Case 20-10941-CSS Doc 215 Filed 05/11/20 Page 1 of 12
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Case 20-10941-CSS Doc 215 Filed 05/11/20 Page 1 of 12 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 TRUE RELIGION APPAREL, INC., et al., Case No. 20-10941 (CSS) Debtors.1 (Jointly Administered) Objection Deadline: May 27, 2020 at 4:00 p.m. Hearing Date: June 22, 2020 at 10:00 a.m. DEBTORS’ APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF COLE SCHOTZ P.C. AS COUNSEL FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE True Religion Apparel Inc. and certain of its affiliates, the debtors and debtors in possession in the above-captioned cases (collectively, the “Debtors”), hereby submit this application (this “Application”) for entry of an order substantially in the form attached hereto as Exhibit A (the “Proposed Order”), pursuant to sections 327(a), 329 and 1107 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (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”), authorizing the Debtors to retain and employ Cole Schotz P.C. (“Cole Schotz” or the “Firm”) as counsel to the Debtors nunc pro tunc to the Petition Date (as defined below). In support of the Application, the Debtors submit the Declaration of Justin R. Alberto in Support of the Debtors’ Application for Entry of an Order Authorizing and Approving the Retention and Employment of Cole Schotz P.C. as Counsel to the Debtors (the “Alberto Declaration”), a copy of which is attached hereto as Exhibit B, and the Declaration of Scott C. McAdam in Support of the 1 The Debtors and the last four digits of their respective taxpayer identification numbers are: TRLG Intermediate Holdings, LLC (3150); True Religion Apparel, Inc. (2633); Guru Denim, LLC (1785); True Religion Sales, LLC (3441); and TRLGGC Services, LLC (8453). The Debtors’ headquarters is located at 1888 Rosecrans Avenue, Manhattan Beach, CA 90266. 60946/0001-20261392v3 Case 20-10941-CSS Doc 215 Filed 05/11/20 Page 2 of 12 Debtors’ Application for Entry of an Order Authorizing the Retention and Employment of Cole Schotz P.C. as Counsel to the Debtors (the “McAdam Declaration”), a copy of which is attached hereto as Exhibit C. In further support of this Application, the Debtors represent as follows: JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Motion under 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 February 29, 2012. This is a core proceeding within the meaning of 28 U.S.C. § 157(b) and, pursuant to Rule 9013-1(f) of the Local Rules, the Debtors consent to the entry of a final order by the Court in connection with this Motion to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article III of the United States Constitution. 2. Venue of these cases and the Application in this District is proper under 28 U.S.C. §§ 1408 and 1409. 3. The statutory and legal predicates for the relief requested herein are sections 327(a), 329 and 1107 of the Bankruptcy Code, Bankruptcy Rule 2014 and 2016 and Local Rules 2014-1 and 2016-1. BACKGROUND I. The Chapter 11 Cases 4. On April 13, 2020, (the “Petition Date”), each Debtor commenced a case by filing a petition for relief under chapter 11 of the Bankruptcy Code (collectively, the “Chapter 11 Cases”). The Debtors Chapter 11 Cases are jointly administered. The factual background regarding the Debtors, including their business operations, their capital and debt structure, and the events leading to the filing of the Chapter 11 Cases, is set forth in the Declaration of Richard 2 60946/0001-20261392v3 Case 20-10941-CSS Doc 215 Filed 05/11/20 Page 3 of 12 Lynch, Interim Chief Financial Officer, in Support of the Chapter 11 Petitions and First Day Pleadings [Docket No. 19], incorporated herein by reference. 5. The Debtors continue to manage and operate their businesses as debtors-in- possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. 6. On April 23, 2020, the Acting United States Trustee for Region 3 (the “U.S. Trustee”) appointed an official committee of unsecured creditors (the “Creditors Committee”) in the Chapter 11 Cases [Docket No. 108]. No trustee or examiner has been appointed in the Chapter 11 Cases. COLE SCHOTZ’S QUALIFICATIONS 7. The Debtors seek to retain Cole Schotz as their 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 complex bankruptcy matters. 8. Since its retention, Cole Schotz has familiarized itself with the Debtors and with the potential legal issues which may arise in the context of the Chapter 11 Cases. The Debtors submit that Cole Schotz’ retention as bankruptcy counsel is necessary and in the best interest 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. SCOPE OF COLE SCHOTZ’S PROPOSED SERVICES 9. 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) take all necessary action to protect and preserve the Debtors’ estates, including the prosecution of actions on the Debtors’ behalf, the defense of 3 60946/0001-20261392v3 Case 20-10941-CSS Doc 215 Filed 05/11/20 Page 4 of 12 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; c) prepare on behalf of the Debtors, as debtors in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors’ estates, including, without limitation, the Chapter 11 plan of reorganization; d) advise the Debtors concerning, and prepare responses to, applications, motions, other pleadings, notices, and other papers that may be filed by other parties in these Chapter 11 Cases; e) attend meetings and negotiate with representatives of creditors and other parties-in-interest, attend court hearings, and advise the Debtors on the conduct of their Chapter 11 Cases; f) take all necessary actions in connection with a plan and related disclosure statement and all related documents, as well as such further actions as may be required in connection with the administration of the Debtors’ estates and the implementation of a plan; and g) perform all other necessary legal services in connection with the prosecution of the Chapter 11 Cases. PROFESSIONAL COMPENSATION 10. 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. 11. Cole Schotz will charge the Debtors for legal services on an hourly basis in accordance with its ordinary and customary hourly rates in effect on the date services are rendered, subject to a twelve (12) percent discount. The current rates of Cole Schotz members, special counsel, associates, paralegals, and litigation support specialists are as follows: 4 60946/0001-20261392v3 Case 20-10941-CSS Doc 215 Filed 05/11/20 Page 5 of 12 Members and Special Counsel $440 to $990 per hour Associates $275 to $535 per hour Paralegals $210 to $330 per hour Litigation Support Specialists $330 to $405 per hour 12. The hourly rates set forth above are the Firm’s standard hourly rates. These rates are set at a level designed to compensate fairly the Firm for the work of its attorneys and paralegals and to cover fixed and routine overhead expenses. As noted above, Cole Schotz has agreed to a twelve percent discount on its hourly rates. Cole Schotz has informed the Debtors that its 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 13. In addition to the hourly rates set forth above, it is Cole Schotz’s policy to charge its clients in all areas of practice for all other expenses incurred in connection with the client’s case. The expenses charged to clients include, among other things, travel expenses, work related meals, facsimile (outgoing only), toll and other charges, external teleconferencing, mail, express mail and overnight mail charges, special and hand delivery charges, document processing, photocopying, printing and scanning charges, vendor charges, computerized research charges, transcription costs, filing fees, CourtCall fees, non-ordinary overhead expenses such as secretarial and other overtime, and other out-of-pocket expenses. Cole Schotz will charge the Debtors for these expenses in a manner and at rates consistent with charges made generally to the Firm’s other clients and the Local Rules. The Debtors respectfully submit that the rates and charges set forth above are reasonable. COMPENSATION RECEIVED BY COLE SCHOTZ FROM THE DEBTOR 14.