Broadview Claims Trading

7/31/2019 Broadview Claims Trading

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Rachel C. StricklandJennifer J. HardyAnna C. BurnsWILLKIE FARR & GALLAGHER LLP787 Seventh Avenue

New York, New York 10019(212) 728-8000

UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK------------------------------------------------------xIn re : Chapter 11

:Broadview Networks Holdings, Inc., et al.,

1: Case No. 12-__________ ( ):

Debtors. : (Joint Administration Pending)

------------------------------------------------------ x

DEBTORS MOTION PURSUANT TO SECTIONS 105(a)

AND 362 OF THE BANKRUPTCY CODE FOR INTERIM AND FINAL

ORDERS (A) REQUIRING CERTAIN ENTITIES TO PROVIDE

INFORMATION PURSUANT TO BANKRUPTCY RULE 2004,

(B) RESTRICTING THE PURCHASE OR SALE OF CERTAIN

CLAIMS AGAINST, AND EQUITY INTERESTS IN, THE DEBTORS, AND

(C) ESTABLISHING NOTIFICATION AND HEARING PROCEDURES FOR

RELIEF FROM THE RESTRICTIONS ON THE PURCHASE OR SALE OF

CERTAIN CLAIMS AGAINST, AND EQUITY INTERESTS IN, THE DEBTORS

TO THE HONORABLE UNITED STATES BANKRUPTCY COURT JUDGE:

The debtors and debtors in possession in the above-captioned cases (Broadview

or the Debtors, as applicable) hereby move for entry ofinterim and final orders pursuant to

1 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses:(i) Broadview Networks Holdings, Inc. (0798); (ii) A.R.C. Networks, Inc. (0814); (iii) ARC Networks, Inc.(4934); (iv) ATX Communications, Inc. (2245); (v) ATX Licensing, Inc. (9838); (vi) ATXTelecommunications Services of Virginia, LLC (3888); (vii) BridgeCom Holdings, Inc. (2965);(viii) BridgeCom International, Inc. (3985); (ix) BridgeCom Solutions Group, Inc. (3989); (x) Broadview

Networks, Inc. (1082); (xi) Broadview Networks of Massachusetts, Inc. (8054); (xii) Broadview Networksof Virginia, Inc. (6404); (xiii) Broadview NP Acquisition Corp. (2734); (xiv) BV-BC AcquisitionCorporation (7846); (xv) CoreComm-ATX, Inc. (0529); (xvi) CoreComm Communications, LLC (2077);(xvii) Digicom, Inc. (0777); (xviii) Eureka Broadband Corporation (6004); (xix) Eureka Holdings, LLC(1318); (xx) Eureka Networks, LLC (1244); (xxi) Eureka Telecom, Inc. (3720); (xxii) Eureka Telecom ofVA, Inc. (5508); (xxiii) InfoHighway Communications Corporation (0551); (xxiv) Info-HighwayInternational, Inc. (8543); (xxv) InfoHighway of Virginia, Inc. (1600); (xxvi) nex-i.com, inc. (7035);(xxvii) Open Support Systems LLC (9972); and (xxviii) TruCom Corporation (0714). The Debtorsexecutive headquarters address is 800 Westchester Avenue, Rye Brook, NY 10573.

12-13581 Doc 14 Filed 08/22/12 Entered 08/22/12 18:35:50 Main DocumentPg 1 of 26

8824200120822000000000018

Docket #0014 Date Filed: 8/22/20


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sections 105(a) and 362 of title 11 of the United States Code (the Bankruptcy Code) and Rule

2004 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules): (a) requiring

certain holders of the Senior Secured Notes2 to provide the Debtors with certain information that

may be required to prepare applications (collectively, the Regulatory Applications) for

regulatory approvals of the change of control contemplated by the Prepackaged Plan;

(b) restricting the purchase or sale of securities that may negatively impact the value of the

Debtors tax attributes; and (c) establishing related notice procedures (the Motion). In support

of the Motion, the Debtors rely upon and incorporate by reference the Declaration of Michael K.

Robinson, President and Chief Executive Officer of Broadview Networks Holdings, Inc., In

Support of Chapter 11 Petitions and First Day Pleadings (the Robinson Declaration), which

was filed with the Court concurrently herewith. In further support of the Motion, the Debtors, by

and through their undersigned proposed counsel, respectfully represent:

BACKGROUND

1. On the date hereof (the PetitionDate), Broadview Networks Holdings,Inc. (BVNH) and each of the other Debtors filed a voluntary petition for reliefunder chapter

11 of the Bankruptcy Code. The Debtors intend to continue in the possession of their respective

properties and the management of their respective businesses as debtors in possession pursuant

to sections 1107 and 1108 of the Bankruptcy Code. The Debtors have requested that these

chapter 11 cases be consolidated for procedural purposes. As of the date hereof, no trustee,

examiner or official committee has been appointed in any of the Debtors cases.

2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in thePrepackaged Plan.



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2. Prior to the Petition Date, the Debtors solicited votes on theJointPrepackaged Plan of Reorganization for Broadview Networks Holdings, Inc.And Its Affiliated

Debtors (including all exhibits, schedules, appendices, and supplements thereto, and as amended,

modified, or supplemented from time to time, the Prepackaged Plan), through their disclosure

statement related to the Prepackaged Plan (the Disclosure Statement). On or around the date

that solicitation commenced, holders of over two-thirds of the aggregate principal amount of the

Debtors 11 3/8% senior secured notes due 2012 (the Required Consenting Noteholders) and

holders of approximately 70% of the preferred equity interests in BVNH (the Consenting

Equity Holders) entered into a restructuring support agreement, dated July 13, 2012 (as

amended, the Restructuring Support Agreement) whereby such parties agreed, among other

things, to (a) support the Prepackaged Plan and (b) provide certain information that may be

required to be included in the Regulatory Applications. The Prepackaged Plan has been accepted

by all classes entitled to vote in excess of the statutory thresholds specified in section 1126(c) of

the Bankruptcy Code. The Debtors have filed concurrently herewith a motion seeking, among

other things, to schedule a combined hearing on the confirmation of the Prepackaged Plan and

approval of the Disclosure Statement.

3. The events leading up to the Petition Date and the facts and circumstancessupporting the relief requested herein are set forth in the Robinson Declaration.

JURISDICTION

4. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. 1334. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). Venue in this Court is

proper pursuant to 28 U.S.C. 1408 and 1409. Venue of these cases and this Motion in this



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district is proper pursuant to 28 U.S.C. 1408 and 1409. The statutory predicates for the relief

requested herein are sections 105(a) and 362 of the Bankruptcy Code and Bankruptcy Rule 2004.

THE REGULATORY APPLICATIONS

A. The FCC and PUC Licenses5. Between 1992 and 2002, the Federal Communications Commission (the

FCC) issued licenses to certain Broadview entities authorizing such entities to provide

competitive interstate and international telecommunications services.3 Additionally, certain

Broadview entities hold authority from multiple Public Utility Commissions (collectively, the

PUCs) in various states to provide competitive local exchange and/or interexchange

telecommunications services.4

6. The Prepackaged Plan contemplates the distribution of 97.5% of theequity in BVNH upon the effective date of the Prepackaged Plan (the Effective Date) to

holders of the Debtors Senior Secured Notes and 2.5% of the new equity to current holders of

preferred equity interests of BVNH, each subject to dilution. Such issuance of new equity will

cause a change of control of BVNH, which requires prior approval by the FCC and applicable

3 Specifically, Broadview Networks, Inc., Broadview NP Acquisition Corp., BridgeCom International, Inc.,TruCom Corporation, ATX Licensing, Inc., A.R.C. Networks, Inc., Eureka Telecom, Inc., Eureka Telecomof VA, Inc. and InfoHighway of Virginia, Inc. hold blanket domestic authority to provide interstatetelecommunications services pursuant to Section 214 of the Communications Act of 1934, as amended (theCommunications Act). Also, Broadview Networks, Inc., BridgeCom International, Inc., TruComCorporation, ATX Licensing, Inc., A.R.C. Networks, Inc. and Eureka Telecom, Inc. hold licenses toprovide international telecommunications services pursuant to Section 214 of the Communications Act.

4 Specifically, Broadview Networks, Inc. holds licenses to provide telecommunications services in all statesexcept Alaska, Hawaii, and Virginia; Broadview NP Acquisition Corp., BridgeCom International, Inc.,TruCom Corporation, ATX Licensing, Inc., A.R.C. Networks, Inc. and Eureka Telecom, Inc. each holdlicenses to provide telecommunication services in multiple states; and Eureka Telecom of VA, Inc.,InfoHighway of Virginia, Inc., Broadview Networks of Virginia, Inc. and ATX TelecommunicationsServices of Virginia, LLC hold licenses to provide telecommunications services in Virginia.



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PUCs. Securing regulatory approval for the change of control is a condition precedent to the

Effective Date. See 10.2(d) of the Prepackaged Plan.

B. The Regulatory Applications7. Because the approval process for the Regulatory Applications can take

more than three months (even on an expedited schedule) and because the Debtors hope to

emerge from these chapter 11 cases as expeditiously as possible, Broadview submitted change of

control applications to the PUCs prior to the Petition Date. The Debtors intend to file the

change of control application with the FCC shortly after the Petition Date. The FCCs rules and

procedures require transfer of control applicants to disclose the identity of all proposed equity

holders who are expected to have a 10% or greater ownership interest or a 50% or greater

ownership interest, each including indirect interests, in such applications. 47 C.F.R.

63.04(a)(4) and 63.24(c). Certain PUCs also require substantially similar disclosures. In

addition, certain PUCs require disclosure of all proposed equity holders who are expected to

have a 20% or greater ownership interest or a 25% or greater ownership interest, each including

indirect interests. Therefore, any change in the identity of the entities who are expected to have a

10%, 20%, 25% or 50% or greater ownership interest in the Reorganized Debtors, including

indirect interests (each such holder, a Significant Equityholder, and each Significant

Equityholders status as a potential holder of either 10%, 20%, 25% or 50% or greater ownership

interest in the Reorganized Debtors, including indirect interests, shall constitute such Significant

Equityholders Triggering Status) pending the approval of the Regulatory Applications would

require the Debtors to amend the applicable Regulatory Application. Such amendments could

delay the approval process.



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i. Equityholder Information8. Pursuant to the terms of the Restructuring Support Agreement, the

Required Consenting Noteholders agreed to cooperate in a commercially reasonable manner in

obtaining the regulatory approvals required to consummate the Prepackaged Plan, including the

timely provision of necessary information for any required regulatory submissions or other

government filings. See 1.1(a) of the Restructuring Support Agreement. In furtherance of

these obligations, the Required Consenting Noteholders have or will provide certain specified

information regarding their holdings and entities, which was included in the Regulatory

Applications as submitted.

9. However, while Required Consenting Noteholders will hold the majorityof the equity in BVNH after the consummation of the Prepackaged Plan, the Debtors may not be

aware of other holders of Senior Secured Notes that may be Significant Equityholders upon

consummation of the Prepackaged Plan. It is, therefore, imperative that any additional Senior

Secured Noteholders, other than the Required Consenting Noteholders, promptly disclose to the

Debtors any additional information that may be required in the Regulatory Applications.

ii. Regulatory Trading Procedures10. As noted above, to secure the approval of the FCC and PUCs of the

change of control contemplated by the Prepackaged Plan, the Debtors must include an accurate

description of the pro forma ownership of reorganized BVNH in their Regulatory Applications.

Once filed, the Debtors seek to avoid having to repeatedly modify or supplement their

Regulatory Applications, which could result in a substantial delay of the approval process. To

avoid this risk, the Debtors request that the Court approve certain restrictions upon trading

Senior Secured Notes, as further described below.



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THE TAX ATTRIBUTES

11. The Debtors estimate that, as of June 30, 2012, they had consolidated netoperating tax loss carryforwards (the NOLs) of at least $213,568,000. Under and pursuant to

section 172 of the Internal Revenue Code of 1986, as amended (the I.R.C.), the Debtors intend

to use the NOLs to offset future income, thereby significantly reducing their future federal

income tax liability. As the Debtors NOLs are valuable assets of the estates, the availability of

these tax savings may prove beneficial to the financial health and going concern value of the

Debtors.

12. By and through this Motion, the Debtors are seeking authorization toprotect and preserve their NOLs and other tax assets, pursuant to sections 105(a), 362 and 541 of

the Bankruptcy Code, by establishing certain notice and hearing procedures governing the

transfer or trading in, or any claims of worthlessness with respect to, any class or series of the

common stock (the Common Stock) or the preferred stock (the Preferred Stock)

(collectively, the Stock) of BVNH.

13. If left unrestricted, such trading could severely limit the Debtors ability touse a valuable asset of their estatestheir NOLsand could have significant negative

consequences for the Debtors, their respective estates and creditors. Specifically, the trading of

the Stock could adversely affect the Debtors ability to utilize their NOLs if a significant number

of five percent (5%) or greater blocks of Stock are created, or if a significant number of shares

are added to or sold from such blocks, such that, together with previous trading by five percent

(5%) stockholders during the three-year period prior to the Petition Date, an ownership change

within the meaning of section 382 of the I.R.C. is triggered prior to consummation of a

confirmed chapter 11 plan for the Debtors.



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14. Likewise, if a fifty percent (50%) or greater shareholder were, for federaltax purposes, to treat its equity securities in the Debtors as becoming worthless prior to the

Debtors emergence from chapter 11, such a claim could trigger an ownership change under

section 382(g)(4)(D) of the I.R.C., thus triggering an adverse effect on the Debtors tax assets.

Such ownership changes may result in all or part of the Debtors NOLs being disallowed under

section 382 of the I.R.C.

15. To preserve the value of their NOLs and other tax assets to the fullestextent possible, the Debtors seek relief enabling them to monitor closely certain transfers of, or

declarations of worthlessness with respect to, the Stock so as to be in a position to act

expeditiously with respect to transfers or declarations that may diminish the value of the

Debtors tax attributes. Further, pursuant to section 362 of the Bankruptcy Code, any sale or any

transfer of, or declaration of worthlessness related to, the Stock that would trigger a change of

ownership may be null and voidab initio. Accordingly, by and through this Motion, the Debtors

seek: (a) to provide notice to potential transferees and shareholders intending to make a

declaration of worthlessness that any such transfers, sales or deductions may be ineffective; and

(b) to otherwise prevent transfers and declarations of worthlessness that would be detrimental to

the Debtors estates.

RELIEF REQUESTED

A. Disclosure of Equityholder Information16. In light of the information required to be included in the Debtors

Regulatory Applications, the Debtors request interim and final orders requiring any Senior

Secured Noteholder or transferee thereof, other than the Required Consenting Noteholders

(whose disclosure requirements are governed by the Restructuring Support Agreement), to



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provide the Debtors with certain information. Specifically, the Debtors request that the Court

enter interim and final orders providing that (a) upon the request of the Debtors, each Senior

Secured Noteholder or its transferee, other than the Required Consenting Noteholders, provide

the Debtors with its name, address, citizenship, principal business, the principal amount of

Senior Secured Notes held by such entity and information regarding whether a foreign entity

owns 10% or more of such Senior Secured Noteholder or transferee (the Equityholder

Information) within seven (7) business days of such request and (b) to the extent that any

Senior Secured Noteholder holds a principal amount of Senior Secured Notes greater than $25

million on the date of the entry of an interim order approving the relief requested herein, such

Senior Secured Noteholder, other than the Required Consenting Noteholders, provide the

Debtors with the Equityholder Information within (7) business days of the entry of such interim

order (as applicable, the Equityholder Disclosure Date). The Debtors shall serve a copy of

the order granting the relief requested in this Motion on each holder of Senior Secured Notes.

B. Regulatory Trading Procedures17. In order to prevent a change in the identity of the Significant

Equityholders previously disclosed to the FCC and PUCs in the Regulatory Applications, which

change may delay the approval of the Regulatory Applications as further described above, the

Debtors request that the Court restrict the purchase or sale of Senior Secured Notes during the

pendency of these cases to the extent such purchase or sale could result in (a) an entity who was

not previously identified as a Significant Equityholder in the Regulatory Applications becoming

a holder of at least 8% of total equity in BVNH upon consummation of the Prepackaged Plan

(each potential holder of 8% or more equity in reorganized BVNH, a Potential Significant



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Equityholder), or (b) a change in the Triggering Status for any entity who has at any point been

identified in the Regulatory Applications as a Significant Equityholder.

18. Such restrictions will allow for a prudent margin of error, which willensure that the Debtors correctly identify in the appropriate Regulatory Applications all entities

that may hold 10% or more of the total equity in BVNH upon consummation of the Prepackaged

Plan. The Debtors estimate that only a small minority of Senior Secured Noteholders will

qualify as Significant Equityholders as of the Effective Date. Therefore, the Debtors expect that

these restrictions will impact very few parties.

19.

Moreover, to ensure compliance with the proposed restrictions, the

Debtors request that the Court establish certain notification and hearing procedures to seek relief

from the restrictions on the purchase or sale of any Senior Secured Notes during the pendency of

these cases. Specifically, the Debtors request that the Court establish the following procedures

(the Regulatory Trading Procedures):

(a) Senior Secured Notes Acquisition Notice: Prior to the consummation ofany transfer of any Senior Secured Notes that would result in either (i) anentity becoming a Potential Significant Equityholder upon emergence, or(ii) a change in the Triggering Status for an entity previously identified asa Significant Equityholder in the Regulatory Applications, the transfereemust serve on the Debtors and their counsel a notice substantially in theform attached to the Motion as Exhibit C-1 (the Senior Secured NotesAcquisition Notice), which Senior Secured Notes Acquisition Notice

must include a statement by the transferee that it is reasonably likely thatthe proposed transaction will not require the Debtors to amend theRegulatory Applications and will not adversely affect prosecution by theDebtors or processing by the FCC or PUCs of the RegulatoryApplications.

(b) Senior Secured Notes Disposition Notice: Prior to the consummation ofany transfer of any Senior Secured Notes that would result in a change inthe Triggering Status for an entity previously identified as a SignificantEquityholder in the Regulatory Applications, the transferor must serve onthe Debtors and their counsel a notice of the intended transfer substantially



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in the form attached to the Motion as Exhibit C-2 (the Senior SecuredNotes Disposition Notice), which Senior Secured Notes DispositionNotice must include a statement by the transferor that it is reasonablylikely that the proposed transaction will not require the Debtors to amendthe Regulatory Applications and will not adversely affect prosecution by

the Debtors or processing by the FCC or PUCs of the RegulatoryApplications.

(c) Objection Procedures: The Debtors shall have five (5) business days afterreceipt of a Senior Secured Notes Acquisition Notice or a Senior SecuredNotes Disposition Notice (each, a Senior Secured Notes Transfer

Notice and together the Senior Secured Notes Transfer Notices) to

file with the Court and serve on the entity filing the Senior Secured NotesTransfer Notice an objection to the proposed transfer on the grounds that itis not reasonably acceptable to the Debtors. If an objection is filed, suchentity shall not proceed with the proposed transaction (or, if such entitydoes proceed with the proposed transaction, such transaction shall not beeffective) unless and until (i) the objection is withdrawn or overruled or(ii) the proposed transaction is approved by a final and nonappealableorder of the Bankruptcy Court determining that the proposed acquisitionor disposition, as applicable, will not require the Debtors to amend theRegulatory Applications and will not adversely affect prosecution by theDebtors or processing by the FCC or PUCs of the RegulatoryApplications; provided that in any hearing on any such objection to aSenior Secured Notes Transfer Notice, the entity filing the Senior SecuredNotes Transfer Notice shall bear the burden of proof as to whether aproposed acquisition or disposition, as applicable, will not require theDebtors to amend the Regulatory Applications and will not adverselyaffect prosecution by the Debtors or processing by the FCC or PUCs ofthe Regulatory Applications. If no objection to a Senior Secured NotesTransfer Notice is filed within such five (5) business day period or if anobjection to a Senior Secured Notes Transfer Notice is filed and laterwithdrawn, the transaction may proceed solely as set forth in the SeniorSecured Notes Transfer Notice. Any further transactions within the scopeof this paragraph must comply with the same noticing and five (5)business day objection procedures. The Debtors will reasonably cooperatewith any entity that wishes to make an inquiry with the FCC and the PUCsas to whether the transaction proposed in a Senior Secured Notes TransferNotice would require the Debtors to amend the Regulatory Applications

and will not adversely affect prosecution by the Debtors or processing bythe FCC or PUCs of the Regulatory Applications. If such entity receives alegally binding determination from the FCC and the PUCs that theproposed transaction would not require the Debtors to amend theRegulatory Applications and will not adversely affect prosecution by theDebtors or processing by the FCC or PUCs of the Regulatory



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Applications, then the Debtors shall not file an objection to the subjectSenior Secured Notes Transfer Notice and the Debtors shall withdraw anypreviously filed objections.

20. The Debtors further request that any transfer of any Senior Secured Notesmade in violation of these Regulatory Trading Procedures be deemed void ab initio.

C. NOL Trading Procedures21. In light of the necessity of preserving the value of the Debtors NOLs, as

described above, the Debtors seek to implement the following procedures (the NOL Trading

Procedures) in connection with the trading of Stock in order to protect and preserve their tax

attributes, pursuant to sections 105(a), 362 and 541 of the Bankruptcy Code:

(a) Notice of Substantial Equityholder Status. Any person or entity whobecomes a Substantial Equityholder (as defined below), must file with theCourt and serve on the Debtors and their proposed counsel a noticesubstantially in the form attached to the Motion as Exhibit D-1 (theSubstantial Ownership Notice) on or before ten (10) days after thatperson or entity becomes a Substantial Equityholder.

(b) Restrictions and Procedures for Acquiring Stock. Prior to the transfer ofequity securities (including Options to acquire stock) that would result inan increase in the amount of Common Stock or Preferred Stock

beneficially owned by a Substantial Equityholder, or would result in aperson or entity becoming a Substantial Equityholder, such SubstantialEquityholder shall file with the Court and serve on the Debtors and theirproposed counsel, advance written notice, in the form attached to theMotion as Exhibit D-2 (the Equity Acquisition Notice), of the intendedtransfer of equity securities of any of the Debtors.

(c) Restrictions and Procedures for Trading Stock. Prior to any transfer ofequity securities (including Options) that would result in a decrease in theamount of Common Stock or Preferred Stock of any of the Debtors,beneficially owned by a Substantial Equityholder, or would result in a

person or entity ceasing to be a Substantial Equityholder, such SubstantialEquityholder shall file with the Court, and serve upon the Debtors andtheir proposed counsel, advance written notice, in the form attached to theMotion as Exhibit D-3 (the Equity Disposition Notice, and togetherwith the Substantial Ownership Notice and the Equity Acquisition Notice,each a Substantial Equityholder Notice and collectively, the



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Substantial Equityholder Notices), of the intended transfer of equity

securities of any of the Debtors.

(d) Objection Procedures. The Debtors shall have thirty (30) days afterreceipt of a Substantial Equityholder Notice to file with the Court andserve on such Substantial Equityholder an objection to any proposedtransfer of equity securities described in the Substantial EquityholderNotice on the grounds that such transfer may adversely affect the Debtorsability to utilize their tax assets. If the Debtors file an objection, suchtransaction will not be effective unless approved by a final andnonappealable order of this Court. If the Debtors do not object withinsuch thirty (30) day period, such transaction may proceed solely as setforth in the Substantial Equityholder Notice. Further transactions withinthe scope of this paragraph shall be the subject of additional notices setforth herein, and shall have an additional thirty (30) day objection period.

(e) For purposes of this Motion and the interim and final orders (i) aSubstantial Equityholder is any person or entity that beneficially owns(x) at least 458,223 shares (representing approximately 4.75% of all issuedand outstanding shares) of any class or series of the Common Stock of theDebtors or (y) at least 16,924 shares (representing approximately 4.75% ofall issued and outstanding shares) of any class or series of the PreferredStock of the Debtors; (ii) beneficial ownership of equity securities shallbe determined in accordance with the applicable rules under I.R.C.section 382, and, thus, shall include direct and indirect ownership (e.g., aholding company would be considered to beneficially own all sharesowned or acquired by its subsidiaries), ownership by such holders familymembers and persons acting in concert with such holder to make a

coordinated acquisition of stock, and ownership shares which such holderhas an option to acquire; and (iii) an Option to acquire stock includesany contingent purchase, warrant, convertible debt, put, stock subject torisk of forfeiture, contract to acquire stock or similar interest, regardless ofwhether it is contingent or otherwise not currently exercisable.

22. In addition, the Debtors seek to implement the following procedures forrestricting the ability of shareholders that own or have owned 50% or more, by value, of Stock in

any of the Debtors to claim a deduction for the worthlessness in connection therewith on its

federal tax returns for the year ending before the Debtors emerge from chapter 11:

(a) Notice of 50% Shareholder Status. Any person or entity that becomes a50% Shareholder (defined below) must file with the Court, and serve uponthe Debtors and their proposed counsel, a notice of such status in the form



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attached to the Motion as Exhibit D-4 (the 50% Shareholder Notice),on or before ten (10) days after that person or entity becomes a 50%Shareholder.

(b) Restrictions and Procedures for Claiming a Deduction for Worthlessness.Prior to filing any federal tax return, or any amendment to such a return,claiming a deduction for worthlessness of the Common Stock or PreferredStock of any of the Debtors, for a tax year ending before the Debtors

emergence from chapter 11, such 50% Shareholder must file with theCourt and serve upon the Debtors and their proposed counsel, a notice ofthe intended claim of worthlessness, in the form attached to the Motion asExhibit D-5 (the Declaration of Intent, and together with the 50%Shareholder Notice, each a Deduction Notice and collectively, theDeduction Notices).

(c) Objection Procedures. The Debtors shall have thirty (30) days afterreceipt of a Deduction Notice to file with the Court and serve on such 50%

Shareholder an objection to any proposed claim of worthlessnessdescribed in the Declaration of Intent on the grounds that such claim mightadversely affect the Debtors ability to utilize their tax assets. If the

Debtors file an objection, the filing of the return with such claim will notbe effective unless approved by a final and nonappealable order of thisCourt. If the Debtors do not object within such thirty (30) day period, thefiling of the return with such claim would be permitted solely as set forthin the Declaration of Intent. The filing of additional returns within thescope of this paragraph shall be the subject of additional notices set forthherein, and shall have an additional thirty (30) day objection period.

(d) For purposes of this Motion and the interim and final orders (i) a 50%Shareholder is any person or entity that, at any time during the three-year period prior to the Petition Date, has beneficially owned either 50%or more of the Stock; (ii) beneficial ownership of equity securities shallbe determined in accordance with the applicable rules under I.R.C.section 382, and, thus, shall include direct and indirect ownership (e.g., aholding company would be considered to beneficially own all sharesowned or acquired by its subsidiaries), ownership by such holders family

members and persons acting in concert with such holder to make acoordinated acquisition of stock, and ownership shares which such holderhas an option to acquire; and (iii) an Option to acquire stock includes

any contingent purchase, warrant, convertible debt, put, stock subject torisk of forfeiture, contract to acquire stock or similar interest, regardless ofwhether it is contingent or otherwise not currently exercisable.



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D. Form of Notice of Trading Procedures23. The Debtors also seek approval of the forms of notice attached to the

Motion as Exhibits C-1 and C-2, which a Significant Equityholder must file pursuant to the

proposed Regulatory Trading Procedures, and the forms of notice attached to the Motion as

Exhibits D-1 through D-5, which a Substantial Equityholder or a 50% Shareholder, as applicable,

must file pursuant to the proposed NOL Trading Procedures.

BASIS FOR RELIEF

A. Disclosure of Equityholder Information24. The Debtors request that the Bankruptcy Court exercise its broad authority

under Bankruptcy Rule 2004 to order Senior Secured Noteholders and their transferees (other

than the Required Consenting Noteholders whose disclosure requirements are governed by the

Restructuring Support Agreement) to identify themselves and provide to the Debtors, by the

applicable Equityholder Disclosure Date, the Equityholder Information. It is well-settled that

Rule 2004 provides courts with the authority to order examinations with respect to the financial

matters of debtors as well as other matters affecting the administration of the estate. In re

Hughes, 281 B.R. 224, 226 (Bankr. S.D.N.Y. 2002). The understanding generally acceptable

today is that the scope of a Rule 2004 examination is very broad. Id. (quoting In re Drexel

Burnham Lambert Grp., Inc., 123 B.R. 702, 711 (Bankr. S.D.N.Y. 1991)). Indeed, the scope of

examination allowed under Rule 2004 is broader than discovery allowed under the Federal Rules

of Civil Procedure and may be in the nature of a fishing expedition. Id. (quoting In re

Ionosphere Clubs, Inc., 156 B.R. 414, 432 (S.D.N.Y. 1993), affd17 F.3d 600 (2d Cir. 1994)).

In ruling on a Rule 2004 information request, section 105(a) of the Bankruptcy Code sets out



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the power of the bankruptcy court to fashion orders as necessary pursuant to the purposes of the

Bankruptcy Code. Id. (quoting In re Chinichian, 784 F.2d 1440, 1443 (9th Cir. 1986)).

25. Moreover, the Debtors request is amply justified given their pressingneed for the Equityholder Information and the fact that the information they seek falls well

within the broad scope of Bankruptcy Rule 2004. The Prepackaged Plan provides for the

reorganization of BVNH in a manner that will give rise to a change of control of BVNH.

Therefore, the Debtors successful emergence from bankruptcy depends (in part) on the Debtors

ability to timely compile the Equityholder Information. The only way for the Debtors to verify,

with certainty, that the Regulatory Applications are and remain complete and accurate is through

the disclosure of Equityholder Information by Senior Secured Noteholders and their transferees.

26. Consequently, given the broad scope of Rule 2004 examinationsgenerally, the narrowly tailored and critically important requests set forth herein easily merit

approval. See, e.g., Hughes, 281 B.R. at 226; Drexel Burnham Lambert Group, 123 B.R. at 711.

Further, similar requests have been previously approved in other cases. See, In re Terrestar

Networks Inc. et al., No. 10-15446 (SHL) (Bankr. S.D.N.Y. Nov. 23, 2010) (requiring provision

of ownership information to aid completion of FCC applications); In re DBSD North America,

Inc. et al., No. 09-13061 (REG) (Bankr. S.D.N.Y. Dec. 11, 2009, as amended Oct. 25, 2010)

(same).

B. Regulatory Trading Procedures27. To ensure that the Regulatory Applications are approved as expeditiously

as possible, without repeated amendments which may cause delay in FCC or PUC approvals, the

Debtors request the Court to restrict the purchase or sale of Senior Secured Notes during the

pendency of these cases to the extent such purchase or sale could result in either an entity



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becoming a Potential Significant Equityholder or a change in the Triggering Status with respect

to an entity previously disclosed as a Significant Equityholder.

28. The proposed restrictions upon trading Senior Secured Notes arenecessary for the Debtors to avoid unnecessary delays and attendant additional costs, thereby

diminishing the value of the Debtors estates. Moreover, imposing the proposed restrictions is in

the best interest of the Debtors and all of their constituents, as such restrictions will facilitate the

approval of the Regulatory Applications as expeditiously as possible, thus allowing for a timely

consummation of the Prepackaged Plan.

29.

The proposed restrictions on trading Senior Secured Notes are appropriate

under these circumstances. The restrictions are narrowly tailored and only bar those trades that

are likely to alter the identity of those entities that must be disclosed in the Regulatory

Applications. As such, the restrictions are well within the ambit of the Courts authority under

section 105(a) of the Bankruptcy Code, which provides that: The court may issue any order,

process, or judgment that is necessary or appropriate to carry out the provisions of this title. . . .

11 U.S.C. 105(a).

30. Further, implementation of the Regulatory Trading Procedures isconsistent with section 362(a)(3), which permits the court to impose measures intended to protect

and preserve property of the estate. SeeIn re Prudential Lines, Inc., 107 B.R. 832 (Bankr.

S.D.N.Y. 1989) (Section 362(a)(3) . . . is designed to afford additional protection permitting the

bankruptcy process to work by enabling a debtor to keep estate property intact during the

process[.]),affd, 119 B.R. 430 (S.D.N.Y. 1990), affd, 928 F.2d 565 (2d Cir. 1991).

31. In fact, bankruptcy courts in this jurisdiction have approved tradingprocedures similar to these and have restricted claims trading in cases where debtors have sought



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regulatory approval from the FCC necessary to consummate the plan of reorganization. See In re

Terrestar Networks Inc. et al., No. 10-15446 (SHL) (Bankr. S.D.N.Y. Nov. 23, 2010); In re

DBSD North America, Inc. et al., No. 09-13061 (REG) (Bankr. S.D.N.Y. Dec. 11, 2009, as

amended Oct. 25, 2010).

32. Moreover, to ensure both due process and compliance with the proposedrestrictions, upon entry of an interim order approving the relief requested herein, the Debtors will

serve a copy of such interim order upon holders of Senior Secured Notes and Stock, which will

provide them with notice of the Regulatory Trading Procedures and the NOL Trading Procedures

(collectively, the Trading Procedures), the date of the final hearing and objection deadline

with respect to the final order.

C. NOL Trading Proceduresi. Ample Support Exists for the Proposed NOL Trading Procedures

33. It is well-established that a debtors tax assets are property of its estate thatis protected by section 362 of the Bankruptcy Code. The Court of Appeals for the Second

Circuit, in its seminal decision Official Committee of Unsecured Creditors v. PSS Steamship Co.

(In re Prudential Lines Inc.), 928 F.2d 565 (2d Cir. 1991), affirmed the application of the

automatic stay and upheld a permanent injunction against a parent corporation that sought to take

a worthless stock deduction with regard to the stock of its subsidiarythe debtor in that case.

Because taking the worthless stock deduction would have adversely affected the subsidiarys

ability to use its NOL carryforwards post-bankruptcy, the Second Circuit held that the debtors

NOL carryforwards were property of the estate under the broad language of section 541 of the

Bankruptcy Code:



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Including NOL carryforwards as property of a corporate debtors

estate is consistent with Congress intention to bring anything of

value that the debtors have into the estate. Moreover, [a]paramount and important goal of Chapter 11 is the rehabilitation ofthe debtor by offering breathing space and an opportunity to

rehabilitate its business and eventually generate revenue.Including the right to a NOL carryforward as property of [thedebtors] bankruptcy estate furthers the purpose of facilitating the

reorganization of [the debtor].

Id. at 573 (citations omitted); seealsoGibson v. United States (In re Russell), 927 F.2d 413, 417

(8th Cir. 1991) (stating that the right to carry forward the [debtors] NOLs was property

interest of the estate); Nisselson v. Drew Indus., Inc. (In re White Metal Rolling & Stamping

Corp.), 222 B.R. 417, 424 (Bankr. S.D.N.Y. 1998) (It is beyond peradventure that NOL

carrybacks and carryovers are property of the estate of the loss corporation that generated

them.). In Prudential Lines, the Second Circuit held that the parent corporations attempt to

claim a worthless stock deduction in stock of its debtor subsidiary would effectively eliminate

the value of the debtors NOL carryforwards and thus would be an act to exercise control over

estate property in violation of the automatic stay under section 362 of the Bankruptcy Code.

Prudential Lines, 928 F.2d at 574.

34. Section 362(a) of the Bankruptcy Code operates as a stay of, among otherthings, any act to obtain possession of property of the estate or of property from the estate or to

exercise control over property of the estate. 11 U.S.C. 362(a)(3). Accordingly, where a non-

debtors action with respect to an interest that is intertwined with that of a bankrupt debtor would

have the legal effect of diminishing or eliminating property of the bankrupt estate, such action is

barred by the automatic stay. Prudential Lines, 928 F.2d at 574 (quoting 48th St. Steakhouse v.

Rockefeller Group, Inc. (In re 48th St. Steakhouse, Inc.), 835 F.2d 427, 431 (2d Cir. 1987)).



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35. The Second Circuit also held that the permanent injunction was supportedby the courts equitable powers pursuant to section 105(a) of the Bankruptcy Code, and refused

to disturb the bankruptcy courts finding that elimination of the debtors ability to apply its NOL

carryforwards to offset income on future tax returns would impede its reorganization. Id.

36. Similarly, in In re Phar-Mor, Inc., 152 B.R. 924 (Bankr. N.D. Ohio 1993),chapter 11 debtors moved to prohibit any transfer of the debtors stock that could have triggered

the section 382 limitation. The court held that the NOL carryforwards qualified as property of

the estate, and issued an injunctive order to protect those assets and enforce the automatic stay.

Id. at 926. Significantly, the court granted the relief requested even though the stockholders did

not state any intent to sell their stock and even though the debtors did not show that a sale was

pending that would trigger the section 382 change in ownership. Seeid. at 927. The court

observed that [w]hat is certain is that theNOL has a potential value, as yet undetermined, which

will be of benefit to creditors and will assist [d]ebtors in their reorganization process. Id.

(emphasis added). The court further held that [t]his asset is entitled to protection while

[d]ebtors move forward toward reorganization. Id. The court also concluded that, because the

debtors were seeking to enforce the stay, they did not have to meet the more stringent

requirements for a grant of preliminary injunctive relief:

The requirements for enforcing an automatic stay under 11 U.S.C. 362(a)(3) do not involve such factors as lack of an adequateremedy at law, or irreparable injury, or loss and a likelihood ofsuccess on the merits. The key elements for a stay . . . are theexistence of property of the estate and the enjoining of all effortsby others to obtain possession or control of property of the estate.

Id. at 926 (quoting In re Golden Distribs., Inc., 122 B.R. 15, 19 (Bankr. S.D.N.Y. 1990))

(omission in the original).



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37. The availability of the requested relief has also been established in thisDistrict. In In re Ames Department Stores, the Court granted broader relief than that sought

herein upon a finding that such relief was necessary and proper in order to preserve the Debtors

NOL carryforwards and are therefore in the best interest of the Debtors, their estates and their

creditors and stockholders. In re Ames Dept Stores, Inc., Ch. 11 Case No. 01-42217 (REG)

(Bankr. S.D.N.Y. August 20, 2001) (enjoining certain transfers of common stock and notes as

violating automatic stay and ordering any transfer in violation of approval procedures void ab

initio); see also In re Casual Male Corp., Ch. 11 Case No. 01-41404 (REG) (Bankr. S.D.N.Y.

May 18, 2001) (same).

38. Other courts in this and other districts have either prohibited or otherwiserestricted claims and/or equity trading to protect a debtor against the possible loss of its NOL

carryovers or other tax attributes. See, e.g., In re Lightsquared Inc., Case No. 12-12080 (SCC)

(Bankr. S.D.N.Y. June 4, 2012) (approving notification procedures and restrictions on certain

transfers of equity interests in the debtors); Aventine Renewable Energy Holdings, Inc., Case

No. 09-11214 (KG) (Bankr. D. Del. May 1, 2010) (same); In re CIT Group Inc. and CIT Group

Funding Company of Delaware LLC, Case No. 09-16565 (ALG) (Bankr. S.D.N.Y. Nov. 23,

2009) (approving notification procedures and restrictions on certain transfers of equity interests

in and claims against the debtors); In re VeraSun Energy Corp., Case No. 08-12606 (BLS)

(Bankr. D. Del. Dec. 3, 2008) (approving notification procedures and restrictions on certain

transfers of equity interests in the debtors); In re Washington Mutual, Inc., Case No. 08-12229

(MFW) (Bankr. D. Del. Nov. 18, 2008) (same); In re Bally Total Fitness of Greater New York,

Inc., Case No. 07-12395 (BRL) (Bankr. S.D.N.Y. Aug. 21, 2007) (same); In re Dura Auto. Sys.,

Inc., Case No. 06-11202 (KJC) (Bankr. D. Del. Nov. 20, 2006) (same).



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39. In short, it is well-settled by courts in this and other circuits that section362(a)(3) stays actions that could adversely affect a debtors NOLs and other tax assets.

ii. The NOL Trading Procedures are Necessary and in the Best Interests ofthe Debtors, their Estates, and Creditors

40. Once a net operating loss is limited under Section 382 of the I.R.C., suchlimitation is permanent. The relief sought herein is necessary to avoid the irreparable harm that

could be caused by trading in BVNHs equity securities sufficient to cause an ownership change,

which could severely limit the Debtors ability to offset future taxable income freely with NOLs.

41. Further, the relief requested herein is tailored as narrowly as is reasonableto permit certain Stock trading to continue, subject only to Rule 3001(e) of the Federal Rules of

Bankruptcy Procedure and applicable securities, corporate and other laws. The proposed

restrictions on trading are crucial because, once an interest is transferred or a declaration of

worthlessness is made, the transaction arguably might not be reversible for tax purposes, though

it should be null and void under section 362 of the Bankruptcy Code. The relief requested,

therefore, is critical to prevent what may be an irrevocable loss of the Debtors NOLs and other

tax assets.

D. Proposed Interim Order,Notice Thereof and Procedures for Filing Objects Thereto

42. The Debtors seek entry of an order, substantially in the form attachedhereto as Exhibit A, approving the relief requested in the Motion on an interim basis (the

Interim Order). Within five (5) business days of the entry of the Interim Order, the Debtors

shall serve a copy of the Interim Order, which will provide notice of the Trading Procedures, the

date of the final hearing and objection deadline with respect to the final order, on: (a) the Office

of the United States Trustee; (b) the United States Securities and Exchange Commission; (c) the



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Office of the United States Attorney General for the Southern District of New York; (d) the

Internal Revenue Service; (e) the Debtors thirty (30) largest unsecured creditors on a

consolidated basis; (f) counsel to the administrative agent under the Debtors prepetition and

postpetition revolving credit agreements; (g) counsel to the Required Consenting Noteholders;

(h) holders of Stock; and (i) holders of Senior Secured Notes.

43. The deadline to file an objection (Objection) to entry of an order (theFinal Order) approving the relief requested herein on a final basis shall be 4:00 p.m.

(prevailing Eastern Time) on the date set forth in the Interim Order (the Objection Deadline).

An Objection shall be considered timely if it: (i) is filed with the United States Bankruptcy

Court for the Southern District of New York, One Bowling Green, New York, NY 10004; and

(ii) is actually received on or before the Objection Deadline by (a) the Office of the United States

Trustee for the Southern District of New York, 33 Whitehall Street, 21st Floor, New York, New

York 10004, Attn: Michael Driscoll and Richard Morrissey (by a hard copy, with all exhibits),

(b) attorneys for the Debtors, Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York,

New York 10019-6099, Attn: Rachel C. Strickland, Esq. and Jennifer J. Hardy, Esq., (c) the

attorneys for any committee of unsecured creditors then appointed in these cases, (d) counsel to

the administrative agent under the Debtors prepetition and postpetition revolving credit

agreements, (e) counsel to the Required Consenting Noteholders, and (e) the Debtors authorized

notice agent, Kurtzman Carson Consultants LLC.

44. If no Objections are timely filed and served, as set forth herein, theDebtors shall seek entry of the Final Order, in substantially the form attached hereto as Exhibit

B, without further notice or opportunity to be heard afforded to any party. If an Objection is

timely filed, a hearing will be held at the United States Bankruptcy Court for the Southern



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District of New York, One Bowling Green, New York, NY 10004, at such date and time set forth

in the Interim Order.

45. Until the Court enters a final order, any purchase or sale of any SeniorSecured Notes during the pendency of these cases, acquisition or disposition of Stock in the

Debtors, or declarations of worthlessness asserted with respect to the Stock, after the Petition

Date in violation of the Trading Procedures set forth above shall be null and voidab initio as an

act in violation of the automatic stay prescribed by section 362 of the Bankruptcy Code and

pursuant to this Courts equitable power prescribed in section 105(a) of the Bankruptcy Code.

46.

The foregoing notice procedures satisfy due process and the strictures of

Rule 9014 of the Federal Rules of Bankruptcy Procedure by providing the counterparties with a

notice and an opportunity to object and be heard at a hearing. See, e.g., Harada v. DBL

Liquidating Trust (In re Drexel Burnham Lambert Group, Inc.), 160 B.R. 729, 733 (S.D.N.Y.

1993) (indicating that opportunity to present objections satisfies due process); Flynn v. Eley (In

re Colo. Mountain Cellars, Inc.), 226 B.R. 244, 246 (D. Colo. 1998) (noting that hearing is not

required in every case to satisfy Bankruptcy Rule 9014). Furthermore, the proposed notice

procedures protect the due process rights of the parties in interest without unnecessarily exposing

the Debtors estates to unwarranted administrative expenses.

47. The Debtors believe that the above measures constitute a sufficient andcost-effective way of providing notice of the Trading Procedures described above.

48. To successfully implement the foregoing, the Debtors respectfully seek awaiver of the notice requirements under Bankruptcy Rule 6004(a) and the fourteen-day stay

under Bankruptcy Rule 6004(h) and request that the Interim Order be effective immediately

upon its entry.



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NOTICE

49. Notice of this Motion will be given to: (a) the United States Trustee forthe Southern District of New York; (b) counsel to the administrative agent under the Debtors

prepetition and postpetition revolving credit agreements; (c) counsel to the Required Consenting

Noteholders; and (d) the Debtors thirty (30) largest unsecured creditors on a consolidated basis.

The Debtors submit that, under the circumstances, no other or further notice is required.

50. No previous motion for the relief sought herein has been made to this orany other Court.

51. Because the authorities relied upon herein are set forth above, the Debtorsrespectfully submit that the Motion itself satisfies the requirements of Rule 9013-1(a) of the

Local Bankruptcy Rules for the Southern District of New York regarding the submission of a

memorandum of law.



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CONCLUSION

WHEREFORE, the Debtors respectfully request that the Court enter interim and

final orders, substantially in the forms annexed hereto as Exhibit A and Exhibit B, granting the

relief requested in the Motion and such other and further relief for the Debtors as may be just or

proper.

Dated: August 22, 2012New York, New York

WILLKIE FARR & GALLAGHER LLPProposed Attorneys to Debtors and

Debtors in Possession

By: /s/ Jennifer J. HardyRachel C. StricklandJennifer J. HardyAnna C. Burns

787 Seventh AvenueNew York, New York 10019(212) 728-8000



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Exhibit A

Proposed Interim Order

12-13581 Doc 14-1 Filed 08/22/12 Entered 08/22/12 18:35:50 Exhibit A -Proposed Interim Order Pg 1 of 11


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:

Broadview Networks Holdings, Inc., et al.,

1

: Case No. 12-__________ ( ):Debtors. : Jointly Administered

------------------------------------------------------ x

INTERIM ORDER (A) REQUIRING CERTAIN ENTITIES TO PROVIDE



CLAIMS AGAINST, AND EQUITY SECURITIES IN, THE DEBTORS, AND

(C) ESTABLISHING NOTIFICATION AND HEARING PROCEDURES

FOR RELIEF FROM THE RESTRICTIONS ON THE PURCHASE OR SALE OF

CERTAIN CLAIMS AGAINST, OR EQUITY SECURITIES IN, THE DEBTORS

Upon the motion (the Motion) of the debtors and debtors in possession in the

above-captioned cases (collectively, the Debtors) for an interim order, pursuant to sections

105(a) and 362 of title 11 of the United States Code (the Bankruptcy Code) and Rule 2004 of

the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules): (a) requiring certain

holders of the Senior Secured Notes to provide the Debtors with certain information that may be

required to prepare applications (collectively, the Regulatory Applications) for regulatory

approvals of the change of control contemplated by the Prepackaged Plan; (b) restricting (i) the

purchase or sale ofsecurities that may negatively impact the value of the Debtors tax attributes;

1 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses:(i) Broadview Networks Holdings, Inc. (0798); (ii) A.R.C. Networks, Inc. (0814); (iii) ARC Networks, Inc.(4934); (iv) ATX Communications, Inc. (2245); (v) ATX Licensing, Inc. (9838); (vi) ATXTelecommunications Services of Virginia, LLC (3888); (vii) BridgeCom Holdings, Inc. (2965);

(viii) BridgeCom International, Inc. (3985); (ix) BridgeCom Solutions Group, Inc. (3989); (x) BroadviewNetworks, Inc. (1082); (xi) Broadview Networks of Massachusetts, Inc. (8054); (xii) Broadview Networksof Virginia, Inc. (6404); (xiii) Broadview NP Acquisition Corp. (2734); (xiv) BV-BC AcquisitionCorporation (7846); (xv) CoreComm-ATX, Inc. (0529); (xvi) CoreComm Communications, LLC (2077);(xvii) Digicom, Inc. (0777); (xviii) Eureka Broadband Corporation (6004); (xix) Eureka Holdings, LLC(1318); (xx) Eureka Networks, LLC (1244); (xxi) Eureka Telecom, Inc. (3720); (xxii) Eureka Telecom ofVA, Inc. (5508); (xxiii) InfoHighway Communications Corporation (0551); (xxiv) Info-HighwayInternational, Inc. (8543); (xxv) InfoHighway of Virginia, Inc. (1600); (xxvi) nex-i.com, inc. (7035);(xxvii) Open Support Systems LLC (9972); and (xxviii) TruCom Corporation (0714). The Debtorsexecutive headquarters address is 800 Westchester Avenue, Rye Brook, NY 10573.



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and (c) establishing related notice procedures; and upon consideration of the Motion and all of

the pleadings related thereto, including the Declaration of Michael K. Robinson, President and

Chief Executive Officer of Broadview Networks Holdings, Inc., in Support of Chapter 11

Petitions and First Day Pleadings, and having heard the statements of counsel and evidence

adduced with respect to the Motion at a hearing before the Court (the Hearing); and due and

sufficient notice of the Motion having been given; and it appearing that no other or further notice

need be provided; and it appearing that the relief requested by the Motion is in the best interests

of these estates, their creditors and other parties in interest; and after due deliberation and

sufficient cause appearing therefor, it is hereby:

ORDERED, ADJUDGED AND DECREED that:

1. The Motion is granted on an interim basis to the extent set forth herein.2. Capitalized terms not otherwise defined herein shall have the meanings

ascribed to such terms in the Motion.

3. Each Senior Secured Noteholder or its transferee, other than the RequiredConsenting Noteholders, is hereby ordered to provide the Debtors with its name, address,

citizenship, principal business, the principal amount of Senior Secured Notes held by such entity

and information regarding whether a foreign entity owns 10% or more of such Senior Secured

Noteholder or transferee (the Equityholder Information), upon the request of the Debtors,

within seven (7) business days of such request.

4. To the extent that any Senior Secured Noteholder holds a principal amountof Senior Secured Notes greater than $25 million on the date of the entry of this Interim Order,

such Senior Secured Noteholder, other than the Required Consenting Noteholders, is hereby



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ordered to provide the Debtors with the Equityholder Information within (7) business days of the

entry of this Interim Order.

5. The Debtors shall serve a copy of the order granting the relief requested inthis Motion on each holder of Senior Secured Notes.

6. In addition to the Equityholder Information specified in paragraph3 of this Interim Order, upon request, holders of Senior Secured Notes shall reasonably

cooperate with the Debtors effortsto prepare and obtain approval of the Debtors

Regulatory Applications.

7.

Any purchase or sale of Senior Secured Notes during the pendency of

these cases is hereby restricted to the extent such purchase or sale could result in either an entity

becoming a Potential Significant Equityholder or a change in the Triggering Status for any entity

which has at any point been identified in the Regulatory Applications as a Significant

Equityholder.

8. The following Regulatory Trading Procedures shall apply to the trading ofany Senior Secured Notes throughout the pendency of these cases:

(i) Senior Secured Notes Acquisition Notice: Prior to the consummation ofany transfer of any Senior Secured Notes that would result in either (i) anentity becoming a Potential Significant Equityholder upon emergence, or(ii) a change in the Triggering Status for an entity previously identified asa Significant Equityholder in the Regulatory Applications, the transfereemust serve on the Debtors and their counsel a notice substantially in theform attached to the Motion as Exhibit C-1 (the Senior Secured NotesAcquisition Notice), which Senior Secured Notes Acquisition Notice

must include a statement by the transferee that it is reasonably likely thatthe proposed transaction will not require the Debtors to amend theRegulatory Applications and will not adversely affect prosecution by theDebtors or processing by the FCC or PUCs of the RegulatoryApplications.



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(ii) Senior Secured Notes Disposition Notice: Prior to the consummation ofany transfer of any Senior Secured Notes that would result in a change inthe Triggering Status for an entity previously identified as a SignificantEquityholder in the Regulatory Applications, the transferor must serve onthe Debtors and their counsel a notice of the intended transfer substantially

in the form attached to the Motion as Exhibit C-2 (the Senior SecuredNotes Disposition Notice), which Senior Secured Notes DispositionNotice must include a statement by the transferor that it is reasonablylikely that the proposed transaction will not require the Debtors to amendthe Regulatory Applications and will not adversely affect prosecution bythe Debtors or processing by the FCC or PUCs of the RegulatoryApplications.

(iii) Objection Procedures: The Debtors shall have five (5) business days afterreceipt of a Senior Secured Notes Acquisition Notice or a Senior SecuredNotes Disposition Notice (each, a Senior Secured Notes Transfer

Notice and together the Senior Secured Notes Transfer Notices) tofile with the Court and serve on the entity filing the Senior Secured NotesTransfer Notice an objection to the proposed transfer on the grounds that itis not reasonably acceptable to the Debtors. If an objection is filed, suchentity shall not proceed with the proposed transaction (or, if such entitydoes proceed with the proposed transaction, such transaction shall not beeffective) unless and until (i) the objection is withdrawn or overruled or(ii) the proposed transaction is approved by a final and nonappealableorder of the Bankruptcy Court determining that the proposed acquisitionor disposition, as applicable, will not require the Debtors to amend theRegulatory Applications and will not adversely affect prosecution by theDebtors or processing by the FCC or PUCs of the RegulatoryApplications; provided that in any hearing on any such objection to aSenior Secured Notes Transfer Notice, the entity filing the Senior SecuredNotes Transfer Notice shall bear the burden of proof as to whether aproposed acquisition or disposition, as applicable, will not require theDebtors to amend the Regulatory Applications and will not adverselyaffect prosecution by the Debtors or processing by the FCC or PUCs ofthe Regulatory Applications. If no objection to a Senior Secured NotesTransfer Notice is filed within such five (5) business day period or if anobjection to a Senior Secured Notes Transfer Notice is filed and laterwithdrawn, the transaction may proceed solely as set forth in the SeniorSecured Notes Transfer Notice. Any further transactions within the scope

of this paragraph must comply with the same noticing and five (5)business day objection procedures. The Debtors will reasonably cooperatewith any entity that wishes to make an inquiry with the FCC and the PUCsas to whether the transaction proposed in a Senior Secured Notes TransferNotice would require the Debtors to amend the Regulatory Applicationsand will not adversely affect prosecution by the Debtors or processing by



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the FCC or PUCs of the Regulatory Applications. If such entity receives alegally binding determination from the FCC and the PUCs that theproposed transaction would not require the Debtors to amend theRegulatory Applications and will not adversely affect prosecution by theDebtors or processing by the FCC or PUCs of the Regulatory

Applications, then the Debtors shall not file an objection to the subjectSenior Secured Notes Transfer Notice and the Debtors shall withdraw anypreviously filed objections.

9. Any purchase, sale or other transfer of, or declarations of worthlessnesswith respect to, equity securities in the Debtors in violation of the NOL Trading Procedures set

forth herein (including the notice requirements set forth in Paragraph 10(i) below), shall be null

and void and shall confer no rights on the transferee.

10. The following NOL Trading Procedures shall apply to trading in equitysecurities:

(i) Notice of Substantial Equityholder Status. Any person or entity whobecomes a Substantial Equityholder (as defined below), must file with theCourt and serve on the Debtors and their proposed counsel a noticesubstantially in the form attached to the Motion as Exhibit D-1 (theSubstantial Ownership Notice) on or before ten (10) days after thatperson or entity becomes a Substantial Equityholder.

(ii) Restrictions and Procedures for Acquiring Stock. Prior to the transfer ofequity securities (including Options to acquire stock) that would result inan increase in the amount of Common Stock or Preferred Stockbeneficially owned by a Substantial Equityholder, or would result in aperson or entity becoming a Substantial Equityholder, such SubstantialEquityholder shall file with the Court and serve on the Debtors and theirproposed counsel, advance written notice, in the form attached to theMotion as Exhibit D-2 (the Equity Acquisition Notice), of the intendedtransfer of equity securities of any of the Debtors.

(iii) Restrictions and Procedures for Trading Stock. Prior to any transfer ofequity securities (including Options) that would result in a decrease in theamount of Common Stock or Preferred Stock of any of the Debtors,beneficially owned by a Substantial Equityholder, or would result in aperson or entity ceasing to be a Substantial Equityholder, such SubstantialEquityholder shall file with the Court, and serve upon the Debtors andtheir proposed counsel, advance written notice, in the form attached to the



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Motion as Exhibit D-3 (the Equity Disposition Notice, and togetherwith the Substantial Ownership Notice and the Equity Acquisition Notice,each a Substantial Equityholder Notice and collectively, the

Substantial Equityholder Notices), of the intended transfer of equitysecurities of any of the Debtors.

(iv) Objection Procedures. The Debtors shall have thirty (30) days afterreceipt of a Substantial Equityholder Notice to file with the Court andserve on such Substantial Equityholder an objection to any proposedtransfer of equity securities described in the Substantial EquityholderNotice on the grounds that such transfer may adversely affect the Debtors

ability to utilize their tax assets. If the Debtors file an objection, suchtransaction will not be effective unless approved by a final andnonappealable order of this Court. If the Debtors do not object withinsuch thirty (30) day period, such transaction may proceed solely as setforth in the Substantial Equityholder Notice. Further transactions withinthe scope of this paragraph shall be the subject of additional notices setforth herein, and shall have an additional thirty (30) day objection period.

(v) For purposes of this Motion and the interim and final orders (i) aSubstantial Equityholder is any person or entity that beneficially owns

(x) at least 458,223 shares (representing approximately 4.75% of all issuedand outstanding shares) of any class or series of the Common Stock of theDebtors or (y) at least 16,924 shares (representing approximately 4.75% ofall issued and outstanding shares) of any class or series of the PreferredStock of the Debtors; (ii) beneficial ownership of equity securities shallbe determined in accordance with the applicable rules under I.R.C.section 382, and, thus, shall include direct and indirect ownership (e.g., a

holding company would be considered to beneficially own all sharesowned or acquired by its subsidiaries), ownership by such holders family

members and persons acting in concert with such holder to make acoordinated acquisition of stock, and ownership shares which such holderhas an option to acquire; and (iii) an Option to acquire stock includesany contingent purchase, warrant, convertible debt, put, stock subject torisk of forfeiture, contract to acquire stock or similar interest, regardless ofwhether it is contingent or otherwise not currently exercisable.

11. The following NOL Trading Procedures shall apply to the claims of adeduction for worthlessness:

(i) Notice of 50% Shareholder Status. Any person or entity that becomes a50% Shareholder (defined below) must file with the Court, and serve uponthe Debtors and their proposed counsel, a notice of such status in the formattached to the Motion as Exhibit D-4 (the 50% Shareholder Notice),



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on or before ten (10) days after that person or entity becomes a 50%Shareholder.

(ii) Restrictions and Procedures for Claiming a Deduction for Worthlessness.Prior to filing any federal tax return, or any amendment to such a return,claiming a deduction for worthlessness of the Common Stock or PreferredStock of any of the Debtors, for a tax year ending before the Debtorsemergence from chapter 11, such 50% Shareholder must file with theCourt and serve upon the Debtors and their proposed counsel, a notice ofthe intended claim of worthlessness, in the form attached to the Motion asExhibit D-5 (the Declaration of Intent, and together with the 50%Shareholder Notice, each a Deduction Notice and collectively, the

Deduction Notices).

(iii) Objection Procedures. The Debtors shall have thirty (30) days afterreceipt of a Deduction Notice to file with the Court and serve on such 50%Shareholder an objection to any proposed claim of worthlessness

described in the Declaration of Intent on the grounds that such claim mightadversely affect the Debtors ability to utilize their tax assets. If theDebtors file an objection, the filing of the return with such claim will notbe effective unless approved by a final and nonappealable order of thisCourt. If the Debtors do not object within such thirty (30) day period, thefiling of the return with such claim would be permitted solely as set forthin the Declaration of Intent. The filing of additional returns within thescope of this paragraph shall be the subject of additional notices set forthherein, and shall have an additional thirty (30) day objection period.

(iv) For purposes of this Motion and the interim and final orders (i) a 50%Shareholder is any person or entity that, at any time during the three-year period prior to the Petition Date, has beneficially owned either 50%or more of the Stock; (ii) beneficial ownership of equity securities shall

be determined in accordance with the applicable rules under I.R.C.section 382, and, thus, shall include direct and indirect ownership (e.g., aholding company would be considered to beneficially own all sharesowned or acquired by its subsidiaries), ownership by such holders familymembers and persons acting in concert with such holder to make acoordinated acquisition of stock, and ownership shares which such holderhas an option to acquire; and (iii) an Option to acquire stock includesany contingent purchase, warrant, convertible debt, put, stock subject to

risk of forfeiture, contract to acquire stock or similar interest, regardless ofwhether it is contingent or otherwise not currently exercisable.

12. The forms of the Senior Secured Notes Acquisition Notice, SeniorSecured Notes Disposition Notice, Substantial Ownership Notice, Equity Acquisition Notice,



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Equity Disposition Notice, 50% Shareholder Notice and the Declaration of Intent attached to the

Motion as Exhibits C-1 and C-2, and Exhibits D-1 through D-5, respectively, including any

ministerial or non-substantive changes that may be made, are hereby approved.

13. The Debtors shall serve a copy of this Interim Order, setting forth theTrading Procedures authorized herein, on: (a) the Office of the United States Trustee; (b) the

United States Securities and Exchange Commission; (c) the Office of the United States Attorney

General for the Southern District of New York; (d) the Internal Revenue Service; (e) the

Debtors thirty (30) largest unsecured creditors on a consolidated basis; (f) counsel to the

administrative agent under the Debtors prepetition and postpetition revolving credit agreements;

(g) counsel to the Required Consenting Noteholders; (h) significant holders of Stock;

(i) significant holders of Senior Secured Notes known to the Debtors; and (j) counsel to the

Indenture Trustee.

14. Upon receipt of the Interim Order, any transfer agent(s) for any Stock willbe required, on at least a quarterly basis, to send such Interim Order to all holders of Stock

registered with such transfer agent. Any such registered holder must, in turn, promptly provide

such Interim Order to any holder for whose account such registered holder holds such Stock, and

so on down the chain of ownership.15. Any person, entity, broker or agent acting on behalf of the holder who

sells shares of Common Stock or Preferred Stock to another person or entity must provide a copy

of the Interim Order to such purchaser or any broker or agent acting on such purchasers behalf.16. The requirements set forth in this Interim Order are in addition to the

requirements of Bankruptcy Rule 3001(e), applicable securities, corporate and other laws, and do

not excuse compliance therewith.



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17. Any of the Debtors may waive in writing any and all restrictions, stays andnotification procedures contained in this Interim Order in their sole discretion.

18. Objections to entry of the relief requested in the Motion on a final basis(the Objections) shall be filed with the United States Bankruptcy Court for the Southern

District of New York, One Bowling Green, New York, NY 10004, and served upon: (a) the

Office of the United States Trustee for the Southern District of New York, 33 Whitehall Street,

21st Floor, New York, New York 10004, Attn: Michael Driscoll and Richard Morrissey (by a

hard copy, with all exhibits); (b) attorneys for the Debtors, Willkie Farr & Gallagher LLP, 787

Seventh Avenue, New York, New York 10019-6099, Attn: Rachel C. Strickland, Esq. and

Jennifer J. Hardy, Esq., (c) the attorneys for any committee of unsecured creditors then appointed

in these cases, (d) counsel to the administrative agent under the Debtors prepetition and

postpetition revolving credit agreements; (e) counsel to the Required Consenting Noteholders;

and (f) the Debtors authorized notice agent, Kurtzman Carson Consultants LLC, by 4:00 p.m.

(prevailing Eastern Time) on _____ __, 2012 (the Objection Deadline).19. If Objections are timely received in accordance with this Interim Order, a

hearing to consider entry of an order granting the relief requested in the Motion on a final basis

shall be held on [____], 2012 at [_____] (the Final Hearing).20. Bankruptcy Rule 6004(a) is waived for the purposes of the Motion, and

notwithstanding any applicability of Bankruptcy Rule 6004(h), this Interim Order shall be

immediately effective and enforceable upon its entry.



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21. The Court shall retain jurisdiction with respect to any matters, claims,rights or disputes arising from or related to the implementation of this Interim Order.New York, New York

Dated: __________________, 2012

UNITED STATES BANKRUPTCY JUDGE



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Exhibit B

Proposed Final Order

12-13581 Doc 14-2 Filed 08/22/12 Entered 08/22/12 18:35:50 Exhibit B -Proposed Final Order Pg 1 of 10


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:

Broadview Networks Holdings, Inc., et al.,

1

: Case No. 12-__________ ( ):Debtors. : Jointly Administered

------------------------------------------------------ x

FINAL ORDER (A) REQUIRING CERTAIN ENTITIES TO PROVIDE



CLAIMS AGAINST, AND EQUITY SECURITIES IN, THE DEBTORS, AND

(C) ESTABLISHING NOTIFICATION AND HEARING PROCEDURES

FOR RELIEF FROM THE RESTRICTIONS ON THE PURCHASE OR SALE OF

CERTAIN CLAIMS AGAINST, OR EQUITY SECURITIES IN, THE DEBTORS

Upon the motion (the Motion) of the debtors and debtors in possession in the

above-captioned cases (collectively, the Debtors) for a final order, pursuant to sections 105(a)

and 362 of title 11 of the United States Code (the Bankruptcy Code) and Rule 2004 of the

Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules): (a) requiring certain holders

of the Senior Secured Notes to provide the Debtors with certain information that may be required

to prepare applications (collectively, the Regulatory Applications) for regulatory approvals of

the change of control contemplated by the Prepackaged Plan; (b) restricting (i) the purchase or

sale ofsecurities that may negatively impact the value of the Debtors tax attributes; and

1 The last four digits of the taxpayer identification numbers of the Debtors follow in parentheses:(i) Broadview Networks Holdings, Inc. (0798); (ii) A.R.C. Networks, Inc. (0814); (iii) ARC Networks, Inc.(4934); (iv) ATX Communications, Inc. (2245); (v) ATX Licensing, Inc. (9838); (vi) ATXTelecommunications Services of Virginia, LLC (3888); (vii) BridgeCom Holdings, Inc. (2965);

(viii) BridgeCom International, Inc. (3985); (ix) BridgeCom Solutions Group, Inc. (3989); (x) BroadviewNetworks, Inc. (1082); (xi) Broadview Networks of Massachusetts, Inc. (8054); (xii) Broadview Networksof Virginia, Inc. (6404); (xiii) Broadview NP Acquisition Corp. (2734); (xiv) BV-BC AcquisitionCorporation (7846); (xv) CoreComm-ATX, Inc. (0529); (xvi) CoreComm Communications, LLC (2077);(xvii) Digicom, Inc. (0777); (xviii) Eureka Broadband Corporation (6004); (xix) Eureka Holdings, LLC(1318); (xx) Eureka Networks, LLC (1244); (xxi) Eureka Telecom, Inc. (3720); (xxii) Eureka Telecom ofVA, Inc. (5508); (xxiii) InfoHighway Communications Corporation (0551); (xxiv) Info-HighwayInternational, Inc. (8543); (xxv) InfoHighway of Virginia, Inc. (1600); (xxvi) nex-i.com, inc. (7035);(xxvii) Open Support Systems LLC (9972); and (xxviii) TruCom Corporation (0714). The Debtorsexecutive headquarters address is 800 Westchester Avenue, Rye Brook, NY 10573.



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(c) establishing related notice procedures; and upon consideration of the Motion and all of the

pleadings related thereto, including the Declaration of Michael K. Robinson, President and Chief

Executive Officer of Broadview Networks Holdings, Inc., in Support of Chapter 11 Petitions and

First Day Pleadings, and having heard the statements of counsel and evidence adduced with

respect to the Motion at a hearing before the Court (the Hearing); and due and sufficient

notice of the Motion having been given; and it appearing that no other or further notice need be

provided; and it appearing that the relief requested by the Motion is in the best interests of these

estates, their creditors and other parties in interest; and after due deliberation and sufficient cause

appearing therefor, it is hereby:

ORDERED, ADJUDGED AND DECREED that:

1. The Motion is granted on a final basis to the extent set forth herein.2. Capitalized terms not otherwise defined herein shall have the meanings

ascribed to such terms in the Motion.

3. Each Senior Secured Noteholder or its transferee, other than the RequiredConsenting Noteholders, is hereby ordered to provide the Debtors with its name, address,

citizenship, principal business, the principal amount of Senior Secured Notes held by such entity

and information regarding whether a foreign entity owns 10% or more of such Senior Secured

Noteholder or transferee (the Equityholder Information), upon the request of the Debtors,

within seven (7) business days of such request.

4. To the extent that any Senior Secured Noteholder held a principal amountof Senior Secured Notes greater than $25 million on the date of the entry of the Interim Order,

such Senior Secured Noteholder, other than the Required Consenting Noteholders, who has not



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yet provided the Equityholder Information pursuant to the Interim Order, is hereby ordered to

provide the Debtors with the Equityholder Information.

5. The Debtors shall serve a copy of the order granting the relief requested inthis Motion on each holder of Senior Secured Notes.

6. In addition to the Equityholder Information specified in paragraph 3 ofthis Final Order, holders of Senior Secured Notes shall also provide to the Debtors all

cooperation reasonably necessary to prepare and obtain approval of the Debtors Regulatory

Applications.

7.

Any purchase or sale of Senior Secured Notes during the pendency of

these cases is hereby restricted to the extent such purchase or sale could result in either an entity

becoming a Potential Significant Equityholder or a change in the Triggering Status for any entity

which has at any point been identified in the Regulatory Applications as a Significant

Equityholder.

8. The following Regulatory Trading Procedures shall apply to the trading ofany Senior Secured Notes throughout the pendency of these cases:

(i) Senior Secured Notes Acquisition Notice: Prior to the consummation ofany transfer of any Senior Secured Notes that would result in either (i) anentity becoming a Potential Significant Equityholder upon emergence, or(ii) a change in the Triggering Status for an entity previously identified asa Significant Equityholder in the Regulatory Applications, the transfereemust serve on the Debtors and their counsel a notice substantially in theform attached to the Motion as Exhibit C-1 (the Senior Secured NotesAcquisition Notice), which Senior Secured Notes Acquisition Notice

Broadview Claims Trading

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