Knoblauch Builders, Inc.

2:06-bk-15934Paeb25 lug 2008

Testo completo

1
UNITED STATES BANKRUPTCY COURT FOR THE
EASTERN DISTRICT OF PENNSYLVANIA
____________________________________
IN RE: 	:
: 	CHAPTER 11
KNOBLAUCH BUILDERS, INC. 	:
: 	BANKRUPTCY NO. 06-15934-elf
DEBTOR 	:
____________________________________:
EIGHTEENTH INTERIM CONSENT ORDER AUTHORIZING
A) LIMITED USE OF CASH COLLATERAL AND B) ADEQUATE PROTECTION
TO PARTIES WITH INTEREST IN CASH COLLATERAL
FOR THE PERIOD OF JULY 23, 2008 THROUGH JULY 31, 2008
AND NOW, this ___ day of _________ 2008, upon the Debtor's Motion to A) Permit Use
of Cash Collateral; B) To Provide Adequate Protection to Parties with Interest in Cash Collateral;
C) to Pay Pre-Petition Wages and Benefits; and D) for an Expedited Hearing (the “Motion”); after
notice and hearing and upon the occurrence of certain events of default of the Seventeenth Interim
Consent Order Authorizing the Use of Cash Collateral (the “Seventeenth Cash Collateral Order”),
this Consent Order is entered into by and between Knoblauch Builders, Inc. (the “Debtor”), by
and through its undersigned counsel, the United States Trustee, Region 3, by and through its
undersigned counsel (the “Trustee”), the Official Committee of Unsecured Creditors of the
Bankruptcy Estate of Knoblauch Builders, Inc. (the “Committee”), by and through its undersigned
counsel, Bucks County Bank (“BCB”), by and through its undersigned counsel and the Internal
Revenue Service (the “IRS”), by and through its undersigned counsel.
WHEREAS, the Seventeenth Cash Collateral Order provided for the immediate and
automatic termination of the Debtor’s use of cash collateral upon failure of the Debtor to submit
timely weekly payroll deposits to the IRS;
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WHEREAS, the IRS submitted a certification of default to the Debtor and its counsel on
or about July 22, 2008, advising that timely weekly payroll deposits were not tendered to the IRS
by the Debtor;
WHEREAS, by operation of the Seventeenth Cash Collateral Order, among other things,
the Debtor’s use of cash collateral immediately and automatically ceased;
WHEREAS, the Debtor has requested an expedited hearing on the continued use of cash
collateral;
WHEREAS, the parties to this Consent Order have agreed to permit the limited use of
cash collateral as set forth herein;
WHEREAS, the parties to this Consent Order have agreed to an expedited hearing on the
Debtor’s continued use of cash collateral;
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
hereinafter set forth, the Debtor, the Trustee, the Committee, BCB and the IRS, subject to the
approval of the Bankruptcy Court, intending to be legally bound, hereby stipulate and agree as
follows:
1. 	As adequate protection for the use of cash collateral, BCB and Wachovia
Bank, National Association, and the IRS are hereby granted, to the extent
and priority of their respective pre-petition liens, if any, a replacement lien
and security interest in all of the Debtor's post-petition assets, including all
cash and non-cash proceeds of accounts, only to the extent of the cash
collateral utilized, without the necessity of filing financing statements or
other instruments of record.
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2. 	All replacement liens granted herein will attach in the same order of
priority as existed pre-petition.
3. 	All funds received by the Debtor shall be deposited into a Debtor-in-
possession account at BCB (the “DIP Account”). 	Only those permitted
expenses, as specifically set forth herein, shall be transferred from such
account or paid in checks drawn from such account.
4. 	The Debtor’s use of Cash Collateral, as defined in the Motion and in
accordance with this Order, is not approved and/or permitted until further
Order of the Bankruptcy Court, except as specifically set forth herein.
5. 	To the extent sufficient funds are available in the DIP Account, BCB
shall transfer to Citizens Bank an amount equal to Debtor’s net payroll
(less taxes) to Citizens Bank upon direction of Debtor.
6. 	To the extent sufficient funds are available in the DIP Account, BCB shall
honor and the Debtor shall be authorized to use Cash Collateral in order to
fund current payroll taxes, Check No. 847 in the amount of $ 30,589.33 and
Check No. 848 $18,506.68, both made payable to the IRS on account of payroll
deposits for July, 2008 (collectively, the “IRS Checks”).
7. 	To the extent sufficient funds are available in the DIP Account, BCB
shall honor and the Debtor shall be authorized to use cash collateral in
order to tender, in addition to current payroll taxes and the IRS Checks, a
payment to the IRS on or before July 30, 2008 in the amount of $10,000
on account of purported delinquencies on the quarterly payroll taxes due
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to the IRS (the “IRS Delinquency”). 	Any and all payments made by the
Debtor with respect to the IRS Delinquency are subject to Debtor’s full
reservation 	of 	rights 	to 	dispute 	the 	amount 	and 	validity 	of 	the 	IRS
Delinquency during this Bankruptcy Case.
8. 	To the extent sufficient funds are available in the DIP Account, BCB
shall honor and the Debtor shall be authorized to use cash collateral in
order to tender premiums for insurance to (a) Inland Marine, in the
approximate amount of $4,617.00 on or before July 31, 2008; and (b)
First Insurance Funding, in the amount of $4,934.94 on or before July 30,
2008.
9. 	The 	Debtor 	is 	prohibited 	from 	compensating 	its 	principal, 	Thomas
Knoblauch until further order of the Bankruptcy Court.
10. 	The 	Debtor 	shall 	make 	any 	and 	all IRS payroll 	tax deposits 	and/or
payments on account of the IRS Delinquency by checks drawn on the DIP
account, after deposit of funds in accordance with this Order in the DIP
Account, by mailing said checks or otherwise presenting said checks
directly to Kitty Staskin of the IRS and not by virtue of deposits made at
BCB and payment by BCB to the IRS.
11. 	To 	the 	extent 	not 	already 	accomplished, 	the 	Debtor 	shall 	maintain
liability insurance, insurance on all personal property in amounts required
under its loan documentation with BCB 	(with BCB listed as loss payee),
and all other insurance required by law to operate its business.
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12. 	This Order, and the consent of any party in interest to this Order, is
without prejudice to any further rights of any party in interest, including
but not limited to the right to object to any plan of reorganization filed by
the Debtor, to object to any further request by the Debtor for use of cash
collateral, or to seek any relief available to such party as provided in the
Code.
13. 	An expedited interim hearing on the Debtor’s request to resume use of
cash collateral shall be held on July 31, 2008 at 1:00 p.m. and the Debtor
and 	all 	parties 	reserve 	all 	rights 	as 	to 	each 	other 	with 	respect 	to
resumption 	of 	the 	Debtor's 	use 	of 	cash 	collateral, 	budget 	items 	and
adequate protection payments.
14. 	Written notice of the above stated hearing shall be given by the Debtor to
Bucks 	County 	Bank, 	Wachovia, 	and 	20 	largest 	holders 	of 	unsecured
claims, any and all committees, if appointed, the U.S. Trustee and any other
parties filing request for notices pursuant to Rule 2002 on or before July
25, 2008 at 5:00 p.m.
CIARDI & CIARDI, P.C.
Dated: July 24 , 2008 	/s/ Shannon D. Leight
Albert A. Ciardi, III, Esquire
Shannon D. Leight, Esquire
One Commerce Square
2005 Market Street, Suite 2020
Philadelphia, PA 19103
(215) 557-3550 telephone
Counsel for Debtor,
Knoblauch Builders, Inc.
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UNITED STATES TRUSTEE, REGION 3
Dated: July 24, 2008 	/s/ Frederic Jay Baker
Frederic Jay Baker, Esquire
Senior Assistant United States Trustee
833 Chestnut Street, Suite 500
Philadelphia, PA 19107
(215) 597-4411 telephone
Counsel for United States Trustee
OBERMAYER REBMANN MAXWELL & HIPPEL,
LLP
Dated: July 24, 2008 	/s/ Edmond M. George
Edmond M. George, Esquire
1617 John F. Kennedy Boulevard
One Penn Center, Suite 1900
Philadelphia, PA 19103
(215) 665-3140 telephone
Counsel for Official Committee of Unsecured Creditors of
the Bankruptcy Estate of Knoblauch Builders, Inc.
CURTIN & HEEFNER, LLP
Dated: July 24, 2008 	/s/ Robert Szwajkos
Robert A. Badman, Esquire
Robert Szwajkos, Esquire
250 N. Pennsylvania Avenue
Morrisville, PA 19067
Counsel for Bucks County Bank
Dated: July 24, 2008 	/s/ Kristina L. Rico
Kristina L. Rico, Esquire
IRS Office of Chief Counsel
701 Market Street, Suite 2200
Philadelphia, PA 19106
Counsel for Internal Revenue Service
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SO ORDERED AND APPROVED:
_______________________________
ERIC L. FRANK,
UNITED STATES BANKRUPTCY JUDGE
Dated:__________
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