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TARTER KRINSKY & DROGIN LLP Attorneys for The Christian Brothers Institute, et al. Debtors and Debtors-in-Possession 1350 Broadway, 11th Floor New York, New York 10018 (212) 216-8000 Scott S. Markowitz, Esq. Marilyn Simon, Esq. Eric H. Horn, Esq. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------------- x In re: : : THE CHRISTIAN BROTHERS INSTITUTE, et al. : : Debtors. : ------------------------------------------------------------------- x

Chapter 11 Case No.: 11-22820 (RDD) (Jointly Administered)

MOTION FOR AN ORDER PURSUANT TO 1121(d) OF THE BANKRUPTCY CODE FURTHER EXTENDING THE DEBTORS EXCLUSIVE PERIODS TO FILE A PLAN AND SOLICIT ACCEPTANCES THERETO TO: THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE The Christian Brothers Institute (CBI) and The Christian Brothers of Ireland, Inc. (CBOI), the above-captioned debtors and debtors-in-possession (together, the Debtors), respectfully represent as follows: RELIEF REQUESTED 1. Pursuant to 1121 of the Bankruptcy Code, a debtor has the exclusive right to file

a plan for one hundred twenty days after the case commences and has an additional period of sixty (60) days during which the plan must be accepted. The original deadline for the Debtors to file a plan in these cases would have expired on August 26, 2011. By motion dated July 28, 2011, the Debtors sought entry of an order pursuant to 1121(d)(1) of the Bankruptcy Code granting an extension of the exclusive periods within which the Debtors may file a plan and

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solicit acceptances thereto for an additional one hundred and twenty (120) days, to through and including December 24, 2011 and February 22, 2012, respectively. By order dated October 28, 2011 (ECF No. 145), the Court extended the Debtors 120-day Exclusive Period to through and including December 24, 2011, and the 180-day Exclusive Period to through and including February 22, 2012. By this Motion, the Debtors seek entry of an order pursuant to 1121(d)(1) of the Bankruptcy Code granting a further extension of the exclusive periods within which the Debtors may file a plan and solicit acceptances thereto for an additional period of one hundred and eighty (180) days, to through and including June 21, 2012 and August 20, 2012, respectively. JURISDICTON, VENUE AND STATUTORY BASES FOR RELIEF 2. This Court has jurisdiction over this application pursuant to 28 U.S.C. 1334 and

the Standing Order of Referral of Cases to Bankruptcy Judges for the Southern District of New York, dated July 10, 1984 (Ward, acting C.J.). These are core proceedings pursuant to 28 U.S.C. 157(b). The statutory predicate for the relief requested herein is 1121(d) of the Bankruptcy Code. Venue of these proceeding and this application is proper pursuant to 28 U.S.C. 1408 and 1409. BACKGROUND 3. On April 28, 2011 (the Petition Dates), each of the above-captioned Debtors

commenced their respective Chapter 11 cases (individually, a Case and together, the Cases) by filing a voluntary petition for relief under Chapter 11 of Title 11, United States Code (the Code). Pursuant to 1107(a) and 1108 of the Code, the Debtors continue to operate as debtors-in-possession. No trustee has been appointed.

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4.

The Debtors cases were consolidated for administrative purposes only, by order

dated May 2, 2011. Thereafter, by order dated May 18, 2011, the Debtors were authorized to retain Tarter Krinsky & Drogin LLP as bankruptcy counsel. 5. On May 11, 2011, the United States Trustee appointed an Official Committee of

Unsecured Creditors (the Committee). The Committee has retained Pachulski Stang Ziehl & Jones LLP as its counsel. 6. CBI is a domestic not-for-profit 501(c)(3) corporation organized under 102(a)(5)

of the New York Not-for-Profit Corporation Law. CBI was formed in 1903 pursuant to Section 57 of the then existing New York Membership Law. The Not-for-Profit Corporation Law replaced the Membership Law effective September 1, 1970. The purpose for which CBI was, and continues to be, formed was to establish, conduct and support Catholic elementary and secondary schools principally throughout New York State. As a not-for-profit corporation, the assets, and/or income are not distributable to, and do not inure to, the benefit of its directors or officers. CBI depends upon grants and donations to fund a portion of its operating expenses. 7. CBOI is a domestic not-for-profit 501(c)(3) corporation organized under the Not-

for-Profit Corporation Law of the State of Illinois. The purpose for which CBOI was, and continues to be, formed was to establish, conduct and support Catholic elementary and secondary schools principally throughout the State of Illinois, as well as other spiritual and temporal affairs of the former Brother Rice Province of the Congregation of Christian Brothers. As a not-forprofit corporation, the assets, and/or income are not distributable to, and do not inure to the benefit of its members, or officers. CBOI depends upon grants and donations to fund a portion of its operating expenses.

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8.

The cause for the filing of these Chapter 11 case has been extensively detailed in the

affidavit pursuant to Local Bankruptcy Rule 1007-2 filed with the original petitions and is referred to as if fully set forth herein. In short, the Debtors Chapter 11 cases were filed in an effort to resolve in one forum, an onslaught of litigation and claims asserted by alleged sexual abuse plaintiffs against the Debtors in several jurisdictions in North America. 9. By order dated June 28, 2011, CBI was authorized to retain Newmark &

Company Real Estate, Inc. d/b/a Newmark Knight Frank (Newmark) as its exclusive real estate broker with respect to the marketing and sale of real property located at 74 W. 124th Street, New York, NY 10027. This is the first of a number of properties that the Debtors are presently reviewing to determine which properties may be sold as part of their efforts to raise the funds necessary to resolve sexual abuse claims and propose a plan to creditors in these cases. CBI has recently signed a contract of sale with respect to the property located at 74 W. 124th Street, New York, New York and is in the process of filing a motion to approve the sale or schedule an auction if other qualified bids are received. CBI has also recently received an offer to purchase property located in Westchester County where Iona Grammar currently operates its school. CBI has shared the offer with the Committee and the Committee is performing due diligence on the offer as the offeror has some relationship with the Debtors. 10. The Debtors have retained accountants who will be reviewing the Debtors

finances and will give the Debtors advice with respect to (i) operations; (ii) the funding that will be required for continued operations; and (iii) evaluating the costs to modify or change their present structure. The Debtors believe that this analysis will take several months and must be completed before embarking on plan/reorganization negotiations.

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11.

A major issue in these cases will be the bar date for the filing of claims and

determining in which jurisdictions notice of the bar date should be advertised/published. It is critical that the Debtors make extensive efforts to notify potential abuse claimants of the importance and the need to file a proof of claim. In that regard, the Debtors, after consultation with the Committee, have obtained a court order authorizing the retention of a claims agent to assist in the bar date campaign. The terms of the bar date order are now being negotiated with the Committee, and it will afford potential abuse victims at least until June 1, 2012, to file proofs of claim. The Debtors have prepared a bar date motion, as well as various customized forms, such as a sexual abuse proof of claim form and notice. The Committee has provided extensive comments to the forms of the bar date pleadings and the Debtors expect to hold an initial hearing on the bar date pleadings in early December. The Debtors and the Committee will also be discussing the need for a future claims representative. The Debtors Chapter 11 cases are somewhat unique in that the Debtors, over a period of many decades, either operated or were significantly involved with several schools and other institutions across the United States and Canada. Noticing and advertising the bar date will be a significant undertaking in these Chapter 11 cases.1 Until the bar date has passed and the claims have been asserted and analyzed, neither the Debtors nor the Committee will be able to determine the aggregate of the claims or the amount that may be necessary to fund a plan in these cases. The Committee has specifically requested that the Debtors provide at least 150 days notice of the bar date to holders of potential sexual abuse claims. As such, the Debtors will not be in a position to know with reasonable

The Debtors are mindful of their obligation to provide actual notice to known creditors or individuals who may reasonably be known to be potential creditors. The Debtors have made requests to numerous schools for production of alumni directories. The Debtors are also in the process of drafting a 2004 motion seeking to obtain an order authorizing the Debtors to issue subpoenas to the various schools who have declined to voluntarily deliver alumni directories.

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certainty the number and amount of claims asserted by sexual abuse claimants until at least June 2012. 12. Recently, the Committee obtained a 2004 order authorizing it to serve subpoenas

on various entities which have a business relationship with the Debtors. The 2004 order also authorizes the Committee to seek substantial discovery from the Debtors. The Debtors have been producing documents on a rolling basis. 13. Another significant issue which must be resolved in order to determine the monies

available to fund a plan is whether or not the Debtors have certain rights in various liability insurance policies which were issued in connection with the operation of various schools throughout the country. The Archdiocese of Seattle commenced an adversary proceeding

seeking to obtain a declaratory judgment with respect to the rights and obligations under two such policies. Issue has been joined in the adversary proceeding and all parties have agreed that the adversary proceeding should be stayed until the bar date is passed so that an analysis can be done as to the amount of claims which may be covered under the insurance policies. DISCUSSION 14. Section 1121 of the Bankruptcy Code provides, in pertinent part, as follows: (b) Except as otherwise provided in this section, only the debtor may file a plan until after 120 days after the date of the order for relief under this chapter. (c) Any party in interest, including the debtor, the trustee, a creditors committee, an equity security holders committee, a creditor, an equity security holder, or any indenture trustee, may file a plan if and only if (1) a trustee has been appointed under this chapter; (2) the debtor has not filed a plan before 120 days after the date of the order for relief under this chapter; or

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(3) the debtor has not filed a plan that has been accepted, before 180 days after the date of the order for relief under this chapter, by each class of claims or interests that is impaired under the plan. (d) (1) Subject to paragraph (2), on request of a party in interest made within the respective periods specified in subsections (b) and (c) of this section and after notice and a hearing, the court may for cause reduce or increase the 120-day period or the 180-day period referred to in this section. (2) (A) The 120-day period specified in paragraph (1) may not be extended beyond a date that is 18 months after the date of the order for relief under this chapter. (B) The 180-day period specified in paragraph 1 may not be extended beyond a date that is 20 months after the date of the order for relief under this chapter. 11 U.S.C. 1121 (b) - (d). 15. The determination of whether sufficient cause exists to grant an extension of a

debtors Exclusive Periods rests with the sound discretion of the court and should be based upon the facts and circumstances of each individual case. In re Adelphia Communications Corp. (In re Adelphia), 352 B.R. 578, 586 (Bankr. S.D.N.Y. 2006); In re Texaco Inc., 76 B.R. 322 (Bankr. S.D.N.Y. 1987); In re McLean Industries, Inc., 87 B.R. 830 (Bankr. S.D.N.Y. 1987); See, e.g., First American Bank of New York v. Southwest Gloves, Inc., 64 B.R. 963, 965 (Bankr. D. Del. 1986). While 1121(d)(1) of the Bankruptcy Code requires the bankruptcy court to find cause to extend a debtors Exclusivity Periods, it is clear from the legislative history of that section that the bankruptcy court is given broad flexibility in making such a determination. See, H.R. rep. No. 95-595, 95th Cong.; 2d Sess 221-222 (1978); In re Perkins, 71 B.R. 294 (W.D. Tenn. 1987) (The hallmark of Section [1121(d)] is flexibility); In re Tony Downs Foods Co., 34 B.R. 405, 406-407 (Bankr. D. Minn. 1983).

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16.

In Adelphia, the court identified several factors that should be evaluated in

considering a debtors request to extend its plan Exclusivity Period. The factors are as follows: (a) (b) the size and complexity of the case; the necessity for sufficient time to permit the debtor to negotiate a plan of reorganization and prepare adequate information; (c) (d) (e) the existence of good faith progress toward reorganization; the fact that the debtor is paying its bills as they become due; whether the debtor has demonstrated reasonable prospects for filing a viable plan; (f) (g) (h) whether the debtor has made progress in negotiations with its creditors; the amount of time which has elapsed in the case; whether the debtor is seeking an extension of exclusivity in order to pressure creditors to submit to the debtors reorganization demands; and (i) whether an unresolved contingency exists.

See In re Adelphia, 352 B.R. at 587. However, not all of the Adelphia factors are relevant in every case and it is within the courts discretion to determine the relevancy and weight of each such factor. In re Hoffinger Industries, Inc., 292 B.R. 639, 644 (8th Cir BAP 2003).

Furthermore, although such factors are helpful, they serve only as a guide and not as required standards for courts to use when determining whether an extension of the Exclusive Periods should be granted in a particular case. In re R&G Properties, Inc., 2009 WL 269696 (Bankr. D. Vt. January 28, 2009). 17. In applying these factors, it has been noted that the hallmark of . . . section

[1121(d)] is flexibility. In re Perkins, 71 B.R. 294, 297 (W.D. Tenn. 1987). Congress intended

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that a debtors exclusive periods be of adequate length for the debtor to formulate, negotiate, and draft a consensual plan and solicit acceptances thereof. As explained in the legislative history, section 1121(d) allows the flexibility in individual cases to extend the exclusivity periods to allow the debtor to reach an agreement. H.R. Rep. No. 595, 95th Cong., 1st Sess. 232 (1977); see In re Public Serv. Co. of New Hampshire, 88 B.R. at 534 (the legislative intent... [is] to promote maximum flexibility); see also In re Gibson & Cushman Dredging Corp., 101 B.R. 405,409 (Bankr. E.D.N.Y. 1989); In re McLean Indus. Inc., 87 B.R. at 833. 18. A review of the Adelphia factors supports an increase of the Exclusive Periods

sought by the Debtors in this Motion. Although the Debtors Chapter 11 cases may not be considered large by New York standards, the cases are complicated by the fact that they are essentially mass tort cases and the process of identifying known creditors is time consuming. The Debtors have certain made good faith progress, as the bar date procedures have been approved in substance by the Committee and the Debtors are in the process of obtaining, either voluntarily or involuntarily, alumni directories from various schools. The Debtors are paying all bills as they come due. The Debtors are not seeking an extension of exclusivity in order to pressure creditors to submit to any demands but rather in order to preserve the ability to ascertain the amount of claims and implement a claims resolution procedure. There are unresolved contingencies, as the outcome of litigation surrounding the insurance policies will certainly affect the amount of funds available to pay legitimate sexual abuse claims. 19. Where the initial exclusive periods prove to be inadequate, section 1121(d) of the

Bankruptcy Code permits the Court to extend a debtors exclusive periods so long as such extension does not extend beyond eighteen months for filing a plan or twenty months for soliciting acceptances to a plan. 11 U.S.C. 1121(d). This Motion is the Debtors second

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request for extensions of its exclusive periods, and the Debtors request is within the extension periods permitted by statute. 20. As detailed above, since the Filing Date, the Debtors have been focusing their

efforts on a variety of issues which must be resolved in order to be in a position to file a meaningful plan. As this Court is aware, the Debtors case is akin to a mass tort case. The crux of the cases is the establishment of a bar date and the proper noticing of same. The Debtors have made significant progress in negotiating the form of the bar date notices, specialized proofs of claim form and the time frame within which to file proofs of claim. The Debtors have also taken reasonable steps to identify potential creditors who will receive actual notice of the bar date. This is an ongoing process which will not likely be finally resolved until early next year. The bar date for sexual abuse claimants will be no earlier than June 2012. 21. The Debtors have also been attempting in good faith to comply with the

Committees extensive document requests and subpoenas authorized by this Court. The Debtors have made substantial progress in marketing and selling some non-core real estate. In short, the Debtors have made significant progress and have been attempting to cooperate with the Committee on a variety of fronts. 22. The Debtors submit that ample cause exists for the Court to grant the requested

extensions of the time. See In re McLean Indus., Inc., 87 B.R. at 834; see also In re Jasik, 727 F.2d at 1382 (extension of exclusivity period to be granted based upon degree of progress that has been achieved by the debtor in the Chapter 11 process); In re Public Serv. Co. of New Hampshire, 88 B.R. 521 at 524 (extension of exclusivity period to be granted based upon whether debtor has shown progress in attempting in good faith to formulate a viable plan).

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NOTICE 23. Notice of this Motion is being given to the Committee and its counsel, the United

States Trustee and all parties having filed a notice of appearance or a request for notice in these cases. The Debtors respectfully submit that no further or other notice need be provided under the circumstances of these cases. PRIOR REQUESTS 24. This is the Debtors second request for an extension of its exclusivity periods.

WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form attached as Exhibit A hereto, granting the Motion, and granting the Debtors such other and further relief as the Court deems just and proper. Dated: New York, New York November 10, 2011 TARTER KRINSKY & DROGIN LLP Attorneys for The Christian Brothers Institute, et al. By: /s/ Scott S. Markowitz Scott S. Markowitz Marilyn Simon 1350 Broadway, 11th Floor New York, New York 10018 (212) 216-8000

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EXHIBIT A

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------------- x In re: : : THE CHRISTIAN BROTHERS INSTITUTE, et al. : : Debtors. : ------------------------------------------------------------------- x

Chapter 11 Case No.: 11-22820 (RDD) (Jointly Administered)

ORDER PURSUANT TO 1121(d) OF THE BANKRUPTCY CODE FURTHER EXTENDING THE DEBTORS EXCLUSIVE PERIODS TO FILE A PLAN AND SOLICIT ACCEPTANCES THERETO Upon the motion (the Motion) of The Christian Brothers Institute, et al., debtors and debtors-in-possession herein (the Debtors) dated November 10 , 2011, for an order pursuant to 1121(d) of Title 11 of the United States Code (the Bankruptcy Code), further extending the Debtors exclusive periods in which to file a plan and solicit acceptances thereto; and notice of the Motion having been given to the Office of the United States Trustee, counsel to the Official Committee of Unsecured Creditors, and any party having filed a notice of appearance in these cases; and no other or further notice being necessary or required; and a hearing to consider the Motion having been held on December 6, 2011, and after due deliberation and sufficient cause appearing therefor, it is ORDERED, that the Motion is granted; and it is further ORDERED, that pursuant to Bankruptcy Code 1121(d), the Debtors exclusive period in which to file a plan is extended to and including June 21, 2012; and it is further ORDERED, that pursuant to Bankruptcy Code 1121(d), the Debtors exclusive period in which to solicit acceptances to the plan is extended to and including August 20, 2012; and it is further

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ORDERED, that the relief granted herein is without prejudice to the Debtors right to request further extensions of its exclusive periods, and the rights of other parties to oppose any further extensions. Dated: White Plains, New York December ___, 2011 THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE

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