PEEKAY ACQUISITION, LLC, Et Al. Debtors. Chapter 11 Ca
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Case 17-11722-BLS Doc 191 Filed 09/07/17 Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 PEEKAY ACQUISITION, LLC, et al.1 Case No. 17-11722 (BLS) Debtors. (Jointly Administered) Hearing Date: October 10, 2017 at 10:00 a.m. (ET) Obj. Deadline: September 21, 2017 at 4:00 p.m. (ET) APPLICATION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR AN ORDER AUTHORIZING AND APPROVING THE EMPLOYMENT AND RETENTION OF CULLEN AND DYKMAN LLP AS ITS COUNSEL EFFECTIVE AS OF AUGUST 21, 2017 The Official Committee of Unsecured Creditors (the “Committee”) appointed in the chapter 11 cases (the “Chapter 11 Cases”) of the above-captioned debtors and debtors-in- possession (collectively, the “Debtors”), hereby submits this application (the “Application”), for entry of an order pursuant sections 328 and 1103 of title 11 of the United States Code (the “Bankruptcy Code”) and Rule 2014(a) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), authorizing and approving the employment and retention of Cullen and Dykman LLP (“Cullen and Dykman”) as lead counsel to the Committee, effective as of August 21, 2017. In support of this Application, the Committee submits the Declaration of S. Jason Teele (the “Teele Declaration”), attached hereto as Exhibit A and incorporated herein by reference, and respectfully states as follows: 1 The Debtors, along with the last four digits of each Debtor’s tax identification number, are: Peekay, Inc. (3429); Peekay Boutiques, Inc. (7972); Christals Acquisition, LLC (0391); Peekay Acquisition, LLC (0923); Peekay SPA, LLC (2165); ConRev, Inc. (2441); Condom Revolution, Inc. (6019); Charter Smith Sanhueza Retail, Inc. (8963); ZI Gifts F-2, L.L.C. (3565); ZJ Gifts F-3, L.L.C. (3562); ZJ Gifts F-4, L.L.C. (8006); ZJ Gifts F-5, L.L.C. (7062); ZJ Gifts F-6, L.L.C. (4381); ZJ Gifts I-1, L.L.C. (5099); ZJ Gifts M-3, L.L.C. (8925); ZJ Gifts M-l, L.L.C, (7202); and ZJ Gifts M-2, L.L.C. (6643). The Debtors’ corporate headquarters and mailing address is 901 West Main Street, Suite A, Auburn, WA 98001. 35012.1 476307v2 Case 17-11722-BLS Doc 191 Filed 09/07/17 Page 2 of 8 JURISDICTION AND VENUE 1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 2. The statutory predicates for the relief sought herein are sections 328 and 1103 of the Bankruptcy Code and Rule 2014(a) of the Bankruptcy Rules. BACKGROUND 3. On August 10, 2017 (the “Petition Date”), each of the Debtors filed a voluntary petition for relief pursuant to chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. 4. The Chapter 11 Cases are being jointly administered for procedural purposes only. 5. Since the Petition Date, the Debtors have continued to operate their businesses and manage 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 the Chapter 11 Cases. 6. On August 21, 2017, the Office of the United States Trustee for Region 3 appointed the Committee pursuant to section 1102(a)(1) of the Bankruptcy Code. The Committee is comprised of the following five (5) creditors: Kristy E. Butt; Brian E. Barnett; Gary Zebrowski; Dreamgirl International; and United Consortium, Inc. See Docket No.82. On August 21, 2017, the Committee selected Cullen and Dykman to serve as its lead counsel. On the same date, the Committee also selected Whiteford Taylor & Preston LLC to serve as its Delaware counsel. On August 24, 2017, the Committee selected The DAK Group, Ltd. to serve as its financial advisor. -2- 35012.1 476307v2 Case 17-11722-BLS Doc 191 Filed 09/07/17 Page 3 of 8 RELIEF REQUESTED 7. By this Application, the Committee seeks the entry of an order authorizing and approving the employment of Cullen and Dykman as its counsel to perform services relating to the Chapter 11 Cases, effective as of August 21, 2017. BASIS FOR RELIEF 8. Pursuant to section 1103(a), a committee appointed under section 1102 of the Bankruptcy Code may select and authorize the employment of one or more attorneys to represent and perform services for such committee. Pursuant to section 328(a) of the Bankruptcy Code, a committee appointed under section 1102 of the Bankruptcy Code, with the Court’s approval, may employ a professional person under section 1103 of the Bankruptcy Code on any reasonable terms and conditions of employment. 11 U.S.C. § 328(a). 9. Bankruptcy Rule 2014 sets forth the requirements for an application for retention of an attorney pursuant to section 1103, and provides that such application must: State the specific facts showing the necessity for the employment, the name of the person to be employed, the reasons for the selection, the compensation, and, to the best of the applicant’s knowledge, all of the person’s connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any other person employed in the office of the United States trustee. Fed. R. Bankr. P. 2014. 10. The Committee is seeking to retain Cullen and Dykman effective as of August 21, 2017. Such relief is warranted by the facts and circumstances presented by theses Chapter 11 Cases. The Third Circuit has identified “time pressure to begin service” and absence of prejudice as factors favoring nunc pro tunc retention. See Matter of Arkansas Co., 798 F.2d 645, 650 (3d Cir. 1986). The complexity, intense activity, and speed that have characterized these -3- 35012.1 476307v2 Case 17-11722-BLS Doc 191 Filed 09/07/17 Page 4 of 8 cases has necessitated that Cullen and Dykman focus immediate attention on time-sensitive matters and promptly devote substantial resources to the representation of the Committee pending submission and approval of this Application. QUALIFICATIONS 11. The Committee believes that it is necessary to employ attorneys to render the professional services described herein, and that without such professional assistance, the Committee’s meaningful participation in these Chapter 11 Cases would not be possible. 12. The Committee selected Cullen and Dykman because of its attorneys’ experience and knowledge in bankruptcy matters. The Committee believes that Cullen and Dykman is well qualified to represent the Committee in the Chapter 11 Cases. Cullen and Dykman’s attorneys have represented official committees in numerous chapter 11 cases in this district and other jurisdictions. SERVICES TO BE PROVIDED 13. The professional services that Cullen and Dykman will provide to the Committee include, but are not limited to: (a) advising the Committee with respect to its rights, duties, and powers in these Chapter 11 Cases; (b) assisting and advising the Committee in its consultations with the Debtors relative to the administration of these Chapter 11 Cases; (c) assisting the Committee in analyzing the claims of the Debtors' creditors and the Debtors’ capital structure and in negotiating with holders of claims and equity interests; (d) assisting the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors and of the operation of the Debtors' businesses; -4- 35012.1 476307v2 Case 17-11722-BLS Doc 191 Filed 09/07/17 Page 5 of 8 (e) assisting the Committee in its investigation of the liens and claims of the holders of the Debtors' pre-petition debt and the prosecution of any claims or causes of action revealed by such investigation; (f) assisting the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to, among other things, the assumption or rejection of certain leases of nonresidential real property and executory contracts, asset dispositions, sale of assets, financing of other transactions and the terms of one or more plans of reorganization for the Debtors and accompanying disclosure statements and related plan documents; (g) assisting and advising the Committee as to its communications to unsecured creditors regarding significant matters in these Chapter 11 Cases; (h) representing the Committee at hearings and other proceedings; (i) reviewing and analyzing applications, orders, statements of operations, and schedules filed with the Court and advise the Committee as to their propriety; (j) assisting the Committee in preparing pleadings and applications as may be necessary in furtherance of the Committee's interests and objectives; (k) preparing, on behalf of the Committee, any pleadings, including without limitation, motions, memoranda, complaints, adversary complaints, objections, or comments in connection with any of the foregoing; and (l) performing such other legal services as may be required or are otherwise 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, Bankruptcy Rules, or other applicable law. COMPENSATION 14. Subject to the Court’s approval and pursuant to sections 328, 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the rules and other procedures which this Court may fix, and the Guidelines promulgated by the United States Trustee, the Committee requests that Cullen and Dykman be compensated on an hourly basis, plus reimbursement of the actual and -5- 35012.1 476307v2 Case 17-11722-BLS Doc 191 Filed 09/07/17 Page 6 of 8 necessary expenses that Cullen and Dykman incurs in accordance with the ordinary and customary rates which are in effect on the date the services are rendered.