United States Bankruptcy Court Southern District of New York
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20-12097-scc Doc 432 Filed 01/05/21 Entered 01/05/21 19:12:07 Main Document Pg 1 of 5 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re Chapter 11 CENTURY 21 DEPARTMENT STORES LLC, et al., Case No. 20-12097 (SCC) Debtors.1 (Jointly Administered) Ref. Docket Nos. 71 & 130 SUPPLEMENTAL DECLARATION OF STEPHEN L. GERBER IN FURTHER SUPPORT OF DEBTORS’ APPLICATION FOR ENTRY OF AN ORDER PURSUANT TO SECTION 327(e) OF THE BANKRUPTCY CODE AUTHORIZING THE RETENTION AND EMPLOYMENT OF WEG AND MYERS, P.C., AS SPECIAL LITIGATION COUNSEL FOR THE DEBTORS AND DEBTORS IN POSSESSION EFFECTIVE AS OF SEPTEMBER 10, 2020 I, Stephen L. Gerber, being duly sworn, state the following under penalty of perjury: 1. I am a principal and co-founder of the risk management consulting firm of MSG Consulting, Inc. (“MSG”), with offices located at 411 Hackensack Avenue, 5th Floor, Hackensack, NJ 07601. 2. I submit this declaration (“Supplemental Declaration”) in support of the Debtors’ Application for Entry of an Order Pursuant to Section 327(e) of the Bankruptcy Code Authorizing the Retention and Employment of Weg and Myers, P.C., as Special Litigation Counsel for the Debtors and Debtors in Possession Effective as of September 10, 2020 [Docket No. 71] (the 1 The Debtors in these chapter 11 cases (the “Chapter 11 Cases”), along with the last four digits of each Debtor’s federal tax identification number, as applicable, are Century 21 Department Stores LLC (4073), L.I. 2000, Inc. (9619), C21 Department Stores Holdings LLC (8952), Giftco 21 LLC (0347), Century 21 Fulton LLC (4536), C21 Philadelphia LLC (2106), Century 21 Department Stores of New Jersey, L.L.C. (1705), Century 21 Gardens Of Jersey, LLC (9882), C21 Sawgrass Blue, LLC (8286), C21 GA Blue LLC (5776), and Century Paramus Realty LLC (5033). The Debtors’ principal place of business is: 22 Cortlandt Street, 5th Floor, New York, NY 10007. 20-12097-scc Doc 432 Filed 01/05/21 Entered 01/05/21 19:12:07 Main Document Pg 2 of 5 “Application”)2 and the Order Authorizing the Retention and Employment of Weg and Myers, P.C. as Special Litigation Counsel for the Debtors and Debtors in Possession Effective as of September 10, 2020 [Docket No. 130] (the “Retention Order”). Except as otherwise noted, I have personal knowledge of the matters set forth herein. MSG’s Qualifications 3. MSG has been a premier global consulting firm specializing in risk management and insurance for almost 30 years and has positioned itself as a world leader in providing its clientele with customized and strategic risk management across a variety of industries, including, among others, energy, food and beverage manufacturing, automotive manufacturing and dealerships, and retail. MSG manages over $1 billion in property and casualty insurance premiums for our clients. 4. Prior to the Petition Date, with the assistance of my staff at MSG, I assisted the Debtors with the placement and procurement of various property and commercial general insurance policies, including certain insurance policies (the “Insurance Policies”) which subsequently became the subject of litigation between the Debtors and the relevant insurance providers under adversary proceeding No. 20-01222 (the “Adversary Proceeding”) in the United States Bankruptcy Court for the Southern District of New York. Services Provided and Compensation 5. It is my understanding that, pursuant to the Retention Order, the Court authorized Weg and Myers, P.C (“W&M”) to represent the Debtors as special litigation counsel in the 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Application. 2 20-12097-scc Doc 432 Filed 01/05/21 Entered 01/05/21 19:12:07 Main Document Pg 3 of 5 Adversary Proceeding according to the terms and conditions of the engagement letter attached to the Retention Order as Exhibit 1 (the “Engagement Letter”). 6. As permitted under paragraph 7 of the Retention Order, MSG was retained by W&M to serve as an independent contractor to assist W&M and the Debtors with the collection and analysis of documents, correspondence, and other information relating to the purchase and placement of the Insurance Policies and the historical development of the terms thereof (collectively, the “Services”). These Services are necessary to the administration and litigation of the Adversary Proceeding. 7. W&M and the Debtors have agreed to pay MSG an hourly rate of $500 for providing the Services, which rate will be passed through directly to the Debtors. I performed 6.5 hours of work to complete the Services on behalf of the Debtors, incurring a total of $3,250.00 in professional fees on account of such Services. Disinterestedness of MSG 8. In connection with its proposed provision of the Services as a contractor under the Retention Order and Engagement Letter, MSG was provided with a list of the potential parties in interest in these Chapter 11 Cases, a copy of which is attached hereto as Schedule 1 (the “Potential Parties in Interest”). MSG’s review of the Potential Parties in Interest, completed under my supervision, consisted of a query of the Potential Parties in Interest through an internal database containing names of individuals and entities that are present or recent former clients of MSG. 9. MSG currently represents the following entities in matters wholly unrelated to the Debtors or the Chapter 11 Cases: (a) In Mocean Group, LLC, (b) JCS Apparel Group, Inc., (c) Louise Paris, Ltd., and (d) M. Hidary & Co., Inc. 3 20-12097-scc Doc 432 Filed 01/05/21 Entered 01/05/21 19:12:07 Main Document Pg 4 of 5 10. Except as set forth herein, to the best of my knowledge, information, and belief, neither I, MSG, nor any employee of MSG, currently represents any party in interest or entity other than the Debtors in connection with these Chapter 11 Cases. 11. In addition, if any new material facts or relationships are discovered or arise, MSG will provide the Court with a supplemental declaration. 12. Based on the conflicts search conducted to date and described herein, to the best of my knowledge, neither I, MSG, nor any employee thereof, insofar as I have been able to ascertain, have any connection with the Debtors, their creditors, or any other parties in interest, their respective attorneys and accountants, the United States Trustee for Region 2 (the “U.S. Trustee”), any person employed by the U.S. Trustee, or any Bankruptcy Judge currently serving on the United States Bankruptcy Court for the Southern District of New York, except as disclosed or otherwise described herein. 13. Based upon the foregoing and the disclosures set forth herein, I believe that MSG is a “disinterested person,” as such term is defined in Bankruptcy Code section 101(14), as modified by section 1107(b), in that MSG, its members, and employees: a. are not creditors, equity security holders, or insiders of the Debtors or their affiliates; b. are not and were not, within two (2) years before the Petition Date, a director, officer, or employee of the Debtors or their affiliates; and c. do not have an interest materially adverse to the interests of the estate or of any class of creditors or equity security holders by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors or their affiliates, or for any other reason. 4 20-12097-scc Doc 432 Filed 01/05/21 Entered 01/05/21 19:12:07 Main Document Pg 5 of 5 Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge and belief. Dated: January 5, 2021 /s/ Stephen L. Gerber New York, New York Stephen L. Gerber Principal & Co-Founder MSG Consulting, Inc. 411 Hackensack Avenue 5th Floor Hackensack, NJ 07601 Email: [email protected] 5 20-12097-scc Doc 432-1 Filed 01/05/21 Entered 01/05/21 19:12:07 Schedule 1 Pg 1 of 97 SCHEDULE 1 Potential Parties in Interest 20-12097-scc Doc 432-1 Filed 01/05/21 Entered 01/05/21 19:12:07 Schedule 1 Pg 2 of 97 LIST OF POTENTIAL PARTIES IN INTEREST Schedule Category (some parties may appear in multiple categories) 1(a) Debtors 1(b) Affiliated Entities and Equity Holders 1(c) Other and Former Debtor Names 1(d) Officers & Directors 1(e) Debtors’ Professionals 1(f) Banks and Lenders 1(g) Material Contract Counter-Parties 1(h) Insurance Brokers and Providers 1(i) Landlords 1(j) Litigation Counter Parties 1(k) Ordinary Course Professionals 1(l) Employees, Temporary Agencies, and Retirees 1(m) Benefit Providers 1(n) Government/Regulatory Agencies 1(o) Significant Competitors 1(p) Taxing Authorities 1(q) Utilities 1(r) Unions 1(s) Bankruptcy Judges and Staff – Southern District of New York 1(t) U.S. Trustee Personnel – Southern District of New York 1(u) Vendors and Suppliers 1 20-12097-scc Doc 432-1 Filed 01/05/21 Entered 01/05/21 19:12:07 Schedule 1 Pg 3 of 97 SCHEDULE 1(a) Debtors C21 Department Stores Holding LLC C21 Ga Blue LLC C21 Philadelphia LLC C21 Sawgrass Blue, LLC Century 21 Department Stores LLC Century 21 Department Stores of New Jersey, L.L.C. Century 21 Fulton LLC Century 21 Gardens Of Jersey, LLC Century Paramus Realty LLC Giftco 21 LLC L.I. 2000, Inc. 2 20-12097-scc Doc 432-1 Filed 01/05/21 Entered 01/05/21 19:12:07 Schedule 1 Pg 4 of 97 SCHEDULE 1(b) Affiliated Entities and Equity Holders Abadi Group, LLC ADC Blue LLC ASG Equities LLC ASG Equities Secaucus LLC ASG Trusts LLC ASG Wynwood LLC Blue Millennium Realty LLC C21 Bay Ridge Blue LLC C21 BK Home LLC C21 Property Management Partners LLC.