Case: jtg Doc #:549 Filed: 09/08/16 Page 1 of 6 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN.

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1 Case: jtg Doc #:549 Filed: 09/08/16 Page 1 of 6 UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF MICHIGAN In re: CHAPTER 11 GREAT LAKES COMNET, INC. et al. 1 CASE NO (Jointly Administered) Debtors. / Hon. John. T. Gregg REPLY MEMORANDUM IN SUPPORT OF EVERSTREAM GLC HOLDING COMPANY, LLC S EVIDENCE OF ADEQUATE ASSURANCE OF PERFORMANCE OF ASSUMED AND ASSIGNED AGREEMENTS [Dkt. No. 366] Everstream GLC Holding Company, LLC ( Everstream ), by and through its undersigned counsel, hereby files this reply (the Reply ) in Support of Everstream s Evidence of Adequate Assurance of Performance of Assumed and Assigned Agreements [Dkt. No. 366] (the Evidence of Adequate Assurance ), which Everstream filed with the Court on April 29, For its Reply, Everstream states the following: I. INTRODUCTION 1. As discussed more fully below, the objection and supplemental objection to the Evidence of Adequate Assurance [Dkt. Nos. 377, 539] (collectively, the Objection ) filed by Independent Bank Corp. ( Independent Bank ) should be overruled on several grounds. First, Everstream and its parent, Everstream Solutions, LLC possess significant telecommunications experience that spans into seven states throughout the Midwest. Second, by Independent Bank s own admission in its Objection, Independent Bank was 1 The Debtors are Great Lakes Comnet, Inc. (Case No ) and Comlink, L.L.C. (Case No ).

2 Case: jtg Doc #:549 Filed: 09/08/16 Page 2 of 6 satisfied with the services that the Debtors provided. These same services that the Debtors provided are now being administered by former employees of the Debtors and improved upon by Everstream based on its technological upgrades and the additional resources available that are due to Everstream s size. 2. In fact, for more than three months, Everstream has given Independent Bank more than enough adequate assurance to satisfy the requirements of 11 U.S.C. 365(f)(2) based on the services it has provided, of which Independent Bank has raised no issue. 3. The reality is that Independent Bank is desirous of finding another voice services telecommunications provider with more favorable terms than the existing terms under the voice-based contract that Everstream assumed upon its acquisition of the Debtors assets (the Voice Contract ). As a result, Independent Bank is looking for any which way to terminate the Voice Contract and has resorted to baseless suggestions that Everstream lacks the capabilities to provide satisfactory service. Such an attempt by Independent Bank cannot be permitted. 4. For these reasons and others stated more fully herein, Independent Bank s Objection should be overruled. II. ARGUMENT 5. With its Objection, Independent Bank disingenuously suggests that Everstream has failed to provide appropriate evidence of adequate assurance of performance and has failed to demonstrate its capabilities as a telecommunications service provider. This assertion overlooks, among other things, the Evidence of Adequate Assurance that Everstream filed with the Court on April 29, 2016 in connection with being 2

3 Case: jtg Doc #:549 Filed: 09/08/16 Page 3 of 6 declared the winning bidder to purchase the Debtors assets. Specifically, Everstream submitted (i) proof of a $55 million loan facility that it subsequently closed with Webster Bank and CoBank ACB, (ii) a pro forma balance sheet that contemplated among other things, the company s new loan facility, and (iii) information on the company s management team, including biographical information on Brett Lindsey, the company s President and CEO, which highlighted Mr. Lindsey s and his team s experience in the telecommunication industry. See Evidence of Adequate Assurance. 6. In addition, upon Everstream s acquisition of the Debtors assets, which closed on June 1, 2016 (the Closing Date ), Everstream increased the size of its capabilities and more than doubled the number of service providers that made up Debtors workforce prior to the closing of the sale transaction. See Declaration of Brett Lindsey attached to this Reply as Exhibit A, 4. Further, since the Closing Date, Everstream has added 30 million minutes of voice traffic to the Everstream platform and has been rapidly growing its voice-related business. Id. Moreover, Everstream has improved the technology in which Debtors were providing voice services to Independent Bank and others similarly situated by implementing a cross-training plan for Everstream s voice platform, which involves multiple engineers and lends itself to better performance. Id. at 5. In addition, Everstream has separated its maintenance technicians from its core network of engineers to provide greater stability to the entire network. Id. at As further evidence of Everstream s capabilities, Independent Bank, as an Everstream customer over the course of the last three months, has been privy to the type of service and performance that Everstream routinely provides. During this period, 3

4 Case: jtg Doc #:549 Filed: 09/08/16 Page 4 of 6 Independent Bank has not registered any complaint or offered any dissatisfaction with Everstream s voice-based services that it has provided. Id. at Thus, Everstream s upgrades and the tangible performance that Everstream has provided to Independent Bank clearly contradicts Independent Bank s baseless assertion that Everstream did not have extensive voice-based telecommunications experience. Objection at 12(d). Without question, Everstream has the extensive capabilities to adequately perform its obligations under each telecommunication-related executory contract, including the Voice Contract, which Everstream has assumed in connection with its acquisition of the Debtors assets. Accordingly, Everstream clearly satisfies the adequate assurance requirements pursuant to 11 U.S.C. 365(f)(2). 9. In reality, Independent Bank is hiding its true intent under the guise of its Objection. Independent Bank has made it abundantly clear that it does not want the Voice Contract to continue and is looking for any way whatsoever to unilaterally terminate the contract. 10. In an effort to resolve the Objection, Everstream, through its counsel, repeatedly attempted to try and schedule a meeting of the parties through Independent Bank s counsel so that Everstream could provide Independent Bank with additional assurances of Everstream s ability to perform each of its obligations under the Voice Contract. Despite these attempts, Independent Bank s counsel failed to provide any definitive meeting dates, which made the filing of this Reply a necessity. 11. Absent a finding of a lack of adequate assurance of performance in connection with an executory contract that has been assumed and assigned, a non-debtor 4

5 Case: jtg Doc #:549 Filed: 09/08/16 Page 5 of 6 party to an executory contract has no right to unilaterally terminate the contract. Here, as set forth in this Reply and its Evidence of Adequate Assurance, Everstream has satisfied the adequate assurance of performance threshold pursuant to 11 U.S.C. 365(f)(2). Accordingly, Independent Bank s Objection should be overruled. III. CONCLUSION Objection. 12. Based on the foregoing, the Court should overrule Independent Bank s Dated: September 8, 2016 THOMPSON HINE LLP /s/ Scott B. Lepene Scott B. Lepene (Ohio Bar # ) 3900 Key Center 127 Public Square Cleveland, OH ) (216) (Direct) (216) (Facsimile) scott.lepene@thompsonhine.com Counsel for Everstream GLC Holding Company, LLC RAYMAN & KNIGHT Steven L. Rayman (P30882) 141 E. Michigan Ave., Ste. 301 Kalamazoo, MI (269) Co-counsel for Everstream GLC Holding Company, LLC 5

6 Case: jtg Doc #:549 Filed: 09/08/16 Page 6 of 6 CERTIFICATE OF SERVICE I, Scott B. Lepene, hereby certify that on September 8, 2016, I electronically filed the foregoing Reply Memorandum In Support Of Everstream GLC Holding Company, LLC s Evidence Of Adequate Assurance Of Performance Of Assumed And Assigned Agreements with the Clerk of the Bankruptcy Court using the ECF system which will send notification of such filing to all ECF participants. /s/ Scott B. Lepene Scott B. Lepene 6

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