2016-04-14_GENERAL DOCUMENTS - C1982056 ‎(2)‎

• Permit No: C1982056
• IBM Index Class Name: General Documents
• Doc Date: 4/14/2016
• Doc Name: Motion of the Debtors and Debtors in Possession
• From: United State Bankruptcy Court
• To: DRMS
• Permit Index Doc Type: General Correspondence
• Email Name: MPB
• Email Name: JRS
• Email Name: JLE
• Media Type: D
• Archive: No

Case 16-42529 Doc 23 Filed 04/13/16 Entered 04/13/16 11:20:44 Main Document
Pg 13 of 32
section 105(a) of the Bankruptcy Code and the doctrine of necessity. Section 105(a) of the
Bankruptcy Code empowers a bankruptcy court to issue "any order, process, or judgment that is
necessary or appropriate to carry out the provisions of the Bankruptcy Code. 11 U.S.C. § 105.
The purpose of section 105 of the Bankruptcy Code is to ensure the bankruptcy court has the
power to take whatever action "is appropriate or necessary in aid of the exercise of [its]
,jurisdiction." 2 Collier on Bankruptcy ¶ 105.01 (Alan N. Resnick & Henry J. Sommer eds., 16th
ed. 2015). "Under [section 105 of the Bankruptcy Code,] the court can permit pre -plan payment
of a pre-petition obligation when essential to the continued operation of the debtor." In re NVR
L.P., 147 B.R. 126,127 (Bankr. E.D. Va. 1992) (citing In re Ionosphere Clubs, Inc., 98 B.R. 174,
177 (Bankr. S.D.N.Y. 1989)).
27. In addition, under the "doctrine of necessity," courts allow the immediate
payment of prepetition claims where such payment is essential to the debtor's continued
operations. See In re Wehrenberg Inc., 260 B.R. 468 (Bankr. E.D. Mo. 200 1) ("Pursuant to 11
U.S.C. § 105(a) the Court may authorize the payment of prepetition claims when such payments
are necessary to the continued operation of the Debtor"); In re United Am., Inc., 327 B.R. 776,
782 (Bankr. E.D. Va. 2005) (acknowledging the existence of the doctrine of necessity "because
otherwise there will be no reorganization and no creditor will have an opportunity to recoup any
part of its prepetition claim"); accord In re Boston & Me. Corp., 634 F.2d 1359, 1382 (1st Cir.
1980) (recognizing the existence of a judicial power to authorize trustees to pay claims for goods
and services that are indispensably necessary to the debtors' continued operation). For the
reasons discussed above, the Debtors submit that payment of prepetition amounts owed in
connection with the Surety Bond Program (including the Bond Premiums) is necessary to avoid
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