Case 8:10-bk-16743-TA

Doc 227 Filed 09/10/10 Entered 09/10/10 17:52:55 Main Document Page 1 of 8

Desc

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

RON BENDER (SBN 143364) JACQUELINE L. RODRIGUEZ (SBN 198838) TODD M. ARNOLD (SBN 221868) JOHN-PATRICK M. FRITZ (SBN 245240) LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Telephone: (310) 229-1234; Facsimile: (310) 229-1244
Email: rb@lnbyb.com; jlr@lnbyb.com; tma@lnbyb.com; jpf@lnbyb.com

Attorneys for Chapter 11 Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA (SANTA ANA DIVISION) In re: WESTCLIFF MEDICAL LABORATORIES, INC., Debtor. ____________________________ BIOLABS, INC., Debtor. ____________________________
Affects Both Debtors Affects WESTCLIFF MEDICAL LABORATORIES, INC. only Affects BIOLABS, INC. only

Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk-16746-TA Chapter 11 Cases DECLARATION OF MATTHEW PAKKALA IN SUPPORT OF APPLICATION FOR ORDER SETTING HEARING ON SHORTENED NOTICE RE: MOTION TO EXTEND TIME TO ASSUME OR REJECT NONRESIDENTIAL REAL PROPERTY LEASES PURSUANT TO 11 U.S.C. 365(D)(4) [No Hearing Required Per L.B.R. 9075-1(b)]

20 21 22 23 24 25 26 27 28

Case 8:10-bk-16743-TA

Doc 227 Filed 09/10/10 Entered 09/10/10 17:52:55 Main Document Page 2 of 8

Desc

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

DECLARATION OF_MATTHEW PAKKALA I, MATTHEW PAKKALA, HEREBY DECLARE AS FOLLOWS: 1. I have personal knowledge of the facts set forth below

and, if called to testify, would and could competently testify thereto. I make this declaration in support of the concurrently

filed Application for Order Setting Hearing on Shortened Notice (the Application for OST) on the motion for entry of an order extending the time within which to assume or reject certain of the Debtors nonresidential real property leases pursuant to 11 U.S.C. 365(d)(4) (the Motion). 2. (FTI), I am a Managing Director its main of FTI Consulting, at 500 E. Inc. Pratt

which

maintains

offices

Street, Suite 1400, Baltimore, MD 21202. located at 633 West 5th Street, 16th

My business office is Floor, Los Angeles,

California, 90071. 3. I hold a B.A. from the University of California, San

Diego, a J.D. from Loyola Law School, and an M.B.A. from the Anderson School of Business at UCLA. I have more than 13 years

of restructuring and related advisory and management experience. My work focuses on on advising distressed and and underperforming strategies for

companies maximizing

restructuring and

alternatives value, and my

performance

expertise

includes

providing financial and operational restructuring, asset sales and expert witness services in the healthcare, retail,

manufacturing and airline industries.

Prior to joining FTI, I

worked in the restructuring groups of PricewaterhouseCoopers and Price Waterhouse in Los Angeles.

Case 8:10-bk-16743-TA

Doc 227 Filed 09/10/10 Entered 09/10/10 17:52:55 Main Document Page 3 of 8

Desc

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Chief

4.

Effective on or about April 1, 2010, I became the Restructuring Officer (CRO) for Westcliff Medical

Laboratories, Inc. and its parent corporation, BioLabs, Inc., Chapter 11 Debtors and Debtors in Possession (collectively, the Debtors). 5. The Debtors commenced their bankruptcy cases by filing

voluntary petitions under Chapter 11 of 11 U.S.C. 101 et seq. on May 19, 2010. 6. The Debtors continued to operate their business until

June 16, 2010 (the Closing Date), when the Debtors closed the sale of substantially all of their operating assets to LabWest, Inc. fka Wave Newco of Inc. (LabWest) Out of pursuant the to the Order of

Authorizing

Sale

Assets

Ordinary

Course

Business, Free and Clear of Liens, Encumbrances, Claims, and Interests; Unexpired Authorizing Leases and the Assumption Contracts; and and Assignment Granting of

Executory

Other

Relief Pursuant to 11 U.S.C. Sections 105, 363, and 365 (the Sale Order). 7. The Debtors were tenants under approximately 163 real LabWest assumed or the Closing Asset 47 Date.

property leases as of the Petition Date. rejected Pursuant approximately to the the Sale Debtors 116 Order leases and as of

corresponding inter

Purchase unexpired for

Agreement, leases

identified, at its

alia, could

that

LabWest,

option,

designate

assumption or rejection after the Closing Date. I am informed that, on or before September 16, 2010, LabWest expects that it will have designated 35 of these 46 leases to either be rejected

Case 8:10-bk-16743-TA

Doc 227 Filed 09/10/10 Entered 09/10/10 17:52:55 Main Document Page 4 of 8

Desc

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

or to be assumed by the Debtors and assigned to LabWest.

For

the remaining 12 leases (the leases that are the subject of the Motion, the Leases), however, LabWest has requested that the Debtors extend the time that LabWest may designate the Leases to either be rejected or assumed by the Debtors and assigned to LabWest. 8. As described more fully in the Motion and Declaration

of Michael Aicher attached thereto, I am informed that LabWest has not been able to make a conclusive determination regarding the rejection or assumption of the remaining Leases because of issues raised by the Federal Trade Commission (FTC). I

understand that LabWest had hoped that the FTC investigation would have been concluded, or at least a determination made with respect to the Leases, prior to September 16, 2010. However,

LabWest recently contacted the Debtors and requested that the Debtors seek to extend the deadline to assume or reject the Leases. 9. The assumption of some or all of the Leases would As a of the

benefit the estate by reducing lease rejection claims. result, I believe that it is in the best interests

Debtors bankruptcy estates to extend the deadline to assume or reject the Leases and that, as a result, cause exists to extend the deadline to assume or reject. 10. The current real deadline property to assume is or reject unexpired 16, 2010;

nonresidential

leases

September

however, given the FTCs concerns as set forth in the Motion,

Case 8:10-bk-16743-TA

Doc 227 Filed 09/10/10 Entered 09/10/10 17:52:55 Main Document Page 5 of 8

Desc

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

LabWest has requested that the Debtors seek a 90 day extension of time within which to assume or reject the Leases. 11. Under 11 U.S.C. 365(d)(4), the Debtors appear to be

required to obtain entry of an order extending the assumption deadline on or prior to September 16, 2010. Given the upcoming deadline, the Debtors are unable to file a motion and obtain an order extending the deadline on regular notice. The Debtors are

informed that LabWest made efforts to resolve the FTCs concerns and successfully narrowed the number of leases that are the subject of this Motion, but the Leases remain at issue. 12. Based on the foregoing, the Motion and Declarations of

Michael Aicher and myself in support thereof, I respectfully believe that sufficient grounds exist to grant the Application for OST as well as the relief sought in the Motion. I declare and verify under penalty of perjury that the foregoing is true and correct to the best of my knowledge,

information and belief. Executed on this 10th day of September, 2010, at Los

Angeles, California.

Case 8:10-bk-16743-TA
In re:

Doc 227 Filed 09/10/10 Entered 09/10/10 17:52:55 Main Document Page 6 of 8
CHAPTER 11 Debtor(s).

Desc

WESTCLIFF MEDICAL LABORATORIES, INC.

CASE NUMBER Lead Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk-16746-TA

PROOF OF SERVICE OF DOCUMENT

I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 10250 Constellation Boulevard, Suite 1700, Los Angeles, California 90067. A true and correct copy of the foregoing document described as DECLARATION OF MATTHEW PAKKALA IN SUPPORT OF APPLICATION FOR ORDER SETTING HEARING ON SHORTENED NOTICE RE: MOTION TO EXTEND TIME TO ASSUME OR REJECT NONRESIDENTIAL REAL PROPERTY LEASES PURSUANT TO 11 U.S.C. 365(D)(4) will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner indicated below: I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s) (LBR), the foregoing document will be served by the court via NEF and hyperlink to the document. On September 10, 2010, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at the email address(es) indicated below: Todd M Arnold tma@lnbrb.com Richard L Barnett rick@barnettrubin.com, rlbsec@barnettrubin.com Ron Bender rb@lnbrb.com Jennifer Witherell Crastz jcrastz@hemar-rousso.com Carol J Fogleman mfrost@bwslaw.com John-patrick M Fritz jpf@lnbrb.com Jeffrey K Garfinkle bkgroup@buchalter.com, jgarfinkle@buchalter.com Nancy S Goldenberg nancy.goldenberg@usdoj.gov D Edward Hays ehays@marshackhays.com Michael J Heyman michael.heyman@klgates.com Mark D Houle mark.houle@pillsburylaw.com Andy Kong Kong.Andy@ArentFox.com Rodger M Landau rlandau@lgbfirm.com, kmoss@lgbfirm.com Matthew A Lesnick matt@lesnicklaw.com Michael B Lubic michael.lubic@klgates.com Aram Ordubegian ordubegian.aram@arentfox.com Justin E Rawlins jrawlins@winston.com, docketla@winston.com Jacqueline L Rodriguez jlr@lnbrb.com Benjamin Seigel bseigel@buchalter.com, IFS_filing@buchalter.com David B Shemano dshemano@pwkllp.com United States Trustee (SA) ustpregion16.sa.ecf@usdoj.gov Howard J Weg hweg@pwkllp.com Sharon Z Weiss sharon.weiss@hro.com Joseph M Welch jwelch@buchalter.com Service information continued on attached page

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 2009

F 9013-3.1

Case 8:10-bk-16743-TA
In re:

Doc 227 Filed 09/10/10 Entered 09/10/10 17:52:55 Main Document Page 7 of 8
CHAPTER 11 Debtor(s).

Desc

WESTCLIFF MEDICAL LABORATORIES, INC.

CASE NUMBER Lead Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk-16746-TA

II. SERVED BY U.S. MAIL OR OVERNIGHT MAIL(indicate method for each person or entity served): On September 10, 2010, I served the following person(s) and/or entity(ies) at the last known address(es) in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States Mail, first class, postage prepaid, and/or with an overnight mail service addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed.
In re Westcliff Medical Laboratories In re BioLabs, Inc. RSN/Landlords File No. 4367

Service by Overnight Mail

Committee-RSN Benjamin Seigel/Jeffrey Garfinkle NEF * Buchalter Nemer 1000 Wilshire Boulevard, Suite 1500 Los Angeles, California 90017-2457 RSN Los Angeles County Treasurer and Tax Collector P.O. Box 54110 Los Angeles, CA 90054-0110 RSN Robert Brill, Of Counsel Grant Callison, VP Cambridge Healthcare Properties, Inc. 1717 Main Street, 59th Floor Dallas, TX 75201
LGSM LAGUNA HILLS, LLC, BBS LAGUNA HILLS, LLC, KITE HILL TOO, LLC, SILVER STREET, LLC AND GREENLAW LAGUNA HILLS, LLC P.O. BOX 60247 Los Angeles, CA 90060-0247

Debtors Westcliff Medical Laboratories, Inc. BioLabs, Inc. 1821 E. Dyer Road, #100 Santa Ana, CA 92705 Counsel for Health Net, Inc.-RSN Pillsbury Winthrop Shaw Pittman LLP Attn: Mark D. Houle, Esq. NEF * 650 Town Center Drive, Suite 700 Costa Mesa, CA 92626-7122 RSN Rita A. Woodard Treasurer-Tax Collector 221 S. Mooney Blvd., Room 104-E Visalia, CA 93291-4593
RVS 110, LLC 210 S. GRAND AVE. STE 220 Glendora, CA 91741

Frank Cadigan Nancy Goldenberg Terry Biers Office of the U.S. Trustee 411 West Fourth St. Suite 9041 Santa Ana, CA 92701 Steven A. Oldham, Sr. Staff Atty State of CA, Dept. of Health Care Services Office of Legal Services-MS 0010 P.O. Box 997413 Sacramento, CA 95899-7413 RSN Counsel to Creditor Google Scott E. Blakeley/Johnny White Blakeley & Blakeley 2 Park Plaza, Suite 400 Irvine, CA 92614
CAMARILLO PROFESSIONAL PARTNERS, Ltd. 1672 West Ave J. Suite 207 Lancaster, CA 93534

GRETCHEN A. HETZLER, MD., INC 10861 CHERRY STREET SUITE 300 Los Alamitos, CA 90720

COMMUNITY HOSPITAL OF LOS GATOS, INC. P.O. BOX 845610 Dallas, TX 75284-5610

STEPHEN ANGEL, M.D. 320 SUPERIOR, SUITE 320 Newport Beach, CA 92663

Royal Development Plaza, LLC P. O. BOX 6126 Laguna Niguel, CA 92607

Eisenhower Properties, Inc. 39000 Bob Hope Drive Rancho Mirage, CA 92270

TERRACINA PROPERTIES, LLC C/O RICHARD J.WILSON 1730 CANYON ROAD Redlands, CA 92373

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 2009

F 9013-3.1

Case 8:10-bk-16743-TA
In re:

Doc 227 Filed 09/10/10 Entered 09/10/10 17:52:55 Main Document Page 8 of 8
CHAPTER 11 Debtor(s).

Desc

WESTCLIFF MEDICAL LABORATORIES, INC.

CASE NUMBER Lead Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk-16746-TA

SAMARITAN PROPERTIES, LLC 2581 SAMARITAN DRIVE # 300 San Jose, CA 95124

Shahram S. Gholami, MD, David M. Nudell, M.D. & Robert P. Panvini, M.D., aka Urology Associate of Silicon Valley 2581 SAMARITAN DRIVE, STE#200 San Jose, CA 95121

BSV MEDICAL OFFICE BUILDING II, LLC c/o G.L BRUNO ASSOC. INC 855 "M" STREET STE 1010 Fresno, CA 93721

Service information continued on attached page III. SERVED BY PERSONAL DELIVERY, FACSIMILE TRANSMISSION OR EMAIL (indicate method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on September 10, 2010, I served the following person(s) and/or entity(ies) by personal delivery, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on the judge will be completed no later than 24 hours after the document is filed. Via Personal Attorney Service The Hon. Theodor C. Albert United States Bankruptcy Court 411 West Fourth Street Santa Ana, CA 92701 Service information continued on attached page I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. September 10, 2010 Date Lourdes Cruz Type Name /s/ Lourdes Cruz Signature

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. January 2009

F 9013-3.1