T R O U B L E D C O M P A N Y R E P O R T E R
Saturday, April 15, 2017, Vol. 21, No. 104
ATLAS DISPOSAL: Can Use IRS Cash Collateral
H&H FARMS: Wants to Ratify and Reaffirm Notes with ARM
PRIME METALS: Has Final Approval to Use S&T Cash Collateral
VALDERRAMA A/C: Wants to Use WSB Cash Collateral
VIOLIN MEMORY: Reports $1.86 Million Net Loss in February
WL MECHANICAL: Wants to Use Max Advance Cash Collateral
ATLAS DISPOSAL: Can Use IRS Cash Collateral
Judge Vincent F. Papalia of the U.S. Bankruptcy Court for the
District of New Jersey authorized Atlas Disposal Options, Inc.'s
use of Internal Revenue Service's cash collateral.
A hearing on the Motion was held on March 14, 2017.
The IRS asserts a security interest in all prepetition property of
the Debtor pursuant to Section 6321 of the Internal Revenue Code,
for which Notices of Federal Tax Lien were filed and a secured
claim of $344,591. The Debtor does not waive by the Consent Order
its right to challenge the Proofs of Claim as filed.
In exchange for the use of cash collateral, the Debtor has agreed
to make adequate protection payments in the amount of $1,500 per
month beginning April 12, 2017, and to continue making monthly
adequate protection payments in the same amount by the twelfth date
of each month thereafter until the earlier of (i) confirmation of a
plan of reorganization; (ii) conversion of the Debtor's Chapter 11
case; or (iii) entry of a contrary order by the Court regarding the
use such cash collateral. The periodic adequate protection
payments made by the Debtor will be applied to the secured claim of
As additional adequate protection for any diminution in value of
the IRS's claim in prepetition collateral, the IRS will have a
continuing replacement lien upon all postpetition assets of the
Debtor of the same character and type, and to the same extent and
validity, as the lien of the IRS attached to the Debtor's assets
prepetition, less any payments made by the Debtor under the action.
The IRS's lien of such post petition assets will have the same
validity as existed between the IRS, the Debtor and all other
creditors or claimants.
The Debtor will make all required Federal Tax Deposits and payments
timely for all post petition Federal Tax liabilities. It will
timely file all required Federal Tax Returns that come due during
the pendency of the agreement.
About Atlas Disposal Options
Atlas was formed to offer environmental contractors and industrial
clients a single source for all their disposal needs. The Debtor
facilitates transportation and disposal of almost any waste
stream, utilizing its own trucks, personnel and equipment to
dispose of any petroleum, sanitary or hazardous waste.
The Debtor sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D.N.J. Case No. 16-19253) on May 12, 2016. The
petition was signed by Paul Masser, president.
At the time of the filing, the Debtor disclosed $347,640 in assets
and $1.05 million in liabilities.
The case is assigned to Judge Vincent F. Papalia.
Initially, the Debtor was represented by Richard Fogel, Esq.
Subsequently, the Debtor employed Stuart M. Nachbar, Esq. at Law
Office of Stuart M. Nachbar, P.C., to represent it in its case.
The Debtor also tapped Walter B. Dennen, Esq. at Aimino & Dennen,
as special counsel; and Todd S. Marrazzo as accountant.
H&H FARMS: Wants to Ratify and Reaffirm Notes with ARM
John and Lujean Hartwell, and H&H Farms ask the U.S. Bankruptcy
Court for the Northern District of Texas to (i) authorize them to
ratify and reaffirm the financial agreements the Debtors entered
into with Ag Resource Management ("ARM") connected with the Wheat
Note and the Corn and Milo Note; (ii) grant them authority to
borrow up to an additional amount of $201,000 from the credit
remaining available on such notes; and (iii) grant ARM a first and
prior lien against the Debtors' 2017 wheat, triticale, corn and
hybrid sorghum crops, along with the crop insurance, and FSA
government payments associated with such crops.
The Debtors in the cases run an integrated farming operation as
part of a common enterprise in which the Hartwells have title to
certain assets used by H&H Farms in the business, and where the
Hartwells, both as partners and by virtue of the execution of
personal guaranties, are liable for all of the debts of H&H Farms.
The Debtors intend to file a motion to request the joint
administration of their bankruptcy cases.
The Debtor, H&H, is a Texas general partnership, consisting of John
Hartwell (30%), his wife, LuJean Hartwell (30%), and their
daughter, Shawn Michelle Hartwell (20%) and, granddaughter,
Alynson Grace Hartwell (20%). H&H conducts farming operations in
Dallam County, Texas, and Roosevelt County, New Mexico, and grows,
harvests and markets feed grains and forage crops produced on land
owned by the Debtors in the affiliated case of the Hartwells as
well as land leased from other land owners in the area. The
primary customers for the farm products produced by H&H are the
dairies and cattle feedlots located in the region where H&H
produces its crops.
The Hartwells own 1,605 acres of farmland in Dallam County, Texas.
The most recent appraisal valued the farmland at $3,046,000 in
2012. Zions First National Bank loaned the Hartwells the funds to
purchase the land, and the current balance of the promissory note
owing to Zions is approximately $1,070,000. The Hartwells claim
200 acres of the land as well as the house located on the property
having an estimated value of $500,000 as their homestead. The
payments are current on the note owing to Zions.
Both the Hartwells and H&H are highly leveraged. The majority of
the farm machinery and equipment used in their farming operations
is subject to purchase money security interests in favor of John
Deere Financial and CNH Industrial Capital covering equipment
purchased by the Hartwells, and equipment leases on vehicles and
farm machinery owned by Indian Ink Leasing and other farm equipment
leasing companies carried in the name of H&H.
The Debtors estimate the value of their farm machinery and
equipment not subject to purchase money security interests or
personal property leases at approximately $391,000. This figure
regarding the value of farm machinery is after they account for
numerous items of equipment sold at public auction by High Plains
Auctioneers prepetition. The equipment sale netted total proceeds
of $127,464, and High Plains Auctioneers recently delivered to John
Hartwell a check made jointly payable to Mr. Hartwell and Happy
In 2012 the Debtors began securing their crop financing from Happy
State Bank, Amarillo, Texas ("HSB"), and over the course of the
lending relationship with HSB executed 6 promissory notes in the
name of H&H having a total estimated current balance of $4,607,923,
and one promissory note in the name of John Hartwell with an
estimated current balance of $213,893. The notes owing HSB by the
Hartwells and H&H have an aggregate estimated balance owing as of
the Petition Date of approximately $4,821,816. The notes have all
matured or been accelerated and demands have been made by counsel
for HSB for repayment of the full amounts outstanding. On March
15, 2017, the real property against which HSB holds a second lien
deed of trust was posted for foreclosure sale to be held on April
4, 2017. In order to prevent HSB's foreclosure of the farmland,
the Hartwells and H&H filed petitions for relief under Chapter 11
of the Bankruptcy Code on March 31, 2017.
All notes held by HSB are cross-collateralized and are secured by a
second lien deed of trust against the 1,405 acres of real property
owned by the Hartwells (not including any homestead acres); a first
lien deed of trust against an 11-acre tract of real property along
with the improvements consisting of an office building and shop
owned by H&H ("Ponderosa Property"), and a first lien against the
Debtors' farm machinery and equipment, inventory, accounts
receivable, and farm products and associated FSA payments produced
during crop year 2016. All of the liens and security interests of
HSB against such assets appear to be properly recorded and
The Debtors estimate the current collateral value of the assets
against which HSB has perfected liens to be as follows: (i) Equity
in 1,405 acres of real estate (2nd lien): $1,476,000; (ii)
Ponderosa Property: $665,000; (iii) equipment proceeds: $127,464;
(iv) farm machinery & equipment: $391,000; (v) estimated
accounts/wheat straw/FSA payments: $606,274. The total collateral
value is $3,265,738.
Based upon the collateral analysis of the Debtors, HSB has a
secured claim against assets of the two bankruptcy estates of
approximately $3,265,738, and an unsecured deficiency claim of
approximately $1,556,078. The Debtors propose to turn over to HSB
the check for the equipment proceeds in the amount of $127,474 to
HSB and have it applied to the outstanding secured claim.
Presently, the Debtors do not have in hand and will not receive the
FSA farm program payments for 2016 totaling an estimated $256,274
until October or November 2017. Thus, the estimated value of HSC's
collateral as of the date of the filing of the Motion, and after
the application of the equipment proceeds, is approximately
In the fall of 2016, the Debtors negotiated an agreement with ARM
to obtain secured credit to finance crop inputs for its 2017 wheat
crop, and a second agreement to provide financing for the summer
crops of corn and a seed block of grain sorghum.
H&H signed a promissory note dated Oct. 28, 2016, in favor of ARM
in the principal sum of $346,456 bearing interest at the annual
rate of 7.5% along with a loan origination fee and loan service fee
of $3,397 each, and being fully due and payable on Aug. 15, 2017
("Wheat Note"). In order to secure the repayment of the loan, H&H
granted ARM a first lien security interest in all the Debtors'
growing crops, crop insurance and FSA farm program payments. The
balance owing on the Wheat Note as of March 22, 2017, was
approximately $297,727, with a remaining credit availability of
The Wheat Note is secured by 3,379.1 acres of irrigated wheat, 901
acres of dryland wheat, 3,905 acres of wheat which is the subject
of pasture leases, and 437.5 acres of triticale, plus all crop
insurance proceeds on all insurable crops, and 2017 FSA farm
program payments associated with the crops. The total estimated
value according to the best projections of the Debtors with respect
to crop yields, commodity prices and pasture rent for these crops
is $1,376,316. The crops should be ready for harvest in late June
or early July, and the Debtors believe they will be able to market
the crops and realize the proceeds from their sale prior to the due
date on the Wheat Note of Aug. 15, 2017.
H&H signed a promissory note dated Jan. 20, 2017, in favor of ARM
in the principal sum of $1,008,561 bearing interest at the annual
rate of 8% along with a loan origination fee and loan service fee
of $9,888 each, and being fully due and payable on March
15, 2018 ("Corn and Milo Note"). In order to secure the repayment
of the loan, H&H granted ARM a first lien security interest in all
the Debtors' 2017 corn and hybrid seed sorghum crops, crop
insurance and FSA farm program payments along with a second lien
security interest in the Debtors' inventory and equipment. The
balance owing on the Corn and Milo Note as of March 22, 2017, was
approximately $420,314, with a remaining credit availability of
The Corn and Milo Note will be secured by 1,915 acres of irrigated
corn, and 250 acres of hybrid sorghum to be grown as a seed block,
plus all crop insurance proceeds on all insurable crops, and 2017
FSA farm program payments associated with the crops. The total
estimated value according to the best projections of the Debtors
with respect to crop yields, commodity prices and pasture rent for
these corn and sorghum seed crops is $1,508,800. The crops should
be ready for harvest in late summer and early fall of 2017, and the
Debtors believe they will be able to market the crops and realize
the proceeds from their sale prior to the due date on the Corn and
Milo Note of March 15, 2018.
No other creditor other than ARM has provided operating funds for
the planting or cultivation of the current wheat and triticale
crops, nor toward the preparation of the Debtors' farmland for the
production of the corn and hybrid sorghum crops. However, HSB has
a prepetition lien against crops, crop insurance and government
The Debtors ask authority to ratify and reaffirm the Wheat Note and
the Corn and Milo Note, along with the financing arrangements
incorporated in the notes and collateral documents between H&H and
ARM. The Debtors further ask authority to access the estimated
$622,000 of credit remaining on the two ARM promissory notes, and
grant ARM postpetition senior liens against the Debtors' existing
wheat and triticale crops as well as the Debtors' 2017 crops, crop
insurance, and government payments.
The Debtors have approximately 90,000 bushels of feed corn in on
farm storage which is subject to a security interest in favor of
the Commodity Credit Corp. ("CCC") to secure the repayment of an
outstanding CCC loan in the approximate sum of $214,000. The
Debtors have arranged a contract with Dalhart Feeders to deliver
the feed corn to it for consumption of its cattle at the feedlot
for the favorable price of $3.90 per bushel. The Debtors lack the
necessary funds to pay the CCC prior to the delivery of the feed
Unless the immediate use of cash collateral is granted the Debtors
risk losing the benefits of the contract with Dalhart Feeders and
the estates will suffer immediate and irreparable harm.
The Debtors, therefore, ask emergency interim authority to use cash
collateral subject to liens in favor of HSB in the form of an
estimated $62,500 worth of proceeds the Debtors project they will
receive from sales of 2016 wheat straw and seed sales commission
during the month of April. These funds will be used in accord with
a budget reflecting sources and uses of funds. This cash
collateral will be used over a period of 30 days, or until the
Court can conduct a final hearing on Debtors' request for permanent
use of cash collateral. The Debtor requires the use of these
proceeds from crop insurance benefits and such funds would be
expended in accordance with the cash flow projections.
As reflected in such cash flow projections, the Debtor estimates
total cash needs over the 30-day period of approximately $286,000
consisting of operating expenses of $201,000 and $85,000 to be
applied in increments of approximately $10,000 each toward the
repayment of the CCC loan.
The Debtors ask an expedited preliminary hearing on the Motion, and
authority to use cash consistent with the attached cash flow
projections. The Debtors suggest that to the extent adequate
protection payments are deemed by the Court to be necessary and
appropriate they be authorized to make monthly interest payments to
HSB on their estimated secured claim in the estimated sum of
$2,882,000 at the annual rate of 5.5%.
Concurrently with the filing of the Motion, the Debtors are filing
in their respective cases a Motion for Emergency Hearing to Shorten
and Limit Notice on the Motion.
The Debtors further ask the Court to set a hearing to consider the
Debtors' continued use of cash collateral and to grant adequate
protection to secured creditors in a manner consistent with the
requirements of the Bankruptcy Code.
A copy of the cash flow projections attached to the Motion is
available for free at:
Ag Resource Management can be reached at:
AG RESOURCE MANAGEMENT
7116 I-40 W., Bldg. C, Ste. B
Amarillo, TX 79106
About H&H Farms
H&H Farms, doing business as Hartwell Harvest, sought Chapter 11
protection (Bankr. N.D. Tex. Case No. 17-20106) on March 31, 2017.
The Debtor estimated assets and liabilities in the range of $1
million to $10 million. The petition was signed by John L.
Judge Robert L. Jones is assigned to the case.
The Debtor tapped David R. Langston, Esq., at Mullin, Hoard &
Brown, L.L.P., as counsel.
PRIME METALS: Has Final Approval to Use S&T Cash Collateral
Judge Jefferey A. Deller of the U.S. Bankruptcy Court for the
Western District of Pennsylvania authorized Prime Metals & Alloys,
Inc., to use the cash collateral of lender S&T Bank on a final
basis from March 31, 2017 through June 23, 2017, to pay its direct
The final hearing was held on April 5, 2017.
The Debtor is authorized to use cash collateral for the purposes of
funding those expenses set forth in the Budget.
The 13-week Budget contemplates total cash outflows in the
aggregate amount of $6,167,054 for the period beginning March 31,
2017 through June 23, 2017.
The Debtor will not use Cash Collateral to pay expenses of the
Debtor except for: (i) those expenses, payments, and/or
disbursements that are expressly set forth in the weekly Budget and
do not exceed a 12.5% measured on a cumulative basis or otherwise
permitted under the Final Order and the Prepetition Loan Documents,
unless waived by S&T Bank; (ii) compensation and reimbursement of
expenses allowed by the Court to attorneys, accountants, or other
professional personnel retained by the Debtor and the Committee as
provided for in the Final Order in accord with the Carve Out; and
(iii) other non-operating expenses identified in the Budget that do
not exceed the weekly Budget line item for such expenses measured
on a cumulative basis.
S&T Bank agrees to a carve-out from all of its collateral, to
satisfy the following fees for professional services rendered on
behalf of the Debtor and/or the Debtor's estate: (i) $172,500 to
satisfy the fees due and owing to the attorneys employed by the
Debtor; (ii) $50,000 to satisfy the fees due and owing to the
financial advisors employed by the debtor; and (iii) $90,000 to
satisfy the fees due and owing to the Committee.
In exchange for S&T Bank consenting to the Debtor's use of Cash
Collateral, S&T Bank will have and is granted replacement security
interests in, and replacement liens on all of the Debtor's
postpetition assets to the same extent, priority and validity of
S&T Bank's prepetition liens against the prepetition collateral.
S&T Bank will also receive interest payments on the amounts due and
owing under the Prepetition Loan Documents so long as the Debtor is
authorized to use Cash Collateral.
Finally, the Debtor will make the payments to S&T Bank in the
amounts and at the times more fully set forth in the Budget. S&T
Bank may seek a super-priority administrative claim to the extent
that the adequate protection granted provides to be inadequate.
A copy of the Budget attached to the Final Order is available for
About Prime Metals & Alloys
Prime Metals & Alloys, Inc., began as a scrap-trading company and
has grown to manufacturing and providing alloys, ingots, specialty
scrap materials and customized scrap blends. The company employs
68 men and women.
Prime Metals & Alloys sought Chapter 11 protection (Bankr. W.D. Pa.
Case No. 17-70164) on March 2, 2017, estimating assets of $1
million to $10 million and $10 million to $50 million in debt. The
petition was signed by Richard Knupp, president.
Judge Jeffery A. Deller is assigned to the case.
The Debtor tapped Kirk B. Burkley, Esq., Allison L. Carr, Esq., and
Daniel R. Schimizzi, Esq., at Bernstein-Burkley, P.C., as counsel.
H2R CPA LLC serves as the Debtor's accountant.
VALDERRAMA A/C: Wants to Use WSB Cash Collateral
Valderrama A/C Refrigeration, Inc., asks the U.S. Bankruptcy Court
for the Southern District of Texas to authorize the interim use of
cash collateral of Wallis State Bank ("WSB") so that it may
maintain its business operations.
The Debtor is the owner of a commercial warehouse located at 8412
Hansen Road, Houston, Texas. The Real Property is composed of
388,120 square feet of real property with a warehouse and office
that is 6,400 square feet. Upon information and belief, the Real
Property has a value of $1,530,889. The Debtor has not had the
Real Property recently appraised.
The Real Property is collateral for two loans by WSB, described as:
(i) loan dated Sept. 18, 2015 in the principal amount of $1,150,100
bearing interest at 2.75% over the WSJ Prime Rate; and (ii) loan
dated Sept. 18, 2015 in the principal amount of $150,000 bearing
interest at 2.75% over the WSJ Prime Rate. The exact balances due
as of today are unknown.
WSB is also secured by liens on Valdarrama's tangible and
intangible personal property, including, but not limited to: (i)
deposit accounts; (ii) accounts receivable; (iii) chattel paper;
(iv) instruments; (v) inventory; (vi ) equipment, furniture,
fixtures, and other tangible property; (vii) investment property;
(viii) documents of title; (ix) general intangibles; and (x)
property in WSB's possession.
The value of Valderrama's personal property is currently unknown,
but it is known to consist of: (i) deposit accounts - $55,000; (ii)
inventory - $18,000; (iii) fork lifts - $17,000; and (iv) office
equipment and furniture - $5,000.
Upon information and belief, WSB has not perfected its lien by the
filing of a UCC financing statement with the Texas Secretary of
State. Nonetheless, WSB has a validly perfected security interest
in Valderrama's deposit accounts at WSB.
The Real Property also has outstanding, first-in-priority, tax
liens as follows: (i) City of Houston - $9,984; (ii) Harris County
Improvement District - $2,491; (iii) Harris County Tax
Assessor–Collector - $22,926; (iv) Pasadena I.S.D. - $43,223; and
(v) San Jacinto Community College District - $2,920.
There is also a junior lien to the WSB liens on the Real Property
held by Friedrich, LLC in the amount believed to be in the
principal amount of $200,000. Based upon the amount of the WSB
liens and the tax liens, the Friedrich's debt is partly
undersecured by $149,345.
Valderrama asks the use of cash collateral in accordance with the
The 3-Week Budget contemplates total operating expenses in the
aggregate amount of 39,105 and gross profit of $41,500 for the
period beginning April 8, 2017 through April 22, 2017.
Valderrama asks the Court to approve the proposed Interim Cash
Collateral Order that has been uploaded with the Motion. The
decretal paragraphs of the Interim Cash Collateral Order define the
adequate protection afforded to Wallis State Bank.
As adequate protection, but only to the extent of the use of the
Cash Collateral, WSB is granted, without any further action a
continuing, additional and replacement lien and first-priority
security interest in cash generated by the Debtor on a postpetition
basis; but only as to the extent of Cash Collateral used by the
Debtor after the Petition Date.
Valderrama requires immediate access to the cash collateral to
continue its business operations and pay its necessary operating
expenses in the regular course of its business. The relief
requested, according to the Debtor, is in the best interests of the
Debtor's estate. The Debtor avers that the failure to authorize
the immediate use of the cash collateral will result in material
harm to the Debtor's business, including the inability to pay
postpetition wages to non-insider employees or to acquire
inventories of equipment and parts. This could ultimately lead to
the Debtor's liquidation, according to the Debtor.
The Debtor, therefore, asks the Court to (i) grant immediate
authority for the interim use of cash collateral as set forth to
prevent immediate and irreparable harm to the Estate pending the
final hearing pursuant to Bankruptcy Rule 4001(b); (ii) set the
Motion for a hearing for the entry of a final order; and grant such
further relief which is just.
A copy of the Budget and the Interim Cash Collateral Order attached
to the Motion is available for free at:
About Valderrama A/C Refrigeration
Valderrama A/C Refrigeration, Inc., designs and installs commercial
refrigeration systems serving clients throughout the Greater
Houston area for more than 28 years.
Valderrama A/C Refrigeration sought Chapter 11 protection (Bankr.
S.D. Tex. Case No. 17-32091) on April 4, 2017, estimating assets
and liabilities in the range of $1 million to $10 million. The
petition was signed by Dario Ciriaco, director.
Judge Karen K. Brown is assigned to the case.
The Debtor tapped William P Haddock, Esq., at Pendergraft & Simon
VIOLIN MEMORY: Reports $1.86 Million Net Loss in February
Violin Memory, Inc., filed with the U.S. Securities and Exchange
Commission its monthly operating report for the month of February
The Debtor's statement of operations reflected a net loss of $1.86
million on $1.65 million of total revenue for February.
As of February 28, 2017, the Debtor had $26.07 million in total
assets, $148.40 million in total liabilities, and $122.33 million
in total stockholders' deficit.
At the start of the month, the Debtor had $3.41 million cash. It
had total receipts of $2.64 million and total disbursements of
$1.70 million. At month end, the Debtor had $4.35 million cash.
A copy of the monthly operating report is available at the SEC at:
About Violin Memory, Inc.
Violin Memory, Inc., develops and supplies memory-based storage
systems for high-speed applications, servers and networks in the
Americas, Europe and the Asia Pacific. Founded in 2005, the
Company is headquartered in Santa Clara, California.
Violin Memory sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Case No. 16-12782) on Dec. 14, 2016. The
petition was signed by Cory J. Sindelar, chief financial officer.
At the time of the filing, the Debtor disclosed $38.93 million in
assets and $145.4 million in liabilities.
Pillsbury Winthrop Shaw Pittman LLP serves as the Debtor's legal
counsel while Justin R. Alberto, Esq. and Scott D. Cousins, Esq.,
at Bayard, P.A., serves as co-counsel. The Debtor has hired
Houlihan Lokey Capital, Inc., as financial advisor and investment
banker. Prime Clerk LLC serves as administrative advisor.
The U.S. Trustee, on Dec. 27, 2016, named three creditors to serve
on the official committee of unsecured creditors Wilmington Trust,
N.A., Clinton Group, Inc., and Forty Niners SC Stadium Company LC.
The Committee hires Cooley LLP as lead counsel, and Elliot
Greenleaf as its Delaware counsel. The Committee tapped DAK Group,
Ltd., as financial advisor and investment banker.
VM Bidco is represented in the case by:
Mark D. Collins, Esq.
Zachary I. Shapiro, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
- and -
Gary T. Holtzer, Esq.
David N. Griffiths, Esq.
WEIL GOTSHAL & MANGES LLP
757 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
WL MECHANICAL: Wants to Use Max Advance Cash Collateral
WL Mechanical Corp., trading as Westlake Heating and Air
Conditioning, asks the U.S. Bankruptcy Court for the Western
District of Virginia to authorize the use of Max Advance, LLC's
cash collateral to continue operating.
The Debtor is in the business of selling and installing Carrier
heating and air conditioning equipment and systems for both
residential and commercial customers. It also provides maintenance
service and repairs for heating and air conditioning equipment.
The Debtor has been in business for over 13 years.
At the commencement of the case, the Debtor had entered into a
financing agreement with Max Advance, a New York limited liability
company. The arrangement with Max Advance involved the sale of
receivables to be generated in exchange for cash advances. In the
agreement Debtor pledged its receivables to secure payment of the
amounts advanced. The repayment terms under each agreement
provided for a daily amount to be withdrawn from Debtor's checking
account at BB&T.
As of the date of the filing of the Petition the balance owed Max
Advance was $67,647. The Debtor requires the use of its accounts
receivables and contract rights in order to continue operating.
To the extent that Max Advance has an interest in cash collateral,
the Debtor proposes to provide a replacement lien postpetition to
such entity in the same asset categories in which each of these
creditors had a secured interest prior to the date of the filing of
the Debtors bankruptcy petition. The replacement liens will be
perfected, enforceable, choate, and effective to the same extent
and priority as such lien had at the time of the filing of the
bankruptcy without the necessity of such creditor taking any other
action, including the filing of any additional security documents
with respect thereto. The Debtor proposes the replacement liens
will be granted only to secure any amount equal to the actual
amount of cash collateral used by the Debtor.
In addition to the replacement lien the Debtor will make as
Adequate Protection payments the following monthly payments to Max
Advance: (i) April - $4,500; (ii) May - $7,000; (iii) June -
$8,000; (iv) July - $11,000; (v) August - $11,000; (vi) September -
$11,000; (vii) October - $11,000; and (viii) November - Remaining
Balance. Monthly payments will be made in equal installments on
the 1st and 15th of each month.
The Pro-forma Budget of the Debtor for the Debtor contemplates the
following monthly expenses for the period beginning April 2017
through October 2017: (i) April - $133,780; (ii) May - $158,680;
(iii) June - $182,530; (iv) July - $220,855; (v) August - $223,110;
(vi) September - $196,630; and (vii) October - $139,500.
The receivables of Debtor as of the date of filing its Petition
were approximately $119,783.
A copy of the Pro-forma Budget of the Debtor for the Debtor and
projected receivables that the Debtor will generate in months April
2017 through October 2017 attached to the Motion is available for
The proposed replacement liens and proposed payments to each
creditor will adequately protect their respective interest. The
Debtor does not contemplate any additional borrowing from either
creditor. Max Advance has agreed to the Debtor's use of cash
collateral under the terms and conditions set out.
The Debtor respectfully asks an Order granting the relief
requested, and such other and further relief as may be necessary
About WL Mechanical Corporation
WL Mechanical Corporation trading as Westlake Heating and Air
Conditioning, filed a Chapter 11 bankruptcy petition (Bankr. W.D.
Va. Case No. 17-70312) on March 9, 2017, disclosing under $1
million in both assets and liabilities. The Debtor is represented
by Richard E. B. Foster, at Richard E. B. Foster, PLLC.
Monday's edition of the TCR delivers a list of indicative prices
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trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine
Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog,
Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa,
Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo
Fernandez, Christopher G. Patalinghug, and Peter A. Chapman,
Copyright 2017. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000 or Nina Novak at 202-362-8552.
*** End of Transmission ***