COOLEY LLP 1114 Avenue of the Americas New York, New York 10036 Telephone: (212) 479-6000 Facsimile:

(212) 479-6275 Lawrence C. Gottlieb James A. Beldner Lesley A. Kroupa Proposed Attorneys for Debtor and Debtor in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------------------------------- x : : In re : : LEHR CONSTRUCTION CORP., : : Debtor. : ---------------------------------------------------------------- x

Chapter 11 Case No. 11-10723 (SHL) Re: Docket No. 60

LIMITED OBJECTION OF DEBTOR TO F&G MECHANICAL CORPORATION AND MEADOWLANDS FIRE PROTECTIONS MOTION FOR AN ORDER PURSUANT TO 11 U.S.C. 503(B)(1), 507(A), 365(D)(2), AND 362(D)(1) FOR AN ORDER (I) COMPELLING IMMEDIATE PAYMENT OF POST-PETITION ADMINISTRATIVE EXPENSE CLAIMS; AND (II) COMPELLING THE DEBTOR TO ASSUME OR REJECT EXECUTORY CONTRACTS OR, IN THE ALTERNATIVE, MODIFYING THE AUTOMATIC STAY TO PERMIT MOVANTS TO TERMINATE THE EXECUTORY CONTRACTS IN THEIR SOLE DISCRETION Lehr Construction Corp., as debtor and debtor in possession (the Debtor),1 hereby submits this limited objection (the Limited Objection) to the motion of F&G Mechanical Corporation (F&G) and Meadowlands Fire Protection (MFP) requesting entry of an order pursuant to sections 503(b)(1), 507(a), 365(d)(2) and 362(d)(1) of Chapter 11 of Title 11, United States Code (the Bankruptcy Code): (i) compelling allowance and immediate payment of postpetition administrative expense claims; and (ii) compelling the Debtor to assume

The last four digits of the Debtors federal tax identification number are 3507.

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or reject certain executory contracts or, in the alternative, modifying the automatic stay to permit F&G and MFP to terminate the executory contracts at their sole discretion (the Motion)2, the Debtor respectfully states as follows: BACKGROUND General 1. On February 21, 2011 (the Petition Date), the Debtor commenced with

this Court a voluntary case under chapter 11 of title 11 of the United States Code (the Bankruptcy Code). The Debtor is authorized to operate its businesses and manage its

properties as debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 2. On March 11, 2011, the Office of the United States Trustee (the U.S.

Trustee) appointed the official committee of unsecured creditors (the Committee). JURISDICTION 3. This Court has jurisdiction to consider this matter pursuant to 28 U.S.C.

157 and 1334. This is a core proceeding pursuant to 28 U.S.C. 157. Venue is proper before this Court pursuant to 28 U.S.C. 1408 and 1409. 4. The statutory bases for the relief requested herein are sections 503(b)(1),

507(a), 365(d)(2) and 362(d)(1) of the Bankruptcy Code. LIMITED OBJECTION A. Requested Relief: MFP and F&G Are Entitled to Allowed Administrative Expense Claims for Unpaid Postpetition Amounts Owed To Date Under the Purchase Orders and the Invoices, and the Court Should Compel the Debtors to Pay Such Postpetition Amounts Owed to F&G and MFP Immediately

Capitalized terms used but not defined herein shall have the meaning ascribed to them in the Motion.

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5.

The Debtor does not object to MFP and F&Gs statement that they are

entitled to allowed administrative expense claims for unpaid charges associated with goods, services and materials provided to the Debtor postpetition; however, the Debtor does object to F&G and MFPs assertion that the Outstanding Administrative Claim is $802,780.00. F&G and MFP do not provide sufficient detail in their Motion to ascertain what percentage of the Purchase Orders pertains to the prepetition period and what percentage pertains to the postpetition period. Based upon information and belief, pursuant to the Debtors books and records, the amount of unpaid charges associated with such postpetition goods and services is approximately $417,650.3 6. The Debtor further objects to MFP and F&Gs assertion that the Debtor

should be compelled to pay the Outstanding Administrative Claim to MFP and F&G immediately upon the Debtors receipt of such corresponding funds from the NBA to the extent the timing of such payment is outside the ordinary course of the provisions of the NBA Agreement, the F&G Purchase Order, or the MFP Purchase Order. 7. Moreover, as F&G and MFP are well aware, the Debtor has been in

discussions with the NBA to establish revised payment provisions such that F&G and MFP as well as other subcontractors and materialmen supplying goods and services to the Project will be paid via two-party checks issued by the NBA and the Debtor to alleviate concerns such subcontractors and materialmen may have regarding payments during the course of the Debtors chapter 11 case. B. Requested Relief: The Court Should Compel the Debtor to Immediately Assume or Reject the Purchase Orders 8. The Debtor objects to F&G and MFPs request that the Debtor be

compelled to immediately assume or reject the Purchase Orders. The Debtor has been diligently
The Debtor reserves all rights to further review its books and records to determine what percentage pertains to the prepetition and postpetition periods.
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working with the NBA and the subcontractors and materialmen involved with the Project to ensure that the Project can be completed in an orderly and timely fashion. Requiring the Debtor to assume the Purchase Orders at this early stage of this chapter 11 case is unnecessary and unwarranted. The Debtor has not had a reasonable time to assess its executory contracts and determine whether such contracts should be assumed or rejected. The harm to the estate could be great if the Debtor is required to assume the Purchase Orders in haste only to determine later that such contracts should be rejected, thus resulting in any contract rejection damages being awarded administrative status. Given that the Debtors chapter 11 case was initiated a mere 30 days ago, the Debtor should not be compelled to decide whether executory contracts should be assumed or rejected at this early stage of the case. C. Requested Relief: Alternatively, the Automatic Stay Should be Modified to Allow F&G and MFP to Terminate the Purchase Orders, at Their Sole Discretion. 9. The Debtor objects to F&G and MFPs request that the automatic stay be

lifted to allow F&G and MFP to terminate the purchase orders, at their sole discretion. Allowing F&G and MFP to terminate the Purchase Orders would have severe adverse consequences on the Debtors estate, the NBA, and the other subcontractors and materialmen involved in the Project. Given the substantial progress already made on the Project, the Debtor believes that it would be extremely difficult to locate alternative subcontractors and materialmen in a timely or costeffective manner. Transitioning the works in progress from F&G and MFP almost certainly would result in additional expenses to the Debtor and the NBA. 10. Further, as discussed above, the Debtor has been in frequent good faith

discussion with the NBA, F&G and MFP to ensure that the Debtor receives timely payments from the NBA and that such payments are transferred as soon as possible to the subcontractors

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and materialmen for any outstanding postpetition invoices that are due and payable. The lifting of the automatic stay would be premature at this early stage of this chapter 11 case. NOTICE 11. The Debtor has served notice of this Limited Objection on (i) the Office of

the United States Trustee for the Southern District of New York, and (ii) counsel to F&G and MFP. The Debtor submits that pursuant to the order shortening time entered on March 16, 2011 (Docket No. 62) no other or further notice need be provided. WHEREFORE, the Debtor respectfully requests entry of an order granting the Limited Objection to the extent set forth herein, and granting such other and further relief as the Court deems just and proper. Dated: March 21, 2011 New York, New York Respectfully submitted, By: /s/ James A. Beldner James A. Beldner

COOLEY LLP 1114 Avenue of the Americas New York, New York 10036 Telephone: (212) 479-6000 Facsimile: (212) 479-6275 Lawrence C. Gottlieb (LG 2565) James A. Beldner (JB 7166) Lesley A. Kroupa (LK 2620) Proposed Attorneys for Debtor and Debtor in Possession

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