No Rust Rebar, Inc
Green Tech Development, LLC has asked the Court to either remove the principal of the Debtor or convert this case from a Chapter 11 to a Chapter 7.1 The Court held a four-day evidentiary hearing on these matters. For the reasons that follow, the Court finds cause to convert the case or remove No Rust as the debtor in possession, and that conversion is in the best interest of the estate and its creditors.
In the 1980s, while operating a boat manufacturing and design business, Don Smith came into the possession of a significant amount of basalt fibers. Smith became fascinated with the material and believed that he could use it to create a replacement for traditional structural reinforcement products, such as rebar, with the advantage that basalt does not rust. However, Smith never patented the process and chose to maintain it in his own head because he was worried that he did not have the means to defend a patent. When the idea of using basalt fibers as structural reinforcement became less financially viable due to the crash of the housing market in the mid 2000s, Smith shifted his focus to the energy sector and founded Raw Energy Materials, Inc. (“REM”), which used basalt fibers to create products for the wind industry.2
REM struggled because it was unable to manufacture basalt fibers itself and its product was large, expensive, and time consuming to produce. Smith, therefore, turned his interest back to manufacturing and selling structural reinforcement products, particularly rebar, made from basalt fibers. At a Christmas party in 2014, Smith met Robert Bryan, who was fascinated by Smith’s idea. In January 2015, following a $1.2 million investment from Bryan, No Rust Rebar, Inc. (“No Rust”) was born. Though Bryan put no specific restrictions on Smith’s use of the funds, he assumed they would be used exclusively for the benefit of No Rust and that the
No Rust initially needed to secure a manufacturing facility. Bryan suggested that No Rust buy a $3 million property he owned in Georgia. Smith declined. Instead, Smith was interested in a foreclosed industrial facility in Pompano Beach, Florida that contained office space, meeting rooms, and an industrial facility, but required significant repairs and maintenance (the “Property”). Bryan suggested he could purchase the Property and No Rust could lease it from him. Again, Smith declined. In July 2015, against the wishes of Bryan, No Rust contracted to purchase the Property for $450,000 and paid a non-refundable $50,000 deposit that allowed it to occupy the premises and begin maintenance and repairs immediately. Bryan, angry that he had been seemingly squeezed out of the deal for the Property, refused to provide No Rust with any further funding. Without additional investment from Bryan, No Rust lacked the funds to close and risked losing both the Property and its $50,000 deposit.4
Desperate for a solution, Smith turned to a friend, Joan Saperstein, for help. Saperstein created a new entity, Green Tech Development, LLC (“Green Tech”) to which No Rust agreed to assign its right to purchase the Property. No Rust contends that consideration for the assignment included an option to purchase the Property
No Rust needed permits and a business license before it could begin manufacturing operations on the Property. Though No Rust filled out the applications, it needed Green Tech, as the owner of the Property, to sign them. For reasons that remain unclear, Green Tech refused. According to Smith, Green Tech’s refusal was part of a concerted effort by associates of Green Tech to extort him into taking out a $10 million loan.6
In May 2016, No Rust executed, but never recorded, a $400,000 mechanics lien against the Property in favor of another company Smith had recently created, Raw Materials Corp. (“RMC”). RMC was created by Smith in September 2015 to provide fiber and resin packages to his entities and also operated out of the Property. When pressed about why RMC received the mechanics lien, Smith acknowledged it was “protection” for his entities to make the Property “less enticing” to Green Tech. Shortly thereafter, Smith listed “No Rust Rebar, Inc.” both as a fictitious name of RMC and as a d/b/a on RMC’s bank account. Smith testified he did this so he could
In November 2016, Smith sought to exercise No Rust’s purported option by filing a Notice of Election to Purchase Real Property, but Green Tech refused to sell. Less than a month later, No Rust sued Green Tech for specific performance; Green Tech countered seeking No Rust’s ejectment and damages for civil trespass (the “Property Dispute”).8
In December 2016, Smith founded Raw, LLC (“Raw”), which served as a holding company. Then, in January 2017, Smith reinstated an older entity, Global Energy Sciences, LLC (“GES”), to hold his intellectual property, including the trademark and brand licenses associated with his basalt rebar product. However, it appears No Rust paid the bills for at least some of GES’s intellectual property and, at least once, transferred a patent to GES for no consideration. No Rust is obligated to pay GES $200/day ($73,000 annually) for a license to produce basalt rebar, though Smith testified that payment has not been required recently given No Rust’s financial situation.9
In February 2017, Smith used various entities to complete a deal with PayMeOn, Inc. (“PayMeOn”), a publicly traded company interested in the sale of
In 2019, the electric company cut the Property’s power due to a split of the power source from the contiguous property; power has not been restored but a generator has provided some power. Since then, No Rust and the other entities operating from the Property have been severely limited in their ability to conduct any business at all.12 Given that the Property is presently unusable for manufacturing and No Rust’s rights to it were in dispute, No Rust could have chosen to lease another Property or take some other action to ramp up its prospective core business. However,
In September 2020, RMC registered “Raw, LLC” as a fictitious name. No explanation has been provided for this action. On March 5, 2021, No Rust registered “Raw, LLC” as a fictitious name. No explanation has been provided for this action either.14
On March 5, 2021, No Rust filed a voluntary bankruptcy petition under Subchapter V of Chapter 11 of the Bankruptcy Code.15 There are irregularities in No Rust’s Schedules, including:16
- RMC’s checking account is not listed in the Schedules even though “No Rust Rebar, Inc.” is listed as a d/b/a on the account and the account was open on the Petition Date. According to Smith, the failure to include the account was not a mistake because, despite being listed as a d/b/a on the account, No Rust has no interest in the account.17
- The 2020 tax returns provide that No Rust is due nearly $492,000 from RMC, but No Rust did not list that accounts receivable as an asset in the Schedules. When pressed, Smith was unable to provide a sufficient explanation for what the debt due to No Rust is for or why it was not included in the Schedules but did acknowledge it should have been.18
- The 2020 tax returns showed that No Rust had no inventory, but No Rust scheduled some inventory on the Schedules. Smith
explained that the inventory was not listed based on any consideration of corporate documentation but was rather determined by walking around the building (which holds other corporate entities’ assets) and identifying certain pieces of inventory to include.19 - No Rust scheduled a $129,250 debt owed to Smith’s sister resulting from a loan she gave to Smith personally in 2005, roughly a decade before No Rust was incorporated. Smith states he agreed to carry the debt into No Rust because No Rust “is the entity that came to fruition out of [her] original seed monies.”20
Shortly after the Petition Date, on March 29, 2021, No Rust removed several actions from state court to this Court, including the Property Dispute.21 The Court denied cross motions for summary judgment in the Property Dispute and the matter remains pending.22
There are only six total claims in this case. Two are related to the Property Dispute: (1) Green Tech asserts a $1.95 million claim arising from damages related to the Property Dispute,23 and (2) Pet Star Corp. asserts a $1.05 million conditional claim arising from its mortgage on the Property.24 No Rust objects to both claims as contingent, unliquidated, and disputed.25 The other claims in this case include, (1) a
On April 14, 2021, as part of a litigation settlement agreement related to the PayMeOn Deal, Raw agreed to sell its 10 million shares in PayMeOn to Basanite, Inc. for $1.2 million.29 The deal was not disclosed, and no Court approval was sought for the transaction. Because Raw does not have its own bank account, the funds were remitted to Smith. Smith contends that, even though Raw is No Rust’s fictitious name, the settlement was unrelated to No Rust and there was not a need to disclose the settlement or seek court approval for it.30
On June 3, 2021, No Rust submitted its Subchapter V Plan. In short, the Plan acknowledges that confirmation depends entirely on No Rust’s success in the Property Dispute and states that, if No Rust loses or is removed as the debtor in possession, the case will automatically convert to a Chapter 7. If No Rust wins the case, however, No Rust states that Smith will personally contribute funds to allow No Rust to acquire the Property and, once No Rust’s business ramps up, it will be
On June 7, 2021, the Court directed the Subchapter V Trustee to investigate No Rust and file a report in the bankruptcy case addressing whether Smith had breached any duties or fiduciary obligations and whether No Rust should be removed as debtor in possession. In the Report, the Subchapter V Trustee concluded that Smith did not appear to have breached his duties and No Rust should not be removed.33
Since the report, however, additional information has become available regarding Smith’s entities—which he refers to as the “Family”—and the commingling of their assets.34 Smith routinely transferred money amongst the Family at his sole
On August 5, 2021, Green Tech filed its Motion for Removal of Debtor as Debtor in Possession and, on November 21, 2021, filed its related Motion to Convert Chapter 11 Case to Chapter 7.36 No Rust opposes the motions, arguing Green Tech lacks standing and has failed to satisfy the standards for removal or conversion.37 The Court set an evidentiary hearing38 and heard the Motion for Removal, the Motion to Convert, and the Motion for Sanctions on December 8, 2021, December 21, 2021, January 4, 2022, and January 10, 2022.39 No Rust, Green Tech, and the Subchapter V Trustee submitted final briefs following the hearings.40
Presently, No Rust is not operating.44
Jurisdiction & Venue
The Court’s subject matter jurisdiction is derived from
Conclusions of Law
Chapter 11 debtors operate as debtors in possession and, in general, “have all the rights . . . and powers, and shall perform all the functions and duties . . . of a trustee serving in a case under this chapter.”
I. Standing
A party must be a “party in interest” to have standing to request conversion of a Chapter 11 case or removal of the debtor as debtor in possession. See
Green Tech holds title to the Property that No Rust currently possesses, asserts an interest in, and has declared to be the lynchpin of its entire bankruptcy case. In fact, No Rust has declared in its Plan and elsewhere that, if it loses the Property Dispute, it cannot reorganize and will simply convert the case. The Property Dispute consists of two lawsuits, both of which have been removed to this Court. The
No Rust contends that Green Tech does not have standing because Green Tech’s relationship with the bankruptcy case arises from the Property Dispute, and if No Rust prevails, that relationship will cease. In support, No Rust relies on E.S. Bankest, where the bankruptcy court concluded that a movant lacked standing to seek conversion where its sole relationship to the case was as a defendant in an adversary proceeding and the movant was only seeking conversion as a “litigation tactic” to delay or hinder prosecution of the adversary proceeding. See E.S. Bankest, 321 B.R. at 593, 596–99. No Rust argues:
By displacing [No Rust] from management of this case, Green Tech sweeps aside its long-time adversary in litigation matters collectively pending for over a decade. And at what cost to the actual, undisputed, allowed claimants in this case? [No Rust] has filed a Plan in which it: waives discharge; pledges full payment to all non-insider creditors; provides for an immediate installment payment to non-insider unsecured creditors; requires Mr. Smith to infuse significant capital; prohibits management from taking a salary until all creditors are paid in full; leaves the Sub V trustee in control of all earnings and future income; and provides for conversion of the case to Chapter 7 if [No Rust] does not prevail in the Specific Performance Suit, or if Mr. Smith loses control over management of this case.
. . . If Green Tech loses the Specific Performance Suit, it will have no claim in this case.
If Green Tech prevails in the Specific Performance Suit, it may have a claim for [No Rust’s] occupancy of the Property, but Green Tech will also have possession of all of [No Rust’s] tangible assets, as well as the assets of non-debtor affiliates, and unaffiliated entities. All that would remain for unsecured creditors is awaiting the outcome of an investigation into the alleged recoveries through litigation by a trustee.46
No Rust’s argument, however, seemingly complicates what is ultimately a relatively simple issue: whether Green Tech clearly has a sufficient interest in who controls the property of the estate “to require representation.” It does.
Green Tech filed a proof of claim. Generally, “[o]ne who has filed a proof of claim is considered a party in interest unless the proof of claim is withdrawn or disallowed.” In re Xenon Anesthesia of Tex., P.L.L.C., 698 F. App’x 793, 794 (5th Cir. 2017). Though No Rust objects to Green Tech’s proof of claim, it has neither been withdrawn nor disallowed. By contrast, the movant in E.S. Bankest never filed a proof of claim and asserted no interest in property of the estate. See E.S. Bankest, 321 B.R. at 596–97. No Rust has not provided, nor can the Court find, any case law concluding that a debtor’s mere objection to a proof of claim eliminates the claimant’s standing; the Court sees no support for such a conclusion here. See, e.g., In re Marshall, 298 B.R. 670 (Bankr. C.D. Cal. 2003) (explaining that “[a] scheduled creditor who has failed to file a proof of claim remains a ‘party in interest’ with standing” under
In addition, even if Green Tech loses the Property Dispute, it still has a claim because No Rust must then perform under the option. As such, regardless of whether No Rust succeeds in its objection to Green Tech’s claim and prevails in the Property Dispute, Green Tech retains a sufficient financial stake in the outcome of these proceedings. See SFD @ Hollywood, LLC, 411 B.R. at 455; E.S. Bankest, 321 B.R. at 595.
Moreover, the basis for Green Tech’s request for removal or conversion is based on Smith’s and No Rust’s alleged fraud, dishonesty, conflicts of interests, incompetence, and gross mismanagement. The Court is unaware of any case law which suggests a debtor can prevent a creditor who seeks to share in the assets of a bankruptcy estate from seeking to protect those assets where it believes some improper action by the debtor may threaten them. To the contrary, such a
II. Cause for Conversion or Removal
Conversion of a Chapter 11 case and removal of a debtor as debtor in possession may only be “for cause.”47 See
A. Smith commingled No Rust’s assets with Smith’s and the Family’s assets in a manner that supports both conversion and removal.
Though Smith sought to portray the Family as a group of related, but separate and distinct entities that operated independently, the evidence does not support his assertion. To the contrary, the Family appears to have been a group of commingled entities whose responsibilities, assets, and liabilities were constantly shuffled to fit Smith’s needs or whims. This commingling resulted from incompetence or gross mismanagement of No Rust’s affairs at best, and fraud or dishonesty at worst, but most damningly created an incurable conflict between the interests of Smith and those of the estate. Accordingly, conversion or removal of No Rust as debtor in possession is required.
Smith’s bookkeeper served as the bookkeeper for the entire Family and Smith would simply rely on her and other financial professionals, such as his accountant, to
This failure to maintain separate books and records amongst the various entities ultimately caused the commingling of many assets. This was perhaps best illustrated by Smith’s testimony regarding how he identified the assets to include in the Schedules. According to Smith, he simply walked around the Property, which houses not just the Family but other entities not owned by Smith, and just picked assets to include in the Schedules.50 It is, therefore, difficult—if not impossible—to discern with reasonable certainty what assets in the Property actually belong to No Rust.
Smith also commingled No Rust’s assets with the assets of other Family members’ through his unusual and improper practice of listing the formal name of one entity as the d/b/a or fictitious name of another.51 He listed “No Rust Rebar, Inc.” as RMC’s fictitious name and as a d/b/a on its bank account, and “Raw, LLC” as a fictitious name of No Rust and RMC.
Raw‘s postpetition sale of 10 million shares of stock for $1.2 million presents similar issues. Even though No Rust listed “Raw, LLC” as its fictitious name with the State of Florida and on the Petition, No Rust received nothing from the sale. This is concerning. The evidence shows that:
- No Rust and Raw are owned and operated by Smith;
- Both No Rust and Raw were parties to the PayMeOn Deal, which included several assets and interests of No Rust and no assets or interests of Raw;
- The PayMeOn deal provided No Rust with no direct consideration, but provided Raw with 10 million shares of PayMeOn stock;
- Raw has no bank account and its only business has ever been to hold the PayMeOn stock;
- Prepetition, No Rust listed “Raw, LLC” as its fictitious name;
On its Petition, No Rust listed “Raw, LLC” as its fictitious name; - Postpetition, in April 2021, Raw sold the PayMeOn stock for $1.2 million as part of a settlement agreement resolving the litigation stemming from the PayMeOn Deal;
- No Rust received nothing from the sale of the stock or as part of the settlement agreement; and
- The funds from the sale were provided to Smith personally.
In response, No Rust argues there is nothing to see here because the sale of the stock resulted from a litigation settlement involving Raw and that No Rust was uninvolved in the litigation and lacks an interest in the stock or in the proceeds resulting from the stock‘s sale.52 This argument is based purely on Smith‘s conclusory testimony. In short, No Rust‘s argument boils down to Smith‘s request to just trust him and let him keep the money. That is simply insufficient and not credible. The Court, therefore, still has significant concerns regarding whether the settlement constitutes a postpetition sale of undisclosed property of the estate without court approval.
Smith commingled No Rust‘s assets with those of the Family and possibly himself, regularly transferred assets between No Rust and other Family members at his sole discretion and failed to maintain sufficient records showing the nature of those transfers and transactions. Other courts have found similar patterns “of intermingling funds and of expedient transfers, and the absence of proper record keeping” to be sufficient evidence to conclude that the debtor‘s principal lacks sound business judgment and supports removal of the debtor as debtor in possession. See In re Rivermeadows Assoc., Ltd., 185 B.R. 615, 619 (Bankr. D. Wyo. 1995). Certainly, there is more than enough evidence available in the record here to arrive at a similar conclusion.
But this issue goes far beyond Smith‘s poor practices and goes to the heart of whether Smith can effectively and appropriately discharge his duty to the estate and its creditors. At best, Smith‘s unusual business practices constitute prepetition incompetence and gross mismanagement of the affairs of No Rust. See
These circumstances demand an investigation into whether the estate has an interest in any funds in RMC‘s bank account, in the PayMeOn stock (or the proceeds from its sale), or in any other assets of the other Family members. But only a trustee or the debtor in possession would seemingly have the authority to investigate and prosecute these issues. See
B. The Plan justifies conversion.
No Rust is presently not operating. This is, at least in part, Smith‘s choice as he decided it was in No Rust‘s best interest to remain on the Property, which lacks power, instead of finding a new location. This leads the Court to have substantial concern over the prospects of No Rust‘s reorganization and the feasibility of complying with a Subchapter V plan.
Under
A confirmable plan must be feasible and provide “adequate means for the plan‘s implementation.” See
The Court has previously explained precisely what No Rust must accomplish to win the Property Dispute:
No Rust seeks specific performance under the alleged Option. To win a suit for specific performance, “the plaintiff must do more than merely prove his case by a preponderance of the evidence ... he must prove the contract as alleged in his complaint by competent and satisfactory proof which must be clear, definite and certain.” Miller v. Murray, 68 So. 2d 594, 596 (Fla. 1953) (emphasis added); see, e.g., Lupetto, Inc. v. South Bay Dev. Grp., LLC, 302 So. 3d 1061, 1063 (Fla. 3d DCA 2020).
Under Florida‘s Statute of Frauds, certain types of contracts – including contracts for the sale of land, contracts for leases that exceed one year, and contracts that will not be performed within one year – are only enforceable if they are in writing and signed by the party against whom relief is sought.
Fla. Stat. § 725.01 ; see Avery v. Marine Bank & Trust Co., 216 So. 2d 251, 252 (Fla. 2d DCA 1968) (“It is axiomatic that, under the Statute of Frauds, ... a mere oral contract for sale of lands is not enforceable in Florida.“). Here, the parties agree there is no written contract signed by Green Tech providing No Rust with the Option. Normally, that would end the inquiry, but No Rust argues that the facts of this case fall under the “partial performance” exception to the Statute of Frauds. To take a contract out of the Statute of Frauds under the partial performance exception, the party seeking enforcement of the oral contract must establish: (1) that an oral contract for sale was made; (2) payment of all or part of the consideration, whether it be in money or services; (3) possession by the party seeking enforcement; and (4) the making of valuable and permanent improvements upon the land with the consent of the owner, or, in the absence of improvements, the proof of such facts as would make the transaction a fraud upon the purchaser if it were not enforced. Miller, 68 So. 2d at 596.If No Rust establishes the existence of a valid and enforceable oral contract including the Option, it will then have to show that it is entitled to specific performance by proving that it strictly complied with the applicable provisions of the contract and was ready, willing, and able to
perform under the contract at the time it exercised the Option. See, e.g., Shapiro v. Jacobs, 948 So. 2d 880, 882 (Fla. 3d DCA 2007). So, to prevail, No Rust must prove:
- No Rust and Green Tech made an oral contract providing No Rust the option to purchase the Property;
- No Rust provided at least part of the consideration under the contract;
- No Rust possessed the Property;
- No Rust made valuable and permanent improvements upon the land with the consent of Green Tech or, alternatively, facts that would make the transaction a fraud upon No Rust if it were not enforced; and
- No Rust complied with all applicable terms of the contract and was ready, willing, and able to exercise its rights and perform the contract at the time it exercised its rights.
No Rust, 2021 WL 4314221, at *3–4.
This is an undeniably high burden for No Rust to satisfy, and it is certainly far from a given that it will. Of course, the Court believes No Rust may succeed, that is why the Court denied Green Tech‘s request for summary judgment, but that does not mean No Rust‘s success is reasonably likely. No Rust‘s Plan depends on victory in the Property Dispute, but because No Rust‘s chances of prevailing in the Property Dispute are not reasonably likely, the Plan is not feasible and fails to provide adequate means for its implementation.
More fundamentally, however, the Plan lacks any explanation of precisely how No Rust will ramp up, particularly because No Rust has not really conducted much business. No Rust offers no estimate of the amount of capital investment required for it to begin operating, a business plan, projections showing profitability allowing it to
The Court finds that the Plan, as presented, is not feasible, fails to provide adequate means for its implementation, and does not include information that is required in every Subchapter V Plan. As such, the Plan‘s material insufficiency constitutes cause for conversion.
C. The Schedules justify conversion.
The Schedules contains several clear deficiencies and possible areas of concern. The clearest deficiency in the Schedules is No Rust‘s failure to schedule a nearly $492,000 debt owed to it by RMC for which No Rust provides no explanation.55 It is notable that No Rust neglected to account for a debt owed to it by a company owned and controlled by Smith. The failure to include the debt in the Schedules, without explanation, constitutes an unexcused failure to disclose material information in the Schedules. Such a failure, whether willful or reckless, supports conversion. See
D. The Monthly Operating Reports justify conversion.
The Subchapter V Trustee testified and included in her final brief that (1) as of December 21, 2021, No Rust had not provided the Subchapter V Trustee with its 2019 or 2020 tax returns, (2) few documents were made available to the Subchapter V Trustee and the U.S. Trustee, (3) the Subchapter V Trustee is of the opinion that No Rust failed to satisfy its obligation to timely file tax returns and other required government filings, and (4) No Rust provided insufficient monthly operating reports. The Court previously found that the monthly operating reports were insufficient and ordered their amendment to include “all required information.” Despite No Rust‘s timely amendments prior to the evidentiary hearing, the Subchapter V Trustee still testified that she had not been presented with “fulsome monthly operating reports.”57 This constitutes cause for conversion.
Second, the “failure to comply with an order of the court” is cause for conversion.
Despite what may or may not be No Rust‘s best efforts, its failure to maintain adequate books and records has seemingly prevented it from providing all the required information necessary to apprise the creditors, Subchapter V Trustee, U.S. Trustee, and the Court with all the necessary information to understand its financial condition. This inability is cause for conversion under
E. Smith‘s prepetition failure to get a signed and written contract that includes an option to purchase the Property constitutes incompetence or gross mismanagement.
Based on the evidence provided, the Property Dispute can only have arisen in one of two ways. Either (1) Smith is lying that Green Tech granted No Rust an option in consideration for the assignment to purchase the Property, or (2) Smith failed to have the agreement signed in writing. For purposes of this analysis, the Court will assume that No Rust and Smith have been truthful in their version of events and No Rust believes Green Tech orally promised an option to buy the Property from Green Tech.
The failure to document the purported option by a signed, written contract with Green Tech is Smith‘s fault and singlehandedly thwarted No Rust‘s business prospects before they even began. Now, as Smith and No Rust acknowledge, they must win the Property Dispute to have any hope at salvaging No Rust. Though the Court denied summary judgment in favor of both parties in the Property Dispute, No Rust or Smith must meet an extremely high burden to succeed in that case.
III. Conversion is in the best interests of the estate.
The Court finds both that (1) there is sufficient cause to remove No Rust as the debtor in possession or to convert the case to a Chapter 7, and (2) the requirements of
As the Subchapter V Trustee articulated in her final brief, No Rust is an entity that, at best, holds an interest in a single piece of real estate, lacks any real production facility, and has failed to provide a “viable solution” to becoming an operational business.58 The statements of Smith and what little information is provided in the monthly operating reports seemingly support this conclusion. There appears to be no business to reorganize and, consequently, no reason to place the Subchapter V Trustee in control of No Rust‘s assets. If the Court removed No Rust as the debtor in possession, in all likelihood, the Subchapter V Trustee would have to liquidate the assets of the estate and pursue any claims that the trustee might believe
Accordingly, the Court ORDERS:
- The Motion to Convert (Doc. 116) is GRANTED.
- This case is CONVERTED to a Chapter 7 case.
- If applicable, the Debtor shall remit to the clerk of court the $15.00 trustee surcharge fee prescribed by the Judicial Conference of the United States (if not previously paid by the debtor).
- No Rust shall:
- Turnover to the Chapter 7 trustee all records and property of the estate under its custody and control as required by
Fed. R. Bankr. P. 1019(4) ; - Within 30 days of the date of this Order, file an accounting of all receipts and distributions made. A copy of this report must be served on the U.S. Trustee; and
- Within 14 days of the date of this Order, file a schedule of unpaid debts incurred after the commencement of the Chapter 11 case as required by
Fed. R. Bankr. P. 1019(5) and a supplement matrix and certification in the format required by Local Rule 1019-1(B). No Rust or No Rust‘s counsel is required to provide notice to those creditorsunder Local Rule 1019-1(B). Failure to comply may also result in sanctions being imposed by the Court. Debts not listed or noticed will not be discharged. A copy of this schedule shall be served on the Chapter 7 trustee. - Within 14 days of the date of this Order, file the statements and schedules required by
Fed. R. Bankr. P. 1019(1)(A) and1007(c) and in accordance with Local Rule 1019-1(B).
- Turnover to the Chapter 7 trustee all records and property of the estate under its custody and control as required by
- Under Local Rule 2016-1(C)(2), the Debtor‘s attorney, any examiner or trustee appointed by the Court, or any other professional person employed under
11 U.S.C. §§ 327 or1103 shall, within 90 days after the date of the post-conversion meeting, file an application for compensation of outstanding fees and expenses incurred during the Chapter 11 administration including an application justifying retention of any retainer received which has not been approved by a prior award. Any retainers received which are not approved will be subject to turnover to the Chapter 7 trustee. Counsel for No Rust shall notify all such professionals of this deadline by serving them with a copy of this Order. - No Rust shall provide notice to affected parties of the deadline set pursuant to Local Rule 1019-1(J)(1) for filing by a
nongovernmental unit a request for payment of an administrative expense. - Failure of No Rust to comply with the provisions of this Order my result in dismissal of this case without further hearing or notice.
- The Motion to Remove (Doc. 70) is DENIED AS MOOT.
# # #
Copes to Stacy Bressler, Esq., who is directed to serve this Order on all interested parties.