IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
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`C.A. No. 2021-0648-KSJM
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`In re:
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`ABS Materials, Inc.,
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`Assignor,
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`To:
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`ABSM (ABC), LLC, a Delaware
`limited liability company,
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`
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`Assignee.
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`EX PARTE MOTION FOR ORDER APPOINTING
`APPRAISERS PURSUANT TO 10 DEL. C. § 7382
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`ABSM (ABC), LLC (“Assignee”), in its sole and limited capacity as the
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`assignee for the benefit of creditors of ABS Materials, Inc. (the “Assignor” or
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`“ABS Materials”) requests with the filing of this motion (the “Motion”) the entry
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`of an order appointing two (2) disinterested appraisers pursuant to 10 Del. C.
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`§ 7382. In support of this Motion, the Assignee respectfully represents as follows:
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`BACKGROUND
`On July 26, 2021, Assignor assigned all of its right, title, and interest
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`1.
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`in its assets to Assignee pursuant to that certain General Assignment executed by
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`the Assignor and the Assignee (the “General Assignment”).
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`EFiled: Aug 11 2021 02:59PM EDT
`Transaction ID 66841068
`Case No. 2021-0648-KSJM
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`C.A. No. 2021-0648-KSJM
`
`
`
`
`
`
`
`In re:
`
`ABS Materials, Inc.,
`
`
`Assignor,
`
`
`To:
`
`ABSM (ABC), LLC, a Delaware
`limited liability company,
`
`
`
`Assignee.
`
`EX PARTE MOTION FOR ORDER APPOINTING
`APPRAISERS PURSUANT TO 10 DEL. C. § 7382
`
`ABSM (ABC), LLC (“Assignee”), in its sole and limited capacity as the
`
`assignee for the benefit of creditors of ABS Materials, Inc. (the “Assignor” or
`
`“ABS Materials”) requests with the filing of this motion (the “Motion”) the entry
`
`of an order appointing two (2) disinterested appraisers pursuant to 10 Del. C.
`
`§ 7382. In support of this Motion, the Assignee respectfully represents as follows:
`
`BACKGROUND
`On July 26, 2021, Assignor assigned all of its right, title, and interest
`
`1.
`
`in its assets to Assignee pursuant to that certain General Assignment executed by
`
`the Assignor and the Assignee (the “General Assignment”).
`
`EFiled: Aug 11 2021 02:59PM EDT
`Transaction ID 66841068
`Case No. 2021-0648-KSJM
`
`
`
`2.
`
`In connection with the General Assignment, Assignor also assigned
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`on July 26, 2021 all of its right, title, and interest to (i) any and all trademark
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`and/or service mark rights throughout the world pursuant to a certain Trademark
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`Assignment Agreement between Assignor and Assignee (the “Trademark
`
`Assignment”), (ii) any and all copyright rights throughout the world pursuant to a
`
`certain Copyright Assignment Agreement between Assignor and Assignee (the
`
`“Copyright Assignment”), and (iii) any and all patent rights throughout the world
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`pursuant to a certain Patent Assignment Agreement between Assignor and
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`Assignee (the “Patent Assignment” and, together with the Copyright Assignment,
`
`Trademark Assignment,
`
`and General Assignment,
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`collectively,
`
`the
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`“Assignments”).
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`3.
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`On July 26, 2021, Assignee filed a Verified Petition for Assignment
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`for the Benefit of Creditors pursuant to 10 Del. C. §§ 7381-7387, which
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`established this assignment for the benefit of creditors proceeding (the “ABC
`
`Proceeding”).
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`4.
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`Assignor is a Delaware corporation specializing in development of
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`products utilizing porous organosilica materials which can swell when absorbing
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`organic liquids. The swelling of such materials enables high-capacity absorption
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`and controlled desorption.
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`2
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`5.
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`Prior to the Assignor’s execution of the Assignments and related
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`documents, the Assignor’s Board of Directors extensively explored, with the aid of
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`seasoned professionals, options to maximize value for its constituents, including
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`(without limitation) finding a buyer to purchase its assets. For various reasons,
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`none of these options were viable, and thus, Assignor determined that the filing of
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`an assignment for the benefit of creditors was the most appropriate mechanism for
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`acting in the best interests of its creditors and equity holders.
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`6.
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`In connection with the Assignment, Assignee intends to continue the
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`Assignor’s business in order to sell the business as a going concern. Specifically,
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`the Assignee has commenced marketing substantially all of the assets of the
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`Assignor’s Assignment Estate as part of a commercially reasonable sale process.
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`The Assignee intends for such process to be administered and concluded in the
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`next sixty (60) days. Following the sale of the Assignor’s Assignment Estate, the
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`Assignee intends to utilize the sale proceeds to make appropriate distributions to
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`the Assignor’s creditors without any preference or priority, except such priority as
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`is established and permitted by applicable law.
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`7.
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`In connection with the administration of the Assignment Estate, the
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`Assignee and Aquanex Technologies, LLC (“Secured Lender”) have entered into a
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`certain Secured Promissory Note and Security Agreement in the amount of
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`$530,177 (the “ABS Secured Note”) in which the Secured Lender has agreed to
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`3
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`make certain financing available in exchange for a second-priority1 security
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`interest in all of the Assignment Estate’s assets (collectively, the “Assets”).
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`8.
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`Simultaneously with the filing of this Motion, the Assignee has filed
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`its Unsworn Affidavit of Inventory Pursuant to 10 Del. C. § 7381, which includes
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`the inventory of the Assignment Estate’s Assets.
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`RELIEF REQUESTED
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`9.
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`Pursuant to 10 Del. C. § 7382, the Court is required to appoint two (2)
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`disinterested appraisers. 10 Del. C. § 7382 provides as follows:
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`Upon the filing of the inventory and affidavit required by
`§ 7381 of this title, the Court of Chancery shall appoint 2
`disinterested and competent persons to appraise the estate
`assigned, who shall, after being duly sworn or affirmed
`by some person having authority to administer oaths, to
`perform their duties with fidelity, forthwith proceed to
`make an appraisement of the estates and effects assigned,
`according to the best of their judgment, and having
`completed the same, shall return the inventory and
`appraisement to the office of the Register in Chancery of
`the county in which the inventory of the assignee and the
`affidavit accompanying the same were filed. The
`appraisers shall receive the same compensation as is now
`allowed by law to appraisers of the estate of a decedent.
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`10 Del. C. § 7382.
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`1
`The first priority lien on the Assignor’s assets comprising the Assignment
`Estate is held by Environmental Management Specialists, Inc. (“EMS”). The
`budget in connection with the ABC Secured Note contemplates payment of the
`first lien debt upon full funding of the ABC Secured Note thereby creating a first-
`priority lien for the Secured Lender.
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`4
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`10. Therefore, as part of the ABC Proceeding, the Assets must be
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`appraised in accordance with the applicable statutory authority. The Assignee
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`proposes the appointment of Cohen & Co. LPA (“Cohen”) and Applied Business
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`Strategy LLC (“Applied”) to appraise the Assets. Both companies are experienced
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`appraisers, and the Assignee believes that the appointment of Cohen and Applied is
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`in the best interests of the Assignment Estate. See Unsworn Affidavit of James E.
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`Gansman, which is attached to this Motion as Exhibit A. Both Cohen and Applied
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`are disinterested appraisers, as set forth in the Statement of Disinterestedness for
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`Approval of Appraiser of each proposed appraiser, attached to this Motion as
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`Exhibits B and C, respectively.
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`11. The basis for seeking relief on an ex parte basis is economic.
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`Assignee is in the process of notifying the various creditors to the Assignment
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`Estate and will apprise them of the ABC Proceeding, the proof of claim process,
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`and the Assignee’s sale process with respect to the Assets.
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`12.
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`In an effort to conserve the limited resources of the estate, Assignee
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`submits that the administrative costs associated with serving this Motion and
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`ancillary documents on the creditors and parties in interest are unnecessary and
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`would further erode recoveries to creditors. Under these circumstances, the
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`Assignee believes that consideration of this matter on an ex parte basis is fair,
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`reasonable, and in the best interests of the Assignment Estate.
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`5
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`WHEREFORE, Assignee respectfully request the entry of an order
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`appointing Cohen and Applied as appraisers in this proceeding pursuant to 10
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`Del. C. § 7382. A proposed Order granting the relief requested herein is being
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`filed simultaneously with this Motion.
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`Dated: August 11, 2021
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`WOMBLE BOND DICKINSON (US) LLP
`
`/s/ Morgan L. Patterson
`Matthew P. Ward (No. 4471)
`Morgan L. Patterson (No. 5388)
`1313 North Market Street, Suite 1200
`Wilmington, Delaware 19801
`Telephone: (302) 252-4320
`Facsimile: (302) 252-4330
`E-mail: matthew.ward@wbd-us.com
`E-mail: morgan.patterson@wbd-us.com
`
`Attorneys for ABSM (ABC), LLC
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`WORDS: 1,057
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`6
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