12-50073-lmc Doc#153 Filed 03/21/12 Entered 03/21/12 11:21:39 Main Document Pg 1 of 5

UNITED STATES BANKRUPTCY COURT WESTERN DISTRICT OF TEXAS SAN ANTONIO DIVISION IN RE: DELTA PRODUCE, L.P.1 DEBTOR CASE NUMBER 12-50073-LMC

CHAPTER 11

MOTION TO LIMIT THE TIME TO ASSUME OR REJECT AN EXECUTORY CONTRACT TO THE HONORABLE JUDGE OF THIS COURT: NOW COMES Wortham Insurance & Risk Management (hereinafter "Wortham") and pursuant to 11 U.S.C 365(d), and Rules 6006 and 9014 of the Rules of Bankruptcy Procedure, files this its Motion to Limit the Time to Assume or Reject an Executory Contract. In support of its motion, Movant would show the following: 1. On or about January 3, 2012, Delta Produce, L.P. (hereinafter Delta) and Superior Tomato Avocado, Ltd. (hereinafter Superior) filed voluntary petitions for relief under Chapter 11 U.S.C. 1101 et seq. (the Bankruptcy Code) in the Western District of Texas. 2. Prior to the filing of these petitions, Wortham served as the insurance agent for Delta and Superior. In that regard, Wortham procured certain insurance policies through The Cincinnati Indemnity Company and St. Paul Travelers Insurance Company on behalf of Delta and Superior with a three year term, beginning April 5, 2010 and ending April 4, 2013. The policies with a three year contract provision include: DELTA: Property and Inland Marine Scheduled Equipment Electronic Data Processing Crime Insurance Equipment Breakdown Commercial General Liability Business Automobile Commercial Umbrella SUPERIOR Property Equipment Breakdown Scheduled Equipment Commercial General Liability Business Automobile Commercial Umbrella
1

Debtors include both Delta Produce, L.P. Case No. 12-50073 and Superior Tomato Avocado, Ltd. Case No. 12-50074.

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4.

Upon information and belief, Delta and Superior did not understand that these contracts

were executory in nature and were under the belief that the policies would expire, of their own accord, on April 5, 2012. As a result, Delta and Superior failed to list these insurance contracts as executory contracts in their petitions. 5. However, because these insurance policies were initially offered as three year policies with annual premium adjustments, Wortham, as the agent for these policies is obligated to offer them to Delta and Superior for renewal through April 5, 2013. Therefore, and in order to comply with its obligations as agent for the policies, Wortham notified Delta and Superior on or around March 16, 2012, by and through their counsel, that the above referenced insurance policies were coming up for renewal and requested that Delta and Superior voluntarily either assume these contracts or reject them. 6. Pursuant to 365(d)(2), Delta and Superior have the right to assume or reject an executory contract at any time before the confirmation of a plan, but the Court, on request of any party to such contract or lease, may order the trustee to determine within a specified period of time whether to assume or reject such contract or lease. 7. Wortham requests that this Court order Delta and Superior to either assume or reject the above referenced insurance contracts on or before March 30, 2012. The reason to limit the time to assume or reject these contracts is because, upon information and belief, Wortham alleges that Delta and Superior are without sufficient funds to pay for the premiums and will not be able to procure financing for the premiums which are due, in full, on or before midnight on April 4, 2012. The amount due for Deltas renewals is $72,621.00 and the amount due for Superior is $23,227.00. 8. As a result of Delta and Superiors inability to pay or finance the premiums, Wortham will be obligated, pursuant to its contract with the insurance carrier, to pay the full amount of the annual premiums to The Cincinnati Indemnity Company and St. Paul Travelers Insurance Company on behalf of Delta and Superior, incurring an expense to its account of almost $96,000.00.2 The liability of this extremely large expense given the likelihood of non-payment by Delta and/or Superior would be an unnecessary burden to be undertaken by Wortham, especially when Delta and Superior were unaware that the policies would renew, and were actually under the impression that policies would expire of their own accord. 9. Presuming Delta and Superior agree to reject these contracts by March 30, 2012, Wortham will suffer no harm since it will have sufficient time to cancel the contracts with the insurance carrier. However, if Delta and Superior do not agree to reject these contracts or attempt to assume them, Wortham will require adequate protection in the form of payment in full of the premiums due on or before April 4, 2012. Therefore, simultaneously with the filing of this Motion to Limit Time to Assume or
A portion of the annual premium amounts could be refunded at a later date, but a portion would necessarily be earned if the policy is not terminated by midnight April 4, 2012.
2

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Reject an Executory Contract, Wortham is filing a Motion to Lift Stay, for cause, based on a lack of adequate protection, requesting that this Court order Delta and Superior to pay Wortham the full amount of all premiums due on or before April 4, 2012 in order to maintain the stay of any action by Wortham to cancel the insurance policies at issue. WHEREFORE, PREMISES CONSIDERED, the Wortham respectfully requests that the Court order Delta and Superior to assume or reject the insurance contracts that are subject of this Motion on or before March 30, 2012, and for such other and further relief in law and in equity as is just. Respectfully submitted, HABBESHAW KALMANS P.C. The Colonnade, Suite 460 9901 I. H. 10 West San Antonio, TX 78230 (210) 699-8086 (210) 699-3409 (Fax) By: /s/Patricia A. Kalmans Patricia A. Kalmans State Bar No. 11082500

CERTIFICATE OF SERVICE I hereby certify that on the 21st day of March, 2012, a true and correct copy of the foregoing Motion was served via electronic means to all parties entitled to receive electronic notice, as well as all parties entitled to receive notice but not enlisted to receive electronic notice (including the Debtor and parties who have filed a notice of appearance requesting service by mail) by first class mail, postage prepaid, and the 20 largest unsecured creditors /s/Patricia A. Kalmans Patricia A. Kalmans Debtor: Delta Produce, LP 201 S. Laredo St. San Antonio, TX 78207 Debtors Attorney Allen M. DeBard R. Glen Ayers, Jr William R. Davis, Jr. Langley & Banack, Inc. 745 E. Mulberry, Suite 90 San Antonio, TX 78212 Debtors Attorney: Craig A. Stokes Stokes Law Offices, LLP 3330 Oakwefl Court, Suite 225 San Antonio,TX 78218

Debtor: Superior Tomato Avocado, Ltd. 2001 S. Laredo St. San Antonio, TX 78207 United States Trustee: Judy A. Robbins P.O. Box 1539 San Antonio, TX 78295-1 539

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20 Largest Unsecured Creditors Harvest Crown Co., Inc. P.O. Box 13578 Bakersfield, CA 93389 Harllee Packing, Inc. P.O. Box 8 Palmetto, FL 34220 A&A Transportation, Inc. 4741 College Park San Antonio, TX 78249 Slankard Produce Co., Inc. 1500 S. Zarzamora San Antonio, TX 78207 Divine Ripe, LLC 700 S. Bridge St., Suite C Hidalgo, TX 78557 Valero Marketing & Supply P.O. Box 300 Amarillo, TX 79105-0300 Rio Queen Citrus 4012 E. Goodwin Rd. Mission, TX 78574 Juniper Tomato Grower, Inc. P.O. Box 38 Greensboro, FL 32330 J-C Distributing, Inc 2731 N. Donna Ave Nogales, AZ 85621 Royal Flavor, LLC 2655 Melksee St. San Diego, CA 92154 Kingdom Fresh Produce, Inc. 2243 North Goolie Rd., #A Donna, TX 78537 Dimare Newman, Inc. P.O. Box 517 Newman, CA 95360-0517 Delta Produce Marketing 2001 S. Laredo St. San Antonio, TX 78207 Bonzana 2001 c/o Kevin P. Kelley 1278 W. Northwest Hwy, Ste. 903 Palatine, IL 60067 Parties Requesting Notice Randy A. Pulman, Leslie Hyman Elliott S. Cappuccio Pulman Cappuccio Pullen & Benson, LLP 2161 NW Military Hwy, Ste 400 San Antonio, TX 78213 Bruce W. Akerly Cantey Hanger, LLP 1999 Bryan St., Suite 3300 Dallas, TX 75201 Michael J. Black Burns & Black, PLLC 750 Rittiman Road San Antonio, TX 78209 Paul D. Barkhurst Barkhurst Hinojosa, PC 110 Broadway, Suite 350 San Antonio, TX 78205 Bernardi & Association 557 E. Frontage Rd Nogales, AZ 85621 Franks Distributing of Produce. P.O. Box 22020 Nogales, AZ 85628-2020 Mission Produce, Inc. 2500 Vineyard Ave., Suite 300 Oxnard, CA 93036 Del Camp Supreme, Inc. 672 W. Frontage Rd. Nogales, AZ 85621 Alamo Leasing 2010 NW Military Hwy San Antonio, TX 78213 IFCO Systems NA 5250 Tacco Drive San Antonio, TX 78207

David G. Aelvoet Linebarger Goggan Blair & Sampson, LLP 711 Navarro, Suite 300 San Antonio, TX 78205 Michael J. Colvard Martin & Drought, PC 2500 Bank of America Plaza 300 Convent St.

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San Antonio, TX 78205 Zachary B. Aoki Thurman & Phillips, PC 8000 111 10 West, Suite 1000 San Antonio, TX 78230 Stephen G. Wilcox Bassel & Wilcox P.O. Box 11509 Ft. Worth, TX 76110-0509 Robert J. Reagan Reagan McLain Lee & Hatch, LLP 6060 N. Central Expressway Suite 690 Dallas, TX 75206 William H. Daniel McGinnis, Lockridge & Kilgore,LLP 600 Congress Ave, Ste. 2100 Austin, TX 78701 Stephen E. Nurenberg Meuers Law Firm, P.L. 5395 Park Centra Court Naples, FL 34109 Jessie Lopez Stoke Law Office, LLP 3330 Oakwell Ct. Ste. 225 San Antonio, TX 78218 Evan Goldstein Updike, Kelley & Spellacy, P.C. 100 Pearl St., 17th Floor Hartford, CT 06123-1277 Celinda B. Guerra Flume Law Firm, LLP lO2O NE Loop 410, Suite 200 San Antonio, TX 78209 John Kurt Stephen Cardenas & Stephen, LLP 100 South Bicennial McAllen, TX 78501 Robert E. Goldman 1 East Broward Blvd., Suite 700 Ft. Lauderdale, FL 33301

Paul Thomas Curl Curl & Stahl, P.C. 700 North St. Marys St., Ste. 1930 San Antonio, TX 78205 Kevin P. Kelley Keaton & Assoc. 1278 W. Northwest Hwy, Ste. 903 Palatine, IL 60067 Scott Fink Lakeside Place, Suite 200 323 W. Lakeside Ave. Cleveland, OH 44113-1099 Diana M. Geis Curl & Stahl 700 N. St. Marys St. Suite 1930 San Antonio, TX 78205