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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

LEE R. BOGDANOFF (State Bar No. 119542) JONATHAN S. SHENSON (State Bar No. 184250) DAVID M. GUESS (State Bar No. 238241) KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 Avenue of the Stars, 39th Floor Los Angeles, CA 90067 Telephone: (310) 407-4000 Facsimile: (310) 407-9090 Bankruptcy Counsel for Debtors and Debtors In Possession Debtors' Mailing Address 3411 N. Perris Blvd. Perris, CA 92571 National R.V. Holdings, Inc.'s Tax I.D. #XX-XXX-1079 National R.V., Inc.'s Tax I.D. #XX-XXX-5022 UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA RIVERSIDE DIVISION In re NATIONAL R.V. HOLDINGS, INC., a Delaware corporation; NATIONAL R.V., INC., a California corporation, Debtors. Case No.: 6:07-17941-PC Chapter 11 Jointly Administered with Case No.: 6:07-17937-PC NOTICE OF MOTION AND MOTION OF DEBTORS FOR ORDER APPROVING AND AUTHORIZING (1) EMPLOYMENT OF HARPER REALTY & DEVELOPMENT CO., INC., AS BROKER PURSUANT TO BANKRUPTCY CODE SECTIONS 327, 328 AND 330 FOR THE PURPOSE OF SELLING CERTAIN REAL PROPERTY OF THE DEBTORS, AND (2) THE SALE OF REAL PROPERTY FREE AND CLEAR OF ALL LIENS, CLAIMS AND OTHER INTERESTS; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; DECLARATIONS OF JONATHAN CORN AND DREW ROSE IN SUPPORT THEREOF

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No Hearing Required Unless Requested

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

TO THE HONORABLE PETER H. CARROLL, UNITED STATES BANKRUPTCY JUDGE, THE OFFICE OF THE UNITED STATES TRUSTEE, THE DEBTORS' SECURED CREDITORS, COUNSEL FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, ANY PARTIES WITH AN INTEREST IN THE SUBJECT ASSET OF THE DEBTORS WHICH IS TO BE SOLD PURSUANT TO THE AUTHORITY OBTAINED THROUGH THIS MOTION (OF WHICH THE DEBTORS BELIEVE THERE ARE NONE), AND OTHER PARTIES IN INTEREST: PLEASE TAKE NOTICE that National R.V. Holdings, Inc. and National R.V., Inc. ("NRV"), the debtors and debtors in possession in the above-captioned cases (the "Debtors") hereby move for entry of an order approving and authorizing (1) employment of Harper Realty & Development Co., Inc. ("Harper") pursuant to Bankruptcy Code sections 327, 328 and 330, and pursuant to the terms and conditions stated herein, for the purpose of selling certain commercial real property located at 8030 U.S. Highway 98 N., Lakeland, Florida 33809 (the "Lakeland Property"), and (2) the sale of Lakeland Property pursuant to Bankruptcy Code sections 105(a) and 363 and Rule 6004(f) and (h) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") free and clear of all liens, claims and other interests. PLEASE TAKE FURTHER NOTICE that the pertinent facts and circumstances supporting the relief requested herein are set forth in the accompanying Memorandum of Points and Authorities. This Motion is based upon the accompanying Memorandum of Points and Authorities, the accompanying Declaration of Jonathan Corn, the accompanying Declaration of Drew Rose (the "Rose Declaration"), the record in these cases, including all pleadings and documents filed by the Debtors, the arguments and representations of counsel, and any oral or documentary evidence presented at or prior to the time of the hearing on the Motion. PLEASE TAKE FURTHER NOTICE that any response and request for hearing, in the form required by Local Bankruptcy Rule 9013-1(a)(7), must be filed and served on (i) the Debtors' bankruptcy counsel, Klee, Tuchin, Bogdanoff & Stern LLP (at the address indicated above in the top left-hand corner), (ii) counsel for the Official Committee of Unsecured Creditors, Pachulski Stang Ziehl & Jones LLP, Attn: Hamid R. Rafatjoo, Esq., 10100 Santa Monica Blvd.,

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

11th Floor, Los Angeles, CA 90067, Fax: (310) 201-0760; and (iii) the Office of the United States Trustee, Attn: Timothy J. Farris, Esq., 3685 Main St. Suite 300, Riverside, CA 92501, Fax: (951) 276-6973, not later than 15 days from the date of service of this Motion. WHEREFORE, the Debtors respectfully request that the Court enter an order approving and authorizing (1) employment of Harper pursuant to Bankruptcy Code sections 327, 328 and 330, and pursuant to the terms and conditions stated herein, for the purpose of selling the Lakeland Property, (2) the sale of Lakeland Property pursuant to Bankruptcy Code sections 105(a) and 363 and Bankruptcy Rule 6004(f) and (h) free and clear of all liens, claims and other interests; and (3) granting such other relief as is necessary and appropriate.

DATED: February 15, 2008

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/s/ David M. Guess DAVID M. GUESS, an Attorney with KLEE, TUCHIN, BOGDANOFF & STERN LLP Bankruptcy Counsel for Debtors and Debtors in Possession

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

MEMORANDUM OF POINTS AND AUTHORITIES I. FACTUAL BACKGROUND A. General Background.

The Debtors commenced these cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code on November 30, 2007 (the "Petition Date"). The Debtors filed these cases in order to conduct an orderly liquidation of their assets, and to maximize the value of those assets for the benefit of the economic stakeholders of their estates. The Debtors' principal business is the manufacture and distribution of RVs throughout the United States and Canada. Since 1964, from their Perris, California facility, the Debtors have designed, manufactured, and marketed some of the industry's highest quality "Class A" gas and diesel RVs across several branded product lines, including Dolphin, Pacifica, Sea Breeze, Surf Side, Tradewinds, and Tropi-Cal. As of the Petition Date, the Debtors were the ninth largest manufacturer of "Class A" motor homes in the country. The objective of these cases is to maximize value as quickly as possible. This likely will be accomplished through an orderly disposition of the Debtors' assets for the best price. The Debtors believe that value for the benefit of creditors and, with perseverance, shareholders, can be derived from primarily three sources: (a) the successful prosecution of the Kemlite Litigation; (b) the orderly sale of inventory, both finished and unfinished motor homes, parts and replacements, and other valuable items on hand; and (c) the collection of accounts receivable, general intangibles (including intellectual property) and other assets.

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B.

The Decision to Sell the Lakeland Property.

The Debtors seek authority to sell NRV's commercial real property located at 8030 U.S. Highway 98 N., Lakeland, Florida 33809 (the "Lakeland Property"). The Lakeland Property was originally purchased by NRV in June 2004 for $850,000, and had been used, up until the Petition Date, as the Debtors' East Coast Service Center. Following the Petition Date, however, the Debtors have ceased using the Lakeland Property as a service center and have shut down the facility altogether. As such, the Lakeland Property is not currently being put to use. The Debtors

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

believe that the Lakeland Property represents a valuable asset of these estates and that it is in the best interest of these estates to facilitate its prompt and orderly sale. C. The Employment of Harper Realty & Development Co., Inc..

The Debtors wish to employ Harper, an experienced real estate brokerage, to list, show and find buyers for the Lakeland Property pursuant to the terms of the Listing Agreement with Harper, attached to the Rose Declaration as Exhibit 1 (the "Listing Agreement"), as modified in herein.1
Before the Debtors entered into Listing Agreement, Jonathan Corn, the Debtors' General Counsel and Vice President, interviewed several local brokers and discussed with each of them how they proposed to list the Lakeland Property and the terms upon which they would agree to do so. Mr. Corn was able to negotiate with Harper a favorable broker fee of 5%, which is below the general going market rate, particularly for commercial and industrial real estate transactions. By and through this Motion, the Debtors seek allowance and authority to pay the broker fee and other amounts due to Harper under the Listing Agreement, without the need for Harper to file a fee application and without further order of the Court, as an expense of administration pursuant to sections 507(a) and 503(b) of the Bankruptcy Code. Based on the Debtors' review of the Rose Declaration (affixed hereto), the Debtors believe that Harper and its professionals are "disinterested" persons (as that term is defined in the section 101 of the Bankruptcy Code) and do not hold or represent any interest adverse to the Debtors or their estates which would preclude Harper from being employed by the Debtors under section 327(a) of the Bankruptcy Code as a real estate broker with respect to the Lakeland Property.

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D.

The Listing Agreement and Sale Process

Based on input from Harper, NRV has elected to list the property at $950,000. The Lakeland Property will be listed on Multiple Listing Services, and Harper will take additional steps (including conducting "open houses") to market the subject property.

Notwithstanding anything to the contrary in Listing Agreement, paragraphs 10 and 11 of the Listing Agreement shall be, and are hereby, deemed not to apply to the subject engagement. 4

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

II. ARGUMENT A. The Employment of Harper Should Be Approved.

Pursuant to Bankruptcy Code sections 327(a), 328 and 330 and Bankruptcy Rule 2014, the Debtors seek to employ Harper as NRV's real estate broker with respect to the private sale of the Lakeland Property, pursuant to the terms of the Listing Agreement (as modified herein). The Debtors believe that employing Harper is in the best interests of the estates. The terms and conditions of the Listing Agreement are standard with economic terms that are well-within what is considered market. Given these terms and conditions, the Debtors request that the Court allow and authorize payment of Harper's broker fee and other amounts due to it under the Listing Agreement without the need for a fee application or further order from or application to the Court, as an expense of administration pursuant to sections 507(a) and 503(b) of the Bankruptcy Code.

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B.

Cause Exists To Approve The Sale Of The Property Under Section 363(b) Of The Bankruptcy Code.

Section 363(b)(1) of the Bankruptcy Code provides that "[t]he trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate." 11 U.S.C. 363(b)(1). Courts have repeatedly held that a bankruptcy court should authorize a debtor to use or sell estate property under section 363(b)(1) whenever the request is supported by some rational, articulated business purpose. See, e.g., Stephens Indus., Inc. v. McClung, 789 F.2d 386, 390 (6th Cir. 1986); In re Continental Air Lines, Inc., 780 F.2d 1223, 1226 (5th Cir. 1986); In re Lionel Corporation, 722 F.2d 1063, 1066 (2d Cir. 1983); Walter v. Sonwest Bank (In re Walter), 83 B.R. 14, 19-20 (B.A.P. 9th Cir. 1987). This was explained by the Bankruptcy Appellate Panel for the Ninth Circuit in In re Walter: [T]here must be some articulated business justification for using, selling, or leasing the property outside the ordinary course of business . . . . Whether the preferred business justification is sufficient depends on the case. As the Second Circuit held in Lionel, the bankruptcy judge should consider all salient factors pertaining to the proceeding and, accordingly, act to further the diverse interests of Debtor, creditors and equity holders, alike.
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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

Id. (quoting In re Continental Air Lines, Inc., 780 F.2d at 1226). See also In re Ernst Home Ctr., 209 B.R. 974, 979 (Bankr. W.D. Wash. 1997) ("The Court may approve the FADCO Transaction if [the debtor] has established some articulated business justification for the transaction."). Where a debtor proffers a rational justification, there is a strong presumption that the decision was made in good faith and in the company's best interests. See, e.g., In re Integrated Resources, Inc., 147 B.R. 650, 656 (Bankr. S.D.N.Y. 1992). Moreover, under the "business judgment rule," there is a presumption that, where the debtor's governing authority implements and follows fair procedures in making a decision, it acts in good faith and for a rational business purpose. See, e.g., In re S.N.A. Nut Co., 186 B.R. 98, 102 (Bankr. N.D. Ill. 1995) ("The Board of Directors is in the business of running the corporation. If the procedures utilized by the Directors were applied fairly, and the Directors do not violate any of their fiduciary duties, then, under the business judgment rule their decision will not be second-guessed.") (citations omitted). Bankruptcy Code section 363 does not require, however, that the Court substitute its own business judgment for that of the debtor. See, e.g., In re Ionosphere Clubs, Inc., 100 B.R. 670, 678 (Bankr. S.D.N.Y. 1989); In re Highway Equip. Co., 61 B.R. 58, 60 (Bankr. S.D. Ohio 1986). Rather, the Court should ascertain whether the debtor has articulated a valid business justification for the proposed transaction. See, e.g., Lewis v. Anderson, 615 F.2d 778, 781 (9th Cir. 1979). This is consistent with the "broad authority to operate the business of a debtor ... [which] indicates congressional intent to limit court involvement in business decisions by a trustee ... [so that] a court may not interfere with a reasonable business decision made in good faith by a trustee." In re Airlift Int'l, Inc., 18 B.R. 787, 789 (Bankr. S.D. Fla. 1982). Bankruptcy Rule 6004(f)(1) provides that a sale under section 363(b) may be made by private sale or public auction. Bankruptcy courts have held that a debtor-in-possession, in its business judgment, has the discretion to determine whether assets of its estate should be sold by public auction or private sale. See, e.g., Scherer v. Federal Nat'l Mortgage Ass'n (In re Terrace Chalet Apartments, Ltd.), 159 B.R. 821, 825 (N.D. Ill. 1993) (noting that manner of sale is in discretion of trustee); In re Canyon Partnership, 55 B.R. 520, 524 (Bankr. S.D. Cal. 1985) (same); Berg v. Scanlon (In re Alisa Partnership), 15 B.R. 802, 802 (Bankr. D. Del. 1981) (same).
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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

As noted above, the Debtors are proceeding with an orderly wind-down and liquidation of its assets. In light of the Debtors' liquidation goals, they have reasonably determined that the sale of the Lakeland Property a facility that currently serves no purpose is in the best interests of the estates and is a sound exercise of their business judgment. The Court can approve and authorize the sale of the Lakeland Property and be assured that value is being maximized.

C.

The Court Is Authorized To Approve The Sale Of The Lakeland Property Free And Clear Of All Liens, Claims And Other Interests.

Pursuant to section 363(f) of the Bankruptcy Code, the Debtors request that the Court approve the sale of the Lakeland Property free and clear of all liens, claims and other interests, with any such liens, claims and other interests attaching to the sale proceeds with the same validity (or invalidity) and priority as existed prior to the sale. Here, the request for relief under Section 363(f) is appropriate under the circumstances. First, the Debtor is not aware of there being any liens or other interests encumbering the Lakeland Property. Also, to the extent that any creditor asserting a lien that received notice of a proposed sale does not object, it will be deemed to have consented to the requested relief and the proposed free and clear sale under Bankruptcy Code section 363(f)(2). See, e.g., In re James, 203 B.R. 449, 453 (Bankr. W.D. Mo. 1997). Finally, to the extent creditors assert liens on the Lakeland Property, the Court should approve a sale free and clear because the parties asserting liens in the Lakeland Property could nevertheless be compelled in these chapter 11 cases to accept a money satisfaction of such interests. See 11 U.S.C. 363(f)(5); In re Grand Slam U.S.A., Inc., 178 B.R. 460, 462 (E.D. Mich. 1995) ("Section 363(f)(5) allows trustees of an estate to sell property free and clear of liens when 'a legal or equitable proceeding' exists that will force the lien holder to accept less than full money satisfaction for their interests.").

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D. 24 25

Request For Waiver Of Bankruptcy Rule 6004(h)

In order to allow the immediate realization of the value of the Lakeland Property consistent with their liquidation goals, the Debtors respectfully requests that the order on this 26 Motion be effective immediately, notwithstanding the otherwise applicable 10-day stay 27 imposed by Bankruptcy Rule 6004(h). Fed. R. Bankr. P. 6004(h) ("An order authorizing the 28
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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

use, sale, or lease of property . . . is stayed until the expiration of 10 days after entry of the order, unless the court orders otherwise.") (emphasis added).

III. CONCLUSION
WHEREFORE, the Debtors respectfully request that this Court enter an order approving and authorizing (1) the employment of Harper pursuant to Bankruptcy Code sections 327, 328 and 330 pursuant to the abovementioned terms and conditions, and (2) the sale of the Lakeland Property free and clear of all liens, claims and other interests pursuant to Bankruptcy Code sections 105(a) and 363 and Federal Rule of Bankruptcy Procedure 6004(f) and (h).

DATED: February 15, 2008

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/s/ David M. Guess DAVID M. GUESS, an Attorney with KLEE, TUCHIN, BOGDANOFF & STERN LLP Proposed Bankruptcy Counsel for Debtors and Debtors in Possession

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

DECLARATION OF JONATHAN CORN I, Jonathan Corn, declare as follows:


1. I am the General Counsel and Vice President of National R.V. Holdings, Inc. and

National R.V., Inc., the above-captioned debtors and debtors-in-possession ("NRV", and together with National R.V. Holdings, Inc., the "Debtors"). 2. In these capacities, and in conjunction with the efforts of other members of the

Debtors' senior management, I am involved on a day-to-day basis with all aspects of the Debtors' affairs, including business operations, strategic planning, legal affairs and other management activities, including the Debtors' efforts to address their current financial difficulties.

3.

Except as otherwise stated herein, if called as a witness, I could and would

competently testify to the matters set forth herein from my own personal knowledge. 4. The Debtors seek authority to sell the real property located at 8030 U.S.

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Highway 98 N., Lakeland, Florida 33809 (the "Lakeland Property"). The Lakeland Property was originally purchased by NRV in June 2004 for $850,000, and had been used, up until the commencement of these chapter 11 cases on November 30, 2007 (the "Petition Date"), as the Debtors' East Coast Service Center. Following the Petition Date, however, the Debtors have ceased using the Lakeland Property as a service center and have shut down their facility there entirely. As such, the Lakeland Property is not currently being put to use. The Debtors believe that the Lakeland Property represents a valuable asset of these estates and that it is in the best interest of these estates to facilitate its prompt and orderly sale. 5. The Debtors wish to employ Harper Realty & Development Co., Inc. ("Harper") to

list, show and find buyers for the Lakeland Property. The Debtors seek to employ Harper pursuant to the terms of that certain listing agreement with Harper, a true and correct copy of which is attached to the accompanying Declaration of Drew Rose as Exhibit 1 (the "Listing Agreement"), as such terms may be modified by the subject Motion. 6.
Before the Debtors entered into Listing Agreement, at my direction, Jeff Goodrick,

a Vice President of National RV, Inc., interviewed several local brokers and discussed with each of them how they proposed to list the Lakeland Property and the terms upon which they would

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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 (310) 407-4000

DECLARATION OF DREW ROSE


I, Drew Rose, declare as follows:

1.

I am an agent with Harper Realty & Development Co., Inc. ("Harper"), the

proposed real estate broker to National R.V., Inc. ("NRV") with respect to the real property located at 8030 U.S. Highway 98 N., Lakeland, Florida 33809 (the "Lakeland Property"). 2. Except as otherwise stated herein, if called as a witness, I could and would

competently testify to the matters set forth herein from my own personal knowledge. 3. A true and correct copy of the listing agreement with Harper is attached hereto

as Exhibit 1 (the "Listing Agreement"). Pursuant to the Listing Agreement, Harper will be entitled to a broker fee of 5% of the proceeds of the Lakeland Property. This rate is below the going market rate, particularly for commercial and industrial real estate transactions. Harper has also agreed that Paragraphs 10 and 11 of the Listing Agreement shall be of no force and effect in the subject engagement. 4. Harper has attempted in good faith to ascertain its relationships, if any, to parties Specifically, Harper has used its computer

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that may have connections to these cases.

programs to review its databases in order to discover relationships. Harper has also inquired of other agents and employees within the brokerage whether any relationships exist that may have escaped scrutiny utilizing the computerized systems. 5. In the instant case, Harper focused its inquiry on ascertaining whether: a. Harper or any agent or employee thereof currently represents or

otherwise currently has a relationship with any person or entity listed on the Lists of Creditors Holding 20 Largest Unsecured Claims (filed with the Court on the Petition Date) and the List of Equity Security Beneficiaries of NRVH (filed with the Court on the Petition Date), the Debtors' secured creditors, the Debtors' directors and officers, and the Debtors' professionals (collectively, the "Searched Parties"); b. c. Parties. Harper represented any of the Searched Parties during the past year; or Harper the past year derived significant revenue from any of the Searched

KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 TELEPHONE: (310) 407-4000

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EXHIBIT 1 LISTING AGREEMENT

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