James H.M. Sprayregen, P.C.
Jonathan S. Henes, P.C.
Christopher T. Greco
Anthony R. Grossi
John T. Weber
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
- and -
Melissa N. Koss
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
555 California Street
San Francisco, California 94104
Telephone: (415) 439-1400
Facsimile: (415) 439-1500
Proposed Counsel to the Debtors and Debtors in Possession
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
)
In re: ) Chapter 11
)
ANSWERS HOLDINGS, INC., et al.,1 ) Case No. 17-10496 (SMB)
)
Debtors. ) (Joint Administration Requested)
)
1 The Debtors in the chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification
number, include: Answers Holdings, Inc. (4504); Answers Corporation (2855); Easy2 Technologies, Inc.
(2839); ForeSee Results, Inc. (3125); ForeSee Session Replay, Inc. (2593); More Corn, LLC (6193); Multiply
Media, LLC (8974); Redcan, LLC (7344); RSR Acquisition, LLC (2256); Upbolt, LLC (2839); and Webcollage
Inc. (7771). The location of Debtor Webcollage Inc.’s principal place of business and the Debtors’ service
address in these chapter 11 cases is: 11 Times Square, 11th Floor, New York, New York 10018.
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DEBTORS’ MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS
(I) AUTHORIZING THE DEBTORS TO (A) CONTINUE USING THE CASH
MANAGEMENT SYSTEM AND (B) MAINTAIN EXISTING BANK ACCOUNTS AND
BUSINESS FORMS; (II) AUTHORIZING CONTINUED INTERCOMPANY
TRANSACTIONS; AND (III) GRANTING SUPERPRIORITY ADMINISTRATIVE
EXPENSE STATUS TO INTERCOMPANY CLAIMS
The above-captioned debtors and debtors in possession (collectively, the “Debtors”)
respectfully state the following in support of this motion (this “Motion”):
Relief Requested
1. By this Motion, the Debtors seek the entry of interim and final orders,
substantially in the forms attached hereto as Exhibit A and Exhibit B, (respectively, the
“Interim Order” and the “Final Order”):2
(a) authorizing, but not directing, continued use of the Cash Management System as
well as honoring any prepetition obligations related to the use thereof;3
(b) authorizing, but not directing, continued use of the: (i) Bank Accounts (as well as
authorizing the Debtors to open and close new bank accounts as appropriate); (ii)
Business Forms; and (iii) Books and Records;
(c) authorizing and directing the Banks to continue to maintain, service, and
administer the Bank Accounts and to debit the Bank Accounts in the ordinary
course of business; and
(d) authorizing, but not directing, continued intercompany funding through the Cash
Management System, approving the Intercompany Transactions, and granting
superpriority administrative expense status to all Intercompany Transactions
among the Debtors.
Jurisdiction and Venue
2. The United States Bankruptcy Court for the Southern District of New York
(the “Court”) has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the
2 Capitalized terms used, but otherwise not defined in this section “Relief Requested,” shall have the meaning
ascribed to such terms elsewhere in this Motion.
3 The Debtors will not honor prepetition checks outstanding as of the Petition Date except to the extent the
payments relating to such checks are authorized and approved by the Bankruptcy Court.
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Amended Standing Order of Reference from the United States District Court for the Southern
District of New York, dated December 1, 2016. The Debtors confirm their consent, pursuant to
Rule 7008 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), to the entry
of a final order by the Court in connection with this Motion to the extent that it is later
determined that the Court, absent consent of the parties, cannot enter final orders or judgments in
connection herewith consistent with Article III of the United States Constitution.
3. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
4. The statutory bases for the relief requested herein are sections 105, 345, 363, 364,
503, and 553 of title 11 of the United States Code (the “Bankruptcy Code”), Rules 6003 and
6004 of the Bankruptcy Rules, and Rule 9013-1(a) of the Local Bankruptcy Rules for the
Southern District of New York (the “Local Bankruptcy Rules”).
Background4
5. The Debtors are leading global providers of high quality internet content and
cloud-based customer solutions, operating in three divisions: (a) “Multiply;” (b) “ForeSee;” and
(c) “Webcollage” (collectively, the “Company”). The Company also has shared services
departments, which perform certain finance, legal, human resource, and administrative support
functions for all of the Company’s operating units. Multiply is an online content publisher that
leverages relationships with Facebook, Inc., Yahoo! Inc., celebrities, and other partners to
acquire traffic to owned and partner websites and generate advertising revenue from Google, Inc.
and other partners. ForeSee measures end customer/user satisfaction for its customers, which
allows it to deliver insights on where its customers should prioritize improvements in their own
4 A description of the Debtors’ businesses, the reasons for commencing these chapter 11 cases, the relief sought
from the Court to allow for a smooth transition into chapter 11, and the facts and circumstances supporting this
Motion are set forth in the Declaration of Justin P. Schmaltz, Chief Restructuring Officer, in Support of
Chapter 11 Petitions and First Day Motions (the “First Day Declaration”), filed contemporaneously herewith.
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customers’ experiences. Webcollage is the leading cloud-based platform for managing and
publishing rich product information for syndication to retail partners’ e-commerce websites.
6. Prior to date hereof (the “Petition Date”), the Debtors commenced the solicitation
of votes by the Debtors’ prepetition first lien lenders and the Debtors’ prepetition second lien
lenders, the only voting classes of creditors with respect to the Joint Prepackaged Chapter 11
Plan of Reorganization for Answers Holdings, Inc. and Its Debtor Affiliates (as amended,
supplemented, or otherwise modified from time to time, the “Plan”), filed contemporaneously
herewith. As of March 2, 2017, holders of approximately 98% in amount of first lien claims
against the Debtors and holders of approximately 98% in amount of second lien claims against
the Debtors voted to accept the Plan. The Plan, which has the support of the overwhelming
majority of the holders of the Debtors’ funded indebtedness, contemplates the Company’s
restructuring through a debt-to-equity conversion of a substantial majority of the Debtors’ funded
debt obligations. Implementation of the restructuring transactions contemplated by the Plan will
enable the Debtors to de-lever their balance sheet by more than $471.4 million5—over 86% of
their funded debt obligations—and position their businesses for stability and success after
emergence from bankruptcy. Notably, all allowed general unsecured claims will remain
unimpaired under the Plan.
7. On the Petition Date, each of the Debtors filed a petition for reorganization under
chapter 11 of the Bankruptcy Code with the Court. The Debtors continue to operate their
businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and
1108 of the Bankruptcy Code. Concurrently with the filing of this Motion, the Debtors requested
procedural consolidation and joint administration of these chapter 11 cases pursuant to
5 Inclusive of $7.4 million of secured swap settlement amounts that are discussed more fully in the First Day
Declaration.
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Bankruptcy Rule 1015(b). No party has requested the appointment of a trustee or examiner in
these chapter 11 cases, and no committees have been appointed under section 1102 of the
Bankruptcy Code.
I. The Cash Management System
8. To facilitate the efficient operation of their businesses, the Debtors and their
non-debtor foreign affiliates use an integrated, centralized cash management system (the “Cash
Management System”) to collect, transfer, and disburse funds generated by their operations.
The Cash Management System facilitates cash monitoring, forecasting, and reporting and
enables the Debtors and their non-debtor foreign affiliates to maintain control over the
administration of approximately 32 bank accounts (together with any other bank accounts the
Debtors may open in the ordinary course of their businesses, the “Bank Accounts”) that are
maintained with banks (collectively, the “Banks”) including those Banks listed on Exhibit 1
annexed to each of Exhibit A and Exhibit B attached hereto and reflected on the diagram of the
Cash Management System attached hereto as Exhibit C.
9. The Cash Management System is similar to those commonly employed by
businesses comparable to those of the Debtors and uses integrated systems to help control funds,
ensure cash availability for each entity, and reduce administrative expenses by facilitating the
movement of funds among multiple entities. Any disruption of the Cash Management System
would be extremely detrimental to the Debtors’ operations, as their businesses require prompt
access to cash and accurate cash tracking. The Debtors’ accounting department maintains daily
oversight over the Cash Management System and implements cash management controls for
entering, processing, and releasing funds.
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II. Description of the Bank Accounts and Flow of Funds
10. The Cash Management System is tailored specifically to meet the Debtors’
operating needs—enabling the Debtors to effectively and centrally control and monitor corporate
funds, ensure cash availability and liquidity, comply with the requirements of their financing
agreements, reduce administrative expenses by facilitating the movement of funds, and enhance
the development of accurate account balances. These controls are critical given the significant
volume of cash transactions managed through the Cash Management System each day.
A. Description of the Bank Accounts
11. The Debtors’ 29 Bank Accounts are held in the name of the following Debtors:
(a) fifteen Bank Accounts at Answers Corporation (“Answers”); (b) two Bank Accounts at
Redcan, LLC (“Redcan”); (c) four Bank Accounts at ForeSee Results, Inc. (“ForeSee”); (d) two
Bank Accounts at Easy2 Technologies, Inc. (“Easy 2”); (e) two Bank Accounts at RSR
Acquisition, LLC (“RSR”); (f) three Bank Accounts at Webcollage Inc. (“Webcollage”); (g) and
one Bank Account at Upbolt, LLC (“Upbolt”). The Debtors’ primary bank is Silicon Valley
Bank (“SVB”), with which the Debtors maintain 25 Bank Accounts. Additionally, the Debtors
maintain four Bank Accounts at Enterprise Bank & Trust (“Enterprise”). There are three Bank
Accounts within the Cash Management System that are held in the name of the following
non-debtor foreign affiliates: (x) one Bank Account at ForeSee Results, Ltd. (UK) (“ForeSee
UK”); (y) one Bank Account at Beanspublishing, Ltd. (“Beanspublishing”); and (z) one Bank
Account at Webcollage Israel Ltd. (“Webcollage Israel,” and collectively with ForeSee UK,
Beanspublishing and Webcollage Europe, LTD (UK), the “Non-Debtor Affiliates”).
12. The bulk of the Debtors’ cash on-hand is comprised of proceeds from the
Debtors’ ongoing business operations and the proceeds of the Debtors’ prepetition revolving
credit facility. As of the Petition Date, the Debtors have approximately $9.2 million in the Bank
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Accounts with approximately $934,000 in the Bank Accounts of the Non-Debtor Affiliates.
Each of the Bank Accounts serves dedicated functions as described in the following table:
Accounts Description of Accounts
Main Concentration Account
SVB Account ending 3839
Answers maintains a master—or “concentration”—account at SVB (the
“Main Concentration Account”), which is the Debtors’ main operating
account to which funds are swept daily from: (a) the Debtors’ various zero
balance Operating Accounts maintained at SVB; and (b) the Debtors’
SVB Lockbox Account (all as defined herein). Funds are also transferred
to the Main Concentration Account on an as-needed basis from the
Debtors’ Enterprise Accounts and certain Operating Accounts (each as
defined herein), as discussed further below.
Funds from the Main Concentration Account, in turn, are transferred to:
the Debtors’ Disbursement/Payroll Accounts and Purchase Card
Disbursement Accounts (each as defined herein), as necessary, to fund
disbursements from such accounts to cover operational and business costs,
including, among other things, tax and payroll obligations.
On the Petition Date, the Main Concentration Account had a balance of
$7,855,617.
[Remainder of page intentionally left blank.]
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Operating Accounts
Overview:
SVB Account ending 3843
SVB Account ending 9096
SVB Account ending 3877
SVB Account ending 3896
SVB Account ending 7915
The Debtors maintain seven (7) deposit accounts and Non-Debtor
Affiliate, ForeSee UK, maintains one deposit account (collectively, the
“Operating Accounts”) at SVB, which are funded by accounts receivable,
cash receipts, and other miscellaneous sources. Each of the Operating
Accounts is a zero balance account, which is swept daily to the Main
Concentration Account. On the Petition Date, the Operating Accounts had
a zero balance, unless otherwise stated herein.
Operating Account ending 3843 is a customer receipts account tied to
cash receipts from Answers’ operations, including accounts receivables.
In certain instances, this account is also utilized as a disbursements
account for Answers-specific accounts payable, and, in connection
therewith is linked to a PayPal account (Acct. No. ending in 5M56)6 to
facilitate disbursements related to the Multiply business’s traffic
acquisition purchases.
Operating Account ending 9096 is a customer receipts account tied to
cash receipts from Redcan’s operations, including accounts receivables.
In certain instances, this account is also utilized as a disbursements
account for Redcan-specific accounts payable, and, in connection
therewith is linked to a PayPal account (Acct. No. ending in WB5Y) to
facilitate disbursements related to the Redcan business’s traffic acquisition
purchases.
Operating Account ending 3877 is a customer receipts account tied to
direct debits from customers and cash receipts from Easy2’s operations,
including accounts receivables.
Operating Account ending 3896 is a customer receipts account tied to
direct debits from customers and cash receipts from RSR’s operations,
including accounts receivables.
Operating Account ending 7915 is a customer receipts account tied to
cash receipts from Webcollage’s operations, including accounts
receivables. This account is also utilized for cash receipts from customers
that are serviced by the operations of Webcollage Israel, but payments are
remitted to this Operating Account per contractual arrangements with
such customers.
6 All accounts described herein with PayPal do not maintain any balance and are only funded on an as-needed
basis from the relevant Bank Accounts to facilitate disbursements related to certain businesses’ traffic
acquisition purchases.
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Operating Accounts
(continued)
SVB Account ending 6712
SVB Account ending 9779
Operating Account ending 6712 is a customer receipts account tied to
cash receipts from ForeSee’s operations, including accounts receivables.
This account is also utilized to (i) fund the direct debit payroll obligations
of ForeSee and certain of its subsidiaries, including payroll for employees
of foreign subsidiaries, and (ii) distribute funds on an as-needed basis to
ForeSee UK’s Operating Account to support European operations.
Periodically, funds from ForeSee UK’s Operating Account ending 9779
are transferred to this Operating Account. In connection with the Debtors’
Purchaser Card Program (defined below), this account is debited
accordingly.
ForeSee UK’s Operating Account ending 9779 is a cash receipts account
tied to ForeSee UK’s operations in Europe. ForeSee UK’s operations
service customers that remit payment directly to this ForeSee UK
Operating Account per certain contractual arrangements with such
customers. On a periodic basis, the funds in this UK Operating Account
are transferred to ForeSee’s Operating Account ending 6712 and ForeSee
UK’s Operating Account ending 9814. This Operating Account is not a
zero balance account and on the Petition Date, this account had a balance
of approximately $157,426.
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Disbursement/Payroll Accounts
Overview:
SVB Account ending 3858
SVB Account ending 3881
SVB Account ending 9104
SVB Account ending 3904
SVB Account ending 3923
SVB Account ending 7173
SVB Account ending 6488
SVB Account ending 6492
The Debtors maintain eight (8) accounts at SVB for disbursements,
including payroll disbursements (the “Disbursement/Payroll Accounts”),
which are funded with cash automatically transferred from the Main
Concentration Account sufficient to cover the Debtors’ various accounts
payable, and payroll disbursements immediately prior to their initiation
each pay period. Each of the Disbursement/Payroll Accounts is a zero
balance account. On the Petition Date, the Disbursement/Payroll
Accounts had a zero balance, unless otherwise stated herein.
Disbursement/Payroll Account ending 3858 is Answers’ general accounts
payable account that services the operating expenses of the Answers’
business operations. This account is also utilized to fund the direct debit
payroll obligations of Answers and certain of its subsidiaries and is
debited in connection with the Debtors’ Purchaser Card Program.
Disbursement/Payroll Account ending 3881 is Easy 2’s general accounts
payable account that services the specific operating expenses of Easy 2’s
business operations.
Disbursement/Payroll Account ending 9104 is Redcan’s general accounts
payable account that services the operating expenses of Redcan’s business
operations.
Disbursement/Payroll Account ending 3904 is RSR’s general accounts
payable account that services the operating expenses of RSR’s business
operations. This account is also utilized to fund direct debit payroll
obligations of RSR.
Disbursement/Payroll Account ending 3923 is Webcollage’s general
accounts payable account that services the operating expenses of
Webcollage’s business operations, including operations of Webcollage’s
foreign subsidiaries. This account is also utilized to fund the direct debit
payroll obligations of Webcollage, Webcollage’s foreign subsidiaries, and
Easy 2.
Disbursement/Payroll Account ending 7173 is a controlled disbursement
account utilized specifically for payment of ForeSee accounts payable.
Disbursement/Payroll Account ending 6488 is funded by the Main
Concentration Account and is a disbursement account utilized to fund the
Debtors’ flex spending program, which was effective as of January 1,
2017. As of the Petition Date, the flex spending account had an aggregate
balance of $71,586.
Disbursement/Payroll Account ending 6492 is funded by the Main
Concentration Account and is a disbursement account utilized to fund the
Debtors’ self-insured health insurance, which was effective as of March 1,
2017.
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Purchaser Card Disbursement
Accounts
Overview:
SVB Account ending 6534
SVB Account ending 6473
SVB Account ending 6911
SVB Account ending 6515
SVB Account ending 6500
Answers maintains five (5) debit card accounts (the “Purchase Card
Disbursement Accounts”),7 which are funded with cash manually on an
as-needed basis from the Main Concentration Account sufficient to satisfy
the Debtors’ obligations under their Purchase Card Program (defined
below). On the Petition Date, the Purchase Card Disbursement Accounts
had an aggregate balance of approximately $0.00.
Purchase Card Disbursement Account ending 6534 is funded by the Main
Concentration Account and then debited to satisfy obligations related to
the Debtors’ Purchase Card Program for the Multiply business’s promoted
content purchases.
This Purchase Card Disbursement Account ending 6473 is funded by the
Main Concentration Account and then debited to satisfy obligations
related to the Debtors’ Purchase Card Program for the Multiply business’s
promoted content purchases.
This Purchase Card Disbursement Account ending 6911 is a contingency
account to be utilized in the event certain of the Debtors’ credit lines are
curtailed and is funded by the Main Concentration Account. This account
is debited to satisfy obligations related to the Debtors’ Purchase Card
Program in connection with employee travel and entertainment expenses.
This Purchase Card Disbursement Account ending 6515 is funded by the
Main Concentration Account and then debited to satisfy obligations
related to the Debtors’ Purchase Card Program for the Multiply business’s
promoted content purchases.
This Purchase Card Disbursement Account ending 6500 is funded by the
Main Concentration Account and then debited to satisfy obligations
related to the Debtors’ Purchase Card Program for the Multiply business’s
promoted content purchases.
[Remainder of page intentionally left blank.]
7 The Purchase Card Disbursement Accounts also include Answers’ Disbursements/Payroll Account (SVB
Account ending 3858) and ForeSee’s Operating Account (SVB Account ending 6712).
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Lockbox Accounts
SVB Account ending 6143
SVB Account ending 7789
Enterprise Account ending 2177
ForeSee maintains one lockbox account at SVB ending 6143 (the “SVB
ForeSee Lockbox Account”), which serves as a check depository for
ForeSee customer receipts. The SVB Lockbox Account is tied to the
Debtors’ Main Concentration Account, with funds in the SVB Lockbox
Account being swept to the Main Concentration Account on a daily basis.
Webcollage maintains one lockbox account at SVB ending 7789 (together
with the SVB Foresee Lockbox Account, the “SVB Lockbox Accounts”),
which serves as a check and cash receipt depository. This lockbox
account is tied to the Debtors’ Main Concentration Account, with funds in
the account being swept to the Main Concentration Account on a daily
basis.
Answers maintains the one lockbox account at Enterprise ending 2177
(the “Enterprise Lockbox Account,” collectively with the SVB Lockbox
Accounts, the “Lockbox Accounts”), which serves as a check depository
for Answers’ customer receipts. The Enterprise Lockbox Account is tied
to the Enterprise Master Account, with funds in the Enterprise Lockbox
Account being swept to the Enterprise Master Account on a daily basis.
Utilities Account
SVB Account ending 6568
Answers recently opened this interest bearing account ending 6568 in
anticipation of these chapter 11 cases to maintain an account for adequate
assurance purposes pursuant to the relief requested in the Debtors’ Motion
for Entry of an Order Determining Adequate Assurance of Payment for
Future Utility Services (the “Utilities Motion”), filed contemporaneously
herewith. This account will only be utilized as may be authorized by the
Court in connection with the relief requested in the Utilities Motion, and
for no other purpose. As of the Petition Date, this account had a balance
of $55.
Sublease Deposit Account
SVB Account ending 6549
This account is a segregated account that is utilized to maintain security
deposit amounts in connection with certain the Debtors’ subtenants
pursuant to the parties’ respective sublease agreements. On the Petition
Date, this account had an aggregate balance of approximately $174,842.
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Enterprise Accounts
Overview:
Enterprise Master Account ending
2150
Enterprise Account ending 2169
Enterprise Account ending 2193
The Debtors maintain one master account (the “Enterprise Master
Account”), three disbursement accounts (the “Enterprise Deposit
Accounts”), and one lockbox account (the “Enterprise Lockbox
Account”) at Enterprise (collectively, the “Enterprise Accounts”). The
Enterprise Master Account, Enterprise Deposit Accounts, and Enterprise
Lockbox Account handle customer receipts as well as customer payment
and disbursements in connection with the business operations of all the
Debtors. The Enterprise Lockbox Account is a zero balance account that
is swept daily into the Enterprise Master Account. On the Petition Date,
the Enterprise Accounts had a combined balance of approximately
$117,408.
Enterprise Master Account ending 2150 serves as the Debtors’
concentration account at Enterprise. On a discretionary basis, the Debtors
transfer cash from the Enterprise Master Account to the Main
Concentration Account to fund the Debtors’ business operations. The
Enterprise Master Account also handles certain cash receipts from all of
the Debtor entities.
Enterprise Account ending 2169 is a disbursement account utilized
specifically for checks issued by Answers for certain accounts payable
and payroll obligations.
Enterprise Account ending 2193 is a disbursement account for accounts
payable specific to Upbolt, and, in connection therewith is linked to a
PayPal account (Acct. No. ending in 24LC) to facilitate disbursements
related to the Upbolt business’s traffic acquisition purchases.
Non-Debtor Foreign Affiliate
Accounts:
SVB Account ending 9814
First International bank of Israel
Account ending 7701
SVB Account ending 5084
Non-debtor Operating Account ending 9814 of ForeSee UK is funded on
an as-needed basis from ForeSee’s Operating Accounts ending 6712 and
9779 and such funds are utilized to satisfy monthly operating expenses
and quarterly rent obligations of ForeSee UK.
Non-debtor Operating Account ending 7701 of Webcollage Israel is
funded on an as-needed basis from Webcollage’s Disbursement/Payroll
Account ending 3923 and used to fund Webcollage Israel operations.8
Non-debtor Operating Account ending 5084 is customer receipt account
tied to cash receipts from Beanspublishing’s European operations,
including accounts receivable. Funds from this account are not swept into
the Main Concentration Account. This is also a general accounts payable
account servicing the operating expenses of Beanspublishing’s business
operations.
8 Webcollage maintains an intercompany account payable to non-debtor Webcollage Israel on account of a
cost-plus funding arrangement between these entities pursuant certain contractual arrangements. This
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13. The Debtors incur periodic service charges and other fees in connection with the
maintenance of the Cash Management System (the “Bank Fees”), which average approximately
$4,500 per month.9 The Bank Fees for each month are paid in arrears and are automatically
deducted from the Debtors’ Bank Accounts as they are assessed by their respective Banks.
B. Description of Funds Processing
14. A diagram setting forth the flow of funds among the Bank Accounts is attached
hereto as Exhibit C. The following list describes the manner in which cash generally moves
through the Cash Management System.
Receipts and Revenues. As explained in greater detail above, the Debtors receipts and
revenues are deposited into the Debtors’ various Operating, Deposit, and Lockbox
Accounts. If such accounts consist of the Debtors’ zero balance accounts at SVB, the
received funds are then swept to the Main Concentration Account on a daily basis.
Certain receipts and revenues from the operations of Answers, Redcan, and Upbolt are
deposited into the Enterprise Master Account. On a periodic basis, funds in the
Enterprise Master Account are transferred to the Main Concentration Account. Notably,
certain of the receipts and revenues deposited into the SVB Operating and Lockbox
Accounts maintained by the Debtor entities are received from customers per certain
contractual arrangements, but these customers receive services from certain non-debtor
foreign affiliates.
Disbursements. With respect to the zero balance Disbursement/Payroll Accounts and
Purchase Card Disbursement Accounts tied to the Main Concentration Account, such
accounts are funded, as needed, by the Main Concentration Account with cash sufficient
to satisfy the Debtors’ obligations on a given day. The Debtors’ Disbursement/Payroll
and Operating Accounts, which are not connected to the Main Concentration Account or
the Enterprise Master Account, but are nonetheless utilized to pay the Debtors’
intercompany account payable arises in the ordinary course of Debtor Webcollage’s business and, therefore, the
Debtors believe such payment obligation constitutes an ordinary course transaction within the meaning of
section 363(c)(1) of the Bankruptcy Code. As such, the Debtors believe they do not require the Court’s
approval to satisfy this intercompany obligation. Nonetheless, out of an abundance of caution, the Debtors are
seeking authority to continue such arrangement on a postpetition basis. The continued performance of the
ordinary course intercompany transactions is integral to ensuring the Debtors’ ability to operate their businesses
and maintain existing revenue streams for the benefit of all stakeholders. Additionally, to the extent such
prepetition obligations are deemed to arise under a prepetition executory contract, such contract shall be
addressed in connection with confirmation of the Debtors’ chapter 11 plan.
9 The gross Bank Fees for October, November, and December of 2016 were approximately $4,542, $4,449, and
$4,519, respectively. Thus, the aggregate amount of Bank Fees may increase, and the Debtors’ seek authority,
to the extent necessary, to pay such Bank Fees in the ordinary course on a postpetition basis.
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obligations, are either self-funded or funded via separate Operational Accounts or the
Enterprise Master Account.
C. The Bank Accounts Comply with Section 345(b) of the Bankruptcy Code and
the U.S. Trustee Guidelines
15. As of the Petition Date, the Debtors’ Bank Accounts comply with section 345(b)
of the Bankruptcy Code. The Debtors maintained deposit accounts at SVB and Enterprise each
of which is insured by the Federal Deposit Insurance Corporation (the “FDIC”). Additionally,
SVB is designated as an authorized depository by the Office of the United States Trustee for the
Southern District of New York (the “U.S. Trustee”) pursuant to the U.S. Trustee’s Operating
Guidelines and Financial Reporting Requirements for Debtors-in-Possession and Trustees (the
“U.S. Trustee Guidelines”). Enterprise is not designated as an authorized depository pursuant to
the U.S. Trustee Guidelines. Nevertheless, Enterprise is a well-capitalized and financially stable
financial institution, and, as of the Petition Date, the amounts maintained in the Enterprise
Accounts ($117,408) are fully insured by the FDIC. In the event, the Bank Accounts cease to
comply with the requirements of section 345(b) of the Bankruptcy Code during the Chapter 11
Cases, the Debtors’ request that the Court provide the Debtors with 45 days to bring the Bank
Accounts into compliance with section 345(b) of the Bankruptcy Code.
III. The Debtors’ Purchase Cards
16. As part of the Cash Management System, the Debtors provide certain employees
with debit and credit cards (collectively, the “Purchase Cards”) issued by American Express,
SVB, or SunTrust Bank (the “Purchase Card Program”). As of February 24, 2017, two (2)
employees have active Purchase Cards. The Purchase Cards are corporate guarantee cards for
which the relevant employees do not have personal liability. The employees use the Purchase
Cards for approved and legitimate business expenses. Using rough estimates, the vast majority
of expenses incurred on the Purchase Cards include business expenses related to promoted
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content and advertising, traffic acquisition, as well as supplies incurred on behalf of the Debtors
in the ordinary course of business. Approximately 30% of the monthly amounts incurred under
the Purchase Card Program are related to employee travel expenses in the furtherance of the
Debtors’ business operations. The expenses incurred on the Purchase Cards are essential to the
operation of the Debtors’ businesses, especially the Multiply business. Costs incurred through
use of the Purchase Cards are satisfied from the Debtors’ Purchase Card Disbursement Accounts.
17. On average, in the months leading up to the Petition Date, approximately
$200,000 to $300,000 per month was debited from the Purchase Card Disbursement Accounts
due to the employees’ use of the Purchase Cards, of which $190,000 is related to the Debtors’
corporate credit card account with American Express (the “American Express Account”). In
addition, the Debtors pay minimal service fees of approximately $1,450 per year in the aggregate
for the use of certain of the Purchase Cards issued under the Purchase Card Program. As of the
Petition Date, the Debtors estimate they owe approximately $235,000 on account of the Purchase
Cards, of which $190,000 is related to the American Express Account. The Debtors seek
authority to continue in the ordinary course the Purchase Card Program, subject to any terms and
conditions thereof, on a postpetition basis consistent with past practice, and to pay any
prepetition amounts related to the Purchase Cards, including any prepetition amounts related to
the American Express Account. Payment and continued use of the Purchase Card Program,
including the American Express Account, will minimize disruption and ensure continuity
benefitting the Debtors’ estates.
IV. The Debtors’ Existing Business Forms
18. The Debtors use a variety of preprinted business forms (including checks,
letterhead, correspondence forms, invoices, and other business forms in the ordinary course of
business (collectively, and as they may be modified, the “Business Forms”)). The Debtors also
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maintain books and records to document their financial results and a wide array of necessary
operating information (collectively, the “Books and Records”). To avoid the significant
distraction and delay in their business operations that would result from a disruption of the Cash
Management System and to avoid unnecessary expense, the Debtors request authorization to
continue using all of the Business Forms and Books and Records in use immediately before the
Petition Date—without reference to the Debtors’ status as chapter 11 debtors in possession—
rather than requiring the Debtors to incur the expense and delay of ordering new Business Forms
and creating new Books and Records; provided that at the request of the U.S. Trustee, the
Debtors will use reasonable efforts during the pendency of these chapter 11 cases to include a
stamp on invoices and checks to reference the Debtors’ status as debtors in possession.
V. The Debtors’ Intercompany Transactions
19. In the ordinary course of business, various Debtors and the Non-Debtor Affiliates
maintain business relationships with each other, resulting in intercompany receivables and
payables (the “Intercompany Claims”). In connection with the daily operation of the Cash
Management System, at any given time there may be Intercompany Claims owing between
Debtors or between a Debtor and a Non-Debtor Affiliate in connection with the receipt and
disbursement of funds, and there may be recognitions of offsets between Debtors or between a
Debtor and a Non-Debtor Affiliate (collectively, the “Intercompany Transactions”).10
The
Intercompany Transactions are critical to ensuring that liquidity is available where and when
needed by the Debtors and the Non-Debtor Affiliates, and enables the Debtors to maintain the
10
Because the Debtors engage in Intercompany Transactions on a regular basis and such transactions are common
among enterprises similar to the Debtors, the Debtors believe the Intercompany Transactions are ordinary
course transactions within the meaning of section 363(c)(1) of the Bankruptcy Code and, thus, do not require
the Court’s approval. Nonetheless, out of an abundance of caution, the Debtors are seeking express authority to
engage in such transactions on a postpetition basis. The continued performance of the ordinary course
Intercompany Transactions are integral to ensuring the Debtors’ ability to operate their businesses.
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operations of certain of their Non-Debtor Affiliates to ensure that the Debtors continue to realize
the revenue generated by such Non-Debtor Affiliates’ operations.
20. With respect to their affiliates, the Debtors track all fund transfers electronically
in their accounting system and can ascertain, trace, and account for Intercompany Transactions.
The Debtors’ Intercompany Transactions with their foreign Non-Debtor Affiliates are completely
integrated within the Cash Management System. If the Intercompany Transactions were to be
discontinued, the Cash Management System and related administrative controls would be
disrupted to the Debtors’ detriment because such discontinuance would affect the Debtors’
ability to fund operations necessary to providing services to their customers and likely result in
decreased revenue streams.
21. To ensure each individual Debtor will not permanently fund the operations of any
affiliate, the Debtors respectfully request that, pursuant to sections 503(b) and 364(c)(1) of the
Bankruptcy Code, all Intercompany Claims against any Debtor arising after the Petition Date as
a result of ordinary course Intercompany Transactions be accorded superpriority administrative
expense status. If Intercompany Claims are given superpriority administrative expense status,
each entity utilizing funds flowing through the Cash Management System should continue to
bear ultimate repayment responsibility for its ordinary course Intercompany Transactions,
reducing the risk that these transactions would jeopardize the recoveries available to the Debtors’
creditors. Moreover, the Debtors request the authority to fund the postpetition payment of
obligations to Non-Debtor Affiliates in a manner consistent with historical practice to enable the
Debtors to smoothly transition into chapter 11 and ensure certain of the Debtors’ revenue streams
are not impacted. For the avoidance of doubt, the Intercompany Claims shall be unsecured,
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junior in priority and subordinated to the DIP Obligations and the Adequate Protection
Super-Priority Claims.11
Basis for Relief
I. The Court Should Approve the Debtors’ Continued Use of the Cash Management
System
A. The Continued Use of the Debtors’ Cash Management System Is Essential to
the Debtors’ Operations and Restructuring Efforts
22. The Cash Management System constitutes an ordinary course and essential
business practice of the Debtors. The Cash Management System provides significant benefits to
the Debtors including, among other things, the ability to control corporate funds, ensure the
availability of funds when necessary, and reduce costs and administrative expenses by
facilitating the movement of funds and developing timely and accurate account balance
information. Thus, to ensure the seamless operation of the Debtors’ businesses and realize the
benefits of the Cash Management System, the Debtors should be allowed to continue using the
Cash Management System and should not be required to open new bank accounts.
23. The U.S. Trustee Guidelines, unless otherwise ordered by the Court, require a
debtor to, among other things, establish one debtor in possession account for all estate monies
required for the payment of taxes (including payroll taxes), close all existing bank accounts and
open new debtor in possession accounts, maintain a separate debtor in possession account for
cash collateral, obtain checks that bear the designation “debtor in possession,” and reference the
bankruptcy case number and the type of account on such checks. These requirements are
designed to provide a clear line of demarcation between prepetition and postpetition claims and
11
The terms “DIP Obligations” and the “Adequate Protection Super-Priority Claims” each as used herein shall
have the meaning ascribed to such terms in the Interim Order (I) Authorizing the Debtors (A) To Obtain
Postpetition Financing and (B) to Utilize Cash Collateral, (II) Granting Adequate Protection to Prepetition
Secured Parties, (III) Modifying the Automatic Stay, (IV) Scheduling a Final Hearing, and (V) Granting Related
Relief (the “Interim DIP Order”).
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payments and help protect against the inadvertent payment of prepetition claims by preventing
banks from honoring checks drawn before the Petition Date. Strict enforcement of those
guidelines in these chapter 11 cases, however, would severely disrupt the ordinary financial
operations of the Debtors by reducing efficiencies and causing unnecessary expenses.
24. The Debtors should be permitted to use the Cash Management System under
section 363(c)(1) of the Bankruptcy Code, which authorizes debtors in possession to “use
property of the estate in the ordinary course of business without notice or a hearing.” 11 U.S.C.
§ 363(c)(1). Section 363(c)(1) of the Bankruptcy Code also allows a debtor in possession to
engage in the ordinary course transactions required to operate its business without unneeded
oversight by its creditors or the court. See, e.g., Med. Malpractice Ins. Ass’n v. Hirsch (In re
Lavigne), 114 F.3d 379, 384 (2d Cir. 1997); In re Enron Corp., No. 01-16034 (AJG), 2003 WL
1562202, at *15 (Bankr. S.D.N.Y. Mar. 21, 2003); Chaney v. Official Comm. of Unsecured
Creditors of Crystal Apparel, Inc. (In re Crystal Apparel, Inc.), 207 B.R. 406, 409 (Bankr.
S.D.N.Y. 1997). Included within the purview of section 363(c) of the Bankruptcy Code is a
debtor’s ability to continue the “routine transactions” necessitated by a debtor’s cash
management system. See Amdura Nat’l Distrib. Co. v. Amdura Corp. (In re Amdura Corp.), 75
F.3d 1447, 1453 (10th Cir. 1996).
25. Bankruptcy courts treat requests for authority to continue utilizing existing cash
management systems as a relatively “simple matter,” see In re Baldwin-United Corp.,
79 B.R. 321, 327 (Bankr. S.D. Ohio 1987), and have recognized that an integrated cash
management system “allows efficient utilization of cash resources and recognizes the
impracticalities of maintaining separate cash accounts for the many different purposes that
require cash.” In re Columbia Gas Sys., Inc., 136 B.R. 930, 934 (Bankr. D. Del. 1992), aff’d in
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part and rev’d in part, 997 F.2d 1039 (3d Cir. 1993). As a result, courts have generally
concluded that the requirement to maintain all accounts separately “would be a huge
administrative burden and economically inefficient.” Columbia Gas, 997 F.2d at 1061; see also
In re Southmark Corp., 49 F.3d 1111, 1114 (5th Cir. 1995) (cash management system allows
debtor “to administer more efficiently and effectively its financial operations and assets”).
26. In other large and complex chapter 11 cases, such as these, courts in this district
routinely waive certain U.S. Trustee Guideline requirements and allow the continued use of cash
management systems and prepetition bank accounts employed in the ordinary course of a
debtor’s prepetition business. See, e.g., In re Int’l Shipholding Corp., Case No. 16-12220 (SMB)
(Bankr. S.D.N.Y. Sept. 16, 2016); In re Aeropostale, Inc., Case No. 16-11275 (SHL) (Bankr.
S.D.N.Y. June 3, 2016); In re Fairway Grp. Holdings Corp., Case No. 16-11241 (MEW) (Bankr.
S.D.N.Y. June 1, 2016); In re Republic Airways Holdings Inc., Case No. 16-10429 (SHL)
(Bankr. S.D.N.Y. Mar. 24, 2016); In re Sabine Oil & Gas Corp., Case No. 15-11835 (SCC)
(Bankr. S.D.N.Y. Sept. 10, 2015); In re Chassix Holdings, Inc., Case No. 15-10578 (MEW)
(Bankr. S.D.N.Y. Apr. 13, 2015).12
B. Opening New Accounts Will Disrupt the Debtors’ Businesses
27. The prospects for a successful reorganization of the Debtors’ businesses, as well
as the preservation and enhancement of the Debtors’ value as a going concern, will be materially
and negatively impacted if the Cash Management System is disrupted and any Bank Accounts
are closed.
28. Indeed, if the Debtors were required to open new accounts as debtors in
possession and modify the Cash Management System, the Debtors would be forced to
12
Because of the voluminous nature of the orders cited herein, such orders have not been attached to this Motion.
Copies of these orders are available upon request to the Debtors’ proposed counsel.
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reconstruct the Cash Management System at this critical juncture when the Debtors should be
otherwise focused on their restructuring and ensuring that their business operations continue as
smoothly as possible. Thus, the Debtors’ treasury, accounting, and bookkeeping employees
would need to focus their efforts on immediately opening new bank accounts and working to
ensure proper controls are in place for cash to flow properly through all operations, thereby
diverting them from their daily responsibilities during this critical juncture in these chapter 11
cases. Opening new bank accounts would increase operating costs, and the delays that would
result from opening new accounts, revising cash management procedures, and instructing
customers to redirect payments would negatively impact the Debtors’ ability to operate their
businesses while pursuing these arrangements.
29. In addition, the Debtors would be subject to significant administrative burdens
and expenses because they would need to execute new signatory cards and depository
agreements and create an entirely new manual system for issuing checks and paying postpetition
obligations, all as generally would be required by the U.S. Trustee Guidelines. See U.S. Trustee
Guidelines, at pp. 2–3.
C. Maintaining the Existing Cash Management System Will Facilitate a Smooth
Transition into Chapter 11 and Will Not Harm Parties in Interest
30. The Debtors’ continued use of the Cash Management System will facilitate their
transition into chapter 11 by, among other things, avoiding administrative inefficiencies and
expenses and minimizing delays in the payment of postpetition debts. The Debtors respectfully
submit that parties-in-interest will not be harmed by the Debtors’ maintenance of the Cash
Management System, including the Bank Accounts. Specifically, with the assistance of their
professionals, the Debtors have implemented internal protocols that prohibit payments on
account of prepetition debts, including prepetition accounts payable payments, without prior
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approval, which will not be granted unless such payment is authorized by an order of this Court.
In light of such protective measures, the Debtors submit that maintaining the Cash Management
System is in the best interests of their estates and creditors.
31. In addition, the Cash Management System provides the Debtors with the ability
to, among other things, quickly create status reports on the location and amount of funds, which
in turn allow management to track and control such funds, ensure cash availability, and reduce
administrative costs through a centralized method of coordinating the collection and movement
of funds.
II. The Debtors Should Be Granted Authority To Use Existing Business Forms
32. The Debtors submit that the continued use of the Business Forms will not
prejudice parties in interest and such relief will avoid unnecessary expenses and administrative
delays at this critical time. Furthermore, the Debtors’ requested relief will not prejudice parties
in interest because parties doing business with the Debtors undoubtedly will know of the
Debtors’ status as a debtor in possession. Thus, changing the Business Forms is unnecessary and
unduly burdensome. Nevertheless, at the request of the U.S. Trustee, the Debtors will use
reasonable efforts during the pendency of these chapter 11 cases to include a stamp on invoices
and checks to reference the Debtors’ status as debtors in possession.
33. Courts in this district regularly permit debtors to use their prepetition check forms
without the “debtor in possession” label in similar large and complex chapter 11 cases. See,
e.g., In re Int’l. Shipholding Corp., Case No. 16-12220 (SMB) (Bankr. S.D.N.Y. Sept. 16, 2016);
In re Fairway Grp. Holdings Corp., Case No. 16-11241 (MEW) (Bankr. S.D.N.Y. June 1, 2016);
In re Republic Airways Holdings Inc., Case No. 16-10429 (SHL) (Bankr. S.D.N.Y. Mar. 24,
2016); In re Sabine Oil & Gas Corp., Case No. 15-11835 (SCC) (Bankr. S.D.N.Y. Sept. 10,
2015); In re Chassix Holdings, Inc., Case No. 15-10578 (MEW) (Bankr. S.D.N.Y. Apr. 13,
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2015); In re Eagle Bulk Shipping Inc., No. 14-12303 (SHL) (Bankr. S.D.N.Y. Sept. 19, 2014);
In re MPM Silicones, LLC, No. 14-22503 (RDD) (Bankr. S.D.N.Y. May 16, 2014).13
III. The Debtors Should Be Authorized to Continue Using Debit, Wire, and
ACH Payments
34. The Debtors request further relief from the U.S. Trustee Guidelines’ requirement
that all disbursements of estate funds be done by check and include a notation representing the
reason for the disbursement. Considering the complexity of the Debtors’ operations, the Debtors
need to conduct transactions by debit, wire, or ACH payments and other similar methods. If the
Debtors are denied the opportunity to conduct transactions by debit, wire, or other methods used
in the ordinary course of business, the Debtors likely would have difficulty performing on their
contracts and the Debtors’ business operations would be disrupted unnecessarily, burdening the
Debtors and their estates with additional costs.
IV. The Debtors Should Be Authorized to Continue Performing Under the
Intercompany Transactions
35. At any given time, there may be balances due and owing between and among
Debtors and the Non-Debtor Affiliates. These balances represent extensions of intercompany
credit made in the ordinary course of business that are an essential component of the Cash
Management System. Thus, the Debtors respectfully request the authority, in their sole
discretion, to continue performing under the Intercompany Transactions in the ordinary course of
business without the need for further Court order.
36. Courts routinely provide authority in other complex multi-debtor chapter 11 cases
to continue ordinary course intercompany transactions.14
See, e.g., In re Sabine Oil & Gas
13
Because of the voluminous nature of the orders cited herein, such orders have not been attached to this Motion.
Copies of these orders are available upon request to the Debtors’ proposed counsel.
14 Because the Debtors engage in Intercompany Transactions on a regular basis and such transactions are common
among enterprises like that of the Debtors and their non-debtor foreign affiliates, the Debtors believe the
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Corp., No. 15-11835 (SCC) (Bankr. S.D.N.Y. Sept. 10, 2015); In re Chassix Holdings, Inc., No.
15-10578 (MEW) (Bankr. S.D.N.Y. Apr. 10, 2015); In re Legend Parent, Inc., No. 14-10701
(RG) (Bankr. S.D.N.Y. May 27, 2014); In re MPM Silicones, LLC, No. 14-22503 (RDD) (Bankr.
S.D.N.Y. May 16, 2014); In re Metro Affiliates, Inc., No. 13-13591 (SHL) (Bankr. S.D.N.Y.
Dec. 2, 2013); In re Residential Capital, LLC, No. 12-12020 (MG) (Bankr. S.D.N.Y. June 15,
2012).15
Thus, the Debtors submit that this Court should authorize them to continue to perform
under the Intercompany Transactions.
V. Granting Superpriority Administrative Priority Status to Postpetition
Intercompany Claims Is Necessary to Protect the Debtors’ Claims
37. The Debtors’ funds are commingled in the Cash Management System with that of
other Debtors and their Non-Debtor Affiliates. If the Intercompany Transactions that permit use
of the Cash Management System were to be discontinued, that system and related administrative
controls would be disrupted to the Debtors’ detriment. On the other hand, preserving the
“business as usual” atmosphere and avoiding the unnecessary distractions that inevitably would
be associated with any substantial disruption in the Cash Management System will facilitate the
Debtors’ reorganization efforts.
38. To ensure each individual Debtor will not fund, at the expense of its creditors, the
operations of another entity, out of an abundance of caution the Debtors respectfully request that
all Intercompany Claims against a Debtor by another Debtor or Non-Debtor Affiliates arising
after the Petition Date, as a result of ordinary course Intercompany Transactions through the
Cash Management System, be accorded superpriority administrative expense status pursuant to
Intercompany Transactions are ordinary course transactions within the meaning of section 363(c)(1) of the
Bankruptcy Code, and thus do not require the Court’s approval.
15 Because of the voluminous nature of the orders cited herein, such orders have not been attached to this Motion.
Copies of these orders are available upon request to the Debtors’ proposed counsel.
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sections 503(b)(1) and 364(c)(1) of the Bankruptcy Code. If Intercompany Claims are accorded
superpriority administrative expense status, each entity utilizing funds flowing through the Cash
Management System should continue to bear ultimate repayment responsibility for such ordinary
course transactions.
39. Superpriority administrative expense treatment for intercompany transactions, as
requested herein, has been granted in chapter 11 cases comparable to these chapter 11 cases.
See, e.g., In re Sabine Oil & Gas Corp., No. 15-11835 (SCC) (Bankr. S.D.N.Y. Sept. 10, 2015);
In re Chassix Holdings, Inc., No. 15-10578 (MEW) (Bankr. S.D.N.Y. Apr. 10, 2015); In re
Legend Parent, Inc., No. 14-10701 (RG) (Bankr. S.D.N.Y. May 27, 2014); In re MPM Silicones,
LLC, No. 14-22503 (RDD) (Bankr. S.D.N.Y. May 16, 2014); In re Metro Affiliates, Inc., No.
13-13591 (SHL) (Bankr. S.D.N.Y. Dec. 2, 2013); In re Residential Capital, LLC, No. 12-12020
(MG) (Bankr. S.D.N.Y. June 15, 2012).16
40. In addition, the Court should authorize the Debtors to preserve and exercise
intercompany setoff rights, including in connection with the postpetition Intercompany
Transactions. Section 553(a) of the Bankruptcy Code provides that “[e]xcept as otherwise
provided in this section and in sections 362 and 363 of the title, this title does not affect any right
of a creditor to offset a mutual debt owing by such creditor to the debtor that arose before the
commencement of the case under this title against a claim of such creditor against the debtor that
arose before the commencement of the case.” 11 U.S.C. § 553(a).
41. A creditor need only establish two elements before a setoff may be asserted—
mutuality and timing. See Official Comm. of Unsecured Creditors v. Mfrs. & Traders Trust Co.
(In re Bennett Funding Grp., Inc.), 212 B.R. 206, 212 (B.A.P. 2d Cir. 1997), aff’d, 146 F.3d 136
16
Because of the voluminous nature of the orders cited herein, such orders have not been attached to this Motion.
Copies of these orders are available upon request to the Debtors’ proposed counsel.
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(2d Cir. 1998); see also Verco Indus. v. Spartan Plastics (In re Verco Indus.), 704 F.2d 1134,
1139 (9th Cir. 1983); In re Lundell Farms, 86 B.R. 582, 584 (Bankr. W.D. Wis. 1988).
Although courts have not uniformly defined the elements of mutuality, most courts require that
the debts are owed between the same parties and in the same right or capacity. See 5 Collier on
Bankr. ¶ 553.03[3][a] & n.86 (16th ed. rev. 2012) (citing, inter alia, Davidovich v. Welton (In re
Davidovich), 901 F.2d 1533, 1537 (10th Cir. 1990); Lubman v. Sovran Bank, N.A. (In re A & B
Homes, Ltd.), 98 B.R. 243, 248 (Bankr. E.D. Va. 1989)). Timing requires that both claims arise
prepetition. See, e.g., Packaging Indus. Grp., Inc. v. Dennison Mfg. Co. (In re Sentinel Prods.
Corp.), 192 B.R. 41, 45 (Bankr. S.D.N.Y. 1996); Scherling v. Hellman Elec. Corp. (In re
Westchester Structures Inc.), 181 B.R. 730, 739 (Bankr. S.D.N.Y. 1995). In addition, courts
allow parties to offset claims postpetition in the same manner as a prepetition setoff, so long as
the mutuality requirements are met. See, e.g., United States v. Gordon Sel-Way, Inc. (In re
Gordon Sel-Way, Inc.), 239 B.R. 741, 751-55 (E.D. Mich. 1999), aff’d, 270 F.3d 280 (6th Cir.
2001); Mohawk Indus., Inc. v. United States (In re Mohawk Indus., Inc.), 82 B.R. 174, 179
(Bankr. D. Mass. 1987).
42. The Cash Management System allows the Debtors to track all obligations owing
between related entities and thereby ensures that all setoffs of Intercompany Transactions will
meet both the mutuality and timing requirements of section 553 of the Bankruptcy Code.
Therefore, the Debtors respectfully request that they be expressly authorized to set off
postpetition obligations arising on account of Intercompany Transactions between a Debtor and
another Debtor or between a Debtor and a Non-Debtor Affiliate.
The Requirements of Bankruptcy Rule 6003 are Satisfied
43. Bankruptcy Rule 6003 empowers a court to grant relief within the first 21 days
after the Petition Date “to the extent that relief is necessary to avoid immediate and irreparable
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harm.” Immediate and irreparable harm exists where the absence of relief would impair a
debtor’s ability to reorganize or threaten the debtor’s future as a going concern. See In re Ames
Dep’t Stores, Inc., 115 B.R. 34, 36 n.2 (Bankr. S.D.N.Y. 1990) (discussing the elements of
“immediate and irreparable harm” in relation to Bankruptcy Rule 4001). For the reasons
discussed above, authorizing the Debtors to (a) continue using their existing Cash Management
System, Bank Accounts, and Business Forms, (b) grant superpriority administrative expense
status to Intercompany Claims, and (c) waiving deposit requirements is integral to the Debtors’
ability to transition their operations into these chapter 11 cases. Failure to receive such
authorization and other relief during the first 21 days of these chapter 11 cases would severely
disrupt the Debtors’ operations at this critical juncture. For the reasons discussed herein, the
relief requested is necessary in order for the Debtors to operate their businesses in the ordinary
course, preserve the ongoing value of the Debtors’ operations, and maximize the value of their
estates for the benefit of all stakeholders. Accordingly, the Debtors submit that they have
satisfied the “immediate and irreparable harm” standard of Bankruptcy Rule 6003 to support
granting the relief requested herein.
Motion Practice
44. This Motion includes citations to the applicable rules and statutory authorities
upon which the relief requested herein is predicated, and a discussion of their application to this
Motion. Moreover, in addition to all entities otherwise entitled to receive notice, the Debtors
have given notice of this Motion to all entities believed to have or be claiming an interest in the
subject matter of the proposed order or who, it is believed, otherwise would be affected by the
proposed order. Accordingly, the Debtors submit that this Motion satisfies Local Bankruptcy
Rule 9013-1(a).
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Waiver of Bankruptcy Rule 6004(a) and 6004(h)
45. To implement the foregoing successfully, the Debtors request that the Court enter
an order providing that notice of the relief requested herein satisfies Bankruptcy Rule 6004(a)
and that the Debtors have established cause to exclude such relief from the 14-day stay period
under Bankruptcy Rule 6004(h).
Reservation of Rights
46. Nothing contained herein is intended, or should be construed, as an admission as
to the validity or priority of any claim against the Debtors, a waiver of the Debtors’ rights to
object to or dispute any claim or its priority, or an approval or assumption of any agreement,
contract, or lease under section 365 of the Bankruptcy Code. The Debtors expressly reserve their
right to contest any claim (or the priority) related to the relief sought herein. Likewise, if the
Court grants the relief sought herein, any payment made pursuant to an order of the Court is not
intended to be nor should it be construed as an admission as to the validity or priority of any
claim or a waiver of the Debtors’ rights to subsequently dispute such claim or priority.
Notice
47. The Debtors have provided notice of this Motion to: (a) the United States Trustee
for Region 2; (b) the entities listed on the Consolidated List of Creditors Holding the 30 Largest
Unsecured Claims filed pursuant to Bankruptcy Rule 1007(d); (c) counsel to the agent under the
Debtors’ prepetition first lien credit facility; (d) counsel to the ad hoc group of holders of certain
first lien debt; (e) counsel to the agent under the second lien credit facility; (f) counsel to the ad
hoc group of holders of certain second lien debt; (g) counsel to the prepetition majority equity
holders; (h) the United States Attorney for the Southern District of New York; (i) the United
States Securities and Exchange Commission; (j) the state attorneys general for each state in
which the Debtors conduct business; (k) the Internal Revenue Service; (l) the Banks; and (m) any
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party that has requested notice pursuant to Bankruptcy Rule 2002. In light of the nature of the
relief requested, the Debtors respectfully submit that no further notice is necessary.
No Prior Request
48. No prior request for the relief sought in this Motion has been made to this or any
other court.
[Remainder of page intentionally left blank.]
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WHEREFORE, for the reasons set forth herein and in the First Day Declaration, the
Debtors respectfully request entry of an Interim Order and Final Order, substantially in the forms
attached hereto as Exhibit A and Exhibit B, respectively, granting the relief requested herein
and granting such other relief as is just and proper.
New York, New York /s/ Christopher T. Greco
Dated: March 3, 2017 James H.M. Sprayregen, P.C.
Jonathan S. Henes, P.C.
Christopher T. Greco
Anthony R. Grossi
John T. Weber
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Telephone: (212) 446-4800
Facsimile: (212) 446-4900
- and -
Melissa N. Koss
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
555 California Street
San Francisco, California 94104
Telephone: (415) 439-1400
Facsimile: (415) 439-1500
Proposed Counsel to the Debtors
and Debtors in Possession
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EXHIBIT A
Proposed Interim Order
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
)
In re: ) Chapter 11
)
ANSWERS HOLDINGS, INC., et al.,1 ) Case No. 17-10496 (SMB)
)
Debtors. ) (Joint Administration Requested)
)
INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO (A) CONTINUE
USING THE CASH MANAGEMENT SYSTEM, AND (B) MAINTAIN EXISTING
BANK ACCOUNTS AND BUSINESS FORMS; (II) AUTHORIZING CONTINUED
INTERCOMPANY TRANSACTIONS; AND (III) GRANTING SUPERPRIORITY
ADMINISTRATIVE EXPENSE STATUS TO INTERCOMPANY CLAIMS
Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in
possession (collectively, the “Debtors”) for entry of an interim order (this “Interim Order”)
(a) authorizing, but not directing, the Debtors to (i) continue using their existing cash
management system and (ii) maintain existing bank accounts and business forms;
(b) authorizing, but not directing, the Debtors to (i) continue Intercompany Transactions; and
(c) granting super administrative expense priority status to Intercompany Claims; all as more
fully set forth in the Motion; and upon the First Day Declaration, and this Court having
jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing
Order of Reference from the United States District Court for the Southern District of New York,
dated December 1, 2016; and this Court having found that this is a core proceeding pursuant to
28 U.S.C. § 157(b)(2), and that this Court may enter a final order consistent with Article III of
1 The Debtors in the chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification
number, include: Answers Holdings, Inc. (4504); Answers Corporation (2855); Easy2 Technologies, Inc.
(2839); ForeSee Results, Inc. (3125); ForeSee Session Replay, Inc. (2593); More Corn, LLC (6193); Multiply
Media, LLC (8974); Redcan, LLC (7344); RSR Acquisition, LLC (2256); Upbolt, LLC (2839); and Webcollage
Inc. (7771). The location of Debtor Webcollage Inc.’s principal place of business and the Debtors’ service
address in these chapter 11 cases is: 11 Times Square, 11th Floor, New York, New York 10018.
2 Capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Motion.
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2
the United States Constitution; and this Court having found that venue of this proceeding and the
Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having
found that the relief requested in the Motion is in the best interests of the Debtors’ estates, their
creditors, and other parties in interest; and this Court having found that the Debtors provided
adequate notice of the Motion and the opportunity for a hearing under the circumstances; and
this Court having reviewed the Motion and having heard the statements in support of the relief
requested therein at a hearing before this Court (the “Hearing”); and this Court having
determined that the legal and factual bases set forth in the Motion and at the Hearing establish
just cause for the relief granted herein; and upon all of the proceedings had before this Court; and
after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:
1. The Motion is granted on an interim basis as set forth herein.
2. The final hearing (the “Final Hearing”) on the Motion shall be held on _______,
2017, at__:__ _.m., prevailing Eastern Time. Any objections or responses to the entry of a final
order on the Motion shall be filed on or before 4:00 p.m., prevailing Eastern Time, on
_________, 2017, and shall be served on: (a) the United States Trustee for Region 2; (b) the
entities listed on the Consolidated List of Creditors Holding the 30 Largest Unsecured Claims
filed pursuant to Bankruptcy Rule 1007(d); (c) counsel to the agent under the Debtors’
prepetition first lien credit facility; (d) counsel to the ad hoc group of holders of certain first lien
debt; (e) counsel to the agent under the second lien credit facility; (f) counsel to the ad hoc group
of holders of certain second lien debt; (g) counsel to the prepetition majority equity holders;
(h) the United States Attorney for the Southern District of New York; (i) the United States
Securities and Exchange Commission; (j) the state attorneys general for each state in which the
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3
Debtors conduct business; (k) the Internal Revenue Service; (l) the Banks; and (m) any party that
has requested notice pursuant to Bankruptcy Rule 2002.
3. Subject to the limitations of this Interim Order, the Debtors are authorized but not
directed to: (a) continue using the Cash Management System and honor any prepetition
obligations related to the use thereof; (b) designate, maintain, close, and continue to use on an
interim basis any or all of their existing Bank Accounts, including, but not limited to, the Bank
Accounts identified on Exhibit 1 hereto, in the names and with the account numbers existing
immediately before the Petition Date; (c) deposit funds in, and withdraw funds from, the Bank
Accounts by all usual means, including checks, wire transfers, ACH transfers, and other debits;
(d) treat their prepetition Bank Accounts for all purposes as debtor in possession accounts; and
(e) open new debtor in possession Bank Accounts.
4. The Debtors are authorized, but not directed, to continue using the Purchase Cards
and the Purchase Card Program, including the American Express Account, and to pay any
prepetition amounts in connection therewith.
5. The Debtors are authorized, but not directed, to continue using, in their present
form, the Business Forms (including Purchase Cards), as well as checks and other documents
related to the Bank Accounts existing immediately before the Petition Date; provided, that the
Debtors will use reasonable efforts during the pendency of these chapter 11 cases to include a
stamp on invoices and checks to reference the Debtors’ status as debtors in possession.
6. Except as otherwise provided in this Interim Order and only to the extent funds
are available in each applicable Bank Account, all Banks at which the Bank Accounts are
maintained are directed to continue to service and administer the Bank Accounts as accounts of
the Debtors as debtors in possession, without interruption and in the ordinary course, and to
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4
receive, process, honor, and pay any and all checks, drafts, wire transfers, and ACH transfers
issued, whether before or after the Petition Date, and drawn on the Bank Accounts after the
Petition Date by the holders or makers thereof, as the case may be; provided, that the Debtors
will instruct the Banks as to which checks, drafts, wire transfers (excluding any wire transfers
that the Banks are obligated to settle), or other items presented, issued, or drawn, shall not be
honored.
7. Except for those checks, drafts, wires, or other ACH transfers that are authorized
or required to be honored under an order of the Court, no Debtor shall instruct or request any
Bank to pay or honor any check, draft, or other payment item issued on a Bank Account prior to
the Petition Date but presented to such Bank for payment after the Petition Date.
8. As soon as practicable after entry of this Interim Order, the Debtors shall serve a
copy of this Interim Order on the Banks.
9. The requirement to establish separate accounts for tax payments is hereby waived.
10. The Debtors are authorized, but not directed to: (a) pay undisputed prepetition
amounts outstanding as of the Petition Date, if any, owed in the ordinary course to the Banks as
service charges for the maintenance of the Cash Management System; and (b) reimburse the
Banks for any claims arising before or after the Petition Date in connection with customer checks
deposited with the Banks that have been dishonored or returned as a result of insufficient funds
in the Bank Accounts in the ordinary course of business, to the same extent the Debtors were
responsible for such items prior to the Petition Date.
11. The Debtors are authorized, but not directed, to enter into and engage in the
Intercompany Transactions and to take any actions related thereto. In connection therewith, the
Debtors shall continue to maintain current records with respect to all transfers of cash so that all
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5
transactions, including the Intercompany Transactions, may be readily ascertained, traced, and
recorded properly on applicable intercompany accounts.
12. Notwithstanding anything to the contrary contained herein, this Interim Order
shall be without prejudice to the rights of the Debtors and all other parties in interest to request
that any modifications made to the relief granted in respect of the Intercompany Transactions in
the Final Order (including, but not limited to, the granting of additional protections) apply
retroactively to the Petition Date, and all such rights shall be preserved in all respects.
13. The Debtors are authorized to continue performing Intercompany Transactions in
the ordinary course of business. All Intercompany Claims arising after the Petition Date shall be
accorded superpriority administrative expense status in accordance with sections 503(b) and
364(c)(1) of the Bankruptcy Code. For the avoidance of doubt, the Intercompany Claims arising
after the Petition Date shall be unsecured, junior in priority and subordinated to the DIP
Obligations and the Adequate Protection Super-Priority Claims (each as defined in the Interim
DIP Order). The Debtors shall (a) continue to track Intercompany Transactions electronically
through their accounting system in accordance with their prepetition practices and (b) provide
access to such records and procedures to the Prepetition Secured Parties,3 and any official
committee appointed under section 1102 of the Bankruptcy Code in these chapter 11 cases.
14. The Debtors are authorized, but not directed, to set off mutual postpetition
obligations relating to intercompany receivables and payables through the Cash Management
System. In connection therewith, the Debtors shall continue to maintain current records with
respect to all transfers of cash so that all transactions, including Intercompany Transactions, may
be readily ascertained, traced, and recorded properly on applicable intercompany accounts.
3 The term “Prepetition Secured Parties” as used herein shall have the meaning ascribed to such term in the Plan.
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6
15. Notwithstanding anything to the contrary contained in this Interim Order or the
Motion, any payment, obligation or other relief authorized by this Interim Order shall be subject
to and limited by the requirements imposed on the Debtors under the terms of any interim and/or
final orders approving any postpetition financing and the use of cash collateral, or budget in
connection therewith, entered by this Court in these chapter 11 cases.
16. Subject to applicable bankruptcy or other law, those certain deposit agreements
existing between the Debtors and the Banks shall continue to govern the postpetition cash
management relationship between the Debtors and the Banks and, subject to applicable
bankruptcy or other law, all of the provisions of such agreements, including the termination, fee
provisions, rights, benefits, offset rights, and remedies afforded under such agreements shall
remain in full force and effect absent further order of the Court or, with respect to any such
agreement with any Bank, unless the Debtors and such Bank agree otherwise.
17. Except as otherwise set forth herein, the Debtors and the Banks may, without
further order of the Court, agree and implement changes to the Cash Management System and
procedures in the ordinary course of business, including the opening and closing of Bank
Accounts as set forth in paragraph 3 hereof.
18. The Debtors are authorized to open new bank accounts so long as any such new
account is (a) with one of the Debtors’ existing Banks or with a bank that is (i) insured with the
FDIC or the Federal Savings and Loan Insurance Corporation and (ii) designated as an
authorized depository by the U.S. Trustee pursuant to the U.S. Trustee’s Operating Guidelines
and reporting Requirements for Debtors in Possession and Trustees, and (b) the Debtors provide
notice to the U.S. Trustee and the Prepetition Secured Parties of the opening of such account;
provided that all accounts opened by any of the Debtors on or after the Petition Date at any bank
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7
shall, for purposes of this Interim Order, be deemed a Bank Account as if it had been listed on
Exhibit 1 hereof; provided, however, for the avoidance of doubt, that any new Bank Account
shall be subject to the Adequate Protection Liens (as defined in the Interim DIP Order).
19. The Banks are authorized to debit the Debtors’ accounts in the ordinary course of
business and without further order of the Court on account of all checks drawn on the Debtors’
accounts that were cashed at the Banks’ counters or exchanged for cashier’s or official checks by
the payees thereof prior to the Petition Date.
20. Notwithstanding any other provision of this Interim Order, should a Bank honor a
prepetition check or other item drawn on any account that is the subject of this Interim Order
(a) at the direction of the Debtors to honor such prepetition check or item, (b) in a good faith
belief that the Court has authorized such prepetition check or item to be honored, or (c) as the
result of an innocent mistake made despite implementation of customary item handling
procedures, the Bank shall not be deemed to be nor shall be liable to the Debtors or their estates
or otherwise be in violation of this Interim Order.
21. Nothing contained herein shall prevent the Debtors from closing any Bank
Accounts as they may deem necessary and appropriate, and, to the extent consistent with any
orders of this Court relating thereto, any relevant Bank is authorized to honor the Debtors’
requests to close such Bank Accounts, and the Debtors shall give notice of the closure of any
Bank Account to the U.S. Trustee and the Prepetition Secured Parties.
22. Except as otherwise provided in this Interim Order, the Banks are authorized to
charge, and the Debtors are authorized to pay, honor, or allow prepetition and postpetition fees,
costs, charges, and expenses, including the Bank Fees, and charge back returned items to the
Bank Accounts in the ordinary course.
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8
23. The relief granted in this Interim Order is subject to the rights of the Prepetition
Secured Parties under the Cash Collateral Order.
24. Notwithstanding entry of this Interim Order, nothing herein shall create, or is
intended to create, any rights in favor of or enhance the status of any claim held by any party.
25. If no objections to the relief granted herein on a permanent basis are timely served
and filed in accordance with this Interim Order, the Court may enter a final order granting the
relief herein without further notice or hearing.
26. Notwithstanding the relief granted in this Interim Order and any actions taken
pursuant to such relief, and subject to the superpriority administrative status afforded pursuant to
paragraph 13 of this Interim Order, nothing contained in the Motion or this Interim Order or any
payment made pursuant to this Interim Order shall constitute, nor is it intended to constitute, an
admission as to the validity or priority of any claim or lien against the Debtors, a waiver of the
Debtors’ rights to subsequently dispute such claim or lien (or the priority thereof), or the
assumption or adoption of any agreement, contract, or lease under section 365 of the Bankruptcy
Code.
27. In the event any of the Bank Accounts cease to comply with the requirements of
section 345 of the Bankruptcy Code during the Chapter 11 Cases, the Debtors shall provide
notice to the U.S. Trustee of such non-compliance (the “Section 345 Notice”), and the Debtors
shall have 45 days from the date of the Section 345 Notice to comply with the requirements of
Section 345 of the Bankruptcy Code.
28. The contents of the Motion satisfy the requirements of Bankruptcy Rule 6003(b).
29. Notice of the Motion satisfies the requirements set forth in Bankruptcy
Rule 6004(a).
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9
30. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this
Interim Order are immediately effective and enforceable upon its entry.
31. All time periods set forth in this Interim Order shall be calculated in accordance
with Bankruptcy Rule 9006(a).
32. The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Interim Order in accordance with the Motion.
33. This Court retains exclusive jurisdiction with respect to all matters arising from or
related to the implementation, interpretation, and enforcement of this Interim Order.
New York, New York
Dated: ____________, 2017 UNITED STATES BANKRUPTCY JUDGE
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EXHIBIT 1
Debtor Bank Accounts
Entity Bank Name Account
Number
Account Type
1 Answers Corporation SVB Ending in 3839 Main Concentration
2 Answers Corporation SVB Ending in 3843 Operating
3 Answers Corporation SVB Ending in 3858 Disbursement/Payroll
4 Answers Corporation SVB Ending in 6473 Purchase Card
Disbursement Account
5 Answers Corporation SVB Ending in 6568 Utilities Account
6 Answers Corporation SVB Ending in 6492 Self-Funded Health
Insurance Account
7 Answers Corporation SVB Ending in 6515 Purchase Card
Disbursement Account
8 Answers Corporation SVB Ending in 6500 Purchase Card
Disbursement Account
9 Answers Corporation SVB Ending in 6549 Subtenant Security
Deposits Account
10 Answers Corporation SVB Ending in 6534 Purchase Card
Disbursement Account
11 Answers Corporation SVB Ending in 6911 Purchase Card
Disbursement Account
12 Answers Corporation SVB Ending in 6488 Flex Spending Account
13 Easy2 Technologies, Inc. SVB Ending in 3877 Operating
14 Easy2 Technologies, Inc. SVB Ending in 3881 Disbursement/Payroll
15 Redcan, LLC SVB Ending in 9096 Operating
16 Redcan, LLC SVB Ending in 9104 Disbursement/Payroll
17 RSR Acquisition, LLC SVB Ending in 3896 Operating
18 RSR Acquisition, LLC SVB Ending in 3904 Disbursement/Payroll
19 Webcollage Inc. SVB Ending in 7915 Operating
20 Webcollage Inc. SVB Ending in 3923 Disbursement/Payroll
21 Webcollage Inc. SVB Ending in 7789 Lockbox
22 ForeSee Results, Inc. SVB Ending in 6712 Operating
23 ForeSee Results, Inc. SVB Ending in 7173 Controlled Disbursement
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2
Entity Bank Name Account
Number
Account Type
24 ForeSee Results, Inc. SVB Ending in 6143 Lockbox
25 ForeSee Results, Inc. SVB Ending in 9779 UK Operating/
Disbursement
26 Answers Corporation Enterprise Ending in 2150 Master
27 Answers Corporation Enterprise Ending in 2169 Deposit
28 Answers Corporation Enterprise Ending in 2177 Lockbox
29 Upbolt, LLC Enterprise Ending in 2193 Disbursement/Payroll
Non-Debtor Affiliate Bank Accounts
Entity Bank Name Account
Number
Account Type
1 ForeSee Results, Ltd. (UK) SVB Ending in 9814 Non-debtor UK
Operating/ Disbursement
2 Beanspublishing, Ltd. (UK) SVB Ending in 5084 Non-debtor UK
Operating/ Disbursement
3 Webcollage Israel Ltd. First
International
Bank of Israel
Ending in 7701 Non-debtor
Disbursement
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EXHIBIT B
Proposed Final Order
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
)
In re: ) Chapter 11
)
ANSWERS HOLDINGS, INC., et al.,1 ) Case No. 17-10496 (SMB)
)
Debtors. ) (Joint Administration Requested)
)
FINAL ORDER (I) AUTHORIZING THE DEBTORS TO (A) CONTINUE
USING THE CASH MANAGEMENT SYSTEM, AND (B) MAINTAIN EXISTING
BANK ACCOUNTS AND BUSINESS FORMS; (II) AUTHORIZING CONTINUED
INTERCOMPANY TRANSACTIONS; AND (III) GRANTING SUPERPRIORITY
ADMINISTRATIVE EXPENSE STATUS TO INTERCOMPANY CLAIMS
Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in
possession (collectively, the “Debtors”) for the entry of a final order (this “Final Order”)
(a) authorizing, but not directing, the Debtors to (i) continue using their existing cash
management system and (ii) maintain existing bank accounts and business forms;
(b) authorizing, but not directing, the Debtors to (i) continue Intercompany Transactions; and
(c) granting super administrative expense priority status to postpetition Intercompany Claims; all
as more fully set forth in the Motion; and upon the First Day Declaration, and this Court having
jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing
Order of Reference from the United States District Court for the Southern District of New York,
dated December 1, 2016; and this Court having found that this is a core proceeding pursuant to
1 The Debtors in the chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification
number, include: Answers Holdings, Inc. (4504); Answers Corporation (2855); Easy2 Technologies, Inc.
(2839); ForeSee Results, Inc. (3125); ForeSee Session Replay, Inc. (2593); More Corn, LLC (6193); Multiply
Media, LLC (8974); Redcan, LLC (7344); RSR Acquisition, LLC (2256); Upbolt, LLC (2839); and Webcollage
Inc. (7771). The location of Debtor Webcollage Inc.’s principal place of business and the Debtors’ service
address in these chapter 11 cases is: 11 Times Square, 11th Floor, New York, New York 10018.
2 Capitalized terms used but otherwise not defined herein shall have the meanings set forth in the Motion.
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2
28 U.S.C. § 157(b)(2), and that this Court may enter a final order consistent with Article III of
the United States Constitution; and this Court having found that venue of this proceeding and the
Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having
found that the relief requested in the Motion is in the best interests of the Debtors’ estates, their
creditors, and other parties in interest; and this Court having found that the Debtors provided
adequate notice of the Motion and the opportunity for a hearing under the circumstances; and
this Court having reviewed the Motion and having heard the statements in support of the relief
requested therein at a hearing before this Court (the “Hearing”); and this Court having
determined that the legal and factual bases set forth in the Motion and at the Hearing establish
just cause for the relief granted herein; and upon all of the proceedings had before this Court; and
after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:
1. The Motion is granted on a final basis only as set forth herein.
2. The Debtors are authorized but not directed to: (a) continue using the Cash
Management System and honor any prepetition obligations related to the use thereof;
(b) designate, maintain, close, and continue to use on a final basis any or all of their existing
Bank Accounts, including, but not limited to, the Bank Accounts identified on Exhibit 1 hereto,
in the names and with the account numbers existing immediately before the Petition Date;
(c) deposit funds in, and withdraw funds from, the Bank Accounts by all usual means, including
checks, wire transfers, ACH transfers, and other debits; (d) treat their prepetition Bank Accounts
for all purposes as debtor in possession accounts; and (e) open new debtor-in-possession Bank
Accounts.
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3
3. The Debtors are authorized, but not directed, to continue using the Purchase Cards
and the Purchase Card Program, including the American Express Account, and to pay any
prepetition amounts in connection therewith.
4. The Debtors are authorized, but not directed, to continue using, in their present form,
the Business Forms (including Purchase Cards), as well as checks and other documents related to
the Bank Accounts existing immediately before the Petition Date; provided, that the Debtors will
use reasonable efforts during the pendency of these chapter 11 cases to include a stamp on
invoices and checks to reference the Debtors’ status as debtors in possession.
5. Except as otherwise provided in this Final Order and only to the extent funds are
available in each applicable Bank Account, all Banks at which the Bank Accounts are
maintained are directed to continue to service and administer the Bank Accounts as accounts of
the Debtors as debtors in possession, without interruption and in the ordinary course, and to
receive, process, honor, and pay any and all checks, drafts, wire transfers, and ACH transfers
issued, whether before or after the Petition Date, and drawn on the Bank Accounts after the
Petition Date by the holders or makers thereof, as the case may be; provided, that the Debtors
will instruct the Banks as to which checks, drafts, wire transfers (excluding any wire transfers
that the Banks are obligated to settle), or other items presented, issued, or drawn, shall not be
honored.
6. Except for those checks, drafts, wires, or other ACH transfers that are authorized
or required to be honored under an order of the Court, no Debtor shall instruct or request any
Bank to pay or honor any check, draft, or other payment item issued on a Bank Account prior to
the Petition Date but presented to such Bank for payment after the Petition Date.
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4
7. As soon as practicable after entry of this Final Order, the Debtors shall serve a
copy of this Final Order on the Banks.
8. The requirement to establish separate accounts for tax payments is hereby waived.
9. The Debtors are authorized, but not directed to: (a) pay undisputed prepetition
amounts outstanding as of the Petition Date, if any, owed in the ordinary course to the Banks as
service charges for the maintenance of the Cash Management System; and (b) reimburse the
Banks for any claims arising before or after the Petition Date in connection with customer checks
deposited with the Banks that have been dishonored or returned as a result of insufficient funds
in the Bank Accounts in the ordinary course of business, to the same extent the Debtors were
responsible for such items prior to the Petition Date.
10. The Debtors are authorized, but not directed, to enter into and engage in the
Intercompany Transactions and to take any actions related thereto. In connection therewith, the
Debtors shall continue to maintain current records with respect to all transfers of cash so that all
transactions, including the Intercompany Transactions, may be readily ascertained, traced, and
recorded properly on applicable intercompany accounts.
11. The Debtors are authorized to continue performing Intercompany Transactions in
the ordinary course of business. All Intercompany Claims arising after the Petition Date shall be
accorded superpriority administrative expense status in accordance with sections 503(b) and
364(c)(1) of the Bankruptcy Code. For the avoidance of doubt, the Intercompany Claims arising
after the Petition Date shall be unsecured, junior in priority and subordinated to the DIP
Obligations and the Adequate Protection Super-Priority Claims (each as defined in the Interim
DIP Order). The Debtors shall (a) continue to track Intercompany Transactions electronically
through their accounting system in accordance with their prepetition practices and (b) provide
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5
reasonable access to such records and procedures to the Prepetition Secured Parties,3 and any
official committee appointed in these chapter 11 cases.
12. The Debtors are authorized, but not directed, to set off mutual postpetition
obligations relating to intercompany receivables and payables through the Cash Management
System. In connection therewith, the Debtors shall continue to maintain current records with
respect to all transfers of cash so that all transactions, including Intercompany Transactions, may
be readily ascertained, traced, and recorded properly on applicable intercompany accounts.
13. Notwithstanding anything to the contrary contained in this Final Order or the
Motion, any payment, obligation or other relief authorized by this Final Order shall be subject to
and limited by the requirements imposed on the Debtors under the terms of any interim and/or
final orders approving any postpetition financing and the use of cash collateral, or budget in
connection therewith, entered by this Court in these chapter 11 cases.
14. Subject to applicable bankruptcy or other law, those certain deposit agreements
existing between the Debtors and the Banks shall continue to govern the postpetition cash
management relationship between the Debtors and the Banks and, subject to applicable
bankruptcy or other law, all of the provisions of such agreements, including the termination, fee
provisions, rights, benefits, offset rights, and remedies afforded under such agreements shall
remain in full force and effect absent further order of the Court or, with respect to any such
agreement with any Bank, unless the Debtors and such Bank agree otherwise.
15. Except as otherwise set forth herein, the Debtors and the Banks may, without
further order of the Court, agree and implement changes to the Cash Management System and
3 The term “Prepetition Secured Parties” as used herein shall have the meaning ascribed to such term in the Plan.
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6
procedures in the ordinary course of business, including the opening and closing of Bank
Accounts as set forth in paragraph 2 hereof.
16. The Debtors are authorized to open new bank accounts so long as any such new
account is (a) with one of the Debtors’ existing Banks or (b) with a bank that is (i) insured with
the FDIC or the Federal Savings and Loan Insurance Corporation and (ii) designated as an
authorized depository by the U.S. Trustee pursuant to the U.S. Trustee’s Operating Guidelines
and reporting Requirements for Debtors in Possession and Trustees, and (c) the Debtors provide
notice to the U.S. Trustee and the Prepetition Secured Parties of the opening of such account;
provided that all accounts opened by any of the Debtors on or after the Petition Date at any bank
shall, for purposes of this Final Order, be deemed a Bank Account as if it had been listed on
Exhibit 1 hereof; provided, however, for the avoidance of doubt, that any new Bank Account
shall be subject to the Adequate Protection Liens (as defined in the Interim DIP Order).
17. The Banks are authorized to debit the Debtors’ accounts in the ordinary course of
business and without further order of the Court on account of all checks drawn on the Debtors’
accounts that were cashed at the Banks’ counters or exchanged for cashier’s or official checks by
the payees thereof prior to the Petition Date.
18. Notwithstanding any other provision of this Final Order, should a Bank honor a
prepetition check or other item drawn on any account that is the subject of this Final Order (a) at
the direction of the Debtors to honor such prepetition check or item, (b) in a good faith belief that
the Court has authorized such prepetition check or item to be honored, or (c) as the result of an
innocent mistake made despite implementation of customary item handling procedures, the Bank
shall not be deemed to be nor shall be liable to the Debtors or their estates or otherwise be in
violation of this Final Order.
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7
19. Nothing contained herein shall prevent the Debtors from closing any Bank
Accounts as they may deem necessary and appropriate, and, to the extent consistent with any
orders of the Court relating thereto, and any relevant bank is authorized to honor the Debtors’
requests to close such Bank Accounts, and the Debtors shall give notice of the closure of any
Bank Account to the U.S. Trustee and the Prepetition Secured Parties.
20. Except as otherwise provided in this Final Order, the Banks are authorized to
charge, and the Debtors are authorized to pay, honor, or allow prepetition and postpetition fees,
costs, charges, and expenses, including the Bank Fees, and charge back returned items to the
Bank Accounts in the ordinary course.
21. The relief granted in this Final Order is subject to the rights of the Prepetition
Secured Parties under the Cash Collateral Order.
22. Notwithstanding entry of this Final Order, nothing herein shall create, or is
intended to create, any rights in favor of or enhance the status of any claim held by any party.
23. Notice of the Motion satisfies the requirements set forth in Bankruptcy
Rule 6004(a).
24. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this
Interim Order are immediately effective and enforceable upon its entry.
25. All time periods set forth in this Final Order shall be calculated in accordance
with Bankruptcy Rule 9006(a).
26. Notwithstanding the relief granted in this Final Order and any actions taken
pursuant to such relief, and subject to the superpriority administrative status afforded pursuant to
paragraph 11 of this Final Order, nothing contained in the Motion or this Final Order or any
payment made pursuant to this Final Order shall constitute, nor is it intended to constitute, an
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8
admission as to the validity or priority of any claim or lien against the Debtors, a waiver of the
Debtors’ rights to subsequently dispute such claim or lien (or the priority thereof), or the
assumption or adoption of any agreement, contract, or lease under section 365 of the Bankruptcy
Code.
27. In the event any of the Bank Accounts cease to comply with the requirements of
section 345 of the Bankruptcy Code during the Chapter 11 Cases, the Debtors shall provide
notice to the U.S. Trustee of such non-compliance (the “Section 345 Notice”), and the Debtors
shall have 45 days from the date of the Section 345 Notice to comply with the requirements of
Section 345 of the Bankruptcy Code.
28. The Debtors are authorized to take all actions necessary to effectuate the relief
granted in this Final Order in accordance with the Motion.
29. This Court retains exclusive jurisdiction with respect to all matters arising from or
related to the implementation, interpretation, and enforcement of this Final Order.
New York, New York
Dated: ____________, 2017 UNITED STATES BANKRUPTCY JUDGE
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EXHIBIT 1
Debtor Bank Accounts
Entity Bank Name Account
Number
Account Type
1 Answers Corporation SVB Ending in 3839 Main Concentration
2 Answers Corporation SVB Ending in 3843 Operating
3 Answers Corporation SVB Ending in 3858 Disbursement/Payroll
4 Answers Corporation SVB Ending in 6473 Purchase Card
Disbursement Account
5 Answers Corporation SVB Ending in 6568 Utilities Account
6 Answers Corporation SVB Ending in 6492 Self-Funded Health
Insurance Account
7 Answers Corporation SVB Ending in 6515 Purchase Card
Disbursement Account
8 Answers Corporation SVB Ending in 6500 Purchase Card
Disbursement Account
9 Answers Corporation SVB Ending in 6549 Subtenant Security
Deposits Account
10 Answers Corporation SVB Ending in 6534 Purchase Card
Disbursement Account
11 Answers Corporation SVB Ending in 6911 Purchase Card
Disbursement Account
12 Answers Corporation SVB Ending in 6488 Flex Spending Account
13 Easy2 Technologies, Inc. SVB Ending in 3877 Operating
14 Easy2 Technologies, Inc. SVB Ending in 3881 Disbursement/Payroll
15 Redcan, LLC SVB Ending in 9096 Operating
16 Redcan, LLC SVB Ending in 9104 Disbursement/Payroll
17 RSR Acquisition, LLC SVB Ending in 3896 Operating
18 RSR Acquisition, LLC SVB Ending in 3904 Disbursement/Payroll
19 Webcollage Inc. SVB Ending in 7915 Operating
20 Webcollage Inc. SVB Ending in 3923 Disbursement/Payroll
21 Webcollage Inc. SVB Ending in 7789 Lockbox
22 ForeSee Results, Inc. SVB Ending in 6712 Operating
23 ForeSee Results, Inc. SVB Ending in 7173 Controlled Disbursement
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2
Entity Bank Name Account
Number
Account Type
24 ForeSee Results, Inc. SVB Ending in 6143 Lockbox
25 ForeSee Results, Inc. SVB Ending in 9779 UK Operating/
Disbursement
26 Answers Corporation Enterprise Ending in 2150 Master
27 Answers Corporation Enterprise Ending in 2169 Deposit
28 Answers Corporation Enterprise Ending in 2177 Lockbox
29 Upbolt, LLC Enterprise Ending in 2193 Disbursement/Payroll
Non-Debtor Affiliate Bank Accounts
Entity Bank Name Account
Number
Account Type
1 ForeSee Results, Ltd. (UK) SVB Ending in 9814 Non-debtor UK
Operating/ Disbursement
2 Beanspublishing, Ltd. (UK) SVB Ending in 5084 Non-debtor UK
Operating/ Disbursement
3 Webcollage Israel Ltd. First
International
Bank of Israel
Ending in 7701 Non-debtor
Disbursement
17-10496-smb Doc 9 Filed 03/03/17 Entered 03/03/17 15:33:59 Main Document Pg 54 of 57
EXHIBIT C
Cash Management System Schematic
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XFER
Ente
rpris
e Ba
nk &
Tru
st
Answ
ers C
orpo
ratio
nCa
sh M
anag
emen
t Sys
tem
Sche
mat
ic
C u s t o m e r s
Answ
ers C
orpo
ratio
nLo
ckbo
xAc
ct #
217
7 (Z
BA)
Lock
box R
ecei
pts
Rece
ipts
6,1
45,8
12
Disb
urse
men
ts (2
32)
Answ
ers C
orpo
ratio
nO
pera
ting
Acct
Acct
# 2
150
Mas
ter A
ccou
nt /
Rece
ipts
for a
ll co
mpa
nies
Rece
ipts
9,2
57,5
98Di
sbur
sem
ents
(5,
683)
Answ
ers C
orpo
ratio
nPa
yrol
l /
Disb
urse
men
tsAc
ct #
216
9
Answ
ers C
heck
sDi
sbur
sem
ents
(2,3
33)
Upb
olt
Payr
oll /
Di
sbur
sem
ents
Acct
# 2
193
Disb
urse
men
ts o
f U
pbol
t Pay
able
sRe
ceip
ts19
8Di
sbur
sem
ents
(520
,015
)
Upb
olt,
LLC
PayP
al A
cct
Acct
# 2
4LC
Paya
bles
for t
raffi
c ac
quisi
tion
rela
ted
to
Upbo
lt
17-1
0496
-sm
b
Doc
9
File
d 03
/03/
17
Ent
ered
03/
03/1
7 15
:33:
59
Mai
n D
ocum
ent
P
g 57
of 5
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