Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 1 of 12 UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

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1 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 1 of 12 UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION In re: WITHOUT WALLS INTERNATIONAL CHURCH, INC., Debtor. / Chapter 11 Case No. 8:14-bk-2567-MGW ORDER (I) APPROVING DEBTOR S DISCLOSURE STATEMENT ON A FINAL BASIS AND (II) CONFIRMING DEBTOR S FIRST AMENDED PLAN OF REORGANIZATION UNDER CHAPTER 11 OF TITLE 11, THE UNITED STATES BANKRUPTCY CODE THIS CASE came on for hearing before the Court on July 9, 2014, at 9:30 a.m. (the Confirmation Hearing ), to consider (i) final approval of the Disclosure Statement for Debtor s Plan of Reorganization under Chapter 11 of Title 11, United States Code dated as of May 27, 2014 [Doc. No. 95] (the Disclosure Statement ) and (ii) confirmation of the Debtor s First Amended Plan of Reorganization under Chapter 11 of Title 11, United States Code dated as of July 2, 2014 [Doc. No. 131] (the Plan ). Each of the Disclosure Statement and the Plan were filed by Without Walls International Church, Inc., as Debtor and Debtor in Possession. All capitalized terms used in this Order but not defined herein shall have the meaning ascribed to such terms in the Plan. In attendance at the Confirmation Hearing were: (i) Harley E. Riedel and Elena Paras Ketchum, counsel for the Debtor; (ii) Andrew Lennox, special counsel for the Debtor, (iii) Andrew M. Brumby, counsel for Evangelical Christian Credit Union ( ECCU ); (iv) Jeffrey Snyder, counsel for The Richman Group of Florida, Inc. 1

2 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 2 of 12 ( Richman ); (v) Darren Farfante, counsel for San Bernardino County Tax Collector ( SBC Tax Collector ); (vi) Denise Barnett, attorney for the United States Trustee s Office; (vii) Larry S. Hyman, Chief Restructuring Officer of the Debtor ( Mr. Hyman ); (viii) Buddy Ford, counsel for Sperry Van Ness Commercial Real Estate ( SVN ); and (ix) Walt Driggers and Jon Barber of Tranzon Driggers. This Court has jurisdiction over the Debtor; the Debtor s Chapter 11 case; all of the Debtor s Property, contracts and assets, wherever located; all Claims against the Debtor; and all Holders of Claims against the Debtor pursuant to 28 U.S.C Confirmation of the Plan is a core proceeding pursuant to, without limitation, 28 U.S.C. 157(b)(2)(A), (L) and (O), and this Court has jurisdiction to enter a final order with respect thereto. Venue is proper before this Court pursuant to 28 U.S.C and The Debtor filed a Voluntary Petition for Relief under Chapter 11 of the Bankruptcy Code on March 10, 2014 (the Petition Date ). On May 27, 2014, the Debtor filed with this Court its Disclosure Statement. On June 2, 2014, this Court entered its Order Conditionally Approving Disclosure Statement, Fixing Time to File Objections to the Disclosure Statement, Fixing Time to File Applications for Administrative Expenses, Setting Hearing on Confirmation of the Plan, and Setting Deadlines With Respect to Confirmation Hearing [Doc. No. 102] (the Disclosure Statement Order ). On June 3, 2014, pursuant to the Disclosure Statement Order, copies of the Disclosure Statement, the plan filed on May 27, 2014, the Disclosure Statement Order and Ballot were mailed by the Debtor to all Creditors of the Debtor as set forth on the Court s master mailing matrix for this Chapter 11 case. On July 2, 2014, the Debtor filed its First Amended Plan of 2

3 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 3 of 12 Reorganization under Chapter 11 of Title 11, United States Code dated as of July 2, 2014 [Doc. No. 131] (the Plan ). Appropriate affidavits and certificates of service have been filed by the Debtor regarding such service. In the Disclosure Statement Order, the Court, among other things, fixed (a) July 1, 2014 as the last date for the filing of Ballots accepting or rejecting the Plan, (b) July 2, 2014 as the last date for the filing of written objections to Confirmation of the Plan, and (c) July 9, 2014 as the date for the Confirmation Hearing. The Court held a hearing on July 9, 2014 at 9:30 a.m. to consider Confirmation of the Plan in accordance with 11 U.S.C and final approval of the Disclosure Statement. Objections to Disclosure Statement and Confirmation of Plan. SVN filed its Objection to Confirmation of Plan and Final Approval of the Disclosure Statement [Doc. No. 118] (the SVN Confirmation Objection ). As set forth in the Amended Sale Order [Doc. No. 134], SVN withdrew the SVN Confirmation Objection at the hearing held on June 27, 2014 at 1:30 p.m. on the sale motion for the Tampa Premises and cast a ballot in favor of the Plan. On June 17, 2014, SBC Tax Collector filed its Limited Objection to Confirmation of Debtor s Plan of Reorganization [Doc. No. 112] (the San Bernardino Objection ). At the Hearing, counsel for the Debtor announced on the record that an agreement had been reached between the parties as to a modification to Article 5.5 of the Plan with respect to the treatment of the Other Secured Tax Claims of Governmental Units under Class 4 of the Plan (which modification is described in paragraph 6 below). As a result of the foregoing, SBC Tax Collector withdrew the San Bernardino Objection and changed its ballot to a vote for acceptance of the Plan. 3

4 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 4 of 12 In addition, the United States Trustee filed its Objection to the Debtor s Plan of Reorganization and Disclosure Statement [Doc. No. 130] (the USTO Objection ). At the Confirmation Hearing, the Court heard arguments of counsel with respect to the USTO Objection and overruled the USTO Objection. The Court found that the exculpation provisions set forth in Article 11 of the Plan are fair and necessary. At the Confirmation Hearing, the Court overruled all objections filed to the Plan and Disclosure Statement. Ballot Tabulation. The Plan classifies Claims into seven (7) separate Classes. Classes 1 and 3 are treated as Unimpaired under the Plan. Since the Claims in Classes 1 and 3 are not Impaired by the Plan, the Holders thereof are conclusively presumed to have accepted the Plan and are not entitled to vote on the Plan pursuant to 1126(f) of the Bankruptcy Code. Classes 2, 4, 5, 6 and 7 are treated as Impaired under the Plan. On July 3, 2014, the Debtor filed its Motion to Count Late Filed Ballots [Doc. No. 138] (the Ballot Motion ) to count the ballots of SVN and Anthony & Partners cast in favor of the Plan. At the Hearing, Debtor s counsel advised the Court that SBC Tax Collector had changed its ballot to accept the Plan. On July 8, 2014, the Debtor filed its Chapter 11 Ballot Tabulation [Doc. No. 144] reflecting the accepting ballots of SVN, Anthony & Partners and SBC Tax Collector. The Court finds that, based upon the tabulation of Ballots and the granting of the Ballot Motion, all impaired Classes, including the Unsecured Creditors in Class 5, have accepted the Plan in the requisite number and amount required under 1126 of the Bankruptcy Code. 4

5 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 5 of 12 Sale of Tampa Premises and Lakeland Premises. At the Confirmation Hearing, the Court found that the transfer and sale of the Tampa Premises and Lakeland Premises as approved pursuant to separate orders of the Court were pursuant to, in implementation of or as contemplated by the Plan and therefore, are transfers pursuant to 1146(c) of the Bankruptcy Code. Confirmation Affidavit. Prior to the Confirmation Hearing, the Debtor filed its Confirmation Affidavit and Memorandum in Support of Confirmation executed by Larry S. Hyman, the Chief Restructuring Officer of the Debtor [Doc. Nos. 141 and 142] (the Confirmation Affidavit ). At the Confirmation Hearing, counsel for the Debtor proffered (without objection) the testimony of Larry S. Hyman, the Chief Restructuring Officer of the Debtor, in support of confirmation of the Plan. Mr. Hyman was present in the Courtroom at the Confirmation Hearing, and all parties present at the Confirmation Hearing were given the opportunity to cross-examine Mr. Hyman. No party objected to the proffer of Mr. Hyman s testimony or requested an opportunity to cross-examine Mr. Hyman. The Court finds that the statements made by Mr. Hyman in the Confirmation Affidavit and the proffers made by counsel for the Debtor at the Confirmation Hearing in support of confirmation of the Plan were unchallenged and unrebutted, were not subject to objection, and are accepted. The Court finds that the Plan and this Order are fair, equitable, reasonable, and proper, in the best interest of the Debtor, the Estate, and all Creditors, and are binding upon all Creditors. The Court further finds that the Plan complies with each of the applicable provisions of Title 11 of the United States Code, including without limitation the provisions of Sections 1122, 1123 and 1129 of the Bankruptcy Code. Without limiting the generality 5

6 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 6 of 12 of the foregoing and by way of example, the Debtor has complied with the disclosure and solicitation requirements of Sections 1125 and 1126 of the Bankruptcy Code. For the reasons stated herein as well as the reasons stated orally and recorded in open court at the Confirmation Hearing, which shall constitute the decision of the Court, it is all respects. ORDERED: 1. The Disclosure Statement is approved on a final basis. 2. The Plan, as modified by this Order (the Modified Plan ), is confirmed in 3. The findings of fact set forth above in this Order be, and the same hereby are, ratified and adopted as findings of this Court and are incorporated herein. To the extent any of the findings of fact set forth herein are deemed to be conclusions of law, then such findings are hereby confirmed as conclusions of law. 4. The Ballot Motion is granted and the ballot cast by SVN and Anthony & Partners shall be counted as a timely acceptance of the Modified Plan. 5. The ballot cast by SBC Tax Collector in favor of the Modified Plan announed at the Confirmation Hearing shall be counted as a timely acceptance of the Modified Plan. 6. Article 5.5 of the Modified Plan shall be deleted in its entirety and the following shall be substituted therefor: 5.5 Class 4: Other Secured Tax Claims of Governmental Units Class 4 consists of all Secured Tax Claims of Governmental Units, other than those included in Class 3. 6

7 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 7 of Each Holder of an Allowed Class 4 Secured Tax Claim secured by property, other than Property transferred to a Purchaser as approved by order of the Bankruptcy Court, shall retain its Liens on its Collateral and shall be paid by the Debtor (a) in equal quarterly payments commencing on the first day of the second month of the calendar quarter following the quarter in which the Effective Date of the Plan occurs, and each calendar quarter thereafter, which payments will result in the Allowed Class 4 Secured Tax Claims being paid on the date that is five (5) years following the Petition Date, with an interest rate equal to the interest rate in effect pursuant to applicable non-bankruptcy law, or (b) under such other terms as may be agreed upon by both the Holder of such Allowed Class 4 Secured Tax Claim and the Debtor, or (c) as otherwise ordered by a Final Order of the Bankruptcy Court. There is no prepayment penalty for early payment. Upon receipt of its Allowed Class 4 Secured Tax Claim, the Lien shall be satisfied and automatically extinguished with no further action being required The San Bernardino Tax Collector shall retain its Liens on its Collateral on account of amounts due and owing for tax years 2011, 2012, 2013 and 2014 until such time as the respective tax year s obligation is satisfied at which time the Lien for that tax year shall automatically extinguish with no further action being required. With respect to the 2014 tax obligation, the Debtor shall remit to the San Bernardino Tax Collector the principal amount due and owing for the 2014 tax obligation (estimated at $5,374.81) in full by December 10, 2014; the San Bernardino Tax Collector will send notice of the 2014 tax obligation to the Debtor in the normal course. The tax amounts, including interest calculated through March 2019, for tax years 2011, 2012 and 2013 are as follows: The 2011, 2012 and 2013 tax amounts (principal, interest and penalties and costs) shall be paid by the Debtor (a) in (eighteen) 18 equal quarterly payments of 7

8 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 8 of 12 $1, commencing on the first day of the second month of the calendar quarter following the quarter in which the Effective Date of the Plan occurs, and each calendar quarter thereafter, which payments will result in the tax amounts being paid on the date that is five (5) years following the Petition Date, or (b) under such other terms as may be agreed upon by both the San Bernardino Tax Collector and the Debtor, or (c) as otherwise ordered by a Final Order of the Bankruptcy Court. There is no prepayment penalty for early payment. If the Debtor chooses to prepay the tax amount for any or all of 2011, 2012 or 2013 tax years, the San Bernardino Tax Collector shall recalculate the interest amounts reflected in the chart above so that interest accrues only through to the date of payment. Other than as stated in this paragraph 5.5.3, there are no other pre-petition amounts due and owing to the San Bernardino Tax Collector as to Parcel Class 4 is Impaired by the Plan. Class 4 is entitled to vote to accept or reject the Plan. 7. The USTO Objection, the SVN Objection and the SBC Tax Collector Objection are overruled. 8. The Debtor and its directors, officers and agents are authorized and directed to take all such steps as may be necessary to effectuate and implement the Modified Plan and this Order, including, without limitation, the execution and delivery of all instruments of transfer, agreements and other documents (and any amendments, supplements or modifications to any of the foregoing) as may be appropriate or necessary to consummate the transactions contemplated by the Modified Plan and this Order. 9. By this Order, the Amended Sale Order on Debtor s Emergency Amended Motion for Order Authorizing the Sale of Real Property to The Richman Group of Florida, Inc., pursuant to 11 U.S.C. 363, 1123 and 1129, Free and Clear of All Liens, Claims and Encumbrances [Doc. No. 134] (the Tampa Sale Order ) approving the sale of the Tampa Premises and each and every finding of fact and conclusion of law set forth therein are ratified and affirmed on a final basis and the sale of the Tampa Premises to 8

9 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 9 of 12 The Richman Group of Florida, Inc. approved therein constitutes a transfer under a plan exempted from any stamp or similar tax (as more fully set forth in paragraph 10 hereof) pursuant to 1146(c) of the Bankruptcy Code. 10. Pursuant to 1146(c) of the Bankruptcy Code, the issuance, distribution, transfer or exchange of any security or the making, delivery or recording of any instrument of transfer pursuant to, in implementation of or as contemplated by the Modified Plan, or the revesting, transfer or sale of any personal or real Property of, by or in the Debtor pursuant to, in implementation of or as contemplated by the Modified Plan, or any transaction arising out of, contemplated by or in any way related to the foregoing, shall not be subject to any document recording tax, stamp tax, conveyance fee, intangible or similar tax, mortgage tax, stamp act, real estate transfer tax, mortgage recording tax or other similar tax or governmental assessment, and the appropriate state or local governmental officials or agents shall be, and hereby are, directed to forego the collection of any such tax or governmental assessment and to accept for filing and recording any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. 11. All settlements, agreements and compromises provided for under the Modified Plan, and all transactions, documents, instruments, and agreements referred to therein, contemplated thereunder or executed and delivered therewith, and any amendments or modifications thereto in substantial conformity therewith, are hereby approved, and the Debtor and the other parties thereto are authorized and directed to enter into them and to perform thereunder according to their respective terms. 9

10 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 10 of The Modified Plan and its provisions shall be binding upon the Debtor, the Debtor s Estate, and all Creditors (whether or not the Claim of any such Creditors is Impaired under the Modified Plan and whether or not such Creditors have accepted the Modified Plan), all parties to any executory contract or unexpired lease of the Debtor, all other parties in interest, and the respective successors and assigns of each of the foregoing. 13. Except as otherwise expressly provided in the Modified Plan or in this Confirmation Order, as of the Effective Date, the provisions relating to discharge, release, injunctions, and stays set forth in Article 11 of the Modified Plan shall apply and be fully binding and are hereby incorporated by reference in this Confirmation Order. The Debtor has satisfied the disclosure requirements set forth in Bankruptcy Rule 3020(c)(1) as to such provisions. 14. The Modified Plan is confirmed in its entirety. The inclusion of language in this Order referring to specific provisions of the Modified Plan or authorizing specific action by the Debtor shall not be construed to imply non-approval of other provisions of the Modified Plan or non-authorization of other actions. The failure to reference or discuss any particular provision of the Modified Plan in this Order shall have no effect on the validity, binding effect and enforceability of such provision and such provision shall have the same validity, binding effect and enforceability as every other provision of the Modified Plan. 15. Notwithstanding the entry of this Order and the occurrence of the Effective Date, until the Bankruptcy Case is closed, this Court shall retain the fullest and most extensive jurisdiction of the Bankruptcy Case that is permitted under applicable law, including that necessary to ensure that the purposes and intent of the Modified Plan are 10

11 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 11 of 12 carried out. Without limiting the generality of the foregoing, after Confirmation of the Modified Plan and until the Bankruptcy Case is closed, this Court shall retain jurisdiction of the Bankruptcy Case for each of the specific purposes set forth in Article 12 of the Modified Plan. 16. This Order shall be served on all parties receiving electronic noticing in this case. Notice of the entry of this Order in the form attached hereto as Exhibit A (the Confirmation Notice ) shall be sent to all Creditors of the Debtor as set forth on the Court s master mailing matrices for the Debtor s Chapter 11 case. The Confirmation Notice shall reflect that a copy of this Order is available on the Internet at Counsel for the Debtor shall thereafter file a certificate of service with the Court regarding the foregoing service of this Order and the Confirmation Notice. 17. The Court will conduct a status conference on Wednesday, September 3, 2014 at 9:30 a.m. in Tampa, Florida Courtroom 8A, Sam M. Gibbons United States Courthouse, 801 N. Florida Avenue. The hearing may be adjourned from time to time by order of the Court or announcement made in open court without further notice. DATED: Copies furnished to: MICHAEL G. WILLIAMSON United States Bankruptcy Judge Attorney Elena Paras Ketchum is directed to serve a copy of this order on interested parties and file a proof of service within 3 business days of entry of this order. 11

12 Case 8:14-bk MGW Doc 148 Filed 07/11/14 Page 12 of 12 UNITED STATES BANKRUPTCY COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION In re: WITHOUT WALLS INTERNATIONAL CHURCH, INC., Debtor. / Chapter 11 Case No. 8:14-bk-2567-MGW NOTICE OF CONFIRMATION OF DEBTOR S FIRST AMENDED PLAN OF REORGANZIATION UNDER CHAPTER 11 OF TITLE 11, UNITED STATES CODE NOTICE IS HEREBY GIVEN, pursuant to Federal Rule of Bankruptcy Procedure 2002(f)(7), that the United States Bankruptcy Court for the Middle District of Florida, Tampa Division, has entered its Order (I) Approving Debtor s Disclosure Statement on a Final Basis and (II) Confirming Debtor s First Amended Plan of Reorganization under Chapter 11 of Title 11, United States Code dated July, 2014 (the Confirmation Order ). A copy of the Confirmation Order is available on request to undersigned counsel for the Debtor or can be reviewed at The Order is also available for inspection and photocopying during the normal business hours of the Office of the Clerk of the United States Bankruptcy Court, Sam M. Gibbons United States Courthouse, 801 N. Florida Avenue, Suite 555, Tampa, Florida Dated: July, 2014 /s/ Elena Paras Ketchum Elena Paras Ketchum (Florida Bar No ) STICHTER, RIEDEL, BLAIN & PROSSER, P.A. 110 East Madison Street, Suite 200 Tampa, Florida PH (813) FAX (813) Attorneys for the Debtor EXHIBIT A 12