Case 16-11452-KJC Doc 579 Filed 08/16/16 Page 1 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re DRAW ANOTHER CIRCLE, LLC, et al., 1 Debtors. Chapter 11 Case No.: 16-11452 (KJC) (Jointly Administered) Hearing Date: September 6, 2016 at 1:30 pm. (ET) Objection Deadline: August 30, 2016 at 4:00 p.m. (ET) MOTION OF DEBTORS FOR AN ORDER EXTENDING PERIOD WITHIN WHICH THEY MAY REMOVE ACTIONS PURSUANT TO 28 U.S.C. 1452 AND RULE 9027 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE The above-captioned debtors and debtors in possession (the Debtors ), by and through their undersigned counsel, hereby file this motion (the Motion ), for entry of an order, substantially in the form attached hereto as Exhibit A (the Proposed Order ), pursuant to section 1452 of title 28 of the United States Code (the Judicial Code ) and Rules 9006(b) and 9027 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), extending the 90- day period set forth in Bankruptcy Rule 9027(a)(2)(A) during which the Debtors may seek to remove actions to federal court under section 1452 of the Judicial Code and Bankruptcy Rule 9027 by an additional 90 days through and including December 10, 2016, without prejudice to the Debtors right to seek further extensions. In support of the Motion, the Debtors respectfully represent as follows: 1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: Draw Another Circle, LLC (2102); Hastings Entertainment, Inc. (6375); MovieStop, LLC (9645); SP Images, Inc. (7773); and Hastings Internet, Inc. (0809). The Debtors executive headquarters are located at 3601 Plains Boulevard, Amarillo, TX 79102.
Case 16-11452-KJC Doc 579 Filed 08/16/16 Page 2 of 7 Jurisdiction and Venue 1. The United States Bankruptcy Court for the District of Delaware (the Court ) has jurisdiction over these cases and the Motion pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated as of February 29, 2012. This is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). Venue of these cases and the Motion in this district is proper under 28 U.S.C. 1408 and 1409. 2 Background 2. On June 13, 2016 (the Petition Date ), each of the Debtors commenced a voluntary case under chapter 11 of the Bankruptcy Code. The Debtors chapter 11 cases have been consolidated for procedural purposes only and are being administered jointly. The Debtors are authorized to continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On June 21, 2016, the Office of the United States Trustee (the U.S. Trustee ) appointed the Official Committee of Unsecured Creditors (the Committee ). Relief Requested 3. By this Motion, the Debtors seek the entry of an order, pursuant to Rule 9006(b) of the Bankruptcy Rules, extending the time by which the Debtors may file notices of removal through and including December 10, 2016 with respect to any proceedings that are eligible for removal under section 1452 of the Judicial Code, to the extent that the time period 2 Pursuant to Rule 9013-1(f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules ), the Debtors consent to the entry of a final judgment or order with respect to the Motion if it is determined that the Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article III of the United States Constitution. 2
Case 16-11452-KJC Doc 579 Filed 08/16/16 Page 3 of 7 for filing any such notices of removal expires on or before December 10, 2016. 3 The Debtors request that the proposed December 10, 2016 deadline to file removal actions apply to all matters specified in Bankruptcy Rules 9027(a)(2) and (3). The Statutory Scheme for Removal 4. Section 1452 of the Judicial Code provides for the removal of pending civil claims pursuant to which the district courts have jurisdiction under section 1334 of the Judicial Code. Section 1452 provides in pertinent part as follows: (a) (b) A party may remove any claim or cause of action in a civil action other than a proceeding before the United States Tax Court or a civil action by a governmental unit to enforce such governmental unit s police or regulatory power, to the district court for the district where such civil action is pending, if such district court has jurisdiction of such claim or cause of action under section 1334 of this title. The court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground. An order entered under this subsection remanding a claim or cause of action, or a decision to not remand, is not reviewable by appeal or otherwise.... 28 U.S.C. 1452. 5. Bankruptcy Rule 9027 establishes the deadline for filing notices of removal of claims or causes of action. Bankruptcy Rule 9027(a)(2) provides in pertinent part as follows: If the claim or cause of action in a civil action is pending when a case under the [Bankruptcy] Code is commenced, a notice of removal may be filed [in the bankruptcy court] only within the longest of (A) 90 days after the order for relief in the case under the [Bankruptcy] Code, (B) 30 days after entry of an order terminating a stay, if the claim or cause of action in a civil action 3 The current time period within which the Debtors may file any removal notices under Bankruptcy Rule 9027(a)(2) expires on September 11, 2016 (the Current Deadline ). Pursuant to Rule 9006-2 of the Local Rules, the filing of this Motion prior to the Current Deadline serves to extend automatically the Current Deadline until such time as the Court rules on this Motion. See Del. Bankr. LR 9006-2. 3
Case 16-11452-KJC Doc 579 Filed 08/16/16 Page 4 of 7 has been stayed under 362 of the [Bankruptcy] Code, or (C) 30 days after a trustee qualifies in a chapter 11 reorganization case but not later than 180 days after the order for relief. Fed. R. Bankr. P. 9027(a)(2). With respect to postpetition actions, Bankruptcy Rule 9027(a)(3) provides that a notice of removal may be filed: only within the shorter of (A) 30 days after receipt, through service or otherwise, of a copy of the initial pleading setting forth the claim or cause of action sought to be removed or (B) 30 days after receipt of the summons if the initial pleading has been filed with the court but not served with the summons. Fed. R. Bankr. P. 9027(a)(3). 6. Finally, Bankruptcy Rule 9006(b)(1) provides that the Court can extend unexpired time periods, including the removal period in Bankruptcy Rule 9027, without notice, upon a showing of cause: [W]hen an act is required or allowed to be done at or within a specified period by these rules or by a notice given thereunder or by order of court, the court for cause shown may at any time in its discretion... with or without motion or notice order the period enlarged if the request therefor is made before the expiration of the period originally prescribed or as extended by a previous order.... Fed. R. Bankr. P. 9006(b)(1). 7. It is well settled that this Court is authorized to extend the removal periods provided under Bankruptcy Rule 9027. See, e.g., Pacor, Inc. v. Higgins, 743 F.2d 984, 996 n.17 (3d Cir. 1984) (stating that under Bankruptcy Rule 9006(b), it is clear that the court may grant such an extension [of time to remove] ); Caperton v. A.T. Massey Coal Co., 251 B.R. 322, 325 (S.D. W.Va. 2000) (explaining that Bankruptcy Rule 9006(b) allows a court to enlarge the time period for removing actions under Bankruptcy Rule 9027(a)(3)); In re Lawrence, 233 B.R. 248, 254-55 (N.D.N.Y. 1999) (stating that Bankruptcy Rule 9006 can be used to extend the time for removal of state court litigation to federal court); Jandous Elec. Constr. Corp. v. City of New 4
Case 16-11452-KJC Doc 579 Filed 08/16/16 Page 5 of 7 York (In re Jandous Elec. Constr. Corp.), 106 B.R. 48, 50 (Bankr. S.D.N.Y. 1989) (stating that the removal period may be extended under Bankruptcy Rule 9006); Saint Joseph s Hosp. v. Dep t of Pub. Welfare of Pa. (In re Saint Joseph s Hosp.), 103 B.R. 643, 648 (Bankr. E.D. Pa. 1989) (extending the 90-day time period in which to seek removal of pending state court litigation); In re World Fin. Servs. Ctr. Inc., 81 B.R. 33, 39 (Bankr. S.D. Cal. 1987) (stating that the court may enlarge the time period for filing removal notices under Bankruptcy Rule 9027(a)(3)). 8. The Debtors are a party to various civil lawsuits and proceedings and are evaluating whether they may seek to remove certain of these actions. Since the commencement of the Debtors chapter 11 cases, the Debtors limited resources have been focused on numerous pressing matters associated with (a) administering their bankruptcy estates, (b) operating their businesses during the sale and store closing process, and (c) pursuing sales of substantially all of their assets. Consequently, the Debtors require a reasonable amount of additional time to complete their evaluation of whether removal is appropriate in any litigation matters. 9. Accordingly, the Debtors seek an extension of the Current Deadline under Bankruptcy Rule 9027(a) to protect their right to remove those civil actions for which they may determine that removal is appropriate. The extension sought will afford the Debtors additional time to determine whether to remove any pending civil action and will ensure that the Debtors do not forfeit valuable rights under section 1452 of the Judicial Code. Critically, the rights of other parties to the relevant litigation will not be prejudiced by the extension, because any party to an action that is removed may seek to have it remanded to the state court pursuant to section 1452(b) of the Judicial Code. 10. The Debtors further request that the order approving this Motion be without prejudice to (a) any position the Debtors may take regarding whether section 362 of the 5
Case 16-11452-KJC Doc 579 Filed 08/16/16 Page 6 of 7 Bankruptcy Code applies to stay any given civil action pending against the Debtors and (b) the right of the Debtors to seek further extensions of the period in which they may remove civil actions pursuant to Bankruptcy Rule 9027. 11. For the reasons stated above, the Debtors submit that the relief requested herein is in the best interests of their estates. Moreover, requests by debtors for extensions of the removal period have been routinely granted by courts in this district. See, e.g., In re AFA Investment Inc., No. 12-11127 (MFW) (Bankr. D. Del. July 10, 2012) (granting 45-day extension); In re Liberty State Benefits of Delaware, Inc., No. 11-12404 (KG) (Bankr. D. Del. Nov. 22, 2011) (granting 90-day extension); In re TWTR, Inc., No. 07-10787 (PJW) (Bankr. D. Del. Nov. 7, 2011) (granting 180-day extension); In re Berkline/Benchcraft Holdings, LLC, No. 11-11369 (MFW) (Bankr. D. Del. Aug. 17, 2011 & Nov. 21, 2011) (granting 90-day extensions); In re Harry & David Holdings, Inc., No. 11-10884 (MFW) (Bankr. D. Del. July 12, 2011) (granting 93-day extension); In re AES Thames, L.L.C., No. 10334 (KJC) (Bankr. D. Del. May 2, 2011 & Sept. 20, 2011) (granting 120-day extensions). Notice 12. Notice of this Motion will be provided to: (a) the U.S. Trustee; (b) counsel to the Committee; (c) counsel to Bank of America, N.A.; (d) counsel to Pathlight Capital, LLC; and (e) all entities that have requested notice pursuant to Bankruptcy Rule 2002. The Debtors respectfully submit that no further notice of this Motion is required. 6
Case 16-11452-KJC Doc 579 Filed 08/16/16 Page 7 of 7 Conclusion WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form of the Proposed Order attached hereto as Exhibit A, granting the relief requested herein and such other and further relief as may be equitable and just. Dated: August 16, 2016 Wilmington, Delaware Respectfully submitted, /s/ L. Katherine Good Christopher M. Samis (No. 4909) L. Katherine Good (No. 5101) Chantelle D. McClamb (No. 5978) WHITEFORD, TAYLOR & PRESTON LLC The Renaissance Centre, Suite 500 405 North King Street Wilmington, Delaware 19801 Telephone: (302) 353-4144 Email: csamis@wtplaw.com kgood@wtplaw.com cmcclamb@wtplaw.com Counsel for the Debtors and Debtors in Possession 7
Case 16-11452-KJC Doc 579-1 Filed 08/16/16 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re DRAW ANOTHER CIRCLE, LLC, et al., 1 Debtors. Chapter 11 Case No.: 16-11452 (KJC) (Jointly Administered) Hearing Date: September 6, 2016 at 1:30 pm. (ET) Objection Deadline: August 30, 2016 at 4:00 p.m. (ET) NOTICE OF MOTION OF DEBTORS FOR AN ORDER EXTENDING PERIOD WITHIN WHICH THEY MAY REMOVE ACTIONS PURSUANT TO 28 U.S.C. 1452 AND RULE 9027 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AND HEARING THEREON PLEASE TAKE NOTICE that, on August 16, 2016, the above-captioned debtors and debtors in possession (the Debtors ) filed the Motion of Debtors for an Order Extending the Period Within Which They May Remove Actions Pursuant to 28 U.S.C. 1452 and Rule 9027 of the Federal Rules of Bankruptcy Procedure (the Motion ). PLEASE TAKE FURTHER NOTICE that any objection or response to the Motion must be (i) filed with the Clerk of the United States Bankruptcy Court for the District of Delaware, 824 Market Street, 3rd Floor, Wilmington, Delaware 19801, on or before August 30, 2016 at 4:00 p.m. (Eastern Time) (the Objection Deadline ) and (ii) served so as to be actually received no later than the Objection Deadline by the undersigned counsel to the Debtors. PLEASE TAKE FURTHER NOTICE that a hearing to consider the Motion is scheduled to be held before the Honorable Kevin J. Carey, United States Bankruptcy Judge, at the United States Bankruptcy Court for the District of Delaware, 5th floor, Courtroom No. 5, 1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: Draw Another Circle, LLC (2102); Hastings Entertainment, Inc. (6375); MovieStop, LLC (9645); SP Images, Inc. (7773); and Hastings Internet, Inc. (0809). The Debtors executive headquarters are located at 3601 Plains Boulevard, Amarillo, TX 79102.
Case 16-11452-KJC Doc 579-1 Filed 08/16/16 Page 2 of 2 824 market street, Wilmington, Delaware 19801 on September 6, 2016 at 1:30 p.m. (eastern time). PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND TO THE MOTION IN ACCORDANCE WITH THIS NOTICE, THE BANKRUPTCY COURT MAY GRANT THE RELIEF REQUESTED IN THE MOTION WITHOUT FURTHER NOTICE OR OPPORTUNITY FOR A HEARING. Dated: August 16, 2016 Wilmington, Delaware Respectfully submitted, /s/ L. Katherine Good Christopher M. Samis (No. 4909) L. Katherine Good (No. 5101) Chantelle D. McClamb (No. 5978) WHITEFORD, TAYLOR & PRESTON LLC The Renaissance Centre, Suite 500 405 North King Street Wilmington, Delaware 19801 Telephone: (302) 353-4144 Email: csamis@wtplaw.com kgood@wtplaw.com cmcclamb@wtplaw.com Counsel for the Debtors and Debtors in Possession 2
Case 16-11452-KJC Doc 579-2 Filed 08/16/16 Page 1 of 3 EXHIBIT A Proposed Order
Case 16-11452-KJC Doc 579-2 Filed 08/16/16 Page 2 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re DRAW ANOTHER CIRCLE, LLC, et al., 1 Debtors. Chapter 11 Case No.: 16-11452 (KJC) (Jointly Administered) Re: Docket No. ORDER EXTENDING PERIOD WITHIN WHICH DEBTORS MAY REMOVE ACTIONS PURSUANT TO 28 U.S.C. 1452 AND RULE 9027 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE This matter coming before the Court on the Motion of Debtors for an Order Extending Period Within Which They May Remove Actions Pursuant to 28 U.S.C. 1452 and Rule 9027 of the Federal Rules of Bankruptcy Procedure (the Motion ) 2 filed by the abovecaptioned debtors and debtors in possession (the Debtors ); the Court having reviewed the Motion and having heard the statements of counsel regarding the relief requested in the Motion at a hearing (if any) before the Court (the Hearing ); the Court finding that (a) the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, (b) this is core proceeding pursuant to 28 U.S.C. 157(b)(2), (c) notice of the Motion and the Hearing (if any) was sufficient under the circumstances and (d) cause exists under Bankruptcy Rule 9006(b)(1) to grant an extension of the removal periods established under Bankruptcy Rule 9027(a); and the Court having determined that the legal and factual bases set forth in the Motion and at the Hearing (if any) establish just cause for the relief granted herein; 1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: Draw Another Circle, LLC (2102); Hastings Entertainment, Inc. (6375); MovieStop, LLC (9645); SP Images, Inc. (7773); and Hastings Internet, Inc. (0809). The Debtors executive headquarters are located at 3601 Plains Boulevard, Amarillo, TX 79102. 2 Capitalized terms not otherwise defined herein have the meanings given to them in the Motion.
Case 16-11452-KJC Doc 579-2 Filed 08/16/16 Page 3 of 3 IT IS HEREBY ORDERED THAT: 1. The Motion is GRANTED. 2. The time period provided under Bankruptcy Rule 9027 within which the Debtors may file notices of removal of any and all civil actions is extended to and including December 10, 2016, to the extent that the time period for filing any such notices of removal expires on or before such date. 3. This Order shall be without prejudice to (a) any position the Debtors may take regarding whether section 362 of the Bankruptcy Code applies to stay any given civil action pending against the Debtors and (b) the Debtors right to seek from this Court further extensions of the period within which the Debtors may file notices of removal under Bankruptcy Rule 9027(a). 4. The Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation of this Order. Dated:, 2016 Wilmington, Delaware THE HONORABLE KEVIN J. CAREY UNITED STATES BANKRUPTCY JUDGE 2