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UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------------------X In Re THE CONNAUGHT GROUP, LTD DEBTOR --------------------------------------------------------------------X FASHION TREND DEVELOPMENT LTD.’S MOTION FOR RETURN OF RECLAMATION PRODUCT, OR IN THE ALTERNATIVE, FOR ALLOWANCE OF ADMINISTRATIVE EXPENSE CLAIM Fashion Trend Development Ltd. (“Fashion Trend”) files this Motion for Return of Reclamation Product (the “Motion”) that was delivered to the Debtor, the Connaught Group, et al, within forty-five (45) days of the Petition Date pursuant to 546(c)(1), or in the alternative, for allowance of an administrative expense claim for Product delivered within twenty (20) days of the Petition Date pursuant to 11 U.S.C. §§ 503(a), 503(b)(9), 507(a)(2). In support hereof, Fashion Trend respectfully represents as follows: I. Jurisdiction 1. Under 28 U.S.C. §§ 157 and 1334, the Court has jurisdiction over the Motion and relief requested herein. Pursuant to 28 U.S.C. §§ 157(b)(2)(A), and (O), this Motion presents a core proceeding. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory predicates for the relief requested herein are 11 U.S.C. §§ 503(a), 503(b)(9), 507(a)(2), and 546(c). Chapter 11 Case No. 12-10512-smb 12-10512-smb Doc 129 Filed 03/19/12 Entered 03/19/12 15:03:21 Main Document Pg 1 of 8

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

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Page 1: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

--------------------------------------------------------------------X In Re THE CONNAUGHT GROUP, LTD DEBTOR --------------------------------------------------------------------X

FASHION TREND DEVELOPMENT LTD.’S MOTION FOR RETURN OF RECLAMATION PRODUCT, OR IN THE ALTERNATIVE, FOR ALLOWANCE

OF ADMINISTRATIVE EXPENSE CLAIM

Fashion Trend Development Ltd. (“Fashion Trend”) files this Motion for Return

of Reclamation Product (the “Motion”) that was delivered to the Debtor, the Connaught

Group, et al, within forty-five (45) days of the Petition Date pursuant to 546(c)(1), or in

the alternative, for allowance of an administrative expense claim for Product delivered

within twenty (20) days of the Petition Date pursuant to 11 U.S.C. §§ 503(a), 503(b)(9),

507(a)(2). In support hereof, Fashion Trend respectfully represents as follows:

I. Jurisdiction

1. Under 28 U.S.C. §§ 157 and 1334, the Court has jurisdiction over the

Motion and relief requested herein. Pursuant to 28 U.S.C. §§ 157(b)(2)(A), and (O), this

Motion presents a core proceeding. Venue is proper in this Court pursuant to 28 U.S.C.

§§ 1408 and 1409. The statutory predicates for the relief requested herein are 11 U.S.C.

§§ 503(a), 503(b)(9), 507(a)(2), and 546(c).

Chapter 11 Case No. 12-10512-smb

12-10512-smb Doc 129 Filed 03/19/12 Entered 03/19/12 15:03:21 Main Document Pg 1 of 8

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1210512120319000000000003
Docket #0129 Date Filed: 3/19/2012
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II. Background

2. On February 9, 2012, the Connaught Group, and its affiliates (collectively

the “Debtors”) filed their voluntary petitions for bankruptcy relief under Chapter 11 of

the Bankruptcy Code (the “Petition Date”).

3. Prior to the Petition Date, Fashion Trend entered into certain purchase

agreements with the Debtor regarding certain merchandise produced by Fashion Trend.

Attached hereto and incorporated herein for all purposes as Exhibit A is a spreadsheet

identifying the Product, and appended as Exhibit B are copies of the invoices for the

Product that Debtors received during the relevant pre-petition time periods. All Product

represented in Exhibit A was received by Debtor within forty-five (45) days of the

Petition Date (the “Forty-Five (45) Day Goods”), and some of the Product represented in

Exhibit A was received by the Debtor within twenty (20) days of the Petition Date (the

“Twenty (20) Day Goods”). The Debtor received Product on the readily identifiable

dates reflected in Exhibit A, which are evidenced by the shipping documents and delivery

receipts1 that are attached hereto and incorporated herein for all purposes as Exhibit C.

4. As established by Exhibits A and B, the total amount due and owing to

Fashion Textiles as of the Petition Date on account of the Forty-Five (45) Day Goods is

$354,055.23. Pursuant to 11 U.S.C. § 546(c)(1), Fashion Trend seeks an Order requiring

the Debtor to immediately return any Product identified in Exhibit A that remains in the

Debtor’s control or possession.

1 Though Fashion Trend has delivery documents for all shipments, at present, Fashion Trend only has delivery receipts for the Federal Express shipments, and not the Eastway Air Freight shipments.

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5. As established by Exhibits A and B, the total amount due and owing to

Fashion Textile as of the Petition Date on account of the Twenty (20) Day Goods is

$66,671.80. Through the Motion, in the event Debtor fails to return the Forty-Five Day

Goods, Fashion Trend seeks an Order granting allowance of an administrative claim

under section 503(b)(9) of the Bankruptcy Code for the Twenty-Day Goods in the

amount of $66,671.80, and payment of such as a priority claim under section 507(a)(2) of

the Bankruptcy Code.

6. Pursuant to section 546(c) of the Bankruptcy Code and within twenty (20)

days of the Petition Date, on February 28, 2012, Fashion Trend sent the Debtor a written

demand for the return of the Forty-Five (45) Day Goods (the “Reclamation Demand

Letter”), and a true and accurate copy was filed with the court on February 29, 2012.

(Not. Recl. Dem., ECF No. 125). The Reclamation Demand Letter was sent to the

following: (i) by Federal Express to William D. Rondina, Founder, CEO and Chairman of

the Connaught Group; (ii) by Federal Express, electronic mail, and facsimile to David L.

Barrack, of Fulbright & Jaworski, LLP, attorney for the Debtor; (iii) by regular mail to

Richard C. Morrisey, Office of the U.S. Trustee; and (iv) by regular mail to Bruce

Buechler, of Lowenstein Sandler, PC, attorney for the Official Committee of Unsecured

Creditors. The Debtors have not returned the Product or otherwise responded to Fashion

Trend’s Reclamation Demand Letter.

7. Nothing herein shall be construed as a waiver or limitation on the rights of

Fashion Trend to pursue any and all claims it holds against the Debtors.

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III. Relief Requested and Basis Therefore

8. Section 546(c) of the Bankruptcy Code provides that Goods delivered by a

vendor and received by the Debtor within forty-five (45) days of the Petition Date upon

which payment remains due and owing, and after a demand is sent to the Debtor in

writing no later than 20 days after the Petition Date, such vendor is entitled to the right of

reclamation.

9. As set forth above and as further identified in the attached exhibits,

Fashion Trend delivered a total of $354,055.23 in Product to the Debtor within forty-five

(45) days before the Petition Date for which payment remains due and owing.

10. Section 503(b)(9) of the Bankruptcy Code provides that there shall be

allowed an administrative expense claim for “the value of any goods received by the

debtor within 20 days before the date of the commencement of a case under this title in

which the goods have been sold to the debtor in the ordinary course of such debtor’s

business.”

11. As set forth above and as further identified in the attached exhibits,

Fashion Trend delivered a total of $66,671.80 in Product to the Debtor within twenty (20)

days before the Petition Date for which it has not received payment.

12. Moreover, such Product was sold to the Debtors under agreements in the

ordinary course of the Debtor’s business.

13. Accordingly, the delivery of such Product is properly characterized as

administrative expenses, and Fashion Trend should be allowed an administrative claim in

the amount of $66,671.80 under section 503(b)(9) of the Bankruptcy Code for the

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Twenty (20) Day Goods, and such administrative claim is entitled to priority under

section 507(a)(2) of the Bankruptcy Code.

14. Fashion Trend also respectfully requests that the Court direct the Debtor to

pay Fashion Trend, on account of its administrative claim, within ten (10) days of the

entry of an Order approving such administrative claim. While the Bankruptcy Code is

not specific about the timing for payment of § 503(b)(9) claims and any other

administrative claims and, therefore, it appears that Congress intended § 503(b)(9) claims

to receive the same treatment as other administrative claims under the Bankruptcy Code.

The Court has broad discretion to issue orders necessary to “carry out the provisions of

this title” and the determination of when an administrative claim is to be paid is within

the discretion of the Court. 11 U.S.C. § 105(2); In re Verco Indus., 20 B.R. 664, 665

(B.A.P. 9th Cir. 1982); see also In re Kaiser Steel Corp., 74 B.R. 885, 891 (Bankr. D.

Colo. 1990) (allowing entry of an order authorizing interim payments to be made on

allowed administrative claims). Here, as a result of Debtor’s failure to pay, and as

supported by the affirmation of William Tse, appended hereto as Exhibit D, Fashion

Trend has received demands totaling $289,798.45, and needs immediate financial relief.

15. As the Debtors have not returned the Product subject to the Reclamation

Demand Letter, Fashion Trend asserts that the Court should Order the Debtor to return

the Forty-Five (45) Day Goods, or alternatively, that the Court should Order the

allowance of an administrative expense claim, which should be equal to the invoice

amounts for the Twenty (20) Day Goods in the amount of $66,671.80.

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WHEREFORE, for the reasons described above, Fashion Trend respectfully

requests this Court to enter an Order (i) allowing Fashion Trend to recover Forty-Five

(45) Day Goods; or, if the goods cannot be returned (ii) providing Fashion Trend with an

administrative claim in the amount of $66,671.80 under section 503(b)(9) of the

Bankruptcy Code, which is entitled to priority distribution under section 507(a)(1) of the

Bankruptcy Code; (iii) requiring the Debtor to pay $66,671.80 to Fashion Trend in

satisfaction of such administrative claim within ten (10) days of the entry of the Order

approving such administrative claim; and (iv) granting such other and further relief as the

Court deems just and proper under the circumstances.

Dated: 16 March 2012

Respectfully submitted, /s/ Russell A. Semmel Russell A. Semmel (RS1926) Neville Peterson LLP 17 State Street—Suite 1900 New York, New York 10004 Telephone: (212) 635-2730 Facsimile: (212) 635-2734 [email protected] [email protected] Counsel to Fashion Trend Development Ltd.

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CERTIFICATE OF SERVICE I, Judy Han, hereby certify that on March 19, 2012, I caused copies of Fashion

Trend Development Ltd.’s Motion for Return of Reclamation Product, or in the

Alternative, for Allowance of Administrative Claim to be served on the following parties

in the service list by way of U.S. Mail:

Dated: 19 March 2012 /s/ Judy Han Judy Han

SERVICE LIST Angel Textiles, Inc. 519 Eighth Avenue, 21st Fl. New York, NY 10018-4573 Citibank, N.A. c/o Sills Cumis & Gross P.C. 30 Rockefeller Plaza New York, NY 10112-00515 Eaglewings Freight Services Inc. c/o Richard Alan Chen, Esq. 41-60 Main Street—Suite 203 Flushing, NY 11355-3899 GGP Limited Partnership Kristen N. Pate 110 North Wacker Drive Chicago, IL 60606-1511 Kurtzman Carson Consultants LLC 2335 Alaska Avenue El Segundo, CA 90245-4808 Missouri Department of Revenue Phyllis Schauffler PO Box 475 301 W. High Street, Room 670 Jefferson City, MO 65105-0475

Simon Property Group, Inc. Attn: Ronald M. Tucker, Esq. 225 W. Washington Street Indianapolis, IN 46204-3438 The Connaught Group, Ltd. 423 West 55th Street—3rd Floor New York, NY 10019-4460 West 55th Street Building LLC c/o Patterson Belknap Webb & Tyler LLP 1133 Avenue of the Americas New York, NY 10036-6710 Manhattan Division One Bowling Green New York, NY 10004-1415 ALA Dept. of Revenue Legal Div. P.O. Box 320001 Montgomery, AL 36132-0001 Citibank, N.A. c/o Sills Cumis & Gross P.C. Attn: Boris I. Mankovetskiy, Esq. 30 Rockefeller Plaza New York, NY 10112-0015

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Commonwealth of Pennsylvania Department of Labor and Industry Reading Bankruptcy & Compliance Unit 625 Cherry St.—Room 203 Reading, PA 19602-1152 Consolidated Edison Company of New York, Inc. Attn: Bankruptcy Group 4 Irving Place, Room 1875-S New York, NY 10003-3502 Idaho State Tax Commission Bankruptcy Unit PO Box 36 Boise, ID 83722-0036 JP Morgan Chase Bank N.A. c/o Herrick Feinstein LLP Two Park Avenue New York, NY 10016-9302 Attn: Andrew C. Gold Jeff J. Friedman, Esq. Katten Muchin Rosenman LLP 575 Madison Avenue New York, NY 10022-2585 Marlin Business Bank 300 Fellowship Road Mount Laurel, NJ 08054-1201 Attn: Bankruptcy Department Missouri Department of Revenue PO Box 475 Jefferson City, MO 65105-0475 Royal Spirit, Ltd. c/o Neiger LLP 151 West 46th Street—4th Floor New York, NY 10036-8512

Sarah A. Powell, Esq. P.O. Box 12265 Columbia, SC 29211-2265 United States Trustee 33 Whitehall Street—21st Floor New York, NY 10004-2122 William D. Rondina Attn: Alan D. Halperin, Esq. c/o Halperin Battaglia Raicht, LLP 555 Madison Avenue, 9th Floor David L. Barrack Fulbright & Jaworski, LLP 666 Fifth Avenue New York, NY 10103-3101 Mark C. Haut Fulbright & Jaworski, LLP 666 Fifth Avenue New York, NY 10103-3101

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 1 of 71

Page 10: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

FASHION TREND EXPORT SUMMARY BALANCE SHEET (CONNAUGHT GROUP) # Freight Company Bill of Lading # HK Ship Date US Arrival Date PO # PO Date Invoice # Inv. Date Packing List # Invoice Total $ Balance $� FEDEX 023-66659283 ���"'�� ���"'�� ��� ���$*��� FTL-40287/01 18-Jan-12 ����"'�� ������ ������

FEDEX 023-66659383 ���"'�� ���"'�� ��� ���$*��� FTL-40289/01 18-Jan-12 ����"'�� �� ���� �� ����

FEDEX 023-66659383 ���"'�� ���"'�� �� ���%)��� FTL-40289/01 ����"'�� ����"'�� ��� ��� ��� ���

� FEDEX 023-66659283 ���"'�� ���"'�� ���� ���$*��� FTL-40290/01 ����"'�� ����"'�� ������� �������

� FEDEX 023-66659283 ���"'�� ���"'�� ��� ���%)��� FTL-40291/01 ����"'�� ����"'�� ������ ������

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 2 of 71

Page 11: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 3 of 71

Page 12: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 4 of 71

Page 13: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 5 of 71

Page 14: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 6 of 71

Page 15: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 7 of 71

Page 16: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 8 of 71

Page 17: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 9 of 71

Page 18: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 10 of 71

Page 19: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 11 of 71

Page 20: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 12 of 71

Page 21: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 13 of 71

Page 22: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 14 of 71

Page 23: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 15 of 71

Page 24: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 16 of 71

Page 25: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 17 of 71

Page 26: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 18 of 71

Page 27: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 19 of 71

Page 28: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 20 of 71

Page 29: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 21 of 71

Page 30: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 22 of 71

Page 31: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 23 of 71

Page 32: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 24 of 71

Page 33: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 25 of 71

Page 34: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 26 of 71

Page 35: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 27 of 71

Page 36: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 28 of 71

Page 37: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 29 of 71

Page 38: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 30 of 71

Page 39: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 31 of 71

Page 40: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 32 of 71

Page 41: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 33 of 71

Page 42: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 34 of 71

Page 43: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 35 of 71

Page 44: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 36 of 71

Page 45: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 37 of 71

Page 46: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 38 of 71

Page 47: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 39 of 71

Page 48: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 40 of 71

Page 49: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 41 of 71

Page 50: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 42 of 71

Page 51: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 43 of 71

Page 52: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 44 of 71

Page 53: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 45 of 71

Page 54: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 46 of 71

Page 55: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 47 of 71

Page 56: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 48 of 71

Page 57: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 49 of 71

Page 58: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 50 of 71

Page 59: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 51 of 71

Page 60: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 52 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 53 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 54 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 55 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 56 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 57 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 58 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 59 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 60 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 61 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 62 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 63 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 64 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 65 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 66 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 67 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 68 of 71

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Page 77: UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN …As the Debtors have not returned the Product subject to the Reclamation Demand Letter, Fashion Trend asserts that the Court should

12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 69 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 70 of 71

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12-10512-smb Doc 129-1 Filed 03/19/12 Entered 03/19/12 15:03:21 Exhibit Pg 71 of 71

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UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

--------------------------------------------------------------------X In Re THE CONNAUGHT GROUP, LTD DEBTOR --------------------------------------------------------------------X

ORDER GRANTING FASHION TREND’S MOTION FOR RETURN OF RECLAMATION PRODUCT, OR IN THE ALTERNATIVE, FOR ALLOWANCE

OF ADMINISTRATIVE EXPENSE CLAIM

Upon review of Fashion Trend Development Ltd.’s (“Fashion Trend”) Motion for

Return of Reclamation Product, or in the Alternative, for Allowance of Administrative

Claim (the “Motion”), and all accompanying documents therein, it is hereby

ORDERED, that the Debtor shall return Forty-Five (45) Day Goods, as identified

in the Motion; or, if such goods cannot be returned, it is—

ORDERED, that Fashion Trend is entitled to an administrative claim in the

amount of $66,671.80 under section 503(b)(9) of the Bankruptcy Code, which is entitled

to priority distribution under section 507(a)(1) of the Bankruptcy Code, and it is further—

ORDERED, that the Debtor shall pay $66,671.80 to Fashion Trend in satisfaction

of such administrative claims, and it is further—

Chapter 11 Case No. 12-10512-smb

12-10512-smb Doc 129-2 Filed 03/19/12 Entered 03/19/12 15:03:21 Proposed Order Pg 1 of 2

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2

ORDERED, that the Debtor shall pay $66,671.80 to Fashion Trend within ten

(10) days of this Order.

It is so Ordered.

_________________________ Judge Stuart M. Bernstein,

United States Bankruptcy Judge for the Southern District of New York

Dated:

12-10512-smb Doc 129-2 Filed 03/19/12 Entered 03/19/12 15:03:21 Proposed Order Pg 2 of 2