HIDDEN LAKE ACADEMY,INC. FILES BANKRUPTCY

[Anonymous]

Case 09-22028-reb Doc 4 Filed 05/14/09 Entered 05/14/09 11:29:42 Desc Main
Document Page 1 of 6

IN THE UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
IN RE: ) CHAPTER 11
)
HIDDEN LAKE ACADEMY, INC. ) CASE NO. 09-22028
)
)
Debtor. ) JUDGE BRIZENDINE
MOTION REQUESTING ENTRY OF ORDER
AUTHORIZING PAYMENT OF PREPETITION
WAGES, SALARIES, AND TAXES AND
REQUEST FOR EXPEDITED HEARING
COMES NOW HIDDEN LAKE ACADEMY, INC. (“Debtor”) and hereby files
this “Motion Requesting Entry of Order Authorizing Payment of Prepetition Wages,
Salaries, and Taxes and Request for Expedited Hearing” (the “Motion”). In support of
the Motion, Debtor shows the Court as follows:
Jurisdiction
1. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157
and 1334. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. This Motion is a
core proceeding pursuant to 28 U.S.C. § 157(b)(2). The statutory predicate for the relief
requested herein is 11 U.S.C. §§ 105(a).
Background
2. On May 14, 2009 (the “Petition Date”), Debtor filed a voluntary petition
for relief under Chapter 11 of Title 11 of the United States Code (as amended, modified,
or supplemented the “Bankruptcy Code”).
3. Debtor is a Georgia non-profit corporation and its primary place of
business is located at 830 Hidden Lake Road, Dahlonega, Georgia
IN THE UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
IN RE: ) CHAPTER 11
)
HIDDEN LAKE ACADEMY, INC. ) CASE NO. 09-22028
)
)
Debtor. ) JUDGE BRIZENDINE
MOTION REQUESTING ENTRY OF ORDER
AUTHORIZING PAYMENT OF PREPETITION
WAGES, SALARIES, AND TAXES AND
REQUEST FOR EXPEDITED HEARING
COMES NOW HIDDEN LAKE ACADEMY, INC. (“Debtor”) and hereby files
this “Motion Requesting Entry of Order Authorizing Payment of Prepetition Wages,
Salaries, and Taxes and Request for Expedited Hearing” (the “Motion”). In support of
the Motion, Debtor shows the Court as follows:
Jurisdiction
1. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157
and 1334. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. This Motion is a
core proceeding pursuant to 28 U.S.C. § 157(b)(2). The statutory predicate for the relief
requested herein is 11 U.S.C. §§ 105(a).
Background
2. On May 14, 2009 (the “Petition Date”), Debtor filed a voluntary petition
for relief under Chapter 11 of Title 11 of the United States Code (as amended, modified,
or supplemented the “Bankruptcy Code”).
3. Debtor is a Georgia non-profit corporation and its primary place of
business is located at 830 Hidden Lake Road, Dahlonega, Georgia
9. Net payroll for the period ending May 15, 2009 is approximately
$15,465.43 exclusive of applicable taxes. The federal and state payroll taxes due for the
pay period ending May 15, 2009, total approximately $3,860.00. The Debtor seeks
authority to pay any such estimated payroll tax obligations and unemployment taxes plus,
any additional amounts which Debtor may not be aware of.
10. The Debtor also deducts certain amounts from its employees wages to pay
for optional items such as insurance premiums, flex spending accounts, supplemental
insurance (Aflac/MoO), garnishments, and child support. The Debtor seeks authority to
deduct these amounts and pay them to the appropriate administrator. The total
approximate of other deductions for the period ending May 15, 2009, is $1,095.71.
Applicable Authority
11. Pursuant to sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code, a
debtor’s employee’s claim for “wages, salaries, or commissions, including vacation,
severance and sick leave pay” earned within 180 days before the Petition Date, and
claims against the Debtor for contributions to employee benefit plans arising from
services rendered within 180 days before the Petition Date, are afforded unsecured
priority status to the extent of $10,000.00 per employee. 11 U.S.C. § 507(a)(3), (a)(4).
Furthermore, section 363(b) of the Bankruptcy Code provides that the debtor in
possession, “after notice and 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). Section 105(a) of the
Bankruptcy Code further provides that “the court may issue any order, process, or
judgment that is necessary or appropriate to carry out the provisions of [the Bankruptcy
Code].” 11 U.S.C. § 105(a).
12. The Debtor believes that the unpaid salaries and wages constitute priority
claims under sections 507(a)(4) and (a)(5) of the Bankruptcy Code because the highest
paid employee will be paid $2,812.50. The Debtor submits, however, that to the extent
any employee is owed in excess of $10,000.00 on account of Prepetition Employee
Obligations, payment of such amount is necessary and appropriate and is authorized
under section 105(a) pursuant to the “necessity of payment” doctrine, which “recognizes
the existence of the judicial power to authorize a debtor in a reorganization case to pay
prepetition claims where such payment is essential to the continued operation of the
debtor.” Duparquet, Inc. v. Local Union No. 3, Int’l Bd. Of Elec. Workers, 386 F.2d 649
(2d Cir. 1967) (separation pay obligations arising in connection with a post-petition
employee lay-off are administrative claims).
13. Here, the post-petition stability of the Debtor’s workforce is integrally tied
to the Debtors’ ability to continue its business operations and to reorganize its business
and financial affairs. Any delay in payments to employees will impact the Debtor’s
relationship with essential workers and may irreparably harm employee morale,
dedication, confidence, and cooperation and cause irreparable harm to the Debtor’s
operations. The support and efforts of the Debtor’s workforce during the pendency of the
case is critical to the Debtor’s ability to maximize the value of its estate. At this early
stage, the Debtor cannot risk losing the critical mass of its personnel or suffering the
substantial damage to the business that would inevitably result from any decline in
employee morale.
14. In addition, for many of the employees, the wages received from the
Debtor is needed to enable the employees to meet their own financial obligations. As a
result, absent an order granting the relief requested in this Motion, the employees and
their families are likely to suffer personal hardship and, in many instances, serious
financial difficulties.
15. Similar relief to the relief requested herein has been granted in this and
other courts. See, e.g., In re Tower Automotive, Inc., Case No. 05-10578 (Bankr.
S.D.N.Y. Feb. 3, 2005); In re Interstate Bakeries Corp., Case No. 04-45814 (Bankr. W.D.
Mo. Sept. 24, 2004); In re Git-N-Go, Inc., Case No. 04-10509 (Bankr. N.D. Okla. Feb.
13, 2004); In re Westpoint Stevens, Inc., Case No. 03-13532 (Bankr. S.D.N.Y. June 3,
2003); In re The Penn Traffic Company, Case No. 03-22945 (Bankr. S.D.N.Y. May 30,
2003). The Debtor submits that the circumstances of this case warrant similar relief.
Notice
16. Notice of this Motion will be given to: (i) the Office of the United States
Trustee, (iii) BB&T, and (iii) the parties listed on each of the Debtors’ twenty (20) largest
unsecured creditors list. The Debtor submits that, under the circumstances, no other or
further notice is required.
Request for Expedited Hearing
17. Debtor requests that this Court shorten any applicable notice period and
schedule a hearing on this Motion on the earliest available calendar on or before May 15,
2009, at the latest. Maintaining a stable work force is essential to Debtor’s
reorganizational effort. Failure to pay employees will result in hardship for the
employees and their families and seriously jeopardize the Debtor’s ability to reorganize..
WHEREFORE, Debtor respectfully requests that this Court enter an order,
substantially in the form annexed hereto, granting the Motion and such other relief as
Case 09-22028-reb Doc 4 Filed 05/14/09 Entered 05/14/09 11:29:42 Desc Main
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may be just and proper.
Respectfully submitted this 14th day of May, 2009.
ELLENBERG, OGIER, ROTHSCHILD &
ROSENFELD, PC
/s/ Barbara Ellis-Monro
Barbara Ellis-Monro
Georgia Bar No. 246117
170 Mitchell St., SW
Atlanta, Georgia 30303
(404) 525-4000 Telephone
(404) 526-8855 Facsimile
bem@eorrlaw.com
Proposed Counsel for the
Debtor and Debtor in Possession

[Ursus]

Notice of Deficient Filing
The document(s) identified below were not filed with the bankruptcy petition. You are hereby notified that the documents must be filed with the Court within the time frame specified below. Failure to file may result in the dismissal of your bankruptcy case.

Is it usual to file for bankruptcy sans all these documents? Seems almost as though he filed in great haste for a reason. His attorney would know what accompanying docs would be required. Why file such an incomplete case, unless you're attempting to stave off creditors who are closing in, with a deadline...

[Ursus]

17. Debtor requests that this Court shorten any applicable notice period and schedule a hearing on this Motion on the earliest available calendar on or before May 15, 2009, at the latest. Maintaining a stable work force is essential to Debtor's reorganizational effort. Failure to pay employees will result in hardship for the employees and their families and seriously jeopardize the Debtor's ability to reorganize..

Can he even get an expedited hearing if his accompanying docs haven't been submitted?

[Troll Control]

I wouldn't get TOO excited about this.  Chapter 11 will allow HLA to continue to operate as it restructures.  Basically, chapter 11 gets rid of all of HLA's unsecured debt, but doesn't shutter the facility...

[Anonymous]

I had that thought last night, but with the facility going on the auction block, where would he operate?

[Anonymous]

I had that thought last night, but with the facility going on the auction block, where would he operate?

Right... I think. The 190 acres secured the debt BB&T is foreclosing on. Once that's gone, on June 2 hopefully, the moving vans show up.

[Anonymous]

Case 09-22028-reb Doc 5 Filed 05/14/09 Entered 05/14/09 11:33:51 Desc Main
Document Page 1 of 11

IN THE UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
IN RE: ) CHAPTER 11
)
HIDDEN LAKE ACADEMY, INC., ) CASE NO. 09-22028
)
)
Debtor. ) JUDGE BRIZENDINE
APPLICATION FOR APPROVAL OF EMPLOYMENT OF
ELLENBERG, OGIER, ROTHSCHILD & ROSENFELD, PC, AS ATTORNEYS
FOR THE DEBTOR NUNC PRO TUNC TO THE FILING DATE
COMES NOW Hidden Lake Academy, Inc., debtor and debtor in possession herein (the
“Debtor” or “Applicant”) and hereby files this Application for Approval of Employment of
Ellenberg, Ogier, Rothschild & Rosenfeld, P.C., (“EORR”), as Attorneys for the Debtor (the
“Application”), pursuant to 11 U.S.C. § 327 and Fed. R. Bankr P. 2014 and 5002 and
respectfully shows the Court as follows:
1. On May 14, 2009, (the “Petition Date”), the Debtor filed its voluntary petition for
relief under Chapter 11 of Title 11, United States Code (the “Bankruptcy Code”).
2. 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. §157(b). Venue of the Debtor’s Chapter 11 case
in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
3. This Motion is supported by the Verified Statement of Barbara Ellis-Monro for
EORR as Proposed Counsel for the Debtor and Debtor In Possession Nunc Pro Tunc to the
Petition Date Pursuant to Section 327(a) of the Bankruptcy Code.
4. Debtor is a non profit Georgia corporation and its primary place of business is located
at 830 Hidden Lake Road, Dahlonega, Georgia. Debtor owns approximately 196 acres of land in

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Lumpkin County, Georgia. There are 23 buildings on the property and a therapeutic school
operated by an affiliate of the Debtor, HLA, Inc., as well as programs for the Georgia court
system run by another, non debtor, affiliate.
5. Dr. Leonard Buccellato is the Debtor’s CEO and sole shareholder.
RELIEF REQUESTED
6. By this application, the Debtor requests that this Court enter an Order authorizing the
Debtor to employ and retain the law firm of Ellenberg, Ogier, Rothschild & Rosenfeld, PC
(:EORR”) as its counsel under a general retainer, pursuant to section 327(a) of the Code,
Fed.R.Bankr.P. 2014.
7. The Debtor desires to employ EORR in particular as its counsel with regard to the
filing and prosecution of its Chapter 11 case, because:
a. EORR has become familiar with the Debtor’s businesses, properties and
affairs, and, for those other reasons which are set forth herein, the Debtor
believes that EORR has the specialized and unique expertise essential to
represent the Debtor in its case;
b. EORR is well qualified to represent the Debtor as debtor in possession in
its case in that EORR is comprised of attorneys who have practiced
exclusively in the field of insolvency, reorganization and bankruptcy law
and who have participated in numerous Chapter 11 cases; and
c. the firm is composed of and employs attorneys duly admitted to practice in
the United States Bankruptcy Court for the Northern District of Georgia.
8. It has been and will be necessary for the Debtor to retain counsel to render various
professional services in connection with its case, including, but not limited to, the following:
a.   to advise the Debtor generally regarding matters of bankruptcy law,

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including, but not limited to, the rights, duties, obligations and remedies of
the Debtor as debtor in possession, both with regard to its assets and with
respect to the claims of its creditors;
b. to conduct examinations of witnesses, claimants or adverse parties, and to
prepare and assist in the preparation of pleadings, exhibits, applications,
reports, accountings, schedules and other documents necessary to the
administration of these proceedings as required by the Code, the Federal
Rules of Bankruptcy Procedure, the local rules of this Court and the
requirements of the United States Trustee;
c. to perform those legal services necessary to the Debtor’s bankruptcy case,
including, but not limited to, institution and prosecution of legal
proceedings, advice regarding debt restructuring and general legal advice
and assistance related to this Chapter 11 case, all of which are necessary to
the proper administration of the Debtor’s Chapter 11 estate;
d. to advise the Debtor concerning a Chapter 11 plan; and
e. to take any and all other actions necessary for the proper preservation and
administration of the Debtor’s Chapter 11 estate, including, but not limited
to, general advice and counsel in connection with its ongoing business
operations.
9. If the Debtor is unable to retain EORR the Debtor and its creditors will be prejudiced
because (a) the Debtor will be unable to avail itself of the services of the experienced and
knowledgeable professionals it deem best suited to serve its needs in this capacity, and (b) the
a.   time burden to the Debtor which will result from a change of the Debtor’s counsel will be

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onerous and will occur at a time when the Debtor can least afford to sustain an unnecessary
disruption.
10. The Debtor wishes to employ EORR on a general retainer at its customary hourly
rates in effect on the date the services are rendered on behalf of the Debtor and to be liable for all
fees and expenses incurred by the Debtor to EORR.
11. To the best of the Debtor’s knowledge, all of EORRs connections with the Debtor, its
creditors, any other party in interest, its attorneys and accountants, the United States Trustee, or
any person employed in the office of the United States Trustee have been disclosed in the
Affidavit annexed hereto. To the best of the Debtor’s knowledge, information and belief, EORR
does not represent any interest adverse to the Debtor or its estate in connection with the matters
upon which SGR is to be engaged and is, therefore, “disinterested” within the meaning of
sections 101(14), 327(a) and 1107(b) of the Code.
12. The employment of EORR as the Debtor’s bankruptcy counsel is in the best interest
of the Debtor, its estate and creditors.
13. EORR agrees to accept compensation for its services and reimbursement of expenses
as may be awarded by this Court upon proper application, after notice and hearing or pursuant to
such other interim procedure as may be approved and authorized by this Court.
NOTICE
13. Notice of this pleading will be served on the United States Trustee. The Debtor
submits that such notice is sufficient and proper, and that no other notice need be given.
14. No previous application for the relief requested herein has been made to this
Court or any other Court.
a.   WHEREFORE, Applicant prays that it be authorized to employ EORR as counsel for the
b.   Case 09-22028-reb Doc 5 Filed 05/14/09 Entered 05/14/09 11:33:51 Desc Main
c.   Document Page 5 of 11
Debtor.
This 14th day of May, 2009.
HIDDEN LAKE ACADEMY, INC.
By:___/s/ Leonard Buccellato_____
Leonard Buccellato, CEO

Case 09-22028-reb Doc 5 Filed 05/14/09 Entered 05/14/09 11:33:51 Desc Main
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EXHIBIT “A”
IN THE UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF GEORGIA
GAINESVILLE DIVISION
IN RE: ) CHAPTER 11
)
HIDDEN LADE ACADEMY, INC . ) CASE NO. 09-22028
)
)
Debtor. ) JUDGE BRIZENDINE
VERIFIED STATEMENT OF BARBARA ELLIS-MONRO FOR EORR
AS PROPOSED COUNSEL FOR THE DEBTOR NUNC PRO TUNC
TO THE PETITION DATE
FULTON COUNTY, GEORGIA
Barbara Ellis-Monro pursuant to Fed.R.Bankr. 2014(a) makes this Verified Statement in
Support of the Application to Employ Ellenberg, Ogier, Rothschild & Rosenfeld, PC as Counsel
to Debtor and Debtor In Possession Nunc Pro Tunc to the Petition Date and shows the Court as
follows:
1. I am a partner in the firm of Ellenberg, Ogier, Rothschild and Rosenfeld, PC
(“EORR”). Our offices are located at 170 Mitchell Street, SW, Atlanta, Georgia
30303.
2. I am a member in good standing in this Court and each of my partners is a
member in good standing in this Court.
3. Hidden Lake Academy, Inc., the Debtor and Debtor In Possession in this case,
seeks to employ EORR for the purposes set forth in the application to which this
statement is attached.
4. Neither I, my firm, nor any lawyer in my firm, has, to the best of my knowledge,

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 any current connection with the debtor, any of its creditors, or any other party in
this case.

5. Neither my firm nor I have received any payments or promises of payment for
services to be rendered in this case for work to be performed and expenses which
maybe incurred, except as follows:
a. My firm received a wire transfer on May 12, 2006 of $15,000 and a second
wire transfer in the amount of $1039.00 on the same date.
b. My firm was paid $1,880.00 for time spent preparing the case for filing and
for the filing fee of $1,039.00 which was necessarily charged to an attorney
credit card.
6. Neither my firm nor I have either shared or agreed to share with any other person
compensation that we are to receive in this case.
7. Neither I, nor anyone in my firm, insofar as I have been able to ascertain
represents any interest adverse to the debtor or the estate, except as set forth in
paragraph 5 hereof.
8. The currently hourly rates for the attorneys of EORR are:
Barbara Ellis-Monro $300.00
Bill Rothschild $400.00
Tamara Ogier $300.00
Allen Rosenfeld $280.00
Paralegal $100.00
9. To the best of my knowledge each of the employees of EORR are and EORR is a
“disinterested person” as defined in Bankruptcy Code §101(14).
10. The foregoing statements are true and based upon my personal knowledge, and
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11. are made under penalty of perjury under the laws of the United States
This 14th day of May, 2009.
ELLENBERG, OGIER, ROTHSCHILD
& ROSENFELD, PC
/s/ Barbara Ellis-Monro
Barbara Ellis-Monro
Georgia Bar No. 246117
170 Mitchell St., SW
Atlanta, Georgia 30303
404-525-4000 Telephone
404-526-8855 Facsimile
bem@eorrlaw.com

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CERTIFICATE OF SERVICE
This is to certify that I have this day served a copy of the within and foregoing
APPLICATION FOR APPROVAL OF EMPLOYMENT OF ELLENBERG, OGIER,
ROTHSCHILD & ROSENFELD, P.C, AS ATTORNEYS FOR THE DEBTOR, NUNC
PRO TUNC TO THE PETITION DATE AND THE PROPOSED ORDER THEREON
by depositing same in the United States Mail in an envelope with adequate postage
affixed thereto to assure delivery addressed as follows:
Office of the United States Trustee
362 Richard Russell Building
75 Spring Street, S.W.
Atlanta, Georgia 30303
This 14th day of May, 2009.
//s// Barbara Ellis-Monro______
Barbara Ellis-Monro
Georgia Bar No. 246117
Proposed counsel for the debtor
Ellenberg, Ogier, Rothschild & Rosenfeld, PC
170 Mitchell St., SW
Atlanta, Georgia 30303
404-525-4000 Telephone
404-526-8855 Facsimile
bem@eorrlaw.com

[Ursus]

I had that thought last night, but with the facility going on the auction block, where would he operate?

Right... I think. The 190 acres secured the debt BB&T is foreclosing on. Once that's gone, on June 2 hopefully, the moving vans show up.

Can Hidden Lake Academy, Inc.'s declaration of bankruptcy stay the BB&T foreclosure and sale of the property?

[Anonymous]

No idea on this one whether the foreclosure or lawsuit settlement would preclude what he is trying to accomplish by filing bankruptcy.   Buccellato may face a problem created by not filing personal bankruptcy. Didn't  Buccellato sign an affidavit, personally guaranteeing the 400,000.
dollar settlement ? That would seem to take it out of the HLA, Inc. bankruptcy filing .

[Ursus]

No idea on this one whether the foreclosure or lawsuit settlement would preclude what he is trying to accomplish by filing bankruptcy.   Buccellato may face a problem created by not filing personal bankruptcy. Didn't  Buccellato sign an affidavit, personally guaranteeing the 400,000.
dollar settlement ? That would seem to take it out of the HLA, Inc. bankruptcy filing .

Perhaps the source for that needed $400,000 was already taken care of prior to this latest development (filing of bankruptcy). Someone mentioned that there has been a lot of property ownership maneuvering going on. Maybe Buccellato shifted funds, property out of Hidden Lake Academy, Inc. prior to having it file for bankruptcy.

Then... the deadline comes up for the foreclosure and property auction, and he (personally) "miraculously" comes up with the requisite $400,000 just in the nick of time. Or... he has a straw man buy the property for him on the block - "a philanthropic donor who wishes to remain anonymous" - with God only knows what kind of back door deal going on behind the scene.

In the above scenario, Buccellato or the anonymous straw man end up owning the property; Hidden Lake Academy, Inc. goes on with business as usual, being somewhat untouchable as a result of having filed for bankruptcy; and... all parents and creditors with lawsuits are... fucked.


Disclaimer: I am a bear, not a lawyer, and have no idea of what I am talking about.

[Anonymous]

Buccellato did not pay the 400,000.

[Anonymous]

It would have been nice if the SOB asked the court to pay the families...I didn't find that... And is he still lying to the Ed. Cons?  Has he told the parents?
Who was the responsible party for the child they reportedly accepted last week.  If I were the parents I would sue the Hell out of  the Ed. Consultant and Buccellato.  Again, what account did the in-take money go into? Personal or HLA, Inc.

[Anonymous]

Since this has been a continuing saga, let's not start dancing in the streets quite yet.  This has been carefully thought out, planned and executed. It would be a
shock if this man does not have an ace in the whole.  His MO, as a narcissist, would indicate that he would not do this, unless there was something beneficial for himself. He gave very little notice to his staff and probably none to the families.  He just might try to pull off being the newest version of "The Comeback Kid".

[Anonymous]

I think everyone is aware of that possibility. He's slipperier that owl shit on a door knob.
This, at the least, is confirmation that he's lied to ECs and parents for some time regarding HLAs solvency.
Every small gain is one more indictment against him, and another legal fire to put out.

Maybe he gave all the funds to someone who will stand on the steps of the courthouse and purchase HLA for pennies on the dollar to set up their own program while paying Buchi off on the side. Many possible scenarios.

[Anonymous]

Buccellato did indeed sign an affidavit with a personal guarantee to the court for the 400,000. dollar settlement.  It would seem that would open the door
for Berger and Montague to argue for attachment to Buccellato's personal assets, if not already out of the country.