12-11076-shl Doc 236 Filed 06/12/12 Entered 06/12/12 14:31:26 Main Document Pg 1 of 35 Objection Deadline: June 19, 2012 at 12:00 p.m. (Prevailing Eastern Time) Hearing Date: June 26, 2012 at 11:00 a.m. (Prevailing Eastern Time) Dennis F. Dunne Abhilash M. Raval Evan R. Fleck c MILBANK, TWEED, HADLEY & M CLOY LLP 1 Chase Manhattan Plaza New York, NY 10005 Telephone: (212) 530-5000 Proposed Counsel for Official Committee of Unsecured Creditors of Arcapita Bank B.S.C.(c), et al. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re Chapter 11 ARCAPITA BANK B.S.C.(C), et al., Case No. 12-11076 (SHL) (Jointly Administered) Debtors. APPLICATION OF OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF ARCAPITA BANK B.S.C.(C), ET AL., UNDER 11 U.S.C. § 1103, FED. R. BANKR. P. 2014 AND 5002 AND S.D.N.Y. LBR 2014-1, FOR ORDER AUTHORIZING RETENTION AND EMPLOYMENT OF HASSAN RADHI & ASSOCIATES AS BAHRAINI COUNSEL, EFFECTIVE NUNC PRO TUNC TO APRIL 16, 2012 TO THE HONORABLE SEAN H. LANE, UNITED STATES BANKRUPTCY JUDGE: 12-11076-shl Doc 236 Filed 06/12/12 Entered 06/12/12 14:31:26 Main Document Pg 2 of 35 The Official Committee of Unsecured Creditors (the “Committee”) of Arcapita Bank B.S.C.(c) and its affiliated debtors and debtors in possession (collectively, the “Debtors”)1 in the above-captioned chapter 11 cases (the “Chapter 11 Cases”) hereby submits this application (the “Application”) for entry of an order, in the form attached hereto as Exhibit A, authorizing the retention and employment of Hassan Radhi & Associates (“HR&A”), effective as of April 16, 2012, as counsel for the Committee, pursuant to section 1103(a) of title 11 of the United States Code, 11 U.S.C. §§ 1011532 (as amended, the “Bankruptcy Code”), rules 2014 and 5002 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and rule 2014-1 of the Local Bankruptcy Rules for the Southern District of New York (the “Local Rules”), and respectfully represents as follows: BACKGROUND 1. On March 19, 2012 (the “Petition Date”), each of the Debtors filed with this Court a voluntary petition for relief under chapter 11 of the Bankruptcy Code. On March 22, 2012, the Court entered an order consolidating the Chapter 11 Cases for joint administration. 2. The Debtors continue to manage and operate their businesses and 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. 3. On April 5, 2012, the United States Trustee for the Southern District of New York (the “U.S. Trustee”) appointed the Committee, consisting of: Arcsukuk (2011-1) Limited c/o BNY Mellon Corporate Trustee Services Limited; Barclays Bank PLC; Central Bank 1 The Debtors in the Chapter 11 cases are: Arcapita Bank B.S.C.(c), Arcapita Investment Holdings Limited, Arcapita LT Holdings Limited, WindTurbine Holdings Limited, AEID II Holdings Limited, and RailInvest Holdings Limited. 2 12-11076-shl Doc 236 Filed 06/12/12 Entered 06/12/12 14:31:26 Main Document Pg 3 of 35 of Bahrain; Commerzbank AG; Euroville S.àr.l.; National Bank of Bahrain; VR Global Partners, L.P. On April 11, 2012, the Committee duly selected Milbank as counsel to represent it during the pendency of the Chapter 11 Cases. 4. The Debtors’ headquarters is located in Manama, Kingdom of Bahrain. The overwhelming majority of the Debtors’ employees, including the Debtors’ senior management, are also located in the Kingdom of Bahrain, and many of the Debtors’ employment agreements are governed by Bahraini law. 5. This Court has jurisdiction to consider this Application pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. RETENTION OF HR&A Services to Be Provided by HR&A 6. The Committee respectfully submits that it will be necessary to employ and retain HR&A pursuant to section 1103(a) of the Bankruptcy Code to render the following services, among others, as directed by the Committee: (a) advise the Committee with respect to all aspects of Bahraini law; (b) assist and advise the Committee on matters related to employment issues arising at the Debtors’ Bahraini offices; (c) assist and advise the Committee on issues related to real estate in the Kingdom of Bahrain owned and/or leased by the Debtors; (d) attend hearings in any related Bahraini proceedings and monitor other developments (e.g., regulatory, governmental, etc.) with respect to the Debtors and their affiliates in Bahrain; and (e) perform such other legal services as may be in the interests of the Committee in accordance with the Committee's powers and duties as set forth in the Bankruptcy Code. 3 12-11076-shl Doc 236 Filed 06/12/12 Entered 06/12/12 14:31:26 Main Document Pg 4 of 35 7. The Committee believes that HR&A has extensive experience and knowledge in the fields of Bahraini corporate law, insolvency and restructuring law, employment law, banking and securities law and general Bahraini commercial litigation and arbitration, and that HR&A is well qualified to represent the Committee. In selecting its Bahraini counsel, the Committee sought counsel based on their expertise in these areas. Disclosure Concerning Conflicts of Interest 8. To the best of the Committee’s knowledge, information and belief, based on and except as otherwise set forth in the annexed declaration of Mr. A. Jalil Al Aradi, a partner in HR&A (the “Al Aradi Declaration”), a copy of which is attached hereto as Exhibit B, HR&A does not have any connection with or represent any other entity having an interest adverse to the Debtors, their creditors or any other party in interest, or their respective attorneys, accountants or other professionals. The Al Aradi Declaration also sets forth, pursuant to Bankruptcy Rule 2014(a), to the best of Mr. Al Aradi’s knowledge, HR&A’s connections with the Debtors, their known creditors, other known parties in interest, their respective attorneys and accountants, the U.S. Trustee for Region 2, and any person employed in the Southern District of New York Office of the United States Trustee. To the best of the Committee’s knowledge and subject to the Al Aradi Declaration, HR&A represents no other entity in connection with the Chapter 11 Cases, is a “disinterested person” as that term is defined in section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Committee with respect to the matters upon which it is to be employed. 9. Based on the Committee’s review of the Al Aradi Declaration, including the description of HR&A’s connections with the parties in interest set forth therein, the Committee has no objection thereto. The Committee believes that employment of HR&A as its 4 12-11076-shl Doc 236 Filed 06/12/12 Entered 06/12/12 14:31:26 Main Document Pg 5 of 35 counsel on the terms of this Application and the Al Aradi Declaration is appropriate, necessary and in the best interests of the unsecured creditor body that the Committee represents. The Committee, thus, seeks entry of an order authorizing and approving HR&A’s engagement by the Committee on the terms set forth in the Al Aradi Declaration and in this Application. Effective Date of Retention 10. The Committee requests that HR&A’s retention be approved effective as of April 16, 2012 – the date HR&A began work on the Committee’s behalf. The Committee believes retention effective as of April 16, 2012 is appropriate due to the nature of the Chapter 11 Cases and the Committee’s immediate and urgent need for the provision of legal services upon its formation and selection of counsel. Compensation of HR&A 11. HR&A intends to apply to the Court for payment of compensation and reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Guidelines promulgated by the Office of the United States Trustee and the Local Rules and orders of this Court, and pursuant to the interim compensation procedures that have been approved by the Court for the Chapter 11 Cases. 12. HR&A will be compensated for its services to the Committee at its standard hourly rates, which are based on each professionals’ level of experience, plus reimbursement of the actual and necessary expenses that HR&A incurs in accordance with the ordinary and customary rates which are in effect on the date the services are rendered. At present, the standard hourly rates charged by HR&A range from $730 to $660 for partners, $560 for counsel, associates and senior attorneys, $450 to $400 for junior attorneys, and $180 for paralegals. These hourly rates are subject to annual firm-wide adjustments in the ordinary course 5 12-11076-shl Doc 236 Filed 06/12/12 Entered 06/12/12 14:31:26 Main Document Pg 6 of 35 of HR&A’s business. HR&A will maintain detailed, contemporaneous records of time and any necessary expenses incurred in connection with the rendering of the legal services described above. Notice 13. No trustee or examiner has been sought or appointed in the Chapter 11 Cases. Notice of this Application has been provided to the following parties and/or their legal counsel (if known, and as applicable): (i) counsel to the Debtors; (ii) the U.S.