Opinion
Case No. 07-10860-WIL, Case No. 07-10862-WIL, Case No. 07-10863-WIL, Case No. 07-10864-WIL, Case No. 07-10867-WIL, Case No. 07-10868-WIL, Jointly Administered Under, Case No. 07-10860-WIL.
April 10, 2008
Consented and Agreed To: TYDINGS ROSENBERG LLP, By: /s/Alan M. Grochal, ATTORNEYS FOR THE DEBTORS, DLA PIPER US LLP, By: /s/Richard M. Kremen, Richard M. Kremen, ATTORNEYS FOR THE COLUMBIA BANK, WHITEFORD, TAYLOR PRESTON, L.L.P., By: /s/Brent C. Strickland, ATTORNEYS FOR THE OFFICIAL COMMITTEE.
On June 4, 2007, the Court approved and entered the Final Agreement And Consent Order Authorizing Debtors To Use Cash Collateral And Granting Adequate Protection [Docket No. 126] (the "Final Agreement") by and between The Columbia Bank (the "Lender") and Barwood, Inc., Blue Star Group, Inc., Checker Transportation Company, Inc., City Lease, Inc., Fleet Tech, Inc. and Silver Spring Transportation Company, debtors and debtors-in-possession (collectively, the "Debtors"). On September 10, 2007, this Court approved a Stipulation and Consent Order Extending and Modifying Final Agreement and Consent Order Authorizing Debtors to Use Cash Collateral and Granting Adequate Protection (the "Extension Agreement"). On November 14, 2007, January 14, 2008 and March 18, 2008, this Court approved Stipulations and Consent Orders Further Extending Final Agreement and Consent Order Authorizing Debtors to Use Cash Collateral and Granting Adequate Protection (respectively, the "Second Extension Agreement," the "Third Extension Agreement" and the "Fourth Extension Agreement"). By its terms, the Fourth Extension Agreement is scheduled to expire on April 12, 2008. Unless otherwise indicated, all capitalized terms used herein shall have the meanings ascribed to them in the Final Agreement.
The Debtors have a continuing need to use Cash Collateral to fund the operation of the Debtors' business and to preserve the value of the Debtors' assets. To allow for the continued use of the Cash Collateral, the Lender and the Debtors desire to enter into this Stipulation and Consent Order Further Extending Final Agreement And Consent Order Authorizing Debtors To Use Cash Collateral And Granting Adequate Protection (Through June 14, 2008) (this "Extension"). Accordingly, the Lender and the Debtors hereby stipulate and agree as follows:
1. The Debtors' authority to use Cash Collateral of the Lender shall be extended from April 13, 2008, through and including June 14, 2008, pursuant to the terms and conditions set forth in the Final Agreement and Extension Agreement, as modified hereby.
2. The Budget attached hereto as Exhibit A shall be substituted in lieu of the Budget attached to the Fourth Extension Agreement.
3. The Debtors are authorized to use Cash Collateral in the amounts and for the purposes set forth in the Budget for the period from April 13, 2008 through and including June 14, 2008, subject to a five percent (5%) overall variance in the cumulative expenditures set forth in the Budget. The Debtors shall only use Cash Collateral in accordance with the time period and category limits set forth in the Budget and only for the periods set forth in the Budget, subject to the 5% overall variance. The amount of such Cash Collateral used during the period shall not exceed $1,503,390. Cash Collateral includes aggregate gross receivables, Eligible Receivables (as defined below), Restricted Cash (as defined below) and Unrestricted Cash (as defined below). "Eligible Receivables" means receivables aged less than sixty (60) days which are not subject to any potential claim of reduction, counterclaim, setoff, recoupment or other defense in law or in equity, or any claim for credits, allowances, or adjustments for any reason. "Restricted Cash" means the C.D. Account titled as BSG-PAS MVA maintained at Mercantile Potomac Bank which cannot be withdrawn without the consent of the MVA, the Money Market Account at Smith Barney titled in the name of a non-debtor affiliate and that portion of the Money Market Account maintained at the Lender that contains funds for driver savings, which funds are in the process of being segregated. Unrestricted Cash means all cash of the Debtors other than Restricted Cash. The Debtors shall maintain the following minimum levels: (a) Eligible Receivables and Unrestricted Cash of not less than $505,000; (b) aggregate gross receivables of not less than $275,000; and (c) aggregate gross receivables, Unrestricted Cash and Restricted Cash of not less than $900,000. Notwithstanding the foregoing, the Debtors shall not be authorized to make any payments to insiders, or related persons or entities (or for the benefit of said persons or entities), during the period covered by this Extension, except for wages and related benefits earned in the ordinary course of business and excluding inter-company transactions in the ordinary course of business. On a weekly basis, the Debtors shall provide the Lender and Counsel to the Official Committee of Unsecured Creditors (the "Official Committee") with a compliance report in the same spreadsheet form as the Budget, certified in writing under penalties of perjury as true and accurate by an authorized representative of the Debtors, that documents the Debtors' actual use of cash for the prior week and cumulative actual cash use since the Petition Date as to each line item and category of the Budget ("Budget Compliance Report"). The authorization granted to the Debtors under this Extension shall terminate upon the earlier of: (i) June 14, 2008, (ii) entry by the Court of an order denying the Debtors' authorization to use Cash Collateral; or (iii) at the option of the Lender, upon the occurrence of an Event of Default under paragraph 9 set forth in the Final Agreement after notice to the Debtors and the expiration of a two (2) business day cure period. Notwithstanding any such termination, the rights and obligations of the Debtors and the rights, claims, security interests, liens and priorities of the Lender with respect to all transactions which occurred prior to the occurrence of any termination, including, without limitation, all replacement liens granted to the Lender as adequate protection and priority claims under Bankruptcy Code Section 507(b) which are provided under the Final Agreement, shall remain unimpaired and unaffected by any termination of the Final Agreement, shall survive any such termination of the Final Agreement, and shall be binding upon the Debtors, any and all successors-in-interest to the Debtors, including any Chapter 11 trustee or any Chapter 7 trustee, all creditors and other parties in interest, and the Debtors' Estate (the "Estate").
4. Any notice which may be required to be given by the Lender to the Debtors or to the Official Committee or vice versa shall be sufficient if notice is given by facsimile transmission, hand delivery, or regular, certified or registered United States mail to:
As to the Debtors:
Alan M. Grochal, Esquire
Tydings Rosenberg LLP
100 East Pratt Street
Baltimore, Maryland 21202
Phone: (410) 752-9715
Facsimile: (410) 727-5460
With copies to:
John Marshall, Esquire
Mulhern, Patterson Marshall, LLP
451 Hungerford Drive, Suite 200
Rockville, Maryland 20850
And
Mr. Lee Barnes
4900 Nicholson Court
Kensington, Maryland 20895
As to the Lender:
Richard M. Kremen, Esquire
Jodie E. Buchman, Esquire
DLA Piper US LLP
The Marbury Building
6225 Smith Avenue
Baltimore, Maryland 21209
Phone (410) 580-3000
Facsimile (410) 580-3001
With a copy to:
Harold Koch
Senior Credit Officer
The Columbia Bank
7168 Columbia Gateway Drive
Columbia, MD 21046
Phone: (410) 423-8150
Facsimile: (410) 423-8151
As to the Official Committee:
Brent C. Strickland, Esquire
Dennis J. Shaffer, Esquire
Whiteford, Taylor Preston, L.L.P.
Seven Saint Paul Street
Baltimore, MD 21202
Phone: (410) 347-9402
Facsimile: (410) 625-7510
5. Within two business days of the entry of this Extension, the Debtors shall promptly serve by first class mail, postage prepaid or telecopy copies of a notice of entry of this Extension, together with a copy of this Extension to the: (a) Lender; (b) Lender's counsel; (c) counsel to the Official Committee; (d) the United States Trustee; (e) any other persons which the Debtors knows is entitled to notice under Bankruptcy Rule 4001(b) as of such date; and (f) any other party-in-interest from whom counsel to the Debtors has received a written request in this case. A further hearing, if necessary, with respect to the Debtors' continued use of cash collateral will be scheduled by the Court.
6. All other terms of the Final Agreement are hereby incorporated into this Extension by cross-reference and shall remain in full force and effect through June 14, 2008. Except as expressly provided herein, no terms of either the Final Agreement or the Fourth Extension Agreement are amended, altered or otherwise nullified.
EXHIBIT A Transco — Cash Flow Projection Projected Projected Projected Projected Projected Projected Projected Projected Projected 04/13/08 — Week Beginning 04/13/2008 04/20/2008 04/27/2008 05/04/2008 05/11/2008 05/18/2008 05/25/2008 06/01/2008 06/08/2008 06/08/2008 Cash Receipts 7 170,559 166,250 166,650 167,950 164,696 163,896 163,996 169,750 170,250 1,503,997 Disbursements Grouping 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Transco — Cash Flow Projection Distribution via email: Week Beginning Cash Receipts Disbursements Grouping 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Total Disbursements 26 Net Cash Flow
1 2 3 4 5 6 7 8 9 Total Projected 1 Cashier Receipts 41,000 41,000 41,000 41,500 41,500 41,500 41,500 42,000 42,000 373,000 2 AR Wire Receipts 9,204 9,250 9,250 9,250 9,250 9,250 9,250 9,250 9,250 83,204 3 AR Check Receipts 65,000 59,000 59,000 59,000 58,946 58,946 58,946 65,000 65,000 548,838 4 Credit Cards — MDT 24,154 25,000 25,100 25,200 24,000 24,200 24,300 24,500 25,000 221,454 5 AR Credit Cards — Taxi Exec Coach 31,200 32,000 32,300 33,000 31,000 30,000 30,000 29,000 29,000 277,500 6 Savings — Damage Reserve — restricted — — — — — — — — — Total Receipts Advertising 950 950 950 950 950 950 950 950 950 8,550 Benefits 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 72,000 Car/Equipment Leasing 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 27,000 Credit Cards 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367 2,367 21,304 Drivers 12,200 12,300 12,300 12,300 11,600 11,600 11,500 11,500 12,200 107,500 Equipment Maintenance 2,057 2,057 2,057 2,057 2,057 2,057 2,057 2,057 2,057 18,509 Equipment Lease 2,845 2,845 2,845 2,845 2,845 2,845 2,845 2,845 2,845 25,603 Fleet Expenses 25,000 25,000 25,000 25,000 25,000 23,000 23,000 23,000 23,000 217,000 Insurance — — 24,500 1,997 1,997 1,997 1,997 1,997 1,997 36,482 Interest/Principal Bank Notes 9,358 9,358 9,358 9,358 14,115 14,115 14,115 15,276 15,276 110,329 Office 13,000 15,000 15,000 15,000 17,375 13,500 13,500 13,500 13,500 129,375 Payroll 61,058 61,058 61,058 61,058 61,058 61,058 61,058 61,058 61,058 549,522 Permits 4,500 4,500 4,500 4,500 4,500 3,800 3,800 3,800 3,800 37,700 Professional Fee 8,405 8,405 8,405 8,405 8,405 8,405 8,405 8,405 8,405 75,645 Telephone 3,152 3,152 3,152 3,152 3,152 3,152 3,152 3,152 3,152 28,371 VEHICLE PURCHASES 8,000 8,000 — — — — — — — 16,000 INSURANCE CLAIMS 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 22,500 Total Disbursements 166,392 168,492 184,992 162,489 168,921 162,346 162,246 163,407 164,107 1,503,390 Net Cash Flow 4,167 (2,242) (18,342) 5,461 (4,225) 1,550 1,750 6,343 6,143 606 cdemko@fult.com; hkoch@thecolumbiabank.com; richard.kremen@dlapiper.com; chopkin@tydingslaw.com bstrickland@wtplaw.com I hereby certify in writing under penalties of perjury as true and accurate that the above is true and accurate and that this 1 Cashier Receipts represents the Debtors' actual use of 2 AR Wire Receipts cash. I further certify that the aggregate gross receivables is not less than 3 AR Check Receipts $275,000; the eligible receivables (aged 4 Credit cards — MDT less than 60 days) plus unrestricted 5 AR Credit Cards — Taxi Exec Coach accounts cash is not less than $505,000; 6 Savings — Damage Reserve — restricted the aggregate gross receivables 7 Total Receipts combined with the unrestricted and restricted cash are not less than $900,000; and at least 50% of receivables are aged less than 60 days. Advertising Benefits Signed: Car/Equipment Leasing Credit Cards Drivers Equipment Maintenance _______________ Equipment Lease Lisa E. Fornatora Fleet Expenses Insurance _______ Interest/Principal Bank Notes Date Office Payroll Permits Professional Fee Telephone VEHICLE PURCHASES INSURANCE CLAIMS