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IN THE UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION
INRE:
DELTA PRODUCE, L.P. 1
DEBTORS
CHAPTERll
APPLICATION OF DEBTORS FOR FINAL ORDER AUTHORIZING THE USE OF CASH COLLATERAL OF INTERNATIONAL BANK OF COMMERCE
TO THE HONORABLE LEIF M. CLARK, JUDGE, UNITED STATES BANKRUPTCY COURT: NOW COMES Delta Produce, L.P. ("Delta"), Superior Tomato-Avocado, Ltd., Atled, Ltd. and Staci Properties, Ltd. (collectively, the "Debtors"), the Debtors in the above captioned cases (the "Cases"), and file this Application for Final Order Authorizing the Use of Cash Collateral ofintemational Bank of Commerce (the "Application"), and in support thereofwould respectfully show the Court the following:
I. JURISDICTION, VENUE AND BACKGROUND
1.
This Court has jurisdiction to consider the Motion pursuant to 28 U.S.C. 157
and 1334. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A). Venue is proper before this Court pursuant to 28 U.S.C. 1408 and 1409(a).
Debtors are the following entities: Delta Produce, L.P.- Case No. 12-50073-LMC-11, Superior Tomato-Avocado, Ltd. -Case No. 12-50074-LMC-11, Atled, Ltd.- Case No. 12-50075-LMC-11 and Staci Properties, Ltd.- Case No. 1250110-LMC.
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2.
On January 3, 2012 (the "Petition Date"), the Debtors (with the exception ofStaci
Properties, Ltd which filed its Chapter 11 case on January 9, 2012) filed voluntary petitions for reliefunder Chapter 11 oftitle 11 ofthe United States Code, 11 U.S.C. 101-- 1532 (as amended, the "Bankruptcy Code"). 3. The Debtors continue to manage and operate their businesses as debtors
in-possession pursuant to 1107 and 1108 of the Bankruptcy Code. No creditors' committee has been appointed in these Cases by the United States Trustee. Further, no trustee or examiner has been requested or appointed. 4. The statutory predicate for the relief requested herein is section 363 of the
Bankruptcy Code. 5. International Bank of Commerce ("IBC") holds pre-petition liens on the Debtors'
equipment, furniture and fixtures, inventory, accounts, general intangibles and insurance policies.
t:;.
v.
IBC consented to, a..'ld the Cou..rt approved the use of cash collateral on an interim
basis pursuant to that Order dated January 24, 2012 [Dkt. No. 49]. A final hearing on the Debtors' use of cash collateral is set for February 2, 2012 at 9:30a.m. Pursuant to the interim Order, the Debtors are required to file a final application by January 27, 2012.
II. RELIEF REQUESTED
7.
The Debtors seek authority under 11 U.S.C. 363(c)(2)(B) to use the cash
collateral ofiBC on a final basis to sustain the Debtors' ongoing operations. Debtors have insufficient other unencumbered cash resources, and have been unable to obtain sufficient postpetition credit to administer its business operations other than pursuant to section 363 of the
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Bankruptcy Code.
III. ARGUMENT
8. Debtor requires the continued use of cash collateral to make payments on, among
other things, taxes, fuel, rentals, insurance, payroll, payroll expenses, utility charges, and the costs of supplies used in the operation of the business. Such expenses are encountered by Debtors in the ordinary course of the Debtors' business, and the payment of these expenses is critical to the continued existence of the business and the administration of the case and bankruptcy estate. A copy of the Debtors' proposed ninety (90) day budget is attached hereto as Exhibit "A". (The Debtors reserve the right to amend the budget at any time prior to any hearing.) 9. Prior to the Petition Date, pre-petition injunctions caused the Debtors' bank
accounts to be frozen, specifically those accounts in the name of Delta and Superior TomatoAvocado, Ltd. ("Superior"). The Debtors' bank accounts consist ofboth cash collateral that can be used by the Debtors in the event the Court approves this motion, and other trust funds that the Debtors do not seek permission to use through this Application. 10. Immediately prior to the Petition Date, IBC advanced approximately $450,000
through a line of credit to the Debtor. Specifically, these funds constitute the cash collateral of IBC and are the subject of this Application. The Debtor does not seek the use of funds in its various accounts that constitute trust funds under the Perishable Agricultural Commodities Act ("PACA") through this Application. To the extent the Debtors seek authority to use cash collateral ofiBC, the Debtors will use it to protect the assets ofthe Debtor and in accordance
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with the proposed budget. 11. The Debtor proposes to provide adequate protection to IBC to the extent required
by this Court, in the form of the following: a. First and to the extent necessary, priming liens on all of the Debtors' real property
and all personal property other than property constituting PACA funds; and b. 12. A second lien on all P ACA trust funds. The Debtors submit that the use of cash collateral in the Debtors' ongoing
operations is in the best interest of the estates and the Debtors' creditors. WHEREFORE, PREMISES CONSIDERED, the Debtors request that the Court authorize them to use the cash collateral of the International Bank of Commerce upon the terms and conditions set forth herein, and for such other and further relief at equity or law to which Debtors may show themselves justly entitled.
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Respectfully submitted,
WILLIAM R. DAVIS, JR. State Bar No. 05565500 ALLEN M. DeBARD State BarNo. 24065132 LANGLEY & BANACK, INC. 745 E. Mulberry, Suite 900 San Antonio, TX 78212 (21 0) 736-6600 Proposed Attorneys for Debtors and Debtors in Possession
CERTIFICATE OF SERVICE I hereby certify that on January ~7, 2012, a true and correct copy of the above and foregoing instrument was mailed, first class, postage prepaid to the attached notice list.
ALLEN M. DeBARD
L & B 14013/0002/L0580006.WPD/
Bonaza 2001
Kingdom Fresh Produce, Inc. 2243 North Goolie Rd., #A Donna, TX 78537
Mission Produce, Inc. 2500 Vinyard Ave., Suite 300 Oxnard, CA 93036
United States Trustee 615 E. Houston St., #533 San Antonio, TX 78205
Averitt Brokerage Co., Inc. 9999 Perrin Beitel, Suite B San Antonio, TX 78217
Fresh Farm Direct, LLC 106 Adams St., Suite 2A Monte Vista, CO 81144
Touchstone & Associates 1500 S. Zarzamora St., #205 San Antonio, TX 78207
Willson Davis Co. 1500 S. Zarzamora St., #103 San Antonio, TX 78207
Craig A. Stokes Stokes Law Offices, LLP 3330 Oakwell Court, Suite 225 San Antonio, TX 78218-3066
Robert E. Goldman, Esq. 1 East Broward Blvd., Ste. 700 Fort Lauderdale, FL 33301
Michael Colvard Martin & Drought Suite 300 Convent Street, 25 1h Floor San Antonio, TX 78205
EXHIBIT ''A''
March 2012
3,000.00 0.00 8,800.00 1,904.00 2,160.00 13,600.00 0.00
April2012
3,000.00 0.00 8,800.00 1,904.00 2,160.00 13,600.00 0.00
300.00 $29,464.00
300.00 $29,464.00
300.00 $29,464.00
March 2012
12,500.00 (plus
benefits)
April2012
12,500.00 (plus
benefits)
12,500.00 (plus
benefitsi
IBC may pay directly insurance premiums. Through this Order, no double authorization for insurance premiums will be allowed. 3 Melinda Day-Harper, CRO $7,500- plus benefits Scott Russell, Transp. Oper. $5,000 -plus benefits 4 IBC may pay directly insurance premiums. Through this Order, no double authorization for insurance premiums will be allowed.