Case number: 2:24-bk-21743 - Wisconsin & Milwaukee Hotel LLC - Wisconsin Eastern Bankruptcy Court

On July 16, the court held a hearing that included a final pretrial and status conference. At that hearing, the debtor's counsel conceded that the plan must be modified further to comply with sec. 1129(b)(2), at least to conform to the absolute-priority rule and potentially to amend payment provisions depending on the court's adjudication of the parties' valuation dispute. Whether a further modified plan like the current one is confirmable may also depend on a resolution of the parties' dispute over the appropriate discount rate for future payments and other issues. Based on these considerations, the court concluded, with the parties' agreement, that the court would commence an evidentiary hearing on July 22 to value the property and receive evidence needed to decide the Lenders' motion, directing that, as to the presentation of evidence, the parties would begin with evidence as to the valuation of the hotel and the hearing would proceed to evidence relating to other matters (and perhaps briefing of issues, including legal issues) as later directed by the court. The court believed that it made clear that this evidentiary hearing would be a final hearing on the Lenders' sec. 362(d) motion. See Minute and Order, ECF No. 660 ("The court will instead proceed with an evidentiary hearing on the valuation of Computershare Trust Company, N.A.'s collateral, and on Computershare Trust Company, N.A. and Wisconsin & Milwaukee Hotel Funding LLC's motion for relief from the automatic stay.").

Clarity, however, was perhaps not achieved. On July 18, the Lenders filed "Supplement to Motion for Relief From the Automatic Stay". ECF No. 659. After restating the requirements of sec. 362(d)(2) and (e), repeating arguments and authorities concerning the interpretation of those provisions, and rehashing topics addressed at length on July 16, the Supplement makes a "REQUEST FOR IMMEDIATE HEARING", stating, "Because Debtor is not ready to move forward with its Second Amended Plan, Lenders respectfully request that the Court move forward on Lenders' Motion." ECF No. 659, at 4. Requests, of course, are properly a matter for motions, not supplements. See Fed. R. Bankr. P. 9013. And, formalities aside, the court already directed and ordered that it would proceed with a hearing on the Lenders' sec. 362(d) motion on July 22 -- 2 business days after the Lenders filed their Supplement and 3 days before the last day previously scheduled for the end of the confirmation hearing, which, again, the parties had agreed and the court had ordered would be the time at which the court would "hold the final hearing on the motion for relief from the automatic stay". ECF No. 593, at 2. So, what's the beef?

Seemingly, the Supplement is intended to emphasize Lenders' oft-repeated point (including at the July 16 hearing) that, in their view, the debtor has taken too long to confirm a plan and appears again to be seeking more time to cure fatal defects in its plan of reorganization. This point is not without force, and, as more time passes without the debtor proposing a modified plan that is at least free of what appear to be insurmountable legal or intractable operating obstacles, it becomes more powerful.

Still, the Lenders' suggestion that the court must grant them relief from the stay by July 25 or sooner -- a request even their Supplement seems not bold enough to make clearly -- is incorrect. As the Lenders acknowledge, sec. 362(e)(2) limits the conclusion of the final hearing on a sec. 362(d) motion to 30 days after a preliminary hearing on the motion "unless the 30-day period is extended with the consent of the parties in interest or for a specific time which the court finds is required by compelling circumstances." The Code does not define "compelling", necessitating resort first to the term's ordinary reading: "compel. . . . 1. To force or constrain, as to do something". Webster's New World Dictionary (Second College ed. 1982), at 289. The circumstances that might force or constrain the court to find that more time is needed to adjudicate the motion might involve matters specific to this case or to unrelated matters to which the court must attend. Focusing only on those matters specific to this case, the court explained at the July 16 hearing that it was persuaded that a sequential presentation of evidence best serves the just and efficient administration of this case, including the adjudication of the Lenders' motion. And, it should presumably go without saying that if the court concludes that there is a need to hear additional testimony that cannot be presented by July 25 or that post-hearing briefing or other submissions are required, the time necessary to receive that evidence or file and consider those submissions would amount to compelling circumstances under sec. 362(e). Since the Lenders have elected to call the question, I will answer it: The court finds based on the record in this case and the court's familiarity with other proceedings before it that there are compelling circumstances for extending the time to decide the motion such that the time is extended by this order until 28 days after the conclusion of all evidentiary proceedings on the motion and the final ordered submission made in connection with the motion.

One last thing, the Supplement complains that "Administrative expenses are continuing to rise; Lenders expect that professional fees in this case are quickly approaching the $1.5 million mark." ECF No. 659, at 4. To address this concern in a minimal way, the court directs the debtor not to file a response to the Supplement. The court elects to bear the not insignificant opportunity cost imposed by the Lenders' Supplement without hearing the further unnecessary debate it invites.

For the reasons stated above, all relief requested in the Supplement that is not included in the Lenders' motion, ECF No. 577, is denied.

s/ G. Michael Halfenger
Chief Bankruptcy Judge

(RE: 659 Support/Supplement). (Halfenger, G.) (Entered: 07/18/2025)