Opinion
Case No. 12-10113-PM
04-27-2012
In re: PENN CAMERA EXCHANGE, INC., d/b/a Penn Camera, Penn, Penn Camera Exchange and Penn Camera Exch, Debtor.
SO ORDERED
_________________
U. S. BANKRUPTCY JUDGE
STIPULATION AND CONSENT ORDER COMPROMISING
WELLS FARGO BANK, N.A.'S SECURED CLAIM
WHEREAS, the Debtor, Penn Camera Exchange, Inc. (the "Debtor"), has moved pursuant to Federal Rules of Bankruptcy Procedure 9019 and 9013 (the "Motion") for entry of an order compromising the secured claim of Wells Fargo Bank, N.A. ("Wells Fargo" or the "Bank"); and
WHEREAS, the Debtor has served a copy of the Motion and of this Order and of the Notice of Hearing on the creditors, the United States Trustee and all other parties requesting notice, pursuant to Rule 2002(a)(3); and
WHEREAS, despite such notice, no one has filed an objection to the Motion or to the terms of the Interim Order; and
WHEREAS, after having held a further hearing on the Motion, it appears that:
(i) The Debtor filed a Voluntary Petition for relief under Chapter 11 of the United States Bankruptcy Code ("Bankruptcy Code") on January 4, 2012 (the "Petition Date");
(ii) Since the Petition Date, the Debtor has operated its business as a Debtor-in-Possession;
(iii) On January 9, 2012, the United States Trustee appointed an official committee of unsecured creditors (the "Committee"), which has received notice of the Motion and of this Order and has consented to the terms hereof;
(iv) Pursuant to a Loan Agreement dated October 18, 2006, amending and restating that certain Loan Agreement dated June 27, 2005, between the Debtor and Wells Fargo, as modified from time to time, the Debtor is a party to a secured term loan in the original principal amount of $1,500,000, as evidenced by a Promissory Note dated June 30, 2010, payable by the Debtor to the Bank, which was most recently modified on November 9, 2011 (the "Term Note"), and a secured revolving loan in the maximum principal amount of $1,400,000 as evidenced by a Promissory Note dated June 30, 2010, which was also modified on November 9, 2011 (the "Revolving Note," collectively with the Term Note, the "Loans");
(v) The Bank has asserted that the Loans are secured by, among other things, a Security Agreement dated June 27, 2005, by the Debtor in favor of the Bank (as amended and restated from time to time, the "Security Agreement");
(vi) Pursuant to the Security Agreement and corresponding financing statements which have been filed among the records of the District of Columbia, the Debtor
believes, and the Bank asserts, that the Loans are secured by a perfected first priority security interest in all of the Debtor's assets, including, without limitation, inventory, accounts, accounts receivable, furniture, fixtures and other equipment, along with the proceeds of such assets (the "Prepetition Collateral");
(vii) As of the Petition Date, the Bank asserts that the outstanding principal indebtedness on the Term Note was approximately $1,266,672.00 and the corresponding indebtedness on the Revolving Note was approximately $758,165.35 (such amounts, together with interest, fees, attorneys' fees and expenses, and all other sums which are now or may in the future be due and owing by Debtor to Wells Fargo are referred to herein as the "Obligations");
(viii) On January 31, 2012, the Court entered its Final Order Approving the Debtor's Use of Cash Collateral and Providing Adequate Protection Therefor (the "Cash Collateral Order") [Dkt. No. 103] in which the Bank asserted, and the Debtor agreed, that as of January 20, 2012, the Bank was owed principal in the total amount of $797,226.19, plus certain pre-petition fees and expenses, including attorneys' fees, and post-petition interest, late charges, expenses and fees, including attorneys' fees;
(ix) Following the sale of certain of the Debtor's assets pursuant to the Court's Order Granting Debtor's Motion Approving Sale of Intellectual Property and Other Assets and Approving Assumption and Assignment of Certain Real Estate Leases [Dkt. No. 157], Wells Fargo has been repaid all of the principal and accrued interest due and owing, both pre- and post-petition, on account of the Loans;
(x) As of February 10, 2012, Wells Fargo was asserting the right to recover a total of $115,120.23 on accountofboth pre- and post-petition fees and expenses, including attorneys' fees, all as set forth in more detail in the Motion (the "Bank's Fee Claim"); and
(xi) As ofFebruary 14, 2012, the Committee, Wells Fargo and the Debtorreached agreement to compromise the Bank's Fee Claim for $100,869.93, which compromise is withoutprejudice to the Bank's rightto seekto recoverthe balance ofits fees and expenses from guarantors ofthe Loans, and withoutprejudice to the guarantors' rights to object to such recovery.
NOW THEREFORE, upon consideration of the Motion, and given the consent to the reliefrequested herein by the Bank, the Debtorand the Committee; and havingscheduled a hearing on the Motion, and it appearing that the Motion and notice ofthe hearing and ofthis Order were served on the Committee and all other parties entitled to be served with the Motion pursuantto Rules 2002(a)(3) and 9019(a) ofthe Federal Rules ofBankruptcy Procedure (collectively, "Notice Parties"); and it appearing further that no objections to the Motion or to this Order have been filed; and it appearing that it is appropriate for this Court to approve the Debtor's compromise ofthe Bank's claims pursuantto the terms and conditions setforth below; itis, by the United States Bankruptcy Courtfor the DistrictofMaryland, hereby:
ORDERED, that the Debtor is authorized to compromise the Bank's Fee Claim for $100,869.93, and to immediately pay and remit such sum to the Bank in satisfaction of the Bank's Fee Claim; and it is further
ORDERED, that the compromise approved by this Order is without prejudice to (a) the Bank's rightto seek to recoverany portion ofthe Bank's Fee Claim, including additional attorneys' fees and expenses, from the guarantors of the Loans, and (b) the guarantors' rights to object to the Bank's efforts to recover any portion of the Bank's Fee Claim, including additional attorneys' fees and expenses, from the guarantors of the Loans.
AGREED AND CONSENTED TO:
DEBTOR:
PENN CAMERA EXCHANGE, INC.
By: _________________
Nelson C. Cohen, Esq.
Counsel for Penn Camera Exchange, Inc.
BANK:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By: _________________
Richard E. Hagerty, Esq.
Counsel for Wells Fargo Bank, National Association
COMMITTEE
By:_________________
Michael J. Lichtenstein, Esq.
Counsel for the Official Committee of Unsecured Creditors
I HEREBY CERTIFY that the terms of the copy of the order submitted to the Court are identical to those set forth in the original order; and the signatures represented by the _________________ on this copy reference the signatures of consenting parties on the original order.
_________________
Nelson C. Cohen
Copies to:
United States Trustee
6305 Ivy Lane, Suite 600
Greenbelt, Maryland 20770
Richard E. Hagerty, Esq.
Troutman Sanders
1660 International Drive Suite 600
McLean, VA 22102
Nelson C. Cohen, Esq.
Zuckerman Spaeder LLP
1800 M Street, N.W., Suite 1000
Washington, DC 20036
Michael J. Lichtenstein, Esq.
Shulman Rogers Gandal Pordy & Ecker
11921 Rockville Pike, 3rd Floor
Rockville, Maryland 20852
END OF ORDER