Page 1 $2$ • Well, GOTSHAL & MANGES LLP Co-Attorneys for The
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$2$ === • WElL, GOTSHAL & MANGES LLP Co-Attorneys for The Grand Union Company 767 Fifth Avenue New York, New York 10153 (212) 310-8000 Jeffrey L. Tanenbaum, Esq. (JT 9797) Judy G.Z. Liu, Esq. (JL 6449) RAVIN, GREENBERG & MARKS, P.A. Co-Attorneys for The Grand Union Company 101 Eisenhower Parkway Roseland, New Jersey 07068 (973) 226-1500 Howard S. Greenberg, Esq. (HSG 8559) UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW JERSEY --------------------------------------------------------------x In re THE GRAND UNION COMPANY, Debtor. Hearing Date: June , 1998 --------------------------------------------------------------x APPUCATION OF THE DEBTOR PURSUANT TO SECTION 327(a) OF THE BANKRUPTCY CODE FOR AUTHORIZATION TO EMPLOY WElL, GOTSHAL & MANGES LLP AS ATTORNEYS FOR THE DEBTOR TO THE HONORABLE UNITED STATES BANKRUPTCY JUDGE: The Grand Union Company, as debtor and debtor in possession (the "Debtor" or "Grand Union"), respectfully represents: NYFS03 ...:\18\50318\OOOm012\APP2098N.35D I ... .' " Background 1. On the date hereof (the "Commencement Date") , Grand Union commenced with this Court a voluntary case under chapter 11 of title 11, United States Code (the "Bankruptcy Code"). 2. The Debtor is continuing to operate its business and manage its properties as a debtor in possession pursuant to sections 1l07(a) and 1108 of the Bankruptcy Code. Jurisdiction and Venue 3. This Court has jurisdiction to consider this application pursuant to 28 U.S .C. §§ 157 and 1334. Consideration of this application is a core proceeding pursuant to 28 U.S.C. § 157(b) . Venue of this proceeding is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. The Debtor's Business 4. Grand Union, a publicly held company, operates 222 retail food stores in six northeastern states: New York, Vermont, New Jersey , Connecticut, New Hampshire, and Pennsylvania. Since its inception in 1872, Grand Union has grown to be one of the largest grocery-store chains in the Northeast, with a name brand recognized for quality and value throughout the region. Grand Union's supermarkets offer a wide selection of national brand and private label grocery and 2 N"{FS03 ...:\18\50318\OOO3\2012\APP2098N.35D general merchandise products, as well as high-quality perishables and service departments. 5. As of the Commencement Date, Grand Union employs approximately 15,000 employees, of whom approximately 67% are employed on a part-time basis. Approximately 50% of the Debtor's employees are covered by 12 collective bargaining agreements. 6. For the fiscal year ending March 28, 1998, Grand Union had net sales of approximately $2,264,192,000. As of March 28, 1998, Grand Union's books and records reflected assets totalling approximately $964,446,000 and liabilities totalling approximately $1,241,819,000. The Proposed Plan of Reorganization 7. Prior to the Commencement Date, Grand Union engaged in extensive negotiations with an unofficial committee of holders of in excess of 48 % in aggregate principal amount of its 12% notes (as individual noteholders, the II Noteholders," and as an unofficial committee, the "Steering Committee") and the holders of Grand Union's preferred stock (the "Preferred Stockholders"), regarding the terms of a proposed financial restructuring for Grand Union, to be implemented through a "prepackaged" chapter 11 case. The final proposal, as agreed to by the parties, is embodied in the proposed plan of reorganization (the "Plan") and described in detail in the related disclosure statement (the "Disclosure Statement"), each of 3 NYFS03...:\18150318\OOO3'.Z012IAPP2098N.35D \. Retention of Weil. Gotshal & Manges LLP 11. The Debtor has employed Weil, Gotsha1 & Manges LLP ("WG&M") as its attorneys in connection with the commencement and prosecution of its chapter 11 case. Pursuant to sections 327(a) and 328(a) of the Bankruptcy Code, the Debtor, as debtor in possession, requests that the Court approve the employment of WG&M, under a general retainer, as its attorneys to perform the legal services that will be necessary during its chapter 11 case. 12. Although WG&M does not have an office in New Jersey, WG&M will represent the Debtor in coordination with the New Jersey law finn of Ravin, Greenberg & Marks, P.A. ("Ravin, Greenberg") . WG&M and Ravin, Greenberg have discussed a division of responsibilities in connection with the representation of the Debtor, and will make every effort to avoid duplication of services in the representation of the Debtor. 13. The Debtor has selected WG&M as its attorneys because of the finn 's knowledge of the Debtor's business and fmancial affairs and its extensive general experience and knowledge, and in particular, its recognized expertise in the field of debtors' protections and creditors ' rights and business reorganizations under chapter 11 of the Bankruptcy Code. WG&M first represented the Debtor in connection with the obtaining of a supplemental term loan from new lenders under the Debtor's existing bank facility in August 1997. In connection therewith, WG&M has 6 NY FS03 ... :\ 18\50318\OOO3\2012\APP2098N.35D become highly familiar with the Debtor's business and affairs, as well as its capital structure. Accordingly, WG&M has the necessary background to deal effectively with many of the potential legal issues and problems that may arise in the context of the Debtor's chapter 11 case. The Debtor believes that WG&M is both well qualified and uniquely able to represent it in its chapter 11 case in a most efficient and timely manner. 14. The employment of WG&M under a general retainer is appropriate and necessary to enable the Debtor to execute faithfully its duties as debtor and debtor in possession and to implement the restructuring and reorganization of the Debtor. Subject to further order of this Court, it is proposed that WG&M be employed to: (a) take all necessary action to protect and preserve the estate of the Debtor, including the prosecution of actions on the Debtor' s behalf, the defense of any actions commenced against the Debtor, the negotiation of disputes in which the Debtor is involved, and the preparation of objections to claims filed against the Debtor's estate; (b) prepare on behalf of the Debtor, as debtor in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtor's estate; (c) perform all other necessary legal services in connection with the prosecution of this chapter II case. 7 NYFS03•..:\1&\503t&' ()()03\2012IAPP209&N.35D 15. It is necessary for the Debtor to employ attorneys under a general retainer to render the foregoing professional services. 16. WG&M has stated its desire and willingness to act in this case and render the necessary professional services as attorneys for the Debtor and debtor in possession. 17. To the best of the Debtor's knowledge, the members and associates of WG&M do not have any connection with or any interest adverse to the Debtor, its creditors or any other party in interest, or its respective attorneys and accountants, except as may be set forth in the affidavit of Judy G.Z . Liu, a member of WG&M (the "Liu Affidavit"), annexed hereto as Exhibit A. 18. Within one year prior to the Commencement Date, WG&M received from the Debtor an aggregate of $2,200,000 for professional services performed relating to general corporate affairs, the potential restructuring of the Debtor's financial obligations and the potential commencement of this chapter 11 case. WG&M also has received a retainer fee and an advance against expenses for services to be performed in the preparation for and prosecution of this chapter 11 case, in the sum of $400,000 and $50,000, respectively, which will be applied to such postpetition allowances of compensation and reimbursement of expenses, respectively. as may be granted by the Court. 8 NYF S03...:\ l 8150318\OOO3\20l2IA PP2098N.35D 19. The Debtor understands that WG&M hereafter intends to apply to the Court for allowances of compensation and reimbursement of expenses in accordance with the applicable provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and the local rules and orders of this Court (the "Local Rules") for all services performed and expenses incurred after the Commencement Date. 20. The Debtor, subject to the provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and further orders of the Court, proposes to pay WG&M its customary hourly rates for services rendered that are in effect from time to time, as set forth in the Liu Affidavit, and to reimburse WG&M according to its customary reimbursement policies, and submits that such rates are reasonable. Waiver of Memorandum of Law 21. Pursuant to D.N.J. LBR 9013-2, the Debtor respectfully requests that the Court waive the requirement that the Debtor file a memorandum of law in support of this application. No memorandum of law is necessary because no novel issues of law are presented herein. Notice 22. No trustee, examiner, or official creditors' committee has been appointed in the Debtor's chapter 11 case. Notice of this application has been given to (i) the Office of the United States Trustee for the District of New Jersey; (ii) the 9 NYFS03.. .:1181503 I Sl000312012IAPP2098N.35D attorneys for the Debtor's prepetition and proposed postpetition lending group; (iii) the attorneys for the Steering Committee; (iv) the attorneys for the Preferred Stockholders; and (v) the trustee under the indenture governing the Debtor's outstanding debt securities. Because of the administrative nature of the relief requested herein, the Debtor submits that no other notice need be given. WHEREFORE the Debtor respectfully requests entry of an order granting the relief requested herein, and such other and further relief as is just.