IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 SP NEWSPRINT HOLDINGS LLC, et al., 1 Case No. 11-13649 (CSS Debtors. Jointly Administered Re: ECF No. 919 DEBTORS MOTION FOR ORDER SHORTENING NOTICE PERIOD AND SCHEDULING EXPEDITED HEARING WITH RESPECT TO THEIR EMERGENCY MOTION FOR ORDER (I(A ENFORCING AUTOMATIC STAY, (B AWARDING ACTUAL DAMAGES, COSTS, ATTORNEY S FEES, AND PUNITIVE DAMAGES, AND (C HOLDING PULPER MINING, LLC, IN CIVIL CONTEMPT OR (II IN THE ALTERNATIVE, EXTENDING AUTOMATIC STAY TO COVER KEY EMPLOYEES SUED BY PULPER MINING, LLC, IN STATE COURT The above-captioned debtors and debtors-in-possession (collectively, the Debtors, by and through their undersigned attorneys, hereby file this motion (the Motion for an order, pursuant to Bankruptcy Rule 9006(c(1 and Local Rules 9006-1(c and (e, (i shortening the notice period with respect to the Debtors Emergency Motion for an Order (I(A Enforcing Automatic Stay, (B Awarding Actual Damages, Costs, Attorney s Fees, and Punitive Damages, and (C Holding Pulper Mining, LLC, in Civil Contempt or, in the Alternative, (II Extending Automatic Stay to Cover Employees Sued by Pulper Mining LLC, in State Court (the Stay Enforcement Motion [ECF No. 919]; 2 and (ii allowing the Stay Enforcement Motion to be heard on an expedited basis before this Court prior to May 25, 2012. In support of this Motion, the Debtors respectfully represent as follows: 1 2 The Debtors in these Chapter 11 cases, along with the last four digits of each of the Debtors tax identification numbers, are: SP Newsprint Holdings, LLC (6180; SP Newsprint Co. LLC (7779; SP Recycling Corporation (2936; and SEP Technologies, L.L.C. (2955. Capitalized terms not otherwise defined herein have the meanings ascribed to them in the Stay Enforcement Motion, which has been filed contemporaneously herewith.
JURISDICTION 1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334. Venue of these cases and this Motion in this District is proper pursuant to 28 U.S.C. 1408 and 1409. This is a core proceeding pursuant to 28 U.S.C. 157(b(2. The statutory predicates for the relief requested herein are Bankruptcy Rule 9006(c(1 and Local Rule 9006-1(c and (e. BACKGROUND 2. The Debtors incorporate by reference, as if fully set forth herein, the Introduction and Factual Background sections of the Stay Enforcement Motion. 3. As of the Petition Date, the Debtors and Pulper Mining were parties to a contract under which Pulper Mining undertook to remove contaminants that are mixed with the discarded newspapers that the Debtors use to produce recycled newsprint. Because Pulper Mining was not performing satisfactorily under such contract, the Debtors rejected it and have been negotiating an alternative arrangement with another party. 4. Displeased with this outcome, but unable as a result of these cases to take action against the Debtors, Pulper Mining recently commenced a proceeding in Georgia state court and filed a related motion for a temporary restraining order (scheduled to be heard this Friday against three key employees and the replacement party with which the Debtors were negotiating, seeking to prevent the Debtors from using certain equipment. This misdirected action is an improper attempt to disrupt the Debtors business and constitutes a willful violation of the automatic stay. 5. Although Pulper Mining has purported to assert claims against others, for all practical purposes, Pulper Mining s action is against the Debtors and an attempt to exercise -2-
control over property of these estates in derogation of the Bankruptcy Code. The practical impact to the Debtors of allowing such proceedings to continue would be no different than if the Debtors were named as defendants and forced to defend against Pulper Mining s claims. 6. Permitting the misdirected state court litigation to proceed could result in material diminution to the Debtors enterprise value, as well as an unjustifiable burden being placed upon the Debtors key employees. Even if Pulper Mining s offensive actions are not found to be direct violations of the automatic stay, the automatic stay should be extended to preclude Pulper Mining s pursuit of such actions to protect the Debtors and to avoid unnecessary distraction of the Debtors and their employees during this critical stage of these cases. 7. A hearing on the TRO Motion is scheduled for May 25, 2012, at 9:00 a.m. (the TRO Hearing, and the Debtors submit that the Stay Enforcement Motion must be heard prior thereto to avoid the consequences detailed in the Stay Enforcement Motion and set forth below. RELIEF REQUESTED 8. By this Motion, the Debtors respectfully request that this Court enter an order (a shortening the notice period with respect to the Stay Enforcement Motion and (b allowing the Stay Enforcement Motion to be heard on an expedited basis prior to the TRO Hearing. BASIS FOR RELIEF REQUESTED 9. Local Rule 9006-1(c requires that all motion papers be filed and served at least 14 days prior to a hearing date scheduled for such motion, and an additional three days if notice is given by mail, unless the Bankruptcy Rules state otherwise. 10. Bankruptcy Rule 9006(c(1 provides, however, that when an act is required or allowed to be done at or within a specified time by these rules or by a notice given -3-
thereunder or by order of Court, the Court for cause shown may in its discretion with or without motion or notice order the period reduced. 11. Additionally, Local Rule 9006-1(e provides that [n]o motion will be scheduled on less time than required by these rules or the Fed. R. Bankr. P. except by Order of the Court on written motion (served on all interested parties specifying the exigencies justifying shortened notice. The Court will rule on such motion promptly without need for hearing. 12. The Debtors submit that allowing the Stay Enforcement Motion to be considered on an expedited basis is reasonable, necessary, and appropriate under the circumstances. Specifically, absent the relief requested in the Stay Enforcement Motion, either the hearing on the TRO Motion will proceed in violation of the automatic stay, or the Key Employees will be forced to divert their efforts from essential tasks for the Debtors and in these cases, including with respect to the Debtors ongoing sale process, to defending the TRO Motion, to the detriment of the Debtors and their estates. As such, the Debtors submit that cause exists to have the Stay Enforcement Motion heard prior to the TRO Hearing, and the ramifications to these estates if the requested relief is not granted would be material and significant. 13. Accordingly, for the reasons set forth above, the Debtors submit that the relief requested herein is in their best interests and the best interests of their estates and creditors and, therefore, should be granted. NOTICE 14. Notice of this Motion has been given via e-mail, overnight delivery, facsimile, and/or hand delivery, as appropriate, to the United States Trustee, counsel to the Committee, counsel to the agent for the Debtors lenders, counsel to Pulper Mining, counsel to Land Care, and any parties that have requested service of notice in these cases pursuant to -4-
Bankruptcy Rule 2002. The Debtors submit that no other or further notice need be given in light of the circumstances of these cases and the emergency nature of the relief requested herein. NO PRIOR REQUEST 15. No previous request for the relief sought in this Motion has been made to this Court or to any other court. CONCLUSION WHEREFORE, the Debtors respectfully request that this Court enter an order, substantially in the form attached hereto as Exhibit A, granting the Motion and such other and further relief as is just and proper under the circumstances. Dated: May 21, 2012 Wilmington, Delaware Respectfully submitted, /s/ Lee E. Kaufman Mark D. Collins (No. 2981 Lee E. Kaufman (No. 4877 RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone: (302 651-7700 Facsimile: (302 651-7701 -and- Joel H. Levitin Richard A. Stieglitz Jr. Scott Watnik Maya Peleg CAHILL GORDON & REINDEL LLP Eighty Pine Street New York, New York 10005 Telephone: (212 701-3000 Facsimile: (212 269-5420 Attorneys for the Debtors and Debtors-in-Possession -5-
EXHIBIT A Proposed Form of Order
IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 SP NEWSPRINT HOLDINGS LLC, et al., 1 Case No. 11-13649 (CSS Debtors. Jointly Administered Re: ECF Nos. 919 and ORDER SHORTENING NOTICE PERIOD AND SCHEDULING EXPEDITED HEARING WITH RESPECT TO DEBTORS EMERGENCY MOTION FOR ORDER (I(A ENFORCING AUTOMATIC STAY, (B AWARDING ACTUAL DAMAGES, COSTS, ATTORNEY S FEES, AND PUNITIVE DAMAGES, AND (C HOLDING PULPER MINING, LLC, IN CIVIL CONTEMPT OR (II IN THE ALTERNATIVE, EXTENDING AUTOMATIC STAY TO COVER KEY EMPLOYEES SUED BY PULPER MINING, LLC, IN STATE COURT Upon consideration of the motion (the Motion 2 of the Debtors for the entry of an order, pursuant to Bankruptcy Rule 9006(c(1 and Local Rule 9006-1(c and (e, (i shortening the notice period with respect to the Stay Enforcement Motion; and (ii allowing the Stay Enforcement Motion to be heard on an expedited basis before this Court prior to the TRO Hearing; and the Court s having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. 157 and 1334; and the Court s having found that good and sufficient cause exists for granting the Motion; and it appearing that the relief requested in the Motion is appropriate in the context of these Cases and is in the best interests of the Debtors and their respective estates, their creditors, and all other parties-in-interest and that it is reasonable, necessary, and appropriate for the Stay Enforcement Motion to be considered by this Court prior to the TRO Hearing; and it appearing that notice of the Motion was adequate and 1 2 The Debtors in these Chapter 11 cases, along with the last four digits of each of the Debtors tax identification numbers, are: SP Newsprint Holdings, LLC (6180; SP Newsprint Co. LLC (7779; SP Recycling Corporation (2936; and SEP Technologies, L.L.C. (2955. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Motion.
proper under the circumstances of these Cases, and it appearing that no other or further notice need be given IT IS HEREBY ORDERED THAT: 1. The Motion is granted as set forth herein. 2. A hearing with respect to the Stay Enforcement Motion shall take place before this Court on May, 2012 at :.m. (EDT. Objections to the Stay Enforcement Motion may be raised at the hearing. 3. The Debtors are authorized and empowered to take any and all actions necessary to effectuate the terms of this Order. and effective upon its entry. 4. The terms and conditions of this Order shall be immediately enforceable 5. This Court shall retain jurisdiction to hear and determine all matters arising from the implementation of this Order. Dated: May, 2012 Wilmington, Delaware THE HONORABLE CHRISTOPHER S. SONTCHI UNITED STATES BANKRUPTCY JUDGE -2-