Filed 02/02/18 Case 17-28245 DOC 38 5 1 J. RUSSELL CUNNINGHAM, State Bar #130578 J. LUKE HENDRIX, State Bar #271424 NICHOLAS L. KOHLMEYER, State Bar #299087 DESMOND, NOLAN, LIVAICH CUNNINGHAM 1830 15th Street Sacramento, California 95811 Telephone: (916) 443-2051 Facsimile: (916) 443-2651 LUJN Attorneys for Sheri L. Carello Chapter 7 Trustee UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF CALIFORNIA SACRAMENTO DIVISION 10 1 1 In re: Case No. Chapter 7 12 NEW MEDIA CENTERS, 13 Date: February 14, 2018 14 Time: 10:00 am. Debtor. Location: 501 I Street, 6th Floor 15 Department Sacramento, CA 95 814 16 17 MOTION TO APPROVE SALE OF ESTATE PROPERTY 18 SHERI L. CARELLO (?Trustee?), in her capacity as Chapter 7 trustee for the bankruptcy 19 estate of NEW MEDIA CENTERS, dba THE NEW MEDIA CONSORTIUM hereby 20 moves for an order approving her sale agreement with EDUCAUSE Learning Initiative (?Buyer?), 21 detailed herein, subject to overbidding; and waiver of the 14 day stay period imposed by Federal 22 Rule of Bankruptcy Procedure 6004(h). In support of her motion, the Trustee submits the following: 23 JURISDICTION AND BACKGROUND 24 1. This Court has jurisdiction over this motion pursuant to 28 U.S.C. 25 and 1334. Venue is proper in this District pursuant to 28 U.S.C. 1409. 26 Relief is sought pursuant 11 U.S.C. 363(b). 27 28 Filed 02/02/18 Case 17-28245 DOC 38 i 2. On December 20, 2017, NMC commenced the above-captioned bankruptcy case 2 by ?ling a voluntary Chapter 7 petition. The Trustee is the duly appointed Chapter 7 trustee. 3 3. Prior to ?ling bankruptcy, NMC operated as a non-pro?t organization in part serving 4 education institutions in developing digital literacy. NMC operated as an international consortium 5 of learning-focused organizations dedicated to the exploration and use of new media and new i 6 technologies. 7 4. NMC is primarily known for its NMC Horizon Project, which has been an ongoing 8 annual research project designed to identify and describe the trends, challenges, and technology 9 developments likely to have an impact on learning, teaching, and creative inquiry in higher 10 education, libraries, and museums, with NMC Horizon Report editions that focus on each g. 1 1 NMC Horizon Report Higher Education Report; and Co SN Horizon Report K-12 Edition). 12 NMC would coordinate a panel of educational technology experts to review, comment, and discuss 13 a range of topics and relevant research and subsequently provide feedback from activities designed 14 to identify the trends, challenges, and developments in educational technology and to select topics 15 to be featured in the respective Horizon Reports. NMC would then produce and publish the reports 16 with an open license, generally available to the public, with members of NMC entitled to certain 17 access and other additional bene?ts. The NMC Horizon Project ?ndings have been presented around 18 the world at conferences, education workshops, etc. 19 5. The ?agship publication of the NMC Horizon Project is the NMC Horizon Report 20 Higher Education Report. NMC has worked for several years in collaboration with the Buyer to 21 produce the annual report, with the research and expert collaboration and feedback generally 22 completed by November of each year, and the report then produced and subsequently released 23 around the following February. The initial phases of research and expert collaboration had been 24 substantially completed for the report and production of the report was set to move forward at the 25 time of the bankruptcy ?ling, with the report to be released at a national education conference in 26 early March 2018. With respect to the Horizon Report K-l2 Edition, the report 27 would generally be released around September of each year, with work beginning in the early part 28 of that year. Filed 02/02/Case 17?28245 . Doc 38 TERMS OF SALE AGREEMENT Subject to Bankruptcy Court approval, the Trustee has entered into a sale agreement with the Buyer for estate?s interest in the following (collectively referred to as ?Sale Assets?): 1) interest in the NMC Horizon Project, NMC Horizon Report Higher Education Report, and Horizon Report K-12 Edition, and all associated goodwill; (2) registered trademarks, identi?ed as NMC Virtual Worlds, registration #3606721; Circle Design, registration #3606722; and NMC, registration #31923 89; (3) membership list and subscriber list; (4) website/domain and all associated goodwill; (5) 5 interest in all software developed to facilitate the NMC Horizon Project and the production of the Horizon Reports, including related coding and tools; (6) telephone number (512-445-4200); (7) Any interest in the names NMC Horizon Project, The New Media Consortium, NMC Horizon Report Higher Education Report, and Horizon Report K-l 2 Edition, and all associated goodwill; and. (8) All of non-leasehold furniture, ?xtures, and equipment.1 The essential terms of the Trustee?s sale agreement are the following: (1) The Trustee Shall sell and the Buyer shall purchase all of the bankruptcy estate?s right, title, and interest in the Sale Assets for the purchase price of $55,000 USD, subject to 'overbidding, payable as follows: $10,000 USD upon executiOn of the agreement, nonrefundable in all events unless the Buyer is not the successful bidder or the Bankruptcy Court does not approve the agreement; and the balance due within 5 calendar days of entry of a Bankruptcy Court order approving the agreement. 1The furniture, ?xtures, and equipment primarily consist of camera and audio equipment, computer equipment, and general of?ce furniture located in an Austin, Texas storage unit (see Exhibit 1 to Bankruptcy Schedule B, ?led January 17, 2018, Docket - 3 Filed 02/02/18 Case 17-28245 DOC 38 1 (2) The Trustee makes no representations or warranties regarding the condition of the Sale 2 Assets. The Buyer agrees to purchase the Sale Assets in ?as is? and ?where is? condition and subject 3 to any and all claims of lien, encumbrance, and interest. The Buyer acknowledges that the Trustee 4 does not have knowledge of the condition of the Sale Assets and is not in a position to make any 5 disclosures to the Buyer concerning the condition of the Sale Assets. The Buyer shall be solely 6 responsible for all transfer taxes, fees, and costs. If the Buyer elects to open an escrow, the Buyer 7 shall be responsible for all associated escrow costs and fees. 8 (3) Upon the Trustee? receipt of the $55,000 purchase price and entry of a Bankruptcy Court 9 order approving the agreement, the Trustee shall convey to the Buyer the bankruptcy estate? interest 10 in the Sale Assets by assignment, bill of sale, and any other appropriate transfer instrument; 11 reasonably cooperate with executing any transfer or other documentation as may be reasonably 12 necessary to con?rm the estate?s interest in the Sale Assets has been transferred to the Buyer; and 13 reasonably cooperate with providing access to the Sale Assets to the extent necessary to facilitate the 14 Buyer taking possession of the Sale Assets, including providing all passwords, lo gins, etc. necessary 15 to facilitate the transfer of the Sale Assets. The Buyer shall be solely responsible for all costs 16 associated with obtaining possession of the Sale Assets. 17 PROPOSED OVERBID PROCEDURES 18 Subject to Bankruptcy Court approval, to be a quali?ed overbidder, a party must provide 19 the Trustee a deposit by cashier?s check in an amount no less than $10,000 USD and proof of 20 funds for the balance of the purchase price, payable in full within 5 calendar days of entry of a 21 Bankruptcy Court order approving the sale, and agree to all other terms of the Trustee?s sale 22 agreement with the Buyer, including purchasing the bankruptcy estate?s interest in the Sale 23 Assets in ?as is? and ?where is? condition and subject to any and all claims of lien, encumbrance, 24 and interest. 25 BASIS FOR APPROVAL OF SALE 26 Pursuant to 11 363(b)(l), a trustee can sell property of the estate after notice and 27 hearing. A sale under must have a valid business justification and be proposed in good faith. In 28 re 240 North Brand Partners, Ltd, 200 BR. 653, 659 (9th Cir. BAP 1996). The Trustee?s Filed 02/02/Case 17?28245 Doc proposed sale is a good faith effort to maximize the return to the estate on account of the Sale Assets. As detailed above, much of the value of the Sale Assets concerns the NMC Horizon Project and its respective reports, including the NMC Horizon Report Higher Education Report. The Trustee?s sale is an attempt to maximize the value of the NMC Horizon Project by maintaining ongoing relationships with its partners and members/subscribers, and enabling the Buyer, or any successful overbidder, to continue efforts to complete the NMC Horizon Report Higher Education Report and timely publish the report, which-is particularly important given that the nature of the report is to identify and describe current educational technology considerations. Finally, the Trustee has received interest from other potential buyers, but the Buyer has presented the highest and best offer to date and prospective buyers interested in bidding more can do so through conclusion of the sale hearing. REQUEST FOR RELIEF PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 6004(h) As detailed above, the Trustee?s sale is an attempt to facilitate an ef?cient administration of the Sale Assets that preserves ongoing relationships and enables continued production of the NMC Horizon Report Higher Education Report. As such, the Trustee requests that the 14 day stay period imposed by Federal Rule of Bankruptcy Procedure 6004(h) be waived so that the sale can be completed immediately upon entry of Bankruptcy Court order approving the sale, allowing the estate to maximize the return to the estate. WHEREFORE, the Trustee prays that: (1) The motion be granted; (2) The Trustee be authorized to sell the bankruptcy estate?s interest in the Sale Assets to the Buyer or any successful overbidder; (3) The Trustee be authorized to take all actions necessary to effectuate the sale; and (4) Such other and further relief as the Court deems necessary and proper. Dated: Fabmarygg, 201 DESMOND, NOLAN, LEXAICH CUNNINGHAM By 15/ . 38E