Case 12-13262-BLS Doc 218 Filed 02/19/13 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: REVSTONE INDUSTRIES, LLC, et al., 1 Debtors. Chapter 11 (Jointly Administered) Case No. 12-13262 (BLS) Obj. Due: 2/19/13 at 12:00 p.m. (Eastern) Hrg. Date: 2/21/13 at 9:00 a.m. (Eastern) Related Docket Nos. (Case No. 12-13262): 185, 186, 187, 190, 193 2 Related Docket No. (Case No. 13-10028): 21 LIMITED OBJECTION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS TO BOSTON FINANCE GROUP, LLC S MOTION FOR MODIFICATION OF THE AUTOMATIC STAY AND FOR ADEQUATE PROTECTION The Official Committee of Unsecured Creditors (the Committee ) of Revstone Industries, LLC ( Revstone ), one of the above-captioned debtors and debtors-in-possession, by and through its undersigned proposed counsel, hereby files its limited objection (the Limited Objection ) to the Motion of Boston Finance Group LLC ( BFG ) for Modification of the Automatic Stay and for Adequate Protection (the Stay Relief Motion ) (Case No. 13-10028, Docket No. 21). In support of this response, the Committee respectfully states the following: 1 2 The Debtors in these Chapter 11 Cases and the last four digits of each Debtor s federal tax identification numbers are: Revstone Industries, LLC (7222); Spara, LLC (6613); Greenwood Forgings, LLC (9285); and US Tool and Engineering, LLC (6450). The location of the Debtors headquarters and the service address for each of the Debtors is 2250 Thunderstick Dr., Suite 1203, Lexington, KY 40505. Docket numbers herein shall be the docket numbers for case number 12-13262, unless otherwise indicated.
Case 12-13262-BLS Doc 218 Filed 02/19/13 Page 2 of 5 1. On February 4, 2013, BFG filed the Stay Relief Motion in the bankruptcy case filed by US Tool & Engineering, LLC ( US Tool ) (US Tool Docket No. 21), and set an objection deadline of March 12, 2013, at 4:00 p.m. (Eastern) with respect to such motion. 2. Thereafter, on February 12, 2013, BFG filed its Motion for Expedited Consideration of the Stay Relief Motion (Docket No. 185) (the BFG Motion to Expedite ), requesting that the Court schedule a hearing on the Stay Relief Motion for February 21, 2013, at 12:00 p.m. (Eastern). 3. On February 13, 2013, the Committee filed a Joinder and Response to the Motion for Expedited Consideration (Docket No. 187) (the Committee Joinder ). In the Committee Joinder, the Committee indicated its support for the Motion to Expedite, but its concerns about the sale process being proposed by BFG and the sale process that it understood was already being undertaken by US Tool and its advisors. The Committee further requested that the Court hold a status conference with respect to the Stay Relief Motion pursuant to Bankruptcy Code section 105(d). 4. On February 13, 2013, the Court entered an order granting the BFG Motion to Expedite (Docket No. 190), scheduling the hearing on the Stay Relief Motion for February 21, 2013 at 12:00 p.m. (ET) and requiring that responses be filed and served by February 19, 2013 at 12:00 p.m. (ET). 2
Case 12-13262-BLS Doc 218 Filed 02/19/13 Page 3 of 5 LIMITED OBJECTION 5. In support of this Limited Objection, the Committee adopts and incorporates by reference herein the Committee Joinder. The Committee believes, based on the limited and largely ad hoc information that it has received to date regarding US Tool, that an expeditious sale of the machinery and equipment located in the Facility (as defined in the Stay Relief Motion) is essential. As alleged in the Stay Relief Motion and the Motion for Expedited Consideration, upon information and belief, the Facility (as defined in the Stay Relief Motion) is empty and unheated, and there is no electricity. 3 Accordingly, the risk of damage to property of US Tool located at the Facility is great, as is the risk of the rapid diminution of any value to be realized for creditors of US Tool, some of which are also creditors of Revstone. 6. Although the Committee generally is supportive of the Stay Relief Motion, the Committee believes that to realize maximum value for the estate of US Tool, and thereby reduce potential claims against the Debtors estates, any sale of the assets subject to the Stay Relief Motion should be conducted by an auctioneer retained for this purpose. As noted in the Committee Joinder, the Committee is concerned that the sale procedures proposed by BFG contemplate BFG serving multiple, potentially conflicting roles in the proposed sale process. The Committee 3 To the extent that the utilities were in the name of any of the Debtors and were terminated post-petition, the Committee notes that violations of Bankruptcy Code sections 362 and 366 may have occurred. The Committee does not know what actions, if any, the Debtors have taken to address these potential violations. 3
Case 12-13262-BLS Doc 218 Filed 02/19/13 Page 4 of 5 also understands (and is concerned) that, concurrent with BFG s efforts to obtain relief from the automatic stay, the Debtors and their proposed chief restructuring officer are attempting to sell US Tool s assets. However, the Committee has received no information about the details of such efforts. 7. As set forth in the Committee Joinder, the Committee believes that the retention of a professional auctioneer to conduct the sale of US Tool s assets is the best way to ensure that the sale process is conducted in accordance with widely accepted best practices in bankruptcy, and to prevent the appearance that any interested party might be directing or otherwise inappropriately affecting the process. The Committee, as set forth in the Committee Joinder, further believes that it is appropriate that the fees and expenses of such auctioneer, therefore, should be paid pursuant to Bankruptcy Code section 506(c) as the reasonable, necessary costs and expenses of preserving and disposing of such property to the extent of any benefit to BFG, which asserts that the assets are BFG s collateral. 8. Therefore, while the Committee supports entry of an order granting the Stay Relief Motion, any such order and related bid procedures should provide for the earliest possible retention of an auctioneer to conduct the sale process and the payment of such auctioneer s fees and expenses out of the proceeds of such property, in accordance with Bankruptcy Code section 506(c). 4
Case 12-13262-BLS Doc 218 Filed 02/19/13 Page 5 of 5 WHEREFORE, the Committee respectfully requests that this Court (i) grant the Stay Relief Motion, subject to the terms of this Limited Objection; and (ii) granting such other and further relief as is just. Dated: February 19, 2013 WOMBLE CARLYLE SANDRIDGE & RICE, LLP /s/ Matthew P. Ward Steven K. Kortanek (Del. Bar No. 3106) Mark L. Desgrosseilliers (Del. Bar No. 4083) Matthew P. Ward (Del. Bar No. 4471) 222 Delaware Avenue, Ste. 1501 Telephone: (302) 252-4320 Facsimile: (302) 661-7738 E-mail: skortanek@wcsr.com E-mail: mdesgrosseilliers@wcsr.com E-mail: maward@wcsr.com Proposed Counsel for the Official Committee of Unsecured Creditors of Revstone Industries, LLC 5 WCSR 7659094v4
Case 12-13262-BLS Doc 218-1 Filed 02/19/13 Page 1 of 1 CERTIFICATE OF SERVICE I hereby certify that on February 19, 2013, the foregoing document was served via CM/ECF on all registered parties and via Hand Delivery or United States Mail on the following parties: Laura Davis Jones David M. Bertenthal Timothy P. Cairns Pachulski Stang Ziehl & Jones LLP 919 North Market Street, 17 th Floor Jane Leamy Office of the United States Trustee 844 King Street, Suite 2207 Stuart M. Brown R. Craig Martin DLA Piper LLP (US) 919 N. Market Street, 15 th Floor Gregg M. Galardi Sarah Castle DLA Piper LLP (US) 1251 Avenue of the Americas New York, NY 10020 Under penalty of perjury, I declare that the foregoing is true and correct. Dated: February 19, 2013 /s/ Heidi E. Sasso Heidi E. Sasso WCSR 7663783v1