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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION IN RE: CASE NO.: 10-22760-BKC-PGH CHAPTER 11 CAMTECH PRECISION MANUFACTURING, INC., Debtor. ______________________________/ IN RE: R & J NATIONAL ENTERPRISES, INC., Debtor. ______________________________/ IN RE: AVSTAR FUEL SYSTEMS, INC., Debtor. ______________________________/ DEBTORS EMERGENCY MOTION FOR THE ENTRY OF AN ORDER AUTHORIZING THE PAYMENT OF PRE-PETITION WAGES, SALARIES, COMMISSIONS AND EMPLOYEE BENEFITS AND APPROVE OFFICER COMPENSATION NUNC PRO TUNC TO MAY 10, 2010 COME NOW the Debtors, CAMTECH PRECISION MANUFACTURING, INC. (hereinafter referred to as CAMTECH), R & J NATIONAL ENTERPRISES, INC. (hereinafter referred to as R&J), and AVSTAR FUEL SYSTEMS, INC. (hereinafter referred to as AVSTAR), (hereinafter all collectively referred to as the Debtors), by and through the undersigned attorneys, hereby file this Emergency Motion for the entry of an order, pursuant to sections 105(a) and 507(a)(3) and (4) of the Bankruptcy Code authorizing the Debtors to pay pre-petition wages, salaries, commissions and employee benefits and approve officer compensation nunc pro tunc to May 10, 2010 (the Motion). In support of the Motion, the Debtors respectfully states as follows: BACKGROUND 1 CASE NO.: 10-22762-BKC-PGH CHAPTER 11 CASE NO.: 10-22765-BKC-EPK CHAPTER 11

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1.

This Chapter 11 proceeding was filed on May 10, 2010, with CAMTECH, R&J

and AVSTAR, operating as the Debtors in Possession pursuant to 11 U.S.C. Section 1107. As of the date hereof, no creditors committee has been appointed in this case. In addition, no trustee or examiner has been appointed. 2. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. 157(b)

and 1334. Venue is proper pursuant to 28 U.S.C. 1408 and 1409. This matter is a core proceeding pursuant to 28 U.S.C. 157(b). 3. The statutory predicates for the relief requested herein are Sections 361 and

363 of the Bankruptcy Code and Rules 2002 and 4001 of the Federal Rules of Bankruptcy Procedure. RELIEF REQUESTED 4. By way of this Motion, the Debtors request that this Court enter an Order

pursuant to 105(a) and 507(a)(3) of the Bankruptcy Code, authorizing the Debtors to pay the various pre-petition wages, salaries, commissions and employee benefits of the Debtors employees (the Employees). 5. As part of the foregoing relief, the Debtors also seek authorization to pay all

federal and state withholding and payroll-related taxes relating to pre-petition periods including, but not limited to, all withholding taxes, Social Security taxes, and Medicare taxes, as well as all other withholdings such as life insurance and other employee deductions, if any. The defined term Pre-petition Employee Obligations is meant to include all such payments. PRE-PETITION EMPLOYEE OBLIGATIONS A. Wages, Salaries and Commissions 6. As of the Petition Date, AVSTAR employed approximately 25 full and part2

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time Employees, including management, other service personnel. CAMTECH employed approximately 64 full and part-time Employees, including management, other service personnel. As of the Petition Date, R&J had no employees. 7. CAMTECH Texas pays its Employees bi-weekly each month, which totals

approximately $108,000.00 gross bi-weekly. CAMTECH New York pays its Employees weekly each month, which totals approximately $8,000.00 gross per week. AVSTAR pays its Employees bi-weekly each month, which totals approximately $64,000.00 gross biweekly. The payroll for CAMTECH Texas and AVSTAR alternate weeks such that there is a payroll each week for one or the other. All payroll disbursements to employees are done through ADP and drawn on the Debtors Regions Bank operating checking accounts. 8. No Employees pre-petition compensation exceeds the $10,950 priority wage

limit set forth in 507(a)(4) of the Bankruptcy Code. There are approximately $3,203.62 of unremitted employee 401(k) contributions from the last payrolls, which have not been presented for payment as of filing date, and authorization is needed herein to pay. 9. The Debtors process its payroll through a payroll service known as ADP. In

connection therewith, the Debtors initial a draw for the entire payroll amount, including the related tax payments, employee direct deposits, all payroll checks and the employees share for medical/dental/life insurance premiums, from the Debtors operating accounts on the same day each payroll is delivered to the Employees. The Debtor also remits amounts for employee payroll taxes withheld, employer payroll taxes, employee loan repayments, wage garnishments and child support payments, if applicable. The Employees receive their net payroll checks drawn on the ADPs bank account. 10. As of the Petition Date, pre-petition payroll has been paid. The next payroll

dates are May 21, 2010 for the weekly scheduled payroll for CAMTECH New York and the 3

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bi-weekly schedule for AVSTAR employees and May 28, 2010 under the bi-weekly schedule for the CAMTECH Texas employees. No Employee will receive pre-petition compensation in excess of the limits set forth under 11 U.S.C. 507(a)(4) in connection with such payrolls. 11. There is one (1) Officer on the Debtors on the payroll. This person is Ron

Weaver, President. This Officer provides valuable services to the Debtors in its operations and will be critical to the Debtors efforts to maximize the value of its assets. Mr. Weavers ordinary compensation is $8,653.85 on a bi-weekly basis. The Debtors do not propose to pay this Officer in excess of the $10,950 priority wage limit set forth in 507(a)(4) of the Bankruptcy Code. The Officer is entitled to pre-petition wages earned and accrued as of May 3, 2010 through the filing date; however, the Officer will not receive pre-petition compensation in excess of $10,950. B. Employee Benefits 12. In the ordinary course of business, as is customary in this industry, the

Debtors have established various employee benefit plans and policies for the benefit of its employees, which includes medical and life insurance, 401k and other similar such benefits (collectively, the Employee Benefits). 13. If the Debtors are unable to maintain its pre-petition employee benefits

programs on a post-petition basis, then the Debtors may experience significant employee attrition. During the Chapter 11 process, the Debtors cannot currently provide the employment stability offered by many of its competitors. As a result, the Debtors currently are at a substantial disadvantage in providing competitive compensation packages and assurances of future employment necessary to retain its Employees. Consequently, the Debtors believe that the continuation of its pre-petition benefits programs is critical to its 4

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efforts to reorganize in this Chapter 11 case. C. Vacation, Personal Days and Employee Reimbursement 14. All regular, full-time hourly Employees are eligible to accrue paid time off

(PTO) based upon their anniversary date and the amount that is earned is based upon seniority. Exempt employees accrue at a higher rate. At termination, these unused amounts are not paid to the employee, and they are not subject to carry over. In addition, all Employees may apply to receive reimbursement for documented and authorized expenditures (i.e. travel) incurred on behalf of the Debtors. 15. By this Motion, the Debtors seek authority to honor in the ordinary course of

business all liabilities to its Employees that arose under its vacation and personal day policies and reimbursement practices prior to the Petition Date. The Debtors anticipate that its Employees will utilize any accrued vacation time or personal days in the ordinary course of business without resulting in any material cash flow requirements beyond the Debtors normal payroll obligations. The obligations arising from unpaid employee reimbursement expenses are unknown at this time. D. Workers Compensation 16. In the State of Florida and other States, the Debtors are required to maintain

a workers compensation policy and program (the Workers Compensation Policies) and to provide its Employees with workers compensation coverage or claims arising from or related to their employment with the Debtors. The Debtors have a workers compensation policy with a monthly average premium payment of $7,673.34. 17. As of the Petition Date, the Workers Compensation premium is current

through May, 2010. The Debtors General Agent is Hartford Insurance Co. The Debtors are currently on a dollar one service program, so there are no outstanding claims under this 5

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program. Claims that are covered under the Debtors Workers Compensation Policies and settled will be paid directly by the appropriate insurance carrier, without requirement for payment of a minimum deductible by the Debtors. 18. As payment of the pre-petition Workers Compensation Claims are essential

to the continued operation of the Debtors business, the Debtors request authority to pay any and all amounts due and owing with respect to any Workers Compensation Claims not covered by insurance, and maintain and continue pre-petition practices with respect to the Workers Compensation Policies, including, among other things, allowing workers compensation claimants, to the extent they hold valid Workers Compensation Claims, to proceed with their claims directly against the Debtors insurance carrier. 19. As of the petition Date, the Debtors are current with respect to all of the

Workers Compensation Policies. BASIS FOR RELIEF 20. 507(a)(4) and 507(a)(5) of the Bankruptcy Code require that certain claims

for pre-petition wages, salaries, commissions, vacation, severance, sick leave, and employee benefit contributions be accorded priority in payment in an amount not to exceed $10,950 for each employee. The Debtors Employees are each owed pre-petition amounts that are less than the $10,950 cap contained in 507(a)(4) an 507(a)(5). 21. In order to retain its Employees and maintain morale under what will be

difficult working conditions, the Debtors must have authority to pay or otherwise satisfy all Pre-petition Employee Obligations as summarized above. The amounts to be paid to Employees pursuant to this Motion are reasonable compared with the importance and necessity of the Employees and the losses the Debtors will likely suffer if these amounts are not paid. Candidly, if the Debtors do not have the ability to maintain its employees and 6

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managers, then the Debtors cannot and will not successfully operate. 22. The relief requested in this Motion is necessary indeed critical and should

be authorized under 105 of the Bankruptcy Code. The Employees are vital to the continued operation of the Debtors business and to its efforts to reorganize and preserve the value of its assets for the benefit of the estate. Accordingly, the Debtors submit that the relief sought herein is consistent with 105(a) and 507(a) of the Bankruptcy Code. 23. Moreover, the Debtors payment of the Pre-petition Employee Obligations in

the ordinary course of business should neither prejudice general unsecured creditors, nor materially affect the Debtors estate, because 507(a)(4) and (a)(5) priority claims are already entitled to payment in full under a reorganization plan. 24. Numerous courts have used their 105(a) powers under the doctrine of

necessity to authorize payment of a debtor-in-possessions pre-petition obligations where, as here such payment is an essential element of the preservation of the debtor-inpossessions potential for rehabilitation. 25. As part of the foregoing relief, the Debtors also seek authority to pay any and

all federal and state withholding and payroll-related funds relating to pre-petition periods, including, but not limited to, all Social Security, FICA, federal and state income taxes, health care payments, and retirement fund withholding. 26. The failure to make such payments may subject the Debtors and its officers to

federal or state liability. See Beiger v. City of Farrell (In re Sharon Steel Corp.), 41 F.3d 92 (3d Cir. 1994) (delineating state law requiring debtor to withhold city income tax from its employees wages created trust relationship between debtor and city for payment of withheld taxes); DuCharmes & Co. v. Michigan (In re DuCharmes), 852 F.2d 194 (6th Cir. 1988) (noting the special liabilities for failure to pay trust fund taxes). Because such funds 7

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are not property of the Debtors estate, the funds are not subject to the normal bankruptcy prohibitions against payment. See Beiger v. IRS, 496 U.S. 53 (1990) (characterizing debtors payment of employee withholding for federal income and FICA taxes not a preferential transfer because withholding held in trust for taxing authority and not a part of debtors estate). 27. The Debtors, therefore, request that the Court confirm that such trust fund

withholding is not property of the Debtors estate, and that the Debtor may direct such withheld amounts to the proper parties in the ordinary course of business. Courts in the cases cited above have routinely granted to business debtors the same or substantially similar relief to that requested in this Motion. 28. Nothing in this Motion shall be construed as a request for authority to

assume any executory contract under Section 365 of the Bankruptcy Code. 29. For the foregoing reasons, the Debtors believe that granting the relief

requested herein is appropriate and in the best interest of all parties-in-interest. 30. No previous request for the relief sought herein has been made to this Court

or any other court. EMERGENCY HEARING REQUESTED 31. The Debtors respectfully requests that the Court set this Motion for hearing on

an emergency basis. Of critical importance to the Debtors are the payment of the payroll that is currently scheduled to be distributed on May 14, 2010 and on May 21, 2010 for all of the Debtors Employees. If the employees of the Debtors are not paid, then there is a substantial likelihood that the majority or all of such Employees will terminate their employment with the Debtors, the result of which will be devastating to the Debtors operations and ultimately to the creditors of the estate. As such, there is a high likelihood 8

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of immediate and irreparable harm to the Debtors and the estate if the Debtors are not authorized pay pre-petition wages, salaries, commissions and employee benefits as set forth herein. WHEREFORE, the Debtors respectfully requests that the Court enter an order: (a) authorizing the Debtors to pay pre-petition wages, salaries, commissions and employee benefits in accordance with the above; (b) authorizing the Debtors to continue the maintenance of all employee benefit programs in the ordinary course in accordance with the above; (c) maintain and pay all premiums for workers compensation insurance coverage; and (d) grant such other and further relief as is just and proper. I HEREBY CERTIFY that I am admitted to the Bar of the United States District Court for the Southern District of Florida and I am in compliance with the additional qualifications to practice in this Court set forth in Local Rule 2090-1(A), and that a true and correct copy of the foregoing has been furnished via U. S. Mail to the U.S. Trustee's office, 51 SW 1st Avenue, Room 1204, Miami, FL 33310, this 11th day of May, 2010. KELLEY & FULTON, P.A. Attorneys for the Debtor in Possession 1665 Palm Beach Lakes Blvd. The Forum - Suite 1000 West Palm Beach, FL 33401 Phone (561) 684-5524 Facsimile (561) 684-3773 BY: __/s/ Craig I. Kelley _ CRAIG I. KELLEY, ESQUIRE Florida Bar 782203

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Service List - GENERAL Office of US Trustee 51 S.W. First Ave. Room 1204 Miami, Fl. 33130 Internal Revenue Service P.O. Box 21126 Philadelphia, PA 19114 Internal Revenue Service Special Procedures - Insolvency P.O. Box 17167 Stop 5760 Attn: Bankruptcy Unit Ft. Lauderdale, FL 33318 State of Florida/Dept. of Revenue Bankruptcy Section P.O. Box 6668 Tallahassee, FL 32314-6668 R & J National Enterprises, Inc. Camtech Precision Manufacturing, Inc. Avstar Fuel Systems, Inc. 1365 Park Lane South Jupiter, FL 33458

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R & J NATIONAL ENTERPRISES, INC. Enterprise Bank of Florida 11811 U.S. Highway One North Palm Beach, FL 33408 Industrial Equipment Capital 2884 Peyton Rd La Verne, CA 91750 People's Capital and Leasing Corp. 255 Bank Street, 4th Floor Waterbury, CT 06702-2213 Plains Capital Leasing 6221 Riverside Drive, Suite 105 Irving, TX 75039 Regions 6990 SW 8th Street Ste 200 Miami, FL 33144 UPS Capital Business Credit 280 Trumbull Street Hartford, CT 06103 UPS Capital Business Credit P.O. Box 406994 Payment Account Atlanta, GA 30384 Wells Fargo Equipment Finance, Inc. One Harbour Place, Suite 175 Portsmouth, NH 03801

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CAMTECH PRECISION MANUFACTURING, INC. 4-M PRECISION STAMPING, INC. 4000 TECHNOLOGY PARK BLVD. AUBURN, NY 13021 A.M. CASTLE & CO. P.O. BOX 841949 DALLAS, TX 75284-1949 ACME INDUSTRIAL COMPANY 441 MAPLE AVENUE CARPENTERSVILLE, IL 60110-1990 ALCAN ROLLED PRODUCTS, LLC 22112 NETWORK PLACE CHICAGO, IL 60673-1221 AMI Metals Inc. P O Box 952474 St Louis, MO 63195-2474 AUBURN PROPERTY MANAGEMENT 18 GARFIELD STREET AUBURN, NY 13021 Betsy Price Tax Assessor PO Box 861018 Fort Worth, TX 76161-0018 CGTech Vericut 9000 Research Drive Irvine, CA 92618 CMC COMMONWEALTH METALS 2200 FLETCHER AVENUE 7TH FLOOR FORT LEE, NJ 07024-5016 Charleston Aluminum, LLC PO Box 890851 Charlotte, NC 28289-0851 Epicor Software Corporation Dept 1547 Los Angeles, CA 90084-1547

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J.T. Ryerson & Son, Inc. P.O. Box 29953 New York, NY 10087-9953 M&H Supply & Equipment P.O. Box 185202 Fort Worth, TX 76181 MAKINO PO Box 632622 Cincinnati, OH 45263-2622 PREFERRED INDUSTRIAL PAINTING 3300 ENTERPRISE ROWLETT, TX 75088 PRINCE MANUFACTURING PO Box 4691 Troy, MI 48099-4691 Reliant Energy Dept 0954 PO Box 120954 Dallas, TX 75312-0954 TW Metals, Inc. PO Box 933014 Atlanta, GA 31193-3014 Venture Management Services 2301 W Big Beaver Road Suite 921 Troy, MI 48084

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AVSTAR FUEL SYSTEMS, INC. 4-M Precision Stamping, Inc. 4000 Technology Park Blvd Auburn, NY 13021 API P.O. Box 1000, Dept. #026 Memphis, TN 38148-0026 AvPower LLC 209 River Laurel Way Woodstock, GA 30188 Hammer Manufacturing Co./WGJF Mfg. Corp. 417 Commerce Road P.O. Box 1340 Linden, NJ 07036 KN Machine & Tool, Inc. 3125 Jupiter Park Circle #4 Jupiter, FL 33458 MZ Machine 3046 Jupiter Park Circle Jupiter, FL 33458 Meier Screw Products & Mfg. Co. 670 East Troy Avenue Ferndale, MI 48220-2853 New Tech Inc. 15915 Assembly Loop Palm Beach Park of Commerce Jupiter, FL 33478 Pre-Tech Inc. 3052 Highway 17-92 North Haines City, FL 33844 Precision Turning Corp 715 Gold Krist Blvd. S.W. Live Oak, FL 32064 Saint-Gobain PPL Corp. PO Box 642625 14

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Pittsburgh, PA 15264-2625 Santa Fe Rubber 12306 E Washington Blvd Whittier, CA 90606 Schafer Precision Machining Division of Schafer Gear Works, Inc. 7603 Honeywell Drive Fort Wayne, IN 46825 The Ayling & Reichert Company 411 South Railroad St. Oak Harbor, OH 43449 Thermal Braze Inc. 231 Venus St Jupiter, FL 33458 Trade-A-Plane P.O. Box 509 Crossville, TN 38557 Trelleborg Sealing Solutions Dept. CH10999 Palatine, IL 60055-0999 Vernay Laboratories, Inc. 120 E. South College Street Yellow Springs, OH 45387-1623 Vulcan Machine, Inc 1217 Tech Blvd. Tampa, FL 33619

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