Case No. 02 B 12059 (Jointly Administered)United States Bankruptcy Court, N.D. Illinois, Eastern Division
September 17, 2002
ORDER AUTHORIZING DEBTOR HA-LO INDUSTRIES, INC. TO (A) CONSENT TO THE SALE OF SUBSTANTIALLY ALL OF THE ASSETS OF ITS INDIRECT SUBSIDIARY, UPSHOT INTEGRATED INC., AND (B) ENTER INTO CERTAIN ADDITIONAL TRANSACTIONS RELATED TO SUCH SALE
CAROL A. DOYLE, United States Bankruptcy Judge
This matter came before the Court upon the Motion of Debtor and Debtor-in-Possession Ha-Lo Industries, Inc. (“Ha-Lo”) pursuant to Section 363(b)(1) of the United States Bankruptcy Code, 11 U.S.C. sec. 363(b)(1), for entry of an Order (A) granting it authority to consent to the sale of substantially all of the assets (the “Sale”) of its indirect subsidiary, Upshot Integrated Inc. (“Assetco”) pursuant to an Asset Purchase Agreement (the “Asset Purchase Agreement”) between Assetco and 1524794 Ontario Limited (“Acquitor”), (B) granting it authority to enter into, or consent to its subsidiaries’ entering into, certain additional transactions related to such sale as detailed in the Motion (together with the sale Assetco’s assets, the “2002 Transactions”), and (C) waiving the ten-day stay otherwise applicable to such orders under Rule 6004(g) of the Federal Rules of Bankruptcy Procedure (the “Motion”)[1] and the Court having jurisdiction over this matter under 28 U.S.C. Sec. 1334(a) and 157(a); and this matter being a core proceeding under 28 U.S.C. § 157(b)(2)(A), (M), (N), and (O); and there being no objections to the Motion; and the Court having conducted a hearing on the Motion; and the Court having heard and considered the arguments and comments of all parties who sought to he heard in support or opposition to the Motion; and it appearing that the relief requested in the Motion is in the best interest of the bankruptcy estate, its creditors, and all other parties-in-interest; and the Court having given due deliberation and consideration to this matter; and good and sufficient cause appearing therefor;
THE COURT HEREBY FINDS:
A. The Court has jurisdiction over the Motion pursuant to 28 U.S.C. § 157 and 1334, and this matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (N). Venue of the Case and the Motion in this district is proper under 28 U.S.C. § 1408
and 1409.
B. The statutory predicates for the relief sought in the Motion are sections 105(a), 363(b), (m) and (n), and 1146(c) of the Bankruptcy Code, and Rules 2002, 6004 and 9014 of the Federal Roles of Bankruptcy Procedure (the “Bankruptcy Rules”).
C. The bidding proLedures (the “Bidding Procedures”) approved in the Order Approving Notice and Bidding Procedures For The Sale of Substantially All of The Assets of Upshot Integrated Inc. (the “Procedures Order”) have been fully complied with in all material respects.
D. Proper, timely, adequate and sufficient notice of the Motion, the Sale and the other transactions contemplated by the Asset Purchase Agreement have been provided in accordance with the Bidding Procedures, sections 102(1), 105(a) and 363 of the Bankruptcy Code and Rules 2002, 6004 and 9014 of the Bankruptcy Rules, and any other applicable provisions of the Bankruptcy Code and the Local Bankruptcy Rules, such notice was good and sufficient, and appropriate under the particular circumstances, and no other or further notice of the Motion, the Sale and other transactions contemplated by the Asset Purchase Agreement or any related document or the entry of this Sale Order, is required.
E. A reasonable opportunity to object or be heard with respect to the Motion and the relief requested therein has been afforded to all interested persons and entities as required by the Procedures Order.
F. HA-LO has marketed the Purchased Assets and conducted the sale process in compliance with the Bidding Procedures set forth in the Proceders Order, and the requirements of applicable law
G. HA-LO has full corporate power and authority to execute the Asset Purchase Agreement and all other documents contemplated thereby in connection with the Sale and the other 2002 Transactions, and the Sale and the other 2002 Transactions have been duly and validly authorized by all necessary corporate action of HA-LO. HA-LO has all the corporate power and authority to perform its obligations under the Asset Purchase Agreement and any other related documents.
H. No consents or approvals, other than those expressly provided for in the Asset Purchase Agreement, are required for HA-LO to perform its obligations under the Asset Purchase Agreement or in connection with any of the other 2002 Transactions.
I. The decision to enter into Asset Purchase Agreement reflects the exercise of HA-LO’s sounds business judgment.
J. Approval at this time of the Asset Purchase Agreement and consummation of the Sale and other transactions contemplated thereby is in the best interests of HA-LO, its creditors, its estate, and other parties in interest.
K. Acquiror has the financial wherewithal to consummate the Sale and purchase the Assets; Assetco, diligently and in good faith, marketed the Purchased Assets to secure the highest and best offer; and the auction process proposed by HA-LO, approved by the Court in the Procedures Order and requited by section 363 of the Bankruptcy Code has permitted Acquiror offer to be tested against other offers.
L. The Asset Purchase Agreement was negotiated, proposed and entered into by Assetco and Acquiror without collusion, in good faith, and from arm’s-length bargaining positions. None of Assetco or Acquiror has engaged in any conduct that would cause or permit the Asset Purchase Agreement, to he avoided under section 363(n) of the Bankruptcy Code.
M. Acquiror is a good faith purchaser within the meaning of section 363(m) of the Bankruptcy Code and, as such, is entitled to all of the protections afforded thereby.
N. The terms and conditions of the Asset Purchase Agreement and the Purchase Price to be provided by Acquiror pursuant to the Asset Purchase Agreement (i) are fair and reasonable,
(ii) represent the highest or otherwise best offer for the Purchased Assets and (iii) constitute reasonably equivalent value and fair consideration under the Bankruptcy Code and other applicable laws.
O. The Sale and other transactions contemplated by the Asset Purchase Agreement must be approved and consummated promptly in order to preserve the value of the Purchased Assets.
P. As a material inducement to Acquiror entering into the Asset Purchase Agreement, the parties have executed a general release (the “General Release”) in a form previously approved by the Committee. Acquiror would not have entered into the Asset Purchase Agreement if it could be liable for any of the released claims described in the General Release.
NOW THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT;
General Provisions
1. The Motion shall be, and it hereby is, granted, as further described herein.
2. All objections, if any, to the Motion or to the relief requested therein that have not been withdrawn, waived, or settled, and all reservations of rights included therein, are hereby overruled on the merits.
Approval of the Asset Purchase Agreement
3. The terms and conditions and transactions contemplated by the Asset Purchase Agreement are hereby approved in all respects to the extent permitted by law, and the closing under the Asset Purchase Agreement is hereby authorized under sections 105(a) and 363(b) of the Bankruptcy Code.
4. Pursuant to sections 363(b) of the Bankruptcy Code, HA-LO is hereby authorized, and empowered to consent to the consummation and implementation of Assetco’s obligations under the Asset Purchase Agreement (including without limitation the provisions of the General Release) and the other 2002 Transactions, together with all additional instruments and documents that may be reasonably necessary or desirable to implement the Asset Purchase Agreement and the transactions contemplated thereby, and to take all further actions as may reasonably be requested by the Acquiror for the purpose of causing Assetco to fully discharge its obligations under the Asset Purchase Agreement.
Additional Provisions
5. This Court retains jurisdiction (i) to enforce and implement the terms and provisions of the Asset Purchase Agreement, all amendments thereto, any waivers and consents thereunder, and each of the agreements executed in connection therewith; (ii) to resolve any disputes, controversies or claims arising out of or relating to the Asset Purchase Agreement; and (iii) to interpret, implement, and enforce the provisions of this Sale Order.
6. This Court hereby orders that the ten-clay stays provided for in Bankruptcy Rules 6004(g) and 6006(d) shall not be in effect with respect to the Sale and other transactions contemplated thereby, and thus this Sale Order shall be effective and enforceable immediately upon entry.
7. In the absence of a stay pending appeal, if Acquiror and Assetco elect to dose under the Asset Purchase Agreement at any time after entry of this Sale Order, then, with respect to the Sale and other transactions contemplated by the Asset Purchase Agreement approved and authorized herein, Acquiror, as a purchaser in good faith, shall be entitled to the protections of 363(m) of the Bankruptcy Code if this Sale Order or any authorization contained herein is reversed or modified on appeal.
8. The failure specifically to include any particular provisions of the Asset Purchase Agreement, or any document, instrument or agreement entered into in connection therewith, in this Sale Order shall not diminish or impair the effectiveness of such provisions, it being the intent of the Court that the Asset Purchase Agreement be authorized and approved in its entirety.
15. The Asset Purchase Agreement and any related agreements, documents or other instruments may be modified, amended or supplemented by the parties thereto in accordance with the terms thereof without further order of the Court, provided that any such modification, amendment or supplement is not material.