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TARTER KRINSKY & DROGIN LLP Proposed Attorneys for The Christian Brothers Institute and The Christian Brothers of Ireland, Inc. Debtors and Debtors-in-Possession 1350 Broadway, 11th Floor New York, New York 10018 (212) 216-8000 Scott S. Markowitz, Esq. Ira R. Abel, Esq. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------------- x In re: : : THE CHRISTIAN BROTHERS INSTITUTE, et al. : : Debtor. : ------------------------------------------------------------------- x

Chapter 11 Case No.: 11-22820 (RDD) (Jointly Administered)

DEBTORS' MOTION FOR ORDER GRANTING AUTHORITY TO (I) MAINTAIN EXISTING BANK ACCOUNTS; (II) CONTINUE TO USE EXISTING BUSINESS FORMS; AND (III) GRANTING RELATED RELIEF TO: THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE The Christian Brothers Institute (CBI) 1 and The Christian Brothers of Ireland, Inc. (CBOI), 2 the above-captioned debtors and debtors-in-possession (individually a Debtor and together, the Debtors), by their proposed counsel, Tarter Krinsky & Drogin LLP, respectfully represent as follows: PRELIMINARY STATEMENT 1. By this motion, (the "Motion") the Debtors request entry of an order under 11

U.S.C. 105, 345, 363, 1107 and 1108, authorizing the Debtors to (i) maintain their existing

The last four digits of CBIs employer identification number are 0153 and its mailing address is 21 Pryer Terrace, New Rochelle, New York 10804. 2 The last four digits of CBOIs employer identification number are 0603 and its mailing address is10001 S. Pulaski, Room 106, Chicago, IL 60655-3356.
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bank accounts; and (ii) continue to use their existing business forms. JURISDICTION, VENUE AND STATUTORY BASIS FOR RELIEF 2. This Court has jurisdiction over this Motion under 28 U.S.C. 157 and 1334 and

the order of reference, dated July 10, 1984 (Ward, C.J.). This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). Venue of this proceeding and this Motion in this District is proper under 28 U.S.C. 1408 and 1409. 3. The statutory bases for the relief requested herein are 105(a), 345(b), 363, 1107

and 1108 of Title 11 of the Bankruptcy Code, 11 U.S.C. 101-1532 as amended from time to time. BACKGROUND 4. On April 28, 2011 (the Petition Date), each of the Debtors commenced their

Chapter 11 cases (the Cases) by filing a voluntary petition for relief under Chapter 11 of Title 11, United States Code (the Code). Pursuant to 1107(a) and 1108 of the Code, the Debtors continue to operate their businesses as debtors-in-possession. 5. Pursuant to an Order entered by this Court on May 2, 2011, the Debtors Chapter

11 cases have been consolidated for procedural purposes only. No trustee has been appointed. No official committee of unsecured creditors has as yet been appointed. 6. CBI is a domestic not-for-profit 501(c)(3) corporation organized under 102(a)(5)

of the New York Not-for-Profit Corporation Law. CBI was formed in 1903 pursuant to Section 57 of the then existing New York Membership Law. The Not-for-Profit Corporation Law replaced the Membership Law effective September 1, 1970. The purpose for which CBI was, and continues to be, formed was to establish, conduct and support Catholic elementary and secondary schools principally throughout New York State. As a not-for-profit corporation, the

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assets, and/or income are not distributable to, and do not inure to the benefit of its directors, or officers. CBI depends upon grants and donations to fund a portion of its operating expenses. 7. CBOI is a domestic not-for-profit 501(c)(3) corporation organized under the Not-

for-Profit Corporation Law of the State of Illinois. The purpose for which is to conduct and support Catholic elementary and secondary schools principally throughout the State of Illinois, as well as other spiritual and temporal affairs of the former Brother Rice Province of the Congregation of Christian Brothers. As a not-for-profit corporation, the assets, and/or income are not distributable to, and do not inure to the benefit of its members, or officers. CBOI depends upon grants and donations to fund a portion of its operating expenses. THE DEBTORS' PRE-PETITION BANK ACCOUNTS 8. Prior to the Petition Date, CBI maintained a separate operating and payroll

account (the Operating Account and the Payroll Account). The Operating Account is used to deposit and disburse CBIs general funds. 3 Funds from CBIs Operating Account are

transferred to the Payroll Account to provide payment of wages, salaries and related items. To the extent that CBI owes taxes, they are paid from the Operating Account. 9. The CBI Operating Account and the CBI Payroll Account are maintained at

JPMorgan Chase Bank. The accounts are listed on Exhibit A annexed hereto. The bank accounts listed on Exhibit A are referred to herein as the CBI Accounts. 10. Prior to the Petition Date, CBOI maintained an operating account, 4 a development

fund account, a scholarship fund account and the Brother Jack Manning endowment fund account (the CBOI Accounts). CBOI utilizes the operating account to pay all of its ordinary

The Debtors funds, generally consists of grant income, gifts and donations, assessments from charges to schools at which certain Brothers act as teachers or in other educational capacities (referred to as pro-rata assessments), contributed services. 4 The CBOI operating account is denoted as the General Fund account.
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operating expenses and as a depository account to receive operating funds. The development fund account is an account utilized to accept donations. The scholarship fund account is utilized to grant scholarships to students. The Brother Jack Manning endowment fund account holds monies donated by the family of Brother Jack Manning and such funds are restricted. CBOI can only withdraw the accrued interest. The CBOI accounts are listed on Exhibit B annexed hereto. 5 11. The CBI Accounts and the CBOI Accounts serve a variety of purposes, including

the payment of ordinary operating expenses and payroll. In order to avoid disrupting the Debtors' ordinary operations, cash flows and post-petition operations, the Debtors should be permitted to maintain the CBI Accounts and CBOI Accounts. To require the Debtors to open new debtor-in-possession bank accounts would disrupt the Debtors' operations and collections and limit the Debtors' ability to efficiently and effectively manage receipts, disbursements, accounting functions, and operations, and would create disruptions in the timely payment of post-petition obligations which would likely have a significant adverse effect on the Debtors' reorganization efforts. 6 12. The United States Trustees operating guidelines require that a Chapter 11 debtor

close its pre-petition bank accounts and open new accounts. This requirement is designed to (a) provide a clear line of demarcation between pre-petition and post-petition transactions and operations; and (b) block the inadvertent payment of pre-petition claims through the payment of checks drawn prior to the commencement of a debtors Chapter 11 case. 13. In other cases, bankruptcy courts have recognized that the strict enforcement of

The CBOI Accounts are not held at approved depositories in the Southern District of New York. However, the amounts on deposit are generally with the range covered by the FDIC. 6 For example, since the Brothers have taken a vow of poverty, certain individual Brothers social security payments are deposited directly into the CBOI operating account, as CBOI operates on a centralized basis.
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the bank-account-closing requirement does not serve the rehabilitative purposes of Chapter 11. Accordingly, courts have waived such requirements and entered orders authorizing debtors to maintain their pre-petition bank accounts. See, e.g. In re Johnson, 106 B.R. 623, 624 (Bankr. D. Neb. 1989). 14. A similar waiver of the bank-account-closing requirement in the Debtors cases is

necessary. Specifically, the Debtors request that the Accounts be deemed to be debtor-inpossession accounts, and that their maintenance and continued use, in the same manner and with the same account numbers, styles and document forms as during the pre-petition period, be authorized subject only to (a) designation of such accounts in the books and records of the Debtors and by the financial institutions as a debtor-in-possession accounts; and (b) a prohibition against honoring pre-petition checks without specific authorization from this Court. The Debtors will advise the financial institutions not to honor checks issued prior to the commencement of this case, except as authorized by this Court. By so advising the financial institutions, the Debtor will achieve the goals of (a) establishing a clear demarcation between pre-petition and postpetition checks; and (b) blocking the inadvertent payment of pre-petition checks -- without disrupting the Debtors ongoing operations. REQUEST FOR CONTINUATION OF BUSINESS FORMS AND STATIONERY 15. The Debtors also request permission to use their existing business forms and

stationery without alteration or change. 16. In the ordinary course of their business, the Debtors use several checks and other

business forms. To minimize expenses to the estates, the Debtors request authority to continue to use all correspondence and business forms (including, but not limited to, letterhead, purchase orders and invoices), as such forms were in existence immediately before the Petition Date.

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17.

The Debtors also request authorization to use their existing check stock, provided,

however, that as soon as practicable, the Debtors will manually imprint the legend "DIP" or "Debtor-in-Possession" on existing checks. Upon depletion of the Debtors' check stock and/or business forms stock, the Debtors will obtain new check stock and/or business forms stock reflecting their status as Debtors-in-Possession. 18. By virtue of the unique nature of the Debtors' operations, it is important that the

Debtors be permitted to continue to use their existing checks and other business forms without alteration or change, except as requested herein. 19. The Debtors have few creditors other than contingent, unliquidated and/or

disputed claims asserted by tort claimants. Most entities that the Debtors transact with are religious organizations and/or community members who are aware of the Debtors Chapter 11 filings. As such, the changing of business forms is unnecessary and burdensome. NOTICE 20. Inasmuch as no official committee of unsecured creditors has yet been appointed

in these Chapter 11 cases, and that it is necessary for this order to be granted in order to avoid disrupting the Debtors operations, it is respectfully submitted that pursuant to 102 of the Bankruptcy Code, that no notice, other than to the United States Trustee, be given under the circumstances and that the Court enter an order granting the relief requested pursuant to the powers granted to this Court under 105 of the Bankruptcy Code. NO PRIOR REQUEST 21. Court. WHEREFORE, the Debtors respectfully request that the Court enter an Order, No prior request for the relief requested herein has been made to this or any other

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authorizing the Debtors to (i) maintain the pre-petition CBI Account and CBOI Accounts, nunc pro tunc, to the Petition Date as described herein; (ii) continue to use existing business forms; and (iii) granting to the Debtors such other and further relief as this Court deems just and proper. Dated: New York, New York May 5, 2011 TARTER KRINSKY & DROGIN LLP Proposed Attorneys for The Christian Brothers Institute and The Christian Brothers of Ireland, Inc. Debtors and Debtors-in-Possession

By:

/s/ Scott S. Markowitz Scott S. Markowitz Ira R. Abel 1350 Broadway, 11th Floor New York, New York 10016 (212) 216-8000

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