Treatment Abuse, Behavior Modification, Thought Reform > The Ridge Creek School / Hidden Lake Academy

HIDDEN LAKE ACADEMY,INC. FILES BANKRUPTCY

<< < (4/20) > >>

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
Document Page 6 of 6

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:

--- Quote ---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.
--- End quote ---

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:

--- Quote ---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..
--- End quote ---

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?

Navigation

[0] Message Index

[#] Next page

[*] Previous page