Local Rule 2081-1: CHAPTER 11 – GENERAL — Bankr. M.D. Fla.

Rule 2081-1 CHAPTER 11 – GENERAL

(a) Operations. The trustee or debtor-in-possession in a Chapter 11 case may operate the business of the debtor pursuant to 11 U.S.C. §§ 1108 and 1184 and any order of the Court specifying terms and conditions of the operation of the debtor's business.

(b) Case Management Summary. Within the earlier of three business days following the petition date, or the date that the debtor-in-possession first files a motion requesting affirmative relief, the debtor-in-possession shall file a Chapter 11 Case Management Summary providing the following information:

(1) description of the debtor's business;

(2) locations of the debtor's operations and whether leased or owned;

(3) reasons for filing Chapter 11;

(4) list of officers, directors and insiders (including relatives of insiders), if applicable, who receive salaries or benefits from the debtor and their respective salaries or benefits at the time of filing and during the one year prior to filing;

(5) the debtor's annual gross revenues;

(6) amounts owed to various creditors, including current year to date and prior fiscal year:

(A) priority creditors such as governmental creditors for taxes,

(B) secured creditors and their respective collateral, and

(7) general description and approximate value of the debtor's current and fixed assets;

(8) number of employees and gross amounts of wages owed as of petition date;

(9) status of the debtor's payroll and sales tax obligations, if applicable;

(10) anticipated emergency relief to be requested within the first 14 days after the petition date; and

(11) the debtor's strategic objectives, i.e., refinancing, cramdown, surrender/sale of assets or business.

(c) Initial Status Conference. The Court may schedule an initial status conference at which debtor's counsel should be prepared to address the following: status of the case and reason for the bankruptcy case, deadlines for filing a plan and disclosure statement, special noticing issues, the need for scheduling regular status conferences, and the scheduling of pending motions.

(d) Monthly Operating Reports in Small Business Cases. Each month, Small Business Debtors as defined in 11 U.S.C. § 101(51D) and Subchapter V Debtors as defined in 11 U.S.C. § 1182 shall complete and file the Schedule of Receipts and Disbursements (also required of Chapter 11 Business Debtors), following as Appendix A. The Schedule may be filed without the referenced attachments. In addition to filing the Schedule included herein as Appendix A, Small Business Debtors and Subchapter V Debtors shall also file a Check Register in the form included herein as Appendix B, which shall identify all checks issued by the debtor during the reporting month and all outstanding checks issued before the commencement of the debtor's bankruptcy case that were permitted to clear during the applicable reporting period. Small Business Debtors and Subchapter V Debtors shall complete and file a separate Check Register for each bank account from which checks are drawn. These requirements are in addition to the completion and filing of the Small Business Monthly Operating Report prescribed or promulgated by the Judicial Conference.

(e) Employee Salaries. Upon the filing of a Chapter 11 petition, all employees (including managers, agents, or officers who are not affiliates within the meaning of 11 U.S.C. § 101(2)(A)) may be paid a salary and receive benefits accruing postpetition in the ordinary course of business. The Court may review, and grant appropriate relief, if such salaries are later determined to be unreasonable.

An officer, manager, or employee who also qualifies as an affiliate (collectively, "Affiliate Officer") must file a motion to have his or her salary and benefits approved by the Court in advance of payment. Court authority for payment of any salary or benefits shall not constitute the assumption of any existing employment agreement. A motion to authorize payment of any prepetition wages or Affiliate Officer's salary may be filed pursuant to the expedited procedures set forth in section (g) of this rule. Authorization for payment may be retroactive to the petition date if the motion so requests.

(f) Bank Accounts. The debtor-in-possession, consistent with 11 U.S.C. § 345, is authorized to open and maintain bank accounts for the deposit, investment, and disbursement of monies of the estate; provided, however, that the debtor-in-possession shall segregate all monies withheld from employees or collected for taxes in a separate bank account(s) and shall pay these funds to the proper authority when due.

(g) Expedited and Emergency Motions. The following motions will be scheduled for hearing within three business days, if reasonably possible, and if the motions are served by electronic mail or by facsimile if electronic mail is not available. All expedited or emergency motions must be served upon the Office of the U.S. Trustee by electronic mail or, if not available, by facsimile directed to the Assistant U.S. Trustee and the assigned Trial Attorney, if one has made an appearance in the case. Notices of hearing of such expedited or emergency motions must be served in the same manner.

(1) Motion Seeking Authority to Use Cash Collateral. A motion seeking authority to use cash collateral pursuant to 11 U.S.C. § 363 shall comply with Fed. R. Bankr. P. 4001(b) or (d) and include the following information:

(A) Required Terms. The motion to use cash collateral shall include the following provisions:

(i) a budget setting forth the projected cash flow of the debtor for the period of time for which the use of cash collateral is sought;

(ii) the amounts and types of cash collateral on the petition date;

(iii) the name of each secured creditor having a security interest in the cash collateral, the basis upon which the secured creditor is entitled to assert a security interest in the cash collateral, and the amount owed to the secured creditor;

(iv) the debtor's proposed adequate protection for each secured creditor (e.g., replacement lien, insurance);

(v) reasonable reporting requirements; and

(vi) proposed consequences of default.

(B) Extraordinary Terms. The following provisions will generally not be approved absent compelling circumstances:

(i) any cross-collateralization provision that would secure the repayment of prepetition debt with postpetition assets;

(ii) a waiver of any claims to include avoidance actions against any secured creditor;

(iii) a waiver of any rights the estate may have under 11 U.S.C. § 506(c);

(iv) any factual stipulations or findings that bind the estate or parties in interest with respect to the validity, priority, and extent of secured creditor's liens;

(v) immediate relief from stay under the order approving use of cash collateral or automatic relief from stay upon default;

(vi) granting of liens on avoidance action recoveries;

(vii) validation of any secured creditor's security interest in its collateral or within a limited period of time after the appointment of a committee pursuant to 11 U.S.C. § 1102; or

(viii) any subordination of administrative priority claims arising under 11 U.S.C. § 726(c).

(2) Motion for Approval of Postpetition Financing. A motion seeking approval of postpetition financing pursuant to 11 U.S.C. § 364 shall comply with Fed. R. Bankr. P. 4001(c) and (d) and must include:

(A) the identity of the proposed lender and its relationship to any of the parties;

(B) a copy of the DIP loan agreement, together with a summary of the terms of the debt to be incurred ("DIP Loan") including:

(i) the collateral in which the lender is seeking to obtain a security interest and whether the lender is seeking to prime existing liens;

(ii) the amount of the loan proposed to be extended by the lender;

(iii) the applicable interest rate and all other charges to be made in connection with the DIP Loan; and

(iv) the payment terms and duration of the DIP Loan.

(C) the amount of credit that the debtor seeks authority to obtain from the date of the preliminary hearing on the motion through and until the final hearing on the motion, if the debtor seeks authority to obtain credit sooner than 14 days after service of the motion. (The debtor shall attach a budget setting forth the projected cash flow of the debtor for the period of time for which the credit is sought.);

(D) the efforts made to obtain financing from other lenders;

(E) the debtor's ability to repay the DIP Loan; and

(F) the inclusion of any of the terms listed in section (g)(1)(B) above.

(3) Motion for Authority to Pay Prepetition Wages. A motion seeking authority to pay employees of the debtor prepetition wages outstanding as of the petition date shall include a schedule setting forth:

(A) the name of each employee to whom such wages are sought to be paid;

(B) the amount due such employee(s) as of the petition date;

(D) the period of time for which prepetition wages are due;

(E) whether the employee is presently employed by the debtor;

(F) the irreparable harm that will result if the relief is not granted; and

(G) whether any of the employees are insiders as defined in 11 U.S.C. § 101(31).

The motion shall also include a representation by the debtor that all applicable payroll taxes and related benefits due to the debtor's employees will be paid concurrently with payment of the wages.

(4) Motion for Authority to Maintain Prepetition Bank Accounts. A motion seeking authority to maintain prepetition bank accounts shall include:

(A) a schedule listing each prepetition bank account that the debtor seeks to maintain postpetition;

(B) the reason for seeking such authority;

(D) whether the depository is an authorized depository pursuant to 11 U.S.C. § 345(b); and

(E) a representation that the debtor has consulted with the Office of the United States Trustee regarding the continued maintenance of prepetition bank accounts and that the United States Trustee has not consented to the proposed maintenance of use of such accounts.

If the debtor is unable to provide the foregoing information, the motion shall set forth the reason why such information is not available and provide an estimate as to when the debtor will supplement its motion with such information.

(5) Motion for Authority to Pay Critical Vendors. A motion seeking authority to pay prepetition claims deemed critical by the debtor will generally not be approved absent compelling circumstances supported by evidentiary findings. Any such motion shall include:

(A) a schedule of the names of each claimant;

(B) the amount due each claimant;

(D) facts and law supporting payment of the prepetition debt under the doctrine of necessity;

(E) the irreparable harm that will result if the relief is not granted; and

(F) whether the claimant has made any concession or other agreement in consideration for the proposed payment, including the extension of postpetition trade credit.

(6) Motion for Authority to Pay Affiliate Officer Salaries. A motion to pay, on an interim basis, the salary of any officer, manager, or employee who also qualifies as an affiliate under 11 U.S.C. § 101(2)(A) shall include:

(A) the name of the Affiliate Officer, the officer's position and job responsibilities;

(B) the nature of the Affiliate Officer's relationship to the debtor;

(C) the salary received by the Affiliate Officer during the 12 months prior to the filing of the debtor's Chapter 11 petition, including a description of any prepetition employment agreement;

(D) a description of any services performed for any third party or compensation received or that will be received by the Affiliate Officer from any source other than the debtor-in-possession after the date of the petition;

(E) the salary proposed to be paid to the Affiliate Officer, including all benefits; and

(F) the amounts to be withheld from such salary of the Affiliate Officer, including all applicable payroll taxes and related benefits.

An interim order to authorize the payment of salaries to Affiliate Officers is subject to review or reconsideration at any time upon the motion of a party in interest or by the Court sua sponte.

(7) Motion to Determine Adequate Assurance for Payment of Utility Services or, in the Alternative, Establishing the Procedure for Determining Adequate Assurance. The Court may consider this motion without a hearing.

(A) Contents of the Motion. A motion to determine adequate assurance of payment of the debtor's utility services shall include:

(i) a schedule of the names and addresses of the utilities;

(ii) whether the debtor is current in the payment of its utility;

(iii) an estimate of average monthly utility expense;

(iv) the amount owed to each utility; and

(v) the method by which the debtor will provide adequate assurance of timely payment.

(B) Proposed Order Conditionally Approving Motion. The motion shall be accompanied by a proposed order that provides for conditional approval of the motion subject to a 30-day objection period, which shall be set forth in the order by including above the preamble and below the title of the order the following bulletin in print either highlighted or bold so as to make it more prominent than the remainder of the text:

Any interested party who fails to file and serve a written objection to the motion (as conditionally approved by this Order) within 30 days after entry of the Order, shall be deemed to have consented to the provisions of this Order.

(C) Objections. Timely objections will be scheduled for hearing. If no timely objection is filed, the order shall be deemed final, and no further notice, hearing, or order shall be required.

(h) Use of Property. Subject to the provisions of 11 U.S.C. §§ 363 and 365, the debtor-in-possession may use, sell, or lease property of the estate. The debtor-in-possession is authorized to pay all necessary and current expenses of operating its business, including tax and lease payments, to the extent that such payments are necessary to preserve the assets or operate the business and provided that the payments are for only the postpetition period.

_______________________ Notes of Advisory Committee 2024 Amendment The amendment to section (g) conforms the rule to amended Federal Rule of Bankruptcy Procedure 5005(b)(1) that no longer requires mail or hand-delivery of papers to the United States Trustee, but allows service by CM/ECF. This amendment to the rule is effective August 15, 2024.

2021 Amendment This amendment revises section (b)(4) to require a list of only those officers, directors, and insiders receiving salaries or benefits from the debtor. This amendment further revises section (d) to require Small Business Debtors and Subchapter V Debtors to file a Check Register in the form of Appendix B with the Small Business Monthly Operating Report and clarifies that both Small Business Debtors and Subchapter V Debtors are required to file a Schedule of Receipts and Disbursements with their monthly operating reports. This amendment to the rule is effective August 1, 2021.

2019 Amendment This amendment revises section (g)(1) to more clearly state the requirements for motions seeking authority to use cash collateral and section (g)(7) to clarify that motions to determine adequate assurance for payment of utility services may be considered by the Court without a hearing. This amendment to the rule is effective July 1, 2019.

2013 Amendment This amendment requires that a Case Management Summary be filed in advance of the filing of any motion in the case and sets forth the matters that the Court may wish to address if an Initial Status Conference is scheduled. This amendment to the rule is effective July 1, 2013.

2012 Amendment This amendment establishes a rule that is consistent with Administrative Order FLMB-2009-1 "Administrative Order Establishing Initial Procedures in Chapter 11 Cases Filed in the United States Bankruptcy Court of the Middle District of Florida." Additionally, the rule requires that Small Business Debtors file a Schedule of Receipts and Disbursements in addition to Small Business Monthly Operating Reports.

Federal Rules of Bankruptcy Procedure 6003 and 4001 should be considered with regard to "first-day" motions. Consideration should also be given to the Court's general procedures for emergency hearings.

The addition of headings and subheadings is a stylistic rather than a substantive change. This amendment to the rule is effective March 15, 2012.

1997 Amendment This amendment conforms the existing Local Rule to the uniform numbering system prescribed by the Judicial Conference of the United States and to the model system suggested and approved by the Advisory Committee on Bankruptcy Rules of the Judicial Conference's Committee on Rules of Practice and Procedure. In renumbering the Local Rules to conform to the uniform numbering system, no change in substance is intended. This amendment to the rule was effective on April 15, 1997.

This rule was formerly Local Rule 3.02. The Advisory Committee Notes to the superseded rules may be helpful in interpreting and applying the current rules.

1995 Amendment The amendment dispenses with the requirement for the filing of a motion for authority to operate the business of the debtor. Consistent with current practice, it is contemplated that the court will enter an order sua sponte setting forth the requirements for operating the business of the debtor. It was the view of the Advisory Committee that dispensing with the requirement of filing a motion would reduce needless paperwork for counsel and the Clerk's office.

These amendments to the rule were effective on February 15, 1995.

← All Local Rules Official Court Website