief requested, no other or further notice need be provided. 15. No previous request for the relief sought herein has been made by the Examiner to this or any other court. WHEREFORE, the Examiner respectfully requests that the Court enter an Order substantially in the form of the attached proposed order setting a hearing on the Modification Motion for July 25, 2018, requiring any objections and other responses to the Modification Motion to be filed no later than five (5) calendar days before the hearing date, requiring any replies to be filed no later than two (2) calendar days before the hearing date, and granting such other or further relief as the Court may deem just. Dated: July 12, 2018 New York, New York /s/ Jorian Rose Jorian Rose, Esq. Baker Hostetler LLP 45 Rockefeller Plaza New York, New York Telephone: (212) Facsimile: (212) jrose@bakerlaw.com Counsel for Examiner 4

5 Pg 5 of 10 Exhibit A

6 Pg 6 of 10 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re FIRESTAR DIAMOND, INC., et al., Debtors. Chapter 11 Case No (SHL) (Jointly Administered) ORDER GRANTING EXAMINER S MOTION FOR AN ORDER SHORTENING NOTICE PERIOD FOR HEARING ON MOTION TO MODIFY ORDER APPOINTING EXAMINER Upon the motion of John C. Carney, the duly appointed examiner (the Examiner ) for the jointly administered chapter 11 bankruptcy estates of Firestar Diamond, Inc., A. Jaffe, Inc., and Fantasy, Inc. et al. (the Debtors ), by and through his undersigned counsel, for entry of an Order, under Rule 9006 of the Federal Rules of Bankruptcy Procedure and Rule of the Local Rules of Bankruptcy Procedure, shortening the 14-day notice period for the Modification Motion, shortening applicable response deadlines, and granting related relief (the Motion to Shorten Time ); and upon the declaration of Jorian Rose, annexed to the Motion to Shorten Time as Exhibit B; and this Court having jurisdiction to consider the Motion to Shorten Time and the relief requested therein; and consideration of the Motion to Shorten Time and the relief required being a core proceeding; and venue being proper before this Court; and it appearing that no other or further notice need be provided; and this Court having determined that relief requested in the Motion to Shorten Time being in the best interest of the estates, creditors, and all parties in interest; and this Court having determined that the legal and factual bases set forth in the Motion to Shorten Time establish just cause for the relief granted herein; and upon all of the proceedings had before this Court and after due deliberation and sufficient cause appearing therefor,

7 Pg 7 of 10 IT IS ORDERED: 1. The Motion to Shorten Time is granted The otherwise applicable notice period will be shortened under Bankruptcy Rule 9006(c)(1) as set forth herein. 3. The deadline for service of the Modification Motion to the parties proposed in the Motion to Shorten Time shall be July, Service shall be by overnight mail and where available. 4. The hearing to consider approval of the Modification Motion shall be held on July, 2018 at :.m. EDT before the Honorable Sean H. Lane, United States Bankruptcy Judge of the United States Bankruptcy Court for the Southern District of New York, One Bowling Green, Courtroom 701, New York, New York Any objections and other responses to the Modification Motion shall be filed and served by no later than 4:00 PM EDT five calendar days before the hearing date. 6. Any replies in support of the Modification Motion shall be filed and served by no later than 4:00 PM EDT two calendar days before the hearing date. 7. This Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation, interpretation, and/or enforcement of this Order. ENTERED: Dated: The Honorable Sean H. Lane United States Bankruptcy Judge 1 Unless otherwise defined, all capitalized terms herein shall have the meaning ascribed in the Motion to Shorten Time.

8 Pg 8 of 10 Exhibit B

9 Pg 9 of 10 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re FIRESTAR DIAMOND, INC., et al., Debtors. Chapter 11 Case No (SHL) (Jointly Administered) DECLARATION OF JORIAN ROSE PURSUANT TO LOCAL BANKRUPTCY RULE (A), IN SUPPORT OF MOTION FOR AN ORDER SHORTENING TIME WITH RESPECT TO THE EXAMINER S MOTION TO MODIFY ORDER APPOINTING EXAMINER I, Jorian Rose, make this Declaration under 28 U.S.C and state the following under penalty of perjury: 1. I am counsel to John C. Carney, duly appointed examiner (the Examiner ) for the jointly administered chapter 11 bankruptcy estates of Firestar Diamond, Inc., A. Jaffe, Inc., and Fantasy, Inc. et al. (the Debtors ). 2. I submit this declaration pursuant to Local Bankruptcy Rule (a), in support of the motion for an order shortening the requisite fourteen (14) day notice period (the Motion to Shorten Time ) with respect to the Examiner s motion for entry of an order pursuant to 11 U.S.C. 1104(c) modifying this Court s April 13, 2018 Order Pursuant to 11 U.S.C. 1104(c) Directing the Appointment of Examiner (the Modification Motion ). 3. Since the Examiner s appointment in these cases, and pursuant to the direction of this Court, the Examiner has engaged in a complex, forensic investigation of the activities of the Debtors, their management and employees, and other persons with potential involvement in the alleged fraudulent activities as directed under Order Pursuant to 11 U.S.C. 1104(c) Directing The Appointment Of An Examiner (the Examiner Order ). Pursuant to the Examiner Order, the 1

10 Pg 10 of 10 Examiner is required to file a report with the Court regarding the outcome of his investigation by August 17, Upon the appointment of Richard Levin, Esq. as the chapter 11 trustee (the Trustee ) of the Debtors cases, the Examiner and Trustee have conferred regarding the division of their respective duties and responsibilities in order to maximize the benefits to the estates and avoid duplication of work. 5. As the deadline to submit the Examiner s report is approaching, and in consideration of the additional work that will need to be done to complete the investigation, modification of the Examiner Order setting forth the scope of the Examiner s duties and investigation would be appropriate in order to permit completion of the investigation and delivery to the Court of the report as expeditiously as possible. 6. Accordingly, shortened notice will ensure guidance from the Court on the Examiner s role and the focus of the investigation, and allow it to proceed on an expedited basis. 7. I believe that the proposed notice is adequate and appropriate under the circumstances of this case. Dated: July 12, 2018 New York, New York /s/ Jorian Rose Jorian Rose Counsel to the Examiner of Firestar Diamond, Inc., A. Jaffe, Inc., and Fantasy, Inc. 2