WOODBRIDGE GROUP of COMPANIES LLC, Et Al.,1 Debtors
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Case 17-12560-KJC Doc 783 Filed 03/19/18 Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE : In re: : Chapter 11 : WOODBRIDGE GROUP OF : Case No. 17-12560 (KJC) COMPANIES LLC, et al.,1 : : (Jointly Administered) : Debtors. : Hearing: May 1, 2018 at 11:00 a.m. : Objection Deadline: April 2, 2018 at 4:00 p.m. APPLICATION OF THE AD HOC NOTEHOLDER GROUP FOR ENTRY OF AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF DRINKER BIDDLE & REATH LLP AS ITS COUNSEL NUNC PRO TUNC TO JANUARY 23, 2018 The Ad Hoc Group of Noteholders (the “Ad Hoc Noteholder Group”) Formed Pursuant to January 23, 2018, Order [D.I. 357] (the “Settlement Order”) hereby files this application (this “Application”) for entry of an order, substantially in the form attached hereto as Exhibit A , authorizing the retention and employment of Drinker Biddle & Reath LLP (“Drinker Biddle”) as its Counsel pursuant to the Settlement Order, sections 105(a), 328(a) and 1103(a) of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), Rule 2014(a) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”) and the Local Bankruptcy Rules for the United States Bankruptcy Court District of Delaware (the “Local Rules”). In support of this Application, the Ad Hoc Noteholder Group also files the Declaration of Steven K. Kortanek, Esq. Pursuant to 28 U.S.C. § 1746 in Support of the Application of the Ad Hoc Noteholder Group for Entry of an Order Authorizing the Employment and Retention of Drinker Biddle & 1 The last four digits of Woodbridge Group of Companies, LLC’s federal tax identification number are 3603. The mailing address for Woodbridge Group of Companies, LLC is 14140 Ventura Boulevard #302, Sherman Oaks, California 91423. A complete list of the Debtors, the last four digits of their federal tax identification numbers, and their addresses may be obtained on the website of the Debtors’ noticing and claims agent at www.gardencitygroup.com/cases/WGC. 91301901.4 Case 17-12560-KJC Doc 783 Filed 03/19/18 Page 2 of 8 Reath LLP as its Counsel Nunc Pro Tunc to January 23, 2018 (the “Kortanek Declaration”), attached hereto as Exhibit B. JURISDICTION AND VENUE 1. The Court has jurisdiction to consider and grant the relief requested herein pursuant to 28 U.S.C. §§ 1334 and 157, and the Amended Standing Order of Reference dated February 29, 2012, from the United States District Court for the District of Delaware. A proceeding to consider and grant such relief is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory predicates for the relief sought herein are sections 105(a), 328(a) and 1103(a) of the Bankruptcy Code. Relief is also proper pursuant to Bankruptcy Rule 2014 and the Local Rules of this District. BACKGROUND 2. On December 4, 2017 (the “Petition Date”), the Debtors each filed their respective voluntary petitions with this Court under chapter 11 of the Bankruptcy Code. The Debtors continue to operate their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 3. On December 11, 2017, Drinker Biddle filed its initial Rule 2019 statements on behalf of the Ad Hoc Committee of Promissory Notes of Woodbridge Mortgage Investment Fund Entities and Affiliates (the “Ad Hoc Noteholder Committee”). Drinker Biddle continued to represent the Ad Hoc Noteholder Committee until the formation of the Ad Hoc Noteholder Group. 4. On December 18, 2017, the Ad Hoc Noteholder Committee filed its motion [D.I. 85] (the “Noteholder Committee Appointment Motion”) pursuant to section 1102(a)(2) of the 2 91301901.4 Case 17-12560-KJC Doc 783 Filed 03/19/18 Page 3 of 8 Bankruptcy Code, seeking entry of an order directing appointment of an official committee of Woodbridge noteholders (the “Noteholders”). The Noteholder Committee Appointment Motion was opposed by the Official Committee of Unsecured Creditors (the “Creditors’ Committee”) [D.I. 288]. On January 23, 2018, the Court entered the Settlement Order approving a global resolution of several pending contested matters, including the Committee Appointment Motion. 5. On February 2, 2018, in accordance with the Settlement Order, the Movant Committee formed the Ad Hoc Noteholder Group [D.I. 470]. 6. Also on February 2, 2018, the Ad Hoc Noteholder Group selected and retained, subject to approval by this Court, Drinker Biddle as its proposed counsel. RELIEF REQUESTED AND BASIS THEREFOR 7. By way of this Application, pursuant to the Settlement Order, and sections 105(a), 328(a) and 1103(a) of the Bankruptcy Code and Bankruptcy Rule 2014, the Ad Hoc Noteholder Group requests entry of the proposed order attached hereto as Exhibit A , approving the employment and retention of Drinker Biddle, nunc pro tunc to January 23, 2018, as its counsel in connection with these chapter 11 cases. 8. The Ad Hoc Noteholder Group determined that Drinker Biddle’s combination of relevant experience, preparation and analysis, among other considerations, warranted selection of the firm. Drinker Biddle’s attorneys have represented secured and unsecured noteholder groups, secured lenders, and over sixty creditors’ committees, among many other major chapter 11 engagements. 9. Pursuant to section 1103(a) of the Bankruptcy Code, the Ad Hoc Noteholder Group requests that this Court approve the employment of Drinker Biddle as its counsel to 3 91301901.4 Case 17-12560-KJC Doc 783 Filed 03/19/18 Page 4 of 8 perform legal services consistent with scope set forth respecting the Ad Hoc Noteholder Group in the Settlement Order, consisting primarily of the following areas: (a) Analysis and potential litigation and/or negotiation of any aspects of Noteholder treatment in the chapter 11 cases; (b) Investigation and analysis of facts and issues related to whether Noteholders are secured; and (c) Analysis of possible Noteholder benefits of substantive consolidation of the Debtors’ estates. 10. Drinker Biddle’s scope will necessarily involve sub-tasks and related tasks, all as contemplated in the Settlement Order, including but not limited to the following: (a) Presenting at meetings of the Ad Hoc Noteholder Group, as well as meetings with other key stakeholders and parties; (b) Summary review of financial and operational information furnished by the Debtors to the Ad Hoc Noteholder Group, insofar as it relates to consolidation issues and cash management requirements that mandate accurate and complete post-petition intercompany accounting and allocation of professional fees and DIP draws; (c) Assisting on issues of unencumbered assets, insofar as they affect DIP draw requirements and adequate protection for Noteholders’ existing liens; (d) Representing Noteholders interests, as the cases’ largest economic constituency, in keeping the cases’ professional fee budgeting to the minimum amounts necessary; (e) Representing Noteholder interests in any sale of assets of the Debtors’ estates; (f) Investigation of liens of other purported secured parties; (g) Conferring with the Debtors’ management, counsel and financial advisors related to the Ad Hoc Noteholders Group scope, and such other matters as reasonably requested by the Debtors; (h) Reviewing the Debtors’ schedules, statements of financial affairs, and business plans related to the Debtors’ real properties; (i) Advising the Ad Hoc Noteholder Group as to the ramifications regarding the Debtors’ activities and motions before this Court that bear upon the aforementioned scope; 4 91301901.4 Case 17-12560-KJC Doc 783 Filed 03/19/18 Page 5 of 8 (j) Preparing and filing appropriate pleadings on behalf of the Ad Hoc Noteholder Group; (k) Reviewing and analyzing the Debtors’ financial professionals’ work product and report to the Ad Hoc Noteholder Group on that analysis, subject to the aforementioned scope; and (l) Performing such other legal services for the Ad Hoc Noteholder Group as may be necessary or proper in these proceedings, subject to the aforementioned scope. 11. Drinker Biddle has advised the Ad Hoc Noteholder Group that it intends to apply to the Court for compensation and reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules, as well as the administrative compensation order and fee examiner order entered in these cases. The proposed rates of compensation, subject to final Court approval, are the customary hourly rates in effect when services are performed by the attorneys, legal assistants and staff who provide services to the Ad Hoc Noteholder Group. The current hourly rates of the primary Drinker Biddle professionals anticipated to be staffed on this engagement are as follows: Timekeeper Title Hourly Rate Steven K. Kortanek Partner $805 James H. Millar Partner $990 Michael P. Pompeo Partner $770 Patrick A. Jackson Associate $605 Joseph N. Argentina, Jr. Associate $495 Cathy Greer Paralegal $400 Drinker Biddle has advised the Ad Hoc Noteholder Group that the firm’s hourly rates are subject to periodic adjustment, of which the firm will provide notice. 12. Consistent with the firm’s policy with respect to its other clients, Drinker Biddle will charge the Ad Hoc Noteholder Group for all charges and disbursements incurred in rendering services to the Ad Hoc Noteholder Group. These customary items include, among other things, photocopying, facsimiles, travel, business meals, computerized research, postage, 5 91301901.4 Case 17-12560-KJC Doc 783 Filed 03/19/18 Page 6 of 8 witness fees, and other fees related to trials and hearings. Internal costs or overhead cost and document production services (including regular secretarial and word processing time), will not be charged for separately. 13. Based upon the Kortanek Declaration filed contemporaneously herewith, the Ad Hoc Noteholder Group is satisfied that (i) Drinker Biddle does not hold or represent an adverse in connection with the cases, and that its employment is in the best interest of the estates, (ii) Drinker Biddle has no connection with the U.S.