US Trustee's Objection for Debtor's Application for Settlement to be denied.

8/13/2019 US Trustee's Objection for Debtor's Application for Settlement to be denied.

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agreement with Rewards Network or an attempt to pay the arrears in onemonth with possible overpayments thereafter.

3. The proposed order includes a finding that the Agreement constitutes anexecutory contract. While the parties may agree to such a conclusion, there

has been no evidence before the Court to include a finding that the agreementconstitutes an executory contract. The UST requests that this paragraph isdeleted. Order at 13.

The proposed order also includes a finding that the collateral is subject towear and tear and is declining in value. The UST requests that this paragraphis deleted unless adequate evidence is offered to support the finding and theamount of the decline. Order at 14.

4. To the extent that the debtor and Rewards Network are seeking to addcollateral securing Rewards Networks claim, the UST objects. (Order at D.

p. 7). Rewards Network should only be provided a lien on the collateral of thesame kind it held pre-petition, in the same priority, and to the extent that thereis a diminution to its collateral.

5. The UST objects to Rewards Network receiving a super-priorityadministrative expense claim. (Order at B at p. 10). At the first meeting ofcreditors, Mr. Lance testified that the debtor was not current on its sales taxes,payroll taxes, and had not paid any post-petition rent. There is no evidencethat Rewards Network should receive a super-priority claim over otheradministrative claims.

6. The proposed order allows the debtor to use the cash collateral to pay items inthe budget attached. Mr. Lance testified that payment of expenses for hispersonal vehicle are included in the budget, and that he is reimbursed by thedebtor for the purchase of inventory rather than the debtor paying for thegoods directly. The monthly operating report reflected that Mr. Lance waspaid for pre-petition amounts due after the bankruptcy case was filed. The useof cash collateral for the items in the budget should not be approved until thedebtor adequately demonstrates that the items benefit the estate and areappropriate expenditures.

Case 13-06856-hb Doc 25 Filed 01/02/14 Entered 01/02/14 10:03:02 Desc MainDocument Page 2 of 4


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The UST asks the Court to deny the relief requested by the debtor unless it adequately

addresses the concerns raised herein.

JUDY A. ROBBINSUNITED STATES TRUSTEEREGION FOUR

By: /s/ Linda K. BarrLinda K. Barr, Id. 6284Trial Attorney1835 Assembly Street, Ste. 953Columbia, SC 29201

(803) 765-5219(803) 765-5260 (facsimile)[email protected]

Date: 1-2-14



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CERTIFICATE OF SERVICE

I, Linda K. Barr, do hereby certify that on January 2, 2014, I served the below-nameddocuments upon the parties listed below by electronic mail and/orby electronic transmissionthrough the Court=s Electronic Case Filing system to the participants thereof, to include:

OBJECTION OF UNITED STATES TRUSTEE TO DEBTORS APPLICATION

OF PROPOSED SETTLEMENT AND COMPROMISE AND MEMORANDUM IN

SUPPORT THEREOF

CERTIFICATE OF SERVICE

L. Showell Blades, IVDavid C. Kimball

Kyle A. Brannon

/s/ Linda K. BarrLinda K. BarrTrial AttorneyOffice of the United States Trustee1835 Assembly Street, Ste. 953Columbia, SC 29201(803) [email protected]

Date: 1-2-14


US Trustee's Objection for Debtor's Application for Settlement to be denied.

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