IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
)
In re: ) Chapter 11
)
BOUCHARD TRANSPORTATION CO., INC., et al.,1 ) Case No. 20-34682 (DRJ) )
Debtors. ) (Jointly Administered)
) Re: Docket Nos. 961, 994
REPLY IN SUPPORT OF DEBTORS’ MOTION TO EXTEND THE EXCLUSIVITY PERIODS TO FILE A CHAPTER 11 PLAN AND SOLICIT ACCEPTANCES THEREOF
The above-captioned debtors and debtors in possession (collectively, the “Debtors”) file this reply (this “Reply”) in support of the Debtors’ Third Motion to Extend the Exclusivity Periods to File a Chapter 11 Plan and Solicit Acceptances Thereof [Docket No. 961] (the “Motion”)2 and in response to the objection to the Motion filed by the Creditors’ Committee [Docket No. 994] (the “Objection”). In support of this Reply, the Debtors respectfully state as follows:
Reply
1. The Debtors’ request for extensions of their plan and solicitation exclusivity periods (the “Exclusivity Periods”) should be granted to permit the Debtors the necessary breathing room to advance these chapter 11 cases to a value-maximizing conclusion. At present, the Debtors’ exclusive period to file a chapter 11 plan expires on June 25, 2021, and their exclusive period to solicit acceptances of a filed chapter 11 plan expires on August 24, 2021, in each case subject to any automatic “bridge” orders for extensions of time under the Procedures for Complex Cases in
1 Due to the large number of Debtors in these chapter 11 cases, a complete list of the Debtor entities and the last four digits of their federal tax identification numbers is not provided herein. A complete list may be obtained on the website of the Debtors’ claims and noticing agent at https://cases.stretto.com/bouchard. The location of the Debtors’ service address is: 58 South Service Road, Suite 150, Melville, New York 11747.
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the Southern District of Texas (the “Complex Case Procedures”). See Second Order Extending the Exclusivity Periods to File a Chapter 11 Plan and Solicit Acceptances Thereof [Docket No. 837] ¶ 1–2; Complex Case Procedures ¶ 18. The Court has discretion to extend the Exclusivity Periods to promote an orderly resolution of these chapter 11 cases, and the Motion amply demonstrates that there is “cause” to grant such an extension. See 11 U.S.C. § 1121(d) (providing that the court may extend the debtor’s exclusivity periods “for cause”).
2. The Objection does not argue that there is no “cause” to grant the relief requested in the Motion.3 Instead, the Objection merely asserts that an extension of plan filing exclusivity is “unnecessary” because the Debtors recently filed a proposed chapter 11 plan [Docket No. 988] (as amended, supplemented, or otherwise modified from time to time, the “Plan”), and granting a further extension of plan filing exclusivity would permit the Debtors to “unilaterally void” the Debtors’ proposed schedule for confirmation of the Plan. Obj. ¶ 8. The Objection also asks the Court to reserve a decision on an extension of the solicitation exclusivity period because such an extension “would be detrimental to the interests of unsecured creditors and potentially administrative and certain secured creditors.” Obj. ¶ 9.
3. These arguments simply are not compelling. The Plan contemplates an orderly distribution of the Debtors’ sale proceeds and the wind-down of their affairs, and the filing of the Plan precludes other parties in interest from proposing a competing plan until the current solicitation exclusivity period expires on August 24, 2020. Nonetheless, the requested 45-day extension of plan filing exclusivity—to August 9, 2021—is warranted because the Debtors, as responsible stewards of their estates, may determine to withdraw the Plan and propose a new plan if an alternative, superior transaction emerges (taking into account any incremental costs
associated with any changes to the anticipated time to confirmation and emergence) that cannot be implemented via the proposed Plan. Absent an extension of plan filing exclusivity, however, pursuing such an alternative would potentially open these chapter 11 cases up to the confusion and distraction of competing chapter 11 plans at the very moment that the Debtors are able to chart a superior course.
4. The Debtors’ request for a commensurate extension of the solicitation exclusivity period should be granted for the same reasons. Although the Debtors are fully committed to pursuing the Plan on the current timeline previously set forth before the Court, in the event the Debtors propose an alternative to the Plan, it will necessarily be because the Debtors have determined that alternative provides a better outcome for stakeholders. Preserving the Debtors’ exclusivity during a reasonable period for solicitation of such an alternative is appropriate and warranted to allow the Debtors the necessary flexibility to maximize value for their stakeholders.
5. Section 1121(d)(1) of the Bankruptcy Code permits a court to extend a debtor’s exclusive periods to file and solicit a plan “for cause.” 11 U.S.C. § 1121(d). The court’s primary consideration is whether terminating or extending exclusivity “will move the case forward”—a consideration easily satisfied here, where the Debtors have filed the Plan, expect to launch solicitation in the coming days, and are managing towards a confirmation hearing in early August following the outcome of their sale process. In re Adelphia Commc’ns Corp., 352 B.R. 578, 590 (Bankr. S.D.N.Y. 2006).
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including, among other things, appointing a chief restructuring officer, stabilizing the Debtors’ business and operations, obtaining necessary financing to effectuate the Debtors’ restructuring, hiring key personnel, addressing critical operational issues, implementing repairs to their fleet, regaining safety certifications, and running a comprehensive marketing and sale process for the Debtors’ assets. The Debtors submit that ample “cause” exists to grant the requested extension. The requested extension of the Exclusivity Periods is without prejudice to the ability of parties in interest—including the Creditors’ Committee—to seek to terminate the Exclusivity Periods for cause. The Objection should be overruled.
Conclusion
Houston, Texas June 22, 2021
/s/ Matthew D. Cavenaugh
JACKSON WALKER L.L.P. KIRKLAND & ELLIS LLP
Matthew D. Cavenaugh (TX Bar No. 24062656) KIRKLAND & ELLIS INTERNATIONAL LLP Genevieve M. Graham (TX Bar No. 24085340) Ryan Blaine Bennett, P.C. (admitted pro hac vice) 1401 McKinney Street, Suite 1900 Whitney Fogelberg (admitted pro hac vice)
Houston, Texas 77010 300 North LaSalle Street
Telephone: (713) 752-4200 Chicago, Illinois 60654
Facsimile: (713) 752-4221 Telephone: (312) 862-2000
Email: [email protected] Facsimile: (312) 862-2200
[email protected] Email: [email protected]
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KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP Christine A. Okike, P.C. (admitted pro hac vice) 601 Lexington Avenue
New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900
Email: [email protected]
Co-Counsel to the Debtors Co-Counsel to the Debtors
Certificate of Service
I certify that on June 22, 2021, I caused a copy of the foregoing document to be served by the Electronic Case Filing System for the United States Bankruptcy Court for the Southern District of Texas.
