Case 21-10549-JTD Doc 136 Filed 04/01/21 Page 1 of 12 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 SC SJ HOLDINGS, LLC, et al. Case No. 21-10549 (JTD) Debtors.1 (Jointly Administered) Hearing Date: April 29, 2021 at 3:00 p.m. (ET) Obj. Deadline: April 22, 2021 at 4:00 p.m. (ET) DEBTORS’ APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF COLE SCHOTZ P.C. AS CO-COUNSEL FOR THE DEBTORS NUNC PRO TUNC TO THE FMT PETITION DATE The above-captioned debtors and debtors in possession SC SJ Holdings LLC and FMT SJ LLC (collectively, the “Debtors”) in the above-captioned chapter 11 cases (the “Chapter 11 Cases”), by and through their undersigned counsel, hereby submit this application (the “Application”), pursuant to sections 327(a), 329, and 1107 of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (as amended, the “Bankruptcy Code”), Rules 2014 and 2016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules 2014-1 and 2016- 1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local Rules”), for entry of an order, substantially in the form attached hereto as Exhibit A (the “Proposed Order”), authorizing the Debtors to retain and employ Cole Schotz P.C. (“Cole Schotz” or the “Firm”) as their co-counsel in these Chapter 11 Cases nunc pro tunc to the FMT Petition Date (as defined below). In support of the Application, the Debtors submit the declarations of (i) Justin R. Alberto, a member of Cole Schotz, attached hereto as Exhibit B (the “Alberto Declaration”) and (ii) Neil Demchick, Chief Restructuring 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, include: SC SJ Holdings LLC (7200) and FMT SJ LLC (7200). The mailing address for both Debtors is 3223 Crow Canyon Road, Suite 300 San Ramon, CA 94583. 62358/0001-40296801v6 Case 21-10549-JTD Doc 136 Filed 04/01/21 Page 2 of 12 Officer of the Debtors, attached hereto as Exhibit C (the “Demchick Declaration”), each of which is incorporated herein by reference. In further support of the Application, the Debtors respectfully state as follows: JURISDICTION AND VENUE 1. The United States Bankruptcy Court for the District of Delaware (the “Court”) has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated as of February 29, 2012. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b). 2. Pursuant to Local Rule 9013-1(f), the Debtors consent to the entry of a final order or judgment by the Court in connection with this Application to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments in connection herewith consistent with Article III of the United States Constitution. 3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 4. The statutory and other bases for the relief requested in this Application are sections 327(a), 329, and 1107 of the Bankruptcy Code, Bankruptcy Rules 2014 and 2016, and Local Rules 2014-1 and 2016-1. BACKGROUND 5. On March 5, 2021 (the “FMT Petition Date”), Debtor FMT SJ LLC commenced a voluntary case under chapter 11 of the Bankruptcy Code in this Court. On March 10, 2021, Debtor SC SJ Holdings LLC commenced a voluntary case under chapter 11 of the Bankruptcy Code in this Court. Each of the Debtors’ Chapter 11 Cases are being jointly administered for procedural purposes only pursuant to Bankruptcy Rule 1015(b). 2 62358/0001-40296801v6 Case 21-10549-JTD Doc 136 Filed 04/01/21 Page 3 of 12 6. The Debtors continue to operate their businesses and manage their properties as debtors and debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 7. Additional information regarding the Debtors’ business, capital structure, and the circumstances supporting these Chapter 11 Cases is set forth in the Declaration of Neil Demchick in Support of Chapter 11 Petitions and First Day Pleadings [Docket No. 11]. RELIEF REQUESTED 8. By this Application, the Debtors request entry of the Proposed Order, substantially in the form attached hereto as Exhibit A, authorizing the Debtors to retain and employ Cole Schotz as co-counsel to the Debtors nunc pro tunc to the FMT Petition Date, pursuant to sections 327(a), 329, and 1107 of the Bankruptcy Code, Bankruptcy Rules 2014 and 2016, and Local Rules 2014-1 and 2016-1. COLE SCHOTZ’S QUALIFICATIONS 9. The Debtors seek to retain Cole Schotz as their co-counsel because of the Firm’s extensive experience and knowledge in the field of debtors’ and creditors’ rights under chapter 11 of the Bankruptcy Code and the Firm’s experience in matters concerning complex bankruptcy litigation. 10. Since its retention, Cole Schotz has familiarized itself with the Debtors and many of the potential legal issues which may arise in the context of these Chapter 11 Cases. The Debtors submit that Cole Schotz’ retention as bankruptcy counsel is necessary and in the best interests of the Debtors and their estates. The Debtors further submit that the firm is both well- qualified and uniquely able to represent the Debtors in these Chapter 11 Cases in an efficient and effective manner. 11. Moreover, pursuant to Local Rule 9010-1(c), an “attorney not admitted to practice by the District Court and the Supreme Court of the State of Delaware may not be admitted pro 3 62358/0001-40296801v6 Case 21-10549-JTD Doc 136 Filed 04/01/21 Page 4 of 12 hac vice unless associated with an attorney who is a member of the Bar of the District Court and who maintains an office in the District of Delaware for the regular transaction of business.” Del. Bankr. L.R. 9010-1(c). Cole Schotz will fulfill the “Delaware Counsel” position as such term is defined in Local Rule 9010-1(c). See id. Cole Schotz will be the registered user of CM/ECF, shall file all papers, and shall attend proceedings before the Court on behalf of the Debtors pursuant to Local Rule 9010-1(c). SCOPE OF COLE SCHOTZ’S PROPOSED SERVICES 12. It is proposed that Cole Schotz be employed by the Debtors to render the following services: (a) provide legal advice with respect to the Debtors’ powers and duties as debtors in possession; (b) provide legal advice with respect to the Local Rules and local practices and procedures; (c) take all necessary action to protect and preserve the Debtors’ estates, including the prosecution of actions on the Debtors’ behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors’ estates; (d) prepare and/or review and comment, on behalf of the Debtors, as debtors in possession, on all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors’ estates; (e) advise the Debtors concerning and prepare and/or review responses to applications, motions, other pleadings, notices, and other papers that may be filed by the Debtors and other parties in the Chapter 11 Cases; (f) prepare notices of agenda, certificates of no objections, certifications of counsel, and notices of motions, applications, and hearings; (g) attend meetings and negotiate with representatives of creditors and other parties in interest, appear at court hearings, and advise the Debtors on the conduct of the Chapter 11 Cases; (h) take all necessary actions in connection with any chapter 11 plan of reorganization and related disclosure statement, as each may be amended from time to time, and all related documents, and such further actions as may be required in connection with the administration of the Debtors’ estates and the implementation of any such documents; 4 62358/0001-40296801v6 Case 21-10549-JTD Doc 136 Filed 04/01/21 Page 5 of 12 (i) monitor the docket for filing deadlines and hearing dates, maintain a critical dates calendar, and coordinate with co-counsel on pending matters; (j) serve as conflicts counsel on certain matters where needed and as the same may arise during the course of these Chapter 11 Cases; and (k) perform all other necessary legal services in connection with the prosecution of the Chapter 11 Cases. PROFESSIONAL COMPENSATION 13. Subject to the Court’s approval of this Application, Cole Schotz intends to apply to the Court for allowance of compensation earned for professional services rendered and reimbursement of actual and necessary expenses incurred in connection with the Chapter 11 Cases in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any other applicable procedures and orders of the Court. The current rates of Cole Schotz members, special counsel, associates, law clerks, paralegals, and litigation support specialists are as follows: Members and Special Counsel $410 to $1050 per hour Associates $285 to $670 per hour Law Clerks $225 to $290 per hour Paralegals $215 to $345 per hour Litigation Support Specialists $340 to $360 per hour These hourly rates are subject to periodic adjustments to reflect economic and other conditions and to reflect their increased expertise and experience in their area of law.2 14.