THIRD MOTION FOR ENTRY OF ORDER UNDER 11 U.S.C. § 1121(d) EXTENDING

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Doc 135, filed May 11, 2020 in In re Panthera Enterprises, LLC, Case No. 2:19-787, Chapter 11, in the United States Bankruptcy Court for the Northern District of West Virginia, is the debtor-in-possession's Third Motion for Entry of Order Under 11 U.S.C. § 1121(d) extending the exclusivity periods for filing and confirming a plan of reorganization and disclosure statement. The motion states that the exclusivity period to file a plan is set to expire on May 12, 2020 and the period to obtain acceptance on July 9, 2020, and it discusses the Covid-19 crisis. It requests an order extending the exclusive time to file a plan to August 12, 2020 and the exclusive time to obtain acceptance to October 12, 2020.

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UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

In re:

PANTHERA ENTERPRISES, LLC,

Case No. 2:19-787

Chapter 11

Debtor-in-possession.

THIRD MOTION FOR ENTRY OF ORDER UNDER 11 U.S.C. § 1121(d) EXTENDING
THE EXCLUSIVITY PERIOD FOR FILING AND CONFIRMING A PLAN OF
REORGANIZATION AND DISCLOSURE STATEMENT

PANTHERA ENTERPRISES, LLC (the “Debtor”) by and through its undersigned
counsel, Bernstein-Burkley, P.C, hereby files this Third Motion for Entry of Order Under 11
U.S.C. § 1121(d) Extending the Exclusivity Periods for Filing and Confirming a Plan of
Reorganization and Disclosure Statement (the “Motion”) and in support thereof states as follows:
JURISDICTION AND VENUE
1.
The Court (hereinafter defined) has jurisdiction to consider this Motion under 28
U.S.C. §§ 157 and 1334. This is a core proceeding under 28 U.S.C. § 157(b).
2.
Venue of this case and this Motion in this district is proper under 28 U.S.C. §§
1408 and 1409.
BACKGROUND
A. Key Factual Backgound
3.
On September 13, 2019, the Plaintiff filed a voluntary petition for relief under
Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as amended, the
“Bankruptcy Code”) of the Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of West Virginia (the “Court”) at case number 19-00787 (the “Case”).
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4.
The Debtor owns the real property located at 2506 Fishpond Road, Old Fields,
West Virginia 26845 (the “Real Property”), including the improvements, structures and various
personal property situated on such real property (collectively, the “Property”), all of which is
utilized as a special operations training facility (the “Facility”).
5.
On or about June 1, 2018, the Debtor and Panthera Training, LLC (“Panthera
Training”) entered into a commercial lease (the “Lease”) by which Panthera Training was to
occupy the Property and the Facility (collectively referred to as the “Leased Premises”) and
conduct certain trainings (the “Trainings”) to fulfill contracts held by the Debtor and an affiliate
of the Debtor (the “Training Contracts”).
6.
The Debtor also agreed to subcontract certain of the work under the Training
Contracts to Panthera Training to allow the Panthera Training to conduct the Trainings while it
was leasing the Property (the “Subcontract”).
7.
Pursuant to the Lease, Panthera Training is required to pay fifty-two thousand
dollars and 00/100 ($52,000.00) per month in “base rent,” which amount is paid by Panthera
Training directly to the Debtor’s mortgagee, West Virginia Economic Development Authority
(“EDA”), in satisfaction of the Debtor’s monthly mortgage obligations to the EDA.
8.
The Lease also requires the Defendant to pay certain monthly “Additional Rent”
on the first day of each calendar month in an amount to be determined by and based on Panthera
Training’s profit and loss statement for each such calendar month.
B.
Covid-19 Crisis Affecting the National Economy and Business Operations
9.
On March 11, 2020, just one day before the Debtor filed its Second Motion to
Extend Exclusivity, the World Health Organization declared the novel coronavirus disease
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(Covid-19) outbreak to be a pandemic.  A day later, on March 13, 2020, the Trump administration
declared a national emergency in response to the Covid-19 outbreak.
10.
On March 16, 2020, a State of Emergency was declared for all counties in West
Virginia.  Shortly thereafter, on March 23, 2020, the Governor of West Virginia issued a “stay at
home” or “shelter in place” Executive Order requiring, among other things, all non-essential
businesses to cease operations (with limited exceptions) and mandating that individuals not leave
their homes except in limited circumstances.  See West Virginia Governor James C. Justice
Executive Order, No. 9-20 dated March 23, 2020.
11.
Eleven days ago on April 30, 2020, Governor Justice issued another Executive
Order amending certain of the restrictions established by the March 23 Executive Order.   The
April 30 Executive Order is meant to replace the prior “Stay at Home” policy with a “Safer at
Home” policy, allowing certain types of businesses to begin to re-open while being monitored
under new guidelines and restrictions.  Regardless, with certain exceptions, all non-essential
businesses and operations are required to continue to temporarily cease operations.  See West
Virginia Governor James C. Justice Executive Order, No. 32-20 dated April 30, 2020.
12.
The unprecedented, exponential spread of Covid-19 throughout the United States
over the course of the past two (2) months, along with the resulting, state-imposed limitations and
prohibitions on non-essential businesses operations, has brought many aspects of the Debtor’s
business plans to a standstill.  As a result of the limitations placed on business operations, the
government trainings that usually take place at the Facility have not been able to take place.  At
this time, there is no definitive time table as to when such business activities may resume.  Even if
allowed by the State of West Virginia in the near future, there is not guarantee as to when the
federal governmental agencies that train at the Facility will be willing to resume training.
13.
These extraordinary and unprecedented events have made it extremely difficult for
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the Debtor and its advisors to engage in meaningful discussions with existing and potential
business partners, contacts, resources and plan advocates because such parties understandably are
waiting for some economic certainty to return to the situation.  Without operations at the Facility,
no revenue is being generated and, therefore, there is no opportunity for the Debtor to earn
Additional Rent under the Lease.  The lack of revenue generating activity and the overall
uncertainty on timing has in many ways frozen activities that otherwise would be taking place in
an effort to explore reorganization options.  Although it is impossible to predict with any
reliability how long the restrictive state orders will remain in effect, the Debtor (and all businesses
in West Virginia) is hopeful that some certainty will be achieved in the coming months and that
operations will be able to resume and return to normal.
14.
As the Court is likely aware, various chapter 11 debtors across the country have
even sought “suspension” of their chapter 11 proceedings pursuant to 11 U.S.C. §305 due to the
restrictions and obstacles resulting from the Covid-19 crisis.  See, e.g., In re Modell’s Sporting
Goods, Inc. et al., Case No. 20-14179 (Bankruptcy Court for the District of New Jersey),
Document No. 166. (Order Temporarily Suspending Chapter 11 Cases).  The Debtor has
contemplated seeking such an order from the Court, but has currently determined that not to be
necessary as long as the status quo continues to be preserved and the Debtor is able to seek
additional time to file a Plan.
15.
Although the Debtor has encountered many of the obstacles commonly
experienced by a Chapter 11 debtor in attempting to formulate a plan of reorganization, the last
two months have brought about unprecedented obstacles that are entirely out of the Debtor’s
control.  As some semblance of certainty begins to return to the business community in West
Virginia (and the country), the ability of the Debtor to make substantive progress toward
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developing future plans should return as well.
RELIEF REQUESTED
16.
Section 1121(b) of the Bankruptcy Code provides that “only the debtor may file a
plan until 120 days after the date of the order for relief under this chapter.” 11 U.S.C. § 1121(b).
The exclusivity period to file a plan in this case is currently set to expire on May 12, 2020 (the
“Filing Exclusivity Period”) and the Debtor has filed this Motion within this time period.
17.
Further, under § 1121(c)(3), a debtor has an exclusive period of 180 days after the
date of the order for relief under this chapter to have a plan accepted “by each class of claims or
interests that is impaired under the plan.” 11 U.S.C. § 1121(c)(3). This period is set to expire on
July 9, 2020 (the “Acceptance Exclusivity Period”, and collectively with the Filing Exclusivity
Period, the “Exclusivity Periods”).
18.
During the Exclusivity Periods, no creditor or other party in interest may file a plan
of reorganization. The purpose of this Exclusivity Period is to give debtors a reasonable time to
obtain confirmation of a plan without the threat of a competing plan. See, e.g. In re Mother
Hubbard, 152 B.R. 189 (Bankr. W.D. Mich. 1993).
19.
Such time period of exclusivity may be extended pursuant to § 1121(d)(1):
“Subject to paragraph (2), on request of a party in interest made within the respective periods
specified in subsections (b) and (c) of this section and after notice and a hearing, the court may for
cause reduce or increase the 120-day period or the 180-day period as referred to in this section.”
11 U.S.C. § 1121(d)(1).
20.
Debtor’s instant request for an extension of the Exclusivity Periods is within the
time limits established by § 1121(d)(2)(A).
21.
The Debtor bears the burden of proving that “sufficient cause exists to justify an
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extension of the exclusivity period” and “the court is granted broad discretion to determine what
is sufficient cause in each individual case.” In re Sharon Steel Corp., 78 B.R. 762, 765 (Bankr.
W.D. Pa. 1987). See also, In re Central Jersey Airport Services, LLC, 282 B.R. 176, 184 (Bankr.
D. N.J. 2002).
22.
By this Motion, the Debtor requests an extension of the Exclusivity Periods for an
additional ninety (90) days to August 12, 2020 for the Filing Exclusivity Period and October 12,
2020 for the Acceptance Exclusivity Period.
23.
Given the unprecedented national emergency, the resulting restrictions placed on
all business activities in the state of West Virginia and the domino effect that such restrictions
have had on the national economy and ability to do business, the Debtor asserts that sufficient
cause exists for an extension of the Exclusivity Periods.  Through no fault of the Debtor, these
proceedings were essentially put “on hold” by the Covid-19 crisis and the Debtor has been
deprived of substantial time to engage in productive discussions that would normally be necessary
to develop a plan of reorganization.
24.
The additional extension of Exclusivity Periods are consistent with the timeline
that is currently anticipated to permit non-essential businesses to begin operations, even if under
continuing monitoring and some restrictions.  The certainty that will follow from the loosening of
the current restrictions will allow the Debtor to meaningfully engage in substantive discussions
regarding its reorganization.
25.
As the Court is aware, the Debtor’s primary assets are its Real Property and its
substantial prime contract with a federal government agency.  The status quo has been and shall
continue to be maintained as to those assets during this process.
26.
Therefore, the Debtor asserts that its creditors will not be prejudiced by the
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requested extension and, in fact, will be best served by an extension of the Exclusivity Periods.
27.
While the Debtor intends to comply with the process of obtaining confirmation of
the Plan within the extended Exclusivity Periods, this request is without prejudice to request any
additional extensions of time should circumstances arise that make such an extension necessary
and appropriate.
WHEREFORE, the Debtor respectfully requests that this Honorable Court enter an Order
(i) granting this Third Motion for Entry of Order Under 11 U.S.C. § 1121(d) Extending the
Exclusivity Periods for Filing and Confirming a Plan of Reorganization and Disclosure
Statement, (ii) extending the Debtor’s exclusive time to file a plan to August 12, 2020, (iii)
extending the Debtors’ exclusive time to obtain acceptance of a plan to October 12, 2020, and
(iv) granting such other relief as this court deems just and appropriate.
Respectfully submitted:
Date: May 11, 2020

BERNSTEIN-BURKLEY, P.C.

By: /s/ John J. Richardson

John J. Richardson, Esq.

WV ID: 13140

jrichardson@bernsteinlaw.com
Mark A. Lindsay, Esq.

PA ID: 89487

Admitted Pro Hac Vice
mlindsay@bernsteinlaw.com
707 Grant Street, Ste. 2200

Pittsburgh, PA 15219

Phone: (412) 456-8100

Fax: (412) 456-8135

Counsel for Debtor

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CERTIFICATE OF SERVICE

I, the undersigned, hereby certify that the within Third Motion to Extend Exclusivity Period was
served via the CM/ECF system upon all parties and counsel of record on this 11th day of May, 2020.
Respectfully submitted:
Date: May 11, 2020

BERNSTEIN-BURKLEY, P.C.

By: /s/ John J. Richardson

John J. Richardson, Esq.

WV ID: 13140

jrichardson@bernsteinlaw.com
707 Grant Street, Ste. 2200

Pittsburgh, PA 15219

Phone: (412) 456-8101

Fax: (412) 456-8135

Counsel for Debtor

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