Inforuptcy Blog Archives July 2014

Asset Deal of the Week: Louisiana Oilfield Services Company

Posted by Michael on July 31, 2014

Since we often notice the sale of mineral rights or services companies in bankruptcy, we thought we would highlight one of those deals this week. You can read the entire sale motion for free and contact counsel for the Unsecured Creditors Committee to learn more about the bid process by clicking on the link below:

Assets of a Louisiana Oilfield Services Company

Snippet from the Sale Motion
NOW INTO COURT, through undersigned counsel, comes the Unsecured Creditors Committee (the “UCC”) who hereby moves this Honorable Court for an order (the “Motion”): (i) approving the notice of bid procedures attached hereto as Exhibit A; and (ii) authorizing Kraemer-Shows Oilfield Services, LLC (the “Debtor” or “Seller”) pursuant to 11 U.S.C. § 363 to sell certain assets of the Debtor as identified herein pursuant to the Summary of Proposed Terms for the Sale of Assets to Terra Oilfield Solutions, LLC, with attached draft asset purchase agreement (the “Agreement”) attached hereto as Exhibit B with Terra Oilfield Solutions, LLC (“Terra”) for the purchase price of $600,000.00 or to a higher bidder at an auction conducted under the auspices of this Court on August 19, 2014 at 11:00 a.m., (Terra or such higher bidder being hereafter referred to as “Buyer”). In support of its Motion, the UCC contends as follows: 

BACKGROUND AND PROCEDURAL HISTORY

A. Bankruptcy Filing and Debtor-in-Possession.
On February 3, 2014, the Debtor filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”). The Debtor continues to operate its business and manage its assets as a debtor-in-possession in accordance with sections 1107 and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed pursuant to section 1104 of the Bankruptcy Code. On April 17, 2014, the United States Trustee appointed the Committee pursuant to section 1102 of the Bankruptcy Code.

The Debtor is in the oil field service business. It performs services for companies such as Shell both offshore and onshore.

B. Proposed Sale of Certain Assets of the Debtor to Terra.
As this Court is aware, the Debtor has been unable to take any action that will bring about a return to creditors. The UCC was contacted by and has negotiated with Terra a sale that will pay some of the Debtor’s creditors. See, Exhibit B.

By this Motion, the UCC is seeking Court authority to either proceed with a diligence and possible sale process pursuant to terms of the Agreement from Terra or conduct an auction based on the proposed bidding procedures as described herein.

The Debtor is not affiliated with Terra and has no interest in Terra. By way of full disclosure the UCC is aware that some employees of the Debtor will be offered employment with Terra.

Pursuant to the offer, Terra has agreed to enter into a diligence process regarding certain assets of the Debtor. Should Terra, at its discretion, be satisfied with the results of the diligence process, Terra intends to purchase certain assets of the Debtor for $600,000.00  (collectively with any higher bid, the “Sale Proceeds”) in “as is” condition with no warranties. The Agreement excludes the purchase of the Debtor’s cash on hand, Chapter 5 causes of action, and receivables, except as allocated to cure certain obligations of the Debtor as set forth in the Agreement. In summary, the Agreement is for the purchase of certain operating assets of and claims owned by the Debtor (collectively, the “Property”) including

(1) all inventory as set forth on schedules attached to the Agreement,

(2) all equipment as set forth on schedules attached to the Agreement,

(3) all certificated moveables and rolling stock as set forth on schedules attached to the Agreement, and

(4) those leases, master service agreements, contracts and other obligations (the “MSAs”) expressly assumed by Terra in its sole discretion.

The Property excludes the Debtor’s cash on hand and its Chapter 5 causes of action. The proceeds of the sale and the Debtor’s receivables shall be used to pay cure costs associated with the assumed MSAs, contracts and other obligations. All liabilities not expressly assigned or assumed shall remain with the Debtor. The Property shall be sold free and clear of all liens, encumbrances, mortgages, and security interest pursuant to a sale order acceptable to Terra in its sole discretion. Any liens, encumbrances and security interests against the Property shall attach to the Sale Proceeds as provided under the Bankruptcy Code.

Upon completion of the diligence process, Terra, at its discretion, shall purchase the Debtor’s Property pursuant to section 363 of the Bankruptcy Code upon the terms and conditions set forth on the Agreement. The Sale Proceeds shall be payable at a closing within fifteen (15) days of entry of a final non-appealable sale order. 

To search and hunt for all asset sales across the country, you can sign up for $99 / month (cancel any time).

If you prefer, you can also schedule a 15 minute web demo so you can see for yourself how to get started.

Schedule a Demo

P.S. If you are a trustee and would like us to showcase your deals in our newsletter, please email us at assets@inforuptcy.com.

P.P.S. Sign up to our free newsletter to learn about more bankruptcy asset sales.

Free Proof of Publication with Court Order

Posted by Michael on July 29, 2014

We are delighted to see more courts requiring online proof of public notices with Inforuptcy.com as evidenced by this recent order (paragraph 8).

8. Not later than twenty (20) days prior to the Auction, the Trustee also shall cause Notice of the Auction and Sale Hearing in the form annexed as Exhibit "B" by publication to be made in the (a) The Wall Street Journal; (b) The Philadelphia Inquirer; and (c) on-line at www.inforuptcy.com

The advantages of posting your public notice on our site are as follows:

  • It's free.  For you as a seller it's always free. With a court order, it will also be free to the public. Normally we charge our subscribers access to our sale motion database that we maintain, but we are delighted to make our listings publicly accessible if a court order is signed.
  • You can attach as many pertinent documents as you like. That can include the notice with corresponding exhibits as exemplified in this public notice for interest in multiple businesses for sale.
  • You can revise and update the listing over time as many times as you like. As more information becomes available that can help prospective bidders, you can keep them informed with one central hub.
  • The listing is available 24/7 and can be accessed from anywhere with an internet connection.
  • The docket is one click away on our site to allow prospective bidders to follow the case seamlessly.
  • Our listings summarize all the key information neatly as a "cheat sheet" for your asset sale. 
  • You can edit the listings yourself since we built a self-service platform, or we would be delighted to give you the white glove service and do it all for you.

If you have any questions, please do not hesitate to call us.

P.S. If you need help finding stalking horse bidders for your assets, please reach to us to learn how we can help you for free.

Asset Deal of the Week: Litigation Rights and Two Hotels in Southern California for Sale

Posted by Michael on July 24, 2014

Last week we got a great response asking us to continue highlighting hairy deals. We think we have that covered this week with the sale of litigation rights. The case is so complicated that the best summary we could provide is a bunch of legalize. So if you are an attorney or know a good attorney, this one would be a good one to sink your teeth into. We also have two hotels in southern California for sale. This one is a bit easier to get your arms around. You can read the entire sale motion for each bankruptcy case for free and contact debtor's counsel to learn more about these sales by clicking on the links below:

Litigation Rights for Sale

The Complaint and Amended Complaint are on file with the Court in adversary 2:13-ap-00612. All interested parties are encouraged to read the Complaint and Amended Complaint to understand the estate’s claims alleged in the complaint for fraud, punitive damages, breach of fiduciary duty, and breach of good faith and fair dealing, all stemming from the pre-petition business relationship between the parties.

Two Hotels in Southern California For Auction

Snippet from Sale Motion

PLEASE TAKE NOTICE that, on August 7, 2014, at 10:00 a.m. the Honorable Richard M. Neiter United States Bankruptcy Judge for the Central District of California (the “Court”), will hold a hearing (the “Hearing”) on regular notice in Courtroom 1645 of the United States Bankruptcy Courthouse located at 255 East Temple Street, Los Angeles, California to consider the Motion For Order (1) Authorizing Sale Of Debtors Assets Free And Clear Of All Liens, Claims, Encumbrances And Other Interests Pursuant To 11 U.S.C. § 363; (2) Approving The Assumption And Assignment Of Certain Leases And Executory Contracts Pursuant To 11 U.S.C. § 365; and (3) Approving Stipulations Resolving Certain Secured Claims, filed by Coastline Investments, LLC (“Coastline”) and Diamond Waterfalls, LLC (“Diamond” and with Coastline, collectively, the “Debtors”) the debtors and debtors in possession in the above- captioned, jointly administered chapter 11 bankruptcy cases.

1. Coastline Hotel

Coastline is the owner of a hotel located at the top of a prominent hill with sweeping views in Pomona, California (the “Hilltop Hotel”). The Hilltop Hotel consists of 130 suites located on three acres of hilltop property by Interstates 10 and 57, Cal-Poly Tech University, and the Los Angeles County fairgrounds, Fairplex. The Hilltop Hotel has three hotel floors along with two levels of parking and features an outdoor pool, spa, exercise fitness center, sauna, steam room and beautiful, full service restaurant, lounge, meeting spaces and a banquet ballroom to accommodate approximately 300 guests.

Coastline believes that the fair market value of the Hilltop Hotel is approximately $12 million. The primary secured debts include a first priority lien in favor of First General Bank (“Bank”) to secure an obligation of approximately $5,250,000, and a second priority lien in favor of an individual investor group (the “Investor Group”) to secured an obligation of approximately $2,500,000, which obligation is also secured (cross-collateralized) the Diamond Hotel, as discussed below. Coastline’s unsecured debts are slightly over $100,000. As a result, Coastline believes that its estate is solvent and will be able to satisfy all claims in full.

Pursuant to the Motion, Coastline does not have a stalking horse bidder who has agreed to purchase the Coastline Hotel with no contingencies. As a result, on August 7, 2014, Coastline proposes to sell the Coastline Hotel to the highest bidder that provides the best offer, to be determined at the discretion of Coastline only. Coastline proposes the following procedures to be used in connection with any bidding on the Coastline Hotel:

Not later than August 1, 2014, all parties seeking to submit bids (“Bidder”) must qualify by:

(i) Providing evidence satisfactory to Coastline of their financial ability to consummate a sale;

(ii) Delivering to Coastline a cashier’s or certified check for an amount equal to 3% of the proposed purchase price;

(iii) Confirm in writing that, if the Bidder is the successful bidder, the foregoing deposit shall be deemed non-refundable to Bidder;

(iv) Confirm in writing that Bidder is ready, willing and able to close the sale transaction before August 30, 2014; and (v) Execute an agreement in material form to that attached to the Motion.

Coastline will consider all bids timely and properly submitted and advise the Court at the commencement of the hearing as to the status of interest in the Coastline Hotel. However, Coastline shall, in its sole discretion, determine whether to proceed with the sale of the Coastline Hotel or withdraw the request for such a sale, based on receipt of bids.

2. Diamond Hotel

Diamond is the owner of a 161 room hotel located in Pomona, California (the “Diamond Hotel” and with the Hilltop Hotel, collectively, the “Hotels”). The Diamond Hotel is a full-service hotel, which includes a business center, meeting facilities, pool, spa, fitness center, steam, sauna, and offices. A restaurant is on the premises but has stopped food service for the time being. Diamond believes that the fair market value of the Diamond Hotel is approximately $12 million. The primary secured debts include a first priority lien in favor of First General Bank to secure an obligation of approximately $5,250,000 (same amount as secured by Coastline, but a separate obligation which is not cross-collateralized), and a second priority lien in favor of the Investor Group to secured an obligation of approximately $2,500,000, which obligation is also secured (cross-collateralized) the Hilltop Hotel. Diamond’s unsecured debts are under $100,000. As a result, Diamond believes that its estate is solvent and will be able to satisfy all claims in full.

In connection with the Debtors’ reorganization efforts, the Debtors retained CBRE to assist the Debtors to market their Hotels to generate the highest possible value. Although several offers were received with respect to the Hotels, a stalking horse bidder emerged for the Diamond Hotel only. No stalking horse bidder has been approved for the Hilltop Hotel. The best offer for the purchase of the Diamond Hotel was submitted by 3200 Temple Associates, LLC (the “Temple Associates”). At a hearing held on June 5, 2014, the Bankruptcy Court approved Temple Associates as “stalking horse” bidder and approved certain bid procedures in connection with the sale of the Diamond Hotel. Although a separate order was entered by the Court on June 23, 2014 [Doc. 82], the material terms of the order and bid procedures are as follows:

1. Temple Associates is approved as the stalking horse bidder with an opening bid of $8,275,000 for the Diamond Hotel;

2. In the event that Temple Associates is not the successful final bidder of the Diamond Hotel, it will receive a breakup fee equal to $248,250, subject to the terms of the sale agreement;

3. The hearing to consider the approval of a sale of the Diamond Hotel to Temple Associates or any qualified overbidder shall be held on August 7, 2014 at 10:00 a.m.; and

4. Any party wishing to bid at the auction on August 7, 2014 at 10:00 a.m., must submit to the Debtor documents and other evidence, as described in the Motion, not later than close of business on August 1, 2014, together with a non-refundable deposit of 3% of the proposed purchase price and proof of ability to close.

To search and hunt for all asset sales across the country, you can sign up for $99 / month (cancel any time).

If you prefer, you can also schedule a 15 minute web demo so you can see for yourself how to get started.

Schedule a Demo

P.S. If you are a trustee and would like us to showcase your deals in our newsletter, please email us at assets@inforuptcy.com.

P.P.S. Sign up to our free newsletter to learn about more bankruptcy asset sales.

Asset Deal of the Week: Ownership Interest in Property Management Company

Posted by Michael on July 16, 2014

Most savvy buyers are always asking us for "hairy" deals. We thought it would be great to start showcasing some of the deals that come across the wire. Below is a snippet from the sale motion. You can read the entire sale motion for free and contact the trustee to learn more about this sale by clicking on the link below:

Ownership Interest in Property Management Company

Snippet from Sale Motion

Donald R. Lassman, the duly appointed chapter 7 trustee (the "Trustee") in the bankruptcy case of Douglas R. Meservey (the "Debtor"), hereby requests authority to sell by private sale ("Private Sale") all of the Debtor's twenty-four percent (24%) interest (the "Interest") in the Massachusetts limited liability company 3DM Properties LLC ("3DM Properties"), to Partnership Liquidity Investors, LLC, or its assignee (the "Purchaser"), for a sale price of $78,500 (the "Purchase Price"). The Purchaser has no relation to the Debtor or the Trustee. The terms of the Private Sale are set forth more particularly below. In further support of this Motion, the Trustee represents as follows:

Background

On June 29, 2011 (the "Petition Date"), the Debtor filed a voluntary petition for relief under chapter 7 of title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Massachusetts (Eastern Division). By order of the Court dated June 30, 2011, the Trustee was appointed as chapter 7 trustee in the Debtor's bankruptcy case and continues to serve in that capacity.

Since the Petition Date, the Trustee has investigated the assets and liabilities of the Debtor, and has determined that the Debtor is the holder of the Interest in 3DM Properties. The remaining interest holders are the Debtor's brother (24% interest) and father (52%). 3DM Properties, in turn, is the owner of several parcels of real property, including two commercial properties with tenants in Chatham, Massachusetts:

a. 11 Chicks Way, South Chatham, MA—This property is a 9,900-square- foot warehouse built in approximately 2007–08 on 1.06 acres of land, zoned industrial. The Trustee has obtained a broker's price opinion of value for this parcel of $1,160,000, subject to a mortgage in the amount of approximately $760,000 according to information provided by 3DM Properties; and

b. 146 Commerce Park South, South Chatham, MA—This property includes a 3,920-square-foot warehouse built in approximately 1983 on approximately 20,000 square feet of land, zoned industrial. The property also houses a cell tower, constructed in approximately 2007 and leased to Seacoast Tower Development, further sub-leased to two cell carriers, most likely AT&T and possibly T-Mobile. The Trustee has obtained a broker's price opinion of value for this parcel of $725,000, subject to a mortgage in the amount of approximately $253,000 according to information provided by 3DM Properties.

Valuation and lien amounts supplied are opinions of third parties and not the Trustee. The Trustee makes no representation about the accuracy of any information provided by 3DM Properties. The Trustee does not have any information regarding the value of the real property owned by 3DM Properties, or the amount, priority or validity of any of the claims asserted against such property. It is incumbent upon all interested parties to conduct their independent research regarding the property and related claims.

The Trustee has solicited offers to purchase the Interest. Although several offers were received, the Trustee submits that the offer from the Purchaser represents the highest and best offer for the Interest.

The Proposed Sale

Subject to Bankruptcy Court approval, the Trustee has agreed to sell the Interest to the Purchaser for the Purchase Price of $78,500. The following are the terms of the offer:

a. The Trustee will sell the Debtor's Interest to the Purchaser.

b. The Purchaser shall pay the Trustee Seventy Eight Thousand Five Hundred and 00/100 Dollars ($78,500.00) as total compensation for the Interest (the "Purchase Price").

c. Counsel to the Trustee is currently holding a deposit in the amount of twenty percent (20%) of the Purchase Price—i.e., $15,700.00—in escrow pending approval of the proposed sale.

d. The Interest shall be sold as-is, where-is with no warranties or representations by the Trustee of any kind. e. The Interest will be conveyed to the Purchaser free and clear of all liens, claims, encumbrances or other interests.

Lastly, in the event that the Interest is sold to any party other than the Purchaser, the Trustee is seeking approval of a breakup fee payable to the Purchaser in an amount equal to five percent (5%) of the Purchase Price; i.e., Three Thousand Nine Hundred Twenty Five and 00/100 Dollars ($3,925.00) (the "Breakup Fee").

To search and hunt for all asset sales across the country, you can sign up for $99 / month (cancel any time).

If you prefer, you can also schedule a 15 minute web demo so you can see for yourself how to get started.

Schedule a Demo

P.S. If you are a trustee and would like us to showcase your deals in our newsletter, please email us at assets@inforuptcy.com.

P.P.S. Sign up to our free newsletter to learn about more bankruptcy asset sales.