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Case 12-27488

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UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: PEREGRINE FINANCIAL GROUP, INC., ) ) ) ) ) ) ) ) ) ) Chapter 7 Case No. 12-27488

Honorable Carol A. Doyle

Debtor.

Hearing Date: July 31, 2012 Hearing Time: 9:30 a.m.

NOTICE OF EMERGENCY MOTION PLEASE TAKE NOTICE that on Tuesday, July 31, 2012 at 9:30 a.m., the undersigned shall appear before the Honorable Donald R. Cassling, in Courtroom 619, 219 S. Dearborn Street, Chicago, Illinois, or before any other Judge sitting in his stead, and then and there present the TRUSTEE’S EMERGENCY MOTION FOR ENTRY OF AN ORDER AUTHORIZING THE REJECTION OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES OF PERSONAL AND NON-RESIDENTIAL REAL PROPERTY at which time you may appear if you see fit and a copy of which has been previously served upon you. THE PARTIES RECEIVING THIS EMERGENCY MOTION SHOULD LOCATE THEIR NAMES AND THEIR CONTRACTS OR LEASES LISTED IN EXHIBIT A.

Dated: July 26, 2012

Robert M. Fishman (#3124316) Allen J. Guon (#6244526) Shaw Gussis Fishman Glantz Wolfson & Towbin LLC 321 North Clark Street Suite 800 Chicago, Il 60654 Phone: (312) 541-0151 Fax: (312) 980-3888 Proposed Counsel to the Trustee

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CERTIFICATE OF SERVICE Allen Guon certifies that he caused to be served a true copy of the above and foregoing NOTICE OF EMERGENCY MOTION and TRUSTEE’S EMERGENCY MOTION FOR ENTRY OF AN ORDER AUTHORIZING THE REJECTION OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES OF PERSONAL AND NONRESIDENTIAL REAL PROPERTY upon the attached ECF Electronic Mail Notice List and Service List in the manner so indicated on this 26th day of July, 2012. /s/ Allen J. Guon Mailing Information for Case 12-27488 Electronic Mail Notice List The following is the list of parties who are currently on the list to receive email notice/service for this case.
                        

Kimberly A Bacher kbacher@shawgussis.com, bharrington@shawgussis.com Salvatore A Barbatano sbarbatano@shawgussis.com, jhampton@shawgussis.com Lawrence M. Benjamin lbenjamin@ngelaw.com, rwills@ngelaw.com Ira Bodenstein iratrustee@shawgussis.com, IL29@ecfcbis.com;sdelamora@shawgussis.com David E Cohen davidecohen@lawcohen.com Brooke E Conner bconner@vedderprice.com, ecfdocket@vedderprice.com;ecarlson@vedderprice.com Michael M. Eidelman meidelman@vedderprice.com, ecfdocket@vedderprice.com Robert M Fishman rfishman@shawgussis.com Ava Gould agould@cftc.gov Joshua M Grenard jgrenard@mayerbrown.com, courtnotification@mayerbrown.com John W Guzzardo jguzzardo@shawgussis.com Thomas S Kiriakos tkiriakos@mayerbrown.com, Courtnotification@mayerbrown.com Vincent E. Lazar vlazar@jenner.com, lyap@jenner.com;mmatlock@jenner.com;docketing@jenner.com Randall M Lending rlending@vedderprice.com, trobinson@vedderprice.com;ecfdocket@vedderprice.com Jennifer M. Muchoney jmuchoney@pfgbest.com Richard A. Saldinger rsaldinger@shawgussis.com Jessica M Scheller jscheller@shawgussis.com, kdevries@shawgussis.com Sean T Scott stscott@mayerbrown.com Thomas C. Wolford twolford@ngelaw.com Gretchen Silver Gretchen.Silver@usdoj.gov Constantine Harvalis Constantine.Harvalis@usdoj.gov Roman L. Sukley Roman.L.Sukley@usdoj.gov Kathryn M. Gleason Kathryn.M.Gleason@usdoj.gov Robert Wasserman rwasserman@cftc.gov
Anne W. Stukes astukes@cftc.gov

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Via Electronic Mail and Overnight Federal Express Delivery
Gaivesville Coins, Inc. c/o Stephanie C. Lieb, Esq. 101 E. Kennedy Blvd., Ste. 2700 Tampa, FL 33602 rcolton@trenam.com slieb@trenam.com William P. Janulis Ava Gould U.S. Commodity Futures Trading Commission 525 West Monroe Street, Ste. 1100 Chicago, IL 60601 wjanulis@cftc.gov agould@cftc.gov James L. Koutoulas Chief Executive Officer Typhon Capital Management jk@typhoncap.com Scott R. Williamson Deputy Regional Counsel CFTC Division of Enforcement 525 W Monroe Street, Suite 1100 Chicago, IL 60661 swilliamson@cftc.gov Gilbert B. Weisman Becket & Lee LLP 16 General Warren Blvd. Malvern, PA 19355 Notices@becket-lee.com

Rosemary C. Hollinger U.S. Commodity Futures Trading Commission 525 West Monroe Street, Ste. 1100 Chicago, IL 60601 Email: rhollinger@cftc.gov Jon J Kramer U.S. Commodity Futures Trading Commission 525 W. Monroe Street Chicago, IL 60661 jkramer@cftc.gov

Joseph M. Russell JP Morgan Chase Bank NA 10 S. Dearborn Street Chicago, IL 60603 Joe.russell@jpmchase.com

Via Electronic Mail Only Robert Wasserman rwasserman@cftc.gov astukes@cftc.gov Anne W. Stukes

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Via Overnight Federal Express Delivery Douglas Emmett 1998, LLC c/o Douglas Emmett Management, LLC Director of Property Management 808 Wilshire Boulevard, Suite 200 Santa Monica, CA 90401 Executive East Properties LLC 100 Maple Park Boulevard, Suite104 St. Clair Shores, MI 48081 Attn: Joy Jones Sui Generis LLC 400 Camarillo Ranch Road, Suite 101 Camarillo, CA 93012 Attn: President MEPT McClurg Court LLC RMK Management Corporation 1 N. Franklin Suite 700 Chicago, IL 60606 Cort Furniture Rental 161 S. Gary Ave. Carol Stream, IL 60188 Attn: Amber Prange Chicago Mercantile Exchange Inc. 20 S. Wacker Dr. Chicago, IL 60606 Attention: MD Co-Location Services Monte C. Strusiner, President Management/Marketing Services Incorporated 401 Huehl Road, Suite 1A Northbrook, IL 60062-2300 SL Investment US-RE Holdings 2009-1, Inc. c/o Crescent Resources, LLC 1000 Primera Blvd., Suite 1130 Lake Mary, FL 32746 Attn: Eydie Cosat The Regus Group LLC 8001 Irvine Center Drive, Suite 400 Irvine, CA 92618 Attn: Meredith Mercer/Kim Graville John Egan 333 E. Ontario Chicago, IL 60611 Chicago Mercantile Exchange Inc. 20 S. Wacker Dr. Chicago, IL 60606 Attention: General Counsel Equinox Operating Co. LLC 301 Velocity Way, 5th Floor Foster City, California 94404 Attn: Heidi B. Caparro, Senior Contracts Mgr.

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UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: PEREGRINE FINANCIAL GROUP, INC., ) ) ) ) ) ) ) ) ) ) Chapter 7 Case No. 12-27488

Honorable Carol A. Doyle

Debtor.

Hearing Date: July 31, 2012 Hearing Time: 9:30 a.m.

TRUSTEE’S EMERGENCY MOTION FOR ENTRY OF AN ORDER AUTHORIZING THE REJECTION OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES OF PERSONAL AND NON-RESIDENTIAL REAL PROPERTY Ira Bodenstein, not personally, but as chapter 7 trustee (“Trustee”) for the estate of Peregrine Financial Group, Inc. d/b/a PFG Best (“Debtor”), pursuant to 11 U.S.C. § 365(a) and Fed. R. Bankr. P. 6006, moves for entry of an order in the above-captioned case (“Case”) authorizing the Trustee to reject, as of 11:59 p.m. on July 31, 2012, the executory contracts (“Contracts”) and the unexpired leases of personal and non-residential real property (“Leases”) set forth in Exhibit A to this motion (“Motion”). respectfully states as follows: Background 1. On July 10, 2012 (“Petition Date”), the Debtor filed a voluntary petition for relief In support of the Motion, the Trustee

under chapter 7 of the Bankruptcy Code, 11 U.S.C. § 101, et. seq. Ira Bodenstein is the duly appointed chapter 7 trustee of the Debtor’s estate. On July 13, 2012, the Court entered an order authorizing the Trustee to operate the Debtor’s business and pay employee obligations pursuant to 11 U.S.C. § 721.

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2.

This Court has jurisdiction to hear this matter and enter a final order granting the

relief requested herein pursuant to 28 U.S.C. §§ 157 and 1334 and Internal Operating Procedure 15(a) of the United States District Court for the Northern District of Illinois. Venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. 3. Prior to the Petition Date, the United States Commodity Futures Trading

Commission (“CFTC”) filed a lawsuit in the United States District Court for the Northern District of Illinois (“District Court”) alleging that the Debtor and its founder, Russell Wasendorf Sr., committed fraud, customer-funds violations and made false statements (“Lawsuit”). In connection with the Lawsuit, on July 10, 2012, the District Court entered an Order Appointing a Temporary Receiver. Shortly thereafter, the Debtor commenced the Case – commodity broker liquidation under subchapter IV of chapter 7 of the Bankruptcy Code. 4. The Debtor’s bankruptcy petition reflects that its assets total approximately $500

million to $1 billion and that its liabilities total approximately $100 million to $500 million. Relief Requested 5. The Debtor is a party to numerous vendor and financial services executory

contracts and unexpired personal property and non-residential real property leases that will provide no benefit to the estate. By this Motion, the Trustee seeks Court authority to reject the Contracts and Leases set forth in the attached Exhibit A1 that, in the Trustee’s business judgment, no longer provide any benefit to the estate. Accordingly, the Debtor seeks the entry of

The Trustee continues to review and evaluate all of its executory contracts and unexpired leases, including those that are not the subject of this Motion. As this process continues, the Trustee may identify additional executory contracts and unexpired leases to be assumed or rejected. Accordingly, the Trustee reserves the right to seek to assume or reject executory contracts or unexpired leases in the future, and this Motion should not be construed as a determination that any leases or executory contracts not listed herein are to be assumed or rejected under § 365.
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an order, pursuant to § 365(a), rejecting the Contracts and Leases effective as of 11:59 p.m. on July 31, 2012. Basis for Relief 6. Section 365(a) of the Bankruptcy Code empowers a trustee, “subject to the court’s

approval, may assume or reject any executory contract or unexpired lease.” 11 U.S.C. § 365(a). The trustee’s rejection of an executory contract or an unexpired lease is subject to review under the business judgment standard. See NLRB v. Bildisco and Bildisco, 465 U.S. 513, 523 (1984); Durkin v. Benedor Corporation (In re G.I. Industries), 204 F.3d 1276, 1282 (9th Cir. 2000); see In re Bullet Jet Charter, Inc., 177 B.R. 593, 601 (Bankr. N.D. Ill. 1995); In re Del Grosso, 115 B.R. 136, 138 (Bankr. N.D. Ill. 1990); Johnson v. Fairco Corp., 61 B.R. 317, 319 (N.D. Ill. 1986). If the trustee’s business judgment has been reasonably exercised, his decision to reject should be approved. See id. 7. This Court has previously authorized the Trustee to operate the Debtor’s business

on a limited basis for the purpose of preserving value for the estate. The Trustee has determined that the Contracts and Leases provide no benefit to the estate and are not necessary to the Debtor’s remaining limited operations. Moreover, the Contracts and Leases would otherwise eventually be rejected by operation of law under § 365(d) of the Bankruptcy Code. Since the Contracts and Leases provide no benefit to the estate, their rejection and the attendant reduction in the estate’s administrative costs reflects the Trustee’s exercise of sound business judgment under the Bankruptcy Code. Accordingly, the Trustee has determined that it is in the best interests of the estate to reject the Contracts and Leases as of the end of the day on July 31, 2012.

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Notice 8. Pursuant to Fed. R. Bankr. P. 6006(c), notice of this Motion has been given to:

(a) the Office of the United States Trustee; (b) the non-Debtor parties to the Contracts and Leases; and (c) the parties requesting notice in this Case. In light of the nature of the relief requested, the Trustee submits that no further or other notice is required. WHEREFORE, the Trustee requests the entry of an emergency order, pursuant to 11 U.S.C. § 365(a) and Fed. R. Bankr. P. 6006, (a) approving the rejection of the Contracts and Leases as of 11:59 p.m. on July 31, 2012; and (b) granting such other and further relief as is just and equitable. Respectfully submitted, Ira Bodenstein, not personally, but as chapter 7 trustee for the estate of Peregrine Financial Group, Inc. Dated: July 26, 2012 Robert M. Fishman (#3124316) Allen J. Guon (#6244526) Shaw Gussis Fishman Glantz Wolfson & Towbin LLC 321 North Clark Street Suite 800 Chicago, Il 60654 Phone: (312) 541-0151 Fax: (312) 980-3888 By: /s/ Allen J. Guon One of his proposed attorneys

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Name of Lessor Chicago Mercantile Exchange, Inc. Cort Furniture Rental

Location Address 2905 Diehl Rd. Aurora, IL

Contract/Lease Master Co-location Services Agreement dated 5/16/11

Monthly Rent $7,154.00 $232.19 $6,784.31 $7,154.00 $400.00 $2,526.63 $1,545.00 $347.67 $3,950.00 $2,050.00

600 N. McClurg Court, Apt. 708A Furniture Lease Agreement 15910 Ventura Boulevard, Suite 1605, Non-residential Real Douglas Emmett 1998, LLC Encino, CA Property Lease Master Services Agreement Equinix Operating Co. LCC dated as of 12/24/10 755 Secaucus Rd., Secaucus NJ 1550 East Beltline SE, Suite 255, Grand Non-residential Real Executive East Properties LLC Rapids, MI Property Lease 601 Skokie Blvd. Suite 1-B, Non-residential Real Management/Marketing Services, Inc. Northbrook, IL Property Lease Non-residential Real MEPT McClurg Court LLC 600 N. McClurg Court, Apt. 708A Property Lease 101 South Wymore Road, Altamonte Non-residential Real SL Investment US-RE Holdings 2009-1 Inc. Springs, FL Property Lease 400 Camarillo Ranch Road, Suite 101, Non-residential Real Sui Generis LLC 400 Camarillo, CA Property Lease 8001 Irvine Center Drive, Suite 400, Non-residential Real The Regus Group, LLC Irvine, CA Property Lease

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