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Roberts BK Derivativei Motion

Roberts BK Derivativei Motion

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Published by: the kingfish on Feb 24, 2012
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02/24/2012

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 IN THE UNITED STATES BANKRUPTCY COURTFOR THE EASTERN DISTRICT OF MISSOURIEASTERN DIVISIONIn re: ) Case No. 11-50744 et seq)ROBERTS BROADCASTING ) Jointly Administered UnderCOMPANY, et al., ) Chapter 11)Debtors. )
EXPEDITED MOTION OF THE
)
OFFICIAL COMMITTEE OF
)
UNSECURED CREDITORS SEEKING
)
DERIVATIVE STANDING TO
)
COMMENCE AND PROSECUTE
)
CERTAIN CAUSES OF ACTION ON
)
BEHALF OF THE DEBTOR’S
 
)
BANKRUPTCY ESTATES
 )) Hearing Date: December 14, 2011) Hearing Time: 2:00 p.m.) Hearing Location: Courtroom No. 5) Thomas F. Eagleton U.S.) Courthouse) 111 S. 10
th
Street, 4
th
Floor
 
)
 
St. Louis, Mo. 63102
 COMES NOW
The Official Committee of Unsecured Creditors of the Chapter 11bankruptcy estates of Roberts Broadcasting Company of Jackson, MS, LLC, RobertsBroadcasting Company of Columbia, SC, LLC, and Roberts Broadcasting Company of 
Evansville, IN, LLC (collectively, the “Debtors”) and
moves this Honorable Court to enter anorder authorizing the Committee to commence and prosecute any and all causes of actions
existing in favor of the Debtors’ estates against the Debtors’ “
insiders
(as that term is defined in11 U.S.C. §101(31)), including, without limitation, any and all causes of action to avoid andrecover any transfers made to (either directly or indirectly) or for the benefit of said insiders
(collectively, the “Insider Actions”). In support hereof, the Committee states the following:
 
 - 2 -
I. JURISDICTION AND VENUE
1.
 
This Court has jurisdiction to hear and adjudicate this Motion pursuant to 28U.S.C. §§ 157(b)(1) and 1334(b), and 11 U.S.C. §§105(a) and 1303. This is a core proceedingpursuant to 28 U.S.C. § 157(b)(2).2.
 
Venue in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
II. BACKGROUND
3.
 
On October 7, 2011
(the “Petition Date”), the Debtor 
s filed for relief underChapter 11 of the Bankruptcy Code and are presently continuing to operate their businesses andmanage their financial affairs as Chapter 11 debtors-in-possession.4.
 
The Debtors collectively own and operate four (4) television broadcast stations:WRBU-46 (St. Louis, Missouri); WRBJ-34 (Jackson, Mississippi); WZRB-47 (Columbia, SouthCarolina); and WAZE-19 (Evansville, Indiana).5.
 
The Debtors are owned either directly or indirectly by Michael V. Roberts andSteven C. Roberts (collectively,
the “Roberts Brothers”).
 6.
 
In addition to the Debtors, the Roberts Brothers also own over thirty (30) otherbusiness ventures, which include numerous hotel, residential and retail properties throughout thecountry, a business consulting service, wireless communication ventures, an aviation business, aconstruction business, various radio-stations and even a gated, residential community in theBahamas.7.
 
On October 21, 2011, the Debtors filed with this Court their Bankruptcy
Schedules and Statement of Financial Affairs (collectively, the “Statements and Schedules”
),which Steven C. Roberts declared under penalty of perjury were true and correct to the best of 
 
 - 3 -his knowledge, information and belief.8.
 
In their Statements and Schedules, the Debtors declared that: (a) they had notmade any transfers to any insider creditors within the one-year period preceding the PetitionDate; and (b) they had not made any transfers outside the ordinary course of business within thetwo year period preceding the Petition Date.9.
 
On the evening of November 8, 2011
 — 
more than a month after thecommencement of these cases and on the eve of the day that the Debtors were scheduled totestify at the First Meeting of Creditors
 — 
the Debtors revealed for the first time that during thiscalendar year alone, they had made pre-petition transfers (for a single bank account) totaling inexcess of $800,000
to the Debtors’ non
-debtor insiders. These insider transfers included thefollowing amounts: (a) $204,400 to SMR Tower Investments LLC; (b) $58,000 to Roberts HotelCWE LLC; (c) $47,470 to Roberts Communications Properties LLC; (d) $39,188 to RobertsHotel CWE Management LLC; (e) $19,600 to Roberts Hotel Management Jackson; (f) $17,200to Roberts Orpheum Theatre LLC; (g) $17,000 to Roberts Hotel Group LLC; and (h) $13,254 toRoberts Restaurants LLC.10.
 
As the Debtors’ Vice President of Operations, Bobby Tate (“Mr. Tate”),
 subsequently testified at the First Meeting of Creditors, the foregoing transfers were made by theDebtors to their non-debtor insiders for no consideration so as to enable such insiders to covertheir payroll and other necessary operating expenses, as they were (and, presumably, remain)unable to pay such items from their own income and assets.11.
 
As Mr. Tate further testified at the First Meeting of Creditors, the Debtors’
practice of making gratuitous transfers to
Debtors’
insiders had been occurring over a significantperiod of time. Accordingly, it appears evident that the potential universe of voidable insider

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