Case Doc 64 Filed 03/07/16 Entered 03/07/16 20:29:53 Desc Main Document Page 1 of 5

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1 Document Page 1 of 5 UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: ) Chapter 15 ) ACE TRACK CO. LTD, ) Case No ) Debtor. ) USCO, S.p.A. S AMENDED MOTION FOR ORDER GRANTING PROTECTION UNDER 11 U.S.C COMES NOW USCO, S.p.A, ( USCO ) and moves the Court for entry of an order granting it protection under 11 U.S.C including, without limitation, holding that FED. R. BANKR. P and 11 U.S.C and 1521(a)(5) and (b) are applicable in the instant case. In support of this motion, USCO presents the following to the Court: 1. On June 4, 2015, this court recognized a foreign main proceeding located in Korea related to Ace Track Co, Ltd. (the Debtor ). See Agreed Order Recognizing Foreign Main Proceeding at Docket No. 52 (the Recognition Order ). 2. SooAn Cho (the Foreign Representative ) is the Debtor s foreign representative for purposes of this chapter 15 case. See Recognition Order. 3. Upon recognition, 11 U.S.C. 361, 362, and 363 became applicable with respect to the Debtor and the property of the Debtor within the territorial jurisdiction of the United States. See 11 U.S.C 1520(a)(1) and (2) and Recognition Order. 4. Upon recognition, the Foreign Representative is authorized to operate the Debtor s business and exercise the rights and powers of a trustee to the extent provided for under 11 U.S.C See 11 U.S.C 1520(a)(3).

2 Document Page 2 of 5 5. The Debtor asserts or did assert claims against Valuepart, Inc. ( VPI ) and/or entities related to Valuepart, Inc. in a proceeding captioned Valuepart, Inc. v. Ace Track Co., Ltd. v. Valuepart Europe S.p.A., Case No The Debtor s claims against VPI, which are believed to include certain accounts receivable, were submitted to mandatory arbitration that is occurring or did occur in Illinois. 7. The Debtor s claims against VPI and their nexus to Illinois were the primary justification for this Court s jurisdiction in this chapter 15 case. See Foreign Representative s Motion for Provisional Relief at Docket No. 8, paragraph 2 ( The Debtor also has substantial accounts receivable... located in the United States... ). 8. On June 16, 2015, this Court entered an Order Modifying the Automatic Stay with the limited purpose to allow the Debtor and VPI to continue the mandatory arbitration for the sole purpose of determining the liability of the claims asserted by Valuepart, Valuepart Europe and the Debtor in the Arbitration, if any. See Order Modifying the Automatic Stay at Docket No. 57 ( Limited Stay Modification Order ). Furthermore, all persons were prohibited from enforcing, attaching, collecting, or recovering by any manner or means any judgment, award, decree or order against Debtor on account of or in connection with any liabilities determined in connection with the Arbitration or any other claims or cause of action. Id. 9. Upon information and belief, the Debtor and VPI are contemplating settlement of the Debtor s claims against VPI or have settled such claims. 10. The Foreign Representative has not been entrusted with the administration or realization of all or part of the Debtor s assets within the territorial jurisdiction of the United States pursuant to 11 U.S.C. 1521(a)(5), and the Foreign Representative has not been entrusted

3 Document Page 3 of 5 with the distribution of all or part of the Debtor s assets located in the United States pursuant to 11 U.S.C. 1521(b). 11. Pursuant to 11 U.S.C. 363(c)(1), without notice and a hearing, the Foreign Representative is only authorized to enter into those transactions which occur in the ordinary course of business. See 11 U.S.C. 363(c)(1). Settlement of ongoing litigation with a creditor is not activity that falls within the ordinary course of business. Further, FED. R. BANKR. P applies in chapter 15 cases and requires the court to approve a compromise or settlement. See In re Grand Prix Assocs., 2009 Bankr. LEXIS 1779 (Bankr. D.N.J. June 26, 2009) (applying Rule 9019 in chapter 15). Accordingly, under 11 U.S.C. 363(c)(1), 1520(a)(3), and Rule 9019, notice and a hearing are required in order to for the Debtor to proceed with its intended settlement with VPI. 12. USCO has a claim against the Debtor and VPI for patent infringement, brought in Case No in the United States District Court for the Western District of Tennessee (the Patent Litigation ). 13. USCO, as the Debtor s sole creditor other than VPI, is in need of sufficient protection from this Court under 11 U.S.C to assure that the Debtor and/or the Foreign Representative does not attempt to settle its claims with VPI and remove any settlement proceeds from the territorial jurisdiction of the United States without first complying with the applicable provisions of the Bankruptcy Code and Federal Rules of Bankruptcy Procedure, including notice to USCO, without providing an opportunity for a hearing before this Court, and without the necessary approval from this Court. THEREFORE, USCO requests the following relief:

4 Document Page 4 of 5 A. The Court enter an order providing that the Limited Stay Modification Order, 363, 1520, and Rule 9019 prohibit the Debtor and/or Foreign Representative from acting to (i) settle or recover its claims against VPI, (ii) administer, realize, or distribute any of the Debtor s domestic assets, including its claims against VPI and any proceeds therefrom, and/or (iii) cause any of the Debtor s domestic assets, including its claims against VPI and any proceeds therefrom, to be removed and transferred from the territorial jurisdiction of the United States without a request for approval from this Court after notice to USCO and an opportunity for hearing; and B. The Court grant such other relief and protections as this Court deems just and proper. Respectfully submitted, BUTLER SNOW LLP CHAPMAN AND CUTLER LLP James E. Bailey III (TN Bar no ) /s/ Mia D. D Andrea Adam M. Langley (TN Bar no ) Mia D. D Andrea (# ) Clifford Ragsdale Lamar II (TN Bar no ) 111 W. Monroe Street 6075 Poplar Avenue, Suite 500 Chicago, Illinois Memphis, TN (312) (901) (312) facsimile (901) facsimile dandrea@chapman.com adam.langley@butlersnow.com dale.lamar@butlersnow.com Dated: March 7, 2016

5 Document Page 5 of 5 CERTIFICATE OF SERVICE The undersigned, an attorney, hereby certifies that she caused a true and correct copy of the foregoing USCO, S.P.A S AMENDED MOTION FOR ORDER GRANTING PROTECTION UNDER 11 U.S.C to be served upon: Patrick S. Layng Office of the U.S. Trustee, Region S. Dearborn Street, Suite 873 Chicago, Illinois John Guzzardo Mark Radtke Brian L. Shaw SHAW FISHMAN GLANTZ & TOWBIN LLC 321 North Clark Street, Suite 800 Chicago, Illinois R. Scott Alsterda Lisa C. Sullivan NIXON PEABODY LLP 70 West Madison Street, Suite 3500 Chicago, Illinois and all other counsel or parties of record via the Court s electronic docket CM/ECF system on March 7, /s/ Mia D. D Andrea Mia D. D Andrea ButlerSnow v2