Reading Broadcasting, Inc .

Those objections are as follows: Gladstone Business Loans, LLC objected to1
both plans to the extent its DIP loan obligations are not paid in full and in cash as of the Effective
Date of the plan. Gladstone further objected to the plans to the extent any discharge or re-vesting
of estate assets occurred before payment of Gladstone’s administrative claim. At the
confirmation hearing, HLM Communications expressed similar concerns.
The trustee and PTN both acknowledged that their intention was to pay these two
secured creditors, with interest, up to the effective date of the plan and that their liens need not be
extinguished until paid. Any confirmation order can provide that the Gladstone and HLM liens
will not be extinguished until they are repaid as required under the plan, with interest, on the
effective date of the plan. See In re Trans World Airlines, Inc., 185 B.R. 302, 323 (Bankr. E.D.
Mo. 1995).
Michael Parker and Partel, Inc. objected to PTN’s plan on feasibility grounds
pursuant to 11 U.S.C. § 1129(a)(11). The arguments made by these parties were similar in
substance to those advanced by the trustee.
S. Merrill Weiss, the purported owner of the patent entitled “Digital Signal
Transmitting Synchronization System,” objected to PTN’s plan on the ground that Weiss’ patent
is integral to the transmission of RBI’s digital broadcast signal but PTN did not address rights of
Mr. Weiss in its plan, particularly as concerns the terms and conditions for the use of, and
compensation for, the Weiss patent.
UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
In re 	: 	Chapter 11
READING BROADCASTING, INC. 	:
Debtor 	: 	Bankruptcy No. 05-26563bif
.................................................
MEMORANDUM
.................................................
In this chapter 11 case without a debtor in possession, two parties have
sought confirmation of chapter 11 plans. The chapter 11 trustee, George L. Miller, seeks
confirmation of a proposed second amended plan of liquidation. In addition, Philadelphia
Television Network (PTN) seeks confirmation of its proposed second amended chapter
11 plan of reorganization. Various objections were filed to each of the plans. 	Creditors1
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The objections of Michael Parker and Partel, Inc., and the objection of S. Merrill2
Weiss, were withdrawn.
The United States trustee took no position. One creditor not at the hearing3
expressed a preference for PTN’s plan.
2
and equity security holders have voted and some have expressed a preference for one plan
over the other.
An evidentiary hearing was held over three days to determine which, if
either, plan should be confirmed. During this hearing, some objections to confirmation
were withdrawn. 	And at the conclusion of the hearing all parties in interest that were in2
attendance (except PTN) expressed a preference for the trustee’s proposed plan. 	See 113
U.S.C. § 1129(c) (even if both plans meet all statutory requirements under sections
1129(a) and (b), only one plan can be confirmed, with the preferences of parties in
interest a consideration).
For the reasons that follow, I shall enter an order confirming the second
amended plan of liquidation proposed by the chapter 11 trustee.
I.
I make the following factual findings in narrative format.
A.
The debtor, Reading Broadcasting, Inc. (“RBI”), owns and operates an
independent television station located in Reading, Pennsylvania. Ex. T-14, at 8. At the
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time of its bankruptcy filing on October 7, 2005, it operated WTVE-TV Channel 51 via
analog signal. Id. It holds a broadcasting license issued by the Federal Communications
Commission. It is this license and the property connected with the operation of the
television station that are the most valuable assets of the bankruptcy estate.
Prior to its bankruptcy filing, RBI was involved in a number of lawsuits. It
settled a lawsuit with Telemundo Networks, LLC for about $1 million. Id., at 10. And in
July 2005, the Pennsylvania Court of Common Pleas entered an interlocutory order
awarding about $8.5 million to PTN (with further damages to be assessed). Id., at 11; Ex.
T-15 (order estimating PTN’s claim for plan voting purposes). RBI filed its voluntary
bankruptcy petition under chapter 11 before any further awards in favor of PTN were
entered.
Shortly after RBI filed its bankruptcy petition an examiner was appointed.
Based upon the examiner’s report, a chapter 11 trustee, Mr. Miller, was appointed under
11 U.S.C. § 1104. The trustee has operated the television station since his appointment
and has sought to sell the station for the highest price possible. In order to do so, it was
necessary for RBI to establish a digital system for broadcasting. The FCC had set a
deadline for stations, such as WTVE, to broadcast their signals digitally. In order to
broadcast its signal digitally, RBI needed to construct a new transmission tower.
RBI’s prepetition attempt to build a large transmission tower near its
Reading offices was thwarted by zoning restrictions. Id., at 10. The chapter 11 trustee
was persuaded, and no party in interest disagreed, that the best alternative was to
construct a multi-tower distributive transmission system (DTS). The DTS transmission
method is novel, and may not be in use at any other full-power station. The system was
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only completely installed and tested in September and October 2007. Although the
testimony was less than clear, it is likely that the FCC has awarded RBI at least a
provisional license to use this new DTS broadcast method.
In May 2006, the trustee (with the consent of all creditors and parties in
interest) engaged SSG Capital Advisors, L.P. to assist the trustee in obtaining financing to
continue operating the television station and convert its analog signal to digital. Ex. T-12.
SSG, which has frequently assisted chapter 11 debtors in financing and sales, was also
responsible for marketing the television station to potential purchasers.
SSG (now known as National City Investments) through its principal, J.
Scott Victor, testified that its initial marketing efforts in 2006 met with no success.
Although there were some expressions of interest, no entity made an offer to purchase
RBI’s television station. At some point, the trustee entered into negotiations with PTN
for the sale of the station assets, but the parties could not agree upon material terms.
In 2007, SSG again sought to market the station, communicating with more
than 100 potential buyers, and receiving nine expressions of interest. Those interested
signed confidentiality agreements and were permitted to review RBI’s financial records
and visit its operations. As will be discussed, only two offers were made and one of them
was later withdrawn.
While these sale efforts were undertaken, the trustee initiated various
adversary proceedings in this bankruptcy case. The largest claims have been lodged
against numerous former officers and shareholders of RBI. This lawsuit, docketed at
Adv. No. 06-0643, seeks damages, inter alia, for breach of fiduciary duty, breach of duty
of loyalty through self-dealing, waste of corporate assets, and fraudulent conveyances.
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Although the amended complaint demands $20 million in damages, the trustee recently
sought to settle this litigation for about $600,000 in cash (with other provisions). The
request under Fed. R. Bankr. P. 9019(a) for court approval of that settlement agreement
was withdrawn when the defendants were unable to comply with certain material terms of
the agreement.
The trustee has been able to pay RBI operating expenses from revenues
generated by its television station, as well as remit post-bankruptcy financing obligations.
As of October 31, 2007, RBI had $986,511.33 in cash on hand. Ex. PTN-5. RBI,
however, has some unpaid administrative expenses owed to professionals and needs to
debit expenses associated with the DTS installation, which expenses are expected to
reduce available cash during the next few months.
B.
The trustee’s proposed second amended plan of liquidation, dated October
1, 2007, states that it “provides for the liquidation and conversion of all of the Debtor’s
assets to cash and the distribution of the net proceeds therefrom to holders of Claims
(and, if proceeds remain after paying all Claims in full, then to holders of Equity
Interests). . . .” T-1, at 6. This plan has two liquidating components. The chapter 11
trustee proposed to sell all of the station assets to the highest qualified bidder, preferably
via auction. After that sale, he would prosecute outstanding litigation. All sale and
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The trustee, with the agreement of secured creditor HLM Communications,4
proposes to pay 95% of its allowed claim.
The trustee opposed my estimating this claim for confirmation purposes. I5
estimated PTN’s claim for voting purposes at more than $11.4 million. Ex. T-15.
6
litigation proceeds would be distributed as follows: first to allowed secured claims ; then4
to allowed administrative and priority expenses; then to allowed unsecured claims; and
then to equity security holders. See generally 11 U.S.C. §§ 725, 726.
Allowed secured claims are estimated to be $8.2 million at present.
Administrative expenses are uncertain, as various objections to fee applications are
pending. The trustee estimated that, as of November 30, 2007, administrative expenses
totaled $2,646,500. Ex. T-8. Allowed unsecured claims exclusive of PTN’s claim were
estimated at about $1.5 million. PTN has filed an unsecured proof of claim, to which the
trustee has pending an objection, in an amount exceeding $20 million. 	The trustee5
conceded at the confirmation hearing that it was unlikely that shareholders would receive
any distribution were his proposed plan confirmed.
The centerpiece of the trustee’s proposed liquidation plan was the sale of
RBI’s station assets. (For reasons best known to the trustee, he elected that this sale take
place on the morning of the confirmation hearing.) The trustee’s bidding procedures
established a reserve price of $12 million, and all bidders were required to deposit
$200,000 at least five business days prior to the intended auction. In order to participate
at this auction, all prospective bidders had to first submit a signed asset purchase
agreement without financing or due diligence contingencies. All bidders were required to
present satisfactory evidence to the trustee of their financial ability to complete the sale
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and to perform under all executory contracts and leases that the bidder wished the trustee
to assume and assign to it under 11 U.S.C. § 1123(b)(2).
The trustee planned to hold an open auction if he received at least two
qualifying bids, with the highest written bid serving as the opening auction bid and any
subsequent bids made in increments of at least $100,000 in cash or equivalent value.
Initially, the trustee received two qualifying bids. However, the night before the auction
was to occur, one of the bidders withdrew. Therefore, instead of holding the auction, the
trustee negotiated and finalized an Asset Purchase Agreement with the remaining bidder,
WRNN-TV Associates Limited Partnership, for $13.5 million. Ex. T-49.
The trustee’s proposed plan specifies that this asset purchase agreement be
approved by the order confirming his plan. See Plan, ¶ 9.1. The effective date of the
plan, however, is conditioned upon the closing of the sale of the station assets. Id., ¶
11.1(c). And the sale closing is conditioned upon FCC approval of the license transfer to
WRNN. Id., ¶ 9.1. Indeed, that is one condition the buyer has imposed for closing this
sale. Ex. T-49. A second condition concerns a post-bankruptcy license agreement
between SOT, Inc. and the chapter 11 trustee on behalf of RBI.
This license agreement, dated July 27, 2006, permits RBI to use a
transmission tower owned by SOT. Ex. T-38. Although RBI’s DTS broadcast method
uses numerous towers, SOT’s tower was identified at the hearing as the most important
one. While the SOT license agreement provides for a five-year term, with renewal
options up to 20 years, it also states: “Notwithstanding the foregoing, this Lease shall
expire upon the date upon which the analog signal must be surrendered in accordance
with regulations promulgated by the FCC.” Ex. T-38, ¶ 2. Since RBI’s license for an
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analog signal is expected to expire in February 2008, the proposed purchaser has
conditioned the asset sale upon SOT’s written modification of this license—so it is clear
that it does not terminate upon expiration of the analog signal—or the entry of a final
court order that voids that provision and permits the assignment of this license from RBI
to WRNN without penalty. See Ex. T-49, ¶ 4.12.
Thus, the effective date of the trustee’s proposed plan depends upon a
successful modification of the SOT tower lease as well as FCC approval of the license
transfer. If those conditions are not met, the trustee’s plan is nullified and the trustee may
either continue to operate the station and seek another sale, convert the case to chapter 7,
or seek some other form of reorganization. Upon occurrence of an effective date, which
the trustee estimated would occur by March 31, 2008, there would be a distribution to
creditors from the sale proceeds.
The trustee’s plan provides for him to continue to operate the debtor and
run its television station after confirmation, pending FCC approval of the license transfer.
After the effective date, the trustee intends to become the plan administrator, prosecute
any pending litigation, object to claims, and then distribute additional proceeds, if any.
WRNN, the proposed purchaser under the trustee’s plan, presently operates
a full-power station out of Rye, New York, with an FCC license. It had considered
purchasing RBI for a number of years and did extensive due diligence. WRNN’s
financial statements were not made part of the record, but Mr. Victor from SSG testified
credibly that he reviewed the audited 2006 statement and the unaudited 2007 statement
and is convinced the buyer is financially capable of completing the purchase if the two
conditions mentioned above are met.
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The specific terms of the commitment letter are:6
(i) negotiation, execution and delivery of definitive documentation
evidencing the consummation of the Acquisition on terms
acceptable to GSSLG;
(ii) completion of a due diligence review of the assets, liabilities
(including contingent liabilities) and business subject to the
Acquisition and any related transactions . . . in scope and with
results satisfactory to GSSLG in its sole and absolute discretion;
(iii) no occurrence, development or change that shall have occurred
after the date hereof, and no information becoming known after the
date hereof, that, in our judgment, has had or could be reasonably
expected to have a Material Adverse Effect;
(iv) there shall not have been any disruption, adverse change or
condition in the financial, lending or capital markets generally;
(v) the accuracy and completeness of all representations that the
Company and its affiliates made to GSSLG and the Company’s
compliance with the terms of this Commitment Letter; and
(vi) the satisfactory negotiation, execution and delivery of
appropriate loan documents relating to the Amended Credit
Facilities . . . .
Ex. T - 48, at 2. The commitment letter further states that:
(continued...)
9
Also offered in evidence is a “commitment letter” to WRNN dated
December 21, 2007, from Goldman Sachs Specialty Lending Group, L.P. Ex. T-48.
WRNN currently has credit availability from Goldman Sachs of $1.5 million. The
commitment letter would increase the credit availability to $16.5 million. Id. This loan
commitment is subject to a number of conditions, including: negotiation and execution of
acceptable loan documents; due diligence concerning RBI; no material adverse changes;
and negotiation and execution of the RBI purchase on terms acceptable to the lender. Id.,
at 2. 6
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(...continued)6
The terms of this Commitment Letter are intended as an outline of
certain of the material terms of the Amended Credit Facilities, but
do not include all of the terms, conditions, covenants,
representations, warranties, default clauses and other provisions
that will be contained in the Loan Amendment Documents. The
Loan Amendment Documents shall include, in addition, provisions
that are customary or typical for amendments of this type.
Id.
PTN’s officers, however, testified that they would be agreeable to the imposition7
of such an escrow provision.
10
If the trustee’s plan were confirmed and the sale to WRNN approved, the
buyer would forfeit to the estate its $200,000 deposit were it unable to complete the sale
due to a lack of funding from Goldman Sachs. Ex. T-4, ¶ 2(vii).
C.
The amended plan proffered by PTN, Ex. T-13, calls for this creditor to pay
in full the allowed secured claim of Gladstone, as well as all allowed unsecured claims
(except PTN’s own claim) with interest at 6% on the effective date of its plan. Moreover,
the plan proposes to pay all allowed administrative expenses in full as of the effective
date. The secured claim of HLM would be paid 95% on the effective date. All leases and
executory contracts assumed by the reorganized debtor at confirmation would be paid
pursuant to contract terms and any arrearage cured on the effective date of the plan.
Unlike the trustee’s proposed plan, PTN’s plan does not expressly provide for any escrow
for claims still disputed on the effective date. 7
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Actually, PTN estimates its liens at $580,000 and total plan funding at8
$11,839,500. Ex. PTN-2. At the hearing, however, PTN’s officers conceded that PTN would
need to pay $50,000 more than its original estimate to one of its creditors, Sony Financial, in
order to satisfy that lien.
Not included in these three exhibits are other exhibits reflecting PTN obligations.9
While PTN testified that certain lien creditors will accept payoffs at discounts, the trustee uses
the non-discounted amounts.
11
PTN’s proposed plan further provides that all shareholder interests in the
debtor will be extinguished and PTN (or its nominee), as plan proponent, would hold all
newly issued shares in the reorganized debtor. The plan is conditioned upon the trustee’s
successful completion of the DTS installation (which has occurred), the existence of a
valid loan commitment sufficient to fund PTN’s plan obligations, and a confirmation
order in a form satisfactory to PTN. Id., at 14-15. Post-confirmation conditions which
must be met by the plan’s effective date include FCC consent to a license transfer, and
plan funding from PTN’s lender. Id., at 15-16. If these various conditions are not met,
PTN has no obligation to comply with its proposed plan.
PTN estimates that it will need $11,889,500 to effectuate all funding
commitments under its proposed plan, based upon an anticipated effective date of March
31, 2008. Ex. PTN-2. This estimate includes repayment of $630,000 in liens held by
creditors of PTN, because PTN’s commitment letter (to be discussed below) requires that
its lender hold a first lien on all PTN as well as RBI assets. 	The trustee’s estimate of8
PTN’s plan funding requirements is much higher: almost $13,800,000. See Exs. PTN-2;
T-16, T-19. The difference involves the latter’s higher projections for administrative
expenses, allowed unsecured claims, lease rejection claims, and satisfaction of liens
against PTN. 9
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Between the date PTN’s plan is confirmed and the effective date, PTN
proposes that the chapter 11 trustee continue to operate the debtor, and provide PTN with
monthly reports. On the effective date, all pending causes of action or claims of the
debtor, as well as cash on hand, would vest in the reorganized debtor. PTN’s plan allows
for at least 12 months between the confirmation date and the effective date of the plan,
with PTN empowered to seek an extension of the effective date. If the effective date
conditions are not met, PTN has no obligation to fund its plan.
Finally, PTN’s plan calls for the rejection of the prepetition lease with SOT
but the assumption of all postpetition leases and contracts. Ex. T-13, at 27. It does not
address the possible extinguishment of the July 2007 SOT licensing agreement mentioned
above. Nonetheless, under the commitment letter received by PTN, its lender reserved
the right to review all material agreements prior to closing. Therefore, the SOT license
issue that concerns WRNN is likely to surface were PTN’s plan confirmed, and would
have to be resolved before PTN would receive any funds from its lender.
D.
Both plan proponents submitted reports of plan voting in compliance with
the orders approving their respective disclosure statements. Under the trustee’s plan,
three classes were impaired and entitled to vote: Class 3—comprised only of the secured
claim of HLM Communications; Class 5—comprised of all allowed unsecured claims;
and Class 6—consisting of all shareholder interests. Under PTN’s plan, only Class
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PTN placed its own unsecured claim in Class VIII and equity holders in Class10
IX. While both of these classes were impaired, they were to receive no distribution based upon
their claims or interests. Both classes were deemed to reject the plan under section 1126(g) and
thus any votes cast were irrelevant. See In re Insilco Technologies, Inc., 480 F.3d 212, 215 n.4
(3d Cir. 2007) (“Equity holders are an eighth class in the Plan, but it provides for the cancellation
of equity interests upon confirmation of the Plan. Thus, equity holders were not entitled to vote
on the Plan, 11 U.S.C. § 1126(g). . . .”); In re Walnut Equipment Leasing Co., Inc., 1999 WL
1068448, at *2 (Bankr. E.D. Pa. 1999) (“A class that is to receive nothing under a plan is deemed
to reject the plan and is not entitled to vote.”).
As will be discussed below, at the conclusion of the confirmation hearing,11
counsel for Helene Associates indicated that his client no longer preferred PTN’s plan over the
trustee’s proposal.
13
III—the secured claim of HLM Communications—was considered impaired and entitled
to vote. 10
Parties eligible to vote were also asked to indicate whether they preferred
the trustee’s or PTN’s plan. HLM Communications voted in favor of both plans. It did
not express a preference for either plan. According to the trustee’s report of plan voting,
Class 5 unsecured creditors voted against the trustee’s plan. Ex. T-3. This was
predominantly due to PTN’s rejecting ballot. Three unsecured creditors indicated a
preference for the trustee’s plan, while three other creditors preferred PTN’s plan (a 50/50
split). 	Id. Class 6 equity interest holdings overwhelmingly voted in favor of the11
trustee’s plan. Of 12 votes received, 10 preferred the trustee’s plan over the PTN plan.
Id.
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II.
A.
Before addressing whether either or both plan proponents met the
confirmation requirements of section 1129 and, if so, which plan should be confirmed, I
must review certain facts regarding PTN’s plan funding that are germane to those issues.
Although WRNN expects to obtain funding for its purchase of RBI’s station
assets from Goldman Sachs, neither its offer nor the trustee’s plan is so conditioned.
Conversely, PTN’s plan is expressly contingent on obtaining plan funding. That funding
source is Wells Fargo Foothill, Inc., which issued a commitment letter dated August 2,
2007. Ex. PTN-1.
In this document Wells Fargo commits to provide up to $15.5 million to
PTN with conditions similar to those in the Goldman Sachs commitment letter discussed
earlier: acceptable loan documentation; due diligence; and no material adverse change.
Id., at 2. However, the term sheet attached to the commitment letter, id., at 7-17, contains
conditions not included in the Goldman Sachs commitment to WRNN. It is those
additional conditions that give rise to many of the feasibility objections to PTN’s plan.
Under the Wells Fargo term sheet, there would be two loans: a term loan
not to exceed $13 million; and a revolver line of credit not to exceed $2.5 million. Ex.
PTN-1, at 7-8. On the loan closing date, PTN could receive a term loan of no more than
52% of the “stic[k] value” of the RBI station assets. This value is defined in the term
sheet as the “fair market value . . . as a start-up station that is sold on an as-is-where-is
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basis in a compressed time frame” based upon an appraisal to be conducted after
confirmation but prior to the loan closing. Id., at 7-8, 14. One-sixtieth of the term loan
principal must be repaid every 3 months, and this loan matures in five years. Id., at 8, 10.
PTN “would be required to maintain minimum levels of EBITDA, [and] a minimum fixed
charge coverage ratio[.]” Id., at 11. Express conditions precedent to the loan closing
include “business, legal, and collateral due diligence . . . satisfactory to [Wells Fargo]”; a
confirmed chapter 13 plan and order satisfactory to the lender; review of all “material
agreements;” PTN’s business plan satisfactory to the lender; minimum cash availability to
PTN at closing of not less than $2 million; assignment of RBI’s FCC license “to a special
purpose subsidiary” of PTN; and PTN and its subsidiaries (which would include RBI)
generating “trailing twelve month EBITDA . . . of not less than $1,000,000 for the most
recent reporting period prior to the Closing Date.” Id., at 11-14.
PTN presently operates a low-power television station. The income from
that station barely covers operating expenses. Thus, PTN has borrowed from its
shareholders to pay corporate expenses. Its present liabilities far exceed its assets
(exclusive of its claim against RBI). Ex. T-23. Through October 31, 2007, RBI’s
finances and PTN’s finances, taken together could meet the trailing twelve month
EBITDA condition in the Wells Fargo commitment letter. But Mr. Victor (for SSG) and
Mr. Coffey (an accountant engaged by the trustee) testified that inclusion of the DTS
expenses beginning November 2007 would not meet this loan condition. They also
opined that present income from RBI and PTN could not repay the maximum term loan
under the requirements of the Wells Fargo term sheet.
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PTN offered the testimony of Mr. Geoff Anfuso, an underwriter with Wells
Fargo, who was familiar with the PTN loan application and commitment letter. His
testimony had three salient points. At the time the loan commitment letter was issued,
Wells Fargo had no reason to believe that PTN would not qualify for the maximum two
loans. Wells Fargo was unwilling to agree that any of the term sheet conditions or other
provisions in the loan commitment would be modified in favor of PTN. They may or they
may not be so altered; Mr. Anfuso (who appeared with counsel) was non-committal.
Furthermore, Wells Fargo may need 90 days or more from the date PTN’s plan was
confirmed before it would complete its due diligence, document and appraisal reviews,
and decide whether and how much of a loan PTN would receive.
B.
Before analyzing each proposed chapter 11 plan for purposes of
confirmation, it is also relevant to note that on October 24, 2005, former counsel to RBI
obtained an appraisal of the station assets using a “fair market compressed stick basis” of
$27 million. Ex. PTN-7:
A “compressed stick value considers the disposition of the
station on an accelerated timeframe. Specifically, the
‘compressed stick value’ approximates an orderly liquidation
of the businesses [sic] over a period of three to six months
from listing to signed letter of intent with escrow deposit.
Id., at 1.
In the state court litigation PTN brought against RBI, the parties offered in
evidence “stick” appraisals of $17,898,772 and $33,750,000. Ex. T-15, at 13-14. Those
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appraisals were not offered in this contested matter. Indeed, Wells Fargo obtained an
appraisal prior to issuance of its commitment letter, but was unwilling to disclose its
terms and no party in interest sought to compel that release.
And, as mentioned earlier, the trustee marketed the station assets through
SSG for more than one year, with the highest offer obtained being $13.5 million.
No creditor or other party in interest opposed using SSG to sell the station assets, nor has
any party offered evidence that the marketing was inappropriate.
III.
Confirmation of a chapter 11 plan requires that the plan proponent meet all
the requirements of section 1129(a), see, e.g., In re Dupell 2000 WL 192972, at *3
(Bankr. E.D. Pa. 2000); In re Future Energy Corp., 83 B.R. 470, 481 (Bankr. S.D. Ohio
1988), except that of 1129(a)(8) (requiring every impaired class of claims or interests to
accept the plan). If all the provisions of section 1129(a) are established, save that of
section 1129(a)(8), then the plan proponent can seek confirmation under section 1129(b).
See 7 Collier on Bankruptcy, ¶ 1129.03[8], at 1129-58 (15th ed. rev. 2007) (“The
condition set forth in section 1129(a)(8) is the only condition precedent which is not
absolutely necessary for confirmation. If a plan satisfies the confirmation criteria set
forth in section 1129(a), including the requirement that if a class of claims is impaired, at
least one impaired class of claims accepts the plan, the plan may be confirmed
notwithstanding the opposition of one or more impaired classes of claims or interests,
provided the plan satisfies section 1129(b).”).
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Here, both the plans of PTN and the trustee had an impaired class,
consisting solely of the secured claim held by HLM Communications, which class voted
in favor of both proposed plans. Each plan proponent also had an impaired class that
either did not vote in favor of its plan or was deemed to reject it. Therefore, if
confirmation of either plan is warranted, it can only be under 11 U.S.C. § 1129(b).
In considering whether the trustee’s plan or PTN’s plan is confirmable,
three provisions of section 1129 are paramount based upon the evidence presented in this
contested matter: section 1129(a)(7) (best interest of creditors test); section 1129(a)(11)
(feasibility) and 1129(b) (fair and equitable standard).
Section 1129(a)(7)(A)(ii) requires that if a class of claims or interests
rejects a proposed plan, that class receives under the chapter 11 plan at least as much as it
would receive in a chapter 7 liquidation. See, e.g., In re Owens Corning, 419 F.3d 195,
208 n.14 (3d Cir. 2005); In re Combustion Engineering, Inc., 391 F.3d 190, 212 (3d Cir.
2004). The application of this provision is relevant to unsecured creditors under the
trustee’s proposed plan and to equity security holders under PTN’s proposed plan.
In addition, every chapter 11 plan must be “feasible” by virtue of section
1129(a)(11):
Section 1129(a)(11) codifies the feasibility requirement and
requires that confirmation of the plan is not likely to be
followed by liquidation or the need for further financial
reorganization, unless such liquidation or reorganization is
proposed in the plan. 11 U.S.C. § 1129(a)(11). To allow
confirmation, the bankruptcy court must make a specific
finding that the plan as proposed is feasible. . . . The standard
of proof required by the debtor to prove a Chapter 11 plan’s
feasibility is by a preponderance of the evidence . . . and we
review the bankruptcy court’s finding that a debtor’s plan is
feasible under the clearly erroneous standard . . . .
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19
In determining whether a debtor’s Chapter 11 plan of
reorganization is feasible, we noted in Briscoe that “the
[bankruptcy] court need not require a guarantee of success . . .
[o]nly a reasonable assurance of commercial viability is
required.” Id. at 1165-66. . . . All the bankruptcy court must
find is that the plan offer “a reasonable probability of
success.” In re Landing Assoc., Ltd., 157 B.R. 791, 820
(Bankr. W.D.Tex. 1993).
Matter of T-H New Orleans Ltd. Partnership, 116 F.3d 790, 801 (5th Cir. 1997) (citations
omitted).
More recently, the Eighth Circuit Court of Appeals explained:
While a reorganization plan’s “[s]uccess need not be
guaranteed,” In re Monnier Brothers, 755 F.2d at 1341, the
bankruptcy court cannot approve a plan unless it has at least a
reasonable prospect for success. See id. . . . The debtors bear
the burden of establishing the feasibility of their plans by a
preponderance of the evidence.
In re Danny Thomas Properties II Ltd. Partnership, 241 F.3d 959, 963 (8th Cir. 2001).
Thus, the chapter 11 feasibility requirement prevents confirmation of
“visionary schemes.” See Matter of Pizza of Hawaii, Inc., 761 F.2d 1374, 1382 (9th Cir.
1985); 7 Collier on Bankruptcy, ¶ 1129.03[11] (15th ed. rev. 2007). Although section
1129(a)(11) does not require that compliance with proposed plan terms be guaranteed,
there must be a “reasonable prospect of success” and the plan must be “workable.” 7
Collier on Bankruptcy, ¶ 1129.03[11], at 1129-74 to 74.1; see, e.g., In re Pikes Peak
Water Co., 779 F.2d 1456, 1460 (10th Cir. 1985); In re Clarkson, 767 F.2d 417, 420 (8th
Cir. 1985); In re Monnier Bros., 755 F.2d 1336, 1341 (8th Cir. 1985); In re Woodmere
Investors Ltd. Partnership, 178 B.R. 346, 361 (Bankr. S.D.N.Y. 1995); In re Orlando
Investors, L.P., 103 B.R. 593, 600-01 (Bankr. E.D. Pa. 1989).
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20
Therefore, in this chapter 11 case, each plan proponent had the burden to
demonstrate that there is a reasonable likelihood that he or it can fulfill the promises made
by their proposed plan. Sincerity and belief in one’s ability to do so are insufficient to
meet this burden:
Feasibility, as noted in the case of In re Bergman . . .
contemplates “the probability of actual performance of the
provisions of the plan. Sincerity, honesty and willingness are
not sufficient to make the plan feasible, and neither are
visionary promises. The test is whether the things which are
to be done after confirmation can be done as a practical matter
under the facts.”
In re Hoffman, 52 B.R. 212, 215 (Bankr. D.N.D. 1985) (quoting In re Bergman, 585 F.2d
1171 (2d Cir. 1978)); see also In re Walker, 165 B.R. 994, 1004 (E.D. Va. 1994).
The trustee challenges PTN’s plan as not feasible because its funding
commitment from Wells Fargo is too speculative for numerous reasons. Similarly, one
must consider whether the trustee’s proposal to sell the station assets to WRNN is
feasible.
Finally, to confirm a plan under section 1129(b) it must be “fair and
equitable.” Typically, the issue arises from the application of the “absolute priority rule.”
See generally In re Armstrong World Industries, Inc., 432 F.3d 507 (3d Cir. 2005).
Neither plan implicates that issue in this dispute. However, “technical compliance with
all the requirements in § 1129(b)(2) does not assure that the plan is ‘fair and equitable.’”
Matter of D & F Const. Inc., 865 F.2d 673, 675 (5th Cir. 1989); see, e.g., Matter of Sandy
Ridge Development Corp., 881 F.2d 1346, 1352 (5th Cir. 1989).
In this contested matter, the compressed stick value of the station assets is
implicated in all three statutory provisions.
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If the trustee’s estimate of allowed administrative, unsecured and rejection12
claims is more accurate, the value of the assets must far exceed $25.77 million.
21
If RBI’s station assets are “worth” roughly $13.5 million as a compressed
stick value (based upon WRNN’s bid) then PTN’s plan is infeasible. Given the present
commitment to loan up to 52% of the value of the station assets, PTN would not obtain
sufficient funding from Wells Fargo to effectuate its plan which, PTN concedes, would
require at least $11.9 million for funding. Since $2 million must be set aside for
operations under the commitment letter then (assuming as testified that a PTN
shareholder would lend $500,000, see also Ex. PTN-2, n.3), PTN must obtain at least
$13.4 million from Wells Fargo to effectuate its plan. At 52% loan to value ratio, it
means that the station assets would require a compressed stick value of at least $25.77
million. 12
Based upon the evidence presented at the confirmation hearing, it is purely
speculative that Wells Fargo would materially alter its loan commitment terms and lend at
a more favorable loan to value ratio, or lessen its $2 million cash availability requirement.
(Wells Fargo would make no such promise.) See, e.g., In re Repurchase Corp., 332 B.R.
336, 343 (Bankr. N.D. Ill. 2005) (“Allowing Debtor’s confirmation to be based on a
‘hope against hope that the financing [would] actually materialize’ post-confirmation
without some form of corroboration would go against a bankruptcy judge’s duties of
ensuring that the Plan complies with the provisions of the Bankruptcy Code.”); In re
Ralph C. Tyler, P.E., P.S., Inc., 156 B.R. 995, 997 (Bankr. N.D. Ohio 1993) (“Without
evidence of a firm commitment of financing, this Plan does not meet the feasibility
requirement.”); In re Stratford Associates Ltd. Partnership, 145 B.R. 689, 699 (Bankr. D.
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Fifty-two percent of $30 million is about $15.5 million: the ceiling mentioned in13
Wells Fargo’s loan commitment. PTN projects, in Ex. PTN-2, that it will receive the maximum
loan proceeds.
22
Kan. 1992) (“Generally, without proper funding in place or a firm commitment of such
funding, the Court cannot find the plan feasible.”); In re Haardt, 65 B.R. 697, 702 (Bankr.
E.D. Pa. 1986) (lack of refinancing commitment rendered plan infeasible); see also In re
Made in Detroit, Inc., 299 B.R. 170, 176-77 (Bankr. E.D. Mich. 2003) (refinancing too
speculative for confirmation); In re Kovalchick, 1995 WL 118171, at *9 (Bankr. E.D. Pa.
1995) (same). Compare In re Global Ocean Carriers Ltd., 251 B.R. 31, 46 (Bankr. D.
Del. 2000) (refinancing is feasible under section 1129(a)(11) where lenders “have issued
a commitment letter and/or agreed to term sheets which are detailed and contingent only
upon final documentation, confirmation of the Modified Plan, and no materially adverse
changes occurring.”). Accordingly, if the station assets have a compressed stick value
less than $25.77 million, PTN’s plan would be too speculative to approve.
If the station assets are worth roughly $30 million as a compressed stick
value, as PTN’s plan implies, 	then unsecured creditors under the trustee’s plan would13
not receive an amount equal to their dividend in a chapter 7 liquidation, unless PTN’s $20
million proof of claim was allowed. See In re River Village Associates, 1993 WL
243897, at *4 (Bankr. E.D. Pa. 1993). Although section 1129(a)(7) is concerned with
liquidation value, see Matter of Sound Radio, Inc., 93 B.R. 849, 854-55 (Bankr. D.N.J.
1988), a forced sale liquidation of assets may be comparable to a compressed stick value.
Similarly, PTN’s plan may not provide equity security holders an amount
equal to a chapter 7 liquidation, unless PTN’s $20 million proof of claim was allowed. If
PTN’s allowed claim is reduced to $11.4 million (as estimated for voting purposes) and
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23
allowed secured and administrative claims total just under $11 million as PTN estimates,
and other unsecured creditors hold allowed claims of about $1.5 million, as PTN
estimates, then the liquidation in chapter 7 of assets with a compressed stick value of $30
million could yield a dividend to shareholders.
And if the station assets had a compressed stick value of roughly $30
million, the trustee’s plan proposal to sell them for $13.5 million may not be fair and
equitable. See generally Protective Committee for Independent Stockholders of TMT
Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 441, (1968) (“Whether a plan of
reorganization excluding junior interests is fair and equitable depends upon the value of
the reorganized company.”); Matter of King Resources Co., 651 F.2d 1326, 1339 (10th
Cir. 1980) (“[A]ny determination that a plan is fair and equitable requires a valuation of
the debtor’s property.”); In re Exide Technologies, 303 B.R. 48, 60-61 (Bankr. D. Del.
2003). PTN’s plan proposal—under which it would obtain all of the debtor’s assets,
including station assets, cash on hand, and litigation claims, for a payment estimated
between $12 million and $14 million—could have a similar problem, unless PTN’s $20
million proof of claim were allowed.
Thus, it is necessary for me at least to estimate the compressed stick value
of RBI’s station assets for purposes of determining this confirmation dispute. See Matter
of Williams, 850 F.2d 250, 253 (5th Cir. 1988) (to determine compliance with section
1129(b), the bankruptcy court properly considered the value of the assets). And, as in
many valuation disputes, the evidence is less than clear.
Although the actual appraisals were not introduced into evidence at
confirmation, during a trial in state court which took place in 2004, RBI offered a stick
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Mr. Weiss objected to both the PTN and the trustee’s plan, in that neither14
provided for his alleged patent rights concerning the “Digital Signal Transmitting
Synchronization System,” purported granted on September 19, 2006. At the confirmation
hearing, his attorney reached an accord with the trustee on this issue. PTN acknowledged that it
would have to accommodate any legitimate patent rights, but did not reach a settlement with Mr.
Weiss.
24
value appraisal of $17,898,772. Ex. T-15, at 13. PTN offered an appraisal during that
same trial valuing the station assets at $33,750,000. Id., at 14. I do not know whether
these appraisals represented compressed stick value.
Then, in 2005, RBI’s counsel obtained a compressed stick value appraisal
of $27 million as of June 1, 2005. Ex. PTN-7. In reviewing this appraisal, I note that it is
based, in part, upon revenue projections for years 2005 to 2012. Id., at 23 (Appendix
Table 1). The appraisal projected that net revenues would be $1.926 million in 2005 and
increase at an average compound annual growth rate of 27.5%. Id. At least part of this
growth assumed that RBI’s digital signal would be available to many more households in
its broadcast region than could receive its analog signal. However, RBI’s October 2007
monthly operating report, Ex. PTN-5, which contains a cumulative column of net
revenues since its bankruptcy filing in October 2005, discloses that RBI’s actual revenues
for 2006 and 2007 fell far short of the projected net revenues found in this 2005 appraisal.
The digital signal was just made operational a few months ago. Whether an
appraiser would now project similar rapid net revenue growth is not known. Moreover,
this 2005 appraisal does not consider the novelty of RBI’s DTS broadcast method, the
patent claim asserted against RBI by S. Merrill Weiss, see docket entry #771, nor the SOT
tower license issue. 	These factors may reduce the value of the assets.14
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25
Prior to August 2007, a precommitment appraisal was done for Wells
Fargo, presumably supporting a $15.5 million loan with a loan to asset ratio of 52% using
compressed stick valuation of the station assets. The methodology and assumptions of
this appraisal were not offered in evidence. Moreover, Wells Fargo will require another
appraisal before actually lending any funds. And both the lender and Mr. Bowman (who
conducted the 2005 and 2007 appraisals) acknowledged in court that consideration would
have to be given to the results of the trustee’s marketing efforts that yielded, as the
highest offer, WRNN’s bid.
Those marketing efforts where undertaken by SSG over many months. SSG
testified that it had extensive marketing experience involving companies in chapter 11,
and no party in interest offered evidence challenging the sufficiency of its efforts to
obtain the highest price for the station assets. Indeed, the order approving SSG’s
retention provided, in effect, for this entity to receive a 2% commission of sales between
$20 million and $30 million, with a 4% commission for sales greater than $30 million. A
sale generated by SSG for less than $20 million resulted in a flat fee. Ex. T-12, at 2.
Thus, SSG had a financial incentive to obtain a price consistent with PTN’s implicit
valuation. The result of SSG’s marketing resulted in the highest offer for the station
assets of $13.5 million.
In attempting to determine the fair market value of property, appraisals
represent expert predictions about the amount that an arms-length, commercially
reasonable sales transaction would yield in the future. See Matter of Excello Press, Inc.,
890 F.2d 896, 905 (7th Cir. 1989). Thus, they are generally probative of value. However,
an appraisal is not as persuasive as “[a] commercially reasonable sale of an asset [which
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26
conclusively] establishes the market value of that asset.” In re BTS Inc., 166 F.3d 346
(Table), 1998 WL 788829, at *1 (10th Cir. 1998). Appraisals should be relied upon,
“only when the price of such a sale cannot be got at directly.” Matter of Excello Press,
Inc., 890 F.2d at 905; see also Bryn Mawr Trust Co. v. Healy, 667 A.2d 719, 723 (Pa.
Super. Ct. 1995) (adopting sale price over sale offers and an appraisal as more indicative
of fair market value). Indeed, “[g]enerally speaking, an auction may be sufficient to
establish that one has paid ‘value’ for the assets of a bankrupt.” In re Abbotts Dairies of
Pennsylvania, Inc., 788 F.2d 143, 149 (3d Cir. 1986).
I am not convinced that WRNN’s bid represents the precise compressed
stick value for the station assets, especially in light of the post-bankruptcy loan made by
Gladstone. The willingness of Gladstone Business Loan, LLC to enter into a March 2006
postpetition first lien financing facility of $7,775,000, assuming a 52% loan to value ratio,
would implicitly value the assets at about $15 million, before installation of the DTS
system. Nonetheless, I find that the trustee’s marketing efforts were reasonable (indeed,
there was no evidence to the contrary), see generally Ready v. Rice, 2006 WL 4550188, at
*3 (D. Md. 2006), and that, given all the factors mentioned above, the present compressed
stick value of the station assets does not exceed $18 million.
With this valuation, PTN would not receive sufficient funding from Wells
Fargo to effectuate its proposed chapter 11 plan. Accordingly, without addressing any
other objections, its plan proposal is not feasible and cannot be confirmed. Indeed, no
party in interest appearing at the confirmation hearing, besides PTN, concluded, after
listening to all of the evidence, that there was sufficient likelihood that this creditor’s plan
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27
would be effectuated. Given that PTN’s proposed plan offered a superior dividend to
unsecured creditors, this absence of support at the hearing is relevant.
As for the trustee’s plan, only PTN’s objections to confirmation remain.
All other objections were withdrawn at the hearing.
The Third Circuit Court of Appeals recognized that a sale of an asset by a
bankruptcy trustee will rarely yield the same value as an asset sold privately, with no time
or other constraints and without any compulsion to sell. Thus, it observed: “Traditionally,
courts have held that ‘[f]air and valuable consideration is given in a bankruptcy sale when
the purchaser pays 75% of the appraised value of the assets.’” In re Abbotts Dairies of
Pennsylvania, Inc., 788 F.2d at 149 (quoting In re Rock Industries Machinery Corp., 572
F.2d 1195, 1197 n.1 (7th Cir. 1978)); see, e.g., In re Colony Hill Associates, 111 F.3d
269, 276 (2d Cir. 1997); Ready v. Rice, 2006 WL 4550188, at *3. Where a bankruptcy
trustee is under some constraints to sell estate property, the value obtained is likely to
reflect those constraints:
[M]arket value, as it is commonly understood, has no
applicability in the forced-sale context; indeed, it is the very
antithesis of forced-sale value. “The market value of . . . a
piece of property is the price which it might be expected to
bring if offered for sale in a fair market; not the price which
might be obtained on a sale at public auction or a sale forced
by the necessities of the owner, but such a price as would be
fixed by negotiation and mutual agreement, after ample time
to find a purchaser, as between a vendor who is willing (but
not compelled) to sell and a purchaser who desires to buy but
is not compelled to take the particular . . . piece of property.”
BFP v. Resolution Trust Corp., 511 U.S. 531, 537-38 (1994) (quoting Black’s Law
Dictionary 971 (6th ed. 1990)).
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Seventy five percent of the value of assets with a fair market value of $1815
million is $13.5 million.
28
Were this case pending under chapter 7, I conclude that a bankruptcy trustee
reasonably marketing the station assets would accept in good faith an offer of $13.5
million, which is fair value for an asset valued at $18 million or less. 	See, e.g.,15
Ready v. Rice, 2006 WL 4550188, at *3 (bid of $4.75 million is fair value for assets
possibly worth $6 million). Thus, the trustee’s plan is both fair and equitable and meets
the best interests of creditors test.
As for feasibility, I appreciate that there is no guarantee that WRNN will
close on this transaction. In addition to the buyer tendering $13.5 million, there needs to
be FCC approval of the license transfer and an agreement with SOT regarding the tower
license. FCC counsel opined during the hearing that WRNN’s present license renders
FCC approval of an additional license more likely. The Goldman Sachs commitment
letter is far less contingent than that issued by Wells Fargo to PTN. See In re Global
Ocean Carriers Ltd., 251 B.R. at 46. Moreover, SSG testified that WRNN is a more
financially established entity than PTN (which opinion is consistent with the description
of WRNN’s full-power station in Rye New York compared with PTN’s low-power
station). And counsel for a SOT shareholder at the conclusion of the hearing represented
that SOT would likely be able to reach an accommodation with the trustee and WRNN.
(Indeed, it was willing to enter into a postpetition lease with the trustee.) Furthermore,
counsel for S. Merrill Weiss stated in open court that an agreement with the trustee for the
use of any patented system had been reached in connection with this sale. Additionally,
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29
the chief engineer at RBI, whose services may be needed to operate the new DTS system,
endorsed the trustee’s sale to WRNN.
Therefore, no party (other than PTN) contends that the trustee’s proposed
sale is speculative. Indeed, both secured creditors—whose claims are treated similarly
under both plans—strongly favor the trustee’s proposal.
I thus conclude it is likely that WRNN will fulfill its station asset purchase
agreement, thereby rendering the trustee’s plan feasible.
IV.
As trustee’s counsel acknowledged, a transfer of RBI’s assets to PTN
whereby all allowed claims would be paid in full would be very likely to yield a greater
dividend than a sale of the station assets to WRNN for $13.5 million, even with the
trustee retaining all other estate property, including litigation claims. And PTN has long
sought to control RBI, and has made a sincere plan proposal. As a result, there were a
number of parties hoping that PTN could meet its burden under section 1129.
Unfortunately, the evidence is sufficiently clear that PTN would not obtain all the funding
necessary to effectuate its plan under the terms of the loan commitment offered by Wells
Fargo. This renders its plan proposal not viable.
It would be months before creditors would know for certain whether PTN
could comply with its plan promises. And when it could not, as the evidentiary record
makes very likely, its plan would be nullified without penalty to PTN. During this
waiting period, the trustee’s post-bankruptcy financing agreement with Gladstone would
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30
mature (to be extended if possible only at some cost), and operating expenses would
increase, as would administrative expense claims. See generally In re Lady H Coal Co.,
Inc., 199 B.R. 595, 601 (S.D. W.Va. 1996) (a delayed sale of assets could reduce their
value), aff’d, In re Leckie Smokeless Coal Co., 99 F.3d 573 (4th Cir. 1996), cert. denied,
United Mine Workers of America 1992 Ben. Plan v. Leckie Smokeless Coal Co., 520
U.S. 1118 (1997).
The trustee’s proposed sale to WRNN, while offering a smaller dividend,
appears to those creditors attending the confirmation hearing as far less risky: an
assessment with which the hearing evidence supports. As the purchase price is fair, and
as the trustee’s plan has sufficient support and meets the statutory requirements of section
1129(b), I shall enter an appropriate order confirming the trustee’s plan.
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UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
In re 	: 	Chapter 11
READING BROADCASTING, INC. 	:
Debtor 	: 	Bankruptcy No. 05-26563bif
.................................................
ORDER
.................................................
AND NOW, this 17th day of January 2008, a confirmation hearing having
been held in the above-captioned case on the chapter 11 trustee’s proposed second
amended plan of liquidation, dated October 1, 2007, and the proposed second amended
plan of reorganization filed by the Philadelphia Television Network (“PTN”), dated
September 28, 2007,
And each plan proponent having filed a report of plan voting that states that
an impaired class of claims voted in favor of its proposed plan,
And two disclosure statements under 11 U.S.C. § 1125 having been sent to
all creditors and interest holders,
And for the reasons stated in the memorandum accompanying this order,
it is hereby ordered that confirmation of PTN’s second amended plan of reorganization is
denied for failure to meet its burden under 11 U.S.C. § 1129(a)(11).
It is further ordered that the various objections to confirmation to the
trustee’s second amended plan are overruled and the plan is confirmed pursuant to 11
U.S.C. § 1129(b),
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And it is further ordered that this court will retain subject matter jurisdiction
of postconfirmation disputes only to the extent allowed by federal bankruptcy law, any
language in the confirmed plan notwithstanding,
It is also ordered that the debtor does not receive a discharge, pursuant to 11
U.S.C. § 1141(d)(3),
It is further ordered that the chapter 11 trustee and/or plan administrator
shall file monthly reports required by Local Bankr. R. 3021.1 until the case is closed and
shall serve those reports upon the Office of the United States Trustee and upon any party
in interest who requests such service,
And it is also ordered that:
1. The effective date of the plan shall occur pursuant to Article XI of the
trustee’s second amended chapter 11 plan of liquidation except that the effective date
shall not be later than May 16, 2008, unless further extended by this court for cause
shown;
2. The sale of station assets to WRNN-TV Associates Limited Partnership,
for $13.5 million, based upon the Asset Purchase Agreement, Ex. T-49, free and clear of
liens and encumbrances is approved pursuant to 11 U.S.C. § 1123(a)(5)(D), (b)(4). This
purchaser is buying in good faith and for fair value;
3. The terms of the settlement between S. Merrill Weiss and the chapter 11
trustee, placed upon the record in open court at the confirmation hearing, are incorporated
into the trustee’s confirmed plan;
4. Allowed secured claims are not released or satisfied until the secured
creditor is paid, with interest as of the effective date, as required by the terms of the
confirmed plan;
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Now codified as section 1146(a).16
5. Except as otherwise specifically provided in the Asset Purchase
Agreement, WRNN shall not be liable for any claims against the debtor or any of its
predecessors or affiliates arising prior to the Closing, other than the liabilities assumed in
the Asset Purchase Agreement;
6. The provisions of 11 U.S.C. § 1146(c) 	apply to the transfer, issuance, or16
exchange of security, or the making or delivery of an instrument of transfer under the
trustee’s confirmed plan; and
7. All applications for payment of administrative expenses incurred prior to
the date of this confirmation order shall be filed and served upon all parties in interest
within sixty days from the date of this order.
It is also directed that the chapter 11 trustee shall forthwith send notice of
this order as required by Fed. R. Bankr. P. 2002(f)(7).
____________________
BRUCE FOX
United States Bankruptcy Judge
copies to:
Paul J. Winterhalter, Esq.
Law Offices of Paul J Winterhalter, P.C.
1717 Arch Street, Suite 4110
Philadelphia, PA 19103
Kevin Callahan, Esq.
Office of the U.S. Trustee
833 Chestnut Street, Suite 500
Philadelphia, PA 19107
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Peter C. Hughes, Esq
Jennifer Maleski, Esq.
Dilworth Paxson LLP
1735 Market Street, 32nd Floor
3200 Mellon Bank Center
Philadelphia, PA 19103
Richard H. Glanton, Esq.
227 Delancey Street
Philadelphia, PA 19103
Henry F. Siedzikowski, Esq.
Brian R. Elias, Esq.
Elliott Greenleaf & Siedzikowski, P.C.
925 Harvest Drive
P.O. Box 3010
Blue Bell, PA 19422
Charles J. Phillips, Esq.
Leisawitz Heller Abramowitch Phillips, P.C.
2755 Century Blvd.
Wyomissing, PA 19610
Karen Lee Turner, Esq.
Ronald S. Gellert, Esq.
Eckert Seamans Cherin & Mellott, LLC
Two Liberty Place
50 South 16th St., 22nd floor
Philadelphia, PA 19102
Kenneth E. Aaron, Esq.
Weir & Partners LLP
1339 Chestnut Street, Suite 500
Philadelphia, PA 19107
Daniel A. DeMarco, Esq.
Hahn Loeser & Parks LLP
200 Public Square, Suite 3300
Cleveland, OH 44114
Mr. S. Merrill Weiss
227 Central Avenue
Metuchen, New Jersey
Robert A. Kargen, Esq.
White and Williams LLP
1800 One Liberty Place
Philadelphia, PA 19103
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Craig Martin, Esq.
Stuart M. Brown, Esq.
Edwards Angell Palmer & Dodge LLP
919 North Market Street, Suite 1500
Wilmington, DE 19801
Case 05-26563-bif Doc 801 Filed 01/17/08 Entered 01/18/08 10:47:53 Desc Main
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