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Full title: Response to 219 Motion filed by Debtor 1 Tea Olive I, LLC. (Kinsella, Steven) (Entered: 04/08/2021)

Document posted on Apr 7, 2021 in the bankruptcy, 5 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

The Debtor and Second Avenue negotiated the use of cash collateral and the Debtor has used the cash collateral to pay all expenses necessary for the preservation of Second Avenue’s collateral. • “Nothing in this Final Order shall prejudice the rights of the Committee or any other party in interest, if granted standing by the Court, to seek, solely in accordance with the provisions of this Paragraph 17, to assert claims against any Prepetition Secured Party, on behalf of the Debtor or the Debtor’s creditors or to otherwise challenge the Debtor’s Stipulations, including, but not limited to those in relation to (i) the validity, extent, priority, or perfection of the security interests, and liens of the Prepetition Secured Parties, (ii) the validity, allowance, priority, or amount of the Prepetition Obligations, or (iii) any liability of the any Prepetition Secured Party with respect to anything arising from the Prepetition Loan Documents. Notwithstanding the immediately preceding sentence, the Committee or any other party in interest must, after obtaining standing approved by the Court, commence a contested matter or adversary proceeding raising such claim, objection, or challenge, including, without limitation, any claim or cause of action against any Prepetition Secured Party (each, a ‘Challenge’) no later than (i) with respect to the Committee, 5:00 p.m. (prevailing Central time) on March 14, 2021, (ii) with respect to other parties in interest, no later than 5:00 p.m. (prevailing Central time) on March 26, 2021, or (iii) with respect to a chapter 11 trustee appointed in the Chapter 11 Case, or any chapter 7 trustee appointed in a Successor Case, prior to the expiration of the periods set forth in subsections (i) and (ii) above, no later than the date that is the later of (A) fourteen (14) days after the appointment of such trustee, or such other time as determined by the Court after motion and hearing, or (B) the expiration of the time periods set forth in the foregoing subsections (i) and (ii) above (the later of (i), (ii) or (iii) the ‘Challenge Deadline’).”On March 31, 2021, the Debtor closed on the sale with RP, which in addition to generating cash proceeds for the purchased assets also relieved the estate of lease rejection damage claims and administrative claims for rent for the post filing period of January 10 to January 31, 2021, for most of the Debtor’s stores, and will provide employment opportunities to the Debtor’s store-level employees.In addition to the above, the remaining issues for liquidation of the estate is resolution of the secured status and claim amount of Worldwide, issues identified by the Committee in its motion for standing to pursue claims against Second Avenue and evaluation and pursuit of other estate causes of action such as preferences or pre-petition fraudulent transfer claims.

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UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF MINNESOTA In re: Case No.: 21-30037 Tea Olive I, LLC d/b/a Stock+Field, Chapter 11 Case Debtor. LIMITED RESPONSE TO MOTION OF THE COMMITTEE FOR AUTHORITY TO BRING CERTAIN CLAIMS ON BEHALF OF THE DEBTOR Tea Olive I, LLC d/b/a Stock+Field (the “Debtor”) submits this limited response to the Motion of the Committee for Authority to Bring Certain Claims on Behalf of the Debtor (the “Motion”). I. RESPONSE TO THE MOTION. In the Motion, the Committee of Unsecured Creditors (the “Committee”) seeks authority to pursue claims against Second Avenue Capital Partners, LLC (“Second Avenue”), as administrative agent for certain prepetition lenders to the Debtor. Specifically, the Committee seeks to assert (a) a marshalling claim, (b) a claim for cost and expenses under 11 U.S.C. § 506(c),1 (c) a determination that Second Avenue’s lien does not cover the Debtor’s titled vehicles, and (d) to the extent a lien asserted by Worldwide Distributors is avoidable under 11 U.S.C. § 544, a determination that the value is preserved for the benefit of the bankruptcy estate (the “Second Avenue Claims”). 1 It is unclear what type of claim the Committee intends to assert against Second Avenue under 11 U.S.C. § 506(c). The Debtor and Second Avenue negotiated the use of cash collateral and the Debtor has used the cash collateral to pay all expenses necessary for the preservation of Second Avenue’s collateral. Consequently, the Debtor does not believe that the estate is entitled to any surcharge from Second Avenue under 11 U.S.C. § 506(c).

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The Final Order (I) Authorizing Use of Cash Collateral; (II) Affording Adequate Protection; and (III) Modifying Automatic Stay [Docket No. 144] (the “Final Cash Collateral Order”) provides that: • “The Debtor holds no valid or enforceable ‘claims’ (as defined in the Bankruptcy Code), counterclaims, causes of action, defenses, or setoff rights of any kind against [Second Avenue]. Subject to Paragraph 17 [of the Final Cash Collateral Order], the Debtor hereby forever waives and releases any and all ‘claims’ (as defined in the Bankruptcy Code), counterclaims, causes of action, defenses, or setoff rights against [Second Avenue], and each of their respective officers, directors, employees, agents, sub-agents, attorneys, consultants, advisors and affiliates and the Prepetition Collateral, whether arising at law or in equity, under tort (including lender liability) or contract, including recharacterization, subordination avoidance, or other claim arising under or pursuant to section 105 or chapter 5 of the Bankruptcy Code or under any other similar provisions of applicable state or federal law.” Final Cash Collateral Order, ¶ E(iv). • “[T]he Debtor shall be deemed to have waived any right to seek to have the Prepetition Secured Parties, or any Collateral (as defined in the Prepetition Loan Documents) be subject to the equitable doctrine of ‘marshalling’ or any similar doctrine; provided, that (x) the Debtor’s waiver shall not prejudice the rights of the Committee, if any, to seek on or prior to the Challenge Deadline (defined below) to have the Prepetition Secured Parties, or any Collateral (as defined in the Prepetition Loan Documents) be subject to the equitable doctrine of ‘marshalling’ or any similar such doctrine, and (y) nothing in this Final Order vests or confers on any person, including the Committee, standing or authority to pursue any such relief.” Final Cash Collateral Order, ¶ 13. • “Nothing in this Final Order shall prejudice the rights of the Committee or any other party in interest, if granted standing by the Court, to seek, solely in accordance with the provisions of this Paragraph 17, to assert claims against any Prepetition Secured Party, on behalf of the Debtor or the Debtor’s creditors or to otherwise challenge the Debtor’s Stipulations, including, but not limited to those in relation to (i) the validity, extent, priority, or perfection of the security interests, and liens of the Prepetition Secured Parties, (ii) the validity, allowance, priority, or amount of the Prepetition Obligations, or (iii) any liability of the any Prepetition Secured Party with respect to anything arising from the Prepetition Loan Documents. Notwithstanding the immediately preceding sentence, the Committee or any other party in interest must, after obtaining standing approved by the Court, commence a contested matter or adversary proceeding raising such claim, objection, or challenge, including, without limitation, any claim or cause of action against any Prepetition Secured Party (each, a ‘Challenge’) no later than (i) with respect to the Committee, 5:00 p.m. (prevailing Central time) on March 14, 2021, (ii) with respect to other parties in interest, no later than 5:00 p.m. (prevailing Central time) on March 26, 2021, or (iii) with respect to a chapter 11 trustee appointed in the Chapter

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11 Case, or any chapter 7 trustee appointed in a Successor Case, prior to the expiration of the periods set forth in subsections (i) and (ii) above, no later than the date that is the later of (A) fourteen (14) days after the appointment of such trustee, or such other time as determined by the Court after motion and hearing, or (B) the expiration of the time periods set forth in the foregoing subsections (i) and (ii) above (the later of (i), (ii) or (iii) the ‘Challenge Deadline’).” Final Cash Collateral Order, ¶ 17(b). Based on the waivers and releases contained in the Final Cash Collateral Order, the Debtor cannot assert the Second Avenue Claims against Second Avenue. The Debtor agrees that the Committee must satisfy the factors identified by the Eighth Circuit in In re Racing Servs., Inc., 540 F.3d 892, 900 (8th Cir. 2008), but the Debtor does not take a position as to the Committee’s ability to satisfy those factors. II. CASE STATUS. In evaluating the Committee’s Motion, the Court may benefit from an update on the case proceedings: Since the Debtor filed this case on January 10, 2021, the Debtor has engaged in going out of business sales to the public of its inventory, fixed assets, and equipment at all of the Debtor’s store locations and warehouses. The Debtor completed these going out of business sales on March 31, 2021, and the Debtor is in the process of reconciling the sales information with its sale consultant and determining additional amounts if any owed the consultant. In conjunction with the going out of business sales, the Debtor also pursued a going concern sale of the balance of its business assets and, on March 15, 2021, the Court approved the sale of substantially all of these remaining assets to R.P. Acquisition Corporation (“RP”) [Docket No. 228]. On March 31, 2021, the Debtor closed on the sale with RP, which in addition to generating cash proceeds for the purchased assets also relieved the estate of lease rejection damage claims and administrative claims for rent for the post filing period of January 10 to January 31, 2021, for most of the Debtor’s stores, and will provide employment opportunities to the Debtor’s store-level employees. After the sales

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and as of the date of this response, the remaining amount owed the pre-petition secured lenders has been reduced from $29,724,104 at the commencement of the case to approximately $5.8 million. In addition, pursuant to the final cash collateral order, the Debtor is holding $3.5 million in cash pending allowance of the secured claim of Worldwide. The Debtor has filed a motion to reject all of its real estate leases and the majority of its other contracts [Docket No. 242]. The Debtor is no longer operating any of its stores and has reduced the number of its employees to a limited number of corporate employees assisting with the sale reconciliation and chapter 11 process. Based on the conclusion of the sales and the end of ongoing operations, the Debtor is contemplating converting this case to chapter 7 at the end of April, after the sale is reconciled and the resolution and payment of chapter 11 administrative expenses pursuant to the cash collateral budget. The Debtor has also been engaged in some limited discussions with the Committee on formulating a liquidating plan as an alternative to conversion, but Debtor has not come to any final conclusion yet as to which course to pursue. In addition to the above, the remaining issues for liquidation of the estate is resolution of the secured status and claim amount of Worldwide, issues identified by the Committee in its motion for standing to pursue claims against Second Avenue and evaluation and pursuit of other estate causes of action such as preferences or pre-petition fraudulent transfer claims. In addition, the Debtor is in the process of reconciling and resolving other remaining chapter 11 administrative claims related to the run-off of the Debtor’s health insurance plan, and pursing recovery of deposits and similar assets.

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Dated: April 8, 2021 /e/ Steven R. Kinsella Clinton E. Cutler (#0158094) James C. Brand (#387362) Steven R. Kinsella (#0392289) Samuel M. Andre (#0399669) Emily M. McAdam (#0400898) FREDRIKSON & BYRON, P.A. 200 South Sixth Street Suite 4000 Minneapolis, MN 55402-1425 Minneapolis, MN 55402-1425 (612) 492-7000 (612) 492-7077 ccutler@fredlaw.com jbrand@fredlaw.com skinsella@fredlaw.com sandre@fredlaw.com emcadam@fredlaw.com ATTORNEYS FOR THE DEBTOR 72600358 v1