19-23185-rdd Doc 101 Filed 08/05/19 Entered 08/05/19 14:01:27 Main Document
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`Larry A. Levick
`State Bar No. 12252600
`Michelle E. Shriro
`State Bar No. 18310900
`SINGER & LEVICK, P.C.
`16200 Addison Road, Suite 140
`Addison, Texas 75001
`Telephone: 972.380.5533
`Fax: 972.380.5748
`Email: levick@singerlevick.com
`ATTORNEYS FOR CONDUENT
`STATE & LOCAL SOLUTIONS, LLC
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`Chapter 11
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`CASE NO. 19-23185 (RDD)
`
`IN THE UNITED STATES BANKRUPTCY COURT
`FOR THE SOUTHERN DISTRICT OF NEW YORK
`
`§
`§
`§
`§
`§
`§
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`IN RE:
`
`RETRIEVAL-MASTERS CREDITORS
`BUREAU, INC.,1
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`
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`DEBTOR.
`
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`CONDUENT STATE & LOCAL SOLUTIONS, LLC’S LIMITED OBJECTION TO MOTION OF
`DEBTOR FOR ENTRY OF AN ORDER PURSUANT TO §§ 105, 361, 362, 363, 364, 503, AND 507:
`(I) AUTHORIZING THE DEBTOR TO OBTAIN SECURED SUPERPRIORITY
`POSTPETITION FINANCING; (II) GRANTING LIENS AND SUPERPRIORITY
`ADMINISTRATIVE EXPENSE CLAIMS; (III) AUTHORIZING USE OF CASH COLLATERAL;
`(IV) GRANTING ADEQUATE PROTECTION; (V) MODIFYING THE AUTOMATIC STAY;
`AND (VI) GRANTING RELATED RELIEF
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`
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`
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`Comes now Conduent State & Local Solutions, LLC f/k/a Xerox State & Local Solutions,
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`Inc. f/k/a ACS State & Local Solutions, Inc. (“Conduent”), and hereby does file its Limited
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`Objection to Motion of Debtor for Entry of an Order Pursuant to §§ 105, 361, 362, 363, 364, 503,
`
`and 507: (I) Authorizing the Debtor to Obtain Secured Superpriority Postpetition Financing; (II)
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`Granting Liens And Superpriority Administrative Expense Claims; (III) Authorizing Use of Cash
`
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`1 The last four digits of Debtor’s taxpayer identification number is 9495. The location of Debtor’s service address
`for purposes of this chapter 11 case is 4 Westchester, Suite 110, Elmsford, NY 10523. Debtor also does business as
`American Medical Collection Agency.
`
`_______________________________________________________________________________________________________
`Page 1
`LIMITED OBJECTION TO MOTION OF DEBTOR FOR POSTPETITION FINANCING AND USE OF CASH COLLATERAL
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`Pg 1 of 4
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`Larry A. Levick
`State Bar No. 12252600
`Michelle E. Shriro
`State Bar No. 18310900
`SINGER & LEVICK, P.C.
`16200 Addison Road, Suite 140
`Addison, Texas 75001
`Telephone: 972.380.5533
`Fax: 972.380.5748
`Email: levick@singerlevick.com
`ATTORNEYS FOR CONDUENT
`STATE & LOCAL SOLUTIONS, LLC
`
`
`
`
`
`
`
`
`Chapter 11
`
`CASE NO. 19-23185 (RDD)
`
`IN THE UNITED STATES BANKRUPTCY COURT
`FOR THE SOUTHERN DISTRICT OF NEW YORK
`
`§
`§
`§
`§
`§
`§
`
`IN RE:
`
`RETRIEVAL-MASTERS CREDITORS
`BUREAU, INC.,1
`
`
`
`DEBTOR.
`
`
`CONDUENT STATE & LOCAL SOLUTIONS, LLC’S LIMITED OBJECTION TO MOTION OF
`DEBTOR FOR ENTRY OF AN ORDER PURSUANT TO §§ 105, 361, 362, 363, 364, 503, AND 507:
`(I) AUTHORIZING THE DEBTOR TO OBTAIN SECURED SUPERPRIORITY
`POSTPETITION FINANCING; (II) GRANTING LIENS AND SUPERPRIORITY
`ADMINISTRATIVE EXPENSE CLAIMS; (III) AUTHORIZING USE OF CASH COLLATERAL;
`(IV) GRANTING ADEQUATE PROTECTION; (V) MODIFYING THE AUTOMATIC STAY;
`AND (VI) GRANTING RELATED RELIEF
`
`
`
`
`
`
`Comes now Conduent State & Local Solutions, LLC f/k/a Xerox State & Local Solutions,
`
`Inc. f/k/a ACS State & Local Solutions, Inc. (“Conduent”), and hereby does file its Limited
`
`Objection to Motion of Debtor for Entry of an Order Pursuant to §§ 105, 361, 362, 363, 364, 503,
`
`and 507: (I) Authorizing the Debtor to Obtain Secured Superpriority Postpetition Financing; (II)
`
`Granting Liens And Superpriority Administrative Expense Claims; (III) Authorizing Use of Cash
`
`
`1 The last four digits of Debtor’s taxpayer identification number is 9495. The location of Debtor’s service address
`for purposes of this chapter 11 case is 4 Westchester, Suite 110, Elmsford, NY 10523. Debtor also does business as
`American Medical Collection Agency.
`
`_______________________________________________________________________________________________________
`Page 1
`LIMITED OBJECTION TO MOTION OF DEBTOR FOR POSTPETITION FINANCING AND USE OF CASH COLLATERAL
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`19-23185-rdd Doc 101 Filed 08/05/19 Entered 08/05/19 14:01:27 Main Document
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`Collateral; (IV) Granting Adequate Protection; (V) Modifying the Automatic Stay; and (VI)
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`Granting Related Relief (the “DIP Motion”), and states as follows:
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`1.
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`2.
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`3.
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`4.
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`Debtor filed its Petition for Chapter 11 Bankruptcy on or about June 17, 2019.
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`The Debtor filed its DIP Motion on July 22, 2019.
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`The Debtor filed its Schedules on July 31, 2019.
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`The Debtor has requested authority to obtain post-petition financing in the form of
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`a delayed draw secured promissory note (“DIP Note”).
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`5.
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`6.
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`The Debtor would borrow $1,000,000.0 from Russell H. Fuchs (“Fuchs”).
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`Fuchs is the founder, Chief Executive Officer, and owns 100% of the equity
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`interests in the Debtor and is currently the only secured creditor in this bankruptcy. Fuchs
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`previously gave the Debtor a secured loan of $2,500,000.00 shortly prior to the filing of the
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`Chapter 11 Petition.
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`7.
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`Conduent (as successor) and Debtor are parties to that Definitive Subcontract
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`Agreement By and Between ACS State & Local Solutions, Inc. and Retrieval-Masters Creditors
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`Bureau, Inc. (as amended from time to time) to Provide Services in Support of Payment
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`Collections, et al ( the “Contract”).
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`8.
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`The Contract and applied law grants Conduent rights in the funds collected on its
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`behalf by Debtors. Conduent objects to the Motion to the extent Fuchs, as an insider, is attempting
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`to obtain rights superior to those of Conduent in these funds. Counsel for Conduent and Debtor
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`have been working on proposed language to address this issue but have been unable to reach an
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`agreement. Conduent’s counsel will continue to try to work with Debtor’s counsel on this issue
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`up until the hearing.
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`_______________________________________________________________________________________________________
`Page 2
`LIMITED OBJECTION TO MOTION OF DEBTOR FOR POSTPETITION FINANCING AND USE OF CASH COLLATERAL
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`19-23185-rdd Doc 101 Filed 08/05/19 Entered 08/05/19 14:01:27 Main Document
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`9.
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`Additionally, Debtor’s counsel has stated that there is no roll up of the Fuch’s pre-
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`petition claim in the DIP Loan and that there is no current deadline imposed to object to the
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`enforceability of Fuch’s pre-petition loan and such language can be inserted in the order for sake
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`of clarity.
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`WHEREFORE, Conduent respectfully requests that the Court grant the limited objection,
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`and for all other relief that is just and proper in the premises.
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`DATED: August 5, 2019
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`Respectfully submitted,
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`SINGER & LEVICK, P.C.
`
`
`
`By:
`
`
`
` /s/ Larry A. Levick
`Larry A. Levick
`State Bar No. 12252600
`Michelle E. Shriro
`State Bar No. 18310900
`
`16200 Addison Road, Suite 140
`Addison, Texas 75001
`Phone: 972.380.5533
`Fax: 972.380.5748
`Email: levick@singerlevick.com
`Email: mshriro@singerlevick.com
`
`ATTORNEYS FOR:
`CONDUENT STATE & LOCAL SOLUTIONS, LLC
`
`_______________________________________________________________________________________________________
`Page 3
`LIMITED OBJECTION TO MOTION OF DEBTOR FOR POSTPETITION FINANCING AND USE OF CASH COLLATERAL
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`19-23185-rdd Doc 101 Filed 08/05/19 Entered 08/05/19 14:01:27 Main Document
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`CERTIFICATE OF SERVICE
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`I hereby certify that Notice of this document will be electronically mailed to the parties
`that are registered or otherwise entitled to receive electronic notices in this case pursuant to the
`Electronic Filing Procedures in this District and upon those parties listed below via Email on this
`5th day of August, 2019.
`
`
`Jordan Adler
`Jessica Boelter
`
`
`
`jordan.adler@ag.ny.gov
`jboelter@sidley.com; mlinder@sidley.com;
`emcdonnell@sidley.com
`justin.clouser@atg.in.gov
`heather.crockett@atg.in.gov
`matt@attorneyzim.com
`chris.donoho@hoganlovells.com
`derek.edwards@wallerlaw.com; nancy.easterling@wallerlaw.com;
`tapdocketingclerk-nash@wallerlaw.com
`william.hao@alston.com; leslie.salcedo@alston.com
`serene.nakano@usdoj.gov
`npasalides@reichpc.com
`will.sugden@alston.com
`USTPRegion02.NYECF@USDOJ.GOV
`wilamowsky@chapman.com
`tom@attorneyzim.com; firm@attorneyzim.com
`
`
`Justin Clouser
`Heather M. Crockett
`Matthew C. De Re
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`Christopher R. Donoho
`Derek W. Edwards
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`William Hao
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`Serene K. Nakano
`Nicholas A. Pasalides
`William S. Sugden
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`United States Trustee
`Steven Wilamowsky
`Tom Zimmerman
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` /s/ Larry A. Levick
`Larry A. Levick
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`
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`_______________________________________________________________________________________________________
`Page 4
`LIMITED OBJECTION TO MOTION OF DEBTOR FOR POSTPETITION FINANCING AND USE OF CASH COLLATERAL
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