Date of Hearing: April 25, 2013

Time of Hearing: 10:30 a.m.

Place of Hearing: Utica
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF NEW YORK
______________________________________

In re:

VWP, INC., Chapter 11
Case No. 13-60282

Debtor.
______________________________________

MOTION FOR RELIEF FROM THE AUTOMATIC STAY
OR, IN THE ALTERNATIVE, ADEQUATE PROTECTION

Secured Creditor Kenneth Pasternak, through his attorneys Lemery Greisler
LLC, as and for his motion for relief from the automatic stay pursuant to 11 U.S.C. 362
(d) (1) and (2) or, in the alternative, for adequate protection pursuant to 11 U.S.C. 361
respectfully states as follows:
The Parties
1. Debtor VWP, nc. ("Debtor or VWP) filed its voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code in this Court on February
26, 2013.
2. Debtor is a debtor in possession with no trustee or examiner having been
appointed in its case
3. Kenneth Pasternak ("Pasternak) is, as more particularly described below, a
secured creditor of the Debtor holding duly perfected mortgage liens on all of
Debtor's real property.
Jurisdiction
4. The Court has jurisdiction over this case and this motion, which is a core
proceeding, pursuant to 28 U.S.C. 157 (b) (2) (G) and 28 U.S.C. 1334.
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Summary of Relief Requested
5. This motion seeks relief from the automatic stay pursuant to 11 U.S.C> 362
(d) (1) for cause because Pasternak's security interests are not adequately
protected and for other cause.
6. Debtor has not made any payments since defaulting in July 2011.
7. Upon information and belief, Debtor is in arrears in payment, although its
schedules do not reveal as such, of real property taxes.
8. Indeed, to protect his interest and in the public interest, Pasternak advanced
other tax payments to the taxing authorities.
9. Debtor has not made any offer of adequate protection to Pasternak.
10. This case is, literally, a two party dispute with the Debtor having not listed any
other creditors aside from Pasternak.
11. As detailed below, other facts show that this Debtor should not be given the
benefit of the automatic stay.
12. Further, the Debtor is not engaged in business and has no business to
reorganize. Therefore, relief under 11 U.S.C. 362 (d) (2) is also appropriate.
The Secured Claim
13. Pasternak is the owner and holder of two separate mortgage loans that
encumber the real property set forth at Schedule A of the Debtor's Petition,
102 Depot Street and 717 Wagner Avenue, both in the Town of Middletown,
Village of Fleischmanns, County of Delaware.
14. As a result of defaults which occurred in no later than July, 2011, Pasternak
commenced two separate state court foreclosure actions which are pending
before Supreme Court, Delaware County.
15. The mortgage loans are evidenced by the following loan documents:
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Loan 1 102 Depot Street
a. A Promissory Note Dated May 18, 2007 in the original principal amount
of $600,000.00 ("Note 1) executed and delivered by Debtor as
Borrower and Debtor's principal William Hrazanek as Guarantor.
Exhibit "A.
b. The unpaid principal balance due on Note 1, which was intended to be
a short term loan, was due and payable in full on December 1, 2009.
c. Interest accrues on the unpaid principal balance at 13% per annum.
d. Late charges are also allowed under the mortgage of 2% of the
overdue payment.
e. Note 1 was secured by a Mortgage dated May 18, 2007 in the original
principal amount of $600,000.00, with interest, which was recorded in
the Delaware County Clerk's Office on June 1, 2007 at Liber of
Mortgages 1454, Page 1. Exhibit "B.
f. Note 1 was further secured by an Absolute Assignment of Rents and
Leases dated May 18, 2007 which was also recorded in the Delaware
County Clerk's Office on June 1, 2007 in Liber of Deeds 117, Page
127. Exhibit "C.
g. A UCC -1 financing statement was also filed against the mortgaged
premises on June 1, 2007 in the Delaware County Clerk's Office at
index no. 07-000142. Exhibit "D.
h. As of the date of filing of this case, February 26, 2013, the following
amounts were due and owing on Note 1: principal $600,000.00;
interest $130,000.00; late charges $17,070.00; tax advances
$18,393.45; interest on tax advances of $1,839.35; legal fees of
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$7,000.00 and late charges on tax advances of $367.87, for a total of
$767,670.66.
i. The loan documents also provide for reimbursement of Pasternak's
costs of collection, including attorney's fees.
Loan 2 717 Wagner Avenue
j. Note and Mortgage dated October 27, 2008 in the original principal
amount of $60,000.00 executed and delivered by Debtor to Pasternak
and recorded in the Delaware County Clerk's Office on October 31,
2008 as Document No. 42811. Exhibit "E.
k. Note and Mortgage dated March 15, 2010 in the original principal
amount of $115,000.00 executed and delivered by Debtor to Pasternak
and recorded in the Delaware County Clerk's Office on March 26, 2010
as Document No. 93762. Exhibit "F.
l. The two Notes and Mortgages recited above, were consolidated,
extended and modified by a Consolidation, Extension and Modification
Agreement dated March 15, 2010 into a Consolidated Note and
Mortgage dated March 15, 2010 in the original principal amount of
$175,000.00 (collectively "Note 2) all of which were recorded in the
Delaware County Clerk's Office on March 26, 2010 as Document No
93763. Exhibit "G.
m. Loan 2 matures on April 1, 2013.
n. Interest on the principal balance accrues at 10% per annum.
o. Late charges accrue at the rate of 2% of the amount of each overdue
payment.
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p. As of the date of filing of this case, February 26, 2013, the following
amounts were due and owing on Note 2: principal $175,000.00;
interest $29,251.75; late charges $4,299.50, for a total of $208,551.25.
q. The loan documents also provide for reimbursement of Pasternak's
costs of collection, including attorney's fees.
Relief Requested
Stay Relief
16. Pasternak is entitled to relief from the automatic stay pursuant to 11 U.S.C.
362 (d) (1), for cause.
17. Cause in this case includes the following:
a. Debtor's failure to pay Loan 1 at maturity and its failure to make any
payments on Loan 1 or Loan 2 since June, 2011.
b. Debtor's failure to pay real property taxes and, in turn, forcing
Pasternak to pay such taxes to protect his interest and in the public
interest.
c. Debtor's failure to offer any adequate protection to Pasternak upon the
filing of this case or since.
d. Debtor's failure to provide evidence to Pasternak of adequate
insurance on the mortgaged premises.
e. In addition, there are other facts showing that this case is not
deserving of the protection of the automatic stay:
i. As evidenced by the Debtor's own schedules (Exhibit "H), this
case is literally a two party dispute that is best resolved in state
court in the context of ongoing foreclosure actions.
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ii. The Debtor's schedules do not reveal that the Debtor has any
going business operation to reorganize. It has no employees
and no ongoing operations expenses.
iii. The statement of financial affairs shows that the Debtor has not
had income for more than two years.
iv. Debtor's Schedule B shows that the Debtor has no personal
property, not even a bank account.
f. Under similar circumstances, Courts have found "cause to lift the stay.
See In re Kaplan Breslaw Ash, LLC, 264 B.R. 309 (Bankr. S.D.N.Y
2001).
g. It appears that the sole purpose in filing this case is an attempt to
benefit the insider equity holder, to the prejudice of Pasternak who has
not been paid in years, by allowing the Debtor time to apply for and
negotiate a purchase of certain of its property under a flood control
program administered through the Federal Emergency Management
Administration ("FEMA). Exhibit ".
h. Delaware County has applied to FEMA for approval of a grant program
to purchase certain properties to redress ongoing flood plain issues
and to attempt to protect against future flood damage. Notice of the
County's application was recently published on February 13, 2013.
Exhibit "J.
i. Whether FEMA will approve the grant and whether Delaware County
will then, in turn, approve Debtor's application, or if approved at the
price level Debtor suggests, is speculative at best.
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j. Debtor indicates in its application under the FEMA program that its
property at 102 Depot Street has a fair market value of $1,200,000.00.
Exhibit ", Page 54.
k. The tax assessment on that property is, however, $291,600.00.
Exhibit "K.
l. Therefore, in addition to all the other facts constituting "cause, it does
not appear that there is, in fact, any equity in the 102 Depot Street
property that would benefit the estate and, ultimately its shareholder
and that Debtor's hope to realize $1,200,000.00 from the property is a
fantasy.
m. And, the 717 Wagner Avenue property does not appear to be subject
to the FEMA application and therefore the probable justification to be
offered by Debtor for continuation of the automatic stay, to sell under
the FEMA program, does not exist for that property.
n. In any event, any equitable arguments Debtor wishes to make to
continue to delay foreclosure can be made to state court.
18. For many of the same reasons, that the Debtor conducts no business, has no
business to reorganize and that this case appears to be for the sole benefit of
the insider, relief under 11 U.S.C. 362 (d) (2) is also appropriate.
19. Even if the Court were inclined to give this Debtor a chance, there is no
reason to not grant limited stay relief to allow the foreclosure to proceed up to
the point of sale such that if Debtor is not successful with FEMA after what
could be many months, Pasternak could then promptly proceed to notice
foreclosure sales.
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20. The usual justification for not allowing such relief, ongoing foreclosure would
chill the market, does not exist in this case as it appears that Debtor's only
hope is the FEMA program which is not a market driven outcome.
21. In balancing the equities, to deny even limited stay relief would seriously
prejudice Pasternak who has not received any payments since June 2011,
almost two years by the time this motion will be heard, and who would then
be delayed several more months in the exercise of his contractual remedies.
Adequate Protection
22. In the alternative, should the court not grant stay relief, it is respectfully
requested that the Court direct the Debtor to provide adequate protection
pursuant to 11 U.S.C. 361 including interest payments, a tax escrow and
proof of insurance.
WHEREFORE it is respectfully requested that the Court grant relief from the
automatic stay or, in the alternative, adequate protection and such other and further
relief as may be deemed just, necessary and proper.
Dated: March 22, 2013 Respectfully submitted,

LEMERY GREISLER LLC
/s/Paul A. Levine, Esq.
Paul A. Levine, Esq.
Attorney for Secured Creditor
Kenneth Pasternak
50 Beaver Street, 2
nd
Floor
Albany, NY 12207
(518) 433-8800
plevine@lemerygreisler.com


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