Gregory Jay Lundberg and Constance Louise Lundberg

Motion to Assume Lease or Executory Contract, Motion For Sale of Property Free and Clear of Liens under Section 363

Bankr. W.D.N.Y.April 2, 2020

- 1 - UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NEW YORK _______________________________________ In re: Gregory J. Lundberg and Constance L. Lundberg, Case No. 19-10014 Chapter 12 Case Hon. Carl L. Bucki, USBJ Debtors ________________________________________ NOTICE OF MOTION OF GREGORY J. AND CONSTANCE L. LUNDBERG FOR AN ORDER (I) AUTHORIZING ASSUMPTION OF AN AGREEMENT FOR THE SALE OF REAL PROPERTY; (II) AUTHORIZING THE SALE OF SUCH REAL PROPERTY FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS; (III) ESTABLISHING BID AND SALE PROCEDURES FOR THE SALE OF SUCH REAL PROPERTY; (IV) SCHEDULING A HEARING ON THE APPROVAL OF THE SALE OF SUCH REAL PROPERTY; AND (V) APPROVING THE FORM AND MANNER OF NOTICE OF THE SALE OF SUCH REAL PROPERTY PLEASE TAKE NOTICE that Gregory J. Lundberg and Constance L. Lundberg, as debtors and debtors in possession (the “Debtors”), by and through their counsel, Hodgson Russ, LLP, filed the Motion for entry of an order: (I) authorizing assumption of an agreement for the sale of approximately 70 acres of a part of real property located in the town of East Otto, Cattaraugus County, New York, known as “VL - (0) Safford Road” or Tax Map No. 36.002-1-5.1, including all privileges, rights, easements, and appurtenances thereto (the “Real Property”), free and clear of liens, claims, encumbrances, and interests; (II) authorizing the sale of such Real Property; (III) establishing Bid and Sale Procedures for the sale of such Real Property; (IV) scheduling a hearing on the approval of the sale of such Real Property; and (V) approving the form and manner of notice of the sale of such Real Property, to be used in connection with the proposed sale of the Real Property. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 1 of 46 - 2 - PLEASE TAKE FURTHER NOTICE that a hearing on the Motion will be held April 17, 2020 at 2 p.m., unless otherwise continued by the Debtors, at the United States Bankruptcy Court, Western District of New York, Orleans Courtroom, Fifth Floor, Robert H. Jackson United States Courthouse, 2 Niagara Square, Buffalo, New York 14202, before the Honorable Carl L. Bucki, United States Bankruptcy Judge. PLEASE TAKE FURTHER NOTICE that the Motion is on file with the Clerk of the U.S. Bankruptcy Court for the Western District of New York. Copies may be obtained by contacting Hodgson Russ LLP, The Guaranty Building, 140 Pearl Street, Suite 100, Buffalo, New York, 14202, Telephone No.: (716) 856-4000, (Attn: Michelle Heftka). The Motion may also be examined and inspected by interested parties on the Court’s website (http://www.nysb.uscourts.gov). Please note that a PACER password is needed to access documents on the Court’s website. PLEASE TAKE FURTHER NOTICE that objections (if any) to the Motion shall be in writing, shall set forth the name of the objecting party, the basis for the objection and the specific grounds therefore, must conform to the Bankruptcy Rules and the Local Rules of the Bankruptcy Court for the Western District of New York, are due as soon as practicable in accordance with Rule 9013-1(B) of the Local Rules of Bankruptcy Procedure for the Western District of New York, and must be served upon the following parties: (I) Hodgson Russ LLP, 140 Pearl Street, Suite 100, Buffalo, New York 14202 (Attn: Garry M. Graber, Esq. and James J. Zawodzinski, Jr., Esq.); (II) the Trustee, Morris L. Horwitz, Atty. at Law, P.O. Box 716, Getzville, New York, 14068 (Attn: Morris L. Horwitz); (III) the Office of the United States Trustee, Olympic Towers, 300 Pearl Street, Suite 401, Buffalo, New York, 14202 (Attn: Joseph Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 2 of 46 - 3 - Allen, Esq.); and (IV) the United States Bankruptcy Court, Robert H. Jackson U.S. Courthouse, 2 Niagara Square, Buffalo, New York, 14202 (Attn: Judge Bucki, marked ‘Chambers Copy’). Dated: Buffalo, New York April 2, 2020 By: s/James J. Zawodzinski, Jr. HODGSON RUSS LLP Garry M. Graber, Esq. James J. Zawodzinski, Jr., Esq. 140 Pearl St., Suite 100 Buffalo, New York 14202 Telephone: (716) 856-4000 Facsimile: (716) 849-0349 Attorneys for Gregory J. Lundberg and Constance L. Lundberg 088739.00001 Litigation 15426588v1 Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 3 of 46 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NEW YORK _________________________________________ In re: Gregory J. Lundberg and Constance L. Lundberg, Case No. 19-10014 Chapter 12 Case Hon. Carl L. Bucki, USBJ Debtors. _________________________________________ MOTION OF GREGORY J. AND CONSTANCE L. LUNDBERG FOR AN ORDER (I) AUTHORIZING ASSUMPTION OF AN AGREEMENT FOR THE SALE OF REAL PROPERTY; (II) AUTHORIZING THE SALE OF SUCH REAL PROPERTY FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS; (III) ESTABLISHING BID AND SALE PROCEDURES FOR THE SALE OF SUCH REAL PROPERTY; (IV) SCHEDULING A HEARING ON THE APPROVAL OF THE SALE OF SUCH REAL PROPERTY; AND (V) APPROVING THE FORM AND MANNER OF NOTICE OF THE SALE OF SUCH REAL PROPERTY Gregory J. Lundberg and Constance L. Lundberg (the “Debtors”), pursuant to Bankruptcy Code §§ 363, 365, and 1206 and Bankruptcy Rules 6004 and 6006, moves this Court by this Motion (the “Motion”), by and through their counsel, Hodgson Russ, LLP, for entry of an order: (I) authorizing assumption of an agreement for the sale of approximately 70 acres of a part of real property, as depicted on the schematic annexed hereto as Exhibit A located in the town of East Otto, Cattaraugus County, New York, known as VL – (0) Safford Road on Tax Map No. 36.002-1-5.1, together with all improvements thereupon, including all privileges, rights, easements, and appurtenances thereto (the “Real Property”), free and clear of liens, claims, encumbrances, and interests, with Aaron A. Hertzler and Katieann B. Hertzler, or theirs assignee (collectively “Purchasers”), pursuant to the terms set forth in the Purchase and Sale Contract for Real Property (the “Agreement”), dated February 22, 2020, annexed hereto as Exhibit B; (II) authorizing the sale of such Real Property pursuant to the terms set forth in the Agreement to Purchasers; (III) establishing Bid and Sale Procedures for the sale of such Real Property (the Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 4 of 46 -2- “Bid and Sale Procedures”) annexed hereto as Exhibit C; (IV) scheduling a hearing on the approval of the sale of such Real Property; (V) approving the form and manner of notice of the sale of such Real Property; and (VI) granting other appropriate related relief. SUMMARY OF RELIEF REQUIRED 1. The Debtors entered into the Agreement with the Purchasers for the sale of the Real Property, together with all improvements thereon, including all privileges, rights, easements, and appurtenances thereto. The Debtors respectfully request this Court to authorize the Debtors to assume the Agreement in its entirety and authorize the sale of the Real Property to the Purchasers or any third party that should be the successful Qualified Bidder. The Debtors seek to establish a Bid and Sale Procedures Order. The Debtors believe that a sale of the Real Property to the Purchasers will maximize the value of their estate and will represent the best possible outcome for the above captioned case. BACKGROUND AND JURISDICTION 2. On January 4, 2019 (the “Petition Date”), the Debtors filed a voluntary petition for relief under Chapter 12 of the Bankruptcy Code with the United States Bankruptcy Court for the Western District of New York (the “Court”), commencing the Debtors’ Chapter 12 case (the “Chapter 12 Case”). 3. On January 7, 2019, Morris L. Horwitz was appointed by the United States Trustee, as Trustee for this Chapter 12 Case. No official committees have been appointed or designated as of the filing of this Motion. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 5 of 46 -3- 4. By way of this Motion, the Debtors seek this Court’s approval to enter into the Agreement. It is the Debtors’ intention to facilitate an orderly distribution of proceeds to the bankruptcy estate through the sale and closing of the Real Property. 5. The Agreement purports to convey fee simple title via warranty deed with lien covenant to the Real Property. In exchange, the Purchasers have agreed to pay $84,000.00, less a deposit of $1,000.00, on the tentative closing date of April 30, 2020. 6. Notably, the Agreement provides that portions of the Real Property, as depicted in Exhibit A annexed hereto, are excluded from the sale of the Real Property for the Debtors’ continued occupancy and use, or for additional sales to which the Debtors may engage potential purchasers for. 7. The purpose and goal of any asset sale is to maximize the recovery of value for the benefit of the estate. In re Jon J. Peterson, Inc., 411 B.R. 131, 137 (Bankr. W.D.N.Y. 2009). A “stalking horse” offer will facilitate a realization of that value, by establishing a framework for bidding. Id. Purchasers remain committed to purchasing the Real Property pursuant to the terms set forth in the Agreement. 8. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory and legal predicates for the relief sought herein are §§ 105(a), 363, 365, and 1206 of the Bankruptcy Code and Bankruptcy Rules 2002, 6004, and 6006. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 6 of 46 -4- SALE AND AUCTION PROCEDURES 9. Pursuant to §§ 363, 365, and 1206 of the Bankruptcy Code, and Bankruptcy Rules 2002, 6004, and 6006, the Debtors seek approval of procedures for the submission of bids and the sale of the Real Property. 10. The Debtors propose a hearing to consider approval of the Bid and Sale Procedures Order and a Sale Hearing (the “Hearings”). The Debtors propose the date of the Hearing to consider approval of the Bid and Sale Procedures Order for April 17, 2020 at 2:00 p.m. (the “Bid Hearing”) and a Sale Hearing to be conducted contemporaneous with an Auction, if any, on May 8, 2020 at 10 a.m. The Hearings will give interested parties an opportunity to conclude their due diligence and finalize a purchase offer. 11. The Debtors request that the Court authorize the sale of the Real Property pursuant to the terms in the Agreement. The Agreement contains the Debtors’ preferred transaction terms and transaction structure, but interested bidders may mark-up the Agreement in connection with their bids, subject to review and acceptance of any changes by the Debtors. As discussed, the Debtors reserve the right to modify the terms of the Agreement. 12. The Debtors respectfully request this Court to authorize the Debtors to assume the Agreement in its entirety for purposes of completing the sale process pursuant to Section § 365 of the Bankruptcy Code. The Agreement also contemplates the sale of the Real Property free and clear of liens, claims, encumbrances, and other interests with all such interests to attach to the proceeds of the sale in the order of priority and with the same validity, force, and effect that such interest has against the Real Property. The Agreement contains the following material terms: Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 7 of 46 -5- a. Purchased Asset – unless defined differently in an Agreement submitted by a potential purchaser, the Purchased Asset refers to the Real Property; b. Purchase Price – paid in immediately available funds at closing in an amount of $84,000.00 (or such higher sum as shall constitute the Successful Bid pursuant to the Bidding Procedures), subject to adjustment for Real Property taxes, sewer and water charges and other similar items (“Purchase Price”); c. Excluded Assets – include, without limitation, all cash and accounts receivable; d. Required Cash Deposit – 10% of the Initial Bid against the Purchase Price (defined below); and e. Exclusion of portions of the Real Property, as depicted on Exhibit A annexed hereto. 13. Parties must submit bids in accordance with the procedures described herein or as otherwise approved by the Court. Accordingly, the Debtors request that this Court approve the proposed sale process, including the Bid and Sale Procedures Order. 14. The Debtors believe that the proposed sale process described herein offers the best opportunity for the Debtors to maximize the value of the Real Property for the benefit of its estate. The Debtors submit that implementation of the proposed sale process is in the best interests of the estate herein, and should be approved. PROPOSED NOTICE OF AUCTION AND SALE HEARING 15. Pursuant to Bankruptcy Rule 2002(a) and 9006, the Debtors are required to provide its creditors with 21 days’ notice of the Sale Hearing, such notice must include the date, time, and place of the Sale Hearing, and the deadline for filing any objections to the relief requested in the sale Motion. The Debtors propose that the deadline for objecting to approval of the proposed sale be set for 5:00 p.m., prevailing local time, two (2) business days prior to the date set for the Sale Hearing. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 8 of 46 -6- 16. The Debtors will provide notice of the Motion by first-class mail, postage prepaid upon the following parties: (a) the Office of the U.S. Trustee for the Western District of New York; (b) all other known parties with liens of record on assets of the Debtors as of the Petition Date; (c) all parties that have filed notices of appearance requesting service in the Chapter 12 Case (the “Notice Parties”); and (d) all other parties required to receive notice pursuant to Bankruptcy Rules 2002, 4001, or 9014 or requesting to receive notice prior to the date hereof. The notice shall indicate that the Motion can be obtained without charge from counsel for the Debtors. 17. The notice will include, among other things, the date, time, and place of the Sale Hearing and the deadline for filing objections to the sale and, will therefore, comply with Bankruptcy Rule 2002(c). The Debtors submit that the methods of notice described herein comply fully with Bankruptcy Rule 2002 and constitute good and adequate notice of the proposed sale of the Real Property. RELIEF REQUESTED 18. By this Motion, the Debtors request that the Court grant the following relief: a. Approving the (i) Bid and Sale Procedures Order, including the procedures for submitting Initial Bids, conducting the Sale Hearing and identifying the Prevailing Bid and the Next Highest Bid and (ii) the Proposed Notice of Hearing and Sale Hearing; and b. Following the Sale Hearing, entry of an Order approving the sale of the Real Property in accordance with the proposed sale process and making the following determinations, among others, with respect to such sale or sales: Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 9 of 46 -7- i. that such sale has been agreed upon, and will be made and completed, in good faith, for purposes of the provisions of Sections 363(m) and 365 of the Bankruptcy Code; ii. that such sale shall be made, and the Real Property shall be delivered to the Successful Bidder, free and clear of any and all liens, claims, encumbrances, and interests (other than as specified in the definitive agreement) with any liens, claims, encumbrances, and interests to attach to the sale proceeds in the same manner and priority as existed on the Petition Date; iii. that the party who submitted the Prevailing Bid shall receive good, valid, and marketable title to the Real Property (together with the rights to improvements thereon, including all privileges, rights, easements and appurtenances thereto, including mineral and surface rights included within each Prevailing Bid that is approved by the Court); iv. that the Debtors have the authority at the Closing to assume and assign to the Successful Bidder all associated improvements thereon, including all privileges, rights, easements and appurtenances thereto, including mineral and surface rights designated by the Successful Bidder in the Agreement free and clear of liens, claims, and encumbrances, and to find that the Cure Amounts are in full satisfaction of all amounts due and owing to cure the same; and v. that the fourteen (14) day stay period provided for in Rules 6004(h) and 6006(d) of the Federal Rules of Bankruptcy Procedure shall not be in effect with respect to the Sale Order and the Sale Order shall be effective and enforceable immediately upon its entry. LEGAL ARGUMENTS IN SUPPORT OF REQUESTED RELIEF A. The Proposed Sale of the Real Property is Within the Sound Business Judgment of the Debtors and the Proposed Bid Procedures Are Appropriate and Reasonable 19. Section 363 of the Bankruptcy Code provides that debtors in possession, “after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate....” 11 U.S.C. § 363(b)(1); see also Bankruptcy Rule 6004(b)(1) (“All sales not in the ordinary course of business may be by private sale or by public auction”). Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 10 of 46 -8- 20. The decision to sell assets outside the ordinary course of business is based upon the sound business judgment of the Debtor. See, e.g., In re Chateaugay Corp., 973 F.2d 141 (2d Cir. 1992); Comm. of Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.), 772 F.2d 1063, 1071 (2d Cir. 1983); In re Adelphia Commc’ns Corp., No. 02-41729 (REG) (Bankr. S.D.N.Y. July 31, 2002). See also, Official Comm. of Sub. Bondholders v. Integrated Res., Inc. (In re Integrated Res., Inc.), 147 B.R. 650, 656 (S.D.N.Y. 1992), appeal dismissed, 3 F.3d 49 (2d Cir. 1993), quoting Smith v. Van Gorkom, 488 A.2d 858, 872 (Del. 1985) (“the business judgment rule ‘is a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action was in the best interests of the company,’” which has continued applicability in bankruptcy). 21. Courts generally show great deference to a debtor in possession’s decisions when applying the business judgment standard. See In re Global Crossing, Ltd., 295 B.R. 726, 744 n.58 (Bankr. S.D.N.Y. 2003) (“[T]he Court does not believe that it is appropriate for a bankruptcy court to substitute its own business judgment for that of the [d]ebtors and their advisors, so long as they have satisfied the requirements articulated in the caselaw.”). 22. Once a court is satisfied that there is a sound business justification for the proposed sale, the court must then determine whether: (i) the debtor in possession has provided the interested parties with adequate and reasonable notice, (ii) the sale price is fair and reasonable, and (iii) the purchaser is proceeding in good faith. In re Betty Owens Sch., Inc. 1997 WL 188127 (S.D.N.Y. 1997); accord In re Delaware and Hudson Ry. Co., 124 B.R. 169, 166 (D. Del. 1991); In re Decora Indus., Inc., Case No. 00-4459, 2002 WL 32332749 at *3 (Bankr. D. Del. May 20, 2002). The business judgment standard has been met here. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 11 of 46 -9- 23. The timeline for submitting bids under the proposed Bid and Sale Procedures Order is necessary to obtain the maximum value for the Real Property and to preserve the value of the Real Property under the circumstances. 24. In sum, the sale of the Real Property and the Bid and Sale Procedures Order contemplated herein reflect a sound business purpose, are a valid exercise of the Debtors’ business judgment, and are fair and reasonable. B. The Auction Will Satisfy the Requirements of Sections 363(f) 1206 for a Sale Free and Clear 25. In the interest of attracting the best offers, the sale of the Real Property should be free and clear of any and all liens, claims, encumbrances, and interests in accordance with § 363(f) of the Bankruptcy Code, with such liens, claims, encumbrances, and interests attaching to the proceeds of the sale in accordance with the relative priorities of such liens, claims, encumbrances and interests. Under § 363(f) of the Bankruptcy Code, a debtor in possession may sell property of the estate free and clear of all interests (including liens, claims and encumbrances) if: a. applicable nonbankruptcy law permits the sale of such property free and clear of such interest; b. the entity with the interest consents; c. such interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property; d. such interest is in bona fide dispute; or e. such entity could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of its interest. See 11 U.S.C. § 363(f); see also Precision Indus. v. Qualitech Steel SBQ, LLC, 327 F.3d 537, 545 (7th Cir. 2003). Section 363(f) is drafted in the disjunctive. Satisfaction of any one of the Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 12 of 46 -10- factors set forth in Section 363(f) allows a sale, including the dispositions contemplated herein, and transfer assets of the estate free and clear. 26. With respect to any party asserting a lien, claim, or encumbrance against the Real Property, the Debtors believe that they will be able to satisfy one or more of the conditions set forth in § 363(f). In particular, the Debtors believe that any lienholders will be adequately protected by having their interests, if any, attach to the proceeds of the sale, in the same order of priority and with the same validity, force and effect that such creditor had prior to the sale, subject to any claims and defenses the Debtors and their estate may have with respect thereto. 27. Finally, the Debtors believe that creditors with any interest in the Real Property, including the secured creditors, will consent to a proposed sale free and clear of liens, claims, encumbrances and interests, if applicable. See 11 U.S.C. § 363(f)(2). To the extent such creditors do not consent explicitly or implicitly, the Debtors believe that the sale will nonetheless satisfy one or more of the factors in Section 363(f). 28. Notwithstanding, the proposed sale pursuant to 11 U.S.C. § 1206 can be so ordered by this Court without the consent of the Converting Debtors’ secured creditors (notwithstanding FCE’s continued support). See In re Carter, 1988 WL 1607919, at *1 (Bankr. S.D.Ga. July 14, 1988) (“Section 1206 is set to modify Section 363, so as to permit sales over the objection of a secured creditor.” (emphasis added)); see also In re Brileya, 108 B.R. 444, 447-48 (Bankr. D. Vt. 1989) (“Section 1206 modifies § 363(f) so the debtor can sell assets not necessary to the reorganization without the secured creditor’s consent” . . . and “[s]ection 1206 Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 13 of 46 -11- allows the DIP to sell unnecessary property without the consent of the secured creditor.” (emphasis added)). C. The Successful Bidder at the Auction will be Entitled to the Protections Afforded to Good Faith Purchasers 29. Section 363(m) of the Bankruptcy Code protects a good-faith purchaser’s interest in property purchased from the debtor notwithstanding that the sale conducted under § 363(b) is later reversed or modified on appeal. Specifically, § 363(m) states that: The reversal or modification on appeal of an authorization under [section 363(b)]...does not affect the validity of a sale...to an entity that purchased...such property in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and such sale...were stayed pending appeal. 11 U.S.C. § 363(m). Section 363(m) “fosters the ‘policy of not only affording finality to the judgment of the bankruptcy court, but particularly to give finality to those orders and judgments upon which third parties rely.’” In re Chateaugay Corp., 1993 U.S. Dist. Lexis 6130, at *9 (S.D.N.Y. 1993) (quoting In re Abbotts Dairies of Penn, Inc., 788 F.2d 143 and 147); see also Allstate Ins. Co. v. Hughes, 174 B.R. 884, 888 (S.D.N.Y. 1994) (“Section 363(m)...provides that good faith transfers of property will not be affected by the reversal or modification on appeal of an unstayed order, whether or not the transferee knew the pendency of the appeal.”); In re Stein & Day, Inc., 113 B.R. 157, 162 (Bankr. S.D.N.Y. 1990) (“pursuant to 11 U.S.C. § 363(m). Good faith purchasers are protected from the reversal of a sale on appeal unless there is a stay pending appeal”). 30. The selection of the successful bidder will be the product of arm’s-length, good-faith negotiations in an anticipated competitive purchasing process through which the Debtors will seek to maximize the value available for the Real Property. The Debtors intend to Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 14 of 46 -12- request at the Sale Hearing a finding that the successful bidder is a good-faith purchaser entitled to the protections of § 363(m) of the Bankruptcy Code. The Debtors believe that providing the successful bidder with such protection will ensure that the maximum price will be received by the Debtors for the Real Property and allow for a prompt closing of the sale. D. The Court Should Waive the Fourteen Day Stay Imposed by Bankruptcy Rules 6004(h) and 6006(b) 31. The Debtor requests that, upon entry of the Sale Order, the Court waive the fourteen-day stay requirements of Bankruptcy Rules 6004(h) and 6006(d). The waiver of the fourteen-day stay imposed by Bankruptcy Rules 6004(h) and 6006(d) is a condition of the Agreement to be entered into with the successful bidder. The Debtors respectfully request that the Court waive the fourteen-day stay requirements contained in Bankruptcy Rules 6004(h) and 6006(d). NOTICE 32. Notice of this Motion has been provided to: (a) the Office of the U.S. Trustee for the Western District of New York; (b) all other known parties with liens of record on assets of the Debtors as of the Petition Date; (c) all parties that have filed notices of appearance requesting service in the Case (the “Notice Parties”); and (d) all other parties required to receive notice pursuant to Bankruptcy Rules 2002, 4001, or 9014 or requesting to receive notice prior to the date hereof. The notice shall indicate that the Motion can be obtained without charge from counsel for the Debtors. The Debtors submit that no other Notice need be provided. NO PRIOR REQUEST 33. No prior request for the relief sought in this Motion has been made to this or any other court in connection with this Chapter 12 Case. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 15 of 46 -13- WHEREFORE, the Debtors respectfully request that the Court (I) enter an order (a) establishing the Bid and Sale Procedures Order described herein, and (b) approving the form and notice of the sale, and (II) enter an order setting a date for the Sale Hearing approving the sale to a successful bidder, and grant such other and further relief to the Debtors as the Court may deem proper. Dated: Buffalo, New York April 2, 2020 By: s/James J. Zawodzinski, Jr. HODGSON RUSS LLP Garry M. Graber, Esq. James J. Zawodzinski, Jr., Esq. 140 Pearl St., Suite 100 Buffalo, New York 14202 Telephone: (716) 856-4000 Facsimile: (716) 819-4645 Attorneys Gregory J. Lundberg and Constance L. Lundberg Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 16 of 46 Exhibit “A” Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 17 of 46 Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 18 of 46 Exhibit “B” Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 19 of 46 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 20 o f 4 6 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 21 o f 4 6 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 22 o f 4 6 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 23 o f 4 6 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 24 o f 4 6 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 25 o f 4 6 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 26 o f 4 6 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 27 o f 4 6 C as e 1- 19 -1 00 14 -C LB , D oc 4 4, F ile d 04 /0 2/ 20 , E nt er ed 0 4/ 09 /2 0 14 :4 0: 58 , D es cr ip tio n: M ai n D oc um en t , P ag e 28 o f 4 6 Exhibit “C” Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 29 of 46 Schedule 1 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NEW YORK _______________________________________ In re: Gregory J. Lundberg and Constance L. Lundberg, Case No. 19-10014 Chapter 12 Case Hon. Carl L. Bucki, USBJ Debtors ________________________________________ BID AND SALE PROCEDURES FOR THE SALE OF DALE F. BEAVER’S REAL PROPERTY FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS AND NOTICE OF TERMS AND CONDITIONS OF AUCTION AND DATE FOR SALE HEARING OF SUCH REAL PROPERTY TO ALL INTERESTED PARTIES: PLEASE BE ADVISED THAT the above-captioned debtors, Gregory J. Lundberg and Constance L. Lundberg (“Debtors”), are soliciting offers for the purchase of 70 acres of real property being a part of VL – (0) Safford Road, Tax Map No. 36.002-1-5.1, located in the town East Otto, Cattaraugus County, New York (the “Real Property”). PLEASE BE FURTHER ADVISED that the disposition of the Real Property to the highest and best bidder is subject to the approval of the Bankruptcy Court. A hearing to consider such approval will be held on May 8, 2020 at 10:00 a.m. before the Hon. Carl L. Bucki, in the Orleans Courtroom, at the United States Bankruptcy Court, Western District of New York, Fifth Floor, Robert H. Jackson United States Courthouse, 2 Niagara Square, Buffalo, New York 14202 (the “Sale Hearing”). PLEASE BE FURTHER ADVISED that, pursuant to the Court-approved Bid and Sale Procedures described below, the Debtors will conduct an Auction of the Real Property (the Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 30 of 46 Schedule 1 “Auction”) in conjunction with the Sale Hearing, among Qualified Bidders (as such term is defined below), if there should be more than one, at the United States Bankruptcy Court, Western District of New York, Fifth Floor, Robert H. Jackson United States Courthouse, 2 Niagara Square, Buffalo, New York 14202, or any other location this Court deems appropriate. PLEASE BE FURTHER ADVISED that, except as otherwise set forth herein, all inquiries concerning the Bid and Sale Procedures, the Auction, the Sale Hearing, the Real Property or related matters should be made in writing and directed to: Hodgson Russ LLP, The Guaranty Building, 140 Pearl Street, Suite 100, Buffalo, New York, 14202, Telephone No.: (716) 856-4000 (Attn: Garry M. Graber, Esq. and James J. Zawodzinski, Jr. Esq.). PLEASE BE FURTHER ADVISED that, the following Bid and Sale Procedures have been approved by the Court and shall be used in connection with the proposed sale of the Real Property: a. Initial Bid. Any third party that is interested in acquiring any or all the Purchased Asset must submit an “Initial Bid” in conformance with the Bid and Sale Procedures twenty four hours prior to the date for the Sale Hearing as set forth by this Court (the “Bid Deadline”). Any such Initial Bid must adhere to the terms contained with the purchase and sale agreement executed by the Debtors annexed to the Motion as Exhibit B) (the “Agreement”) and incorporated herein by reference: i. Contain a signed Agreement (together with a copy of the signed agreement that is marked to show changes from the form Agreement) with, at a minimum, the following requirements: (i) having substantially identical terms and conditions as the Agreement; (ii) containing terms and conditions no less favorable to the Debtors’ estate than the terms and conditions in the Agreement (provided that no Initial Bid shall provide for the payment to the bidder of any breakup fee, topping fee, expense reimbursement or other similar arrangement); (iii) the Agreement should not be subject to any (1) financing contingency, (2) contingency relating to the completion of unperformed due diligence, (3) contingency related to the approval of the bidder’s board of directors or other internal approvals or consents, (4) material adverse change clause, or (5) any conditions precedent to the bidder’s obligation to Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 31 of 46 Schedule 1 purchase the Real Property other than those in the Agreement; (iv) a written statement by the bidder stating that it agrees to be bound by the terms and conditions of the form of the Agreement and close on the sale immediately after notice of entry of the Court’s order approving a sale; (v) be subject to acceptance by the Debtors solely by its execution of the bid and approval of the bid by the Court; (vii) be accompanied by the deposit described below; and (viii) be received at or prior to the Bid Deadline; ii. Provide for the exclusion of portions of the Real Property as depicted in Exhibit A to the Motion; iii. Include a cashiers’ or certified check payable to the order of Gregory J. Lundberg and Constance L. Lundberg, Debtors in Possession, representing a deposit equal to 10% of the Initial Bid (the “Deposit”) (it being understood that Deposits may also be sent by wire transfer of immediately available funds);1 iv. Include a written guarantee, letter of credit, mortgage commitment, evidence of cash on deposit, or other reasonable evidence of the potential bidder’s ability to close which is acceptable to the Debtors pursuant to which the equity holder(s) of the potential bidder are responsible for such bidder’s obligations in connection with the sale; v. Fully disclose the identity of each entity that will be bidding for the assets or otherwise participating in connection with such bid, and the complete terms of any such participation; vi. To the extent not previously provided to the Debtors, be accompanied by evidence satisfactory to the Debtors in their reasonable discretion that the bidder is willing, authorized, capable and qualified financially, legally and otherwise, of unconditionally performing all obligations under the Agreement (or its equivalent) and within the timeframe contemplated under the Agreement in the event that it submits the Prevailing Bid at the Auction (as defined below); vii. Remain open and irrevocable until thirty (30) days after the entry of an order by the Court approving a definitive agreement providing for the sale of the Real Property; and viii. Be submitted to Gregory J. Lundberg and Constance L. Lundberg by and through counsel to the Debtors, Hodgson Russ, LLP, (Attn: Garry M. Graber, Esq. and James J. Zawodzinski, Jr. Esq.), The 1 If a bidder submits a bid that is selected as the Prevailing Bid (as defined below) and such bidder subsequently defaults or breaches, then the deposit submitted by such bidder shall be deemed forfeited and shall be retained by the Debtors. Deposits of other bidders will be returned to such bidders promptly upon the Court’s entry of an order approving the Prevailing Bid (defined below), except for the deposit of the Next Highest Bidder, which shall be returned to the Next Highest Bidder promptly upon the closing of the sale to the Prevailing Bidder. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 32 of 46 Schedule 1 Guaranty Building, 140 Pearl Street, Suite 100, Buffalo, New York, 14202 (the “Objecting Party”) in each case so as to be received not later than the Bid Deadline. The Debtors may extend the Bid Deadline without further notice and for one or more bidders, but shall not be obligated to do so. The Debtors have been, and will continue, providing due diligence information to potential bidders; provided, however, that the Debtors shall not be obligated to furnish any due diligence information after the Bid Deadline or to any person that the Debtors and Creditors Committee determine is not reasonably likely to be a Qualified Bidder. b. Auction. In the event there is more than one Qualified Bidder, the Debtors intend to conduct an Auction with respect to the sale of the Real Property at the United States Bankruptcy Court, Western District of New York, Fifth Floor, Robert H. Jackson United States Courthouse, 2 Niagara Square, Buffalo, New York 14202, or any other location that this Court deems appropriate (the “Auction”) in conjunction with the Sale Hearing. Based upon information as the Debtors determine is relevant, the Debtors may propose rules for the conduct of the Auction in the manner the Debtors determine that will promote the goals of the Auction and achieve the maximum realizable value for the Real Property. In order to participate in the Auction, each prospective purchaser shall be required to comply with the requirements of these Bid and Sale Procedures and to submit an Initial Bid that is timely and that complies in all respects with the Bid and Sale Procedures. At the Auction, Qualified Bidders may submit successive bids in increments to be determined at the Auction for the purchase of the Real Property. Immediately prior to concluding the Auction, the Debtors shall determine which bid or bids is the highest or best offer, subject to Bankruptcy Court approval (the “Prevailing Bid”) and the next highest or otherwise best offer after the Prevailing Bid (the “Next Highest Bid”). Qualified Bidders shall also be permitted to make other modifications to their bids at the Auction in order to make their bids more favorable to the estate. All bidding for the Real Property will be concluded and the Prevailing Bid will be announced by the Court at the Sale Hearing. All bids shall be made on an open basis, participating Qualified Bidders shall be entitled to be present for all bidding; and the principals of each participating Qualified Bidder shall be fully disclosed to all other participating Qualified Bidders throughout the entire Auction. All bidders at the Auction shall be deemed to have consented to the core jurisdiction of the Court and waived any right to jury trial in connection with any disputes relating to the Auction, the Sale of the Real Property and the construction and enforcement of the Prevailing Bid or the Next Highest Bid. c. Highest and/or Best Bid. At all times during the Proposed Sale Process, the Debtors retain the right to determine which bid constitutes the highest or otherwise best offer for the purchase of the Real Property, and which bid should be selected as the Prevailing Bid and the Next Highest Bid, if any, all subject to final approval by the Court pursuant to the provisions of Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 33 of 46 Schedule 1 Section 363(b) of the Bankruptcy Code. When evaluating the bids, the Debtors shall consider the financial and contractual terms of each bid and factors affecting the speed and certainty of closing each bid. Without limiting the generality of the foregoing, the Debtors may, at any time before entry of an order of the Court approving a Prevailing Bid, reject any bid that, after consultation with the Debtors and their counsel, is determined to be (i) inadequate or insufficient, (ii) contrary to the requirements of the Bankruptcy Code or the Proposed Sale Process, or (iii) contrary to the best interests of the estate or its creditors. Prior to the Sale Hearing, the Debtors reserve the right to file with the Court additional pleadings in support of the sale to the winning bidder, together with a copy of the Prevailing Bid. d. Sale Hearing. The Sale Hearing will be conducted on May 8, 2020 at 10:00 a.m. at the United States Bankruptcy Court, Western District of New York, Orleans Courtroom, 2 Niagara Square, Buffalo, New York, 14202, before the Honorable Carl L. Bucki, United States Bankruptcy Judge, at which time the Debtors intend to present the Prevailing Bid for approval by the Court pursuant to the provisions of Sections 105, 363(b), 363(f), 363(m), 363(n), 365, and 1206 of the Bankruptcy Code, if any. The Debtors shall be deemed to have accepted a bid only when the bid has been approved by the Court at the Sale Hearing. Upon the failure to consummate a sale of the Real Property after the Sale Hearing because of the occurrence of a breach or default under the terms of the Prevailing Bid, such bidder shall be deemed to have forfeited its Deposit in partial satisfaction of the damages incurred by the estate and the Next Highest Bid, as disclosed at the Sale Hearing, shall be deemed the Prevailing Bid without further order of the Court and the parties shall be authorized to consummate the transaction contemplated by such Next Highest Bid. The Sale Hearing may be adjourned by the Debtors or by the Court at any time. If there are no Prevailing Bids for approval by the Court, Debtors move this Court to approve the sale subject to the terms contained within the Agreement between Gregory J. Lundberg and Constance L. Lundberg, and Aaron A. Hertzler and Katieann B. Hertzler, or their assignee. e. Sale Implementation. Following the approval of the Prevailing Bid, or assumption of the Agreement, at the Sale Hearing, the Debtors will be authorized to take all commercially reasonable and necessary steps to complete and implement the transaction(s) contemplated by the Prevailing Bid or assumption of the Agreement, including (but not limited to) seeking entry of a sale order. f. Conflict. Any conflict between the terms and conditions of the Bid and Sale Procedures and the Agreement which may arise with any of the bidders shall be resolved in favor of the Bid and Sale Procedures. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 34 of 46 Schedule 2 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NEW YORK _______________________________________ In re: Gregory J. Lundberg and Constance L. Lundberg, Case No. 19-10014 Chapter 12 Case Hon. Carl L. Bucki, USBJ Debtors ________________________________________ NOTICE OF BID AND SALE PROCEDURES FOR THE SALE OF GREGORY J. LUNDBERG AND CONSTANCE L. LUNDBERG’S REAL PROPERTY FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS AND NOTICE OF TERMS AND CONDITIONS OF AUCTION AND DATE FOR SALE HEARING OF SUCH PROPERTY PLEASE TAKE NOTICE, that on April 17, 2020 pursuant to a Motion by Gregory J. Lundberg and Constance L. Lundberg, the Debtors-in-Possession (the “Debtors”), dated April 2, 2020, the United States Bankruptcy Court for the Western District of New York (the “Court”) entered the attached Order scheduling an Auction of and hearing on the sale of Debtors’ Real Property (the “Sale Hearing”) and approving the form of this Notice in connection with the proposed Sale Hearing as well as Bid and Sale Procedures accompanying such Order. The Real Property will be sold as one (1) lot, exclusive of portions as depicted in Exhibit A to the Motion. The Sale is proposed outside of the ordinary course of the Debtors’ business. PLEASE TAKE FURTHER NOTICE that the Sale Hearing will be held on May 8, 2020 at 10:00 a.m. at the United States Bankruptcy Court, Western District of New York, Fifth Floor, Robert H. Jackson United States Courthouse, 2 Niagara Square, Buffalo, New York 14202. PLEASE TAKE FURTHER NOTICE, that pursuant to the Bid and Sale Procedures Order, any bidder desiring to submit a bid with respect to the Real Property (a “Bid”) shall send Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 35 of 46 Schedule 2 a letter indicating its interest in bidding addressed to the Debtors’ counsel listed below and shall be qualified by the Debtors by providing the requisite financial and other information as more fully described in the Bid and Sale Procedures. The Bid and Sale Procedures contain detailed requirements for the submission of all Bids and should be reviewed carefully. Any person seeking to participate as a bidder at the Auction must comply with the Bid and Sale Procedures unless otherwise waived at the sole discretion of the Debtors. PLEASE TAKE FURTHER NOTICE, that the Auction, if any, shall commence in conjunction with the Sale Hearing at the United States Bankruptcy Court, Western District of New York, Fifth Floor, Robert H. Jackson United States Courthouse, 2 Niagara Square, Buffalo, New York 14202, or such other time and/or place as the Debtors shall notify all Qualified Bidders and parties in interest. PLEASE TAKE FURTHER NOTICE, that pursuant to the Bid and Sale Procedures Order, the Debtors may: (I) amend the Bid and Sale Procedures Order or impose additional terms and conditions at or prior to the Auction; (II) extend the deadlines set forth in the Bid and Sale Procedures and/or adjourn the Sale Hearing by announcement at the Sale Hearing in open court (without further notice), and (III) reject any or all such Bids if any such Bid is not on terms that are fair and adequate and maximize value for the Debtors’ estate. PLEASE TAKE FURTHER NOTICE, that all requests for information concerning the Real Property should be directed to Hodgson Russ LLP, The Guaranty Building, 140 Pearl Street, Suite 100, Buffalo, New York, 14202, Telephone No.: (716) 856-4000, (Attn: Michelle Heftka). Each bidder is solely responsible for conducting its own due diligence and must complete its due diligence prior to the submission of its bid. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 36 of 46 Schedule 2 Dated: April ___, 2020 By: _________________________ HODGSON RUSS LLP Garry M. Graber, Esq. James J. Zawodzinski, Jr., Esq. 140 Pearl St., Suite 100 Buffalo, New York 14202 Telephone: (716) 856-4000 Facsimile: (716) 819-4645 Attorneys for Gregory J. Lundberg and Constance L. Lundberg 088739.00001 Litigation 15427710v1 Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 37 of 46 - 1 - UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NEW YORK _________________________________________ In re: Gregory J. Lundberg and Constance L. Lundberg, Case No. 19-10014 Chapter 12 Case Hon. Carl L. Bucki, USBJ Debtors. _________________________________________ ORDER ON MOTION OF GREGORY J. AND CONSTANCE L. LUNDBERG FOR AN ORDER (I) AUTHORIZING ASSUMPTION OF AN AGREEMENT FOR THE SALE OF REAL PROPERTY; (II) AUTHORIZING THE SALE OF SUCH REAL PROPERTY FREE AND CLEAR OF LIENS, CLAIMS, ENCUMBRANCES, AND INTERESTS; (III) ESTABLISHING BID AND SALE PROCEDURES FOR THE SALE OF SUCH REAL PROPERTY; (IV) SCHEDULING A HEARING ON THE APPROVAL OF THE SALE OF SUCH REAL PROPERTY; AND (V) APPROVING THE FORM AND MANNER OF NOTICE OF THE SALE OF SUCH REAL PROPERTY Upon consideration of the motion dated April 2, 2020 (the “Motion”)1 of Debtors, Gregory J. Lundberg and Constance L. Lundberg (the “Debtors”), for entry of an order: (I) authorizing assumption of an agreement for the sale of approximately 70 acres of a part of real property, as depicted on the schematic annexed to the Motion as Exhibit A located in the town of East Otto, Cattaraugus County, New York, known as VL – (0) Safford Road on Tax Map No. 36.002-1-5.1, together with all improvements thereupon, including all privileges, rights, easements, and appurtenances thereto (the “Real Property”), free and clear of liens, claims, encumbrances, and interests, with Aaron A. Hertzler and Katieann B. Hertzler, or theirs assignee (collectively “Purchasers”), pursuant to the terms set forth in the Purchase and Sale Contract for Real Property (the “Agreement”), dated February 22, 2020, annexed to the Motion as Exhibit B; (II) authorizing the sale of such Real Property pursuant to the terms set forth in the Agreement to Purchasers; (III) 1 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 38 of 46 - 2 - establishing Bid and Sale Procedures for the sale of such Real Property (the “Bid and Sale Procedures”) annexed to the Motion as Exhibit C; (IV) scheduling a hearing on the approval of the sale of such Real Property; (V) approving the form and manner of notice of the sale of such Real Property; and (VI) granting other appropriate related relief, to be used in connection with the proposed sale of the Real Property, and upon a hearing held before this Court on April 17, 2020 at 2:00 p.m. on the proposed Bid and Sale Procedures (the “Procedures Hearing”); and based upon all of the evidence proffered or adduced at the Procedures Hearing; and after consideration of any memoranda, objections, or other pleadings filed in connection with the Procedures Hearing; and after consideration of the arguments of counsel made at the Procedures Hearing; and upon the entire record of this case; and it appearing that the approval of the Bid and Sale Procedures as requested in the Motion is in the best interests of the Debtors, their estate and creditors; and it appearing that appropriate service was made upon creditors and parties-in-interest, and after due deliberation thereon; and good and sufficient cause appearing therefor, it is hereby FOUND AND DETERMINED THAT: A. The form and manner of notice of the Bid and Sales Procedures annexed to Exhibit C to the Motion as Schedules 1 and 2, and Procedures Hearing shall be, and hereby are, approved as sufficient and adequate notice. No other or further notice in connection with the entry of this Order is or shall be required. B. The Bid and Sale Procedures attached to Exhibit C of the Motion were proposed by the Debtors in good faith with the goal of maximizing the value of the Real Property for the benefit of all parties involved. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 39 of 46 - 3 - C. Approval of the Bid and Sale Procedures attached to Exhibit C of the Motion will facilitate an orderly sale process and will help ensure that all potential purchasers of the Real Property will compete on a level playing field. NOW, THEREFORE, IT IS HEREBY: ORDERED that the Motion is granted as set forth herein. The Bid and Sale Procedures attached to the Motion as Exhibit C are hereby approved and shall be used in connection with the proposed sale of the Real Property. AND IT IS FURTHER ORDERED that the form of the Auction and Hearing Notice is approved and the Debtors are directed to serve a copy of the Auction and Hearing Notice on the Notice Parties within two business days of entry of this Order. AND IT IS FURTHER ORDERED that Objections to approval of any Prevailing Bid or to approval of any proposed sale of the Real Property pursuant to any Prevailing Bid, shall be in writing, shall set forth the name of the objecting party, the basis for the objection and the specific grounds therefor, and shall be filed with the Court and served so as to be actually received one business day prior to the date of the proposed hearing on the sale of the Real Property (the “Sale Hearing”) upon the following parties: (I) Hodgson Russ LLP, 140 Pearl Street, Suite 100, Buffalo, New York 14202 (Attn: Garry M. Graber, Esq. and James J. Zawodzinski, Jr. Esq.); (II) the Chapter 12 Trustee (Attn: Morris L. Horwitz, Esq.); (III) the Office of the United States Trustee, Olympic Towers, 300 Pearl Street, Suite 401, Buffalo, New York, 14202 (Attn: Joseph Allen, Esq.); and (IV) the United States Bankruptcy Court, Robert H. Jackson U.S. Courthouse, 2 Niagara Square, Buffalo, New York, 14202 (Attn: Judge Bucki, marked ‘Chambers Copy’). Any objection not filed and served in accordance with this paragraph may be deemed waived. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 40 of 46 - 4 - AND IT IS FURTHER ORDERED that the failure of any third party to file and serve an objection as ordered and directed herein may be deemed the consent of such party to the granting of the Motion and the sale and transfer of the Real Property. AND IT IS FURTHER ORDERED that the components of the Bid and Sale Procedures are fair and reasonable, are reasonably calculated to produce the best and highest offers for the Real Property, and will confer actual benefits upon the Debtors’ estate. The Bid and Sale Procedures represent an exercise of the Debtors’ sound business judgment and will facilitate an orderly sale process. AND IT IS FURTHER ORDERED that if more than one Qualified Bidder comes forward, Debtors will conduct an Auction at the United States Bankruptcy Court, Western District of New York, Orleans Courtroom, Fifth Floor, Robert H. Jackson United States Courthouse, 2 Niagara Square, Buffalo, New York 14202, before the Honorable Carl L. Bucki, United States Bankruptcy Judge at the time of the Sale Hearing. AND IT IS FURTHER ORDERED that the Auction may be rescheduled for a later date or time or a different place, providing the Debtors provide notice to all Noticed Parties. AND IT IS FURTHER ORDERED that prior to the Sale Hearing, counsel for the Debtors shall meet and confer as to which bid constitutes the highest or otherwise best offer for the purchase of the Real Property, and which bid should be selected as the Prevailing Bid and the Next Highest Bid. Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 41 of 46 - 5 - AND IT IS FURTHER ORDERED that nothing herein shall impair the rights of any parties-in-interest to object to the sale of the Real Property and any such objections shall be heard at the Sale Hearing. AND IT IS FURTHER ORDERED that the Sale Hearing shall be held on May 8, 2020 at 2:00 p.m. at the United States Bankruptcy Court, Robert H. Jackson U.S. Courthouse, 2 Niagara Square, Buffalo, New York, 14202. AND IT IS FURTHER ORDERED that appearances at the Sale Hearing and/or Auction must be made by telephonic appearance in light of the ongoing COVID-19 pandemic, instructions for which are available on the Bankruptcy Court for the Western District of New York’s website. Dated: April ___, 2020 Buffalo, New York ___________________________ Hon. Carl L. Bucki United States Bankruptcy Judge 088739.00001 Litigation 15447956v1 Case 1-19-100 4-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 42 of 46 - 1 - UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF NEW YORK _______________________________________ In re: Gregory J. Lundberg and Constance L. Lundberg, Case No. 19-10014 Chapter 12 Case Hon. Carl L. Bucki, USBJ Debtors ________________________________________ CERTIFICATE OF SERVICE STATE OF NEW YORK ) ) SS.: COUNTY OF ERIE ) Christine Napierski, being duly sworn, deposes and says: 1. I am over 18 years of age and an employee of Hodgson Russ LLP and not a party to this action. 2. On the 2nd day of April 2020, I served Debtors Motion for an Order (I) authorizing assumption of an agreement for the sale of approximately 70 acres of a part of real property located in the town of East Otto, Cattaraugus County, New York, known as “VL - (0) Safford Road” or Tax Map No. 36.002-1-5.1, including all privileges, rights, easements, and appurtenances thereto (the “Real Property”), free and clear of liens, claims, encumbrances, and interests; (II) authorizing the sale of such Real Property; (III) establishing Bid and Sale Procedures for the sale of such Real Property; (IV) scheduling a hearing on the approval of the sale of such Real Property; and (V) approving the form and manner of notice of the sale of such Real Property, to be used in connection with the proposed sale of the Real Property, by using the Court’s CM/ECF system which immediately notifies all registered users via electronic Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 43 of 46 - 2 - transmission at the respective email addresses designated for such service and via U.S. Mail on the parties on the attached list. Dated: April 2, 2020 ______________________________ Christine Napierski Sworn to before me this ____ day of April 2020 Notary Public JAMES J. ZAWODZINSKI No. 02ZA6398926 Notary Public, State of New York Qualified in Erie County My Commission Expires Oct. 7, 2023 088739.00001 Litigation 15448667v1 3rd Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 44 of 46 Corporation Tax Attn. Franchise Tax State Campus Albany, NY 14226 Experis Manpower Group 2050 East ASU Circle, Suite 120 Tempe, AZ 85284-1839 Farm Service Agency The Galleries of Syracuse 441 S. Salina St., Suite 256 Attn: Nancy New Syracuse, NY 13202-5206 Harris County et al c/o John P. Dillman Linebarger Goggan Blair & Sampson LLP PO Box 3064 Houston, TX 77253-3064 Internal Revenue Service Insolvency Group I Niagara Center, 2nd Floor 130 S. Elmwood Avenue Buffalo, NY 14202 Joseph W. Allen, II Office of the U.S. Trustee Olympic Towers 300 Pearl Street, Suite 401 Buffalo, NY 14202-2523 NYS Dept of Tax & Finance Bankruptcy Section PO Box 5300 Albany, NY 12205-0300 NYS Dept. of Labor Field Tax Services Section 290 Main St., Room 219 Buffalo, NY 14202-4006 NYS Dept. of Tax & Finance Att: District Tax Attorney 77 Broadway, Suite 112 Buffalo, NY 14203-1670 NYS Dept. of Tax & Finance Att: District Tax Attorney Rm. 526 Swan St. Bldg. 6 Empire State Plaza Albany, NY 12228-0001 Nationstar Mortgage LLC d/b/a Mr. Cooper Shapiro, DiCaro & Barak, LLC 175 Mile Crossing Boulevard Rochester, NY 14624-6249 Office of the U.S. Trustee 100 State Street, Room 6090 Rochester, NY 14614-1321 Morris L. Horwitz Morris L. Horwitz, Atty. at Law PO Box 716 Getzville, NY 14068-0716 Oil & Gas Management, Inc. PO Box 1204 Mt. Pleasant, PA 15666-3304 P2ES Holdings, Inc. Georgette Schermerhorn 1670 Broadway, Suite 2800 Denver, CO 80202-4800 Pitney Bowes Global Financial Services, LLC 27 Waterview Drive Shelton, CT 06484-4301 Secretary of the Treasury 1500 Pennsylvania Avenue, NW Washington, DC 20220-0001 The Production Companies, Inc. Attn: John Meek One Greenway Plaza, Suite 1010 Houston, TX 77046-0108 U.S. Attorney Federal Centre 138 Delaware Ave. Buffalo, NY 14202-2404 U.S. Securities & Exchange Commission 233 Broadway New York, NY 10279-0001 USDA – Farm Service Agency Attn: Suzanne Montana 441 S. Salina Street Room 536 Syracuse, NY 13202 U.S. Bankruptcy Court Robert H. Jackson U.S. Courthouse 2 Niagara Square Buffalo, NY 14202-3350 American Express P.O. Box 981537 El Paso, TX 79998-1537 Bank of America P.O. Box 982238 El Paso, TX 79998 Capital One P.O. Box 30285 Salt Lake City, UT 84130-0285 First Niagara Bank 1 Hudson City Center Hudson, NY 12534-2355 HSBC Bank 2929 Walden Avenue Depew, NY 14043-2690 Internal Revenue Service P.O. Box 7346 Philadelphia, PA 19101-7346 Justin Valle, Esq. Shapiro, Dicaro & Barak, LLC 175 Mile Crossing Blvd. Rochester, NY 14624-6249 Nationstar Mortgage, LLC 8950 Cypress Waters Blvd. Coppell, TX 75019-4620 Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 45 of 46 Sam and Dorothy Grey 8248 Reed Hill Road Cattaraugus, NY 14719-9640 Tom and Charlene Makowski 8760 Krager Hill Road Little Valley, NY 14755-9784 USA acting through USDA FSA 6542 Turner Road Jamestown, NY 14701 View From Above, LLC 6698 Mill Valley Road East Otto, NY 14729 Wakefield & Associates 3901 S. Jamaica Court Suite 200 Aurora, CO 80014 Constance Louise Lundberg P.O. Box 36 East Otto, NY 14729-0036 Gregory Jay Lundberg P.O. Box 36 East Otto, NY 14729-0036 American Express National Bank c/o Becket and Lee LLP P.O. Box 3001 Malvern, PA 19355 Capital One Bank (USA), N.A. 4515 V. Santa Fe Avenue Oklahoma City, OK 73118 KeyBank, N.A. 4910 Tideman Road Brooklyn, OH 44144 Kevin D. Robinson, Esq. Assistant US Attorney 138 Delaware Avenue Buffalo, NY 14202 Friedman Vartolo LLP c/o Richard Postiglione, Esq. 1325 Franklin Avenue, Suite 230 Garden City, NY 11530 Robert H. Kutzuba, Esq. Ward & Kutzuba PLLC 364 Main Street Arcade, New York 14009 Case 1-19-10014-CLB, Doc 44, Filed 04/02/20, Entered 04/09/20 14:40:58, Description: Main Document , Page 46 of 46