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Case 10-14407-elf
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
In re:
Chapter 11
JOHN N. IRWIN,
Case No. 10-14407 (ELF)
Debtor.
MOTION OF THE LIQUIDATING AGENT FOR
APPROVAL OF AN INTERIM DISTRIBUTION TO CREDITORS
George L. Miller (“Liquidating Agent”), Liquidating Agent of the Estate of John N. Irwin
(“Debtor’s Estate”), by and through his undersigned counsel, hereby moves (the “Motion”) this
Honorable Court for approval of an interim distribution to creditors. In support of the Motion,
the Liquidating Agent represents as follows:
JURISDICTION AND VENUE
1.
The Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and
1334. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (O). Venue of
this proceeding and this Motion is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.
BACKGROUND
2.
On May 27, 2010 (the “Petition Date”), John N. Irwin (the “Debtor”) filed a
voluntary petition for relief under chapter 11 of title 11 of the United States Code (the
“Bankruptcy Code”).
3.
On January 12, 2012, this Court entered an order (the “Confirmation Order”) [D.I.
296] confirming the Second Amended Plan of Reorganization of Debtor and Debtor-inPossession Pursuant to 11 U.S.C. §§ 1121 and 1123(a) (the “Plan”) [D.I. 282]. In pertinent part,
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the Plan provides for the appointment of the Liquidating Agent, who has the authority to pursue
Avoidance Actions and to liquidate all of Debtor’s Assets and distribute all proceeds thereof.1
4.
On March 19, 2012, George L. Miller was appointed as the Liquidating Agent of
the Debtor’s Estate.
5.
Pursuant to the duties ascribed to him under the Plan, since being appointed, the
Liquidating Agent has worked to recover and liquidate assets of the Debtor’s Estate for the
benefit of unsecured creditors. As of December 2014, the Liquidating Agent was holding cash
in the amount of $2,057,857.17. See Quarterly Report for Fourth Quarter 2014 [D.I. 434].
6.
In addition, the Liquidating Agent has completed a comprehensive claims
analysis and reconciliation, which resulted in approximately nine (9) filed claims objections
[D.I. 372-383] and negotiations with other claimants, including the largest claimant in the case,
Marion A. Hecht, as Receiver for Joseph Forte, L.P. (the “Receiver”). The Liquidating Agent
has also reviewed the Debtor’s Schedules of Assets and Liabilities, and any amendments
thereto, and reconciled the claims as set forth therein.
7.
Pursuant to the Plan, there are five (5) classes of claims2. Classes 1 through 4, the
priority and secured claims, have either already received their distributions on account of their
claims, or otherwise received, or are entitled to receive, the collateral securing their claims. The
Liquidating Agent is then tasked with making pro rata distributions to the Allowed Unsecured
Claims, including any Deficiency Claims, after payment to all Allowed Administrative Claims.
The Liquidating Agent has paid all Allowed Administrative Claims to date.
1 Capitalized terms used and not otherwise defined herein shall have the meaning set forth in the Plan.
2 The classes of claims under the Plan are as follows: Class 1 – Priority Claims; Class 2 – Secured Claim
of Chase Home Finance, LLC; Class 3 – Secured Claim of IndyMac Bank, F.S.B.; Class 4 – Secured
Claim of Intergroup Services Corp.; and Class 5- Allowed Unsecured Claims.
2
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RELIEF REQUESTED
8.
The Liquidating Agent seeks entry of an order from this Court authorizing the
Liquidating Agent to make a pro rata, interim distribution of $1,500,000.00 to Allowed
Unsecured Claims pursuant to the distribution schedule set forth on Exhibit A, which is attached
hereto.
BASIS FOR RELIEF REQUESTED
9.
The Liquidating Agent is nearing completion of the administration of the Debtor’s
Estate. Substantially all assets of the Debtor’s Estate have been liquidated. Additionally, the
claims reconciliation and objection process is nearly complete. As noted, the Liquidating Agent
filed numerous claims objections and also asserted informal issues with the Receiver’s claim.
All filed claims objections have been resolved or adjudicated. The informal issues with the
Receiver’s claim have been resolved resulting in an amended claim that was recently filed.3
10.
While administration of the Debtor’s Estate is almost complete, there are still
tasks left to be completed by the Liquidating Agent. The Liquidating Agent must file tax returns
on behalf of the Debtor’s Estate, which task is complicated by the numerous stock and entity
ownership interests that are property of the Debtor’s Estate. The Liquidating Agent has been
working with the Debtor and his counsel to address these issues.
11.
In addition, there are still assets to be collected by the Liquidating Agent. For
instance, pursuant to the Plan, the Debtor is required to contribute a “sum equal to twenty-five
(25%) percent of his gross annual personal services income in excess of $50,000 to the
Liquidating Agent” on the first, second and third anniversaries of the Effective Date of the Plan.
See Plan § 6.5. The Effective Date of the Plan occurred on or about January 27, 2012, thereby
requiring the Debtor to turn over these assets to the Liquidating Agent in 2013 through 2015.
3 On December 18, 2014, the Receiver filed an amended claim in the amount of $31,887,441.00.
3
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12.
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Also, the Liquidating Agent and the Debtor are negotiating other open issues,
including discussions regarding potential stock distributions received by the Debtor and current
sources of income of the Debtor. The Liquidating Agent is hopeful that all of these open issues
will be resolved in the short term without the need for the Court’s intervention.
13.
The Liquidating Agent has determined that he can at this time prudently make an
interim distribution of $1,500,000.00 to the Allowed Unsecured Claims. This will result in the
Liquidating Agent holding approximately $500,000.00 of current cash as a reserve in finishing
out the administration of the estate. As described on Exhibit A, the proposed interim distribution
of $1,500,000.00 will result in a current 4.35% distribution to Allowed Unsecured Claims.4
14.
As such, the Liquidating Agent believes that it is in the best interests of the estate
and creditors for an interim distribution to be authorized at this time. This will allow creditors to
recover a substantial payment on their claims prior to the completion of this case, while also
allowing the Liquidating Agent to maintain a reserve of funds for the final administration of the
Debtor’s Estate. The claims have been reconciled and determined, therefore it is reasonable and
appropriate, and a prudent exercise of the Liquidating Agent’s business judgment, to make the
interim distribution at this time so that creditors can begin receiving distributions on their claims.
WHEREFORE, the Liquidating Agent respectfully requests that the Court enter the
Order granting the interim distribution of $1,500,000.00 to Allowed Unsecured Claims, as
4 Also, as reflected on Exhibit A, it is currently anticipated that no distribution will be made to Jacklin
Associates, Inc. (“Jacklin”). Jacklin is an entity formerly owned by the Debtor. While the claim of
Jacklin is listed on the Debtor’s Schedule F as an undisputed, unsecured claim, through analysis and
discussions with the Debtor and his counsel and the Receiver, it appears that the claim of Jacklin is
duplicative of the claim of National Penn Bank, which is also listed on Schedule F. Jacklin never filed a
proof of claim in this case. As such, the Liquidating Agent is filing an amended Schedule F to eliminate
the Jacklin claim from the schedules. The Liquidating Agent notes it on Exhibit A in an abundance of
caution and to fully disclose this situation.
4
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provided for in detail on Exhibit A, and granting such other and further relief as this Court may
deem just and proper.
Respectfully submitted,
O’KELLY ERNST & BIELLI, LLC
Dated: January 30, 2015
By:
/s/ David M. Klauder
Thomas D. Bielli (No. 202100)
David M. Klauder (No. 207309)
1500 Walnut Street, Suite 900
Philadelphia, PA 19102
Phone: (215) 543-7182
Fax: (215) 391-4350
[email protected]
[email protected]
Counsel for George L. Miller, Liquidating
Agent for the Estate of John N. Irwin
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
In re:
Chapter 11
JOHN N. IRWIN,
Case No. 10-14407 (ELF)
Jointly Administered
Debtor.
ORDER
AND NOW this ______ day of ______________ 2015, upon consideration of the Motion
of the Liquidating Agent for Approval of an Interim Distribution to Creditors (the “Motion”),
and it appearing that sufficient notice of the Motion having been provided, and upon
consideration of any responses filed, it is hereby
ORDERED that the Motion is GRANTED; and it is further
ORDERED that the Proposed Interim Distribution, attached to the Motion as Exhibit A,
is approved.
The Honorable Eric L. Frank
Chief Judge, United States Bankruptcy Court
Case 10-14407-elf
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
In re:
Chapter 11
JOHN N. IRWIN,
Case No. 10-14407 (ELF)
Debtor.
CERTIFICATE OF SERVICE
I, David M. Klauder, Esquire, hereby certify that I caused a true and correct copy of the
Motion of the Liquidating Agent for Approval of an Interim Distribution to Creditors, to be
served by first class mail, postage prepaid, on January 30, 2015, upon the attached list.
O’KELLY ERNST & BIELLI, LLC
Dated: January 30, 2015
By:
/s/ David M. Klauder
Thomas D. Bielli (No. 202100)
David M. Klauder (No. 207309)
1500 Walnut Street, Suite 900
Philadelphia, PA 19102
Phone: (215) 543-7182
Fax: (215) 391-4350
[email protected]
[email protected]
Counsel for George L. Miller, Liquidating
Agent for the Estate of John N. Irwin
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SERVICE LIST
Chandra M. Arkema, Esq.
Shapiro & DeNardo, LLC
3600 Horizon Dr., Ste. 150
King of Prussia, PA 19406
Danielle Boyle-Ebersole, Esq.
Federman & Associates, LLC
305 York Rd., Ste. 300
Jenkintown, PA 19046
Dave P. Adams, Esq
U.S. Trustee
Office of the U.S. Trustee
833 Chestnut St., Ste. 500
Phila., PA 19107
David M. Burkholder, Esq.
Powell Trachtman Logan Carrle &
Lombardo
475 Allendale Rd., Ste. 200
King of Prussia, PA 19406
Derek J. Baker, Esq.
Reed Smith LLP
2500 One Liberty Pl.
1650 Market St.
Phila., PA 19103-7301
GE Money Bank
c/o Recovery Management
Systems Corp.
25 SE 2nd Ave., Ste. 1120
Miami, FL 33131-1605
Henry I. Pass, Esq.
Law Offies of Henry Ian Pass
401 E. City Ave.
Ste. 200
Bala Cynwyd, PA 19004
Jeffrey Kurtzman, Esq.
Kathryn Evans Perkins, Esq.
Klehr Harrison Harvey Branzburg LLP
1835 Market St., Ste. 1400
Phila., PA 19103
Jeffrey M. Carbino, Esq.
3712 Highland Ave.
Drexel Hill, PA 19026
John Albert Wetzel, Esq.
Wetzel Gagliardi & Fetter LLC
101 E. Evans St.
Walnut Bldg. - Ste. A
West Chester, PA 19380
John N. Irwin
610 Lindsay Circle
Villanova, PA 19085
Kurt Althouse, Esq.
Bingaman, Hess, Coblentz and Bell, P.C.
Treeview Corporation Center
Ste. 100, 2 Meridian Blvd.
Wyomissing, PA 19610
Robert Mark Bovernick, Esq.
Bovarnick & Associates, LLC
2 Logan Sq.
100 N. 18th St., Ste. 2030
Phila., PA 19103
Shernese V. Woodbine, Esq.
Udren Law Offices, P.C.
Woodcrest Corporate Center
111 Woodcrest Rd.
Cherry Hill, NJ 08003-3620
Graham F. Zug
127 Rose Ln.
Haverford, PA 19041
Homestead Capital Co.
104 W. 1st St.
Wayne, NE 68787
Bryn Mawr Trust Co.
801 Lancaster Ave.
Bryn Mawr, PA 19010
Intergroup Services Corp.
101 Lindenwood Dr., Ste. 150
Malvern, PA 19355
National Penn Bank
P.O. Box 547
Boyertown, PA 19512-0547
Marion A. Hecht, as receiver
for Joseph S. Forte LP
c/o Arlene Fickler
Hoyle Fickler Herschel & Mathes LLP
One S. Broad St., Ste. 1500
Phila., PA 19107
Montgomery, McCracken,
Walker & Rhoads
c/o Ellen Brotman, Esquire
123 S. Broad Street
Avenue of the Arts
Philadelphia, PA 19109
Jacklin Associates, Inc.
c/o Maureen P. Steady, Esq.
12000 Lincoln Dr. W., Ste. 208
Marlton, NJ 08053