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11362857.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
In re:
PANTHERA ENTERPRISES, LLC,
Case No.: 2:19-bk-00787
Chapter 11
Debtor.
PANTHERA TRAINING, LLC’S MOTION TO COMPEL
PERFORMANCE UNDER SUBCONTRACT
Panthera Training, LLC (“Panthera Training”), by and through its undersigned
counsel, respectfully moves this Court (the “Motion”) for entry of an order: (1) compelling the
Debtor pursuant to sections 105 and 365 of title 11 of the United States Code (the “Bankruptcy
Code”) to timely perform all obligations under the Subcontract (as defined herein). In support of
the Motion, Panthera Training states as follows:
Jurisdiction and Venue
1.
The Court has jurisdiction over the Motion pursuant to 28 U.S.C. §§ 157
and 1334. Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
2.
This is a core proceeding within the meaning of 28 U.S.C. § 157(b).
3.
The statutory and legal predicates for the relief requested herein are 11
U.S.C. §§ 105 and 365.
Relevant Background
4.
On September 13, 2019 (the “Petition Date”), Panthera Enterprises, LLC
(the “Debtor”) filed its voluntary petition for relief under chapter 11 of the Bankruptcy Code.
5.
As of June 1, 2018, the movant, Panthera Training, the Debtor, and
Panthera Training Center, LLC (the “Center”) executed a subcontract (the “Subcontract”).
6.
Pursuant to the Subcontract, Panthera Training conducts training courses
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for members of the United States Army and United States Drug Enforcement Agency (the
“Clients”) upon their issuance of task orders or call orders as provided in three contracts (the
“Contracts”) on which either the Debtor or the Center is the prime contractor. Additionally,
Panthera Training provides all of the supplies and related services necessary to conduct the
training courses.
7.
Panthera Training conducts the training courses on a 750 acre multi-venue
training facility located in Hardy County, West Virginia (the “Facility”) that includes, without
limitation, tactical driving tracks, a vehicle obstacle course, shooting ranges, a live fire shoot-
house, a Mobile Operations Urban Training combat town, an FAA approved helicopter landing
pad, an armory and explosives vault, multiple classrooms, on-site dining facilities and off-site
lodging.
8.
The training conducted by Panthera Training provides critical tactical
skills to the Clients’ employees in preparation for deployment or other activities.
9.
Panthera Training has exclusive custody, control and possession of the
Facility for the next forty-one (41) years pursuant to the terms of a Commercial Lease executed
on or about June 1, 2018, by and between Panthera Training, as tenant, and the Debtor, as
landlord (the “Lease”).1
10.
Prior to Panthera Training, the Debtor rented the Facility to its subsidiary
Panthera Training Center, LLC (“Center”). Center defaulted in the payment of rents due under
the prior lease thereby resulting in that lease’s termination.
1 11 years remain in the base term with three 10-year options that Panthera Training intends to exercise.
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11.
Center’s default in its obligations under the prior lease caused the Debtor
to default in its payment obligations on two promissory notes dated August 21, 2013 and July 2,
2014, payable to the West Virginia Economic Development Authority (“WVEDA”).2
12.
As a result, on or around February 28, 2018, the WVEDA demanded that
the Debtor pay the WVEDA notes in full. The Debtor was unable to meet this demand and
requested that Panthera Training enter into the Lease to generate sufficient cash flow to prevent
the WVEDA from foreclosing upon the Facility.
13.
Further, Panthera Training agreed to pay, and has paid, base rent in the
amount of $52,000.00 per month directly to the WVEDA since July 1, 2018.
14.
Neither the Debtor nor Center is capable of generating sufficient income
under the Contracts to benefit the bankruptcy estate. In fact, the Debtor and Center have
acknowledged their inability to perform the obligations required under the Contracts as set forth
in that certain Agreement effective as of June 1, 2018, by and between the Debtor, Center, and
Panthera Training (the “Agreement”). Absent performance by Panthera Training, the Debtor
and Center are unable to generate revenue under the Contracts.
15.
As a result, pursuant to the Agreement the Debtor and Center assigned and
conveyed to Panthera Training their respective rights to all contracts that involve the use of
portions of the Facility for any activities, demonstrations, or training and teaching operations.
16.
The Debtor’s sole obligation under the Subcontract is to send invoices for
the work performed by Panthera Training, and immediately forward to Panthera Training all
payments received on the invoices.
2 The WVEDA notes are secured by first deeds of trust on the Facility.
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17.
In exchange, Panthera Training pays the Debtor $20,000.00 per month.
Panthera Training’s performance under the Subcontract has the potential to generate
approximately $960,000.00 for the benefit of the Debtor’s bankruptcy estate over the next four
(4) years.
18.
Panthera Training has fully performed all of its obligations set forth in the
Subcontract without interruption since June 1, 2018. Most recently, Panthera Training
conducted training operations pursuant to the Subcontract on September 19, 2019.
19.
However, despite Panthera Training’s good faith performance under the
Subcontract, the Debtor has failed to forward Client payments in the approximate amount of
$220,000 due and owing to Panthera Training since the Petition Date. To the best of Panthera
Training’s knowledge, the Debtor has invoiced Clients for Panthera Training’s services rendered
pursuant to the Subcontract, and payments either have been made or will soon be made to the
Debtor.
20.
To avoid any interruption in the services Panthera Training provides under
the Subcontract to the Clients, Panthera Training asks this Court to compel the Debtor to timely
perform its obligations under the Subcontract.
Argument
21.
The Subcontract requires the Debtor to route payments directly to
Panthera Training when possible. In all other instances, the Debtor is required to wire payment
to Panthera Training immediately upon receipt.
22.
Despite the clear language of the Subcontract and Panthera Training’s
good faith performance under the Subcontract, the Debtor is wrongfully withholding funds due
and owing to Panthera Training for training services provided pursuant to the Subcontract.
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23.
For example, during June of 2019, the Debtor received approximately
$172,000.00 from the United States Drug Enforcement Administration for work performed by
Panthera Training. Despite the clear language of the Subcontract, the Debtor unilaterally sent
only $70,000.00 to Panthera Training instead of forwarding the full payment of $172,000.00.
Because of the Debtor’s financial embarrassment, a creditor of the Debtor garnished the Debtor’s
account and received payment of $97,782.94 that was to be directed to Panthera Training for its
performance under the Subcontract.
24.
As of the date of this Motion, the Debtor has withheld approximately
$220,000 from Panthera Training since the Petition Date. Additional payments will become due
as Panthera Training continues to provide training services pursuant to the Subcontract.
25.
Further, the Debtor has circumvented the ordinary course of payment and
communication as set forth in the Subcontract. Specifically, the Debtor has engaged the Clients
to advise that payments for training services should not be made directly to Panthera Training.
26.
In addition, the Debtor has attempted to obstruct communications between
Panthera Training and the Clients by causing incoming emails addressed to Panthera Training to
be redirected to the Debtor and/or its agents.
27.
During the first half of October, 2019, Panthera Training learned that the
Debtor inserted itself into communications between Panthera Training and a prospective
customer, causing confusion for the prospective customer as to who was operating the Facility.
As a result, Panthera Training lost a $21,000 business opportunity. Such conduct is in clear
violation of the Agreement.
28.
Absent an order compelling the Debtor to perform its obligations under
the Subcontract, Panthera Training will continue to suffer harm, including, but not limited to
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damaged client relations and decreased cash flow due to the Debtor’s failure to wire payment for
training services performed by Panthera Training pursuant to the Subcontract and the Debtor’s
interference with Panthera Training’s client communications. As a result of the Debtor’s
conduct, the bankruptcy estate may be deprived of a sizable future income stream.
29.
Based upon the foregoing, Panthera Training respectfully requests that this
Court compel the Debtor to perform its obligations under the Subcontract to prevent further harm
to Panthera Training and to maximize the value of the bankruptcy estate.
Conclusion
WHEREFORE, Panthera Training respectfully requests that the Court enter an
Order; (1) compelling the Debtor to timely perform all obligations under the Subcontract, (2)
directing the Debtor to cease and desist interfering with or injecting itself into communications
between Panthera Training, the Clients and prospective clients, and (3) granting such additional
relief as the Court deems just and proper.
PANTHERA TRAINING, LLC
By Counsel
/s/ Julia A. Chincheck
Julia A. Chincheck (WV Bar No. 718)
Michael R. Proctor (WV Bar No. 9122)
Zachary J. Rosencrance (WV Bar No. 13040)
BOWLES RICE LLP
600 Quarrier Street
Post Office Box 1386
Charleston, West Virginia 25325-1386
Telephone: (304) 347-1100
Facsimile: (304) 343-3058
E-mail: jchincheck@bowlesrice.com
E-mail: mproctor@bowlesrice.com
E-mail: zrosencrance@bowlesrice.com
-and-
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Douglas E. Kahle (VA Bar No. 15964)
BASNIGHT, KINSER, LEFTWICH & NUCKOLLS, P.C.
308 Cedar Lakes Drive, 2nd Floor
Chesapeake, Virginia 23322
Telephone: (757) 547-9191
Facsimile: (757) 547-9135
E-mail: DKahle@basnightkinser.com
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11362857.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
In re:
PANTHERA ENTERPRISES, LLC,
Case No.: 2:19-bk-00787
Chapter 11
Debtor.
CERTIFICATE OF SERVICE
I, Julia A. Chincheck, do hereby certify that a true and correct copy of Panthera
Training, LLC’s Motion to Compel Performance Under Subcontract and proposed Order
Granting Panthera Training, LLC’s Motion to Compel Performance Under Subcontract has
been served on all parties registered to receive notices by the Court’s ECF System in this case,
on this 18th day of October, 2019.
/s/ Julia A. Chincheck
Julia A. Chincheck (WVSB # 718)
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