01:12240983.

1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

In re:

Cordillera Golf Club, LLC,
1

dba The Club at Cordillera,

Debtor

Chapter 11

Case No. 12-11893 (CSS)

Hearing Date: July 27, 2012 at 1:00 p.m. (ET)
Obj. Deadline: July 20, 2012 at 4:00 p.m. (ET)

Docket Ref. Nos. 9 and 44
NOTICE OF ENTRY OF INTERIM ORDER (A) AUTHORIZING
DEBTORS USE OF CASH COLLATERAL, (B) GRANTING
ADEQUATE PROTECTION, AND (C) SCHEDULING FINAL
HEARING PURSUANT TO BANKRUPTCY RULE 4001
TO: (A) THE OFFICE OF THE UNITED STATES TRUSTEE; (B) THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION; (C) THE OFFICE FO THE UNITED
STATES ATTORNEY FOR THE DISTRICT OF DELAWARE; (D) THE INTERNAL
REVENUE SERVICE; (E) THE DEBTORS TWENTY (20) LARGEST UNSECURED
CREDITORS; (F) THE DEBTORS CASH MANAGEMENT BANKS; (G) COUNSEL
TO PREPETITION SECURED LENDERS; (H) COUNSEL TO PROPOSED POST-
PETITION SECURED LENDER; AND (I) ALL PARTIES THAT HAVE REQUESTED
NOTICE PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 2002
PLEASE TAKE NOTICE that on June 26, 2012, the above-captioned debtor and
debtor in possession (the Debtor) filed the Motion of the Debtor for Entry of Interim and Final
Orders (a) Authorizing the Use of Cash Collateral; (b) Granting Adequate Protection; (c)
Scheduling a Final Hearing; and (d) Granting Related Relief [Docket No. 9] (the Cash
Collateral Motion), a copy of which is annexed hereto as Exhibit A.
PLEASE TAKE FURTHER NOTICE that on June 27, 2012, the United States
Bankruptcy Court for the District of Delaware (the Court) entered an interim order [Docket
No. 44] (the Interim Order) granting the relief requested in the Cash Collateral Motion on an
interim basis. A copy of the Interim Order is annexed hereto as Exhibit B.

1
The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is: XX-
XXX1317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202, Edwards, CO 81632.

2
01:12240983.1
PLEASE TAKE FURTHER NOTICE that objections to the entry of an order
approving the Cash Collateral Motion, on a final basis, must be filed on or before July 20, 2012
at 4:00 p.m. (ET) (the Objection Deadline) with the United States Bankruptcy Court for the
District of Delaware, 3rd Floor, 824 Market Street, Wilmington, Delaware 19801. At the same
time, you must serve a copy of the response(s) upon the undersigned proposed counsel to the
Debtor so as to be received on or before the Objection Deadline.
PLEASE TAKE FURTHER NOTICE THAT A FINAL HEARING ON THE
CASH COLLATERAL MOTION WILL BE HELD ON JULY 27, 2012 AT 1:00 P.M. (ET)
BEFORE THE HONORABLE CHRISTOPHER S. SONTCHI AT THE UNITED STATES
BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE, 824 MARKET STREET,
5TH FLOOR, COURTROOM NO. 6, WILMINGTON, DELAWARE 19801.
PLEASE TAKE FURTHER NOTICE THAT IF NO OBJECTIONS TO THE
CASH COLLATERAL MOTION ARE TIMELY FILED, SERVED, AND RECEIVED IN
ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF
REQUESTED IN CONNECTION WITH THE CASH COLLATERAL MOTION, ON A
FINAL BASIS, WITHOUT FURTHER NOTICE OR HEARING.

3
01:12240983.1
Dated: Wilmington, Delaware
June 28, 2012

FOLEY & LARDNER LLP
Christopher Celentino
Erika Moribita
Mikel Bistrow
402 West Broadway, Suite 2100
San Diego, California 92101
Telephone: (619) 234-6655
Facsimile: (619) 234-3510

-and-

YOUNG CONAWAY STARGATT & TAYLOR, LLP

/s/ Donald J. Bowman, Jr. ,
Michael R. Nestor (No. 3526)
Joseph M. Barry (No. 4221)
Donald J. Bowman, Jr. (No. 4383)
Kenneth J. Enos (No. 4544)
1000 N. King Street
Rodney Square
Wilmington, Delaware 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253

Proposed Counsel for Debtor and Debtor in Possession


EXHIBIT A
Cash Collateral Motion
01:12240983.1
In re:
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
Chapter 11
Cordillera Golf Club, LLC,
1
dba The Club at Cordillera,
Case No. 12-11893 ( _ ~ )
Debtor.
MOTION OF THE DEBTOR FOR ENTRY OF INTERIM AND FINAL
ORDERS (A) AUTHORIZING USE OF CASH COLLATERAL; (B)
GRANTING ADEQUATE PROTECTION; (C) SCHEDULING A
FINAL HEARING; AND (D) GRANTING RELATED RELIEF
Cordillera Golf Club, LLC, debtor and debtor in possession (the "Debtor"), by
and through its undersigned counsel, respectfully brings this motion (the "Motion") for the entry of
(i) an interim order, substantially in the form of Exhibit A hereto (the "Interim Order") (a).
authorizing the Debtor, pursuant to sections 105(a), 361, 362, 363 and 552 of title 11 of the United
States Code (the "Bankruptcy Code"), Rule 4001 (b) of the Federal Rules of Bankruptcy Procedure
(the "Bankruptcy Rules") and Local Rule 4001-2 of the Local Rules of Bankruptcy Practice and
Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"),
to use Cash Collateral (as defmed below), (b) granting and affirming the adequate protection given
to the Alpine Bank ("Alpine") and David Wilhelm ("Wilhelm"), and (c) scheduling a final hearing
on this motion (the "Final Hearing") and (ii) a final order (the "Final Order") on substantially the
same terms as the Interim Order. The Debtor is informed and believes that Wilhelm consents to
the use of cash collateraL The Debtor does not know Alpine's position at this time. In support of
this motion (the "Motion"), the Debtor relies upon the Declaration of DanielL. Fitchett in support
1
The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is: XX-
XX:X:l317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202, Edwards, CO 81632.
01:12230349.4
of Chapter 11 Petitions and First Day Relief(the "First Day Declaration"), which is incorporated
herein by reference, and respectfully represent as follows:
JURISDICTION
1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and
13 34 and the Amended Standing Order of Reference from the United States District Court for the
District of Delaware, dated as of February 29, 2012. This is a core proceeding pursuant to 28
U.S.C. 157(b)(2), and the Court may enter a fmal order consistent with Article III of the United
States Constitution. Venue is proper in this Court pursuant to 28 U.S. C. 1408 and 1409. The
statutory and legal predicates for the relief requested herein are sections 105, 361, 362, 363 and
552 of the Bankruptcy Code.
BACKGROUND
2. On the date hereof (the "Petition Date"), the Debtor filed a voluntary
petition for relief under chapter 11 of the Bankruptcy Code.
~ - The Debtor continues to operate its business and manage its properties as
debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee,
examiner or official committee of unsecured creditors has been appointed in this case.
4. The Debtor is the owner and operator of the "Club at Cordillera" (the
"Club") located in Edwards (Eagle County), Colorado. The Club facilities consist of, among other
property, three (3) full length golf courses (the "Courses"), four distinct clubhouses, real estate
surrounding the Courses, a Dave Pelz short course, an athletic club offering indoor lap pool and
fitness facilities, a tennis and swim club, and a winter nordic center with groomed tracks
(collectively, the "Facilities"). More detailed information regarding the Debtor's history and
business operations, its capital structure and primary secured indebtedness, and the events leading
01:12230349.4
2
up to the commencement of this chapter 11 case can be found in the First Day Declaration, which
is incorporated herein by reference.
SECURED DEBT OBLIGATIONS
5. Or about June 26, 2009, Alpine and the Debtor entered into that certain
Business Loan Agreement (the "Loan Agreement"), pursuant to which Alpine loaned to the Debtor
the original principal amount of$13,700,000 (the "Alpine Loan"). A true and correct copy of the
relevant Alpine Bank Loan Agreement and related documents will be filed contemporaneously
herewith.
6. The Alpine Loan is evidenced by a Promissory Note dated June 29, 2009
(the "Alpine Note"). The Note matured on June 26, 2012. The Alpine Loan purports to be secured
pursuant to a Deed of Trust dated June 26,2009 and recorded in Eagle County Record's Office on
June 29, 2009 as Document No. 200912623 (the "Alpine Deed of Trust").
7. As security for the Debtor's obligations under the Alpine Note, the Alpine
Deed of Trust purports to encumber the real property described therein, including all or a portion
of the Facilities (the "Real Property"). The Alpine Deed of Trust also purports to encumber certain
personal property described therein, including "all equipment, fixtures, and other articles of
personal property now or hereafter owned by Grantor, and now or hereafter attached or affixed to
the Real Property .... " The Alpine Note also purports to be secured pursuant to a Collateral
Assignment of Contracts dated June 26, 2009 purporting to encumber certain water rights, and
related contracts as listed therein; a Collateral Assignment and Security Agreement Covering
Agreements, Permits and Contracts dated June 26, 2009, purporting to encumber the "Collateral"
as defined therein, including contracts, licenses, and other agreements as described therein; a
Collateral Assignment and Security Agreement Covering Golf Membership Revenues dated
01:12230349.4
3
June 26, 2009, purporting to encumber "Net Sales Revenues" and "Income from Dues" as defined
therein, including revenues from the sale of golf course memberships with respect to the Courses
and dues, assessments, fees or other charges on account of memberships in the Club; a
Commercial Pledge Agreement dated June 26, 2009 purporting to encumber all memberships in
the Club; and a Commercial Security Agreement dated June 26, 2009 purporting to encumber
furniture, fixtures, equipment, inventory, accounts receivable, general intangibles, contracts and
contract rights, permits, goods, instruments, investment property, letter of credit rights, chattel
paper, commercial tort claims, and all proceeds from the disposition thereof (all of the personal
property purporting to be collateral for the Alpine Note (collectively, the "Personal Property"). On
June 30, 2009, Alpine filed a UCC Financing Statement with the Delaware Secretary of State
purporting to perfect its security interest in the Personal Property. The documents executed in
connection with the Alpine Loan are collectively referred to as the "Alpine Loan Documents."
2
All collateral purported to secure the Alpine Note is collectively referred to as the "Alpine
Collateral."
8. On or about June 23, 2010, David Wilhelm ("Wilhelm") made a loan to the
Debtor in the original principal amount of $6,500,000 (as at any time increased, the "Wilhelm
Loan"), evidenced by a Promissory Note dated June 23, 2010 (as at any time amended or modified,
the "Wilhelm Note"). The Wilhelm Note purports to be secured by a Deed of Trust, Security
Agreement, Assignment of Leases and Rents and Fixture filing dated June 23, 2010, and recorded
with the Eagle County Recorder's Office on August 12, 2010 as Document No. 20105834 (as at
any time amended or modified, the "Wilhelm Deed of Trust"), purportedly encumbering the Real
Property and portions of the Personal Property, as further described therein. The documents
2
The Alpine Loan Documents referred to herein are being filed with the Court contemporaneously
herewith.
01:12230349.4
4
executed in connection with the Wilhelm Loan are collectively referred to as the "Wilhelm Loan
Documents."
3
All collateral purported to secure the Wiihelm Note is collectively referred to as the
"Wilhelm CollateraL" The Alpine Collateral and the Wilhelm Collateral is collectively referred to
as the "Collateral," and Collateral which is personal property is collectively referred to as the
"Personal Property CollateraL"
9. As of the filing date, the Debtor's books and records reflect the amount of
the outstanding amounts of the Alpine Loan and the Wilhelm Loan as approximately $12.7 million
and $7.5 million, respectively.
THE CASH COLLATERAL
10. Certain cash, documents of title, deposit accounts and other cash equivalents
now or hereafter coming into the possession or control of or acquired by the Debtor and arising
from the Alpine Collateral and/or the Wilhelm Collateral is or may be such lenders' (each a
"Lender" and collectively, the "Lenders") "cash collateral" within the meaning of 11 U.S.C.
363(a), including without limitation portions of amounts that were on deposit as of the Petition
Date in Debtor's bank accounts (collectively, the "Cash Collateral").
11. As of the filing of the Debtor's case, the Debtor held cash of approximately
$210,000.00. On a post-petition basis, the Debtor also expects to generate cash from its
operations, including without limitation from membership dues, food and beverage sales, green
fees, guest fees, property sales and otherwise.
DEBTOR'S REQUEST TO USE CASH COLLATERAL
12. It is essential to the Debtor's efforts to preserve and maximize the value of
the Club and Facilities that it obtain the authority to use the Cash Collateral derived from operating
3
The Wilhelm Loan Documents referred to herein are being filed with the Court contemporaneously
herewith.
01:12230349.4
5
the businesses claimed as collateral by Alpine and/or Wilhelm. The Cash Collateral will be used
to pay for expenses identified in the budget attached as Exhibit A to the Interim Order (the
"Budget"). Such expenses include, but are not limited to, employee payroll and other benefits,
Club and Course maintenance, utilities, taxes, other expenses related to the Debtor's business
operations and administrative expenses of the bankruptcy estate. The Debtor anticipates cash
needs in excess of Cash Collateral expected to be generated on a short term basis, and it is
exploring potential avenues from which it may obtain post-petition financing for additional
liquidity to fund its operations during the pendency of this case.
13. After considering other alternatives, the Debtor's management and
ownership, in their reasonable business judgment, have concluded that the most effective way to
maximize the value of the estate for the benefit of creditors is to complete a prompt sale of one of
its Club Facilities- the Mountain Course- pursuant to section 363 of the Bankruptcy Code,
subject to higher or better bids at a public auction (a "Sale Transaction").
14. The Debtor believes that a Sale Transaction of the Mountain Course through
a Bankruptcy Court supervised process will result in a substantial infusion of capital resulting in
the emergence of a much stronger and economically viable enterprise that will maximize the value
for the Debtor's business and ultimately benefit all creditor constituents, including Alpine and
Wilhelm.
15. To advance the foregoing goals, the Debtor- in consultation with its
management and professionals - has retained the services of an experienced real estate consultant
with significant experience in the golf and hospitality industries, GA Keen Realty Advisors, LLC,
to assist the Debtor in conducting a robust post-petition marketing process to sell the Mountain
Course to the highest and best bidder through a court-supervised auction process. The resulting
01:12230349.4
6
capital return to the Debtor's estate will be utilized to reorganize and fund the Debtor's remaining
asset portfolio through a chapter 11 plan of restructuring.
16. The Debtor is also seeking post-petition financing; however, inasmuch that
this financing has not yet been finalized, the Debtor requires the use of cash collateral while
negotiations for such financing continue, can be finalized and brought before the Court for
approval.
17. The reasons supporting the Debtor's need to use Cash Collateral during the
course of this case are compelling. As the Debtor has extremely limited funds, use of Cash
Collateral is required to fund the day-to-day operating expenses, including payments to employees,
Club and Course maintenance and sustaining the going concern value of the Debtor's businesses.
Unless the Court authorizes use of the Cash Collateral, the Debtor will be unable to pay for
services and expenses necessary to preserve and maximize the value of the Debtor's assets.
Indeed, absent sufficient funds to support the Debtor's business operations, the value of the
Debtor's assets may erode. Therefore, authorization to use Cash Collateral pending the Final
Hearing is in the best interests of the Debtor's estate and creditors.
18. As set forth in the First Day Declaration, the Debtor believes the value of
the Real Property to be $33,000,000, based upon the appraisal dated June 15, 2012 prepared by
Chrysalis Valuation Consultants, LLC.
4
RELIEF REQUESTED AND ADEQUATE PROTECTION
19. The Debtor seeks: (a) authority pursuant to sections 105(a), 361, 362, 363
and 5 52 of the Bankruptcy Code for use of the purported Cash Collateral pursuant to the terms of
the Interim Order; (b) to grant to Alpine and Wilhelm adequate protection in respect of their
4
Such appraiser previously appraised the Real Property for Alpine Bank.
01:12230349 _4
7
respective interests in the Cash Collateral portions of the Collateral; and (c) a fmal hearing on this
Motion (the "Final Hearing").
20. By this Motion, the Debtor does not concede the validity, priority, extent of
or perfection of Alpine's or Wilhelm's purported security interests or liens in any Collateral or
other property, including the Real Property, the Personal Property, the Personal Property Collateral
or the purported Cash Collateral. This Motion seeks authority to use Cash Collateral to the extent
it exists, and to grant replacement liens in the Debtor's assets of the same type as exist as Personal
Property Collateral in favor of Alpine and/or Wilhelm, respectively, on a pre-petition basis, in the
same priority as exists pre-petition and to the same extent, validity, priority and perfected status as
on a pre-petition basis.
5
21. Bankruptcy Rule 400l(d) provides that the Court may fix the time within
which objections to the approval of an agreement relating to cash collateral and adequate
protection pursuant to section 363 of the Bankruptcy Code must be filed. In addition, the Court is
empowered to conduct an expedited preliminary hearing on the motion and authorize the use of
cash collateral to the extent necessary to avoid immediate and irreparable harm to the Debtor's
estate.
22. The interests of both Alpine and Wilhelm in the Collateral, Personal
Property Collateral and Cash Collateral is adequately protected by the value of their respective
interests in the Real Property. As set forth in the First Day Declaration, the estimated value of the
5
For example, pursuant to Bankruptcy Code 552, property acquired by the Debtor's estate post-petition,
such as food and beverage receipts or the like, may not be subject to Alpine's or Wilhelm's pre-petition
security agreements. For purposes of this Motion, the Debtor does not seek a determination of the extent of
such property as collateral under section 5 52 or otherwise, or the nature, extent, priority or perfection of any
liens, or the effect of the claims ofthe Debtor against Alpine and/or Wilhelm or the Debtor's obligations to
such parties. All of such issues are reserved and preserved for determination at a later time, if and as
necessary.
01:12230349.4
8
real property is $33,000,000, creating a large equity cushion protecting both Alpine's and
Wilhelm's interests.
23. Because the above-described equity cushion protects both Lenders'
interests, no further adequate protection is required under the Bankruptcy Code. However, for
purposes of this Motion only, and subject to the reservation of all the Debtor's rights, as further
adequate protection for the use of the purported Cash Collateral, to secure the repayment of any
portion of the Cash Collateral used by the Debtor, the Debtor will grant to each of the Lenders a
security interest in and lien upon (collectively, the "Replacement Liens"), all of the Debtor's now
existing or hereafter acquired personal property of the same type as the Personal Property
Collateral in which they have a purported interest, respectively, but specifically excluding
avoidable transfer claims and recoveries and/or similar claims and recoveries pursuant to Sections
542 through 550, et seq. of the Bankruptcy Code, to further protect Lenders from any potential or
actual loss due to the use by the Debtor of purported Cash Collateral. The Replacement Liens are
to be granted to the same extent, and with the same validity and priority, as such Lenders' existing
liens in the Debtor's Cash Collateral existing on the Petition Date and which such Cash Collateral
is used thereafter.
24. The Debtor, as well as any creditor's committee appointed in the Debtor's
case or other creditors or parties-in-interest as may have standing under applicable law, reserve
their rights to dispute that Lenders (or either of them) hold a valid, enforceable, perfected and/ or
unavoidable security interest in and/or liens upon the Cash Collateral, the Personal Property
Collateral or other Collateral or property, including without limitation, the Real Property and/or the
Personal Property, as well as any Cash Collateral derived from Debtor's business operations which
is subject to the security agreements between Lenders and the Debtor; and nothing in the Motion,
01:12230349.4
9
the Interim Order or the Final Order shall act to confirm, acknowledge or ratify the validity,
perfection or amount of either Lender's pre-petition lien on any Collateral or other property, or
either Lender's debt or claims, nor act as a waiver of the right of the Debtor to impose additional
security interests or liens on any Collateral or other property, whether senior or junior to Lenders'
liens, nor act as a waiver of any claims against Lenders, a waiver of rights under 11 U.S.C.
506( c), a "rollover" of pre-petition debt of Lenders to post-petition debt, the granting of relief from
the automatic stay, nor to operate to divest the Debtor of any discretion in the formulation of a plan
or administration ofthe estate or limit access to the Court to seek any relief under applicable
provisions oflaw, including without limitation, with respect to the treatment of claims.
ARGUMENT
25. Alpine and Wilhelm assert (or may assert) that the cash received by the
Debtor generated from the operation of its businesses in the ordinary course constitutes "cash
collateral" as provided in the Bankruptcy Code. The Debtor's use of the Cash Collateral is
necessary to maintain and maximize the value of the Debtor's assets during the pendency of the
case for the benefit of, among others, the Lenders. Absent the use of Cash Collateral, and absent
other sources of funds, the Debtor will be unable to operate its businesses in a manner necessary to
maintain and maximize the value of its assets.
26. Without the use of the Cash Collateral as requested by this Motion, the
Debtor will suffer immediate and irreparable harm, its business operations may cease and the
operational value of the business may not be realized.
27. Bankruptcy Rule 4001(b) permits a court to approve a debtor's request for
use of cash collateral during the 14-day period following the filing of a motion requesting
authorization to use cash collateral, "only ... as is necessary to avoid immediate and irreparable
harm to the estate pending a fmal hearing." Bankruptcy Rule 4001(b )(2). In examining requests
01:12230349.4
10
for interim relief under this rule, courts apply the same business judgment standard applicable to
other business decisions. See, e.g., In re Simasko Production Co., 47 B.R. 444, 449 (D. Co. 1985),
47 B.R. at 449; see also In re Ames Dep't Stores Inc., 115 B.R. 34, 38 (Bank S.D.N.Y. 1990) 115
B.R. at 3 8. After the 14-day period, the request for use of cash collateral is not limited to those
amounts necessary to prevent destruction of the debtor's business. A debtor is entitled to use cash
collateral that it believes prudent in the operation of its business. See, e.g., Simasko, 47 B.R. at
449; Ames Dep 't Stores, 115 B.R. at 36.
28. Section 363(c)(2) of the Bankruptcy Code provides that a debtor may not
use cash collateral unless "(A) each entity that has an interest in such cash collateral consents; or
(B) the court, after notice and hearing, authorizes such use, sale, or lease in accordance with the
provisions ofthis section." 11 U.S.C. 363(c)(2). Further, Bankruptcy Code section363(e)
provides, in pertinent part, that "on request of an entity that has an interest in property ...
proposed to be used, sold, or leased, by the trustee, the court, with or without a hearing, shall
prohibit or condition such use, sale, or lease as is necessary to provide adequate protection of such
interest." 11 U.S.C. 363(e). Examples of adequate protection are provided in section 361 of the
Bankruptcy Code and include, but are not limited to: (a) lump sum or periodic cash payments to
the extent that such use will result in a decrease in value of such entity's interest in the property;
(b) provisions for an additional or replacement lien to the extent that the use ofthe property will
cause a decrease in the value of such entity's interest in the property; and (c) such other relief as
will result in the realization by the entity of the indubitable equivalent of such entity's interest in
6
the property. 11 U.S.C. 361.
6
The Debtor believes that Wilhelm consents to the use of Cash Collateral as provided in this Motion.
01:12230349.4
11
29. Courts have found a secured creditor adequately protected where either a
sufficient equity cushion in the collateral exists to protect the secured creditor, or the level of the
secured creditor's collateral is not decreasing over time. In re Aventine Inc., Ch. 11 Case No. 09-
11214 (KG) transcript of hearing, p. 244, ln. 18 (Bankr. D. Del. April14, 2009) (approving
contested use of cash collateral and priming debtor-in-possession financing based, in part, on
existence of"a very sufficient equity cushion); In re Dynaco Corp., 162 B.R. 389, 394 (Bankr. D.
N.H. 1993) (secured creditor was adequately protected and debtor was authorized to use cash
collateral where level of collateral was not declining); In re May, 169 B.R. 462 (Bankr. S.D. Ga.
1994) (equity cushion in property may provide creditor with adequate protection of its interest,
sufficient to permit the debtor to use cash collateral); In re Southwest Assocs., 140 B.R. 360
(Bankr. S.D.N.Y. 1992) (same). Even in those instances where its equity cushion is fluctuating, a
secured creditor is adequately protected so long as an adequate cushion remains over and above its
secured claim. Dynaco Corp., 162 B.R. at 394 (Bankr. D. N.H. 1993).
30. Adequate protection must be determined on a case-by-case basis, in light of
the particular facts and circumstances presented, the focus being that which is required to protect a
secured creditor from diminution in the value of its interest in the particular collateral during the
use period. In re Ledgmere Land Corp. ,116 B.R. 338, 343 (Bankr. D. Mass. 1990); Delbridge v.
Production Credit Assoc. & Federal Land Bank, 104 B.R. 824, 827 (E. D. Mich. 1989); In re Kain,
86 B.R. 506, 513 (Bankr. W.D. Mich. 1988); In re Beker Indus. Corp., 58 B.R. 725, 736 (Bankr.
S.D.N.Y. 1986).
31. In light of the particular facts and circumstances currently before the Court,
to the extent the security interests asserted by the Lenders in the Cash Collateral are valid,
perfected and unavoidable, the Debtor submits that the interests of the Lenders are adequately
01:12230349.4
12
protected. Initially, the Debtor believes that such interests are adequately protected by the
substantial equity cushion in favor of the Lenders on the Real Property. See, e.g., In re Pawtuxet
Valley Prescription & Surgical Ctr., Inc., 2008 Bankr. LEXIS 868 (Bankr. D.R.I. Mar. 10, 2008)
(permitting continued use of cash collateral, where debtor had not met any of its projections and
management had made a series of poor business decisions, because the creditor continued to
maintain a significant equity cushion). Furthermore, the value of the Real Property is enhanced by
the Debtor's continued management of the Real Property, the Club and the Facilities.
32. Based on the foregoing, the Debtor believes that no further adequate
protection is required. However, as more fully set forth in the Interim Order, in addition to
adequate protection existing in favor of Lenders by virtue of the equity cushion in the Real
Property, as additional adequate protection for the use of purported Cash Collateral, the Debtor
will provide Lenders with, inter alia, the Replacement Liens to secure the repayment of any
portion of the Cash Collateral used by the Debtor, in the Debtor's now existing or hereafter
acquired personal property of the same type as the Personal Property Collateral, respectively, but
specifically excluding avoidable transfer claims and recoveries and/or similar claims and
recoveries pursuant to Sections 542 through 550 of the Bankruptcy Code. The Replacement Liens
are to be granted to the same extent, and with the same validity and priority, as such Lender's
existing liens in the Debtor's Cash Collateral existing on the Petition Date and which is used
thereafter.
3 3. Therefore, the Debtor respectfully submits that the use of Cash Collateral on
the terms set forth in the attached proposed Interim Order provides Lenders with additional
adequate protection and is in the best interest of the Debtor, its estate, its creditors and all parties in
interest and therefore should be authorized by this Court.
01:12230349.4
13
PROVISIONS THAT IMPLICATE LOCAL RULE 4001-2
34. The Debtor does not believe that the Interim Order contains any provisions
requiring special disclosure under Local Rule 4001-2.
REQUEST FOR FINAL HEARING
35. Pursuant to Bankruptcy Rule 400l(b)(2), the Debtor requests the Court to
set a date for the Final Hearing.
NOTICE
36. Notice of this Motion has been provided to: (i) the Office of the United
States Trustee; (ii) the United States Securities and Exchange Commission; (iii) the Office of the
United States Attorney for the District of Delaware; (iv) the Internal Revenue Service; (v) the
Debtor's twenty (20) largest unsecured creditors; (vi) counsel to Alpine and Wilhelm, and (vii)
counsel to the proposed post-petition secured lender. Notice of this Motion and any order entered
hereon will be served in accordance with Local Rule 9013-l(m). In light ofthe nature of the relief
requested herein, the Debtor submits that no other or further notice is necessary.
01:12230349.4
14
CONCLUSION
WHEREFORE, the Debtor respectfully requests entry of the Interim Order, in the
form annexed hereto as Exhibit A, granting the Debtor the relief requested herein, and such other
and further relief as is just
Dated: Wilmington, Delaware
June 26, 2012
01:12230349.4
FOLEY & LARDNER LLP
Christopher Celentino ( CA No. 1316 8 8)
Mikel Bistrow (CA No. 102978)
Erika Morabito (VA No. 44369)
402 West Broadway, Suite 2100
San Diego, California 92101
Telephone: (619) 234--6655
Facsimile: (619) 234-3510
-and-
YOUNG CONAWAY STARGATT & TAYLOR, LLP
a J ~ & ~
Michael R. Nest(N{):3526)
Joseph M. Barry (No. 4221)
Donald J. Bowman, Jr. (No. 4383)
Kenneth J. Enos (No. 4544)
1000 N. King Street
Rodney Square
Wilmington, Delaware 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1253
Proposed Counsel for Debtor and Debtor in Possession
15
EXHIBIT A
Order
01:12230349.4
Inre:
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
Chapter 11
Cordillera Golf Club, LLC,
1
dba The Club at Cordillera,
Case No. 12-11893 ( ' - _ ~ )
Ref. Docket No.
Debtor.
INTERIM ORDER
(A) AUTHORIZING DEBTOR'S USE OF CASH COLLATERAL,
(B) GRANTING ADEQUATE PROTECTION, AND
(C) SCHEDULING FINAL HEARING
PURSUANT TO BANKRUPTCY RULE 4001
Upon the motion (the "Motion") of the above-referenced debtor, as debtor-in-
possession (the "Debtor"), seeking this Court's authorization pursuant to Sections 105, 361, 362
and 363 ofthe United States Bankruptcy Code, 11 U.S.C. 101 et seq. (the "Bankruptcy
Code"), and Rules 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (the
"Bankruptcy Rules"), for the Debtor to use cash collateral, as such term is defmed in Section 363
of the Bankruptcy Code ("Cash Collateral"), solely in accordance with the terms of this order
(the "Interim Order"), upon which the Lenders have asserted perfected security interests and
liens; and a hearing (the "Interim Hearing") having been held by the Court on _____ .
2012 to consider the relief sought in the Motion; and pursuant to Bankruptcy Rule 4001, due and
sufficient notice of the Motion and the relief sought at the Interim Hearing having been given by
the Debtor to the Office of the United States Trustee, the United States Securities and Exchange
Commission, the Office of the United States Attorney for the District of Delaware, the Internal
Revenue Service, the Debtor's twenty (20) largest unsecured creditors and counsel to the
Lenders; and the Court having considered the offers of proof, evidence adduced, objections
1
The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is: XX-
XXX1317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202, Edwards, CO 81632.
01:12230351.3
asserted and the statements of counsel at the Interim Hearing; and it appearing to the Court that
granting the relief sought in the Motion on the terms and conditions herein contained is
necessary and essential to enable the Debtor to continue to manage the Club, the Course, the
Facilities and Real Property and that such relief is fair and reasonable and that entry of this
Interim Order is in the best interest of the Debtor and its estate and creditors; and due
deliberation and good cause has been shown to grant the relief sought in the Motion as modified
herein:
NOW, THEREFORE,
A. Capitalized terms used, but not defined herein shall have the meaning set
forth in the Motion.
B. On June 26, 2012 ("Petition Date"), the Debtor filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code in this case (the "Case"), and it has continued
with the management and operation of its businesses and properties as a debtor-in-possession
pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
C. The Debtor asserts that, according to its books and records, as of the
Petition Date, the aggregate amounts outstanding on the Alpine Loan and the Wilhelm Loan
were approximately $12.7 million and $7.5 million, respectfully.
D. The Debtor asserts that the appraised value of the Real Property, in the
aggregate, is $33,000,000 based upon the appraisal by Chrysalis Valuation Consultants LLC
dated June 15, 2012 (the "Chrysalis Appraisal").
E. The Debtor has requested immediate entry of this Interim Order pursuant
to Bankruptcy Rule 400l(b)(2) and has an immediate need to obtain use ofthe Cash Collateral in
order to permit, among other things, the preservation of its assets upon which the Lenders assert
01:12230351.3
2
perfected security interests. Without such funds, the Debtor will be unable to pay the necessary
expenses associated with the management of the Club, the Course, the Facilities and the Real
Property including, without limitation, payroll, taxes, general maintenance costs and
administrative expenses. The ability of the Debtor to fund its operations through the use of the
purported Cash Collateral is vital to the Debtor and its efforts to maximize the value of its assets
and to reorganize under the Bankruptcy Code. Absent entry of this Interim Order, the Debtor's
estate will be immediately and irreparably harmed.
F. Notice of the requested relief sought at the Interim Hearing was provided
by the Debtor to: (a) the Office of the United States Trustee; (b) the Lenders; and (c) the
Debtor's twenty (20) largest unsecured creditors. Given the nature of the relief sought the Court
concludes that sufficient and adequate notice of the Interim Hearing has been given pursuant to
Bankruptcy Rules 2002, 4001(b) and (d) and 9014 and Section 102(1) of the Bankruptcy Code as
required by Sections 361 and 363 of the Bankruptcy Code, and that, given the exigent
circumstances presented by the Motion, no further notice of, or hearing on, the relief sought at
the Interim Hearing and the relief granted herein is necessary or required.
G. Consideration of the Motion constitutes a "core-proceeding" as defmed in
28 U.S.C. 157(b )(2)(A), (B), (D), (M) and (0). This Court has jurisdiction over this
proceeding and the parties and property affected hereby pursuant to 28 U.S.C. 157 and 1334
and the Amended Standing Order of Reference from the United States District Court for the
District of Delaware dated as of February 29, 2012.
H. Based on the Chrysalis Appraisal, adequate protection exists in Lender's
interests in Cash Collateral proposed to be used by the Debtor by virtue of the equity cushion in
the Real Property and as otherwise provided below.
01: 122303 51.3
3
I. Under the circumstances, good, adequate and sufficient cause has been
shown to justify entry of this Interim Order. Among other things, granting the relief set forth in
this Interim Order will permit the Debtor to meet its expenses and to maximize value for the
benefit of creditors.
NOW, THEREFORE, UPON THE RECORD OF THE PROCEEDINGS
HERETOFORE HELD BEFORE TIDS COURT WITH RESPECT TO THE MOTION,
THE EVIDENCE ADDUCED AT THE INTERIM HEARING, AND THE STATEMENTS
OF COUNSEL THEREAT, IT IS HEREBY ORDERED THAT:
1. Subject to the terms and conditions of this Interim Order, the Court hereby
authorizes the Debtor's use during the period (the "Budget Period") beginning on the Petition
Date and ending on the Expiration Date (as defined below in paragraph 5) of purported Cash
Collateral for the disbursements set forth in the budget which is attached as Exhibit A hereto (the
"Budget"), or in such greater amounts as Lenders may authorize and consent to from time to
time. The expenditures authorized in the Budget shall include a 10% variance for any individual
line item within the Budget Period.
2. As adequate protection for the Debtor's use of purported Cash Collateral
during the interim period between the Petition Date and the final hearing on the Motion, the
Debtor shall be authorized to make the expenditures set forth in the Budget, provided, however,
that (a) nothing in this Interim Order shall constitute a determination by the Court regarding (i)
the extent, if any, to which any asset of the Debtor may constitute "cash collateral" (as defined in
section 363 of the Bankruptcy Code) pursuant to the terms of this Interim Order, (ii) the
entitlement of any party to receive any form of adequate protection, and (b) the rights of all
parties with respect to the foregoing matters set forth in clause (a) hereof are expressly reserved.
01:12230351.3
4
3. As adequate protection for, and to secure payment of, in an amount equal
to the aggregate diminution in the value of the purported Cash Collateral from the Petition Date
as a result of the use thereof, the Debtor hereby grants to Alpine the following adequate
protection:
a. A security interest in and lien upon (the "Alpine Replacement Lien"), all of the
Debtor's now existing or hereafter acquired personal property of the same type as
the Personal Property Collateral in which it has an interest, but specifically
excluding avoidable transfer claims and recoveries and/or similar claims and
recoveries pursuant to Sections 542 through 550, of the Bankruptcy Code, to
further protect Alpine from any potential or actual loss due to the use by the
Debtor of purported Cash Collateral. The Alpine Replacement Lien is to be
granted to the same extent, and with the same validity and priority, as Alpine's
lien in the Debtor's Cash Collateral existing on the Petition Date and which such
Cash Collateral is used thereafter.
4. As adequate protection for, and to secure payment of, in an amount equal
to the aggregate diminution in the value of the purported Cash Collateral from the Petition Date
as a result of the use thereof, the Debtor hereby grants to Wilhelm the following adequate
protection:
01:12230351.3
a. A security interest in and lien upon (the "Wilhelm Replacement Lien"), all of the
Debtor's now existing or hereafter acquired personal property of the same type as
the Personal Property Collateral in which it has an interest, but specifically
excluding avoidable transfer claims and recoveries and/or similar claims and
recoveries pursuant to Sections 542 through 550, of the Bankruptcy Code, to
5
further protect Wilhelm from any potential or actual loss due to the use by the
Debtor of purported Cash CollateraL The Wilhelm Replacement Lien is to be
granted to the same extent, and with the same validity and priority, as Wilhelm's
lien in the Debtor's Cash Collateral existing on the Petition Date and which such
Cash Collateral is used thereafter.
5. The rights of all parties in interest are hereby reserved with respect to the
Final Hearing, including, but not limited to, asserting that any property is not subject to Lenders'
asserted liens and any property may be used by the Debtor and its estate in the operation of its
business and the administration of the case. Further, the Debtor, as well as any creditor's
committee appointed in the Debtor's case or other creditors or parties-in-interest as may have
standing under applicable law, reserve their rights to dispute that Lenders (or either of them) hold
a valid, enforceable, perfected and/or unavoidable security interest in and/or liens upon the Cash
Collateral or other Collateral or property, including the Real Property and/or the Personal
Property, as well as any Cash Collateral derived from Debtor's business operations which is
subject to the security agreements between Lenders and the Debtor; and nothing in the Motion or
this Interim Order shall act to confirm, acknowledge or ratify the validity, perfection or amount
of either Lender's pre-petition lien on any Collateral or other property, or either Lender's debt or
claims, nor act as a waiver of the right of the Debtor to impose additional security interests or
liens on any Collateral or other property, whether senior or junior to Lenders' liens, nor act as a
waiver of any claims against Lenders, a waiver of rights under 11 U.S. C. 506( c), a "rollover"
of pre-petition debt of Lenders to post-petition debt, the granting of relief from the automatic
stay, nor to operate to divest the Debtor of any discretion in the formulation of a plan or
01:12230351.3
6
administration of the estate or limit access to the Court to seek any relief under applicable
provisions of law, including without limitation, with respect to the treatment of claims.
6. The Debtor's authorization to use purported Cash Collateral pursuant to
this Interim Order shall terminate on the earliest to occur of (each such occurrence being
hereinafter referred to as a "Termination Event"): (a)------' 2012 (the "Expiration
Date"); (b) the dismissal of the Case or the conversion of the Case to a case under Chapter 7 of
the Bankruptcy Code; (c) the appointment or election of a trustee, examiner with expanded
powers or any other representative with expanded powers; (d) the occurrence of the effective
date or consummation date of a plan of reorganization for the Debtor; (e) the entry of an order of
this Court reversing, staying, vacating or otherwise modifying in any material respect the terms
of this Interim Order; (f) the entry of a fmal order approving a superseding stipulation entered
into by and between the Debtor and Lenders; or (g) the entry of a final order by this Court
governing the use of the Cash Collateral. On and after the occurrence of a Termination Event
specified in the Clauses (a) through (e) above, the Debtor shall, within two (2) business days,
cease using purported Cash Collateral absent the written consent of any party claiming an
interest in such Cash Collateral or further order of this Court.
7. The Debtor is authorized and directed to perform all acts and to make,
execute and deliver any and all instruments as may be reasonably necessary to implement the
terms and conditions of this Interim Order and the transactions contemplated hereby.
8. The provisions of this Interim Order shall be binding upon any trustee
appointed during this Case or upon a conversion to a Case under Chapter 7 of the Bankruptcy
Code, and any actions taken pursuant hereto shall survive entry of any order which may be
01:12230351.3
7
entered converting the Case to a Chapter 7 case, or dismissing the Case, or any order which may
be entered confirming or consummating any plan(s) ofreorganization.
9. The terms of this Interim Order shall be valid and binding upon the
Debtor, all creditors of the Debtor and all other parties in interest from and after the entry of this
Interim Order by this Court. In the event this Court stays, modifies or vacates any of the
provisions of this Interim Order following any further hearing, such modifications, stays or
vacation shall not affect the rights of the Lenders granted pursuant to this Interim Order.
10. Notwithstanding any such stay, modification or vacation, any
indebtedness, obligation or liability incurred by the Debtor pursuant to this Interim Order arising
prior to the Lenders' receipt of notice of the effective date of such stay, modification or vacation
shall be governed in all respects by the original provision of this Interim Order, and the Lenders
shall continue to be entitled to all of the rights, remedies, privileges and benefits, authorized
herein, with respect to all such indebtedness, obligation or liability, and the validity of any
payments made or obligations owed or credit extended pursuant to this Interim Order is and shall
remain subject to the protection afforded under the Bankruptcy Court.
11. The Final Hearing on the Motion is scheduled for ______ , 2012
at_ o'clock _.m. before this Court (the "Final Hearing").
12. The Debtor shall promptly mail copies of this Interim Order to the parties
having been given notice of the Interim Hearing and to any other party which has filed a request
for notices with this Court. Any party in interest objecting to the relief sought at the Final
Hearing shall serve and file written objections by no later than ________ ,, 2012 at
4:00 p.m. which objections shall be served so as to be received on such date, upon (i) Young,
Conaway Stargatt & Taylor, LLP, 1000 North King Street, Wilmington, Delaware 19889-0391,
01:12230351.3
8
Attention: Joseph M. Barry, and, Foley & Lardner LLP, 402 W. Broadway, Suite 2100, San
Diego, California 92101, Attn: Christopher Celentino, Proposed Attorneys for the Debtor, (ii)
counsel for the Lenders, (iii) counsel to any statutory committees appointed in these cases, and
(iv) the Office of the United States Trustee for the District of Delaware, 844 King Street, Suite
2207, Wilmington, Delaware 19801, Attention: Mark Kenney.
13. This Interim Order shall constitute findings of fact and conclusions oflaw
and shall take effect and be fully enforceable immediately upon entry hereof.
Dated: Wilmington, Delaware
June_,2012
01:12230351.3
United States Bankruptcy Judge
9
Exhibit A
Budget
Weeki Week2 Week3
Revenues:
Membership Dues Social & Golf $ 85,057 $ - $
-
Other Revenue- member past due accounts, collections $ 6,500 $ 500 $ 500
Member trade revenues & dues AIR $ 12,500 $ 12,500 $ 12,500
Public Play $ 19,800 $ 15,300 $ 16,200
Golf Revenue {greens, cart fees ,rental, other) $ 35,000 $ 30,000 $ 25,000
Golf Shop Sales $ 8,250 $ 5,500 $ 5,500
Food and Beverage $ 13,100 $ 10,900 $ 10,900
TOTAL REVENUES $ 180,207 $ 74,700 $ 70,600
Cost of Goods: F&B
Golf Operations $ {8,218) $ {6,745) $ {5,795)
Food & Beverage {coffee stations, lunch, dinner) $ {4,716) $ (3,924) $ {3,924)
TOTAL COST OF GOODS $ {12,934) $ {10,669) $ {9,719)
Net Revenue $ 167,274 $ 64,031 $ 60,881
Operating Expenses:
Golf Operations $ {9,800) $ {16,605) $ [9,850)
Golf Course Maint $ {14,000) $ (65,620) $ (14,000)
Clubhouse Staff; F & B $ - $ {13,407) $ -
General I Administrative I Management $ (13,896) $ (16,407) $ (2,200)
IT $ (800) $ (800) $ {800)
HR $ - $ (15,144) $ -
Engineering $ {2,105) $ (7,874) $ (2,105)
Marketing $ - $ - $ -
Sales Staff $ - $ (2,500) $ -
Commissions on Sales 3% $
-
$
-
$ -
Legal $ - $
-
$ {1,500)
Recreation {note 2) $ {100) $ (2,062) $ -
Utility Deposit $ {32,000)
Fixed {Insurance, leases, property tax, POA) $ {28,930) $ (9,600) $ (15,000)
TOTAL OPERATION EXPENSES $ (101,631) $ {150,019) $ {45,455)
EBITDA $ 65,643 $ {85,988} $ 15,426
Origination fee $ {94,000)
Interest Expense- D.LP. financing $ (752,000)
DIP Loan- In Process $ 4,700,000
Legal, Restructuring and US TRUSTEE FEES $ (125,000)
Keen Origination Fee $ (94,000)
Capital Exp- Graham Ditch $ (40,000)
Net Cash Flow $ 3,785,643 $ {85,988) $ (109,574)
Cumulative Cash Flow $3,785,643 $3,699,655 $3,590,081
Footnotes:
1. Witholdings from employee compensation for 401k contributions are pass through items and hence are not
reflected as part of the budget.
2. Recreation expense represents expenses incurred in connection with various non-golf activities
such as tennis, swimming pool and personal training.
Week4 TOTAL
$ - $ 85,057
$ -
$ 500 $ 8,000
$ 12,500 $ 50,000
$ 16,200 $ 67,500
$ 30,000 $ 120,000
$ 5,750 $ 25,000
$ 10,200 $ 45,100
$ 75,150 $ 400,657
$ {6,793) $ {27,550)
$ (3,672.) $ (16,236)
$ {10,465)
$ {43,786)
$ 64,686 $ 356,871
$ (23,944) $ {60,199)
$ (79,352) $ {172,972)
$ {13,407) $ {26,814)
$ {20,817) $ (53,320)
$ {4,600) $ {7,000)
$ {15,144) $ (30,288)
$ (8,825) $ (20,909)
$ - $ -
$ {2,500) $ {5,000)
$
-
$
-
$
-
$ (1,500)
$ (3,028) $ (5,190)
$ (39,520) $ {93,050)
$ (211,137) $ {508,242)
$ {146,452) $ {151,371}
$ (94,000)
$ (752,000)
$ 4,700,000
$ {125,000)
$ (94,000)
$ -
$ (146,452) $ 3,483,629
$3,443,629 $0
EXHIBITB
Interim Order
01:12240983.1
Inre:
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
Chapter 11
Cordillera Golf Club, LLC,
1
dba The Club at Cordillera,
Case No. 12-11893 (CSS)
Ref. Docket No. 9
Debtor.
INTERIM ORDER
(A) AUTHORIZING DEBTOR'S USE OF CASH COLLATERAL,
(B) GRANTING ADEQUATE PROTECTION, AND
(C) SCHEDULING FINAL HEARING
PURSUANT TO BANKRUPTCY RULE 4001
Upon the motion (the "Motion")ofthe above-referenced debtor, as debtor-in-
possession (the "Debtor"), seeking this Court's authorization pursuant to Sections 105, 361, 362
and 363 of the United States Bankruptcy Code, 11 U.S.C. 101 et ~ . ( t h e "Bankruptcy
Code"), and Ru1es 2002, 4001 and 9014 of the Federal Rules of Bankruptcy Procedure (the
"Bankruptcy Rules"), for the Debtor to use cash collateral, as such term is defined in Section 363
of the Bankruptcy Code ("Cash Collateral"), solely in accordance with the terms ofthis order(the
"Interim Order"), upon which the Lenders have asserted perfected security interests and liens;
and a hearing (the "Interim Hearing") having been held by the Court on June 27, 2012 to
consider the relief sought in the Motion; and pursuant to Bankruptcy Rule 4001, due and
sufficient notice of the Motion and the relief sought at the Interim Hearing having been given by
the Debtor to the Office of the United States Trustee, the United States Securities and Exchange
Commission, the Office of the United States Attorney for the District of Delaware, the Internal
01:12244107.2
The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is:
XX- XXX 1317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202,
Edwards, CO 81632.
Revenue Service, the Debtor's twenty (20) largest unsecured creditors and counsel to the
Lenders; and the Court having considered the offers of proof, evidence adduced, objections
asserted and the statements of counsel at the Interim Hearing; and it appearing to the Court that
granting the relief sought in the Motion on the terms and conditions herein contained is fair and
reasonable and that entry of this Interim Order is in the best interest of the Debtor and its estate
and creditors; and due deliberation and good cause has been shown to grant the relief sought in
the Motion as modified herein:
NOW, THEREFORE,
A Capitalized terms used, but not defined herein shall have the
meaning set forth in the Motion.
B. On June 26, 2012 ("Petition Date"), the Debtor filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code in this case (the "Case"),
and it has continued with the management and operation of its businesses and
properties as a debtor-in-possession pursuant to Sections 1107 and 1108 of the
Bankruptcy Code.
C. The Debtor asserts that, according to its books and records, as of
the Petition Date, the aggregate principal amounts outstanding on the Alpine Loan
and the Wilhelm Loan were approximately $12.7 million and $7.5 million,
respectively. Each of the Lenders asserts a security interest in, among other things,
Cash Collateral to secure their respective Loans.
The Debtor asserts that the appraised value of the Real Property, in the aggregate, is $33,000,000
based upon the appraisal of Chrysalis Valuation Consultants LLC dated June 5, 2012 (the
"Chrysalis Appraisal"). Neither Alpine nor Wilhelm stipulate to the Debtor's assertion in this
regard, nor is the Court entering any findings with respect to such assertion by the Debtor.
01:12244107.2
2
01:12244107.2
D. The Debtor has requested immediate entry of this Interim Order
pursuant to Bankruptcy Rule 4001(b)(2) to meet expenses associated with the
management of the Club, the Course, the Facilities and the Real Property including,
without limitation, payroll, taxes, general maintenance costs and administrative
expenses.
E. Notice of the requested relief sought at the Interim Hearing was
provided by the Debtor to: (a) the Office of the United States Trustee; (b) the
Lenders; and (c) the Debtor's twenty (20) largest unsecured creditors. Given the
nature of the relief sought the Court concludes that sufficient and adequate notice of
the Interim Hearing has been given pursuant to Bankruptcy Rules 2002, 4001 (b) and
(d) and 9014 and Section 102(1) ofthe Bankruptcy Code as required by Sections 361
and 363 of the Bankruptcy Code, and that, given the exigent circumstances presented
by the Motion, no further notice of, or hearing on, the relief sought at the Interim
Hearing and the relief granted herein is necessary or required.
F. Consideration of the Motion constitutes a "core-proceeding" as
defined in28 U.S.C. 157(b)(2)(A), (B), (D), (M) and (0). This Court has
jurisdiction over this proceeding and the parties and property affected hereby
pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of
Reference from the United States District Court for the District of Delaware dated as
of February 29, 2012.
G. Under the circumstances, good, adequate and sufficient cause has
been shown to justify entry of this Interim Order. Among other things, granting the
relief set forth in this Interim Order will permit the Debtor to meet its expenses.
3
H. The Lenders have consented to the Debtor's use of Cash Collateral
on an interim basis on the terms and conditions hereinafter set forth.
NOW, THEREFORE, UPON THE RECORD OF THE PROCEEDINGS
HERETOFORE HELD BEFORE THIS COURT WITH RESPECT TO THE MOTION,
THE EVIDENCE ADDUCED AT THE INTERIM HEARING, AND THE STATEMENTS
OF COUNSEL THEREAT, IT IS HEREBY ORDERED THAT:
1. Subject to the terms and conditions of this Interim Order, the Court hereby
authorizes the Debtor's use during the period (the "Budget Period") beginning on the Petition
Date and ending on the Expiration Date (as defined below in paragraph 5) of purported Cash
Collateral for the disbursements set forth in the budget which is attached as Exhibit A hereto (the
"Budget"), or in such greater amounts as Lenders may authorize and consent to from time to
time. The expenditures authorized in the Budget shall include a 10% variance for each
individual line item within the Budget Period (the "Budget Variance").
2. During the interim period between the Petition Date and the final hearing
on the Motion, the Debtor shall be authorized to make the expenditures set forth in the Budget,
subject to the Budget Variance, and to provide the adequate protection to the Lenders hereinafter
set forth; provided, however, that (a) nothing in this Interim Order shall constitute a
determination by the Court regarding (i) the extent, if any, to which any asset of the Debtor may
constitute "cash collateral" (as defined in section 363 ofthe Bankruptcy Code), (ii) the
entitlement of any party to receive any form of adequate protection on a fmal basis or the
adequacy of any such protection offered or proposed by the Debtor, (iii) the value of the Real
Property or any other asset of the Debtor, or (iv) whether there exists any or sufficient equity
01:12244107.2
4
cushion in relation to the Lenders' secured claims, and (b) the rights of all parties with respect to
the foregoing matters set forth in clause (a) hereof are expressly reserved.
3. As adequate protection for, and to secure payment of, an amount equal to
the aggregate diminution in the value of the purported Cash Collateral from the Petition Date as a
result of the use thereof, the Debtor hereby grants to Alpine the following adequate protection:
01:12244107.2
a A security interest in and lien upon (the "Alpine Replacement
Lien"), all of the Debtor's now existing or hereafter acquired
property of the same type as the Alpine Collateral, but specifically
excluding avoidable transfer claims and recoveries and/or similar
claims and recoveries pursuant to Sections 542 through 550, of the
Bankruptcy Code. The Alpine Replacement Lien shall have the
same validity and priority as Alpine's lien on the Alpine Collateral
existing on the Petition Date.
b. To the extent that the Alpine Replacement Lien proves insufficient
to provide Alpine with adequate protection, an allowed
superpriority administrative claim, pursuant to Bankruptcy Code
section 507(b), having priority over all other administrative claims
(the "Alpine Administrative Claim").
c. The Alpine Replacement Liens shall be deemed valid, binding,
enforceable, and perfected without the need for the recording of
UCC financing statements or any other recordation or additional
action by Alpine.
5
4. As adequate protection for, and to secure payment of, in an amount equal
to the aggregate diminution in the value of the purported Cash Collateral from the Petition Date
as a result of the use thereof, the Debtor hereby grants to Wilhelm the following adequate
protection:
0 l: 12244107.2
a. A security interest in and lien upon (the "Wilhelm Replacement
Lien"), all ofthe Debtor's now existing or hereafter acquired
property of the same type as the Wilhelm Collateral, but
specifically excluding avoidable transfer claims and recoveries
and/or similar claims and recoveries pursuant to Sections 542
through 550, of the Bankruptcy Code. The Wilhelm Replacement
Lien shall have the same validity and priority as Wilhelm's lien on
the Wilhelm Collateral existing on the Petition Date.
b. To the extent that the Wilhelm Replacement Lien proves
insufficient to provide Wilhelm with adequate protection, an
allowed superpriority administrative claim, pursuant to Bankruptcy
Code section 507(b), having priority over all other administrative
claims except the Alpine Administrative Claim, as to which it shall
have the same priority as the Lenders' respective interests in the
Collateral.
c. The Wilhelm Replacement Liens shall be deemed valid, binding,
enforceable, and perfected without the need for the recording of
UCC financing statements or any other recordation or additional
action by Wilhelm.
6
5. The rights of all parties in interest are hereby reserved with respect to the
Final Hearing, including, without limitation, with respect to the matters identified in paragraph 2
hereof, and otherwise with respect to this proceeding, except as expressly set forth herein.
Without limiting the generality of the foregoing:
01:12244107.2
a. The Debtor may assert that any property is not subject to Lenders'
asserted liens and any property may be used by the Debtor and its
estate in the operation of its business and the administration of the
case. Further, the Debtor, as well as any creditor's committee
appointed in the Debtor's case or other creditors or parties-in-
interest as may have standing under applicable law, reserve their
rights to dispute that Lenders (or either of them) hold a valid,
enforceable, perfected and/or unavoidable security interest in
and/or liens upon the Cash Collateral or other Collateral or
property, including the Real Property and/or the Personal Property,
as well as any Cash Collateral derived from Debtor's business
operations which is subject to the security agreements between
Lenders and the Debtor; and nothing in the Motion or this Interim
Order shall act to confirm, acknowledge or ratify the validity,
perfection or amount of either Lender's pre-petition lien on any
Collateral or other property, or either Lender's debt or claims, nor
act as a waiver of the right of the Debtor to seek an order of this
Court imposing additional security interests or liens on any
Collateral or other property, whether senior or junior to Lenders'
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01:12244107.2
liens, nor act as a waiver of any claims against Lenders, a waiver
of rights under 11 U.S.C. 506(c), a "rollover" of pre-petition debt
of Lenders to post-petition debt, the granting ofrelieffrom the
automatic stay, nor to operate to divest the Debtor of any discretion
in the formulation of a plan or administration of the estate or limit
access to the Court to seek any relief under applicable provisions
oflaw, including without limitation, with respect to the treatment
of claims.
b. Nothing in this Order shall limit or affect the right of either Lender
to oppose on any available grounds any other or further use of
Cash Collateral other than as set forth in this Interim Order, any
attempt by the Debtor to place additional liens or security interests
on any of the Collateral, or any other relief or order of this Court
sought by the Debtor, including, without limitation, on the basis
that the interests of such Lender are not being adequately
protected. Further, nothing in this Order shall limit or affect the
right of either Lender to seek relief from the automatic stay or such
other relief in this proceeding as such Lender shall deem necessary
or appropriate, including, without limitation, a transfer of venue of
this proceeding to the District of Colorado, or to otherwise take
such position on any matter raised in this proceeding as such
Lender shall elect.
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6. During the Budget Period, The Debtor shall provide to Alpine Bank, by
and through counsel, within three (3) days following the end of each week, a report of all income
received by the Debtor and all expenses paid by the Debtor during such week, formatted in line
item form in a manner consistent with the Budget, and including a comparison of such actual
results as against the Budget's projections.
7. The Debtor's authorization to use purported Cash Collateral pursuant to
this Interim Order shall terminate on the earliest to occur of (each such occurrence being
hereinafter referred to as a "Termination Event"):( a) July 27, 2012 (the "Expiration Date");
(b) the dismissal of the Case or the conversion of the Case to a case under Chapter 7 of the
Bankruptcy Code; (c) the appointment or election of a trustee, examiner with expanded powers
or any other representative with expanded powers; (d) the Debtor's deviation from any line item
of the Budget by more than the Budget Variance during the Budget Period without the express
consent of Alpine; (e) the occurrence of the effective date or consummation date of a plan of
reorganization for the Debtor; (f) the entry of an order of this Court reversing, staying, vacating
or otherwise modifying in any material respect the terms of this Interim Order; (g) the entry of a
final order approving a superseding stipulation entered into by and between the Debtor and
Lenders; or (h) the entry of a final order by this Court governing the use of the Cash Collateral.
On and after the occurrence of a Termination Event specified in the Clauses (a) through (f)
above, the Debtor shall cease using purported Cash Collateral, absent the written consent of any
party claiming an interest in such Cash Collateral or further order of this Court.
8. The Debtor is authorized and directed to perform all acts and to make,
execute and deliver any and all instruments as may be reasonably necessary to implement the
terms and conditions of this Interim Order and the transactions contemplated hereby.
01:12244107.2
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9. The provisions of this Interim Order shall be binding upon any trustee
appointed during this Case or upon a conversion to a Case under Chapter 7 of the Bankruptcy
Code, and any actions taken pursuant hereto shall survive entry of any order which may be
entered converting the Case to a Chapter 7 case, or dismissing the Case, or any order which may
be entered confirming or consummating any plan(s) of reorganization.
10. The terms ofthis Interim Order shall be valid and binding upon the
Debtor, all creditors of the Debtor and all other parties in interest from and after the entry of this
Interim Order by this Court. In the event this Court stays, modifies or vacates any of the
provisions of this Interim Order following any further hearing, such modifications, stays or
vacation shall not affect the rights of the Lenders granted pursuant to this Interim Order.
11. Notwithstanding any such stay, modification or vacation, any
indebtedness, obligation or liability incurred by the Debtor pursuant to this Interim Order arising
prior to the Lenders' receipt of notice of the effective date of such stay, modification or vacation
shall be governed in all respects by the original provision of this Interim Order, and the Lenders
shall continue to be entitled to all of the rights, remedies, privileges and benefits, authorized
herein, with respect to all such indebtedness, obligation or liability, and the validity of any
payments made or obligations owed or credit extended pursuant to this Interim Order is and shall
remain subject to the protection afforded under the Bankruptcy Court.
12. The Final Hearing on the Motion is scheduled for July 27, 2012 at 1:00
p.m. (ET) before this Court (the "Final Hearing").
13. The Debtor shall promptly mail copies of this Interim Order to the parties
having been given notice of the Interim Hearing and to any other party which has filed a request
for notices with this Court. Any party in interest objecting to the relief sought at the Final
01:12244107.2
10
Hearing shall serve and file written objections by no later than July 20, 2012 at 4:00p.m. (ET)
which objections shall be served so as to be received on such date, upon (i) Young, Conaway
Stargatt & Taylor, LLP, 1000 North King Street, Wilmington, Delaware 19889-0391, Attention:
Joseph M. Barry, and, Foley & Lardner LLP, 402 W. Broadway, Suite 2100, San Diego,
California 92101, Attn: Christopher Celentino, Proposed Attorneys for the Debtor, (ii) counsel
for the Lenders, (iii) counsel to any statutory committees appointed in these cases, and (iv) the
Office of the United States Trustee for the District of Delaware, 844 King Street, Suite2207,
Wilmington, Delaware 19801, Attention: Mark Kenney.
1 S: This Interim Order shall constitute findings of fact and conclusions of law
and shall take effect and be fully enforceable immediately upon
Dated: Wilmington, Delaware
June2]2012
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