13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg 1 of 9 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK in re: Chapter 11 RHINOCEROS VISUAL EFFECTS Case No. AND DESIGN LLC Debtor. AFFIDAVIT PURSUANT TO LOCAL RULE 1007-2 Zviah Eldar, certifies the following: 1. I am the chief executive officer of the debtor and debtor-in--possession, Rhinoceros Visual Effects Design LLC (the "Debtor"). I respectfully submit this affidavit pursuant to Rule 1007-2 of the Rules of the United States Bankruptcy Court for the Southern District of New York. A. The Nature of the Debtor's Business and a Concise Statement of the Circumstances Leading to the Debtor's Filing under Chapter 11 2. The Debtor is a provider of computer-generated imagery animation and digital visual effects. The Debtor's core business is servicing the advertising companies of major corporations by locating production assistance and actors who can create animation and digital visual effects. 3. The Debtor's business is fundamentally strong. In past several months, the Debtor has secured several profitable contracts from influential clients in the automotive and sports industries amongst others. 4. Aside from its operating expenses, the Debtor's liabilities include two bank loans. One loan is to Bank Hapoalim B.M. which provides a working capital revolving line of credit. The Debtor also has liabilities on a loan from Israel Discount Bank of New York. The 13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg 2 of 9 two banks have an inter-creditor agreement between them. Although it is believed that the loan obligations are in default, the banks continue to work with the Debtor. 5. The Debtor's most immediate problem stems from its office space lease. The Debtor operates out of approximately 13,000 square feet of located on the third floor and a number of rooms on the fourth floor at 315 Madison Ave. in New York, New York (the "Premises") pursuant to a six-year and six-month lease (the "Lease") with Fifty East Forty Second Company LLC ("Landlord") expiring on December 31, 2014. 6. Over the past few years, the Debtor's business reduced its staff to reduce its overall expenses and the Debtor no longer has a need for the space on the fourth floor. In Spring 2013, the Landlord and the Debtor negotiated an agreement whereby 1) the Debtor would surrender the entire fourth floor of the Premises to the Landlord; 2) the Landlord would lower the rent; and 3) Landlord would apply the Debtor's security deposit (or a portion thereof) to the alleged arrears. 7. Despite this agreement, on April 23, 2013, Landlord served the Debtor with a "Three Day Notice to Tenant" alleging that the Tenant owed $138,056.40 in arrears, and refused to honor the deal it had orally negotiated 8. On May 2, 2013, the Landlord commenced case No. 6565852013 in the Civil Court of New York City Proceeding"). On August 19, 2013 that court entered an order awarding Landlord $138,056, and directing that a warrant issue. The Debtor understands that unless it were to pay this amount, it would be evicted from the premises. 9. On September 13, 2013, the landlord served an additional rent demand for $327,305.15. 13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg 3 of 9 10. As the Debtor is not in a position to pay the amounts demanded by the landlord at this time, and will face imminent eviction (and corresponding business interruption) without bankruptcy relief, the Debtor filed this case. B. Previous Trustee/Creditors Committee 11. This case was not commenced as a Chapter 7 or13. No creditors committee has been organized. C. The 20 Unsecured Claims. 12. A list of the Debtor's largest twenty creditors is being filed with this certification as Exhibit D. Top 5 Secured Creditors 13. As indicated above, the Debtor has two secured creditors. B.M., 1177 Avenue of the Americas, New York, New York 10036. Total debt: Approximately $1.1 million. (1) B.M. has filed a claiming a security interest in all personal and fixture property of every kind including all goods (inventory, equipment and accessions), promissory notes, documents (tangible or electronic), accounts, chattel paper, deposit accounts, letter-of-credit rights, commercial tort claims, securities and other investment property, supporting obligations and contract rights, rights to payment, insurance claims and proceeds and general intangibles. (2) The Debtor estimates that the liquidation Value of this collateral is approximately $258,000. (3) B.M.'s claim and lien is not disputed at this time. Debtor's counsel is unable to evaluate whether the claim or lien could be subject to a bona fide dispute and is not in possession of all relevant documents necessary for such an evaluation. 13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg 4 of 9 (ii) Israel Discount Bank of New York,( 511 Fifth Avenue, New York, New York 10017. Total Debt: Approximately 583,000 IDB has filed a UCC--1 financing claiming a security interest in the following collateral: "All Assets" (1) The Debtor estimates that the liquidation value of this collateral is approximately $258,000. (2) IDB's claim and lien has not been disputed. At this time, Debtor's counsel is unable to evaluate whether or not the claim or lien could be subject to a bona fide dispute and is not in possession of all relevant documents necessary for such an evaluation. Some or all of IDB's claim may arise from an inter-corporate guarantee, 14. The Debtor also has a $350,000 cash security deposit with its landlord, Abramson Brother, Inc., 50 Fifth Avenue, New York, New York 10017. The landlord claims it is owed $465,381 plus attorney's fees. The Debtor disputes the landlord's claim 13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg 5 of 9 E. Summary of Debt0r's Assets and Liabilities. The Debtor's assets and liabilities as of June 30, 2013 were: Effeetslarid Design LLC DBA Gravity Balance Sheets (from internal report 6/30/1013} CurrentAssets__ I Cash and Cash Eqoiyalents 1,699 Accounts Receivable 5 90,291. Other Receivables 78,186 Security Deposits -- I sub-total 170,176 Tam . . .. . . . Security De posits 5 352,972 I sub--total: 352,972 Fixed A5595_C.?5t5 . .0 5 5 (3.090355)5 sub-total 5 199,805? TOTAL ASSETS 722,954 5 Current Liabilities ?b9rtTeern1Credit.,t, I I4 #:0917664 . ~$ecuritv I-- . -I I Other Pa_yab_Ies 516,909 3 I . . 5Ub't9la' I I I Lease Pavable; tLs$seC.ut.r9nt tPorttiont. . 0 Security Deposits P_ayebl_e A . . . 0 sub-total 3,848,301 TOTAL LIABILITIES 6,077,341 F. Securities of the Debtor Publicly Held. 15. The Debtor has no publicly held securities. 13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg 6 of 9 G. Property in the possession or custody of a custodian, public officer, mortgagee, pledgee, assignee of rents, or secured creditor 16. The Debtor has a security deposit held by Landlord in the amount of $340,537.05. 17. The Debtor's banking account is with BHI USA, the New York branch of Bank Hapoalirn, and all cash held by the Debtor is in that account. 18. No other property is in possession or custody of any custodian, public ofiicer, mortgagee, pledgee, secured creditor or agent of any such entity. H. List of premises owned, leased or held by the Debtor 19. The debtor leases a portion of the third floor and the entire fourth floor of 315 Madison Ave. in New York, New York. The Debtor does not currently use the fourth floor. I. The location of debtor's substantial assets, the location of its books and records and the nature, location and value of any assets held by the debtor outside the territorial limits of the United States 20. The Debtor's equipment, books and records are located at 315 Madison Avenue, New York, New York. 21. The Debtor has no assets located outside of the United States. J. Nature and present status of each action or proceeding, pending or threatened against the debtor or its property Where a judgment against the debtor or the seizure of its property may be imminent. 22. Aside from the Proceeding, the Debtor does not have any action or proceeding pending or threatened wherein a judgment against the debtor or the seizure of its property is imminent. K. Amounts proposed to be paid to officers, stockholders (members) or directors for thirty days following the filing of the petition. 23. The Debtor anticipates making payments totaling $35,896.26 to officers, members in the thirty days following the filing of the petition. -5- 13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg 7 of 9 L. Amounts proposed to be paid to officers, stockholders (members) or directors for thirty days following the filing of the petition. 24. The Debtor anticipates making payments totaling $35,896.26 to officers, members in the thirty days following the filing of the petition. M. Thirty day schedule of estimated cash receipts and disbursements, net cash gain or loss, obligations and receivables expected to accrue but remain unpaid, other than professional fees 25. A Statement of estimated cash receipts and disbursements, net cash gain or loss, obligations and receivables expected to accrue but remain unpaid, other than professional fees is as follows: gag!' 16-20 Sept 23-27 30-Oct 4 Oct 7-11 Oct Balance 50,000 62,230 36,816 208,816 99,759 Collection 67,730 90,086 340,000 33,643 64,590 Payroll 110,000 110,000 Freetencers 24,000 28,000 Outsourscing 0 110,000 42,356 Rent 28,000 56,000 Con--Ed Etictricity Office Exp 2,000 2,000 2,000 2,000 Travel exp 1,500 3,500 2,700 Total Exp 55,500 115,500 168,000 142,700 42,356 Balance 62,230 36,816 208,816 99,759 121,993 I certify under penalties of the perjury that I have read the foregoing and it is true and correct to the best of my information, knowledge and belief. Dated: New York, New York September 17, 2013 Zviah Elder -7. 13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg 8 of 9 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re RHINOCEROS VISUAL EFFECTS AND DESIGN, LLC Debtor. Chapter 11 Casehto TOP TWENTY UNSECURED CREDITORS Following 15 the list ofthc the 20 largest unsecured clahlts. The list is prcparcd 111 accordaucc with Fed. R. Bauizt. P. for filing in this cltaptel 11 [at-chapter 9] case-. Th: list does not ittcludu: (I 1 persons who come the of "insider" set foul; 1:1 1 1 U.S.C. 101. or (31 secured craditors unless the value of the collateral is such that the 11:13-:c11n:d ctcficietlcy places the creditor aluong the holders 38 claims If 2: ntinar cluld as one of the creditors holding the largest uns-:cured claims. state the child's illitials and the name and address of the child's parent or guartliall. such as a ulinor clliid. Due. Do not disclose the ll U.S.C ?l 12 and Fed R. Baukr. P. (31 E5) qfrradttar numhr qfr-'am [fr-'at'v: Anson. r:r ma' Malling (anal: aft-EL 591:? as an. aim trade. of fear. cf araicpt:-rmazrr ca an-n.-r, nth} dfsfiahi nr neurvnf rorI'( xtmfi' who -nay be Nature of Claim 10 Skyline Credit Ride, . 3 - - Trade - 5 13,013 13-13016-smb Doc 2 Filed 09/17/13 Entered 09/17/13 12:50:12 Main Document Pg9of9 (1) (3) (3) Nzmo nftre?rmr Noare, refrpitoaza ma-rrber and ofciafm and camping co.-rzpiere infirm. {nude duh'. bank miifisg zip code, of Jean. er.-rpfruw. ogsmr. :9nn*acr. vrc.j code wrr}: tiaim who .-wry bl murdered Name ted: NewYork, New York September 17, (43 fedicaisr is coxriiegvfif. ffseczrma' unfiguriflnred, afar: of :|:bjerrm Claim Zviah Elder certifies under penalty of periury that I am the chief executive officer of the debtor herein that [have read the foregoing schedule and the same is true an correct to the best of my knowledge, information and belief Undersecured creditors are shown iess estimated liquidation 1 value of collateral All ciaims are subject to investigation by counsel and may he 2 disputed based an investigation