Rule 4001-4

First Day Motions

(a)  Advance Courtesy Copy to United States Trustee.  Unless ordered otherwise by the Court, for any motion for which an accelerated hearing or interim relief is sought within the first thirty (30) days after the filing of a chapter 11 petition (e.g., a “first day motion”), the debtor or movant must provide the United States Trustee at least twenty-four (24) hours’ advance notice of the following:  (i) the nature of the case; (ii) the relief sought; (iii) the proposed date for the hearing; and (iv) provide the United States Trustee courtesy copies of the motions in substantially final form. The United States Trustee shall keep advance notice and courtesy copies confidential until the case is filed.

(b)  Conspicuousness Requirements for First Day, Cash Collateral and Financing Motions.  Any motion for use of cash collateral under Code § 363 and any motion for post-petition financing under Code § 364 must conspicuously state in the first or second paragraph whether any of the following relief is sought and, if so, identify the pages of the motion and the attached exhibits that support the relief:

(1)  Granting a prepetition creditor a lien or security interest in post-petition assets that the creditor would not otherwise have under its prepetition security agreement and applicable law, other than replacement liens in the same kind of collateral as the creditor had prepetition (i.e. “cross-collateralization”); 

(2)  Findings, conclusions, holdings or orders:  (i) about to the amount of a secured debt; (ii) validity; (iii) perfection; and/or (iv) scope of the security interests that purportedly affect the rights of the estate or anyone other than the debtor in possession and the secured creditor;

(3)  Release, waiver or abandonment of claims, setoff rights, surcharge rights, avoidance actions and subordination actions against a secured creditor, or findings or stipulations that no such rights exist, that purportedly affect the rights of the estate or anyone other than the debtor in possession and the secured creditor;

(4)  Granting of liens or security interests against rights and actions arising under Code §§ 544, 545, 547, 548 or 549;

(5)  The use of funds derived from post-petition financing to pay all or part of a prepetition secured debt, or a provision deeming prepetition secured debt to be post-petition secured debt, other than as permitted by Code § 552(b);

(6)  Granting surcharge or “carve-out” rights to a debtor’s professionals without providing equivalent treatment to professionals engaged by an authorized committee, or any restrictions on the surcharge or carve-out rights granted to such professionals other than the requirement for Court approval of the fees or expenses (e.g. restriction against investigating or pursuing causes of action against the secured creditor);

(7) Payment of prepetition wages, salary or other compensation to an employee in an amount exceeding the Code’s priority amount, payment of any severance or vacation pay earned prepetition, or payment of any officer’s, director’s, insider’s or equity holder’s prepetition wages, salaries, commissions, benefits or consulting fees; and

(8)  Priming any secured creditor under Code § 364(d) without that creditor’s consent.

 (c)  Procedure to Obtain Hearing on First Day Matters.  All first day motions must be set for hearing. A party may request an expedited hearing by filing a motion in compliance with LR 9013-1(h).

 (d)  Notice of Hearing on First Day Matters.  The moving party is responsible for giving notice of any hearing.

 (e)  Limited Scope of Interim Relief.  Absent extraordinary circumstances, the Court will not grant a motion that includes any of the provisions listed in subsection (b) above on an interim or accelerated basis, and such provisions may be excluded even from “final” orders issued after fourteen (14) days’ notice, unless an official creditors’ committee has had sufficient time to be appointed, organize, engage professional(s), and analyze and investigate the requested relief with the advice of such professional(s).

 


Notes 2018:  LR updated to incorporate uniform procedures for first day matters, and provide clarification regarding hearing requirement, notice to United States Trustee’s office, service of orders, and interim nature of first day orders.

 

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