UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA WEST (1)

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					              Case 11-14183-EPK          Doc 210     Filed 07/29/11       Page 1 of 6



                          UNITED STATES BANKRUPTCY COURT
                           SOUTHERN DISTRICT OF FLORIDA
                              WEST PALM BEACH DIVISION

IN RE:
                                                           Case No.: 11-14183-EPK
ZEIGER CRANE RENTAL, INC., et al.,
                                                           (Jointly Administered)
               Debtors.
                                                     / Chapter 11

     RESPONSE IN OPPOSITION TO FORD MOTOR CREDIT COMPANY, LLC’S
                    MOTION FOR RELIEF FROM STAY

       ZEIGER CRANE RENTAL, INC., ATLANTIC LEASING, INC. and DYER ROAD

PROPERTY, LLC (collectively, the “Debtors”), by and through undersigned counsel, files this

response in opposition to Ford Motor Credit Company LLC’s Motion for Relief from Stay (the

“Motion”) (D.E. #208).

                                    JURISDICTION AND VENUE

       1.      This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157(a) and

(b), 1334 and the United States District Court’s general order of reference. Venue of this matter

in this District is proper pursuant to 28 U.S.C. § 1409.

       2.      This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(A)

and (G).

                                         BACKGROUND

A.     Petition Date

       3.      The Debtors commenced these cases by filing voluntary petitions for relief under

Chapter 11 of the Bankruptcy Code (the “Bankruptcy Code”) on February 18, 2011 (the “Petition

Date”). Pursuant to sections 1107(a) and 1108 of the Bankruptcy Code, the Debtors are in

possession of their assets and managing their affairs as debtors-in-possession. As of the date

hereof, no trustee or examiner has been appointed in these cases.


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B.     Organizational Background

       4.      Zeiger was incorporated under the laws of the State of Florida in 1986 and has

been operating continuously for the past twenty-five (25) years.          Atlantic Leasing was

incorporated under the laws of the State of Florida in 1997. Dyer Road was organized as a

Florida limited liability company in 2005. Steve Zeiger is the sole shareholder and director of

Zeiger and Atlantic, and is the sole member and managing member of Dyer Road.

C.     Business Operations

       5.      Zeiger is a nationwide crane rental company that has been operating out of Palm

Beach County, Florida since 1986.

       6.      Zeiger operates a fleet of Manitowoc and Link-Belt Crawler Cranes ranging from

150-ton to 550-ton, all of which are 2004 or newer and hold annual and third party certifications.

Zeiger also operates a fleet of rough terrain cranes from 30-ton to 90-ton, hydraulic truck cranes

from 40-ton to 90-ton, and all-terrain cranes up to 200-ton. Zeiger derives revenues from both

bare equipment and manned rentals. Equipment is rented on both short and long-term bases.

The foregoing equipment is owned by either Zeiger or Atlantic.

       7.      Dyer Road owns real property situated at 4651 Dyer Boulevard, Riviera Beach,

Florida, from which both Zeiger and Atlantic conduct their business operations.

D.     Pre-Petition Financing

       8.      In order to finance operations, the Debtors borrowed from People’s United

Equipment Finance, Inc. (“Peoples”), Wells Fargo Equipment Finance, Inc., FCC Equipment

Financing, Inc. (“FCC”), TCF Equipment Finance, Inc. (“TCF”), Kelly Tractor Corporation

(“Kelly”) and Ford Motor Credit, LLC (“Ford Credit”).




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       9.      Each of FCC, TCF, Kelly and Ford Credit hold liens against certain equipment

and proceeds, while People’s holds a blanket lien on all remaining collateral. People’s also holds

a mortgage against real property owned by Dyer Road In some instances, the debt is cross-

collateralized and cross-guaranteed by Zeiger, Atlantic and/or Dyer Road. In the case of Ford

Credit, it has a lien against six (6) Ford pickup trucks.

       10.     On July 14, 2011, Ford Credit filed the Motion.

E.     The Plan

       11.     On May 25, 2011, the Debtors filed their Joint Plan of Reorganization (the

“Plan”) (D.E. #175) and Disclosure Statement for Debtors’ Joint Plan of Reorganization (D.E.

#176). With respect to Ford Credit, the Plan contemplates that the Ford Credit claim shall be

paid in the ordinary course of business by the Debtors in accordance with the terms and

conditions of the financing agreements entered into by the Debtors and Ford Credit, and Ford

Credit shall retain its first-priority lien against its collateral. See Plan at ¶ 4.06. Accordingly,

Ford Credit is being treated as unimpaired under the Plan.

                                            RESPONSE

A.     Stay Relief Generally

       12.     Relief from the automatic stay pursuant to section 362(d)(1) requires a showing of

“cause.” 11 U.S.C. § 362(d)(1). Because the Bankruptcy Code does not define “cause,” courts

must make that determination on a case-by-case basis. In re Robinson, 169 B.R. 356, 359 (E.D.

Va. 1994). In making this determination, courts look at the totality of the circumstances, In re

George, 315 B.R. 624 (Bankr. S.D. Ga. 2004). In adjudicating motions brought under section

362(d)(1), courts balance the potential hardship the movant will suffer if the stay is not lifted

against the potential prejudice to the debtor, the estate or other creditors of the stay is lifted.

Robinson, 169 B.R. at 359.

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       13.    Alternatively, a creditor may obtain stay relief against property of the Debtor

where (A) the debtor does not have equity in the property; and (B) such property is not necessary

to an effective reorganization. 11 U.S.C. § 362(d)(2).

B.     Adequate Protection Generally

       14.    Adequate protection must be decided on a case-by-case basis.              See In re

O’Connor, 808 F.2d 1393, 1396-1397 (10th Cir. 1987). Adequate protection is meant to protect

secured creditors from diminution in the value of their interest in collateral during the

reorganization process. See In re Energy Partners, Ltd., 409 B.R. 211, 236 (Bankr. S.D. Tex.

2009; In re Hawaiian Telecom Comm., Inc., 2009 WL 5386130 (Bankr. D. Haw. Dec. 30, 2009).

       15.    Conversely, if a secured creditor cannot show that the value of their interest in

collateral is diminishing, that is cause to deny adequate protection. See First Federal Bank of

California v. Weinstein (In re Weinstein), 227 B.R. 284 (9th Cir. B.A.P. 1998), citing

Confederation Life Ins. Co. v. Beau Rivage Ltd., 126 B.R. 632, 640 (N.D. Ga. 1991).

B.     Cause Does Not Exist to Lift the Stay

       16.    These are not cases that have dragged on or show no sign of the possibility of an

effective reorganization. Instead, the Debtors have filed a Plan within the first 100 days of the

Petition Date. Under the Plan, the Debtors seek to retain the Ford Credit collateral and make

payments to Ford Credit as contemplated by the loan agreement with Ford Credit. If there is any

depreciation of the collateral through ordinary wear and tear during the pendency of the

bankruptcy proceedings, Ford Credit is not harmed because the Debtors are paying 100% of the

Ford Credit claim under the Plan.

       17.    When viewed through the broader context of the bankruptcy proceedings as a

whole, the totality of the circumstances does not justify relief from the automatic stay. Relief

from stay would harm the Debtors by removing vehicles from business operations that would

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take considerable time and expense to replace and would impair the Debtors’ ability to do

business.

       18.     The harm to Ford Credit by denying stay relief, on the other hand, is minimal.

Under the Plan, Ford Credit will receive 100% of its claim. Moreover, a confirmation hearing on

the Disclosure Statement is scheduled for August 8, 2011, so the delay in payment would be

minimal.

       19.     In order to grant stay relief under section 362(d)(2), the movant must establish

that (a) there is no equity in the property, and (b) the property is not necessary for an effective

reorganization.

       20.     As set forth above, the Ford Credit collateral is used by the Debtors in its day-to-

day business. Moreover, the Debtors intend to retain the Ford Credit collateral under the Plan.

Therefore, the Ford Credit collateral is absolutely necessary for an effective reorganization from

Chapter 11.

       21.     Finally, although the Motion does not contain a request for an award of adequate

protection in lieu of stay relief, adequate protection should be denied. As discussed above,

adequate protection is not meant to improve the undersecured creditor’s position in relation to

other creditors. See In re Reddington Sunarrow Ltd. Partnership, 119 B.R. 809, 813 (Bankr.

D.N.M. 1990). Permitting adequate protection to serve as interest or lost opportunity costs for an

unsecured creditor was expressly prohibited by the United States Supreme Court in Timbers.

United States Ass’n of Texas v. Timbers of Inwood Forest Associates, 484 U.S. 365 (1988). This

is the reason why adequate protection, if it is allowed at all, must only equate to the diminution

of the collateral. The Debtors are adequate protecting Ford Credit by providing that the Ford

Credit claim will be paid in full under the Plan, notwithstanding any lack of equity in the



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collateral. To the extent that there has been any diminution in value, given that the property is

insured and maintained, the Court should find that diminution is de minimis.

       WHEREFORE, the Debtor respectfully requests that this Court deny Ford Credit’s

request for stay relief or adequate protection, as well as grant any other and further relief that the

Court may deem just and proper.


                                                  s/Steven E. Seward
                                                  Michael D. Seese (FBN 997323)
                                                  Steven E. Seward (FBN 29546)
                                                  HINSHAW & CULBERTSON LLP
                                                  One East Broward Boulevard
                                                  Suite 1010
                                                  Ft. Lauderdale, FL 33301
                                                  Telephone: 954-467-7900
                                                  Facsimile: 954-467-1024
                                                  Attorneys for the Debtors




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