In re

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE
Chapter 11
CRDENTIA CORP., et al./ Case No. 10-
Debtors. (Joint Administration Requested)
MOTION OF DEBTORS FOR ENTRY OF AN INTERIM AND FINAL ORDER
PURSUANT TO 11 U.S.C. lOS( a) AND 366 (I) PROHIBITING UTILITIES
FROM ALTERING, REFUSING, OR DISCONTINUING SERVICES ON
ACCOUNT OF PREPETITION INVOICES, (ll) DEEMING UTILITIES
ADEQUATELY ASSURED OF FUTURE PERFORMANCE, AND (Ill)
ESTABLISHING PROCEDURES FOR DETERMINING
ADEOUATE ASSURANCE OF PAYMENT
The above-captioned debtors and debtors in possession (collectively, the
"Debtors"), hereby move (the "Motion") for entry of an interim order (the "Interim Order")
and a final order (the "Final Order"), pursuant to sections 105(a) and 366 of title 11 of the
United States Code (the "Bankruptcy Code"), (i) determining that the Utility Providers (as
defmed below) have been provided with adequate assurance of payment within the meaning of
section 366 of the Bankruptcy Code; (ii) approving the Debtors' proposed offer of adequate
assurance and procedures whereby the Utility Providers may request additional or different
adequate assurance; (iii) prohibiting the Utility Providers fiom altering, refusing or
discontinuing services on account of prepetition amounts outstanding or on account of any
perceived inadequacy of the Debtors' proposed adequate assurance; (iv) determining that the
Debtors are not required to provide any additional adequate assurance beyond what is proposed
The Debtors, along with the last four digits of their federal tax identification numbers, are: Crdentia Corp.
(5701), ATS Universal, LLC (3980), Baker Anderson Cbristie, Inc. (3631), CRDE Corp. (2509), GHS
Acquisition Corporation (9736), Health Industry Professionals, LLC ( 4246), IDP Holding, Inc. (3468), MP
Health Corp. (4403), New Age Staffing, Inc. (1214) and Nurses Network, Inc. (6291). The Debtors'
mailing address for purposes of these cases is 1964 Howell Branch Road, Ste. 206, Winter Park, Florida
32792.
{BAY:01512186vl}
by this Motion; and (v) setting a final hearing (the "Final Hearing") on the Debtors' proposed
adequate assmance and consideration of entry of the Final Order. In support of this Motion,
the Debtors respectfully state as follows:
JURISDICTION
1. The Comt has jmisdiction over the Motion pmsuant to 28 U.S.C. 157
and 1334. This is a core proceeding within the meaning of 28 U.S. C. 157(b)(2). Venue of
these proceedings and the Motion in this Court is proper under 28 U.S.C. 1408 and 1409.
2. The statutory bases for the relief requested herein are sections 105(a) and
366 of the Bankruptcy Code.
BACKGROUND
3. On March 17, 2010 (the "Petition Date"), the Debtors commenced their
bankruptcy cases by filing voluntary petitions for relief under chapter 11 of the Bankruptcy
Code. No trustee, examiner or creditors' committee has been appointed in these cases. The
Debtors are operating their respective businesses as debtors in possession pmsuant to sections
1107 and 1108 of the Bankruptcy Code.
4. The events leading up to the Petition Date and the facts and circumstances
supporting the relief requested herein are set fmth in the Declaration of Rebecca Irish in Support
of the Debtors' Chapter 11 Petitions and First Day Pleadings filed contemporaneously herewith
and incorporated herein by reference.
5. In the ordinary course of business, the Debtors regularly incur utility
expenses for electricity, natural gas, local and long-distance telephone service, and water and
sewer services and waste management services, which are generally included as pmt of the
common area and maintenance charges and paid as part of the Debtors' monthly lease payments.
The Debtors' aggregate average monthly cost for utility services is approximately $9,627.00.
2
The utility servtces are provided by approximately twenty one (21) utility cornparnes (the
"Utility Providers"). A list of these Utility Providers ts attached as Exhibit A hereto (the
"Utility Provider List")
2
6. As of the Petition Date and as qualified below, the Debtors are generally
cmTent on payments to the Utility Providers for utility services. Overall, the Debtors have a long
and established payment history with most of the Utility Providers indicating consistent payment
for utility services. As of the Petition Date, however, the Debtors may have had (a) prepetition
accounts payable to cettain Utility Providers, (b) outstanding checks issued to certain Utility
Providers in payment for prepetition charges for utility services that had not cleared the Debtors'
bank account prior to the Petition Date or (c) liabilities for prepetition utility services for which
the Debtors had not yet been billed.
7. Access to utility services is critical to the Debtors' ongoing operations
pending the sale of some or all of the Debtors' business and assets and thereafter during the
transition period. Should any Utility Provider refuse or discontinue a utility service even for a
brief period of time, the Debtors' retail operations and administrative functions would be
severely disrupted. Any such disruption would diminish the value of the Debtors' estates. In
this regard, it is in the best interest of the Debtors, their estates and their creditors to maintain
continuous and unintenupted utility services during these chapter 11 cases. Accordingly, the
Debtors are seeking the relief requested herein.
2
The Debtors reserve the right to assert that any of the eotities now or hereafter listed in Exhibit A are not
"utilities" within the meaning of section 366(a) of the Bankruptcy Code, and to assert that any such entity is
compelled by contractual obligation, state or local law, or otherwise, to continue to furnish services to the
Debtors notwithstanding the filiug of these chapter 11 cases.
3
RELIEF REQUESTED
8. Section 366(a) of the Bankruptcy Code prevents utility companies from
discontinuing, altering or refusing service to a debtor during the frrst twenty (20) days of a
bankmptcy case. However, a utility company has the option of terminating its services thirty
(30) days from the petition date pursuant to section 366(c)(2) of the Bankruptcy Code if a debtor
has not fumished adequate assurance of payment.
9. By this Motion, the Debtors respectfully request the entry of the Interim
Order and the Final Order, pursuant to sections 1 05( a) and 366 of the Bankmptcy Code: (i)
determining that the Utility Providers have been provided with adequate assurance of payment
within the meaning of section 366 of the Bankruptcy Code; (ii) approving the Debtors' proposed
offer of adequate assurance and procedures whereby the Utility Providers may request additional
or different adequate assurance; (iii) prohibiting the Utility Providers from altering, refusing or
discontinuing services on account of prepetition amounts outstanding or on account of any
perceived inadequacy of the Debtors' proposed adequate assurance; (iv) determining that the
Debtors are not required to provide any additional adequate assurance beyond what is proposed
by this Motion; and ( v) setting the Final Hearing on the Debtors' proposed adequate assurance
and consideration of entry of the Final Order.
3
Nothing herein is intended or should be construed as (a) an admission as to the validity or priority of any
claim against the Debtors, (b) a waiver of the Debtors' rights to dispute any claim, including the validity or
priority thereof, or (c) an approvdl or assumption of any agreement, contract or lease whether under section
365(a) of the Bankruptcy Code or otherwise. Likewise, if the Court grants the relief sought herein, auy
payment made pursuant to the Court's order is not intended and should not be construed as an admission as
to the validity of any claim or a waiver of the Debtors' rights to subsequently dispute such claim.
4
I. The Proposed Adequate Assurance
10. The Debtors fully intend to pay all postpetition obligations owed to the
Utility Providers in a timely manner and expect that they will have funds sufficient to pay all
postpetition utility obligations.
11. As adequate assurance of future payment to the Utility Providers, the
Debtors propose to deposit cash in an amount equal to the approximate aggregate cost of two (2)
weeks of utility service from the Utility Providers calculated as an historical average for 2009 or
$4,814.00 (the "Adequate Assurance Deposits") into an interest-bearing, newly-created
segregated account (the "Utility Account") within ten (10) business days after the date of entry
of the Interim Order approving this Motion; provided, however, that, the Debtors, in their sole
discretion and without further application to or order of the Comt, may reduce the Utility
Account upon termination of utility services from a particular Utility Provider in an amount
equal to the approximate cost of two (2) weeks of utility service from such Utility Provider
4
Upon the effective date of any plan of reorganization or liquidation of the Debtors, unless
otherwise provided in such plan of reorganization or liquidation or other order of the Comi, the
Debtors, in their sole discretion and without further application to or order of the Comt, may
close the Utility Account and return all remaining funds to their operational and deposit accounts
maintained in the ordinary course of business.
12. The Debtors submit that the Adequate Assurance Deposits, in conjunction
with the Debtors' ability to pay for future utility services in the ordinary course of business
(collectively, the "Proposed Adequate Assurance"), constitutes sufficient adequate assurance to
4
In fue event fuat fue Debtors have multiple utility services accounts wifu a particular Utility Provider, fue
Debtors' reduction of the Utility Deposit upon termination of utility services from a particular Utility
Provider will be based on fuose utility services accounts actually terminated.
5
the Utility Providers. If any Utility Provider believes additional assurance is required, they may
request such assurance pursuant to the below described procedures.
II. The Proposed Adequate Assurance Procedures
13. In light of the severe consequences to the Debtors of any interruption in
services by the Utility Providers, but recognizing the right of the Utility Providers to evaluate the
Proposed Adequate Assurance on a case-by-case basis, the Debtors propose the following
procedures (the "Adequate Assurance Procedures") for approval and adoption:
(a) Absent compliance with the Adequate Assurance Procedures, the
Utility Providers may not alter, refuse or discontinue service to or
otherwise discriminate against the Debtors on account of the
commencement of these chapter 11 cases or any unpaid prepetition
charges or request payment of a deposit or receipt of other security
in connection with any unpaid prepetition charges.
(b) The Debtors will serve copies of the Motion and the Interim Order
via first-class mail, within three (3) business days after the date
that the Interim Order is entered by the Court on all Utility
Providers identified on the Utility Provider List. In the event that
any Utility Provider has been omitted from the Utility Provider
List, the Debtors shall supplement this list and shall promptly serve
copies of the Motion and the Interim Order on such Utility
Provider upon learning of such omission.
(c) Any Utility Provider that believes it requires additional adequate
assurance must serve a request (an "Adequate Assurance Request")
so that it is received no later than five ( 5) days prior to the Final
Hearing (the "Request Deadline") by the Debtors and by proposed
counsel for the Debtors at the following addresses: (i) Crdentia
Corp., Attn: Rebecca Irish, 1964 Howell Branch Road, Ste. 206,
Winter Park, Florida 32792, rirish@rvrteam.com; (ii) Gersten
Savage LLP, Attn: Paul Rachmuth, 600 Lexington Avenue, New
York, New York 10022, prachmuth@gerstensavage.com; and (iii)
Bayard, P.A., Attn: Jamie L. Edmonson, 222 Delaware Avenue,
Suite 900, Wilmington, DE 19801,jedmonson@bayardlaw.com
(d) Any Adequate Assurance Request must (i) be made in writing;
( ii) set forth the location for which utility services are provided;
(iii) include a summary of the Debtors' payment history relevant to
the affected account(s), including any security deposits or other
6
prepayments or assurances previously provided by the Debtors;
(iv) set fmth the basis for the Utility Provider's belief that the
Proposed Adequate Assurance is not sufficient adequate assurance
of future payment; ( v) include a proposal for what would constitute
adequate assurance of future payment from the Debtors, along with
an explanation of why such proposal is reasonable; and (vi) be
received by the Request Deadline. Any Adequate Assurance
Request that fails to meet these requirements shall be deemed an
invalid request for adequate assurance.
(e) Upon the Debtors' receipt of any Adequate Assurance Request at
the address set forth above, the Debtors shall have until two (2)
days prior to the Final Hearing or such other date as the parties
mutually agree (the "Resolution Period") to negotiate with a Utility
Provider and advise the Utility Provider that the Adequate
Assurance Request is acceptable or that they will contest the
Adequate Assurance Request at the Final Hearing.
(f) The Debtors may, in their discretion, resolve any Adequate
Assurance Request by mutual agreement with the Utility Provider
and without futther order of the Court, and may, in connection
with any such agreement, in their discretion, provide a Utility
Provider with additional adequate assurance of future payment,
including, but not limited to, cash deposits, prepayments and/or
other fmms of security, without futther order of this Court if the
Debtors believe such additional assurance is reasonable.
(g) If the Debtors determine that the Adequate Assurance Request is
not reasonable and are not able to reach an alternative resolution
with the Utility Provider during the Resolution Period, the
adequacy of assurances of payment with respect to a particular
Utility Provider pursuant to section 366(c)(3) of the Bankruptcy
Code will be determined at the Final Hearing.
(h) Pending resolution of an Adequate Assurance Request at any such
Final Hearing and entry of a final, non-appealable order thereon
finding that the Utility Provider is not adequately assured of future
payment, such Utility Provider shall be (i) prohibited from
discontinuing, altering or refusing service to the Debtors on
account of unpaid charges for prepetition services or on account of
any objections to the Proposed Adequate Assurance and
( ii) deemed to have adequate assurance of payment.
( i) Any Utility Provider that does not serve an Adequate Assurance
Request by the Request Deadline shall be deemed to have received
adequate assurance of payment that is satisfactory to such Utility
7
Provider within the meaning of section 366(c)(2) of the
Bankruptcy Code, and shall be further deemed to have waived any
right to seek additional adequate assurance during the course of the
Debtors' chapter 11 cases, except as provided in section 366(c)(3)
of the Bankruptcy Code.
14. The Debtors also request that any bonds or security deposits that were in
place prior to the Petition Date shall remain in place and shall continue to be held by those
Utility Providers holding the same, except upon either (a) written agreement(s) between the
Debtors and a Utility Provider without further order of the Court or (b) further order(s) of the
Court.
ill. The Final Hearing
15. In order to (a) address any outstanding objections to the Motion and/or (b)
resolve any Adequate Assurance Request within thirty (30) days following the Petition Date, the
Debtors request that the Court schedule the Final Hearing at its convenience on a date in advance
of the expiration of such thirty (30) day period.
IV. Subsequent Modifications To The Utility Provider List
16. The Debtors have made an extensive and good faith effort to identify the
Utility Providers and include them on the Utility Provider List. Nonetheless, it is possible that
cetiain Utility Providers have not yet been identified or included. To the extent that the Debtors
identify additional Utility Providers, the Debtors will promptly (a) file a supplement to the
Utility Provider List adding the name of the newly-identified Utility Providers and (b) serve
copies of the Motion, the Interim Order, and the Final Order on such Utility Providers.
17. Any Utility Provider subsequently added to the Utility Provider List that
believes it requires additional adequate assurance must (a) serve an Adequate Assurance Request
so that it is received on or prior to the date that is tbitiy (30) days after the date of service of the
8
Motion, the Interim Order, and the Final Order by proposed counsel for the Debtors, and (b)
othe1wise comply with the Adequate Assurance Procedures.
18. The Debtors request that the Interim Order and Final Order (when entered)
be binding on all Utility Providers, regardless of when such Utility Provider was added to the
Utility Provider List.
BASIS FOR RELIEF
19. This Court has the authority to grant the relief requested herein pursuant to
section I 05( a) of the Bankruptcy Code. Section 1 05( a) of the Bankruptcy Code provides that a
coUJt "may issue any order, process or judgment that is necessary or appropriate to carry out the
provisions of this title." 11 U.S.C. 105(a).
20. Section 366(a) of the Bankruptcy Code protects a debtor against the
immediate temlination of utility services after it files for bankruptcy. Pursuant to this section, as
amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the
"BAPCP A"), a utility provider may not, during the first twenty (20) days of the case, alter, refuse
or discontinue services to a debtor in a chapter 11 case solely because of unpaid prepetition
amounts if a debtor furnishes "adequate assurance" of payment. However, the utility provider
may do so thereafter unless the debtor furnishes "adequate assurance" of payment for
postpetition services in a form "satisfactmy" to the utility provider within thirty (30) days of the
Petition Date.
21. Section 366(c) of the Bankruptcy Code, as amended by the BAPCPA,
(a) defines the forms of adequate assurance of payment that a debtor may employ in providing
adequate assurance of payment to include cash deposits, letters of credit, certificates of deposit,
surety bonds, prepayments of utility consumption or another form of security that is mutually
agreed on between the utility provider and the debtor; (b) excludes fiom the definition of
9
adequate assurance the availability of an administrative expense claim; and (c) provides that a
court may not consider cettain facts in determining the amount of assurance that is adequate. 11
U.S. C. 366(c)(1)(A) and (B) and (c)(3)(B).
22. Although amended section 366 of the Bankruptcy Code does clarifY what
forms adequate assurance of payment may take and what factors the court should consider when
determining whether such assurance is adequate, Congress still instructs courts to determine
what amount, if any, is necessary to provide adequate assurance of payment. Under section
3 66( c) of the Bankruptcy Code, there is nothing to prevent a court from deciding that, on the
facts of the case before it, the amount required of a debtor to adequately assure payment to utility
providers is zero or nominal.
23. Prior to the BAPCPA, courts had the discretion to make such a
determination. Virginia Elec. & Power Co. v. Caldor, Inc., 117 F.3d 646, 650 (2d Cir. 1997)
("Even assuming that 'other security' should be interpreted nanowly, we agree with the
appellees that a bankruptcy court's authority to 'modifY' the level of the 'deposit or other
security,' provided for under 366(b), includes the power to require no 'deposit or other
security' where none is necessary to provide a utility supplier with 'adequate assurance of
payment."'). In this regard, the Court is not bound by state or local regulations governing what
constitutes adequate assurance of payment for postpetiton utility services. !d. at 199; In re
Begley, 41 B.R. 402, 405-06 (Bankr. B.D. Pa. 1984), aff'd, 760 F.2d 46 (3d Cir. 1987). Whether
utilities are subject to an umeasonable risk of nonpayment for postpetition services must be
determined from the facts of each case. See In re Keydata Corp., 12 B.R. 156 (Bankr. D. Mass.
1981). Since amended section 366(c)(3) ofthe Bankruptcy Code still permits courts to order the
modification of the amount of an assurance of payment, courts remain free to require no deposit
10
or security where none is necessary to ensure adequate assurance of payment in any particular
case.
24. In revising section 366 of the Bankruptcy Code under the BAPCP A,
Congress had the oppmtunity to establish a minimum adequate assurance amount that would be
required in each case. Congress did not set a minimum adequate assurance amount, but rather
vested discretion in the comts to determine the appropriate level of adequate assurance required
in each case. Accordingly, amended section 366 of the Bankruptcy Code does not give utility
companies a blank check or the right to extract from debtors an unlimited amount of adequate
assurance.
25. The Debtors submit that on the facts of the instant cases, the Proposed
Adequate Assurance is sufficient to provide adequate assmance to the Utility Providers of the
Debtors' futme performance. Additionally, the Debtors propose to further protect the Utility
Providers by requesting that this Court adopt the Adequate Assurance Procedmes outlined
above. The Debtors also submit that granting the requested relief will not prejudice the rights of
the Utility Providers to seek additional adequate assurance of payment under section 366 of the
Bankruptcy Code should the Proposed Adequate Assurance fail to provide the Utility Providers
with adequate assurance of payment.
26. As set forth above, the Debtors cannot continue their operations without
the continued services of the Utility Providers. If any of the Utility Providers alter, refuse, or
discontinue service, even for a brief period, the Debtors' business operations would be severely
disrupted and the value of their estates would be negatively impacted. In contrast, if the Court
grants the relief requested herein, the Utility Providers will not be prejudiced by the continuation
of their services.
11
NOTICE
27. No trustee, examiner or creditors' committee has been appointed in these
chapter 11 cases. Notice of the Motion has been provided to: (a) the U.S. Trustee; (b) those
patties listed on the consolidated list of creditors holding the twenty (20) largest unsecured
claims against the Debtors, as identified in their chapter 11 petitions; (c) counsel for the Debtors'
secured lender, Com Vest Capital, LLC; and (e) the Utility Providers. In light ofthe nature ofthe
relief requested herein, the Debtors submit that no other or finiher notice is required.
NO PRIOR REQUEST
28. No prior request for the relief sought in the Motion has been made to this
Court or any other Court.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
12
WHEREFORE, the Debtors respectfully request that the Court (i) enter the
Interim Order and the Final Order (a) detennining that the Utility Providers have been provided
with adequate assurance of payment within the meaning of section 366 of the Bankruptcy Code;
(b) approving the Debtors' proposed offer of adequate assurance and procedures whereby the
Utility Providers may request additional or different adequate assurance; (c) prohibiting the
Utility Providers from altering, refusing or discontinuing services on account of prepetition
amounts outstanding or on account of any perceived inadequacy of the Debtors' proposed
adequate assurance; (d) determining that the Debtors are not required to provide any additional
adequate assurance beyond what is proposed by this Motion; and (e) setting a Final Hearing on
the Debtors' proposed adequate assurance and consideration of entry of the Final Order; and ( ii)
grant such other and futther relief as may be just and proper.
Dated: March 17,2010
Wilmington, Delaware
BAYARD, P.A.
Is/ Jamie L. Edmonson
Jamie L. Edmonson (No. 4247)
222 Delaware A venue, Suite 900
Wilmington, DE 19801
Phone: (302) 655-5000
Fax: (302) 658-6395
-and-
GERSTEN SAVAGE, LLP
Paul Rachmuth
600 Lexington Avenue
New York, New York 10022
Telephone: (212) 752-9700
Facsimile: (212) 980-5192
Proposed Counsel for the Debtors and
Debtors in Possession
13
EXHIBIT A
Utility Providers
Monthly
Vendor Address City State Zip Code Amounts
City ofTucson PO BOX 28811 TUCSON AZ 85726 $ 129.20
Southwest Gas Corporation
P 0 BOX 98890 LAS VEGAS NV 89150 $ 68.27
Tucson Electric and Power
P 0 BOX 27327 TUCSON AZ 85726 $ 67.62
JEA
21 WEST CHURCH STREET JACKSONVILLE FL 32202 $ 407.21
Teco Tampa Electric
P.O. BOX 31318 TAMPA FL 33631 $ 177.53
AT&T
PO BOX 630047 DALLAS TX 75263 $ 648.94
AT&T Pro Cabs
P. 0. BOX 105373 ATLANTA GA 30348 $ 346.74
COX Communications
P 0 BOX 78071 PHOENIX AZ 85062 $ 121.40
DeltaCom
P.O. BOX 740597 ATLANTA GA 30374 $ 496.36
In Contact
P 0 BOX 31475 SALT LAKE CITY UT 84131 $ 6.99
Livingston Telephone
701 W CHURCH LIVINGSTON TX 77351 $ 83.72
Logix Communications
PO BOX3608 HOUSTON TX 77253 $ 2,128.91
NTS Communications
5307 WEST LOOP 289 LUBBOCK TX 79414 $ 398.53
Nuvox Communication
P. 0. BOX 580451 CHARLOTIE NC 28258 $ 626.95
Qwest
P 0 BOX 856169 LOUISVILLE KY 40285 $ 76.67
TWTelcom
10475 PARK MEADOW DRIVE LITILETON co 80124 $ 1,480.55
UCN 7730 UNION PARK AVE,# SOD
MIDVALE
UT 84047 $ 19.38
Verizon Florida LLC
P. 0. BOX 920041 DALLAS TX 75392 $ 413.87
Von age 23 MAIN STREET
HOLMDEL
NJ 7733 $ 9.47
Windstream
4001 RODNEY PARHAM RD UTILE ROCK AR 72212 $ 1,110.95
XO Communication Services, Inc.
P.O. BOX 5738 CAROL STREAM IL 60197 $ 806.99
TOTAL $ 9,626.25
EXHIBITB
Proposed Interim Order
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re Chapter 11
Case No. 10-
----
CRDENTIA CORP., et al./
Debtors. (Joint Administration Requested)
INTERIM ORDER PURSUANT TO 11 U.S.C. lOS( a) AND 366 (I) PROHIBITING
UTILITIES FROM ALTERING, REFUSING, OR DISCONTINUING SERVICES ON
ACCOUNT OF PRE-PETITION INVOICES, (II) DEEMING UTILITIES
ADEQUATELY ASSURED OF FUTURE PERFORMANCE, AND (III)
ESTABLISIDNG PROCEDURES FOR DETERMINING
ADEQUATE ASSURANCE OF PAYMENT
Upon the motion (the "Motion")
2
of the above-captioned debtors and debtors in
possession (collectively, the "Debtors"), for entry of the Interim Order and the Final Order,
pursuant to sections 105(a) and 366 of the Banktuptcy Code, (i) determining that the Utility
Providers have been provided with adequate assurance of payment within the meaning of section
366 of the Banktuptcy Code; (ii) approving the Proposed Adequate Assurance and the Adequate
Assurance Procedures; (iii) prohibiting the Utility Providers fiom altering, refusing or
discontinuing services on account of prepetition amounts outstanding or on account of any
perceived inadequacy of the Proposed Adequate Assurance; (iv) determining that the Debtors are
not required to provide any additional adequate assurance beyond the Proposed Adequate
Assurance; and (v) setting the Final Hearing; and upon the Declaration of Rebecca Irish in
Suppmt of the Debtors' Chapter 11 Petitions and First Day Pleadings; and due and sufficient
2
The Debtms, along with the last four digits of their federal tax identification numbers, are: Crdentia Corp.
(5701), ATS Universal, LLC (3980), Baker Anderson Christie, Inc. (3631), CRDE Corp. (2509), GHS
Acquisition Corporation (9736), Health Industry Professionals, LLC ( 4246), HIP Holding, Inc. (3468), MP
Health Corp. (4403), New Age Staffing, Inc. (1214) and Nurses Network, Inc. (6291). The Debtors'
mailing address for purposes of these cases is 1964 Howell Branch Road, Ste. 206, Winter Park, Florida
32792.
Capitalized terms not defined herein have the meanings ascribed to theru in the Motion.
notice of the Motion having been given; and it appearing that no other or further notice need be
provided; and upon the record herein; and it appearing that the relief requested by the Motion is
in the best interest of the Debtors, their estates, their creditors and other parties in interest; and
after due deliberation and sufficient cause appearing therefor;
IT IS HEREBY ORDERED THAT:
1. The Motion is GRANTED on an interim basis, pending the Final Hearing.
2. Payment of Post-Petition Date Utility Charges. The Debtors are
authorized to and shall pay, in accordance with their pre-Petition Date practices, all post-Petition
Date utility charges for all utility services rendered by the Utility Providers to the Debtors.
3. Pre-Petition Date Bonds and Security Deposits. Any bonds or security
deposits that were in place prior to the Petition Date shall remain in place and shall continue to
be held by those Utility Providers holding the same, except upon either (a) written agreement(s)
between the Debtors and a Utility Provider without further order of the Court or (b) further
order( s) of the Court.
4. Adequate Assurance of Future Payment. The Proposed Adequate
Assurance is hereby approved on an interim basis and until such time as the Final Order is
entered by the Court, the Debtors are deemed to have furnished the Utility Providers with
adequate assurance of payment under section 366 of the Bankruptcy Code for post-Petition Date
utility services by depositing cash in an amount equal to the approximate aggregate cost of two
(2) weeks of utility service from the Utility Providers calculated as a historical average for 2009
or $4,814.00 (the "Adeguate Assurance Deposits") into the Utility Account within ten (10)
business days after the date of entry of this Interim Order; provided, however, that, the Debtors,
in their sole discretion and without further application to or order of the Comt, may reduce the
2
Utility Account upon tennination of utility services from a particular Utility Provider in an
amount equal to the approximate cost of two (2) weeks of utility service from such Utility
Provider
3
Upon the effective date of any plan of reorganization or liquidation of the Debtors,
unless otherwise provided in such plan of reorganization or liquidation or other order of the
Comt, the Debtors, in their sole discretion and without further application to or order of the
Court, may close the Utility Account and retUlii all remaining funds to their operational and
deposit accounts maintained in the ordinary course of business.
5. Prohibition. Subject to the Adequate Assurance Procedures, until such
time as the Final Order is entered by the Court, all Utility Providers are prohibited fi'om (a)
discontinuing, altering or refusing service to the Debtors on account of any prepetition amounts
outstanding, (b) discriminating against the Debtors or (c) requiring payment of a deposit or
receipt of any other security for continued service as a result of the Debtors' bankruptcy filings
or any outstanding prepetition invoices, other than as provided in the Motion.
6. Adequate Assurance Procedures. The Adequate Assurance Procedures for
detennining requests for additional adequate assurance are approved as follows:
(a) Absent compliance with the Adequate Assurance Procedures, the
Utility Providers may not alter, refuse or discontinue service to or
otherwise discriminate against the Debtors on account of the
commencement of these chapter 11 cases or any unpaid prepetition
charges or request payment of a deposit or receipt of other security
in connection with any unpaid prepetition charges.
(b) The Debtors will serve copies of the Motion and the Interim Order
via first-class mail, within three (3) business days after the date
that the Interim Order is entered by the Court on all Utility
Providers identified on the Utility Provider List. In the event that
any Utility Provider has been omitted from the Utility Provider
List, the Debtors shall supplement this list and shall promptly serve
In the event that the Debtors have multiple utility services accounts with a particular Utility Provider, the
Debtors' reduction of the Utility Deposit upon termination of utility services from a particular Utility
Provider will be based on those utility services accounts actually terminated.
3
cop1es of the Motion and the Interim Order on such Utility
Provider upon learning of such omission.
(c) Any Utility Provider that believes it requires additional adequate
assurance must serve a request (an "Adequate Assurance Request")
so that it is received no later than five ( 5) days prior to the Final
Hearing (the "Request Deadline") by the Debtors and by proposed
counsel for the Debtors at the following addresses: (i) Crdentia
Corp., Attn: Rebecca Irish, 1964 Howell Branch Road, Ste. 206,
Winter Park, Florida 32792, rirish@rVIteamcom; (ii) Gersten
Savage LLP, Attn: Paul Rachmuth, 600 Lexington Avenue, New
York, New York 10022, prachmuth@gerstensavage.com; and (iii)
Bayard, P.A., Attn: Jamie L. Edmonson, 222 Delaware Avenue,
Suite 900, Wilmington, DE 19801,jedmonson@bayardlaw.com
(d) Any Adequate Assurance Request must (i) be made in writing;
( ii) set fmth the location for which utility services are provided;
(iii) include a summary of the Debtors' payment history relevant to
the affected account(s), including any security deposits or other
prepayments or assurances previously provided by the Debtors;
( iv) set forth the basis for the Utility Provider's belief that the
Proposed Adequate Assurance is not sufficient adequate assurance
of future payment; (v) include a proposal for what would constitute
adequate assurance of future payment fiom the Debtors, along with
an explanation of why such proposal is reasonable; and (vi) be
received by the Request Deadline. Any Adequate Assurance
Request that fails to meet these requirements shall be deemed an
invalid request for adequate assurance.
(e) Upon the Debtors' receipt of any Adequate Assmance Request at
the address set forth above, the Debtors shall have until two (2)
days prior to the Final Hearing or such other date as the parties
mutually agree (the "Resolution Period") to negotiate with a Utility
Provider and advise the Utility Provider that the Adequate
Assurance Request is acceptable or that they will contest the
Adequate Assurance Request at the Final Hearing.
(f) The Debtors may, in their discretion, resolve any Adequate
Assmance Request by mutual agreement with the Utility Provider
and without further order of the Court, and may, in connection
with any such agreement, in their discretion, provide a Utility
Provider with additional adequate assurance of future payment,
including, but not limited to, cash deposits, prepayments and/or
other forms of security, without further order of this Court if the
Debtors believe such additional assurance is reasonable.
4
(g) If the Debtors determine that the Adequate Assurance Request is
not reasonable and are not able to reach an altemative resolution
with the Utility Provider during the Resolution Period, the
adequacy of assurances of payment with respect to a particular
Utility Provider pursuant to section 366(c)(3) of the Bankruptcy
Code will be determined at the Final Hearing.
(h) Pending resolution of an Adequate Assurance Request at any such
Final Hearing and entry of a final, non-appealable order thereon
finding that the Utility Provider is not adequately assured of future
payment, such Utility Provider shall be (i) prohibited from
discontinuing, altering or refusing service to the Debtors on
account of unpaid charges for prepetition services or on account of
any objections to the Proposed Adequate Assurance and
(ii) deemed to have adequate assurance of payment.
( i) Any Utility Provider that does not serve an Adequate Assurance
Request by the Request Deadline shall be deemed to have received
adequate assurance of payment that is satisfactory to such Utility
Provider within the meaning of section 366( c)(2) of the
Bankruptcy Code, and shall be further deemed to have waived any
right to seek additional adequate assurance during the course of the
Debtors' chapter 11 cases, except as provided in section 366(c)(3)
of the Bankmptcy Code.
7. Modifications to the Utility Provider List. To the extent that the Debtors
identity additional Utility Providers not included on the Utility Provider List, the Debtors will
promptly (a) file a supplement to the Utility Provider List adding the name of the newly-
identified Utility Providers and (b) serve copies of the Motion, the Interim Order and the Final
Order on such Utility Providers. This Order shall be binding on all Utility Providers, regardless
of when such Utility Provider was added to the Utility Provider List, subject to any further
order(s) of the Comt.
8. Any Utility Provider subsequently added to the Utility Provider List that
believes it requires additional adequate assurance must (a) serve an Adequate Assurance Request
so that it is 1'eceived on or prior to the date that is thirty (30) days after the date of service of the
5
Motion, the Interim Order, and the Final Order as proposed by connsel for the Debtors and
(b) otherwise comply with the Adequate Assurance Procedures.
9. Failure to Submit Adequate Assurance Request by Appropriate Deadline.
Any Utility Provider that fails to submit an Adequate Assurance Request pursuant to the
Adequate Assurance Procedures and by the appropriate deadlines set forth above, shall be
deemed to have received adequate assurance of future payment during the pendency of these
chapter 11 cases, and shall further be deemed to have waived any right to seek additional
adequate assurance during the course of the Debtors' chapter 11 cases, except as provided in
section 366(c) ofthe Bankruptcy Code.
10. Service of Order. The Debtors will serve copies of the Interim Order via
first-class mail, within three (3) business days after the date that this Interim Order is entered by
the Corut on all Utility Providers identified on the Utility Provider List.
11. Burden of Proof Nothing in this Interim Order shall be deemed to affect
any burden of proof that either the Debtor or any Utility Provider may have in a Determination
Hearing.
12. No Admission or Waiver. Nothing in the Motion or in this Interim Order
is intended or should be construed as (a) an admission as to the validity or priority of any claim
against the Debtors, (b) a waiver of the Debtors' rights to dispute any claim, including the
validity or priority thereof, or (c) an approval or assumption of any agreement, contract or lease
whether under section 365(a) of the Bankruptcy Code or otherwise. Likewise, any payment
made pursuant to this Order is not intended and should not be construed as an admission as to the
validity of any claim or a waiver of the Debtors' rights to subsequently dispute such claim.
6
13. Authorization of Post-Petition Date Payments. This Interim Order shall
constitute valid autho1ization for the post-Petition Date payments to be made to the Utility
Providers pursuant to section 549( a) of the Bankruptcy Code.
14. Objection Deadline and Final Hearing. The deadline by which Utility
Providers must file and serve objections, if any, to the Motion is _______ , 2010 at
_: _ _ .m. (ET). If no objections to the Motion are filed, the Court may enter the Final
Order without further notice or hearing. The Final Hearing, if required, will be held on
________ , 2010 at _: __ .m. (ET).
15. Nothing in the Motion or in this Interim Order is intended or should be
construed as (a) an admission as to the validity or priority of any claim against the Debtors, (b) a
waiver of the Debtors' rights to dispute any claim, including the validity or priority thereof, or
(c) an approval or assumption of any agreement, contract or lease whether under section 365(a)
of the Bankruptcy Code or othe1wise. Likewise, if the Court grants the relief sought in the
Motion and enters the Final Order, any payment made pursuant to this Interim Order or the Final
Order is not intended and should not be construed as an admission as to the validity of any claim
or a waiver of the Debtors' rights to subsequently dispute such claim Further, the relief granted
in this Order shall be subject to the Tenns of the Ratification Agreement, the Budget and (as
applicable) the Interim Order or Final Order (each as defined in the Debtors' Motion to obtain
post-petition financing).
16. The Debtors are authorized and empowered to take such actions as may be
necessary and appropriate to implement the tenns of this Interim Order.
7
17. This Court shall retain jurisdiction with respect to all matters relating to
the interpretation or implementation of this Order.
Dated: March_, 2010
Wihnington, Delaware
THE HONORABLE

8
EXHIBITC
Proposed Final Order
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
Inre Chapter 11
CRDENTIA CORP., eta!./ Case No. 10-
Debtors. (Joint Administration Requested)
FINAL ORDER PURSUANT TO 11 U.S.C. lOS( a) AND 366 (I) PROHIBITING
UTILITIES FROM ALTERING, REFUSING, OR DISCONTINUING SERVICES ON
ACCOUNT OF PRE-PETITION INVOICES, (II) DEEMING UTILITIES
ADEQUATELY ASSURED OF FUTURE PERFORMANCE, AND (III)
ESTABLISIITNG PROCEDURES FOR DETERMINING
ADEQUATE ASSURANCE OF PAYMENT
Upon the motion (the "Motion")
2
of the above-captioned debtors and debtors in
possession (collectively, the "Debtors"), for entry of the Interim Order and the Final Order,
pursuant to sections lOS( a) and 366 of the Bankruptcy Code, (i) determining that the Utility
Providers have been provided with adequate assurance of payment within the meaning of section
366 of the Bankmptcy Code; (ii) approving the Proposed Adequate Assurance and the Adequate
Assurance Procedures; (iii) prohibiting the Utility Providers from altering, refusing or
discontinuing services on account of prepetition amounts outstanding or on account of any
perceived inadequacy of the Proposed Adequate Assurance; (iv) determining that the Debtors are
not required to provide any additional adequate assurance, beyond the Proposed Adequate
Assurance; and ( v) setting the Final Hearing; and upon the Declaration of Rebecca Irish in
Suppmt of the Debtors' Chapter 11 Petitions and First Day Pleadings; and due and sufficient
2
The Debtors, along with the last four digits of their federal tax identification numbers, are: Crdentia Corp.
(5701), ATS Universal, LLC (3980), Baker Anderson Orr:istie, Inc. (3631), CRDE Corp. (2509), GHS
Acquisition Corporation (9736), Health Industry Professionals, LLC ( 4246), HIP Holding, Inc. (3468), MP
Health Corp. (4403), New Age Staffing, Inc. (1214) and Nurses Network, Inc. (6291). The Debtors'
mailing address for purposes of these cases is 1964 Howell Brauch Road, Ste. 206, Winter Park, Florida
32792.
Capitalized terms not defined herein have the meanings ascribed to them in the Motion.
notice of the Motion having been given; and it appearing that no other or further notice need be
provided; and upon the record herein; and it appearing that the relief requested by the Motion is
in the best interest of the Debtors, their estates, their creditors and other parties in interest; and
after due deliberation and sufficient cause appearing therefor;
IT IS HEREBY ORDERED THAT:
1. The Motion is GRANTED.
2. Payment of Post-Petition Date Utility Charges. The Debtors are
authorized to and shall pay, in accordance with their pre-Petition Date practices, all post-Petition
Date utility charges for all utility services rendered by the Utility Providers to the Debtors.
3. Pre-Petition Date Bonds and Security Deposits. Any bonds or security
deposits that were in place prior to the Petition Date shall remain in place and shall continue to
be held by those Utility Providers holding the same, except upon either (a) written agreement(s)
between the Debtors and a Utility Provider without further order of the Court or (b) futther
order(s) of the Court.
4. Adequate Assurance of Future Pavment. The Proposed Adequate
Assurance is hereby approved and the Debtors are deemed to have furnished the Utility
Providers with adequate assurance of payment under section 366 of the Bankruptcy Code for
post-Petition Date utility services by depositing cash in an amount equal to the approximate
aggregate cost of two (2) weeks of utility service fi"om the Utility Providers calculated as a
historical average for 2009 or $4,814.00 (the "Adequate Assurance Deposits") into the Utility
Account within ten (10) business days after the date of entry of the Interim Order; provided,
however, that, the Debtors, in their sole discretion and without further application to or order of
the Comt, may reduce the Utility Account upon termination of utility services from a particular
2
Utility Provider in an amount equal to the approximate cost of two (2) weeks of utility service
ti:om such Utility Provider.
3
Upon the effective date of any plan of reorganization or liquidation
of the Debtors, unless otherwise provided in such plan of reorganization or liquidation or other
order ofthe Comi, the Debtors, in their sole discretion and without further application to or order
of the Court, may close the Utility Account and retum all remaining funds to their operational
and deposit accounts maintained in the ordinary course of business.
5. Prohibition. Absent finiher order of the Court, all Utility Providers are
prohibited from (a) discontinuing, altering or refusing service to the Debtors on account of any
prepetition amounts outstanding, (b) discriminating against the Debtors or (c) requiring payment
of a deposit or receipt of any other security for continued service as a result of the Debtors'
bankruptcy filings or any outstanding prepetition invoices, other than as provided in the Motion
and this Order.
6. Adequate Assurance Procedures. The Adequate Assurance Procedures for
detennining requests for additional adequate assurance are approved as follows:
(a) Absent compliance with the Adequate Assurance Procedures, the
Utility Providers may not alter, refuse or discontinue service to or
otherwise discriminate against the Debtors on account of the
commencement of these chapter 11 cases or any unpaid prepetition
charges or request payment of a deposit or receipt of other security
in connection with any unpaid prepetition charges.
(b) The Debtors will serve copies of the Motion and the Interim Order
via first-class mail, within three (3) business days after the date
that the Interim Order is entered by the Court on all Utility
Providers identified on the Utility Provider List. In the event that
any Utility Provider has been omitted fiom the Utility Provider
List, the Debtors shall supplement this list and shall promptly serve
copies of the Motion and the Interim Order on such Utility
Provider upon learning of such omission.
In the event that the Debtors have multiple utility services accounts with a particular Utility Provider, the
Debtors' reduction of the Utility Deposit upon termination of utility services from a particular Utility
Provider will be based on those utility services accounts actually terminated.
3
(c) Any Utility Provider that believes it requires additional adequate
assurance must serve a request (an "Adequate Assurance Request")
so that it is received no later than five ( 5) days prior to the Final
Hearing (the "Request Deadline") by the Debtors and by proposed
counsel for the Debtors at the following addresses: (i) Crdentia
Corp., Attn: Rebecca Irish, 1964 Howell Branch Road, Ste. 206,
Winter Park, Florida 32792, rirish@rvrteam.com; (ii) Gersten
Savage LLP, Attn: Paul Rachmuth, 600 Lexington Avenue, New
York, New York 10022, prachmuth@gerstensavage.com; and (iii)
Bayard, P.A., Attn: Jamie L. Edmonson, 222 Delaware Avenue,
Suite 900, Wilmington, DE 19801, jedmonson@bayardlaw.com.
(d) Any Adequate Assurance Request must (i) be made in writing;
( ii) set forth the location for which utility services are provided;
(iii) include a summary of the Debtors' payment histmy relevant to
the affected account(s), including any security deposits or other
prepayments or assurances previously provided by the Debtors;
(iv) set fmth the basis for the Utility Provider's belief that the
Proposed Adequate Assurance is not sufficient adequate assurance
of future payment; (v) include a proposal for what would constitute
adequate assurance of future payment from the Debtors, along with
an explanation of why such proposal is reasonable; and (vi) be
received by the Request Deadline. Any Adequate Assurance
Request that fails to meet these requirements shall be deemed an
invalid request for adequate assurance.
(e) Upon the Debtors' receipt of any Adequate Assurance Request at
the address set forth above, the Debtors shall have until two (2)
days prior to the Final Hearing or such other date as the parties
mutually agree (the "Resolution Period") to negotiate with a Utility
Provider and advise the Utility Provider that the Adequate
Assurance Request is acceptable or that they will contest the
Adequate Assurance Request at the Final Hearing.
(f) The Debtors may, in their discretion, resolve any Adequate
Assurance Request by mutual agreement with the Utility Provider
and without further order of the Court, and may, in connection
with any such agreement, in their discretion, provide a Utility
Provider with additional adequate assurance of future payment,
including, but not limited to, cash deposits, prepayments and/or
other forms of security, without further order of this Comt if the
Debtors believe such additional assurance is reasonable.
(g) If the Debtors determine that the Adequate Assurance Request is
not reasonable and are not able to reach an alternative resolution
4
with the Utility Provider during the Resolution Period, the
adequacy of assurances of payment with respect to a pmticular
Utility Provider pursuant to section 366(c)(3) of the Bankruptcy
Code will be determined at the Final Hearing.
(h) Pending resolution of an Adequate Assurance Request at any such
Final Hearing and entry of a final, non-appealable order thereon
finding that the Utility Provider is not adequately assured of future
payment, such Utility Provider shall be ( i) prohibited from
discontinuing, altering or refusing service to the Debtors on
account of unpaid charges for prepetition services or on account of
any objections to the Proposed Adequate Assurance and
(ii) deemed to have adequate assurance of payment.
( i) Any Utility Provider that does not serve an Adequate Assurance
Request by the Request Deadline shall be deemed to have received
adequate assurance of payment that is satisfactory to such Utility
Provider within the meaning of section 366(c)(2) of the
Bankruptcy Code, and shall be further deemed to have waived any
right to seek additional adequate assurance during the course of the
Debtors' chapter 11 cases, except as provided in section 366(c)(3)
of the Bankruptcy Code.
7. Modifications to the Utility Provider List. To the extent that the Debtors
identify additional Utility Providers not included on the Utility Provider List, the Debtors will
promptly (a) file a supplement to the Utility Provider List adding the name of the newly-
identified Utility Providers and (b) serve copies of the Motion, the Interim Order and the Final
Order on such Utility Providers. This Order shall be binding on all Utility Providers, regardless
of when such Utility Provider was added to the Utility Provider List, subject to any further
order(s) of the Comt.
8. Any Utility Provider subsequently added to the Utility Provider List that
believes it requires additional adequate assurance must (a) serve an Adequate Assurance Request
so that it is received on or prior to the date that is thirty (30) days after the date of service of the
Motion, the Interim Order, and the Final Order as proposed by counsel for the Debtors and
(b) otherwise comply with the Adequate Assurance Procedures.
5
9. Failure to Submit Adequate Assurance Request by Appropriate Deadline.
Any Utility Provider that fails to submit an Adequate Assurance Request pursuant to the
Adequate Assurance Procedures and by the appropriate deadlines set forth above, shall be
deemed to have received adequate assurance of future payment during the pendency of these
chapter 11 cases, and shall ftuiher be deemed to have waived any right to seek additional
adequate assurance during the course of the Debtors' chapter 11 cases, except as provided in
section 366(c) of the Baukruptcy Code.
10. Service of Order. The Debtors will serve copies of the Final Order via
first-class mail, within three (3) business days after the date that this Final Order is entered by the
Comt on all Utility Providers identified on the Utility Provider List.
11. Burden of Proof. Nothing in this Final Order shall be deemed to affect
any burden of proof that either the Debtor or any Utility Provider may have in a Determination
Hearing.
12. No Admission or Waiver. Nothing in the Motion or in this Final Order is
intended or should be construed as (a) an admission as to the validity or priority of any claim
against the Debtors, (b) a waiver of the Debtors' rights to dispute any claim, including the
validity or priority thereof, or (c) an approval or assumption of any agreement, contract or lease
whether under section 365(a) of the Bankruptcy Code or otherwise. Likewise, any payment
made pursuant to the Interim Order or this Final Order is not intended and should not be
construed as an admission as to the validity of any claim or a waiver of the Debtors' rights to
subsequently dispute such claim.
6
13. Authorization of Post-Petition Date Payments. This Final Order shall
constitute valid authorization for the post-Petition Date payments to be made to the Utility
Providers pursuant to section 549( a) of the Bankruptcy Code.
14. The Debtors are authorized to take all actions necessary to implement this
Final Order.
15. This Court shall retain jurisdiction with respect to all matters arising from
or relating to the interpretation or implementation of this Final Order.
Dated:=:--:---::::-::------' 2010
Wilmington, Delaware
THE HONORABLE ________ _
UNITED STATES BANKRUPTCY JUDGE
7