NC0088838_Reeivership Document for RSC Holdings, Inc._20230523

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STATE OF NORTH CAROLINA a IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF UNION 23-CVS- 1 Mo
IN RE:
RADIATOR SPECIALTY COMPARY,.INC.,
RSC HOLDINGS, INC., RSC CHEMICAL
SOLUTIONS, LLC, GUNK LLC, LIQUID
WRENCH LLC, TITE SEAL LLC, RSC
BRANDS, LLC and RSC LICENSOR, LLC
Debtors.
ORDER
APPOINTING RECEIVER
THIS CAUSE came before the undersigned Judge of the Superior Court Division of the
a
General Court of Justice of Union County, North Carolina, on May , 2023, on the motion of
Radiator Specialty Company, Inc., RSC Holdings, Inc., RSC Chemical Solutions, LLC, Gunk LLC,
Liquid Wrench LLC, Tite Seal LLC, RSC Brands, LLC and RSC Licensor, LLC (collectively,
"RSC") for an order for the appointment of a general receiver.
FINDINGS OF FACT
Jivrisrlirtinn
1. Radiator Specialty Company, Inc. ("Radiator") is an S-corporation formed and
operating under the laws of North Carolina, having its principal place of business located at 600
Radiator Road, Indian Trail in Union County, North Carolina with its registered office located at 212
South Tryon Street, Suite 1000, Charlotte, North Carolina.
2. Radiator is a wholly -owned subsidiary of RSC Holdings, Inc. ("Holdings").
Holdings is also a North Carolina corporation, having its principal place of business and registered
office located at 600 Radiator Road, Indian Trail, North Carolina.
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3. Radiator has a number of wholly owned subsidiaries, all of which are North
Carolina limited liability companies: RSC Chemical Solutions, LLC, Gunk LLC, Liquid Wrench
LLC, Tite Seal LLC, RSC Brands LLC and RSC Licensor LLC (collectively, the "RSC
Affiliates"). A current corporate organization chart is attached as Exhibit A to the Complaint.
4. This Court has jurisdiction over RSC by virtue of, among other reasons, Section
1-75.4 of the North Carolina General Statutes, and venue is proper in this Court.
Company History
5. Radiator Specialty Company was founded in Charlotte, North Carolina in 1924 by
a traveling salesman, I. D. Blumenthal, of Savannah, Georgia after he experienced a leak in the
radiator of his Packard motor car. Such leaks were common at that time, as cars were punished by
rough, muddy roads. Radiator repairs were typically performed by a tinsmith, which was usually
very inconvenient to arrange.
6. Mr. Blumenthal's solution was his first product, Solder Seal Powder Radiation
Repair. It was received enthusiastically throughout the country and soon it spread to other
applications for repairing heating boilers in apartments and factories.
7. In 1937, the company acquired real property in Charlotte, NC and remodeled the
existing buildings on the site.
8. Mr. Blumenthal purchased Golden State Rubber Mills in Los Angeles, California
later the same year, leading to the development of various rubber plumbing products that became
favorites of master plumbers across the country.
9. On December 7, 1941, Liquid Wrench became part of the Solder Seal line of
products. During the war effort, the company worked with aviation and other manufacturers.
10. In 1.949, the rubber plant was moved from California to RSC's Charlotte location.
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11. In 1959, Gunk Laboratories became associated with RSC, establishing the Gunk
family of cleaning and degreasing products.
12. A new 62,470 square foot rubber mill was built in Charlotte in 1961 and later
expanded in 1968. A new office building was constructed in 1964, followed by expansions in
production capacity in Charlotte and Canada in 1972 and 1973. At its peak, the Charlotte facility
contained 286,326 square feet, with over 3,000 SKU's and employing more than 500 employees.
13. In 1988, the Truck and Heavy -Duty Division was established, and in 1995,
Highway Safety Products in Napa, CA was acquired to make traffic cones on the West Coast.
14. In 1999, Omega Products in Bremen, IN, a major supplier of hoses to the home
appliance OEM market, was acquired.
15. The following are key acquisitions that grew RSC's product offerings and
production capacity to serve the automotive aftermarket, plumbing, hardware and appliance
industries:
1941 Liquid Wrench
1959 Gunk Laboratories
1969 Douglas Tool Company
1979 Beacon Hose Manufacturing Company
1982 Interstate Rubber Division
1983 Stimsonite Division of Anchor Swan
1988 Truck and Heavy -Duty Division
1995 Highway Safety Products in Napa, CA
1999 Omega Products (later sold in 2017)
2010 RSC Bio Solutions
16. In May 2019, RSC ceased manufacturing operations and focused solely on
licensing its brands and related intellectual property. Blumenthal Brands, Inc. ("BBl" ), a new and
separate entity, became the principal licensee. BBI manufactured the products via third -party
contract manufacturers, marketed and sold the products into the market, and paid RSC royalties
on the associated revenues.
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17. The majority of RSC's fixed assets were sold over the following year, culminating
in the sale of essentially all of the real estate properties in Charlotte, NC in September 2020. With
the proceeds of this sale, RSC paid off its secured lender in frill.
18. In addition, in April 2020, the Gunk brand and related IP was sold to BBI.
19. In May 2022, BBI sold its rights as the principal licensee to the remaining brands
to B'laster LLC, which then stepped into BBI's shoes.
Litigation
20. Beginning in the early 2000s, RSC was inundated with lawsuits seeking damages
for bodily injuries allegedly caused by long-term exposure to benzene in its products.I
21. Over the past five decades, RSC purchased 107 standard -form product liability
insurance policies from more than a dozen insurers ("Insurers").
22. RSC paid more than $7.1 million in premiums to ensure that it would have coverage
for any lawsuits related to its products. As it turned out, RSC needed the insurance coverage it
purchased.
23. Faced with the prospect of significant and ongoing liability, RSC asked the Insurers
to keep their contractual promises to defend and indemnify the company. When the Insurers failed
to do so, RSC filed a coverage lawsuit, seeking coverage for more than $45 million in defense and
settlement costs which RSC was required to pay out of pocket.
24. After years of litigation with Insurers, the trial court awarded RSC only a tiny
fraction of the insurance coverage for which it had paid millions of dollars in premiums. For
example, Landmark American Insurance Company ("Landmark"), which sold the most coverage
1 RSC's products have not contained benzene since 1978. Nevertheless, plaintiffs claimed harm due to prior exposure.
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to RSC, charged more than $1.1 million in premiums in exchange for $125 million in policy limits
and was ordered to pay RSC an amount just shy of $350,000.
25. Seeking relief from the trial court's judgment, RSC appealed. The trial court's order
focused on three key issues: trigger of coverage, allocation, and exhaustion. The North Carolina
Court of Appeals disagreed with the trial court's characterization of when the trigger of coverage
occurred, agreed but found moot the payment allocation issue, and disagreed that exhaustion of
certain policies were required before a duty to defend arose.
26. The North Carolina Supreme Court allowed RSC's petition for discretionary review
as well as those of several key insurance companies, including Landmark, that were involved
throughout the litigation. The outcome of that proceeding was not favorable to RSC.
27. The North Carolina Supreme Court affirmed in part and reversed in part, holding
that the trial court correctly applied an exposure -based approach with respect to the trigger of
coverage issue and correctly applied a pro rata allocation approach. The Court reversed certain
decisions of the North Carolina Court of Appeals and remanded the case to the trial court with
directions to conduct proceedings consistent with its opinion.
28. In light of this ruling, the reality was that without insurance coverage, RSC lacked
the assets to satisfy its future liabilities, regardless of the outcome of the subsequent trial court
proceeding. Justice Hudson, concurring stated: "[t]he holding in this case will deter entities and
individuals who can self -insure from purchasing insurance (thus reducing the pool of insurance)
and apparently requires the insured to sue and litigate with all their insurance providers to receive
the indemnity they purchased (or until forced to declare bankruptcy)."
Current Assets and Liabilities
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29. Collectively, through litigation recoveries and settlements prior to the ruling, RSC
has recovered a total of $34,781,717 from Insurers, although based on the holding of the North
Carolina Supreme Court, RSC would only have been entitled to approximately $16 million under
the strict language of the policies.
30. In addition to recovering insurance proceeds, RSC has attempted to wind down its
operations and either license or sell its remaining assets in order to maximize value and to pay
creditors.
31. The funds recovered from Insurers and through the licensing and sale of RSC's
assets have been used to repay RSC's secured debt obligations, fund ongoing litigation expenses,
settle tort claims and pay taxes. As of the date of this filing, RSC has no secured debt, no judgments
have been entered against the company and all taxes are current.
32. Assets consist of $2.95 million of cash, royalties receivable, notes receivable from
related parties, and certain intellectual property. In addition, the last remaining fixed asset
consisting of a 50-acre parcel of land is under contract and undergoing due diligence, with closing
anticipated later this year.
33. The approximate amount of tort claim expenses and settlements paid by RSC since
2004 exceeds $50 million. The total number of toxic tortibenzene claims brought against RSC
over the last 20 years is in excess of 800 lawsuits. RSC has been named in 4,965 asbestos cases
since 2004. RSC has also been a defendant in over 350 product liability property damage claims
over the last 20 years. RSC currently has 80 active benzene personal injury claims, 58 active
product liability property damage claims, and 185 active asbestos cases. Over the last 20 years,
RSC has incurred an average of $74,826 per case in settlement and defense expenses per benzene
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claim. The average settlement value over the last 20 years on the property damage claims is $8,865
and $290 per asbestos claim.
34. In light of the North Carolina Supreme Court decision, RSC is and will continue to
be overwhelmed by the financial liabilities incurred as a result of the benzene litigation. These
current and potential future liabilities are projected to greatly exceed the total value of RSC's
remaining assets.
Appointment of Receiver
35. A receiver is necessary to manage, operate, protect, maintain and/or preserve RSC
and its assets (collectively, the "Assets"), to collect all receivables, earnings, revenues, rents, issues,
profits, royalties, income, deposits or other sums owed to RSC, to ensure an orderly liquidation of
RSC's Assets, to evaluate claims against RSC, to process distributions to RSC's creditors and
ultimately to dissolve RSC.
36. Michael L. Martinez ("Receiver") has agreed to accept appointment as receiver
pursuant to the terms of this Order, at the rate of compensation of $395/hour.
37. As set forth in the Affidavit of Michael L. Martinez attached as Exhibit B to the
Complaint, Receiver has significant experience as a receiver and a liquidator of insolvent
companies such as RSC, and has agreed to serve at the pleasure of this Court in accordance with
the terms of this Order.
38. Receiver is an attorney and member of Grier Wright Martinez, PA, where a
substantial portion of his law practice focuses on representing state court receivers, federal equity
receivers, chapter 7 bankruptcy trustees, chapter 11 bankruptcy trustees, and debtors -in -
possession. Receiver is a member of the National Association of Federal Equity Receivers, a
member of the pool of subchapter V bankruptcy trustees for the Western District of North
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Carolina, and a board -certified specialist in business bankruptcy law by the American Board of
Certification and the North Carolina State Bar. In addition to prior receivership engagements,
Receiver has recently served as receiver in two pending cases Linder the North Carolina Commercial
Receivership Act —Mt. Pleasant Properties, LLC v. Southern Grace Distilleries, Inc., No. 22-CVS-
3143 (Cabanas) and Adrienne L. LaFar v. The David R. LaFar, III Family, LLC et al., No. 21-CVS-
5503 (Mecklenburg (Bus. Ct.))—and serves as general counsel to the receiver in two other pending
cases under the North Carolina Commercial Receivership Act Blueprint 2020 Opportunity Zone
Fund, LLLP et al. v. 10 Academy Street QOZB I, LLC, No. 23-CVS-1931 (Mecklenburg (Bus. Ct.))
and Flexible Funding Ltd. Liability Co. v. Graham County -Land Co., L.L.C. et al., No. 21-CVS-142
(Graham County (Bus. Ct.)).
39. Neither Receiver nor any insider of Receiver has ever been disqualified from
serving as a receiver, convicted of a felony or other crime involving moral turpitude or been found
liable in a civil court for fraud, breach of fiduciary duty, civil theft, or similar misconduct.
40. Receiver has no materially adverse interest with respect to any party or RSC's
Assets, and has no material financial or pecuniary interest, other than compensation for
receivership services, in the outcome of the underlying dispute.
41. Receiver is not a debtor, creditor, lienor of, or holder of any equity interest in, any
party in interest or of receivership property.
42. Receiver has not participated in any action that constitutes a violation of N.C. Gen.
Stat. § 23-46.
43. Receiver has the financial ability to post the bond required by N.C. Gen .Stat. § 1-
507.26 and shall post a bond in the amount of $500.00 as a receiver's and surety's bond.
CONCLUSIONS OF LAW
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44. The foregoing Findings of Fact are denominated Conclusions of Law to the extent
that they constitute the same.
45. Appointment of a general receiver is appropriate under the provisions of N.C. Gen.
Stat. § 1-501 et seq., § 1-507.20 et seq. and § 1-485 et seq., which appointment allows a receiver,
among other things, to take possession of, manage, operate, protect, maintain and/or preserve RSC
and its Assets to maximize value for RSC's creditors as permitted by law and subject to the terms
of this Order.
46. Specifically, a general receiver is needed to manage, operate, protect, maintain
and/or preserve RSC's Assets (collectively, the "Receivership Estate"), including to collect
insurance proceeds and accounts receivable; to establish and manage a process for resolving claims
against the Receivership Estate; to propose and execute a process for distributing the Receivership
Estate funds to holders of allowed claims; to enter into contracts and other agreements, including
leases and licenses, to ensure that potential assets of RSC are recognized at their highest potential;
and to take any other action it deems necessary to protect the interests of RSC's creditors, subject
to this Court's supervision.
47. A general receiver is needed to determine whether to sell all or any portion of RSC's
Assets free and clear of any and all liens and encumbrances and, if so, to effectuate such a sale.
48. The bond of $500.00 to be posted by Receiver is deemed to be sufficient for the
faithful performance of the duties of Receiver as described in N.C. Gen. Stat. § 1-507.26 (the "Bond").
49. This Order is entered to manage, operate, protect, maintain and/or preserve RSC and
its Assets for the benefit of RSC's creditors, including to collect amounts owed to RSC and ensure
professional management and a fair distribution of RSC's Assets.
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NOW, THEREFORE, based upon the foregoing findings of fact and conclusions of law, IT
IS HEREBY ORDERED, ADJUDGED, and DECREED that:
1. Michael L. Martinez is hereby appointed as a general receiver within the meaning of
the North Carolina Commercial Receivership Act, N.C. Gen. Stat. § 1-507.20, et seq. (the "Act'), to
take control of RSC and its Assets; to enter upon and take possession of, manage, collect, lease, sell,
liquidate, and distribute RSC's Assets; and to take any other actions otherwise permitted under the
Act or other applicable law, and as the Court may direct. In any event, Receiver's possession of RSC's
Assets may not be disturbed absent an order of this Court during the term of Receiver's appointment.
2. Receiver's management fees shall be $395/hour.
3. During the teen of Receiver's appointment, Receiver:
a. is authorized and empowered to take all actions it deems necessary or appropriate to
take control of and manage RSC and RSC's Assets, including assuming control of all accounts,
collecting all amounts owed to RSC and taking all actions set out in the Order or otherwise permitted
by applicable law;
b. shall collect and preserve all of RSC's Assets, proceeds, and any other income
associated with RSC's Assets and use such proceeds to make payments and disbursements, in the
ordinary course of business, as may be needed and proper for the management, operation, protection,
maintenance and/or preservation of RSC's Assets, as is set forth hereinafter. Upon issuance of this
Order, Receiver shall direct any receivables due to RSC to be paid to Receiver;
C. is authorized, empowered, and directed to deposit all receipts and revenues coming
into its or RSC's possession into a federally insured bank having an office in North Carolina to be
selected in its sole discretion with due regard for the safety, preservation, and protection of such funds
and shall use said accounts as an operating fund for the Receivership Estate. Any accounts established
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by Receiver related to RSC's Assets shall be designated such that it is clear that Receiver is
safeguarding such funds in its capacity as a receiver (collectively, the "Receivership Account');
d. is authorized to endorse any check received by Receiver in the course of its
management of the Receivership Estate and to execute in the name of RSC any and all reports and
other documents required to be executed in connection with the performance of Receiver's obligations
hereunder;
e. is authorized to take possession of RSC's Assets including, but not limited to: the
originals (it being understood that RSC may retain copies and without any requirement for RSC to
expend finds for the preparation of the same if any are not now existing) of all books, records,
statements, checkbooks, check registers, cancelled checks, bank and other statements, worksheets,
spreadsheets, memoranda, statements of account, receipts, files and other financial information;
the originals of all marketing, advertising, listing and promotional materials; all telephone,
facsimile, e-mail and post office box numbers and addresses, the originals of all listing and
commission contracts, agreements and commitments, together with all related files,
correspondence and communications with all brokers and their agents and representatives; the
originals of all permits, licenses, authorizations and other approvals; the originals of all contracts,
agreements, purchase orders, invoices, bills, receipts, account statements, files, correspondence
and communications with all utility companies, service providers, contractors, subcontractors,
vendors, vendees, govermnental authorities and other third parties in any way relating to
ownership, repair, maintenance, improvement, management, leasing, use, operation, preservation
and/or protection of RSC's Assets; copies of insurance certificates; copies of all local, state
and federal tax returns for RSC, all utility deposits, all payroll and employee records,
creditibackground checks, applications and other materials relevant to RSC's employees,
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assuming such turnover is allowed by applicable law, and all local, state and federal employer and
employee reports, tax deposits and returns; copies of all notices, protests, objections, claims,
demands, suits, complaints, petitions, injunctions, restraining orders, pleadings and mediation and
arbitration proceedings received, sent or filed by or against RSC. To the extent that payroll and
employee information turnover is not allowed or is restricted, at a minimum, RSC shall provide a
list of employees showing the names of employees, positions held and current compensation and
benefit teens (all documents described herein to the extent necessary for the management,
operation, protection, maintenance and/or preservation of RSC's Assets may be collectively referred
to as "Project Documents"). To the extent that Project Documents exist in electronic form, RSC
shall use commercially reasonable efforts to provide Receiver with electronic versions of and/or
electronic access to such Project Documents;
f, is authorized to enforce, amend, renew, extend, terminate, and/or enter into
contracts, including, but not limited to, leases and licenses, and to take such action with respect
to such contracts, including, without limitation, the termination of existing vendor contracts, as
may be necessary or appropriate to manage, operate, protect, maintain and/or preserve RSC's Assets
and to collect all receivables, earnings, revenues, rents, issues, profits, royalties, income, deposits or
other sums payable in the exercise of Receiver's business judgment. Additionally, Receiver is
authorized to obtain the industry standard insurance protections afforded receivers, including but
not limited to, being named as an insured or additional insured on RSC's liability policies,
insurance policies, appropriate waiver of subrogation clauses pursuant to which RSC's insurance
carriers would waive all rights of subrogation against Receiver with respect to losses payable
under such policies. Receiver is authorized to procure additional insurance policies as it deems
necessary. In the event that Receiver obtains its own insurance, Receiver is authorized to cancel
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or cause RSC to cancel any existing insurance. Any refund of a paid premium or a return of
unearned premium shall be paid to Receiver and be property of the Receivership Estate;
g. shall report and pay all appropriate expenses of the Receivership Estate, including,
without limitation, Receiver's management fees, as such expenses become due and shall pay all
other expenses related to the maintenance and management of RSC's Assets as Receiver deems
reasonably necessary in the exercise of its business judgment.
h. shall maintain an accurate ledger or similar books of account and all receipts by and
all disbursements made by it pursuant to this Order and shall otherwise safely keep the operating
statements and any other documents provided to it pursuant to this Order;
is authorized to sell, lease, rent, and license any of RSC's Assets on such terms and
conditions as are appropriate in the exercise of Receiver's business judgment;
j. is empowered to take all actions in the name of RSC without the necessity of any
approval or consent of the shareholders, members, managers, directors, officers, partners, trustees, or
other persons that pursuant to the governance documents of RSC or applicable law would be legally
required in the absence of the Receiver's appointment to approve or consent to such action, as
described in N.C. Gen. Stat. § 1-507.28(b);
k. is empowered to take any and all actions under applicable law to wind up and
dissolve Radiator, Holdings and the RSC Affiliates including, but not limited to the actions
described in Article 14 of Chapter 55 and Article 6 of Chapter 57D of the North Carolina General
Statutes;
1. is authorized to administer known and unknown claims in accordance with N.C.
Gen. Stat. § 55-14-01, et. seq. or N.C. Gen. Stat. § 57D-6-01 et seq., as applicable; and
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in. is empowered to obtain its own tax identification number(s) to assist in payment and
preparation of taxes in connection with the receivership for the period beginning with the appointment
of Receiver and continuing through termination of the receivership; provided, however, that Receiver
shall have no obligation to prepare or file income tax returns, or pay income taxes, for RSC, nor shall
Receiver be obligated to pay any other taxes preceding the receivership period, except as set forth
herein.
4. Receiver shall be vested with all powers, rights, and duties of receivers to the greatest
extent provided by law. As of the date of this Order, and until further orders by this Court, RSC shall
comply with all duties described in N.C. Gen. Stat. § 1-507.30, and is hereby enjoined from
knowingly interfering with Receiver or its duly appointed agents or representatives in connection with
the management or control over RSC and its Assets, and from interfering with the operations of
Receiver as herein authorized. As of the date of this Order, said parties and entities are hereby ordered
to promptly turn over possession of RSC's Assets to Receiver, together with Project Documents,
equipment, physical or virtual keys, fobs, security codes, passwords, point of sale equipment; cash,
bank accounts, accounts receivable, security deposits, pre -paid rent, petty cash, advance deposits, safe
deposit boxes, royalties, issues, profits, income or other funds in bank accounts or other depository
accounts, including any statements of deposit, advances or prepaid contracts or rent, credit card
merchant accounts, such as Visa, MasterCard, American Express, and Discover, gift cards, records
of advance deposits or payments, websites, social media accounts, general ledgers, certificates of
insurance, leases, environmental reports, memoranda, correspondence and other personal property of
RSC if in the possession, custody, or control of RSC or hereafter received or obtained. Within forty-
eight (48) hours of the entry of this Order, RSC shall deliver its federal tax identification number to
Receiver, which Receiver may use in accordance with the rights granted pursuant to this Order. RSC
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shall surrender possession and control of all vehicles and vehicle title and registration records of any
vehicles owned by RSC. RSC shall not terminate any paid -up insurance policy and shall take such
reasonable steps to have Receiver listed as an additional insured under each such policy and/or any
other policies that Receiver procures for itself or RSC's Assets pursuant to this Order.
Notwithstanding anything to the contrary contained herein, Receiver shall be responsible for
obtaining insurance with respect to RSC's Assets as Receiver deems reasonable and necessary
with any premiums to be paid from the Receivership Estate.
5. RSC is hereby further ordered and directed to promptly turn over to Receiver any and
all income, cash, or funds on deposit collected by RSC or its agents arising out of the management,
operation, or ownership of RSC's Assets, together with a complete accounting for such funds, and
shall make no further disbursement or distribution of said income, cash or funds. RSC is fiuther
enjoined and restrained from collecting any receivables, revenues, proceeds, or other sums payable
with respect to RSC's Assets. Should RSC come into possession of any such receivables, revenues,
proceeds, or other sums subsequent to the date of entry of this Order, any such party is hereby ordered
and directed promptly to remit the same to Receiver in the form received.
6. Receiver is authorized to serve this Order on all of the financial institutions that
maintain any of RSC's bank accounts (or its agents holding fiends related to RSC's Assets), and any
such financial institution and any other persons in active concert or participation with RSC shall take
such steps as are necessary to restrain or prevent RSC from withdrawing, disbursing, distributing, or
causing the diversion of any income, cash, or funds on deposit in any of RSC's bank accounts and
RSC, its agents and any such financial institution maintaining an account with such funds shall
immediately turnover all funds of RSC in RSC's or its agents' bank accounts to Receiver. Any
financial institution maintaining RSC's bank accounts shall provide to Receiver a complete listing of
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account numbers under the name of RSC. For each such account the financial institution shall provide
the current balance for each account and, upon request by Receiver, shall provide monthly bank
statements (and details of any such transactions as requested) for a period of up to one year prior to
entry of this Order.
7. In carrying out the duties contained in this Order, Receiver is authorized, but not
required to employ attorneys, accountants, other professionals, contractors, managing agents, and any
other persons, firms or corporations necessary or appropriate for the orderly and efficient
management, operation, protection, maintenance and/or preservation of the Receivership Estate.
Subject to final court approval in connection with the Receiver's final report and accounting, Receiver
may compensate Receiver and Receiver's professionals from funds of the Receivership Estate on a
monthly basis without interim approval of the Court.
8. Receiver hereby succeeds to all licenses, contracts, permits, and privileges now held
or owned by RSC, and all rights, privileges, and responsibilities arising therefrom. Receiver shall
have the authority to take all actions necessary to apply for and obtain new licenses and/or to renew
or modify existing licenses. Receiver shall have the authority to operate under any business or other
license currently held in the name of RSC or for RSC's Assets until Receiver is able to obtain new
licenses or renew or modify the existing licenses.
9. Receiver shall be entitled to obtain such licenses, permits, and privileges in its own
name to the extent it deems they will be useful in the management, operation, protection, maintenance
and/or preserve of RSC's Assets. Receiver may operate RSC under any existing name or trade name.
10. During the term of the receivership, all tenants, bailees, or other persons in
possession of RSC's Assets, or any portion thereof are hereby directed to attorn to Receiver and,
until further order of this Court: (i) are hereby directed to pay over to Receiver or its duly
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designated agent all receivables, earnings, revenues, rents, issues, profits, royalties, income, deposits
or other sums with respect to RSC's Assets which sums are now due and unpaid or hereafter
become due, and (ii) are hereby enjoined and restrained from paying to RSC or its agents, officers,
directors, employees, or attorneys any such receivables, earnings, revenues, rents, issues, profits,
royalties, income, deposits or other sums.
11. Receiver is hereby authorized to institute, carry on, and maintain all actions, suits,
proceedings and procedures necessary: (a) for the proper management, operation, protection,
maintenance and/or preservation of RSC's Assets or to gain or recover possession of all or any part
thereof, and (b) for collection of any receivables, earnings, revenues, rents, issues, profits, royalties,
income, deposits or other sums now due or hereafter to become due or fixed.
12. Receiver, in managing, operating, protecting, maintaining and/or preserving RSC's
Assets, shall not be bound by or otherwise subject to any existing management agreement, any real
estate listing, brokerage, sales or leasing agreement, or any other obligation, contract or agreement,
or existing financial obligation of RSC.
13. Receiver may, in Receiver's sole discretion, offer employment to existing RSC
employees or employees of related parties and RSC shall cooperate with Receiver in, such
employment process.
14. Receiver is hereby authorized to list or enter into a listing agreement with a third party,
or otherwise advertise for sale and to solicit offers to purchase RSC's Assets, to enter into a contract
to sell RSC's Assets, and to sell, following notice and a hearing, RSC's Assets on such terms as are
acceptable and approved by the Court, by way of public or private sale or other disposition free and
clear of all security interests, liens, claims and other interests with all valid security interests and liens
to attach to the proceeds of such sale. Receiver is further authorized to execute any documentation on
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behalf of RSC as its attorney -in -fact to effectuate such sale(s), including, but not limited to, contracts
for sale and purchase of RSC's Assets
15. All persons having notice of this Order, and having written agreements with RSC for
the supply of goods and/or services related to RSC's Assets (collectively, "Vendor Contracts"), are
hereby restrained until further order of this Court from discontinuing, altering, interfering with or
terminating the supply of such goods or services as may be required by Receiver to manage, operate,
protect, maintain and/or preserve RSC's Assets, provided in each case the nonnal prices and charges
for all such goods or services received after entry of this Order shall be paid by Receiver in accordance
with the ordinary course of business of RSC and such supplier, or such other practices as may be
agreed upon by Receiver and the supplier, or as may be ordered by this Court. Should Receiver
determine, in its sole discretion, that any Vendor Contracts are not beneficial to the continued
management, operation, protection, maintenance and/or preservation of RSC's Assets, Receiver shall
have the right to terminate any such Vendor Contracts, subject to the terms of the applicable Vendor
Contracts, including any termination rights contained therein, or upon such other terms as may be
approved by this Court.
16. RSC is hereby restrained and enjoined from malting any transfer or other disposition
of RSC's Assets except to Receiver.
17. All persons, firms, and corporations are restrained and enjoined from interfering with
Receiver in the performance of its duties or from soliciting or accepting RSC's Assets, or proceeds of
RSC's Assets from any person or entity, except as affirmatively approved by Receiver.
18. All persons, firms and corporations are hereby ordered and directed to turn over to
Receiver all receivables, earnings, revenues, rents, issues, profits, royalties, income, deposits or other
sums payable resulting from RSC's Assets, and are further ordered and directed to turn over to
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Receiver all warranties, books, records, contracts, insurance policies, leases, and other documents and
records relating to RSC's assets, or the management, operation, protection, maintenance and/or
preservation thereof, including, but not limited to, all mail received, and Receiver shall give
appropriate receipts for the same.
19. Without limiting any of the general or specific powers granted herein, Receiver is
hereby vested with all of the powers, rights, and duties provided to receivers under applicable law,
including, without limitation, N.C. Gen. Stat. § 1-501 et seq. and N.C. Gen. Stat. § 1-507.20 et
seq., including those powers granted to a general receiver described in N.C. Gen. Stat. § 1-
507.28(b), and shall have no liability for any acts or omissions taken with respect to RSC, RSC's
Assets, or pursuant to this Order except to the extent arising due to Receiver's gross negligence, fraud,
illegal acts or willful misconduct. Any risk, obligation or liability incurred by Receiver in connection
with the receivership (other than arising due to Receiver's gross negligence, fraud, illegal acts or
willful misconduct) shall be the risk, obligation or liability of the Receivership Estate, to be satisfied
solely from the assets of the Receivership Estate. No action or omission of Receiver or its agents,
including resolution of claims against RSC or the cancellation, termination or rejection of any existing
contract or lease, shall result in personal liability to RSC or its shareholders, it being the understanding
of all concerned with this Order that all assets of RSC have been subject to the Receiver's authority
and that all obligations and liabilities arising through the conduct of the receivership hereby approved
shall be paid and satisfied without recourse or claim against RSC or its shareholders. Receiver is not
obligated to advance personal funds and has no personal liability for the obligations of RSC,
including, without limitation, any obligations, liabilities, taxes, and penalties assessed against RSC
during the pendency of, or after the termination of, the receivership.
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20. As further described in N.C. Gen. Stat sec. 1-507.42, the entry of this Order "shall
operate as a stay, applicable to all persons, of. (i) the commencement or continuation of a judicial,
administrative, or other action or proceeding, including the issuance or use of process, against the
debtor or the receiver that was or could have been commenced before the time of appointment, or
to recover a claim against the debtor that arose before the time of appointment and (H) the
commencement or continuation of a judicial, administrative, or other action or proceeding,
including the issuance or use of process, to enforce any lien having priority over the rights of the
receiver in receivership property (the "Stay")." Notwithstanding any language to the contrary in
the Act, the Stay shall remain in place until further order of this Court. Any party in interest may
move to modify the Stay, as set forth in N.C. Gen. Stat sec. 1-507.42(e).
21. No individual or entity may sue Receiver with respect to RSC, RSC's Assets, or this
Order without first obtaining permission of the Court.
22. Receiver shall serve a copy of this Order or provide notice of the entry of this Order
on such creditors and customers of RSC as it deems necessary and appropriate. All persons, frmis,
and corporations on whom this Order may be served or otherwise receive notice of the entry of this
Order shall take notice of the terms and provisions hereof.
23. The Sheriff of Union County is directed to assist Receiver as requested in taking
possession of RSC and RSC's assets, all documents, equipment, cash, money on deposit and other
personal property pertaining to the management, operation, protection, maintenance and/or
preservation of RSC's Assets, and to deliver the same to Receiver as provided by law.
24. The Bond to be posted by Receiver in the amount of $500.00 satisfies the requirements
of N.C. Gen. Stat. § 1-507.26. Receiver is hereby authorized to act before Receiver posts the Bond,
as described in § 1-507.26(b).
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25. As described in N.C. Gen. Stat. § 1-507.32, Receiver shall file under oath within 90
days from the time of appointment schedules of receivership property, creditors, taxing authorities
and regulatory authorities (collectively, the "Schedules"). Receiver may request an extension of the
90-day filing deadline.
26. Concurrently with the mailing of the Schedules to all parties on the Master Service
List, Receiver shall recommend to the Court a process for resolving claims against the Receivership
Estate pursuant to N.C. Gen. Stat. § 1-507.49(a). In addition, as soon as reasonably practicable,
Receiver shall recommend to the Court a method and process for distributing Receivership Estate
funds to holders of allowed claims.
27. Upon entry of this Order, Receiver shall be vested with the powers and duties provided
for in N.C. Gen. Stat. § 1-507.28, and the existing directors, officers, and managers of Radiator,
Holdings and the RSC Affiliates shall be deemed to have been removed from their offices as directors,
officers, and managers and shall have no ongoing or further authority or responsibility with respect
to RSC.
28. Any powers granted to Receiver pursuant to this Order which exceed the powers
specifically enumerated within the Act, and any duties of Receiver limited pursuant to this Order shall
be deemed so granted or limited pursuant to N.C. Gen. Stat. § 1-507.28(d). In the event of a conflict
between the scope of the powers and duties of Receiver described in the Act and the powers and
duties described in this Order, the terms of this Order shall control.
29. Receiver shall, during the pendency of this action, have the right to apply to this
Court for further instructions, directions or authority.
30. This cause is retained for such other and further orders as may be necessary or
appropriate, including any request by Receiver to be relieved of its duties as provided herein. Upon
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liquidation and distribution of RSC's Assets, and dissolution of RSC, Receiver shall be discharged of
its duties as Receiver.
31. Upon termination of the receivership, Receiver shall retain sufficient fiords to pay its
final bills and expenses. After filing a final accounting and upon motion to this Court, Receiver shall
be fully discharged and released, and the Bond shall be released pursuant to further order of this Court.
32. Because RSC has consented to the relief requested, no further hearing is required for
entry of this Order.
This 19 day of May, 2023. ,
Sup6rior Court Judge Presiding
Ij
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CONSENTED TO:
K&L GATES LLP
'Margaret R. Westbrook
North Carolina State Bar No. 23327
Christopher J. Fernandez
North Carolina State Bar No. 27818
_John R. Gardner
North Carolina State Bar No. 32683
300 S Tryon St Suite 1000
Charlotte, North Carolina 28202
Telephone: [phone] Fax: [phone]
Email: [e-mail]
chri s. fernandezLg)klgates. com
john.gardner@,klgates.com
Counsel for RSC
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RECEIVER
Michael L. Martinez f
is
521 E. Morehead Street, Suite 440
Charlotte, North Carolina 28202
Phone: [phone]; Fax:
704/332.0215
Email: mmartinez(@uierlaw.com
Proposed Receiver