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KLEE, TUCHIN, BOGDANOFF & STERN LLP 1999 AVENUE OF THE STARS, 39TH FLOOR LOS ANGELES, CALIFORNIA 90067-6049 TELEPHONE: (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, California 90067 Telephone: (310) 407-4000 Facsimile: (310) 407-9090 Proposed 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. MOTION PURSUANT TO LOCAL BANKRUPTCY RULE 2081-1(g) FOR ORDER DIRECTING JOINT ADMINISTRATION OF RELATED CASES UNDER BANKRUPTCY RULE 1015(b); MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Hearing Date: Time: Place: December 12, 2007 1:30 p.m. Courtroom 303 U.S. Bankruptcy Court 3420 Twelfth Street Riverside, CA 92501-3819 Case No.: 6:07-17941-PC Case No.: 6:07-17937-PC Chapter 11

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100278.1

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

TO THE HONORABLE PETER H. CARROLL, UNITED STATES BANKRUPTCY JUDGE; THE OFFICE OF THE UNITED STATES TRUSTEE; THE DEBTORS' TWENTY LARGEST UNSECURED CREDITORS; THE DEBTORS' SECURED LENDERS; AND OTHER PARTIES IN INTEREST: National R.V. Holdings, Inc., a Delaware corporation ("NRVH"), and National R.V., Inc., a California corporation ("NRV", and collectively, the "Debtors"), hereby move this Court, pursuant to Local Bankruptcy Rule ("LBR") 2081-1(g), for entry of an order under Rule 1015(b) of the Federal Rules of Bankruptcy Procedure ("Bankruptcy Rules") authorizing and directing joint administration of their chapter 11 cases listed in the foregoing caption (the "Motion"). The basis for the relief requested in the Motion is set forth below and in the Declaration of Thomas J. Martini in Support of First-Day Motions, which is being filed concurrently with this Motion and is incorporated herein by reference. Jointly administering the Debtors' estates will eliminate unnecessary and expensive duplication of effort by the Debtors, their professionals, their creditors, parties in interest, and this Court. If these cases are not jointly administered, parties filing papers with this Court will have to prepare multiple sets of papers that will often be identical but for the captions. Moreover, many of the Debtors creditors will unnecessarily receive multiple copies of the papers. Joint administration will avoid such problems. Pursuant to this Motion and consistent with LBR 2081-1(g), the Debtors request joint administration only, not substantive consolidation. For example, the Debtors request that this Court maintain a joint pleadings docket, approve a joint pleadings caption, and permit the Debtors to combine notices to creditors.

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100278.1

Motion For Joint Administration

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

WHEREFORE, the Debtors respectfully request that the Court enter an order granting this Motion in its entirety, and: (1) authorizing and directing the joint administration of the Debtors' chapter 11 cases under the case number for National R.V. Holdings, Inc.; (2) approving the form of joint caption annexed hereto as Exhibit 1; and (3) granting such other relief as this Court deems necessary and appropriate. DATED: December 10, 2007 /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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100278.1

Motion For Joint Administration

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

MEMORANDUM OF POINTS AND AUTHORITIES I. STATEMENT OF FACTS 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 disposition 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 recreational vehicles ("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. Prior to commencing these cases, the Debtors explored a variety of approaches to their continuing liquidity crisis, including a sale, a sale of certain underperforming assets, and the infusion of new equity capital. Despite many efforts, it became increasingly clear that the Debtors simply could not continue to operate for any extended period of time. As a result, the Debtors determined they had no choice other than to pursue an orderly liquidation of their assets. To that end, after having conducted substantial "reductions in force," resulting in more than a 90% reduction of their work force, they commenced these cases. 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

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100278.1

Motion For Joint Administration

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

Litigation;1 (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. Before the filing, and during the brief period since these cases were commenced, the Debtors' efforts have been directed toward maximizing their recovery from these assets. As noted, while the Debtors conducted a substantial reduction in force prepetition, the Debtors have nonetheless maintained a skeletal staff comprised of key employees, many of whom have

important relationships with dealers and their flooring lenders, vendors, and customers. These relationships should prove to be invaluable to the Debtors as they proceed with an orderly disposition of their assets. Indeed, specific work teams already have been organized to
coordinate the liquidation efforts, to work with dealers, and to address customer concerns.

Additional information concerning the Debtors, their operations, their turnaround efforts, and the commencement of these cases, can be found in the Declaration of Thomas J. Martini in Support of First-Day Motions, on file with the Court. B. The Affiliated Entities.

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These cases are suitable for joint administration for several reasons. First, the Debtors are affiliates as defined by Bankruptcy Code section 101(2) and Bankruptcy Rule 1015(b). NRVH is the direct parent of NRV. The Debtor entities share common management and ultimately the same ownership. The affairs of the two Debtor entities are centrally managed by the same management team and corporate staff, and their financial activities are accounted for on a consolidated basis. There is also some overlap in the creditor bodies of the two Debtors. If these estates are jointly administered, creditors will receive joint notices of the matters involving each of the affiliated entities, thereby ensuring that creditors are
1

In June 2006, NRV commenced a multi-million lawsuit against Crane Composites, Inc. and its parent company for breach of contract, breach of warranty, misrepresentation and other causes of action. The lawsuit seeks both compensatory and punitive damages. This matter is now pending before District Judge Stephen G. Larson in the U.S. District Court for the Central District of California, and is scheduled to go to trial in Riverside in January 2008. At a hearing held before District Judge Larson on December 1, 2007, the Court reaffirmed that trial would start in January. The Debtors believe that this action represents a valuable asset of the estates and are eager to proceed to trial.

100278.1

Motion For Joint Administration

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

fully informed of all matters potentially affecting their claims. It is almost certain that many (if not all) of the motions filed in these cases will concern both NRVH and NRV. If these cases are not jointly administered, parties filing papers with this Court will have to prepare multiple sets of papers that will often be identical but for the captions. Moreover, many of the Debtors' creditors will unnecessarily receive multiple copies of the papers. expensive duplication. In short, jointly administering these related cases will expedite the Debtors' cases and reduce their expense without prejudicing any creditor's substantive rights. Creditors will receive a joint notice of all matters that affect multiple entities and will only have to refer to a single docket, thereby ensuring that they are fully informed of matters that potentially affect their claims. The earlier the Debtors can implement these streamlined procedures, the greater the savings to the Debtors' estates and their creditors. C. The Scope of Joint Administration. Joint administration will avoid such unnecessary and

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The Debtors propose that all pleadings relating to these cases shall bear a joint caption substantially in the form attached as Exhibit 1 to this Motion, and that the Debtors be permitted to combine notices to parties in interest of matters affecting multiple Debtors. The Debtors request that the Clerk of the Court file and maintain all of the pleadings filed in these cases under the docket for National R.V. Holdings, Inc. Nothing contained in this Motion is intended to request or compel substantive consolidation of these estates. This Motion requests only joint administration of the estates. Therefore, the relief requested in this Motion will not prejudice any entity's substantive rights and will result in no conflicts. If the Debtors conclude that substantive consolidation of these estates is warranted, the Debtors will bring a separate motion in this Court requesting such relief.

100278.1

Motion For Joint Administration

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

II. ARGUMENT A. Joint Administration Of These Cases Will Yield Substantial Administrative Benefits.

Bankruptcy Rule 1015 states that joint administration may be appropriate when two or more related debtor entities whether spouses, partnerships, or corporations have filed for protection under the Bankruptcy Code: (b) Cases Involving Two or More Related Debtors. If a joint petition or two or more petitions are pending in the same court by or against . . . a debtor and an affiliate, the court may order a joint administration of the estates . . . . (c) Expediting and Protective Orders. When an order for . . . joint administration of a joint case or two or more cases is entered pursuant to this rule, while protecting the rights of the parties under the Code, the court may enter orders as may tend to avoid unnecessary costs and delay.2 Bankruptcy Rule 1015 promotes the efficient and economical administration of affiliated debtors' related cases while also ensuring that individual creditor's rights are not unduly prejudiced.3 As stated in the Official Committee Note, joint administration expedites cases and reduces their overall cost: Joint administration . . . may include combining the estates by using a single docket for the matters occurring in the administration, including the listing of filed claims, the combining of notices to creditors of the different estates, and the joint handling of other purely administrative matters that may aid in expediting the cases and rendering the process less costly.4 Joint administration and substantive consolidation differ significantly. In substantive consolidation, assets and liabilities are pooled, and generally, the separate entities' creditors
2 3

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4

Fed. R. Bankr. P. 1015(b) (c). See 9 COLLIER ON BANKRUPTCY 1015.03 (15th ed. 2005); see also In re Brookhollow Assocs., 435 F. Supp. 763, 766 (D. Mass. 1977) (joint administration "help[s] the bankruptcy court to administer economically and efficiently different estates with substantial interests in common"), aff'd, 575 F.2d 1003 (1st Cir. 1978); In re N.S. Garrott & Sons, 63 B.R. 189, 191 (Bankr. E.D. Ark. 1986). Fed. R. Bankr. P. 1015 (Committee Note 4).

100278.1

Motion For Joint Administration

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

share pro rata in the estates' aggregate net value.5 Joint administration, however, is merely procedural; it has no impact on creditors' substantive rights.6 Thus, joint administration does not in itself prejudice any creditor's rights. Joint administration is warranted in these cases. By definition, the Debtors are

affiliates under Bankruptcy Code section 101(2) and Bankruptcy Code section 1015(b), and are closely related entities that share ultimate ownership. As stated above, NRV is a wholly owned subsidiary of NRVH. Additionally, the Debtor entities share common management and ultimately the same ownership. The affairs of the two Debtor entities are centrally managed by the same management team and corporate staff, and their financial activities are accounted for on a consolidated basis. There also is also some overlap in the creditor bodies of the two Debtors. If these cases were administered separately, each Debtor would need to provide the same creditors with duplicate copies of many of the same notices and motions in these cases. This unnecessary duplication would be costly without creating any

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counterbalancing benefit for creditors. Joint administration will greatly reduce the cost of administering these cases and will eliminate the substantial confusion and waste that would otherwise be created by maintaining separate dockets. In many instances, the only material differences between each set of pleadings that would be filed in these cases would be in the captions. Matters affecting one estate may often affect the other. Requiring each of the debtor entities to file separate pleadings in each matter will entail considerable duplication at substantial cost. This

duplication would not generate any additional benefit to stakeholders. To the contrary, it would impose an unnecessary burden on the estates, the stakeholders, the Court, and the Clerk of the Court. B. Joint Administration Will Not Prejudice Any Creditors.

There will be no material prejudice to creditors if these estates are jointly

5

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6

See In re Standard Brands Paint Co., 154 B.R. 563 (Bankr. C.D. Cal. 1993); In re I.R.C.C., Inc., 105 B.R. 237, 241 (Bankr. S.D.N.Y. 1989). N.S. Garrott, 63 B.R. at 191; In re Arnold, 33 B.R. 765, 767 (Bankr. E.D.N.Y. 1983).

100278.1

Motion For Joint Administration

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

administered.

As discussed above, joint administration would benefit all creditors by

substantially reducing costs and administrative burdens in general. III. CONCLUSION WHEREFORE, the Debtors respectfully request that the Court enter an order granting this Motion in its entirety, and: (1) authorizing and directing the joint administration of the Debtors' chapter 11 cases under the case number for National R.V. Holdings, Inc.; (2) approving the form of joint caption annexed hereto as Exhibit 1; and (3) granting such other relief as this Court deems necessary and appropriate. DATED: December 10, 2007 /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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100278.1

Motion For Joint Administration

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

LEE R. BOGDANOFF (State Bar No. 119542) MICHAEL L. TUCHIN (State Bar No. 150375) 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, California 90067 Telephone: (310) 407-4000 Facsimile: (310) 407-9090 Proposed 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 [TITLE OF PLEADING OR ORDER] Hearing Date: Time: Place: TBD TBD Courtroom 303 U.S. Bankruptcy Court 3420 Twelfth Street Riverside, CA 92501-3819

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EXHIBIT "1"