Shimba Hills Coffee Company, Inc.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
SHIMBA HILLS COFFEE COMPANY,
INC.,
Debtor.
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Case No. 07-00004
(Chapter 11)
Not for Publication in
West’s Bankruptcy Reporter
MEMORANDUM DECISION
RE MOTION TO RECONSIDER DECISION TO MANDATE DEPOSIT OF $45,000
At the hearing on the United States Trustee’s motion to
convert this case to a case under chapter 7, the court heard
evidence establishing that the debtor’s continued operations at a
loss threatened the estate. 	Based on the debtor’s statement that
it would promptly cause $45,000 to be deposited into its debtor
in possession account, the court agreed to continue the hearing
on the motion to dismiss conditioned on that $45,000 being
deposited and a monthly operating report being filed by a
specified deadline, with the case to be converted to chapter 7 if
the United States Trustee filed a praecipe noting any failure in
that regard and requesting conversion of the case.
The debtor has filed as Motion to Reconsider Court’s Order
Mandating Deposit of $45,000 Into Debtor in Possession Account.
The decision below is signed as a decision of
the court.
Signed: June 05, 2007.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
Case 07-00004 Doc 79 Filed 06/06/07 Entered 06/06/07 09:37:08 Desc Main
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The motion was filed before the court entered an order directing
the deposit of the $45,000. 	The motion seeks an order directing
that the debtor shall cause $45,000 to be deposited with the
escrow account of the debtor’s attorneys and that the money in
the escrow would then be distributed to fund whatever court-
approved cure is required in the event that assumption of the
debtor’s lease with its landlord is approved. 	The debtor
believes that it will be able to demonstrate that the rent owed
its landlord does not include certain marketing charges, and that
it will thus be able to assume the lease. 	In the event that
assumption is denied, the $45,000 presumably would be returned to
the debtor’s principal who is the source of the $45,000. 	The
debtor’s principal does not wish to risk the $45,000 being lost
by him in the event that the debtor’s motion to assume is denied.
This does not bespeak confidence in the debtor’s motion to
assume, and would allow the debtor’s principal a risk-free bet on
the outcome of that litigation.
The debtor’s proposal does nothing to protect the estate
with respect to continued losses being suffered by the estate, in
the form of increasing administrative claims, should the debtor
not prevail on its motion to assume its lease. 	Nothing would be
available to cover the losses the estate is suffering in the
interim should the debtor’s motion to assume be denied.
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A motion to reconsider seeking to restrict the use of the
$45,000 for administrative expenses (but not for non-
administrative claims), regardless of the outcome of the motion
to assume, would be a different story. 	That would protect
against losses to the estate, by providing funds to cover such
losses arising from increasing unpaid administrative claims, and
thus meet the concern that prompted the court’s decision to
require a deposit of $45,000. 	But the debtor has not suggested
that its principal is willing to deposit $45,000 to cover
administrative expenses in the case regardless of the outcome of
the motion to assume the lease.
An order follows denying the debtor’s motion. 	The court
will sign the United States Trustee’s proposed order requiring a
deposit of $45,000 and the filing of a monthly operating report.
[Signed and dated above.]
Copies to: Lisa Dessel; Martha L. Davis, Trial Attorney, Office
of the United States Trustee; Ronald M. Levin; Debtor.
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