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UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT of California SANTA ANA DIVISION 14 15 in re: CRYSTAL CATHEDRAL MINISTRIES, 16 a California nonprofit corporation. Case No. 8:10-bk-24771-RK Chapter II Proceeding debtor's NOTICE of Motion and Motion for order Extending the debtor's plan EXCL
UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT of California SANTA ANA DIVISION 14 15 in re: CRYSTAL CATHEDRAL MINISTRIES, 16 a California nonprofit corporation. Case No. 8:10-bk-24771-RK Chapter II Proceeding debtor's NOTICE of Motion and Motion for order Extending the debtor's plan EXCL
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UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT of California SANTA ANA DIVISION 14 15 in re: CRYSTAL CATHEDRAL MINISTRIES, 16 a California nonprofit corporation. Case No. 8:10-bk-24771-RK Chapter II Proceeding debtor's NOTICE of Motion and Motion for order Extending the debtor's plan EXCL
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Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc
Main Document Page 1 of 16
2 3 4 5 6 7 MARC J. WINTHROP- State Bar No. 63218
KAVITAGUPTA-StateBarNo.l38505 kgupta@winthropcouchot.com WINTHROP COUCHOT PROFESSIONAL CORPORATION 660 Newport Center Drive, Suite 400 Newport Beach, CA 92660 Telephone: (949) 720-4100 Facsimile: (949) 720-4111 General Insolvency Counsel for 8 Debtor and Debtor-in-Possession 9 10 ll 12 13 UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION 14 15 In re: CRYSTAL CATHEDRAL MINISTRIES, 16 a California nonprofit corporation, 17 18 19 20 21 22 23 24 25 26 27 28 Debtor and Debtor-in-Possession. Case No. 8:10-bk-24771-RK Chapter II Proceeding DEBTOR'S NOTICE OF MOTION AND MOTION FOR ORDER EXTENDING THE DEBTOR'S PLAN EXCLUSIVITY PERIODS; MEMORANDUM OF POINTS AND AUTHORITIES; IN SUPPORT THEREOF [11 US.C 1121] DATE: TIME: PLACE: February 8, 2011 2:30p.m. Courtroom 5D 411 W. Fourth Street Santa Ana, C:A 9270 I MAINDOCS-11-1566 70-v l-CI) sta I _pian_ Exclusivity_ Motion. DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 2 of 16 1 TO THE HONORABLE ROBERT KWAN, UNITED STATES BANKRUPTCY 2 JUDGE, THE OFFICE OF THE UNITED STATES TRUSTEE, AND ALL OTHER 3 PARTIES-IN-INTEREST: 4 Crystal Cathedral Ministries, a California nonprofit corporation, the debtor and debtor-in- 5 possession herein ("Debtor") hereby moves ("Motion") the Court, pursuant to the provisions of 6 Section 1121 of the United States Bankruptcy Code ("Bankruptcy Code"), for an order granting 7 the following relief: 8 1. Extending, through and including May 16, 2011, the Debtor's exclusive period to 9 file a plan of reorganization ("Plan"); 10 2. Extending, through and including July 16, 2011, the Debtor's exclusive period to 11 solicit acceptances to such a Plan; 12 3. Providing that such order is without prejudice to the Debtor's right to seek further 13 extensions of the applicable exclusivity periods provided by Section 1121 of the Bankruptcy 14 Code; and 15 4. Granting to the Debtor such other and further relief as is just and proper under the 16 circumstances of this case. 1 7 This Motion is made on the basis of the within points and authorities, the Declaration of 18 Gywn Myers attached hereto, and on such other evidence as the Court elects to consider prior to 19 or at the hearing on this matter. 20 IF YOU DO NOT OPPOSE THE MOTION DESCRIBED ABOVE, YOU NEED 21 TAKE NO FURTHER ACTION. HOWEVER, IF YOU OBJECT TO THE MOTION, 22 PURSUANT TO LOCAL BANKRUPTCY RULE 9013-1(F), YOU MUST FILE AND 23 SERVE A WRITTEN OBJECTION AT LEAST 14 DAYS BEFORE THE HEARING. 24 25 26 27 28 DATED: January 12,2011 WINTHROP COUCHOT PROFESSIONAL CORPORATION By: Is/ Marc J Winthrop Marc J. Winthrop Ka vita Gupta General Insolvency Counsel for the Debtor and Debtor-in-Possession -2- MAINDOCS-1115 G670-v l-C1ystal_ Pl;m _ Exc:usivity _Motion. DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 3 of 16 2 3 4 A. MEMORANDUM OF POINTS AND AUTHORITIES I. STATEMENT OF FACTS The Debtor. 5 The Reverend Dr. Robert H. Schuller and his wife, Arvella, founded the Debtor's 6 predecessor in 1955. At that time, it consisted of a single church, known as Garden Grove 7 Community Church, which held its services in space rented from the Orange Drive-In Theatre. 8 The church moved to its current location in Garden Grove, California in 1961, occupying a new 9 sanctuary designed by architect Philip Johnson. I 0 The Debtor produces The Hour of Power, which is shown throughout the world and is II North America's longest running televised church service. The Debtor's message of"possibility 12 thinking" is also supported through its many facets, including, inter alia: (I) the delivery of 13 messages of hope each Sunday by Pastors Sheila Schuller Coleman and Dante Gebel. Dr. 14 Schuller, who is 84, is the featured speaker once per month; (2) providing meals for the homeless 15 every Monday; (3) conducting weekly youth groups; and (4) hosting a number of weekly self-help 16 programs. The Debtor also operates a school and cemetery on its campus. The Debtor has 17 approximately 250 full-time and part-time employees who support its many facets. 1 8 R. Events Precipitating The Debtor's Financial Difficulties and Efforts to 19 Reorganize. 20 Over the last few years, the Debtor's leadership has gone through several changes as the 21 ministry has endeavored to transition from its founders to the next generation who will carry the 22 mission of the ministry forward. Robert A. Schuller became Senior Pastor in 2006. He ultimately 23 resigned and Dr. Sheila Schuller Coleman became the Senior Pastor in July of 2009. The period 24 of unsettled leadership caused some in the congregation and viewing audience to leave the 25 ministry, resulting in reduced revenue for an organization that exists primarily on donations. 26 However, the greatest impact on the Debtor's revenues came from the severe downturn in the 27 national economy, which has had a drastic impact on donations to the Debtor and to charitable 28 giving in general. Donations were down approximately 24% in 2009 alone. 3 .MAIN DOCS-# 1566 70-vl-Crysta 1_ Plan_ Exclusivity_ MO!ionDOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 4 of 16 Since Dr. Coleman has taken over as Senior Pastor, she has focused her efforts on restoring 2 confidence and enthusiasm in the ministry. Tt is too early to gauge the results of her efforts but 3 early indicators appear to be favorable. Even though the Debtor cut expenses, the decline in 4 donations and other revenue was so severe that the benefits of these reductions could nul be 5 recognized quickly enough and the Debtor's level of debt, both secured and unsecured, increased. 6 Ultimately, the Debtor decided to address the growing amount of debt by convening a general 7 meeting of creditors under the auspices of Credit Managers Association of California. The meeting 8 was well attended and resulted in a voluntary 90-day moratorium on debt collection activities, 9 which was almost universally observed. Due to the need to have reliable financial information on 10 which to base an out of court repayment plan, the Unofficial Creditors Committee ("Unofficial II Committee") granted the Debtor a conditional 90-day extension of the moratorium. Negotiations 12 were well underway between the Debtor and Unofficial Committee when certain creditors sought 13 and obtained writs of attachment and a number of other lawsuits were filed against the Debtor. 14 Unfortunately, the negotiations between the Debtor and the Unofficial Committee stalled due to 15 concern over the cash flow projections and financial reports. Given these circumstances, the 16 Unofficial Committee decided to allow the moratorium to expire on October 9, 2010 and made a 17 demand for payment. Cumulatively, these circumstances then forced the Debtor to file the present 18 Chapter II proceeding on October 18, 2010 (""Petition Date") in order to obtain a breathing spell 19 within which to address the claims of all creditors on a fair, equitable and uniform basis. 20 C. The Committee. 21 The Office of the United States Trustee ("UST") appointed the Official Committee of 22 Unsecured Creditors ("Committee") pursuant to Section 1102(a)(l) of the Bankruptcy Code on 23 October 27, 20 I 0. The Committee subsequently employed the law firm of Ringstad & Sanders, 24 LLP as its counsel. 25 Ill 26 27 28 -4- MAINDOCS-# 1566 70-v l-Cryslal_ Plan_ Exclusivity __Motion. DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 5 of 16 D. Post-Petition Operation/Progress Towards Reorganization. 2 As of this writing, the Debtor's case was filed almost three months ago. However, due in 3 part to the Debtor's financial condition, the seasonality of revenue, 1 and the complexity of dealing 4 with various internal and external operational issues, this case has still not stabilized to the point 5 that the Debtor has the financial information required to produce a feasible plan. 6 Notwithstanding, since the Petition Date, the Debtor has continued to identifY ways to improve its 7 c<llih flow and to lower its costs. To that end, the Debtor is, inter alia, evaluating its contracts and 8 services, negotiating with landlords to reduce administrative rent pa}ments, and has declined to 9 renew certain contracts that were unprofitable. I 0 The Debtor has also engaged, on a regular basis, with the Committee, UST amlto a lesser 11 extent, its secured creditors to resolve outstanding issues, including cash collateral issues. 12 Specifically, on November 15,2010, the Court granted the Debtor's motion to use cash collateral 13 on a final basis. The Debtor has also provided both the Committee and the UST with all material 14 or relevant information that they have requested. Finally, the Debtor has complied with the 15 obligations imposed upon it by the Bankruptcy Code, this Court's orders and the UST 16 requirements. 17 This case has received extensive coverage in the press, which has primarily focnsed on 18 insider compensation. At present, the Committee and the UST have collectively filed four 19 objections to Notices of Setting/Increasing Insider Compensation (collectively, "Contested 20 Notices"). The Debtor has agreed with the Committee and UST to the appointment of an 21 examiner for the limited purpose of assisting in the resolution of insider compensation issues, 22 including the Contested Notices and any future notices that may be filed. 23 In summary, notwithstanding the complexity of this case and the fact that the Debtor filed 24 its petition only approximately three months ago, the Debtor has made significant progress in its 25 case. The Debtor believes that extending the exclusivity periods from February 17, 2011 and 26 27 28 1 Specifically, the results for the year-end holiday season (which is the most profitable) will not be available until such time as the exclusivity periods expire. -5- MAINDOCS-# 1566 7 0-vl-Crystal -Plan _ E"clusi\ity _Motion DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 6 of 16 April 17, 20 II through and including Y!ay 16, 2011 and July 16, 20 II will enable the Debtor to 2 resolve many of the foregoing issues and to file a confinnable plan of reorganization. 3 II. 4 THIS COURT HAS AUTHORITY TO EXTEND THE EXCLUSIVE 5 PERIODS FOR FILING AND SOLICITING ACCEPT Al'I.Cli:S TO A PLAN 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A. "Cause" Exists to Extend the Exclusivity Periods. Pursuant to Section 1121 (b) of the Bankruptcy Code, a Chapter 11 debtor has the exclusive right to file a plan of reorganization during the first 120 days following the filing date of a Chapter 11 bankruptcy petition and to thereafter solicit acceptances to any plan so filed for a period of an additional 60 days. Section 112l(b) of the Bankruptcy Code provides: Except as otherwise provided in this section, only the debtor may file a plan until after 120 days after the date of the order for relief under this chapter. 11 U.S.C. 112l(b). No other party-in-interest may file a plan of reorganization unless: (i) a trustee has been appointed, (ii) the debtor has not filed a plan within 120 days after the date of the order of relief, or (iii) the debtor has not filed a plan that has been accepted before 180 days after the date of the order for relief by each class of claims or interests that is impaired by the plan. See II U.S.C. 112l(c). However, Bankruptcy Code Section 112l(d) empowers the Court to reduce or extend the 120-day and 180-day periods for "cause." Section 1121 (d) of the Bankruptcy Code provides in peninent part: 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 referred to in this section. II U.S.C. 1121. The Bankruptcy Code does not define "cause" as used in Section 1121 (d) so the decision of whether or not to grant a request to extend or shorten the exclusivity periods lies within the sound discretion ofthe bankruptcy judge. See, e.g, Official Comm. of Unsecured Creditors v. -6- MAINDOCS-# 15 66 70-v 1-Cryslal_ Plan_ Exclusivity_ Motion.DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 7 of 16 Henry Mayo Newhall Mem '/How (In re Henry Mayo Newhall Mem '/Hasp.), 282 B.R. 444, 453 2 (R.A.P. 9th Cir. 2002); In re Adelphia !:nmmc'ns Corp, 352 B.R. 578,590 (Bankr. S.IJ N.Y. 3 2006). The "cause" standard referred to in Section 1121 has been recognized as a general 4 standard that allows the bankruptcy court "maximwn flexibility to suit various types of 5 reorganization proceedings." In rePublic Serv. Co. of New Hampshire, 88 B.R. 521, 534 (Rankr. 6 D.N.H. 1988). 7 The primary consideration for a bankruptcy court in determining whether to modify a 8 debtor's exclusivity is whether "adjustment of exclusivity will facilitate moving the case forward 9 towards a fair and equitable resolution." In re Henry Mayo Newhall Mem 'I Hasp., 282 B.R. at 10 453; see also In re Dow Corning Corp., 208 B.R. 661,670 (Bankr. E.D. Mich. 1997); In re II Adelphia Commc 'ns, 352 B.R. at 590. Further, the legislative history for Section 1121 dictates 12 that granting an extension of exclusivity "should be based on a showing of some promise of 13 probable success." Senate Report No. 95-989, 95th Cong., 2d Sess. 118 (1978); see also In re 14 Landmark Park Plaza Ltd. P'ship, 167 B.R. 752,756 (Bankr. D. Conn. 1994) (requiring "a 15 showing of some promise of probable success"); In re Montgomery Court Apartments ofingham 16 County, Ltd, 126 B.R. 537,539 (Bankr. S.D. Ohio 1991) ("[A] debtor seeking an extension 17 should make a showing 'of some probable success' in formulating a plan."); In re Grossinger 's 18 Assocs., 116 R.R. 34, :lfi (Rankr. S.D.N.Y. 1990) (requiring "probable success in formulating a 19 plan of reorganization"). 20 Other criteria that courts consider in determining if"cause" exists include: (1) the number 21 of extensions that have been requested; (2) whether the case is complicated; (3) the time period 22 the case has been pending, relative to its size and complexity; ( 4) whether the debtor is 23 proceeding in good faith; ( 5) whether the debtor is paying current expenses; ( 6) whether the 24 debtor has shown a reasonable prospect for filing a viable plan; (7) whether the debtor is making 25 satisfactory progress negotiating with key creditors; (8) whether the debtor is seeking an 26 extension of exclusivity to pressure creditors; and (9) whether the debtor is depriving the official 27 committee of unsecured creditors of material or relevant information. See In re Dow Corning, 28 208 B.R. at 661; In re Express One Int'l, Inc., 194 B.R. 98, 100 (Bankr. E.D. Tex. 1996). Courts -7- MAINOOCS-# 1566 70-v 1-Cl)'s:al_ Plan _ Motion.DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 8 of 16 1 have also recognized that the diligence of management and the proper administration of the case 2 are factors supporting an extension of the exclusivity periods. See Tn re United Press in/ 'I, 3 60 B.R. 265 (Bankr. D.D.C. 1986). 4 In tlris case, "cause" exists to grant the Debtor's request for an extension of the 5 exclusivity periods. Such request satisfies the general principles established by the courts as 6 guideposts in ascertaining what constitutes "cause" within the meaning of Section 1121 (d). As 7 set forth above, this is the Debtor's first request for an extension. Further, the Debtor's case was 8 filed only three months ago and has proven to be quite complicated. The Debtor has provided 9 the Committee with all material or relevant information that it has requested and it is not seeking 10 this extension to pressure creditors. In fact, the Debtor has been proceeding in good faith, 11 having worked with the Committee to resolve any outstanding issues, including cash collateral 12 issues. Ultimately, extension of the exclusivity periods as requested herein will significantly 13 facilitate the proposal of a confirmable Plan- a truly fair and equitable resolution to this case. 14 B. The Debtor Has Properly Administered Its Case. 15 Courts have recognized that the diligence of management and the proper administration of 16 the case are yet additional factors in supporting an extension of the exclusivity periods. See, In re 17 United Press Int'l, 60 B.R. at 265, In re Trainer's, Inc., 17 B.R. 246, 247 (Bankr. E.D. Pa. 1982). 18 Since the Petition Date, the Debtor has properly administered its Chapter II case. The 19 Debtor has complied with the obligations imposed upon it by the Bankruptcy Code and this 20 Court's orders. Also, the Debtor has filed the necessary schedules and reports required by the 21 UST. The Debtor's administration of its case supports granting the relief requested herein. 22 III. 23 CONCLUSION 24 Based upon the foregoing, the Debtor respectfully requests that the Court enter an order 25 granting the following relief: 26 1. Extending, through and including May 16,2011, the Debtor's exclusive period to 27 file a Plan; 28 -8- MAINDOCS-111566 70-v 1-Crystal_ Plan_ Exclus:vity _Motion .DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 9 of 16 2. Extending, through and including July 16, 2011, the Debtor's exclusive period to 2 solicit acceptances to such a Plan; 3 3. Providing that such Order is without prejudice to the Debtor's right to seek further 4 extensions of the applicable exclusivity periods provided by Section 1121 of the Bankruptcy 5 Code; and 6 4. Granting to the Debtor such other and further relief as is just and proper under the 7 circumstances of this case. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DATED: January 12,2011 WINTHROP COUCHOT PROFESSIONAL CORPORATION By: Is/ Marc J Winthrop Marc J. Winthrop Kavita Gupta General Insolvency Counsel for the Debtor and Debtor-in-Possession -9- MAINDOCS-# 1566 70-v I-Crys1al_ Plan_ Ex:clusivily _ Motion.DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 10 of 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 DECLARATION OF GWYN MYERS I, Gwyn Myers, declare as follows: 1. I am the Chief Restructuring Officer of Crystal Cathedral Ministries, a California nonprofit corporation, the debtor and debtor-in-possession herein ("Debtor"), 1 and am responsible for overseeing the day-to-day operations and financial performance of the Debtor. Consequently, T have been involved in supervising all aspects of the Debtor's financial and business affairs since April2010. 2. The facts stated herein are within my personal knowledge, and if called upon to testify to such facts I could and would testify competently thereto. 3. The Reverend Dr. Robert H. Schuller and his wife, Arvella, founded the Debtor's predecessor in 1955. At that time, it consisted of a single church, known as Garden Grove Community Church, which held its services in space rented from the Orange Drive-In Theatre. The church moved to its current location in Garden Grove, California in 1961, occupying a new sanctuary designed by architect Philip Johnson. 4. The Debtor produces The Hour of Power, which is shown throughout the world and is North America's longest running televised church service. The Debtor's message of "possibility thinking" is also supported through its many facets, including, inter alia: (I) the delivery of messages of hope each Sunday hy Pastors Sheila Schuller Coleman and Dante Gebel. Dr. Schuller, who is 84, is the featured speaker once per month; (2) providing meals for the homeless every Monday; (3) conducting weekly youth groups; and (4) hosting a number of weekly self-help programs. The Debtor also operates a school and cemetery on its campus. The Debtor has approximately 250 full-time and part-time employees who support its many facets. 5. Over the last few years, the Debtor's leadership has gone through several changes 24 as the ministry has endeavored to transition from its founders to the next generation who will 25 carry the mission of the ministry forward. Robert A. Schuller became Senior Pastor in 2006. He 26 ultimately resigned and Dr. Sheila Schuller Coleman became the Senior Pastor in July of 2009. 27 The period of unsettled leadership caused some in the congregation and viewing audience to leave 28 1 Capitalized terms used herein but not othenvise defined shall have the meaning set forth in the Motion. -10- MAINDOCS-# 156670-v 1-Crysml_ Plan_ Exc:usivity _Motion. DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 11 of 16 the ministry, resulting in reduced revenue for an organization that exists primarily on donations. 2 However, the greatest impact on the Debtor's revenues came from the severe downturn in the 3 national economy, which has had a drastic impact on donations to the Debtor and to charitable 4 giving in general. Donations were down approximately 24% in 2009 alone. 5 6. Since Dr. Coleman has taken over as Senior Pastor, she has focused her efforts on 6 restoring confidence and enthusiasm in the ministry. It is too early to gauge the results of her 7 efforts but early indicators appear to be favorable. Even though the Debtor cut expenses, the 8 decline in donations and other revenue was so severe that the benefits of these reductions could 9 not be recognized quickly enough and the Debtor's level of debt, both secured and unsecured, 10 increased. Ultimately, the Debtor decided to address the growing amount of debt by convening a II general meeting of creditors under the auspices of Credit Managers Association of California. The 12 meeting was well attended and resulted in a voluntary 90-day moratorium on debt collection 13 activities, which was almost universally observed. Due to the need to have reliable financial 14 information on which to base an out of court repayment plan, the Cnofficial Creditors Committee 15 ("Unoftlcial Committee") granted the Debtor a conditional90-day extension of the moratorium. 16 Negotiations were well underway between the Debtor and Unofficial Committee when certain 17 creditors sought and obtained writs of attachment and a number of other lawsuits were filed 18 against the Debtor. Unfortunately, the negotiations between the Debtor and the Unoftlcial 19 Committee stalled due to concern over the cash flow projections and financial reports. Given 20 these circwnstances, the Unofficial Committee decided to allow the moratorium to expire on 21 October 9, 2010 and made a demand for payment. Cumulatively, these circumstances then forced 22 the Debtor to file the present Chapter II proceeding on October 18, 2010 ("Petition Date") in 23 order to obtain a breathing spell within which to address the claims of all creditors on a fair, 24 equitable and uniform basis. 25 7. The Office of the United States Trustee ("UST") appointed the Official Committee 26 of Unsecured Creditors ("Committee") pursuant to Section 11 02(a)(l) of the Bankruptcy Code on 27 October 27,2010. The Committee subsequently employed the law firm of Ringstad & Sanders, 28 LLP as its counsel. -II- MA TNOOCS-# 15 6670-v !-Crystal_ Plan_ Exclusivity_ Motion. DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 12 of 16 8. As of this writing, the Debtor's case was filed almost three months ago. However. 2 due in part, to the Debtor's financial condition, the seasonality of revenue, 1 and the complexity of 3 dealing with various internal and external operational issues, this case has still not stabilized to the 4 point that the Debtor has the financial infom1ation required to produce a feasible plan. 5 Notwithstanding, since the Petition Date, the Debtor has continued to identifY ways to improve its 6 cash flow and to lower its costs. To that end, the Debtor is, inter alia, evaluating its contracts and 7 services, negotiating with landlords to reduce administrative rent payments, and has declined to 8 renew certain contracts that were unprofitable. 9 9. The Debtor has also engaged, on a regular basis, with the Committee, UST and to a 10 lesser extent, its secured creditors to resolve outstanding issues, including cash collateral issues. 11 Specifically, on November 15, 2010, the Court granted the Debtor's motion to use cash collateral 12 on a tina! basis. "!be Debtor has also provided both the Committee and the UST with all material 13 or relevant information that they have requested. Finally, the Debtor has complied with the 14 obligations imposed upon it by the Bankruptcy Code, this Court's orders and the UST 15 requirements. 16 10. This case has received extensive coverage in the press, which has primarily focused 17 on insider compensation. At present, the Committee and the UST have collectively filed four 18 objections to Notices of Setting/Increasing Insider Compensation (collectively, "Contested 19 Notices"). The Debtor has agreed with the Committee and UST to the appointment of an 20 examiner for the limited purpose of assisting in the resolution of insider compensation iss Lies, 21 including the Contested Notices and any future notices that may be filed. 22 II. In summary, notwithstanding the complexity of this case and the fact that the 23 Debtor filed its petition only approximately three months ago, the Debtor has made significant 24 progress in its case. This is the Debtor's first request for an extension. I believe that extending 25 the exclusivity periods from February 17,2011 and April17, 2011 through and including May 16, 26 27 28 1 Specifically, the results for the year-end holiday season (which is the most profitable) will not be available until such time as the exclusivity periods expire. -12- MAJNDOCS-# 156670-v l..Ctystal_ Plan_ Ly_ Motion.DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 13 of 16 01/11/2011 TU3 20! 3.3 FAX 71H7143l5 id!OOl/001 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 II and July 16, 2011 will enable the Debtor to resolve many of the foregoing issues and to file a confirmable plan of reorganization. I declare under penalty of perjury under the laws of the Uncted States of America and the State of California that the foregoing is true and correct. Executed thi> i.L. of January 2011, at Garden Grove, California. -13- )l.iAINDOCS-h'l 56<>10-v 1 _ EKclusivity_ Mol ion. DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 14 of 16 2 3 4 5 6 7 8 9 10 II 12 13 14 NOTE: When using this form to indicate service of a proposed order, DO NOT list any person or entity in Category 1. Proposed orders do not generate an NEF because only orders that have been entered are placed on the CM/ECF docket PROOF OF SERVICE OF DOCUMENT I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 660 Newport Center Drive, 4'" Fl., Newport Beach, CA 92660. A true ond correct copy of the foregoing document described as: DEBTOR'S :'<OTICE OF MOTION AND MOTION FOR ORDER EXTENDING THE flFATOR 'S PI AN EXCLUSIVITY PERIODS; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION IN SUPPORT THEREOF will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner indicated below: I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING !"NEF"l- Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s) ("LBR"), the foregoing document will be served by the court via NEF and hyperlink to the document. On January 12. 2011, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at the email address(es) indicated below: Service information continued on attached page II. SERVED BY U.S. MAIL OR OVERNIGHT MAIL( indicate method for each person or entity served): On January 12, 2011, I served the following person(s) and/or entity(ies) at the last known address(es) in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States Mail, first class, postage prepaid, and/or with an overnight mail service addressed as follows. Listing the judge here constitutes a declaration that mailing to the JUdge will be completed no later than 24 hours after the document is filed. 15 Service information continued on attached page 16 Ill. SERVED BY PERSONAL DELIVERY, FACSIMILE TRANSMISSION OR EMAIL flnd1cate method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on , 17 2011 I served the following person(s) and/or entity(ies) by personal delivery, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here 18 constitutes a declaration that personal delivery on the judge will be completed no later than 24 hours after the document is filed. 19 20 D Service information continued on attached page 21 22 I declare under penalty of perjury under the laws of the United States of and correct. oregoing is true 23 January 12, 2011 Susan Connor Date Type Name 24 25 26 27 28 -14- M A NDOCS-# 1566 70-v !-Crystal_ Pla11_ Exclusi vitL Motion.DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 15 of 16 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NEFSERVICE Frank Cadigan frank.cadigan@usdoj.gov Mark R Campbell mcampbell@markcampbelllaw.com Bernard R Given bgiven@frandzel.com, cfiling@frandzel.com;shom@frandzel.com;bgiven@frandzel.com Marshall F Goldberg mgoldberg@glassgoldberg.com Kavita Gupta kgupta@winthropcouchot.com Edward S Kim ekim@hemar-rousso.com Sleven B Lever sblever@leverlaw.com MichaelS Mitchell mike@demarcomitchell.com John D Monte montelaw@eatihlink.net SueY Park spark@callahan-law.com Todd C. Ringstad becky@ringstadlaw.com Chri,lupher 0 Rivas crivas@reedsmith.com Nanette D Sanders becky@ringstadlaw.com Ramesh Singh c1aims@recoverycorp.com Edward J Tredinnick etredinnick@greeneradovsky.com United States Trustee (SA) ustpregionl6.sa.ecf@usdoj.gov Andrew F Whalnall awhatnall@daca4.com Marc J Winthrop mwinthrop@winthropcouchot.com, pj@winthropcouchot.com Arnold H Wuhrman Wuhrman@serenitylls.com Crystal Cathedral Ministries AUn: Gwyn Myers. CRO 13280 Chapman Ave. Garden Grove_ CA 9 2 8 4 0 ~ 4 4 1 4 NJ-:F Proposed Committee Counsel Nanette D. Sanders. Esq. Ringstad & Sanders LLP 2030 Main Strcel. Suik 1200 Irvine, C/\ 92614 r&M Bank of Long Beach c/o Lawrence C. Meyerson, Esq 578 Washington Blvd .. #867 Morino Del Rcy. CA 90292 Gipson Hoffman & Pancione Attn: Robert E. Gipson, Esq. I')() I I\ venue of the Stars #II 00 Los Angeles, CA 90067-6002 SERVICE VIA FIRST CLASS MAIL (Unless NEF indicated) 'IEP United Stales Trustee's Office Alln: Frank Cadigan, Esq. 411 West fourth Sl., #9041 Santa Ana, CA 9270 t Credit Managers Association Attn: Charles Klaus 40 Ea<>l Verdugo Ave. Burbank, CA 91502 NEFJ0/21/10 Dr. Robert H. Schuller c/o Mark R. Campbell, Esq. Mark Campbell Law 300 S. Harbor Blvd., #700 Anaheim. CA 92805 -15- CCM SpecialNoticc, Secured LimitNioticeOrderEntd I0/2lll0 Document No. 153!J50 F&M Bank of Long Beach c/o Michael Leight, Esq. 6700 Pacific Coast llwy, if-237 Long Beach, CA 90803 Judy A. <.)uan, Esq. Gardner & Quan Inc. 5000 Birch St., #4400 Newport Beach. CA 9660 NEF 10127110 PNCEF, LLC. c/o Marshall P. Goldberg, Esq. Glass & Goldberg 21700 Oxnard St., #430 Woodland II ills, CA 91367-3665 MAI\I"DOCS-#1%670-vl-Crystal Plan Exclusivih_Motion_DOC Case 8:10-bk-24771-RK Doc 127 Filed 01/12/11 Entered 01/12/11 13:08:49 Desc Main Document Page 16 of 16 2 3 4 5 6 7 8 9 10 1l 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I employ. Inc. c/o Callahan & Blaine. APLC Stephen F._ Ria me, Esq Sue Y. Park, Esq. 3 HuLton Centre Dr., 9th Fl. Santa Ana. C'A 92707 NEF 11/1/10 NEF 11/11/10 Prandzel, Robins Bloom & CsatG, LC Bernard R. Given. 11 6500 Wilshire Blvd., 1 i 11 Pl. Los Angeles, CJ\ lJ004S 11/10/10 CrLMamw.l Christina Wilcox: 2480 fairview Way Costa Mesa, CA 92626 RSN11/16/10 Morgan Stanley Bank, NA c/o Reed Smith LLP Christopher 0. Rivas. Esq. 355 S. Grand Ave., #2900 l.os Angeles, CA 90071-15 J 4 l\Ef 12/6/2010 Nlif 1219/10 Steven B. Lever, Esq. Catellus Pinancc 1. LLC Attn: Managing Member 201 Mission St., #340 San Francisco. CA 94105 EdwardS. Kim, Esq. Hemar, Rousso & lleald, LLP Catellus Finance I, LLC Attn: Ass;ct Management 125tll E. Imperial Highway, #550 Norwalk, CA 90650 -16- NEF 11/10/10 Edward J. Tredinnick, Esq. Greene Radovsky Maloney Shmc & llennigh LLP Pour Embarcadero Center, #400 San Francisco, CA 94111 RSN 11/16/10 Morgan Stanley Hank, NA c/o Reed Smith LLP Mark D. Silverschotz, Esq. 599 Lexington Ave. New York, NY 10022 1/6/11 RSN Marilyn M. Pcoples-Hugghins c/o DcMarco-Mitchell, PLLC 1255 West 15 1 h St., 481 0 Plano, TX 75075 MAl NDOCS-111 5 66 70-v 1-Crystnl_ Plan_ Exclusivity_ Motion.DOC