No. BK-S-00-10534-LBR, No. BK-S-00-10535-LBR, No. BK-S-00-10536-LBR, No. BK-S-00-10537-LBRUnited States Bankruptcy Court, D. Nevada
August 1, 2000
Attorneys for Debtors in Possession, WILLIAM P. WEINTRAUE, ESQ., DAVID M. BERTENTHAL, ESQ., MALHAR S. PAGAY, ESQ., PACHULSKI, STANG, ZIEHL, YOUNG JONES P.C., San Francisco, CA
JAMES PATRICK SHEA, ESQ., CANDACE CARLYON, ESQ., SHEA CARLYON, LTD., Las Vegas, NV
ORDER GRANTING MOTION FOR ORDER AUTHORIZING SALE OF ASSETS FREE AND CLEAR OF LIENS, CLAIMS AND ENCUMBRANCES PURSUANT TO BANKRUPTCY CODE SECTION 363(F) TO WILLAMETTE GRASS SEED, LLC
LINDA B. RIEGLE, United States Bankruptcy Judge
On June 28, 2000, and July 10, 2000 (collectively, the “Sale Hearing”), the Court conducted a hearing regarding the June 13, 2000,Motion for Order Authorizing Sale of Assets Free and Clear of Liens,Claims and Encumbrances Pursuant to Bankruptcy Code Section 363(f) andthe June 23, 2000, Debtors’ First Supplement to Notice of Motion andMotion for Order Authorizing Sale of Assets Free and Clear of Liens,Claims and Encumbrances Pursuant to Bankruptcy Code Section 363(f)
(collectively the “Sale Motion”),[1] filed by AgriBioTech, Inc., a Nevada corporation, AgriBioTech Canada, Inc., a Canadian corporation, Las Vegas Fertilizer Co., Inc., a Nevada corporation, Garden West Distributors, Inc., an Arizona corporation and Geo. W. Hill Co., Inc., a Kentucky corporation, the debtors and debtors in possession in the above-captioned jointly administered bankruptcy cases (collectively, the “Debtors”). William P. Weintraub, David M. Bertenthal and Malhar S. Pagay of Pachulski. Stang, Ziehl, Young Jones P.C., and James Patrick Shea of Shea Carlyon, Ltd., appeared on behalf of the Debtors. Other appearances were as noted in the record.
Pursuant to the Sale Motion, the Debtors seek, among other things, authority to sell the WGS Assets to Willamette Grass Seed, LLC (the “Buyer”), free and clear of liens, claims and interests of others, with such liens, claims, and interests to attach to the proceeds of sale with the same validity (or invalidity) and priority as existed prior to the sale, all as more particularly described in the final, executed WGS Asset Purchase Agreement by and among the Debtors and the Buyer (the “Sale”).
The Court, having received and considered the Sale Motion and annexed Memorandum of Points and Authorities, the Declaration of Bradley D. Sharp of Development Specialists, Inc. (the “Sharp Declaration”), notice of the Sale Hearing, and all other papers filed in support of the Sale Motion, the arguments of counsel and all testimonial and documentary evidence presented at or prior to the Sale Hearing, all matters of which the Court may take judicial notice and the record in Debtors’ jointly administered chapter 11 cases, hereby makes the following findings:
A. The Sale Motion is a core proceeding over which this court has jurisdiction pursuant to 28 U.S.C. § 157(b) and 1334.
B. Notice of the Sale Motion and the Sale Hearing was proper, adequate and sufficient under the circumstances and complied with all applicable statutes and rules as well as this Court’s prior order approving the form and manner of notice. To the extent that notice of the Sale Motion or the Sale Hearing failed to comply with any applicable statute or rule, the requirements thereof are hereby modified such that the notice that was given complies therewith. The requirements of the Court’s Order ApprovingProcedures For Sale of Assets Free and Clear of Liens. Claims andInterests of Others and Assumption and Assignment of Certain ExecutoryContracts, entered on June 15, 2000, have been satisfied.
C. Good cause exists, and it is in the best interests of Debtors’ estate and creditors, to approve the sale of the WGS Assets on the terms described in the Sale Motion and in the WGS Asset Purchase Agreement, including but not limited to the fact that (i) the Purchase Price to be paid by the Buyer represents fair and adequate consideration for the WGS Assets being sold by the Debtors, (ii) prompt sale of the WGS Assets is required giver the distressed nature of Debtors’ business operations, and (iii) the sale provides the possibility for transferring certain of the Debtors’ employees to the Buyer.
D. After extensive marketing efforts, the Buyer provided the highest and best offer for the WGS Assets. A reasonable opportunity for others to make higher offers for the WGS Assets was given, and no such offers were made.
E. With respect to each such entity that has or asserts Liens and Claims on, or other interest in, the WGS Assets, such entity consents to the sale or could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of such interest or such entity’s interest is m bona fide dispute.
F. Sale of the WGS Assets free and clear of all liens, interests, encumbrances and claims, other than those expressly assumed by the Buyer, to the extent described in the WGS Asset Purchase Agreement, is appropriate pursuant to section 363(f) of the Bankruptcy Code.
G. The negotiations which resulted in the WGS Asset Purchase Agreement at all times were conducted in good faith and at arms length, with Debtors, on the one hand, and the Buyer, on the other hand, being separately represented therein. In addition, at all times relevant thereto, neither the Debtors, nor any officer, director, shareholder or employee was affiliated or in any way connected with the Buyer, except as disclosed in the Sale Motion. Accordingly, the Buyer is a good faith purchaser for value for all purposes, including, without limitation, within the meaning of “good faith” purchaser as used in section 363(m) of the Bankruptcy Code.
Based on the foregoing, IT IS HEREBY ORDERED that:
1. The Sale Motion is granted and approved with respect to the WGS Assets. This order is without prejudice to entry of such further order or orders as may be appropriate for the disposition of non-WGS Assets pursuant to the Sale Motion;
2. The Debtors are authorized to sell the WGS Assets to the Buyer on the terms and conditions set forth in the final executed WGS Asset Purchase Agreement;
3. The Debtors are authorized to enter into and perform the WGS Asset Purchase Agreement and take any actions reasonably necessary or appropriate to (a) consummate the proposed sale to the Buyer in accordance with the terms and conditions set forth in the WGS Asset Purchase Agreement and any amendments thereto, without limitation, to convey to the Buyer the WGS Assets which are the subject of the WGS Asset Purchase Agreement; and (b) perform, implement and close fully the sale to the Buyer together with all additional instruments and documents that may be reasonably necessary or desirable to implement the sale;
4. The Sale of the WGS Assets is being consummated in accordance with the Bankruptcy Code, including, without limitation, section 363(m) of the Bankruptcy Code, and the Buyer is deemed a good faith purchaser entitled to the protections afforded such a purchaser pursuant to section 363(m) of the Bankruptcy Code;
5. Effective upon the closing of the Sale of the WGS Assets to the Buyer, the WGS Assets shall be transferred, sold and delivered to the Buyer free and clear of liens, encumbrances, obligations, liabilities, contractual commitments, and claims as defined in section 101(5) of the Bankruptcy Code, to the fullest extent allowed by law whether based in law or equity (collectively, “Liens and Claims”), including, without limitation, any security interest, mortgage, lien, charge against or interest in property, adverse claim, claim of possession, license or restriction of any kind, including, but not limited to, any restriction on the use, receipt of income or other exercise of any attributes of ownership or any option to purchase, option, charge or retention agreement which is intended as security or other matters of any person or entity that encumber or relate to, or purport to encumber or relate to, the WGS Assets, except as specifically provided in the WGS Asset Purchase Agreement or this Order. All such Liens and Claims shall attach to the proceeds of the Sale in the same order of priority and shall have the same validity (or invalidity) as existed prior to the Sale.
6. Upon and after closing of the WGS Asset Purchase Agreement, Buyer shall not be deemed or considered a successor to, or continuation of, Debtors or their enterprises.
7. This Order is and shall be effective as a determination that, upon transfer of the WGS Assets to the Buyer, all Liens and Claims existing as to the WGS Assets conveyed to the Buyer have been and hereby are terminated and declared to be unconditionally released, discharged and terminated, and shall be binding upon and govern the acts of all entities, including all filing agents, filing officers, administrative agencies or units, governmental departments or units, secretaries of state, federal, state and local officials and all other persons and entities who may be required to report or insure any title or state of title in or to the WGS Assets conveyed to the Buyer. All Liens and Claims of record as of the date of this Order, except as otherwise provided in this Order, shall be forthwith removed and stricken as against the WGS Assets. All entities described in this paragraph are authorized and specifically directed to strike all such recorded liens against the WGS Assets from their records, official or otherwise.
8. The failure to identify in the Sale Motion, and any exhibits or schedules thereto, any lien asserted by a grower shall not preclude such grower from receiving the benefits set forth under the Final OrderAuthorizing Debtor to Obtain Secured Credit and Granting Senior RelatedRelief, entered on March 22, 2000.
9. The Court retains jurisdiction to:
a. Interpret, implement and enforce the terms and provisions of this Order and the terms of the WGS Asset Purchase Agreement, all amendments thereto and any waivers and consents thereunder and each of the agreements executed in connection therewith;
b. Resolve any disputes arising under or related to the sale of the WGS Assets to the Buyer;
c. Adjudicate all issues concerning alleged Liens and Claims and any other alleged interest in or to the WGS Assets or the proceeds of the sale;
10. The failure to specifically include any particular provision of the WGS Asset Purchase Agreement in this Order shall not diminish or impair the efficacy of such provision; it being the intent of the Court that the WGS Asset Purchase Agreement, and each and every provision, term and condition there be, and therefore is, authorized and approved in its entirety;
11. This Order shall be effective immediately upon entry pursuant to Rules 7062 and 9014 of the Federal Rules of Bankruptcy Procedure and shall not be subject to the stay provisions contained in Rule 6004(g) of the Federal Rules of Bankruptcy Procedure;
12. With respect to the WGS Assets, pursuant to Rule 58 of the Federal Rules of Civil Procedure, as made applicable herein by Rule 9021 of the Federal Rules of Bankruptcy Procedure, this Order shall constitute an order approving, the notice of the Sale Motion and Sale Hearing, and the Sale Motion; and
13. This Order is binding upon any trustee appointed in this case or, if this case is converted to a case under chapter 7, in such chapter 7 case.