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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., ) ) Debtor. ) ) ) ) Chapter 7 Case No. 12-27488 Honorable Carol A. Doyle Hearing Date: November 1, 2012 Hearing Time: 10:00 a.m.

NOTICE OF MOTION PLEASE TAKE NOTICE that on November 1, 2012 at 10:00 a.m., the undersigned shall appear before the Honorable Judge Carol A. Doyle, in Courtroom 742, 219 South Dearborn Street, Chicago, Illinois, and then and there present the TRUSTEE’S FIFTH MOTION FOR THE ENTRY OF AN ORDER AUTHORIZING THE REJECTION OF CERTAIN EXECUTORY CONTRACTS, at which time you may appear if you deem fit. Dated: October 24, 2012 Respectfully submitted, Ira Bodenstein, not personally, but as chapter 7 trustee for the estate of Peregrine Financial Group, Inc. By Robert M. Fishman (#3124316) Allen J. Guon (#6244526) Kimberly Bacher (#6285677) Shaw Fishman Glantz & Towbin LLC 321 North Clark Street, Suite 800 Chicago, Il 60654 Phone: (312) 541-0151 Fax: (312) 980-3888 /s/ Kimberly Bacher One of his proposed attorneys

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CERTIFICATE OF SERVICE Kimberly Bacher certifies that she caused to be served a true copy of the above and foregoing NOTICE OF MOTION and TRUSTEE’S FIFTH MOTION FOR THE ENTRY OF AN ORDER AUTHORIZING THE REJECTION OF CERTAIN EXECUTORY CONTRACTS upon the attached Electronic Mail Notice List through the ECF System and on the attached Service List in the manner so indicated on this 24th day of October, 2012. /s/ Kimberly Bacher
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@shawfishman.com Salvatore A Barbatano sbarbatano@shawfishman.com Lawrence M. Benjamin lbenjamin@ngelaw.com, rwills@ngelaw.com Stephen T. Bobo sbobo@reedsmith.com Ira Bodenstein iratrustee@shawfishman.com, IL29@ecfcbis.com Ira Bodenstein ibodenstein@shawfishman.com David E Cohen dcohen@fishercohen.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@shawfishman.com Geoffrey S. Goodman ggoodman@foley.com, egreen@foley.com;khall@foley.com Ava Gould agould@cftc.gov Joshua M Grenard jgrenard@mayerbrown.com, courtnotification@mayerbrown.com Allen J Guon aguon@shawfishman.com John W Guzzardo jguzzardo@shawfishman.com David Paul Holtkamp dholtkamp@wfactorlaw.com, nb@wfactorlaw.com Stephanie K. Hor-Chen shor@vedderprice.com, ecfdocket@vedderprice.com Kevin M Hyde khyde@shawgussis.com Thomas S Kiriakos tkiriakos@mayerbrown.com, Courtnotification@mayerbrown.com James C. Koutoulas jk@typhoncap.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 Michael C. Moody mmoody@orourkeandmoody.com, firm@orourkeandmoody.com,morourke@orourkeandmoody.com Jennifer M. Muchoney jmuchoney@pfgbest.com Michael J O'Rourke morourke@orourkeandmoody.com, firm@orourkeandmoody.com Mark L Radtke mradtke@shawfishman.com Rene S Roupinian RSR@outtengolden.com Richard A. Saldinger rsaldinger@shawfishman.com Jessica M Scheller jscheller@shawfishman.com Sean T Scott stscott@mayerbrown.com Scott A Semenek scott.semenek@faegrebd.com, melanie.senesac@faegrebd.com Anne W Stukes astukes@cftc.gov William W Thorsness wthorsness@vedderprice.com, ecfdocket@vedderprice.com

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 

John Edward Waters john.waters@iowa.gov Thomas C. Wolford twolford@ngelaw.com

Via Electronic Mail and U.S. Mail CRT Special Investments LLC Attn: Joseph Sarachek 262 Harbor Drive Stamford, CT 06902 Gaivesville Coins, Inc. c/o Stephanie C. Lieb, Esq. 101 E. Kennedy Blvd., Ste. 2700 Tampa, FL 33602 rcolton@trenam.com slieb@trenam.com Joseph M. Russell JP Morgan Chase Bank NA 10 S. Dearborn Street Chicago, IL 60603 Joe.russell@jpmchase.com Gilbert B. Weisman Becket & Lee LLP 16 General Warren Blvd. Malvern, PA 19355 Notices@becket-lee.com John B. Connor John B. Connor, P.L.C. 1033 N. Fairfax St., Ste. 310 Alexandria, VA 22314 jack@johnbconnor.com Outten & Golden LLP 3 Park Ave., 29th Floor New York, NY 10016 Attn: Jack Raisner Rene Roupinian Stephen Mertz Michael Stewart Faegre Baker Daniels LLP 90 South 7th St., Ste. 2200 Minneapolis, MN 55402 stephen.mertz@faegrebd.com Michael.stewart@faegrebd.com William L. Wallander John Paul K. Napier Vinson & Elkins L.L.P. 2001 Ross Avenue, Ste. 3700 Dallas, TX 75201 jnapier@velaw.com bwallander@velaw.com Lazonia Clark Chase Paymentech Solutions, LLC 14221 Dallas Parkway Building II Dallas, TX 75254-2942 Lazonia.clark@chasepaymentech.com Andrea M. Momnie Philip J. Hendel Hendel & Collins, P.C. 101 State Street Springfield, MA 01103 amomnie@hendelcollins.com

Alicia Martin Attn: Steven R. Lehr, Esq. Steven R. Lehr, P.C. 33 Clinton Road, Ste. 100 West Caldwell, NJ 07006 slehr@lehrlaw.com Via Electronic Mail Rosemary Hollinger rhollinger@cftc.gov Robert W. Wasserman rwasserman@cftc.gov Scott Williamson swilliamson@cftc.gov Pat DiMaria pdimaria@pfgbest.com Vivian Drohan vdrohan@dlkny.com rickmedley@aol.com roythompson@comcast.net mark.sherrill@sutherland.com

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VIA FEDEX Non-Debtor Counter Party U.S. Cellular Attn: Mark Armour 8410 W. Bryn Mawr, Suite 700 Chicago, IL 60631-3486 Chicago Mercantile Exchange Inc. 30 South Wacker Drive Chicago, IL 60606 C T Corporation System 208 So. LaSalle Street, Suite 814 Chicago, IL 60604 Avadhi Software, LLC Paresh Malde 1745 Hamilton Road Suite 340 Okemos, Michigan 48864 Blair Hysni Clark Hill PLC 500 Woodward Avenue Suite 3500 Detroit, Michigan 48226 Chicago Mercantile Exchange Inc. Attn: Dale Michaels 30 South Wacker Drive Chicago, IL 60606 Chicago Mercantile Exchange Inc. Attn: Brian J. McElligolt Managing Director 20 South Wacker Drive Chicago, IL 60606 Deutsche Borse AG Attn: Georg Gross Neue Borsenstrabe 1 60487 Frankfurt am Main Germany Intercontinental Exchange, Inc. Attn: Jonathan Short 2100 RiverEdge Parkway Suite 500 Atlanta, GA 30328 ICE Futures, U.S. Attn: Audrey Hirschfield One North End Avenue New York, NY 1082-1101 IntercontinentalExchange, Inc. Attn: Jonathan Short 2100 RiverEdge Parkway Suite 500 Atlanta, GA 30328 ICE Futures, U.S. Attn: Audrey Hirschfield One North End Avenue New York, NY 1082-1101 Trading Central Asia Limited Attn: Alain Pellier Level 28 Three Pacific Place 1 Queen’s Road East Hong Kong North American Derivatives Exchange, Inc. 311 South Wacker Drive Suite 2675 Chicago, IL 60606 Jacob Mulaikal 311 S. Wacker Dr. Ste. 2675 Chicago, IL 60606 Stephen Farber, Vice President Finance and Administration eSignal, a division of Interactive Data Corporation 3955 Point Eden Way Hayward, CA 94545-3720 EBS Dealing Resources, Inc. Attn: Tony Cohen 535 Madison Avenue, 24th Floor New York, NY 10022
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EBS Service Company Limited For the Attention of: The Directors Lavaterstrasse 40 PO Box 375 CH/8027 Zurich, Switzerland Qwest Corporation d/b/a CenturyLink QC Attn: Legal Dept. 1801 California St. #900 Denver, CO 80202 Real-time Analysis & News Limited 25 Copthall Avenue London, EC2R 7BP Equifax Information Services, LLC Attn: General Counsel 1550 Peachtree St., NW Atlanta, Georgia 30309 Fleetwood Financial A Division of IDB Leasing, Inc. Attn: Richard A. Frank 1001 Durham Avenue South Plainfield, NJ 07080

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UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION In re: ) ) PEREGRINE FINANCIAL GROUP, INC., ) ) Debtor. ) ) ) ) Chapter 7 Case No. 12-27488 Honorable Carol A. Doyle Hearing Date: November 1, 2012 Hearing Time: 10:00 a.m.

TRUSTEE’S FIFTH MOTION FOR THE ENTRY OF AN ORDER AUTHORIZING THE REJECTION OF CERTAIN EXECUTORY CONTRACTS 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 the executory contracts (“Contracts”) set forth in Exhibit A to this motion (“Motion”). In support of the Motion, the Trustee respectfully states as follows: Background 1. On July 10, 2012 (“Petition Date”), the Debtor filed a voluntary petition for relief

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. 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.

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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 this Case – a commodities broker liquidation under subchapter IV of chapter 7 of the Bankruptcy Code. Relief Requested 4. The Debtor is a party to numerous vendor and financial services executory

contracts that will provide no benefit to the estate. By this Motion, the Trustee seeks Court authority to reject the Contracts 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 an order, pursuant to § 365(a), rejecting the Contracts effective as of the date of filing this Motion. Basis for Relief 5. 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

The Trustee continues to review and evaluate all of its executory contracts and leases, including those that are not the subject of this Motion. As this process continues, the Trustee may identify additional executory contracts and/or 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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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. 6. 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 provide no benefit to the estate and are not necessary to the Debtor’s remaining limited operations. Moreover, the Contracts would otherwise eventually be rejected by operation of law under § 365(d) of the Bankruptcy Code. Since the Contracts 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. 7. Out of an abundance of caution and a desire to prevent the accrual of any

administrative expense in connection with the Contracts and Leases, the Trustee requests that this Court approve his rejection of these burdensome Contracts effective as of the date of the filing of this Motion. 8. Having clearly exercised his intention to terminate the Contracts by filing this

Motion, the Trustee is entitled to such relief. See Thinking Machines Corporation v. Mellon Financial Services Corporation (In re Thinking Machines Corporation), 67 F.3d 1021, 1028 (1st Cir. 1995) (bankruptcy courts may enter retroactive orders under § 365, and should do so when the balance of equities preponderates in favor of such remediation); In re Joseph C. Spiess Co., 145 B.R. 597, 606 (Bankr. N.D. Ill. 1992) (the rejection of a lease should be retroactive to the date that the trustee takes affirmative steps to reject said lease such as serving notice of a motion
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to reject). The Trustee believes that, since the majority of the estate’s creditors are defrauded customers, the equities under the circumstances weigh in favor of permitting the Trustee to expeditiously reduce unnecessary administrative claims against the estate by permitting the Trustee to reject the Contracts as of the date of this Motion. Accordingly, the equities

substantially favor the Court authorizing rejection effective as of October 24, 2012. Notice 9. 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 (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 order, pursuant to 11 U.S.C. § 365(a) and Fed. R. Bankr. P. 6006, (a) approving the rejection of the Contracts as of October 24, 2012; and (b) granting such other and further relief as is just and equitable. Dated: October 24, 2012 Respectfully submitted, Ira Bodenstein, not personally, but as chapter 7 trustee for the estate of Peregrine Financial Group, Inc. By: Robert M. Fishman (#3124316) Allen J. Guon (#6244526) Kimberly Bacher (#6285677) Shaw Fishman Glantz & Towbin LLC 321 North Clark Street Suite 800 Chicago, Il 60654 Phone: (312) 541-0151 Fax: (312) 980-3888 /s/ Kimberly Bacher One of his attorneys

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EXHIBIT A

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EXHIBIT A Non-Debtor Counter Party
U.S. Cellular Attn: Mark Armour 8410 W. Bryn Mawr Suite 700 Chicago, IL 60631-3486 Mark.armour@uscellular.com Chicago Mercantile Exchange Inc. 30 South Wacker Drive Chicago, IL 60606 And C T Corporation System 208 So. LaSalle Street, Suite 814 Chicago, IL 60604 Avadhi Software, LLC Paresh Malde 1745 Hamilton Road Suite 340 Okemos, Michigan 48864 And Blair Hysni Clark Hill PLC 500 Woodward Avenue Suite 3500 Detroit, Michigan 48226 Chicago Mercantile Exchange Inc. Attn: Dale Michaels 30 South Wacker Drive Chicago, IL 60606 And C T Corporation System 208 So. LaSalle Street, Suite 814 Chicago, IL 60604 SPAN Software Evaluation Agreement Private Labeling and Service Agreement

Contract
Proposal and Cellular Service Agreement

Customer Connection Agreement

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Chicago Mercantile Exchange Inc. Attn: Brian J. McElligolt Managing Director 20 South Wacker Drive Chicago, IL 60606 And C T Corporation System 208 So. LaSalle Street, Suite 814 Chicago, IL 60604 Deutsche Borse AG Attn: Georg Gross Neue Borsenstrabe 1 60487 Frankfurt am Main Germany Intercontinental Exchange, Inc. Attn: Jonathan Short 2100 RiverEdge Parkway Suite 500 Atlanta, GA 30328 And ICE Futures, U.S. Attn: Audrey Hirschfield One North End Avenue New York, NY 1082-1101 IntercontinentalExchange, Inc. Attn: Jonathan Short 2100 RiverEdge Parkway Suite 500 Atlanta, GA 30328 And ICE Futures, U.S. Attn: Audrey Hirschfield One North End Avenue New York, NY 1082-1101 Trading Central Asia Limited Attn: Alain Pellier Level 28 Three Pacific Place 1 Queen’s Road East Hong Kong

Market Data License Agreement

Market Data Dissemination Agreement of Deutsche Borse AG

User Interface

Direct Access Interface

Contract for Technical Analysis Strategies for Peregrine Financial Group, Inc.

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North American Derivatives Exchange, Inc. 311 South Wacker Drive Suite 2675 Chicago, IL 60606 And Jacob Mulaikal 311 S. Wacker Dr. Ste. 2675 Chicago, IL 60606 Stephen Farber, Vice President, Finance and Administration eSignal, a division of Interactive Data Corporation 3955 Point Eden Way Hayward, CA 94545-3720 EBS Dealing Resources, Inc. Attn: Tony Cohen 535 Madison Avenue, 24th Floor New York, NY 10022 And EBS Service Company Limited For the Attention of: The Directors Lavaterstrasse 40 PO Box 375 CH/8027 Zurich, Switzerland Qwest Corporation d/b/a CenturyLink QC Attn: Legal Dept. 1801 California St. #900 Denver, CO 80202 Real-time Analysis & News Limited 25 Copthall Avenue London, EC2R 7BP

FCM Membership Agreement

License and Re-Marketing Agreement

EBS Trader Service Customer Acknowledgement for the United States and EBS Trader Customer Agreement

Centurylink ISDN PRS, DSS Advanced or UAS Bulk Rated Agreement

Agreement by and between Real-time Analysis & News Limited and PFG Best dated as of August 15, 2011

Equifax Information Services, LLC Attn: General Counsel 1550 Peachtree St., NW Atlanta, Georgia 30309

Authentication Services Agreement

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Fleetwood Financial A Division of IDB Leasing, Inc. Attn: Richard A. Frank 1001 Durham Avenue South Plainfield, NJ 07080

Master Lease Schedule No. 1 to Master Equipment Lease No. 6657

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