In the United States Bankruptcy Court for the District of Delaware
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Case 17-12560-KJC Doc 784 Filed 03/19/18 Page 1 of 10 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 CONWAY MACKENZIE, INC. AS FINANCIAL ADVISOR NUNC PRO TUNC TO JANUARY 23, 2018 The Ad Hoc Group of Noteholders Formed Pursuant to January 23, 2018, Order [D.I. 357] (the “Ad Hoc Noteholder Group”) hereby files this Application (the “Application”) for Authority to Employ Conway MacKenzie, Inc. as Financial Advisor to the Ad Hoc Noteholder Group, nunc pro tunc to January 23, 2018. This Application is supported by the Declaration of Matthew D. Sedigh (the “Sedigh Declaration”), attached hereto as Exhibit A . In support of this Application, the Ad Hoc Noteholder Group respectfully states as follows: 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). 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. The Noteholder Group maintains an informational website at http://www.omnimgt.com/woodbridge. 91369608.4 Case 17-12560-KJC Doc 784 Filed 03/19/18 Page 2 of 10 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 327, 328(a), and 1103 of the Bankruptcy Code. Relief is also proper pursuant to Bankruptcy Rule 2014 and the Local Rules of this District. BACKGROUND A. Chapter 11 Cases 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. No trustee or examiner has been appointed in these chapter 11 cases. 3. On December 18, 2017, the Ad Hoc Committee of Promissory Notes of Woodbridge Mortgage Investment Fund Entities and Affiliates (the “Movant Ad Hoc Committee”) filed a motion [D.I. 85] (the “Committee Appointment Motion”) pursuant to section 1102(a)(2) of the Bankruptcy Code for entry of an order directing appointment of an official committee of Woodbridge noteholders (the “Noteholders”). The motion was opposed by the Official Committee of Unsecured Creditors (the “Creditors’ Committee”) [D.I. 288]. On January 23, 2018, the Court entered an order approving a global resolution of several pending contested matters, including the Committee Appointment Motion [D.I. 357] (the “Settlement Order”). 4. On February 2, 2018, in accordance with the Settlement Order, the Movant Committee formed the Ad Hoc Noteholder Group [D.I. 470]. 2 91369608.4 Case 17-12560-KJC Doc 784 Filed 03/19/18 Page 3 of 10 5. Also on February 2, 2018, the Ad Hoc Noteholder Group selected and retained, subject to approval by this Court, Conway MacKenzie as its proposed financial advisor. 6. The Ad Hoc Noteholder Group’s selection of Conway MacKenzie as its financial advisor was based upon, among other things: (a) the Ad Hoc Noteholder Group’s need to retain a financial advisory firm to provide advice relevant to the scope of the Ad Hoc Noteholder Group’s mandate; (b) Conway MacKenzie’s senior professionals’ extensive experience and excellent reputation in providing financial advisory services in chapter 11 cases such as these cases; and (c) Conway MacKenzie’s knowledge of the industry. 7. The Ad Hoc Noteholder Group determined that Conway MacKenzie brought a unique blend of case-specific knowledge, relevant experience and expertise, given not only the firm’s own experience and prior involvement in the chapter 11 cases, but also in view of the added subject matter expertise brought about by Conway MacKenzie’s collaboration with staff from Dundon Advisers LLC, who are associating with Conway MacKenzie for the Ad Hoc Noteholder Group engagement. The Ad Hoc Noteholder Group believes that Conway MacKenzie’s proposed compensation structure is competitive, appropriate, and reasonable in the context of these chapter 11 cases. B. Conway MacKenzie’s Background 1. Conway MacKenzie is a turnaround and crisis management consulting firm specializing in corporate restructurings, operations improvement, litigation analytics and valuations. Conway MacKenzie has extensive experience working with and for distressed companies in complex financial and operational restructurings, both out-of-court and in chapter 11 proceedings throughout the United States. Conway MacKenzie professionals have advised debtors, creditors and equity constituents in numerous reorganizations, which advisory services 3 91369608.4 Case 17-12560-KJC Doc 784 Filed 03/19/18 Page 4 of 10 have included financial analysis and budgeting, forecasting, cash management, operational assessments and improvements, and the provision of interim management. Conway MacKenzie has advised companies with annual sales ranging from $5 million to over $5 billion in a broad range of industries. 2. In light of the size and complexity of these chapter 11 cases, the Ad Hoc Noteholder Group requires the services of a seasoned and experienced financial advisor familiar with the industry to, among other things, assist the Ad Hoc Noteholder Group in (i) understanding the Debtors’ businesses and operations, (ii) executing its fiduciary duties and (iii) maximizing the value of the Debtors’ estates. Therefore, the Ad Hoc Noteholder Group respectfully submits that the services of Conway MacKenzie are necessary and appropriate to ensure that the Ad Hoc Noteholder Group’s interests are protected. 3. In addition, in order to provide the Ad Hoc Noteholder Group with additional subject matter expertise, on securities, trading, and certain transactional and litigation advisory matters, and without the need to engage a separate advisor, Conway Mackenzie has associated with staff from the firm of Dundon Advisers LLC, headed by Matthew Dundon. RELIEF REQUESTED 4. Pursuant to this Application, pursuant to section 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 B, approving the employment and retention of Conway MacKenzie as its financial advisor, nunc pro tunc to January 23, 2018, in connection with the Debtors’ Chapter 11 cases. 4 91369608.4 Case 17-12560-KJC Doc 784 Filed 03/19/18 Page 5 of 10 RETENTION OF CONWAY MACKENZIE A. Services to be Provided 8. The Ad Hoc Noteholder Group requests that this Court approve the employment of Conway MacKenzie to perform advisory 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 support and/or negotiation assistance on 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. 9. Conway MacKenzie’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) Assistance in the analysis, review and monitoring of the restructuring process, including, but not limited to an assessment of potential recoveries for Noteholders; (c) Advising and designing potential claims liquidity solutions for Noteholders, including measures to foster reasonable claims trading activities; (d) Review and analysis of financial information prepared by the Debtors, including, but not limited to, cash flow projections and budgets, business plans, cash receipts and disbursement analysis, asset and liability analysis, and the economic analysis of proposed transactions for which Court approval is sought; (e) Review and analysis of any tax issues associated with Noteholder treatment and recoveries; (f) Review and analysis necessary for the confirmation of a plan and related disclosure statement in these chapter 11 proceedings; 5 91369608.4 Case 17-12560-KJC Doc 784 Filed 03/19/18 Page 6 of 10 (g) Attendance at meetings and assistance in discussions with the Debtors, potential investors, the Official Committee of Unsecured Creditors, the Ad Hoc Unitholder Group, the U.S. Trustee, and other parties in interest and professionals hired by the same, as requested; (h) Review and analysis of financial related disclosures required by the Court, including Schedules of Assets and Liabilities, Statements of