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UWBKQ 9-27-12 Motion to Extend

UWBKQ 9-27-12 Motion to Extend

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Published by: Griswold on Sep 27, 2012
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In re: ))UNITED WESTERN BANCORP, INC. ) Case No. 12-13815 ABC) Chapter 11Debtor. )______________________________________ ))In re: ))MATRIX BANCORP TRADING, INC. ) Case No. 12-13822 ABC) Chapter 11Debtor. )______________________________________ ))In re: ))MATRIX FUNDING CORP. ) Case No. 12-13824 ABC) Chapter 11Debtor. ))
 Jointly Administered Under
Case No. 12-13815 ABC 
 UNITED WESTERN BANCORP, INC. (“UWBK”); MATRIX BANCORP TRADING,INC. (“MBT”); and MATRIX FUNDING CORP. (“MF”), Debtors-in-Possession herein (together,the “Debtors”), by and through their counsel, Sender & Wasserman, P.C., respectfully submit theirJoint Motion to Extend Exclusivity Periods Under 11 U.S.C. § 1121(d)(1). In support, the Debtorsstate as follows:1.
The Debtors filed their petitions for relief under Chapter 11 of Title 11 of the UnitedStates Code (the “Bankruptcy Code”) on March 2, 2012 (the “Petition Date”), and since that datehave been operating as debtors-in-possession.2.
Section 1121(b) of the Bankruptcy Code provides that “only the debtor may file aplan until after 120 days” after the Petition Date (the “120-day Exclusivity Period”).
Case:12-13815-ABC Doc#:176 Filed:09/27/12 Entered:09/27/12 09:48:16 Page1 of 4
Section 1121(c)(3) of the Bankruptcy Code provides that any party in interest mayfile a plan, if and only if “the debtor has not filed a plan that has been accepted, before 180 daysafter” the Petition Date (the “180-day Exclusivity Period”).4.
Section 1121(d)(1) of the Bankruptcy Code provides that “on request of a party ininterest made within the respective periods specified in subsections (b) and (c) of this section andafter notice and a hearing, the court may for cause reduce or increase the 120-day period or the 180-day period referred to in this section.”5.
In the instant case, the 120-day Exclusivity Period was previously extended by Orderof the Court to October 1, 2012, and the 180-day Exclusivity Period extended to November 27,2012. (
Order Granting Motion to Extend Exclusivity Periods Under 11 U.S.C. § 1121(d)(1),Doc. #153.)
The Debtors seek to extend both the 120-day Exclusivity Period and the 180-dayExclusivity Period by approximately 45 days each, to November 15, 2012 and January 11, 2013,respectively.6.
The Exclusivity Period under 11 U.S.C. § 1121(c) is intended to afford a debtor ameaningful opportunity to develop and confirm a consensual plan of reorganization under Chapter11 of the Bankruptcy Code.
See In re Aspen Limousine Service, Inc.
, 187 BR 989 (Bankr. D. Colo1995).7.
“Cause” is not defined under 11 U.S.C. § 1121(d)(1). However, courts have adopteda non-exclusive list of factors that a court may consider in determining whether to extend anexclusivity period.
See In re Friedman’s, Inc.
, 336 B.R. 884 (Bankr. S.D. Ga. 2005).8.
Such factors include:a.
the size and complexity of the debtor’s case;b.
the necessity of sufficient time to negotiate and prepare adequateinformation;c.
the existence of good faith progress toward reorganization;d.
whether the debtor is paying its bills as they come due;e.
whether the debtor has demonstrated reasonable prospects for filing a viableplan;f.
whether the debtor has made progress in negotiations with its creditors;g.
the amount of time which has elapsed in the case;h.
whether the debtor is seeking an extension to pressure creditors; andi.
whether an unresolved contingency exists.
Case:12-13815-ABC Doc#:176 Filed:09/27/12 Entered:09/27/12 09:48:16 Page2 of 4
Cause for an extension of the Exclusivity Period exists in this case as shown by thefollowing:a.
The size and complexity of the Debtors’ cases, the necessity of time tonegotiate and prepare adequate information, and the existence of good faithprogress toward reorganization:As more fully explained in the Debtors’ Joint Motion Seeking ExpeditedEntry of Orders (Docket No. 11), on January 21, 2012, the Office of ThriftSupervision (“OTS”) appointed the Federal Deposit Insurance Corporation(“FDIC”) as receiver of United Western Bank (the “Bank”), a formersubsidiary of UWBK. In response, UWBK and the Bank (among others)initiated a civil complaint in the United States District Court for the Districtof Columbia (the “DC Court”) against the OTS and the FDIC (among others)seeking rescission of the receivership or for an award of money damages (the“Lawsuit”). Debtors’ liquidation depends, in large amount, on the outcomeof the Lawsuit. Should the Lawsuit result in the award of sufficient monetarydamages to UWBK, the Debtors will propose a plan creating a structuredpayment formula with a detailed methodology for paying creditors andshareholders.The Bank and the OTS’s successor in interest, the Office of Comptroller of the Currency (“OCC”), have submitted competing dispositive motions in theLawsuit. The competing motions were fully briefed months ago and awaitruling from the DC Court.Debtors believed that a decision in the Lawsuit would be reached prior toOctober 1, 2012. However, as of this date, no decision has been rendered.Accordingly, Debtors have begun drafting a Plan that addresses thepossibility of recovery in the Lawsuit and the alternative possibility that itdoes not win a recovery. However, because such a Plan is necessarily morecomplicated than one in which the outcome of the Lawsuit was known, theDebtors need additional time to formulate, draft, and propose a plan of liquidation. The additional time will allow Debtors to draft and circulate amore thorough and thoughtful plan and disclosure statement for the benefit of creditors and parties in interest. It is also possible that, during the extension,the Lawsuit will be decided so that Debtors will be able to draft a moredefinite liquidation plan.b.
Whether the Debtor is paying its bills as they come due: The Debtors havebeen paying their bills as they come due as shown by its most recent MonthlyOperating Reports.c.
Whether the Debtor has demonstrated reasonable prospects for filing a viableplan: The Debtors have reasonable prospects for filing a viable plan. The
Case:12-13815-ABC Doc#:176 Filed:09/27/12 Entered:09/27/12 09:48:16 Page3 of 4

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