Case 17-11722-BLS Doc 52 Filed 08/14/17 Page 1 of 13 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 PEEKAY ACQUISITION, LLC, et al.,l Case No. 17-11122 (BLS) Debtors. (Jointly Administered) Hearing Date: September 6,2017 at 10:00 a.m. Objection Deadline: August 30,2017 at 4:00 p.m. APPLICATION OF THE DEBTORS FOR ENTRY OF AN ORDER (I) AUTHORIZING THE EMPLOYMENT AND RETENTION OF TRAVERSE LLC TO PROVIDE THE DEBTORS A CHIEF RESTRUCTURING OFFICER AND CERTAIN ADDITIONAL PERSONNEL AND (II) DESIGNATING ALBERT ALTRO AS THE DEBTORSO CHIEF RESTRUCTURING OFFICER, NUNC PRO TUNC TO THE PETITION DATE The above-captioned debtors and debtors-in-possession (the "Debtors") hereby submit this Application of the Debtors for Entry of an Order (I) Authorizing the Employment and Retention of Traverse LLC to Provide the Debtors a Chief Restructuring Officer and Certain Additional Personnel and (II) Designating Albert Altro as the Debtors' Chief Restructuring Officer, Nunc Pro Tunc to the Petition Date (the"Application"). In support of the Application, the Debtors rely on the Declaration of Albert Altro in Support of the Application of the Debtors þr Entry of an Order (I) Authorizíng the Employment and Retention of Traverse LLC to Provide the Debtors a Chief Restructuring Officer and Certain Additíonal Personnel and (II) Designating Albert Altro as the Debtors' Chief Restructuring Officer, Nunc Pro Tunc to the Petition Date (the "Altro Declaration"), attached hereto as Exhibit A. In further support of the Application, the rThe 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 (2765); Contev, lnc. (2441); Condom Revolution, Inc. (6019); Charter Smith Sanhueza Retail, Inc. (8963);ZJ Gifts F-2, L.L.C. (3565); ZI Gifts F-3, L.L.C. (3562);ZI GiftsF-4,L.L.C. (8006);ZJ Gifts F-5, L.L.C. (7062);ZI Gifrs F-6, L.L.C. (a381); ZJ Gifts I-1, L.L.C. (5099); ZJ Gifts M-3, L.L.C. (8925); ZJ Gifts M-1, L.L.C. (7202); and ZJ Gifts M-2,L.L.C. (6643). The Debtors' corporate headquarters and mailing address is 901 V/est Main Street, Suite A, Auburn, WA 98001. {1097.001-w0048190.} Case 17-11722-BLS Doc 52 Filed 08/14/17 Page 2 of 13 Debtors submit the Declaration of Albert Altro in Support of Debtors' Chapter II Petition and First Day Pleødings tD.I. 2] (the "First Da)¡ Declaration"),2 and respectfully represent and set forth as follows: JURISDICTION AND VENUE 1. The United States Bankruptcy Court for the District of Delaware (the "Court") has jurisdiction over this Application pursuant to 28 U.S.C. $$ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated as of February 29,2012. This matter is a core proceeding within the meaning of 28 U.S.C. $ 157(bX2), and the Court may enter a final order consistent with Article III of the United States Constitution.3 Ven,re is proper in this District pursuant to 28 U.S.C. $$ 1408 and 1409. 2, The statutory predicates for the relief sought herein are sections 105(a) and 363(b) of title 11 of the United States Code (as amended or modified, the "Bankruptclz Code"). GENE,RAT, BACKGROUND 3. On August 70,2017 (the "Petition Date"), the Debtors commenced the above- captioned chapter 1 1 cases (the 11 by each filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code with the Court. 4. The Debtors continue to operate their business and manage their properties as debtors-in-possession, pursuant to Bankruptcy Code sections 1107(a) and 1108. As of the date 2 Capítalized terms used but not otherwise dehned in this Application shall have the meanings ascribed to them in the First Day Declaration. 3 Pursuant to rule 9013-1(Ð of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"), the Debtors hereby confirm their consent to entry of a final order by this Court in connection with this Application if it is later determined that this Court, absent consent of the parties, Çannot enter final orders or judgments consistent with Article III of the United States Constitution. { r 097.001-w0048190. } 2 Case 17-11722-BLS Doc 52 Filed 08/14/17 Page 3 of 13 of this Application, no trustee, examiner or statutory committee has been appointed in these Chapter 11 Cases. 5. Additional information regarding the circumstances leading to the commencement of these Chapter 11 Cases and information regarding the Debtors' business and capital structure is set forth in detail in the First Day Declaration filed on the Petition Date and incorporated herein by reference. RELIEF REOUESTED 6. By this Application, the Debtors request entry of an order (i) authorizing the Debtors to retain Traverse LLC ("Traverse") to provide the Debtors with a Chief Restructuring Officer ("CRO") and certain Additional Personnel (as defined below), and (ii) designating Albert Altro as the Debtors' CRO, nunc pro tunc to the Petition Date, pursuant to the terms and conditions in the engagement letter between the Debtors and Traverse, dated November 9,2016 (the "Ensasement Letter"), a copy of which is attached hereto as Exhibit B. Pursuant to Bankruptcy Code sections 105(a) and 363(b), the Debtors request entry of an order, substantially in the form annexed hereto, authorizing such employment. 7. Mr. Altro will serve as CRO to assist the Debtors with their reorganization efforts and these Chapter 11 Cases, as further described below. Traverse will provide additional employees (collectively, the "Additional Personnel." aÍrd, together with the CRO, the "Engagement Personnel"), as necessary to assist the CRO in the execution of the duties set forth more fully in the Engagement Letter and herein. RETENTION OF TRAVERSE 8. In consideration of the size and complexity of their business, as well as the exigencies of the circumstances, the Debtors have determined that the services of experienced restructuring managers will enhance substantially their attempts to maximize the value of their a { 1097.00 l -w0048 190. } J Case 17-11722-BLS Doc 52 Filed 08/14/17 Page 4 of 13 estates. The Engagement Personnel are well qualified to act on the Debtors' behalf given their extensive knowledge and expertise with respect to chapter 11 proceedings. 9. The Engagement Personnel specialize in interim executive management, tumaround consulting, operational due diligence, creditor advisory services, and financial and operational restructuring. Traverse's debtor-advisory services have included a wide range of activities targeted at stabilizing and improving a company's financial position, including developing or validating forecasts and business plans and related assessments of a business's strategic position, monitoring and managing cash, cash flow, and supplier relationships, assessing and recommending cost-reduction strategies, and designing and negotiating financial restructuring packages. 10. Mr. Altro is Traverse's founder and also is the Managing Director of its Corporate Restructuring and Transaction Services goup and is based in Los Angeles, California. He has over 25 years of experience in corporate restructuring, public accounting, consulting, and executive management. His experience spans a variety of industries, primarily focusing on middle market companies, as well as debtors-in-possession. Mr. Altro has served as CRO of seven (7) of companies. 1 1. Relative to the Debtors, Mr. Altro and a team of Traverse professionals began providing advisory assistance in mid-November 2016. In doing so, Mr. Altro and the Traverse team became familiar with the Debtors' business, financial affairs and capital structure. Since their initial retention, the Engagement Personnel have worked closely with the Debtors' management and other professionals to understand the Debtors' business and coordinate the necessary professional services and other vital aspects ofpreparing for these Chapter 11 Cases. Accordingly, the Debtors believe that Traverse has developed significant relevant experience and { r 097.001-w0048190.} 4 Case 17-11722-BLS Doc 52 Filed 08/14/17 Page 5 of 13 expertise regarding the Debtors, their operations and the unique circumstances of these cases. For these reasons, Traverse is both well qualified and uniquely suited to deal effectively and efficiently with matters that may arise in the context of these cases. Accordingly, the Debtors submit that the retention of Traverse and the designation of Mr. Altro as CRO on the terms and conditions set forth herein and in the Engagement Letter are necessary and appropriate, are in the best interests of the Debtors' estates, creditors, and all other parties in interest, and should be granted. TRAVERSE'S DISINTERESTEDNESS 12. To the best of the Debtors' knowledge, information, and belief, and based on the Altro Declaration: (a) Traverse holds no interest materially adverse to the Debtors, its significant creditors, and equity interest holders for the matters for which Traverse is to be employed; and (b) Traverse has no connection to the Debtors, its significant creditors, equity interest holders or related parties herein except as disclosed in the Altro Declaration. Moreover, the retention and employment of Traverse is necessary and in the best interests of the Debtors, their estates, creditors, and equity interest holders. 13. Further, to the best of the Debtors'knowledge, information and belief, and based on the Altro Declaration, none of Traverse's past or current engagements would or do appear to create an interest materially adverse to the interests of the Debtors, their creditors, or equity interest holders in these Chapter 11 Cases.