Amended Order Authorizing and Directing Abandonment of Assets — In re HDC Holdings II, LLC

Summary

An Amended Order Authorizing and Directing Abandonment of Assets in the jointly administered Chapter 7 cases of HDC Holdings II, LLC, et al., Case No. 24-12307 (TMH), in the U.S. Bankruptcy Court for the District of Delaware, filed November 19, 2025 as Doc 537. It rules on a joint motion by Hilco Trading, LLC and BMO Bank N.A., as Agent, and a Notice of Abandonment by chapter 7 trustee George Miller concerning Employee Retention Tax Credits (ERTCs). The court finds that the Agent holds a first priority lien on the ERTCs and that the ERTC Estates have no equity in them. It orders the ERTC Estates' interests in the ERTCs, and the estates' interests in accounts receivable and intellectual property, abandoned under section 554 of the Bankruptcy Code, with any ERTC checks the Trustee receives delivered to TopCo.

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                  Case 24-12307-TMH         Doc 537       Filed 11/19/25       Page 1 of 3




                        IN THE UNITED STATES BANKRUPTCY COURT
                             FOR THE DISTRICT OF DELAWARE

                                                          )        Chapter 7
                                                          )
HDC HOLDINGS II, LLC, et al,                              )        Case No. 24-12307 (TMH)
                                                          )        (Jointly Administered)
                          Debtors.                        )
                                                          )        Related DI: 506, 514, 523, 524, 531, 535

AMENDED ORDER AUTHORIZING AND DIRECTING ABANDONMENT OF ASSETS

            This matter coming to be heard upon: (1) that certain Joint Motion of Hilco Trading, LLC

and BMO Bank N.A. For Entry of an Order Compelling Abandonment of ERTC Estates’ Interests

in and to the ERTCs [D.I. 506] (the “Motion”)1 filed jointly by Hilco Trading, LLC (“Hilco”) and

BMO Bank N.A., as Agent (“BMO,” and together with Hilco, the “Movants”); and (2) that certain

Notice of Abandonment of Property [D.I. 514] (the “Notice of Abandonment”) filed by George

Miller, in his capacity as chapter 7 trustee (the “Trustee”) in the above-captioned, jointly

administered bankruptcy cases (the “Bankruptcy Cases”), concerning, among other things, the

abandonment of certain property of the Estates including, but not limited to, any interests of the

estates of the ERTC Debtors2 in and to rights to receive any and all refundable tax credits pursuant

to the Coronavirus Aid, Relief, and Economic Security Act, on account of the Debtors’ retention

of employees and payment of certain payroll taxes on behalf of such employees during the

Coronavirus pandemic, commonly known as Employee Retention Tax Credits (the “ERTCs”),

including any proceeds thereof; and together with the Motion and all related briefing thereon, the



1
 Capitalized terms not otherwise defined shall have the meaning ascribed in the Motion or the Notice of
Abandonment.
2
 The ERTC Debtors include: CAL Support Services, LLC, CCM Support Services, LLC, Channel Control Merchants
of Texas, LLC, Dirt Cheap I, LLC, Dirt Cheap Arkansas, LLC, Dirt Cheap Building Supplies, LLC, Dirt Cheap of
Georgia, LLC, Dirt Cheap of Louisiana, LLC, Dirt Cheap SE, LLC, Dirt Cheap Tennessee, LLC, and Treasure Hunt,
LLC (collectively, the “ERTC Debtors,” and each of their estates, the “ERTC Estates”).



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              Case 24-12307-TMH           Doc 537      Filed 11/19/25      Page 2 of 3




“ERTC Abandonment”); the Court having jurisdiction to consider the ERTC Abandonment

pursuant to 28 U.S.C. §§ 157 and 1334; and venue being proper before this Court; and

consideration of the ERTC Abandonment being a core proceeding pursuant to 28 U.S.C. § 157(b);

due and proper notice of the Motion and Notice of Abandonment having been provided; it

appearing that no other or further notice need be provided; and the Court having found and

determined that the relief set forth below is in the best interests of the ERTC Estates, their creditors

and all parties in interest, and that the legal and factual bases set forth in the Motion and Notice of

Abandonment establish just cause for the relief granted herein; and after due deliberation and

sufficient cause appearing therefor, it is hereby FOUND that:

        A.      The Agent on behalf of the lenders under the Credit Agreement, as defined in the

                Motion, holds a first priority, perfected, non-avoidable lien and continuing security

                interest in the ERTCs (the “Blanket Lien”);

        B.      The Blanket Lien secures the claim of the lenders under the Credit Agreement ,

                arising from the ABL Balance, which exceeds the maximum value of the ERTCs

                and accordingly the ERTC Estates have no equity in the ERTCs;

        C.      TopCo is the ultimate parent of each of the Debtors; and

        D.      BMO designated TopCo as its agent for the purpose of performing the ERTC

                Liquidation Tasks.

It is hereby ORDERED that:

        1.      The following interests in property and all proceeds thereof are hereby abandoned

                pursuant to section 554 of the Bankruptcy Code (the “Abandonment”):

                a. The ERTC Estates’ interests in the ERTCs;

                b. All Estates’ interests in any Accounts Receivable; and

                c. All Estates’ interest in any Intellectual Property.
                                                 -2-
        Case 24-12307-TMH         Doc 537      Filed 11/19/25      Page 3 of 3




  2.     As a result of the Abandonment, neither the ERTC Estates nor the Trustee has any

         remaining right, title, or interest in the ERTCs or proceeds thereof.

  3.     As a result of the Abandonment, all interests in the ERTCs or proceeds thereof are

         no longer vested in the ERTC Estates.

  4.     To the extent the Trustee has received, or receives in the future, checks payable to

         any of the ERTC Debtors or the ERTC Estates arising from the ERTC’s, the Trustee

         shall deliver such checks and/or remit all proceeds therefrom to TopCo after this

         Order becomes a final order.

  5.     The provisions of notice to the parties set forth in the Motion are proper and

         sufficient under the circumstances, and the requirement of notice to any other

         parties as set forth in Bankruptcy Rule 6007, including, but not limited to, service

         of the Motion on all creditors has been satisfied or is otherwise dispensed with and

         waived.

  6.     This Order is immediately effective upon its entry and is not stayed by operation of

         law notwithstanding the stay provisions of Fed. R. Bankr. P. 4001(a)(4).

  7.     Nothing in this Order shall prejudice or be deemed a waiver of the rights of

         Hancock Whitney Bank.

  8.     This Order shall amend and supersede the Order appearing at D.I. 535.

  9.     This Court shall retain jurisdiction over any and all matters arising from or related

         to the interpretation and implementation of this Order.




Dated: November 19th, 2025                  THOMAS M. HORAN
Wilmington, Delaware                        UNITED STATES BANKRUPTCY JUDGE



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