SC SJ HOLDINGS, LLC, Et Al.,1 Debtors. Chapter 11 Case

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

Chapter 11 In re: Case No. 21-10549 (JTD) SC SJ HOLDINGS, LLC, et al.,1 (Jointly Administered) Debtors. Objection Deadline: April 22, 2021, at 4:00 p.m. (ET) Hearing Date: April 29, 2021, at 3:00 p.m. (ET)

APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR ENTRY OF AN ORDER AUTHORIZING RETENTION AND EMPLOYMENT OF SEWARD & KISSEL LLP AS COUNSEL TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, NUNC PRO TUNC TO MARCH 29, 2021

The Official Committee of Unsecured Creditors (the “Committee”) of SC SJ Holdings,

LLC, et al. (the “Debtors”) submits this application (the “Application”), pursuant to sections

328(a) and 1103(a) of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy

Code”), Rules 2014(a), Rule 2016 and Rule 5002 of the Federal Rules of Bankruptcy Procedure

(the “Bankruptcy Rules”) and Rule 2014-1 and Rule 2016-1 of the Local Rules of Practice and

Procedure for 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 authorizing the employment and retention of Seward & Kissel LLP (“S&K”) as counsel to the Committee nunc pro tunc to March 29, 2021. The Declaration of John R. Ashmead in support of this Application is attached hereto as Exhibit B (the “Ashmead Declaration”) and the Declaration of Anthony J.

Torano in support of this Application is attached hereto as Exhibit C (the “Torano Declaration”).

In further support of this Application, the Committee respectfully represents as follows:

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 (5141) and FMT SJ LLC (7200). The mailing address for both Debtors is 3223 Crow Canyon Road, Suite 300, San Ramon, CA 94583.

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BACKGROUND

1. On March 5, 2021 (the “FMT Petition Date”), Debtor FMT SJ LLC commenced a case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code and on

March 10, 2021 (the “SC SJ Petition Date”), Debtor SC SJ Holdings LLC commenced a case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code (collectively, the

“Chapter 11 Cases”). The Debtors’ Chapter 11 Cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015(b) and Local

Rule 1015-1.

2. On March 26, 2021 (the “Committee Formation Date”), the United States Trustee

(the “U.S. Trustee”) appointed the Committee pursuant to Bankruptcy Code section 1102. The

Committee consists of three members.2 On March 29, 2021 (the “Retention Date”), the

Committee selected S&K to serve as counsel to the Committee pursuant to Bankruptcy Code section 1103(a). On March 29, 2021, the Committee selected Benesch Friedlander Coplan &

Aronoff LLP (“Benesch”) to serve as Delaware co-counsel to the Committee. On March 30, 2021 the Committee selected FTI Consulting to serve as its financial advisor.

3. Pursuant to Bankruptcy Code sections 1107(a) and 1108, the Debtors continue to operate their businesses and manage their properties as debtors-in-possession. No trustee or examiner has been appointed in the Debtors’ chapter 11 cases.

JURISDICTION AND VENUE

4. 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

2 The members of the Committee are (i) San Jose Water Company; (ii) Minibar North America, Inc.; and (iii) Pacific Coast Trane Service.

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of Delaware, dated February 29, 2012. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2) and the Court may enter a final order consistent with Article III of the United States Constitution.

Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. Pursuant to Local Rule

9013-1(f), the Committee consents to the entry of a final judgment or order with respect to this

Application if it is determined that the Court would lack Article III jurisdiction to enter such final order or judgment consent of the parties.

5. The statutory predicates for the relief sought herein are sections 328(a) and 1103(a) of the Bankruptcy Code, Bankruptcy Rules 2014(a), 2016(a), and 5002, and Local Rules 2014-1 and 2016-1.

RELIEF REQUESTED

6. By this Application, the Committee respectfully requests the entry of an order authorizing the employment and retention of S&K as its counsel to perform the services described more thoroughly herein in connection with the Debtors’ chapter 11 cases, nunc pro tunc to March

29, 2021. The Committee requests that the Court approve the retention of S&K in accordance with the terms and conditions set forth herein and in the accompanying exhibits.

BASIS FOR RELIEF

A. S&K’s Eligibility to Serve as Counsel Under Section 1103.

7. Section 328(a) of the Bankruptcy Code provides that a committee appointed under section 1102 may, with the court’s approval, “employ or authorize the employment of a professional person under section 327 or 1103 of this title, as the case may be, on any reasonable terms and conditions of employment . . . .” 11 U.S.C. § 328(a). Section 1103(b) provides that an attorney employed to represent a committee under section 1102 “may not, while employed by such committee, represent any other entity having an adverse interest in connection with the case.” 11

U.S.C. § 1103(b). However, “[r]epresentation of one or more creditors of the same class as

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represented by the committee shall not per se constitute the representation of an adverse interest.”

Id.

8. In connection with its proposed retention by the Committee in these cases, S&K researched its computer client database to determine whether it has any relationships with any of the potentially interested parties listed on Schedule 1 attached to the Ashmead Declaration. S&K’s conflict database includes the names of: (i) current and former clients and, where practical, the known affiliates of those clients, (ii) current and former adverse parties, and (iii) certain current and former related parties in matters upon which S&K has been or is currently engaged.

9. S&K maintains and systematically updates its conflict check system in the regular course of its business, and it is the regular practice of S&K to make and maintain these records. It is the policy of S&K that no new matter be accepted or opened within the firm without completing and submitting to those charged with maintaining the conflict check system the information necessary to check each such matter for conflicts, including the identity of the prospective client, the matter and the related adverse parties. Accordingly, it is S&K’s regular practice to update its database for every new matter undertaken by S&K.

10. Moreover, through a firm-wide email, S&K solicited information from its attorneys to determine whether any attorneys employed by S&K are related to any of the Bankruptcy Judges in this District, the U.S. Trustee for Region 3, or any attorney known by S&K to be employed in the Wilmington Office of the U.S. Trustee. S&K also solicited information from its attorneys to determine if any attorneys employed by S&K (i) are investors of any of the Debtors, or (ii) were, within two years of the Petition Date, a director, officer, or employee of any of the Debtors. No such connections were discovered, except as set forth in the Ashmead Declaration.

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11. To the best of the Committee’s knowledge, except as otherwise set forth in the

Ashmead Declaration, S&K neither holds nor represents any interest adverse to the Committee and is a “disinterested person” within the meaning of Bankruptcy Code sections 327(a) and

101(14) as it (a) does not hold or represent an interest adverse to the Committee, the Debtors, or the estates in the Chapter 11 Cases; (b) is a “disinterested person” as defined by section 101(14) of the Bankruptcy Code; and (c) has no connection with the Committee, the Debtors, creditors, any other party in interest, their respective attorneys and accountants, the U.S. Trustee, or any person employed in the office of the U.S. Trustee in these Chapter 11 Cases, except as may be disclosed in the Ashmead Declaration

12. S&K advised the Committee, and as disclosed in the Ashmead Declaration, that

S&K may have in the past represented or opposed, may currently represent or oppose, and may in the future represent or oppose, certain parties in interest in these cases in matters wholly unrelated to the Debtors and/or these Chapter 11 Cases. S&K has not (except as may be disclosed in the

Ashmead Declaration) and will not represent any such parties, or any of their affiliates or subsidiaries, in these Chapter 11 Cases.

13. S&K has further advised the Committee that it appears in many cases, proceedings, and transactions involving many different attorneys, counsel, accountants, financial consultants, and investment bankers, some of which now or may in the future represent parties in interest in these Chapter 11 Cases.

14. To the extent that S&K discovers any connections with any interested party or enters into any new relationships with any interested party, the Committee understands that S&K will promptly supplement its disclosures to the Court.

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15. The Committee therefore respectfully submits that S&K satisfies the applicable standards to represent the Committee as counsel in these Chapter 11 Cases.

B. S&K’s Qualifications.

16. The Committee is familiar with the professional standing and reputation of S&K.

The Committee has selected S&K because of its experience and reputation handling complex bankruptcy matters, including the representation of official committees of unsecured creditors and debtors, as well as litigation matters, business reorganizations, restructurings, and liquidations under chapter 11 of the Bankruptcy Code, and its expertise, experience, and knowledge in practicing before this Court. Further, the Committee believes that S&K is especially well-suited to serve as Committee counsel due to its attorneys’ experience representing creditors’ committees in other chapter 11 cases, including such cases as Furniture Factory Ultimate Holding, L.P., SFP

Franchise Inc., PQ NY, Inc., Suniva, Inc., Gracious Home LLC, North Texas Bancshares, Inc., and Tribune Media Company.

17. The Committee has determined that S&K has the resources and experience necessary to assist the Committee and deal effectively and efficiently with many of the potential legal issues that may arise in the context of the Debtors’ Chapter 11 Cases. The Committee therefore believes that S&K’s employment as counsel with Benesch as Delaware co-counsel is in the best interest of the Debtors, their estates and their constituents and desires that S&K represent it as counsel in connection with these cases.

C. S&K’s Scope of Employment as Counsel to the Committee.

18. To specifically disclose the division of labor and to avoid unnecessary duplication of services, subject to the Court’s approval of the Application, S&K and Benesch have discussed

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the appropriate scope of services of both firms and the firms have developed a working plan to ensure that there is no duplication of services rendered on behalf of the Committee.

19. The services S&K has rendered and may be required to render for the Committee, include, without limitation, the following:

a. advising the Committee with respect to its rights, powers and duties;

b. advising the Committee in its consultations with the Debtors relative to the administration of the Chapter 11 Cases;

c. advising the Committee in analyzing the claims of the Debtors’ creditors and in negotiating with such creditors;

d. reviewing financial and operational information furnished by the Debtors to the Committee;

e. investigating, and advising the Committee with respect thereto, the acts, conduct, assets, liabilities, and financial condition of the Debtors and/or insiders, the operations of the Debtors’ business and the desirability of the continuance of such business, motions filed, assets of the estate and any other matters relevant to the Chapter 11 Cases or to the formulation of a plan and/or exit strategy;

f. advising the Committee with respect to any contemplated marketing or sale of the Debtors’ assets, and assisting, participating, and attending any related auction and marketing or sale process;

g. assisting the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, cash collateral usage and financing to be obtained in the Chapter 11 Cases and the terms of any plan of reorganization or liquidation of the Debtors;

h. conferring with the Debtors’ management, counsel, and financial advisor and any other retained professional;

i. conferring with the principals, counsel and advisors of the Debtors’ lenders and equity holders;

j. assisting and advising the Committee with respect to its communications with the general creditor body regarding significant matters in the Chapter 11 Cases;

k. representing the Committee at hearings and other proceedings;

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l. attending the meetings of the Committee;

m. reviewing and analyzing applications, orders, statements of operations, and schedules filed with the Court and advising the Committee as to their propriety;

n. taking necessary actions to protect and preserve the interests of the Committee, including, but not limited to (i) possible prosecution of actions on its behalf, (ii) if appropriate, negotiations concerning all litigation in which the Debtors are involved, and (iii) if appropriate, reviewing and analyzing claims filed against the Debtors’ estate;

o. appearing, as appropriate, before this Court and the appellate courts, to protect the interests of the Committee before those courts;

p. assisting the Committee in preparing and filing pleadings, motions, applications, answers, orders, reports and papers as may be necessary in furtherance of the Committee’s interests and objections; and

q. performing such other legal services as may be required and are deemed to be in the interests of the Committee in accordance with the Committee’s powers and duties as set forth in the Bankruptcy Code.

The services described in this paragraph are designed to limit any unnecessary duplication of services with Benesch and the Committee’s other professionals. To the extent that S&K is assigned by the Committee, in consultation with Benesch, to perform additional services as requested by the Committee that may be necessary and proper in these proceedings and that are materially different from the above-described services, S&K will file a supplemental declaration in accordance with Bankruptcy Rule 2014, disclosing both the nature of its expanded employment and the reasons supporting the additional duties and responsibilities.

D. S&K’s Professional Compensation.

20. Section 328(a) of the Bankruptcy Code authorizes the employment of a professional person on any reasonable terms and conditions of employment, including on an hourly basis. 11

U.S.C. § 328(a). Subject to this Court’s approval and in accordance with section 330(a) of the

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Bankruptcy Code, the Bankruptcy Rules, and the Local Rules, the Committee requests that S&K be compensated on an hourly basis for the work it performs, plus reimbursement of the actual and necessary expenses that S&K incurs.

21. S&K has advised the Committee that its ordinary hourly rates range from $975 to

$1,600 per hour for partners, from $875 to $1,050 per hour for counsel, from $450 to $875 per hour for associates, and from $225 to $450 per hour for paraprofessionals.

22. The primary attorneys and paralegal that are expected to work on this representation and their respective hourly rates are included in the following chart. As part of its ordinary business practice, S&K reviews and adjusts its firm-wide rates periodically. Other attorneys and paralegals may render services to the Committee on as needed or emergency basis.

Professional Position Hourly Rate

John R. Ashmead Partner $1,400

Mark D. Kotwick Partner $1,250

Robert J. Gayda Partner $1,100

Catherine V. LoTempio Associate $875

Noah S. Czarny Associate $875

Andrew J. Matott Associate $700

23. The ranges of hourly rates set forth above are S&K’s standard hourly rates for work of this nature. These rates are set at a level designed to fairly compensate S&K for the work of its attorneys and paralegals, to cover fixed and routine overhead expenses, and are subject to periodic adjustment to reflect economic and other conditions. S&K has advised the Committee, and the

Committee understands, that, as part of its ordinary business practice, S&K reviews and adjusts its

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firm-wide rates periodically. S&K will file a supplemental affidavit with the Court describing any increase to the Debtors, the Committee and the U.S. Trustee.

24. S&K did not receive any retainer from the Debtors, the Committee, or any other entity in these cases. Other than as set forth herein, there is no proposed arrangement to compensate S&K. S&K has not shared, nor agreed to share, (a) any compensation it has received or may receive with any other party or person, other than with the partners and associates of S&K, or (b) any compensation another person or party has received or may receive. S&K has advised the Committee 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, the Local Rules, any order entered in these cases governing the compensation of professionals, and any applicable U.S. Trustee guidelines.

25. The Committee believes the compensation arrangements with S&K are consistent with, and typical of, arrangements entered into by S&K and other law firms with respect to rendering similar services for clients such as the Committee. The Committee, therefore, respectfully requests entry of an order, substantially in the form submitted herewith, authorizing the retention and employment of S&K as counsel to the Committee.

26. By separate application, the Committee is also seeking approval to employ

Benesch. The Committee believes that if the employment of S&K and Benesch are approved by this Court, these firms have allocated and will allocate their delivery of services to the Committee so as to limit unnecessary duplication of services. It is the carefully considered view of the

Committee that, considering the complexity of these cases, the timing of the Committee’s appointment, the pace of these cases and the various interests involved, representation of the

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Committee by S&K and Benesch is necessary, advisable and in the best interests of the Committee and these estates.

E. Nunc Pro Tunc Relief

27. The Committee requests that S&K’s retention be made effective as of March 29,

2021, in order to allow S&K to be compensated for the work it performed for the Committee as of and following the date it was retained and prior to the Court’s consideration and approval of this

Application. Due to the size, short timeline, and complex nature of these chapter 11 cases, as well as the significant relief sought by the Debtors during the early stages of these chapter 11 cases, there was an immediate need for S&K to perform services for the Committee upon its retention.

The Committee submits that under the circumstances, and to avoid the irreparable harm to the

Debtors’ estates that may occur if S&K was not immediately retained, retroactive approval to

March 29, 2021, the date of S&K’s retention, is warranted. See, e.g., F/S Airlease II, Inc. v. Simon

(In re F/S Airlease II, Inc.), 844 F.2d 99, 105 (3d Cir. 1988), cert denied, 488 U.S. 852 (1988); In re Arkansas Co., 798 F.2d 645, 650 (3d Cir. 1986); Indian River Homes, Inc. v. Sussex Trust Co.,

108 B.R. 46, 51 (D. Del. 1989).

Notice

28. Notice of this Application has been given to: (a) counsel to the Debtors; (b) the U.S.

Trustee; and (c) those parties requesting notice pursuant to Bankruptcy Rule 2002, in accordance with Local Rule 2002-1(b). The Committee submits that, in light of the nature of the relief requested herein, no other or further notice is necessary.

29. No previous application for the relief requested herein has been made to this or any other court.

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WHEREFORE, the Committee respectfully requests that the Court enter an order substantially in the form submitted herewith and grant such other and further relief as is just and proper.

THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF SC SJ HOLDINGS, LLC, ET AL.,

By:

/s/ Anthony J. Torano Anthony J. Torano, on behalf of Minibar North America, Inc., solely in its capacity as Chair of the Official Committee of Unsecured Creditors of SC SJ Holdings, LLC, et al.

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EXHIBIT A Case 21-10549-JTD Doc 174-1 Filed 04/08/21 Page 2 of 4

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

Chapter 11 In re: Case No. 21-10549 (JTD) SC SJ HOLDINGS, LLC, et al.,1 (Jointly Administered) Debtors. RE: _____

ORDER AUTHORIZING EMPLOYMENT AND RETENTION OF SEWARD & KISSEL LLP AS COUNSEL TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS NUNC PRO TUNC TO MARCH 29, 2021

Upon the application (the “Application”) of the Official Committee of Unsecured

Creditors (the “Committee”) appointed in the chapter 11 cases of the above-captioned debtors and debtors in possession (collectively, the “Debtors”) for an order, pursuant to sections 328 and 1103 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”), authorizing the Committee to employ and retain Seward & Kissel LLP (“S&K”) as the

Committee’s counsel in these cases, nunc pro tunc to June 15, 2020 (the “Retention Date”); and upon the declaration of John R. Ashmead (the “Ashmead Declaration”) and Anthony J. Torano

(the “Torano Declaration”); and it appearing that due and proper notice of the Application has been given; and it appearing that this Court has jurisdiction to consider the Application pursuant to 28 U.S.C. §§ 157 and 1334; and it appearing that venue of these cases and the Application in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and it appearing that this matter is a core proceeding pursuant to 28 U.S.C. § 157(b); and it appearing that S&K is eligible for retention pursuant to sections 328 and 1103 of the Bankruptcy Code in that S&K does not represent

or hold any interest adverse to the Debtors as to the matters upon which S&K has been and is to be employed, and that S&K is a “disinterested person” as such term is defined in section 101(14) of the Bankruptcy Code, and that it shall not, while employed by the Committee, represent any other entity having an adverse interest in connection with these cases; and it appearing that to the

Court that there is just cause for the relief granted herein; and after due deliberation, and sufficient cause appearing therefore; it is hereby

ORDERED that the Application is APPROVED, as set forth herein; and it is further

ORDERED that, pursuant to sections 328 and 1103(a) of the Bankruptcy Code, the

Committee is authorized to employ and retain S&K as its counsel in these chapter 11 cases, nunc pro tunc to the Retention Date; and it is further

ORDERED that S&K shall apply for compensation for professional services rendered and reimbursement of expenses incurred in connection with these cases in compliance with sections

330 and 331 of the Bankruptcy Code and applicable provisions of the Bankruptcy Rules, Local

Rules, and any other applicable procedures and orders of the Court. S&K also intends to make a reasonable effort to comply with the U.S. Trustee’s requests for information and additional disclosures as set forth in the Guidelines for Reviewing Applications for Compensation and

Reimbursement of Expenses Filed Under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases

Effective November 12, 2013, both in connection with this Application and the interim and final fee applications to be filed by S&K in these cases; and it is further

ORDERED that the Committee is authorized to take all actions necessary to effectuate the relief granted pursuant to this Order in accordance with the Application and the Ashmead

Declaration; and it is further

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ORDERED that the terms and conditions of this Order shall be immediately effective and enforceable upon its entry; and it is further

ORDERED that this Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation of this Order.

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EXHIBIT B Case 21-10549-JTD Doc 174-2 Filed 04/08/21 Page 2 of 61

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

Chapter 11 In re: Case No. 21-10549 (JTD) SC SJ HOLDINGS, LLC, et al.,1 (Jointly Administered) Debtors.

DECLARATION OF JOHN R. ASHMEAD IN SUPPORT OF APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR ENTRY OF AN ORDER AUTHORIZING RETENTION AND EMPLOYMENT OF SEWARD & KISSEL LLP AS COUNSEL TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS, NUNC PRO TUNC TO MARCH 29, 2021

I, John R. Ashmead, hereby declare, pursuant to 28 U.S.C. § 1746, under penalty of perjury as follows:

1. I am a Partner at Seward & Kissel LLP (“S&K”), which maintains offices for the practice of law at One Battery Park Plaza, New York, New York 10004. I am an attorney-at-law, duly admitted and in good standing to practice in the State of New York, as well as the United

States District Court for the District of Delaware on a pro hac vice basis.

2. I submit this declaration in connection with the application (the “Application”) of the Official Committee of Unsecured Creditors (the “Committee”) appointed in the cases of the above-captioned debtors (collectively, the “Debtors”) for an order authorizing the retention of

S&K as its counsel, nunc pro tunc to March 29, 2021, and to provide the disclosures required under section 1103 of title 11 of the United States Code 11 U.S.C. §§ 101-1532 (the “Bankruptcy

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Code”), Rules 2014(a), 2016(a) and 5002 of the Federal Rules of Bankruptcy Procedure (the

“Bankruptcy Rules”), and Rule 2014-1 of the Local Rules of Practice and Procedure for the

United States Bankruptcy Court for the District of Delaware (the “Local Rules”). All statements made herein are true and correct to the best of my knowledge, information, and belief, and are the result of my direct knowledge or the knowledge of other attorneys at S&K that have reported such statements to me.

3. All terms not otherwise defined herein have the meanings ascribed to such terms in the Application. Except as otherwise indicated herein, I have personal knowledge of the matters set forth herein and, if called as a witness, would testify competently thereto. To the extent that any information disclosed herein requires amendment or modification upon S&K’s completion of further analysis or as additional information becomes available to S&K, a supplemental declaration will be submitted to the Court.

S&K’s Disinterestedness

4. S&K maintains and systematically updates its conflict database system in the regular course of its business, and it is the regular practice of S&K to make and maintain these records. It is the policy of S&K that no new matter be accepted or opened within the firm without completing and submitting to those charged with maintaining the conflict database system the information necessary to check each such matter for any potential conflict of interest, including the identity of the prospective client, the matter and the related and adverse parties. Accordingly, it is S&K’s regular practice to update its database for every new matter undertaken by S&K.

5. To ensure compliance with the requirements of the Bankruptcy Code and the

Bankruptcy Rules regarding retention of professionals by an official committee under the

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Bankruptcy Code, S&K searched its conflicts database for the potentially interested parties as set forth on Schedule 1 attached hereto.

6. Moreover, through a firm-wide email, S&K solicited information from its attorneys to determine whether any attorneys employed by S&K are related to any of the Bankruptcy Judges in this District, the U.S. Trustee for Region 3, or any attorney known by S&K to be employed in the Wilmington Office of the U.S. Trustee. S&K also solicited information from its attorneys to determine if any attorneys employed by S&K (i) are investors of any of the Debtors or (ii) were, within two years of the Petition Date, a director, officer, or employee of any of the Debtors. No such connections were discovered.

7. An attorney working under my supervision reviewed any client connections to the parties in interest in instances where S&K represented the client within the past ten years. Insofar as I have been able to ascertain, S&K does not represent or have any material connection with any of the potentially interested parties listed on Schedule 1, except those disclosed in Schedule 2 attached hereto in connection with matters unrelated to these Chapter 11 Cases. Fees collected from each of the clients identified in Schedule 2 comprised less than 1.0% of S&K’s revenues for the period January 2019 through December 2020. S&K believes that its representation of these parties has not and does not affect its representation of the Committee.

8. As part of its practice, S&K appears in many cases, proceedings, and transactions involving many different attorneys, counsel, accountants, financial consultants, and investment bankers, some of which now or may in the future represent claimants and parties in interest in these cases. I have advised the Committee that S&K does not have any relationship with any such entities that would be adverse to the Committee or its interests in the matters upon which S&K is to be employed or otherwise cause S&K to be a disinterested person. From time to time, S&K has

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referred work to other professionals involved in these cases. Likewise, certain such professionals have referred work to S&K. However, none of these referrals create an interest as contemplated in the definition of “disinterested person” in the Bankruptcy Code.

9. Certain insurance companies may pay the legal bills of S&K clients from time to time. Some of these insurance companies may be involved in the cases. None of these insurance companies, however, are clients of S&K as a result of the fact that they pay legal fees on behalf of

S&K clients, unless set forth otherwise on Schedule 2.

10. In light of the foregoing, S&K is a “disinterested person,” as that term is defined in section 101(14) of the Bankruptcy Code, and neither represents nor holds an interest adverse to the interests of the Committee with respect to the matters on which S&K is to be employed.

Finally, S&K will not, while employed by the Committee, represent any other entity having an adverse interest in connection with these cases.

11. The information required to be included on Schedule 1 (and, therefore, potentially

Schedule 2) may have changed without our knowledge and may change during the pendency of the cases. Accordingly, if S&K discovers any information that is contrary to or pertinent to the statements made herein, S&K will promptly disclose such information to the Court by filing and serving a supplemental declaration. To the extent that S&K discovers any connection with any interested party or enters into any new relationship with any interested party, S&K will promptly supplement its disclosure to the Court.

Compensation

12. S&K intends to apply to the Court for compensation and reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, any order entered in these cases governing the compensation of professionals,

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and any applicable U.S. Trustee guidelines, including the new Guidelines for Reviewing

Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. § 330 by

Attorneys in Larger Chapter 11 Cases (the “Revised U.S. Trustee Fee Guidelines”), as adopted on June 11, 2013.

13. S&K will seek compensation on an hourly basis for the services it renders, plus reimbursement of actual and necessary expenses and other charges that it incurs. Attorneys and paraprofessionals of S&K bill their time in one-tenth hour increments. S&K has advised the

Committee that S&K’s standard hourly rates range from $975 to $1,600 per hour for partners, from

$875 to $1,050 per hour for counsel, from $450 to $875 per hour for associates, and from $225 to

$450 per hour for paraprofessionals. The primary attorneys and paralegal that will work on this representation, and their respective hourly rates are included in the following chart:

Professional Position Hourly Rate

John R. Ashmead Partner $1,400

Mark D. Kotwick Partner $1,250

Robert J. Gayda Partner $1,100

Catherine V. LoTempio Associate $875

Noah S. Czarny Associate $875

Andrew J. Matott Associate $700

Other attorneys and paralegals may render services to the Committee as necessary.

14. The hourly rates set forth in the ranges disclosed above are S&K’s standard hourly rates for work of this nature both inside and outside of the bankruptcy context.

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15. The rates indicated in the Application and this Declaration are set at a level designed to fairly compensate S&K for the work of its attorneys and paralegals, to cover fixed and routine overhead expenses, and are subject to periodic adjustments to reflect economic and other conditions. S&K has advised the Committee, and the Committee understands, that the hourly rates set forth above are subject to periodic adjustments as part of S&K’s ordinary business practice.

S&K will advise the Committee of any additional rate increases once they are established and when any other rate change becomes effective during S&K’s engagement.

16. In addition to the hourly billing rates set forth above, S&K customarily charges its clients for all costs and expenses incurred, including telephone and telecopier charges, mail and express mail charges, hand delivery charges, document processing, photocopying and print copy charges, travel expenses, expenses for “working meals,” computerized research and transcription costs. S&K has advised the Committee that it would charge such costs and expenses in accordance, and only to the extent consistent, with the Local Rules.

17. S&K has not received any retainer from the Debtors, the Committee, or any other entity in these cases. Other than set forth herein, there is no proposed arrangement to compensate

S&K. S&K has not shared, nor agreed to share, (a) any compensation it has received or may receive with any other party or person, other than with the partners and associates of S&K, or (b) any compensation another person or party has received or may receive.

18. S&K intends to make reasonable efforts to comply with the Revised U.S. Trustee

Fee Guidelines. S&K also intends to work cooperatively with the U.S. Trustee to address any concerns with S&K’s Application and to respond to any further information requests.

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19. Pursuant to Part D.1 of the Revised U.S. Trustee Fee Guidelines, S&K is seeking employment as counsel to the Committee and hereby provides the following responses set forth below:

Question Answer Did you agree to any variations from, or alternatives to, your No. standard or customary billing arrangements for this engagement? Do any of the professionals included in this engagement vary their rate No. based on the geographic location of the bankruptcy case? S&K did not represent the If you represented the client in the 12 Committee in the 12 months months prepetition, disclose your prepetition. S&K may billing rates and material financial represent in the future terms for the prepetition certain Committee members engagement, including any and/or their affiliates in their adjustments during the 12 months capacities as members of prepetition. If your billing rates and official committees in other material financial terms have chapter 11 cases or changed postpetition, explain the individually in matters difference and the reasons for the wholly unrelated to these difference. Chapter 11 Cases. S&K expects to develop a budget and staffing plan to reasonably comply with the Has your client approved your U.S. Trustee’s request for prospective budget and staffing information and additional plan, and, if so, for what budget disclosures, as to which period? S&K reserves all rights. The Committee has approved S&K’s proposed hourly billing rates.

20. Pursuant to Part F of the Revised U.S. Trustee Fee Guidelines, S&K is proposed to serve as primary counsel for the Committee with Delaware co-counsel, Benesch Friedlander

Coplan & Aronoff LLP (“Benesch”). Benesch has primary responsibility for the services disclosed in its retention application. To disclose the division of labor and to avoid unnecessary

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duplication of services, subject to the Court’s approval of the Application, the services S&K has rendered and may be required to render for the Committee in these cases, include, without limitation, the following: