20-12097-scc Doc 125 Filed 10/13/20 Entered 10/13/20 19:33:22 Main Document Pg 1 of 118 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) FIRST SUPPLEMENTAL DECLARATION AND DISCLOSURE STATEMENT OF JEFF J. MARWIL ON BEHALF OF PROSKAUER ROSE LLP I, Jeff J. Marwil, being duly sworn, state the following under penalty of perjury: 1. I am a partner of the law firm of Proskauer Rose LLP (“Proskauer”), located at Eleven Times Square, New York, New York 10036. I am an attorney from Proskauer working on behalf of the above-captioned debtors and debtors in possession (collectively, the “Debtors”). I am a member in good standing of the Bar of the State of Illinois. I am admitted to practice in the United States District Court for the District of Illinois and admitted to practice pro hac vice in the above-captioned matter before the Court. 2. I submit this supplemental declaration (“Declaration”) in support of the Application of Debtors for Authority to Retain and Employ Proskauer Rose LLP as Attorneys for Debtors Effective as of the Petition Date (the “Application”) to provide disclosure in connection with section 328 of title 11 of the United States Code, as amended (the “Bankruptcy Code”), and 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 125 Filed 10/13/20 Entered 10/13/20 19:33:22 Main Document Pg 2 of 118 Rule 2014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”). Except as otherwise noted, I have personal knowledge of the matters set forth herein. 3. This Declaration supplements or clarifies the Declaration and Disclosure Statement of Jeff J. Marwil on Behalf of Proskauer Rose LLP [ECF No. 69] (the “Original Declaration”).2 To the extent any information disclosed herein requires amendment, supplement, or modification upon Proskauer’s completion of further review, or as additional party-in-interest information becomes available, a supplemental declaration (by me, or another member of Proskauer) will be submitted to the Court reflecting such amended, supplemented, or modified information. Proskauer’s Structure 4. Proskauer is a New York registered limited liability partnership with affiliated offices in the United States, France, Hong Kong, and China.3 Proskauer is a part of a global operation that also includes Proskauer Rose (UK) LLP, an English registered limited liability partnership, and Proskauer Rose Brazil – Consultores em Direito Estrangeiro/Direito Norte- Americano e Direito Ingles, a Brazilian partnership (“Proskauer Rose Brazil” and, collectively, with Proskauer Rose (UK) LLP and Proskauer Rose LLP, “Proskauer Rose”). Only partners and employees of Proskauer Rose LLP (the U.S. entity) have billed time and are expected to bill time in these Chapter 11 Cases. To the extent that partners and employees other than those of the Proskauer Rose LLP will perform services on these Chapter 11 Cases, the Debtors will be billed 2 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Original Declaration. 3 These 3 entities are branches of Proskauer Rose LLP, the U.S. firm. Equity partners in those branches are equity partners in the U.S. firm. 2 20-12097-scc Doc 125 Filed 10/13/20 Entered 10/13/20 19:33:22 Main Document Pg 3 of 118 so that, after application of conversion rates, the applicable rates in U.S. Dollars are the same as those disclosed in the Application. 5. Proskauer is not a creditor of the Debtors. During the ninety-day period prior to the Petition Date, Proskauer received from the Debtors approximately $2,307,527.72 for professional services performed or to be performed. Proskauer received payments in July that refreshed an existing retainer. Since then, Proskauer billed time periodically against the retainer, maintaining a positive balance and requesting and receiving regular retainer replenishment payments. The Debtors held a retainer balance of approximately $1,134,884.66 leading up to the filing of the Debtors’ petitions and, after drawing down that balance prepetition and applying approximately $602,442.44 on account of prepetition fees incurred, Proskauer is holding a remaining retainer balance of approximately $532,442.22. A summary of payments invoiced and received by Proskauer in the ninety days prior to the Petition Date is set forth on Schedule 3 annexed hereto. Compensation Received by Proskauer from the Debtors 6. Pursuant to Bankruptcy Code section 504, Proskauer will not in the future agree to share (a) any compensation it has received or may receive with another party or person in these Chapter 11 Cases, other than with the partners, associates, and contract attorneys associated with Proskauer, or (b) any compensation another person or party has received or may receive in these Chapter 11 Cases. Attorney Statement Regarding Revised U.S. Trustee Guidelines 7. As disclosed in the Original Declaration, Proskauer represented the entities that are now the Debtors in the twelve months prepetition. Prior to August 14, 2020, Proskauer charged the Debtors its standard rates at a 10% discount, which arrangement was premised on the general, 3 20-12097-scc Doc 125 Filed 10/13/20 Entered 10/13/20 19:33:22 Main Document Pg 4 of 118 high-volume corporate services that Proskauer had historically provided to these long-term clients. Starting August 14, 2020, after it became clear that the rationale underpinning the discount no longer applied, Proskauer agreed to provide to the Debtors a suite of services focused on restructuring and bankruptcy and, for that reason, the Debtors agreed to pay Proskauer’s standard rates, without the discount. The foregoing notwithstanding, with respect to postpetition fees, Proskauer will continue to provide the Debtors a 10% discount in the aggregate fees payable by the Debtors, with the precise fees to be waived to attain the 10% reduction to be designated by Proskauer (in its sole discretion) in connection with the final fee application process. Proskauer’s Disinterestedness 8. Except as set forth herein, to the best of my knowledge, information, and belief after due inquiry by me, or attorneys working under my supervision, neither I, Proskauer, nor any member, counsel, or associate of Proskauer currently represents any party in interest or entity other than the Debtors in connection with these Chapter 11 Cases. 9. In connection with its proposed retention by the Debtors in these Chapter 11 Cases, Proskauer undertook to determine whether it has any conflicts or other relationships that might cause it not to be disinterested or to hold or represent an interest adverse to the Debtors. Specifically, Proskauer obtained from the Debtors and their representatives, or pulled from documents, the names of individuals and entities that may be parties in interest in these Chapter 11 Cases (the “Potential Parties in Interest”). The Potential Parties in Interest are listed on Schedule 1 hereto.4 4 Proskauer’s inclusion of parties on the Schedules hereto is solely to illustrate Proskauer’s conflict search process and is not an admission that any party has a valid claim against the Debtors or that any party properly belongs in the Schedules or has a claim or legal relationship to the Debtors of the nature described in the Schedules. 4 20-12097-scc Doc 125 Filed 10/13/20 Entered 10/13/20 19:33:22 Main Document Pg 5 of 118 10. Proskauer Rose’s Conflicts Database (as defined in the Original Declaration) is an electronic global database that covers every office in Proskauer Rose’s global organization. Every Proskauer Rose client, whether from Proskauer Rose LLP (the U.S. entity), or any affiliated office is included in the global database. Proskauer has searched the global Proskauer Rose electronic database for its connections to the Potential Parties in Interest as set forth in the Original Declaration. 11. To the extent that I have been able to ascertain that Proskauer has been retained within the last three years to represent any of the Potential Parties in Interest (or their affiliates, as the case may be) in matters unrelated to these Chapter 11 Cases, such facts are disclosed on Schedule 2 attached hereto. I do not believe any of the representations listed on Schedule 2 are related to these Chapter 11 Cases. 12. The Potential Parties in Interest may have changed without Proskauer’s knowledge and may change during the pendency of these Chapter 11 Cases. Accordingly, Proskauer will update disclosures in accordance with Bankruptcy Rule 2014 and applicable law and when Proskauer becomes aware of additional information. 13. Proskauer has searched the global Proskauer Rose electronic database for its connections to the Potential Parties in Interest. Listed on Schedule 2 hereto are the results of Proskauer’s conflicts searches (the “Disclosure List”). For the avoidance of doubt, the Debtors will retain conflicts counsel for any disputes involving equity, or equity owned or controlled entities. Proskauer will not commence a cause of action in these Chapter 11 Cases against the other entities listed on Schedule 2 that are current clients of Proskauer unless Proskauer (a) has an applicable waiver on file or (b) first receives a waiver from such entity allowing Proskauer to commence such an action.