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SCOTT C. CLARKSON, ESQ. SBN 143271 EVE A. MARSELLA, ESQ. SBN 165797 CLARKSON, GORE & MARSELLA A PROFESSIONAL LAW CORPORATION 3424 Carson Street, Suite 350 Torrance, California 90503 (310) 542-0111 Telephone (310) 214-7254 Facsimile Attorneys for MTI Technology Corporation

FILED & ENTERED MAY 15 2008


CLERK U.S. BANKRUPTCY COURT Central District of California BY Duarte DEPUTY CLERK

UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA, SANTA ANA DIVISION In re MTI TECHNOLOGY CORPORATION, a Delaware corporation, Case No. 8:07-bk-13347 ES In a Chapter 11 Case ORDER PURSUANT TO SECTIONS 105, 363(b), 363(f) AND 365 OF THE BANKRUPTCY CODE APPROVING (1) AMENDED AND RESTATED CLIENT TRANSITION AGREEMENT WITH THE COLLECTIVE GROUP, LLC ; (2) SALE OF ASSETS FREE AND CLEAR OF LIENS, CLAIMS AND INTERESTS; AND (3) BIDDING PROCEDURES Date: Time: Ctrm: April 11, 2008 10:30 a.m. 5A 411 West 4th Street Santa Ana, CA 92701

Debtor and Debtor in Possession.

The motion of MTI Technology Corporation, debtor in possession in the above-captioned chapter 11 case (Debtor and Case respectively), for an order pursuant to sections 105, 363(b), 363 (f) and 365 of title 11 of the United States Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code) approving Debtors agreement with The Collective Group, LLC (Collective) (the Motion) came on for hearing at the time, place and location set forth above. Eve A. Marsella, Esq., of Clarkson, Gore & Marsella, APLC, appeared on behalf of the Debtor. 1
Order re: Motion to Sell Certain of Debtors Assits to The Collective Group

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Robert Opera, Esq., of Winthrop Couchot, P.C., appeared on behalf of the official committee of unsecured creditors appointed in the Case (Committee). Having considered the Motion, all supporting papers, including the Debtors Supplement to Bidding Procedures and the Debtors Second Supplement to Bidding Procedures, and after considering all relevant documents on file in the Case, as well as the arguments of counsel and representations made at the hearing on the Motion (Hearing); finding that notice of the Motion and the Hearing were good and sufficient under the circumstances, after due deliberation and other good and sufficient cause appearing, IT IS HEREBY ORDERED, ADJUDGED AND DECREED, EFFECTIVE IMMEDIATELY, AS FOLLOWS: General Provisions. 1. 2. The Motion is granted. All parties in interest have had the opportunity to object to the relief requested in

the Motion and, to the extent that objections to the Motion, or the relief requested therein, have not been withdrawn, waived or settled, such objections and all reservations of rights included therein, are hereby overruled. The parties who did not object are deemed to have consented to the relief requested by the Debtor in the Motion pursuant to Section 363(f)(2) of the Bankruptcy Code. Approval of the Sale of the Purchased Assets to Collective and Approval of the Amended and Restated Client Transition Agreement, as Modified Herein. 3. The Amended and Restated Client Transition Agreement entered into by and

between the Debtor and Collective, attached hereto as Exhibit 1 and incorporated herein by this reference is hereby approved, subject only to the following modifications (the Amended and Restated Client Transition Agreement, as modified herein, shall be referred to herein as the Agreement): (a) Collective guarantees collections of up to $160,000.00 of the outstanding

accounts receivable by 90 days from the entry of this Order; and (b) Collective fully releases the Estate of any and all liability for up to

$100,000 of any administrative claim arising on or before the date of entry of this Order. 2
Order re: Motion to Sell Certain of Debtors Assits to The Collective Group

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Collective acknowledges upon entry of this order and pursuant to the Agreement, Collective will assist the Debtor in the collection of the Debtors accounts receivable. Collective shall have no right to file an administrative claim on this basis, and shall assert no offset against or defense to the amount that Collective owes to the Debtor pursuant to the Agreement. Notwithstanding the foregoing, Collective retains all rights, causes of action, and lawful setoff rights any nature whatsoever relating to or arising from any breach by the Debtor of the Debtors obligations to Collective pursuant to the Agreement. 4. The Agreement is binding upon the parties to the Agreement, pursuant to Sections

105(a), 363 and 365 of the Bankruptcy Code. Upon entry of this Order, the covenants contained in the Agreement shall be fully enforceable by the parties to the Agreement in accordance with and subject to the terms and conditions of the Agreement. The Debtor is authorized, empowered and directed, pursuant to Sections 105(a), 363, and 365 of the Bankruptcy Code, to perform all of its obligations under the Agreement and to execute and deliver such other documents and instruments and take such other actions as are reasonably necessary to effectuate the transactions contemplated by the Agreement and this Order. Transfer of the Purchased Assets to the Buyer. 5. The Debtors transfer to Collective of the assets purchased by Collective pursuant

to the Agreement (Purchased Assets), pursuant to this Order and the Agreement (the "Sale"), will vest Collective with good title to the Purchased Assets and will be a legal, valid and effective transfer of the Purchased Assets free and clear of any interest in the Purchased Assets of an entity other than the Estate, including, without limitation, by Canopy Group, Inc. (collectively, Interests) in accordance with the provisions of Section 363(f) of the Bankruptcy Code, with any such Interests to attach solely and exclusively to the proceeds, if any, generated from the Sale with the same validity, priority, force, effect and extent as any such Interests existed against the Purchased Assets immediately prior to the closing of the Sale (Closing).

Order re: Motion to Sell Certain of Debtors Assits to The Collective Group

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6.

All entities holding any Interests in the Purchased Assets shall be, and hereby are,

forever barred from asserting, after the Closing, any such Interests against Collective, or its successors or assigns, or against the Purchased Assets. 7. The Court expressly finds that Collective has acted in good faith and is a good

faith purchaser under section 363(m) of the Bankruptcy Code. Other Provisions. 8. In accordance with the provisions of Section 363(m) of the Bankruptcy Code,

absent a timely stay of this Order, any reversal or modification on appeal of this Order shall not affect the validity of the Sale or the authorization granted by this Order. 9. This Order shall be binding on any trustee appointed in the Case or in any

converted case under chapter 7 of the Bankruptcy Code. Nothing contained in any plan of reorganization proposed in the Case (Plan), or any order confirming the Plan shall conflict with or derogate from the provisions of the Agreement or this Order. 10. Any conflict between the terms and provisions of this Order and the Agreement

shall be resolved in favor of this Order. 11. The Debtor is authorized to perform each and all of its obligations under the

Agreement prior to the Closing without further order of the Court. 12. The Sale is hereby approved free of transfer or similar taxes pursuant to section

1146(c) of the Bankruptcy Code. 13. This Order constitutes a final and appealable order within the meaning of 28

U.S.C. 158(a). As provided by Bankruptcy Rule 7062, this Order shall be effective and enforceable immediately. The provisions of Bankruptcy Rules 6004(h) and 6006(d) staying the effectiveness of this Order for 10 days are hereby waived, and this Order shall be effective, and the parties may consummate the transactions contemplated by the Agreement, immediately upon entry of this Order. The parties to the Agreement shall be authorized to close the sale as soon as possible consistent with the terms of the Agreement.

Order re: Motion to Sell Certain of Debtors Assits to The Collective Group

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DATED: May 15, 2008

IT IS SO ORDERED. ###

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United States Bankruptcy Judge

Order re: Motion to Sell Certain of Debtors Assits to The Collective Group

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [X] STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

PROOF OF SERVICE

I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to the within action; my business address is 3424 Carson Street, Suite 350, Torrance, California, 90503. On May 8, 2008 I served the foregoing document described as: Order Pursuant to Sections 105, 363(b), 363(f), 365 of the Bankruptcy Code Approving (1) Amended and Restated Client Transition Agreement with The Collective Group, LLC ; (2) Sale of Assets Free and Clear of Liens, Claims and Interests; and (3) Bidding Procedures on the interested parties in this action by placing the original thereof enclosed in a sealed envelope and by causing such envelope with postage thereon fully prepaid to be placed in the United States mail, at Torrance, California, addressed as follows: See Service List Attached (BY MAIL) As follows: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with U.S. postal service on that same day with postage thereon fully prepaid at Torrance, California in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. Executed on May 8, 2008, at Torrance, California. [X] Federal: I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made.

/S/ Michelle Carpenter

Order re: Motion to Sell Certain of Debtors Assits to The Collective Group

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Kerry Peterson, Esq. Wick Phillips, LLP 2100 Ross Avenue, Suite 950 Dallas, TX 75201 William F. Govier Bingham, McCutchen, LLP 355 South Grand Ave. Los Angeles, CA 90071

MTI Technology Corporation

Robert Opera, Esq. Winthrop Couchot, P.C. 660 Newport Center Drive, 4th Floor Newport Beach, CA 92660 United States Trustee Attn.: Frank Cadigan Terry Biers 411 West Fourth Street, Suite 904 Santa Ana, CA 92701-4593 MTI Technology Corporation Attn.: Thomas P. Raimondi, Jr 15641 Read Hill Ave., Suite 200 Tustin, CA 92780

Order re: Motion to Sell Certain of Debtors Assits to The Collective Group

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Order re: Motion to Sell Certain of Debtors Assits to The Collective Group

SERVICE LIST FOR ENTERED ORDER

SERVED ELECTRONICALLY Clarkson, Gore & Marsella 3424 Carson Street, Suite 350 Torrance CA 90503 Robert Opera, Esq. Winthrop Couchot, P.C. 660 Newport Center Drive, 4th Floor Newport Beach, CA 92660 United States Trustee Attn.: Frank Cadigan Terry Biers 411 West Fourth Street, Suite 904 Santa Ana, CA 92701-4593

SERVED BY U.S. MAIL MTI Technology Corporation Attn.: Thomas P. Raimondi, Jr 15641 Read Hill Ave., Suite 200 Tustin, CA 92780 William F. Govier Bingham, McCutchen, LLP 335 S, Grand Ave. Los Angeles, CA 90071 Kerry Peterson, Esq. Wick Phillips, LLP 2100 Ross Avenue, Suite 950 Dallas, TX 75201

Bankruptcy Noticing Center 2525 Network Place, 3rd Floor Herndon, Virginia 20171-3514 District/off: 0973-8 Case: 07-13347

CERTIFICATE OF SERVICE
User: admin Form ID: pdf031 Page 1 of 2 Total Served: 30 Date Rcvd: May 15, 2008

The following entities were served by first class mail on May 17, 2008. db +MTI Technology Corporation, 15641 Red Hill Avenue, Suite 200, Tustin, CA 92780-7323 aty +Brian T Harvey, Buchalter Nemer, 1000 Wilshire Blvd Ste 1500, Los Angeles, CA 90017-1730 aty +Clarkson, Gore & Marsella, APLC, 3424 Carson St Ste 350, Torrance, CA 90503-5716 aty +Eve A Marsella, 3424 Carson St Ste 350, Torrance, CA 90503-5716 aty +Gilbert B Weisman, ll, Becket & Lee LLP, 16 General Warren Blvd, POB 3001, Malvern, PA 19355-0701 aty +Ivan L Kallick, 11355 W Olympic Blvd, Los Angeles, CA 90064-1631 aty +Lesley A Hawes, 444 S Flower St 8th Fl, Los Angeles, CA 90071-2901 aty +Manatt Phelps & Phil, 11355 W Olympic Blvd, Los Angeles, CA 90064-1631 aty +Mark A Shaiken, 1201 Walnut St Ste 2700, Kansas City, MO 64106-2139 aty +Michael B Reynolds, Snell & Wilmer LLP, 600 Anton Blvd Ste 1400, Costa Mesa, CA 92626-7689 aty +Patricia B Tomasco, 111 Congress Ste 1400, Austin, Tx 78701-4093 aty +Richard H Golubow, Winthrop Couchot, 660 Newport Center Drive Ste 400, Newport Beach, CA 92660-6427 aty +Robert E Opera, 660 Newport Center Dr Ste 400, Newport Beach, CA 92660-6427 aty +Robert L Eisenbach, III, 101 Califonia St 5th Fl, San Francisco, CA 94111-5800 aty +Scott C Clarkson, 3424 Carson St Ste 350, Torrance, CA 90503-5716 aty Sharon Z Weiss, Weinstein Weiss & Ordubegian, 1925 Century Park E Ste 1150, Los Angeles, CA 90067-2712 aty Sheryl L. Moreau, Missouri Dept of Revenue, General Counsels Office, 301 W High St Rm 670, POB 475, Jefferson City, MO 65105-0475 ust +United States Trustee (SA), 411 W Fourth St., Suite 9041, Santa Ana, CA 92701-8000 cr AM-PM, Inc. dba Aries Internet Services, Inc., c/o Weinstein, Weiss & Ordubegian, LLP, 1925 Century Park East Ste 1150, Los Angeles, CA 90067-2712 cr American Express Travel Related Svcs Co Inc Corp C, C/O Becket & Lee LLP, PO Box 3001, Malvern, PA 19355-0701 cr +Bowne Of Los Angeles, Inc., c/o Bronwen Price attn Gail Price, 2600 Mission St Ste 206, San Marino, CA 91108-1676 cr +Fusionware Corp, c/o William Lawrence, CFO, 5605 NE Elam Young Pkwy, Hillsboro, OR 97124-6454 cr +IBM CORP, ATTN: VICKY NAMKEN, 13800 DIPLOMAT, DALLAS, TX 75234-8812 cr +Iron mountain Information Management Inc, C/O R Frederick Linfesty, 745 Atlantic Ave 10th floor, Boston, MA 02111-2735 cr Missouri Department of Revenue, c/o Bankruptcy Unit, Attn Sheryl L Moreau, POB 475, Jefferson City, MO 65105-0475 cr +Office of Unemployment Compensation Tax Services (, Department of Labor and Industry, Commonwealth of Pennsylvania, 333 Market St 16th Fl, Harrisburg, PA 17101-2234 cr +Tennessee Department of Revenue, c/o TN Attorney Generals Office, PO Box 20207, Nashville, TN 37202-4015 cr +The Collective Group, LLC, c/o Patricia B. Tomasco, Brown McCarroll, L.L.P., 111 Congress Avenue, Suite 1400, Austin, TX 78701-4093 op +Winthrop Couchot, PC, 660 Newport Center Drive, Ste 400, Newport Beach, CA 92660-6427 The following entities were served by electronic transmission on May 16, 2008. aty +E-mail/Text: KLIPPMAN@MUNSCH.COM Kevin M Lippman, Munsch Hardt Kopf & Harr, PC, 3800 Lincoln Plaza, 500 N Akard St, Dallas, TX 75201-3302 TOTAL: 1 cr auc intp fa cr cr cr crcm cr acc intp cr ***** BYPASSED RECIPIENTS (undeliverable, * duplicate) ***** CH Realty IV/Royal Centre, LLC CMA Business Credit Services Copper Holdings LLC Corporate Recovery Associates Dell Financial Services, L.L.C. Frank Parsons Paper Company, Inc International Business Machines Corp. Official Committee of Unsecured Creditors Rockwell Collins, Inc Squar, Milner, Peterson, Miranda & Williamson, LLP The Canopy Group, Inc Verizon Business Global LLC TOTALS: 12, * 0 Addresses marked + were corrected by inserting the ZIP or replacing an incorrect ZIP. USPS regulations require that automation-compatible mail display the correct ZIP.

District/off: 0973-8 Case: 07-13347

User: admin Form ID: pdf031

Page 2 of 2 Total Served: 30

Date Rcvd: May 15, 2008

***** BYPASSED RECIPIENTS (continued) *****

I, Joseph Speetjens, declare under the penalty of perjury that I have served the attached document on the above listed entities in the manner shown, and prepared the Certificate of Service and that it is true and correct to the best of my information and belief. Meeting of Creditor Notices only (Official Form 9): Pursuant to Fed. R. Bank. P. 2002(a)(1), a notice containing the complete Social Security Number (SSN) of the debtor(s) was furnished to all parties listed. This official court copy contains the redacted SSN as required by the bankruptcy rules and the Judiciarys privacy policies.

Date: May 17, 2008

Signature: