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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ALLIED SYSTEMS HOLDINGS, INC., et a/.

, 1 Debtors. Chapter 11 Case No. 12-11564 (CSS) (Jointly Administered)


Hearing Date: August 28, 2012 at 11:00 a.m. (EDT) Objection Deadline: July 16, 2012 at 4:00p.m. (EDT)

APPLICATION TO EMPLOY AND RETAIN RICHARDS, LAYTON & FINGER, P.A. AS CO-COUNSEL TO THE DEBTORS NUNC PRO TUNC TO JUNE 10, 2012 Allied Systems Holdings, Inc. ("Allied Holdings") and its U.S. and Canadian subsidiaries (collectively, the "Debtors") file this application (the "Application") for entry of an order, substantially in the form attached hereto as Exhibit A (the "I>roposed Order"), authorizing the Debtors to employ and retain Richards, Layton & Finger, P .A. ("RL&F") as its bankruptcy co-counsel nunc pro tunc to June 10, 2012 (as defined below) pursuant to section 327(a) oftit1e 11 of the United States Code (the "Bankruptcy Code"), Rule 2014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and Rule 2014-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"). In support of this Application, the Debtors respectfully state as follows:

The Debtors in these cases, along with the federal tax identification number (or Canadian business number where applicable) for each of the Debtors, are: Allied Systems Holdings, Inc. (58-0360550); Allied Automotive Group, Inc. (58-2201081); Allied Freight Broker LLC (59-2876864); Allied Systems (Canada) Company (900169283); Allied Systems, Ltd. (L.P.) (58-1710028); Axis Areta, LLC (45-5215545); Axis Canada Company (875688228); Axis Group, Inc. (58-2204628); Commercial Carriers, Inc. (38-0436930); CT Services, Inc. (382918187); Cardin Transport LLC (38-1985795); F.J. Boutell Driveway LLC (38-0365100); GACS Incorporated (58-1944786); Logistic Systems, LLC (45-4241751); Logistic Technology, LLC (45-4242057); QAT, Inc. (592876863); RMX LLC (31-0961359); Transport Support LLC (38-2349563); and Terminal Services LLC (910847582). The location of the Debtors' corporate headquarters and the Debtors' address for service of process is 2302 Parklake Drive, Bldg. 15, Ste. 600, Atlanta, Georgia 30345.

RLFl 6086973v. 1

Jurisdiction
1.

This Court has jurisdiction to consider this matter pursuant to 28 U.S.C. 157

and 1334. This is a core proceeding pursuant to 28 U.S.C. 157(b). Venue for this matter is proper in this district pursuant to 28 U.S. C. 1409.
Background

2.

On May 17, 2012 (the "Involuntary Petition Date"), involuntary petitions were

filed against Allied Holdings and its subsidiary Allied Systems, Ltd. (L.P.) ("Allied Systems") under chapter 11 of the Bankruptcy Code in this Court. On June 10, 2012 (the "Voluntary
Petition Date," and together with the Involuntary Petition Date, the "Petition Date," as

applicable to the particular Debtor), the remaining Debtors filed voluntary petitions in this Court and, in connection therewith, Allied Holdings and Allied Systems consented to the involuntary petitions filed against them. Additional information regarding the Debtors' business and the background relating to events leading up to the above-captioned chapter 11 cases (the "Chapter
11 Cases") can be found in the Declaration of Scott D. Macaulay in Support of First-Day

Pleadings [Docket No. 80] which was filed on the Voluntary Petition Date.
3. On June 19, 2012, the Office of the United States Trustee for the District of

Delaware (the "U.S. Trustee") appointed an official committee of unsecured creditors (the
"Creditors' Committee") in the Chapter 11 Cases.

The Debtors continue to operate their

business and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
Relief Requested

4.

The Debtors are seeking to employ and retain RL&F nunc pro tunc to June 10,

2012 to represent them as their co-counsel in connection with their chapter 11 filings and prosecution of their bankruptcy cases. Accordingly, the Debtors respectfully request that the
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Court enter the Proposed Order authorizing it to employ and retain RL&F as their attorneys under an evergreen retainer nunc pro tunc to June 10, 2012 and as further described in the affidavit of Mark D. Collins, a director at RL&F (the "Collins Affidavit"), attached hereto as

Exhibit B. A. Services to be Provided


5. Subject to further order of the Court, the Debtors request the employment and

retention of RL&F to render the following professional services: a) to prepare all necessary petitions, motions, applications, orders, reports, and papers necessary to commence the Chapter 11 Cases; to advise the Debtors of their rights, powers, and duties as a debtor and debtor in possession under chapter 11 of the Bankruptcy Code; to prepare on behalf of the Debtors all motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtors' estate; to take action to protect and preserve the Debtors' estates, including the prosecution of actions on the Debtors' behalf, the defense of actions commenced against the Debtors in the Chapter II Cases, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors; to assist the Debtors with the sale of any of its assets pursuant to section 363 of the Bankruptcy Code; to prepare the Debtors' disclosure statement and any related motions, pleadings, or other documents necessary to solicit votes on the Debtors' plan of reorganization; to prepare the Debtors' plan of reorganization; to prosecute on behalf of the Debtors, the proposed plan of reorganization and seeking approval of all transactions contemplated therein and in any amendments thereto; and to perform all other necessary legal services m connection with the Chapter 11 Cases.

b)

c)

d)

e)

f)

g) h)

i)

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Basis for Relief

6.

Under section 327(a) of the Bankruptcy Code, a debtor in possession "with the

court's approval, may employ one or more attorneys ... that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the [debtor in possession] in carrying out [its] duties under this title." II U.S.C. 327(a). Such employment may be based "on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, on a fixed percentage fee basis, or on a contingent fee basis." II U.S.C 328(a). 7. The Debtors believe that RL&F is well qualified to represent them in their

bankruptcy cases in an efficient and timely manner. The Debtors have selected RL&F as their co-counsel because of the firm's extensive experience and knowledge in the field of debtors' and creditors' rights, business reorganizations and liquidations under chapter II of the Bankruptcy Code, its expertise, experience, and knowledge in practicing before this Court, its proximity to the Court, and its ability to respond quickly to emergency hearings and other emergency matters. RL&F's services will enable the Debtors to execute faithfully their duties as debtors in possessiOn. 8. To that end, RL&F has stated its desire and willingness to act in these cases and

to render the necessary professional services as co-counsel to the Debtors. In addition, the Debtors submit that pursuant to Local Rule 9010-l(c), the Debtors are required to retain Delaware counsel. 9. By separate application, the Debtors are also seeking to employ the law firm of

Troutman Sanders LLP ("Troutman") as co-counsel in the Chapter II Cases. Troutman and RL&F have discussed a division of responsibilities regarding the Debtors' representation in the Chapter II Cases and will make every effort to avoid and/or minimize duplication of services.

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A.

Professional Compensation

(i) 10.

Professional Fees RL&F intends to apply to the Court for allowance of compensation and

reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any applicable orders of this Court. Subject to those provisions, the Debtors propose to pay RL&F its customary hourly rates in effect from time to time as set forth in the Collins Affidavit. The Debtors submit that these rates are reasonable. 11. Prior to the Petition Date, the Debtors paid RL&F a total retainer of $85,000.00

(the "Retainer") in connection with and in contemplation of the Chapter 11 Cases. The Debtors propose that the retainer monies paid to RL&F and not expended for prepetition services and disbursements be treated as an evergreen retainer to be held by RL&F as security throughout the Chapter 11 Cases until RL&F's fees and expenses are awarded by final order and payable to RL&F. 12. RL&F submits that an evergreen retainer is appropriate here. First, evergreen

retainer agreements reflect normal business terms in the marketplace. See In re Insilco Techs., Inc., 291 B.R. 628, 634 (Bankr. D. Del. 2003) ("it is not disputed that the taking of evergreen retainers is a practice now common in the marketplace ... [and] the practice in this district has been engaged in since at least the early 1990s"). Second, RL&F and the Debtors are

sophisticated business entities that have negotiated the Retainer at arm's length. Approval of the proposed evergreen retainer is thus warranted under the standards articulated in Insilco. !d. (ii) 13. Expenses
It is RL&F's policy to charge its clients in all areas of practice for all other

expenses incurred in connection with the client's case. The expenses charged to clients include, among other things, telephone and telecopier toll, and other charges, regular mail and express

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mail

charges,

special

or

hand

delivery

charges,

document

processmg

charges,

printing/photocopying charges, travel expenses, expenses for "working meals," computerized research charges, transcription costs as well as non-ordinary overhead expenses such as secretarial and other overtime. RL&F will charge the Debtors for these expenses in a manner and at rates consistent with charges made generally to RL&F's other clients or as previously fixed by this Court. RL&F believes that it is fair to charge these expenses to the clients incurring them instead of increasing hourly rates and spreading these expenses among all clients.

B.

Disinterestedness
14. To the best of the Debtors' knowledge and as disclosed herein and in the Collins

Affidavit: (a) RL&F is a "disinterested person" under section 101(14) of the Bankruptcy Code; (b) RL&F does not hold or represent an interest adverse to the Debtors' estates; and (c) RL&F's directors and associates have no connection to the Debtors, their creditors, or its related parties except as may be disclosed in the Collins Affidavit.
C.

Rule 5002
15. As set forth in the Collins Affidavit, no director or associate ofRL&F is a relative

of, or has been so connected with, any judge of the bankruptcy court for this District. Accordingly, the appointment ofRL&F is not prohibited by Bankruptcy Rule 5002.

Notice
16. No trustee, examiner or creditors' committee has been appointed in these Chapter

11 Cases. The Debtors have provided notice of this Application to the following parites: (i) the Office of the United States Trustee for the District of Delaware; (ii) counsel for the agent for the Debtors' proposed debtor-in-possession lenders; (iii) counsel for The CIT Group/Business Credit, Inc., as resigning agent under the Debtors' first lien credit agreement, counsel for BDCM Opportunity Fund II, LP, Black Diamond CLO 2005-1 Adviser L.L.C. and Spectrum Investment 6
RLfl 6086973v. 1

Pmtners LP, and each other lender under the Debtors' first lien credit agreement; (iv) counsel for

The Bank of New York Mellon. in its capacity as administrative agent and collateral agent under
the Debtors' second lien credit agreement; (v) proposed counsel to the Creditors' Committee:

and (vi) all other persons requesting notices" The Debtors submit that no other or funher notice
need be provided.

No Prior Request 17. No prior request for the relief sought in this Application has been made to this or

any other court.

WHEREFORE. for the reasons set fmth herein. the Debtors respectfully request that the Court enter the Proposed Order. substantially in the form attached hereto as Exhibit A. granting the relief requested herein and such other and further relief the Com1 deems just and proper. Dated: July 2, 2012 ALLIED SYSTEMS HOLDINGS, INC., for and on behalf of itself and its affiliated Debtors

By:

~~z=y-~
John F. Blount Vice President, Chief Administrative Officer, General Counsel

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RLF! 6DX6<n:.\v. i

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ALLIED SYSTEMS HOLDINGS, INC., et at./ Debtors. Chapter 11 Case No.12-11564 (CSS) (Jointly Administered)
Hearing Date: August 28, 2012 at II :00 a.m. (EDT) Objection Deadline: July 16, 2012 at 4:00p.m. (EDT)

NOTICE OF APPLICATION AND HEARING PLEASE TAKE NOTICE that, on July 2, 2012, the above-captioned debtors (collectively, the "Debtors") filed the Application to Employ and Retain Richards, Layton & Finger, P.A. as Co-Counsel to the Debtors Nunc Pro Tunc to June 10, 2012 (the "Application") with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). PLEASE TAKE FURTHER NOTICE that any responses or objections to the Application must be in writing, filed with the Clerk of the Bankruptcy Court, 824 North Market Street, 3rd Floor, Wilmington, Delaware 1980 l, and served upon and received by the undersigned proposed counsel for the Debtors on or before July 16, 2012 at 4:00 p.m. (Eastern Daylight Time). PLEASE TAKE FURTHER NOTICE that a hearing to consider the Application, ifrequired, will be held before The Honorable Christopher S. Sontchi, United States Bankruptcy

The Debtors in these cases, along with the federal tax identification number (or Canadian business number where applicable) for each of the Debtors, are: Allied Systems Holdings, Inc. (58-0360550); Allied Automotive Group, Inc. (58-2201081); Allied Freight Broker LLC (59-2876864); Allied Systems (Canada) Company (900169283); Allied Systems, Ltd. (L.P.) (58-1710028); Axis Areta, LLC (45-5215545); Axis Canada Company (875688228); Axis Group, Inc. (58-2204628); Commercial Carriers, Inc. (38-0436930); CT Services, Inc. (382918187); Cordin Transport LLC (38-1985795); F.J. Boutell Driveaway LLC (38-0365100); GACS Incorporated (58-1944786); Logistic Systems, LLC (45-4241751); Logistic Technology, LLC (45-4242057); QAT, Inc. (592876863); RMX LLC (31-0961359); Transport Support LLC (38-2349563); and Terminal Services LLC (910847582). The location of the Debtors' corporate headquarters and the Debtors' address for service of process is 2302 Parklake Drive, Bldg. 15, Ste. 600, Atlanta, Georgia 30345.
RLFI 620729lv. l

Judge for the District of Delaware, at the Bankruptcy Court, 824 North Market Street, 5th Floor, Courtroom 6, Wilmington, Delaware 19801 on August 28, 2012 at 11:00 a.m. (Eastern
Daylight Time).

IF NO OBJECTIONS TO THE APPLICATION ARE TIMELY FILED, SERVED AND RECEIVED IN ACCORDANCE WITH THIS NOTICE, THE BANKRUPTCY COURT MAY GRANT THE RELIEF REQUESTED IN THE APPLICATION WITHOUT FURTHER NOTICE OR HEARING.

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RLFI 6207291v.l

Dated: July 2, 2012 Wilmington, Delaware

Is/ Marisa A. Terranova Mark D. Collins (No. 2981) Clnistopher M. Samis (No. 4909) Andrew C. Irgens (No. 5193) Marisa A. Terranova (No. 5396) RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King Street Wilmington, Delaware 19801 Telephone No.: (302) 651-7700 Facsimile No.: (302) 651-7701 Email: collins@rlf.com samis@rlf.com irgens@rlf.com terranova@rlf.com
-andJeffrey W. Kelley (GA Bar No. 412296) Ezra H. Cohen (GA Bar No. 173800) Carolyn P. Richter (GA Bar No. 574097) Matthew R. Brooks (GA Bar No. 378018) Benjamin R. Carlsen (GA Bar No. 940614)
TROUTMAN SANDERS LLP

Bank of America Plaza 600 Peachtree Street, Suite 5200 Atlanta, Georgia 30308-2216 Telephone No.: (404) 885-3000 Facsimile No.: (404) 885-3900 Email: jeffrey.kelley@troutmansanders.com ezra.cohen@troutmansanders.com carolyn.richter@troutmansanders.com matthew. brooks@troutmansanders.com benjamin.carlsen@troutmansanders.com

Proposed Counsel for the Debtors

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RLFI 6207291v. I

Exhibit A
Proposed Order

RLFl 6086973v. l

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ALLIED SYSTEMS HOLDINGS, INC., et at./ Debtors. Chapter 11 Case No. 12-11564 (CSS) (Jointly Administered)
Re: Docket No.

ORDER AUTHORIZING THE DEBTORS TO EMPLOY AND RETAIN RICHARDS, LAYTON & FINGER, P.A. AS CO-COUNSEL TO THE DEBTORS NUNC PRO TUNC TO JUNE 10, 2012 This matter coming before the Court on the Application to Employ and Retain Richards,

Layton & Finger, P.A. as Co-Counsel to the Debtors Nunc Pro Tunc to June 10, 2012 (the
"Application"); the Court having reviewed the Application; the Conrt finding that (a) it has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, (b) this is a core matter pursuant to 28 U.S.C. 157(b)(2)(A); and (c) notice of the Application was sufficient under the circumstances; the Conrt having considered the Affidavit of Mark D. Collins (the "Collins Affidavit"); the Conrt having determined that the legal and factual bases set forth in the Application and the Collins Affidavit establish just cause for the relief granted herein; and after due deliberation and sufficient cause appearing therefor,
IT IS HEREBY ORDERED THAT:

1.

The Application is GRANTED, as set forth herein.

The Debtors in these cases, along with the federal tax identification number (or Canadian business number where applicable) for each of the Debtors, are: Allied Systems Holdings, Inc. (58-0360550); Allied Automotive Group, Inc. (58-2201081); Allied Freight Broker LLC (59-2876864); Allied Systems (Canada) Company (900169283); Allied Systems, Ltd. (L.P.) (58-1710028); Axis Areta, LLC (45-5215545); Axis Canada Company (87568828); Axis Group, Inc. (58-2204628); Commercial Carriers, Inc. (38-0436930); CT Services, Inc. (382918187); Cardin Transport LLC (38-1985795); F.J. Boutell Driveway LLC (38-0365100); GACS Incorporated (58-1944786); Logistic Systems, LLC (45-4241751); Logistic Technology, LLC (45-4242057); QAT, Inc. (592876863); RMX LLC (31-0961359); Transport Support LLC (38-2349563); and Terminal Services LLC (910847582). The location of the Debtors' corporate headquarters and the Debtors' address for service of process is 2302 Parklake Drive, Bldg. 15, Ste. 600, Atlanta, Georgia 30345.

RLFI 6086973v. I

2.

Pursuant to section 327(a) of the Bankruptcy Code, 2 the Debtors are authorized to

retain and employ RL&F as its co-counsel, in accordance with the terms and conditions set forth in the Application, effective nunc pro tunc to June 10, 2012. 3. RL&F shall be compensated in accordance with the procedures set forth in

sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and any other such procedures as may be fixed by order of this Court. 4. The Retainer shall be treated as an evergreen retainer and shall be held by RL&F

as security throughout the Debtors' bankruptcy cases until RL&F's fees and expenses are awarded and payable to RL&F on a final basis. 5. Notwithstanding the possible applicability of any stay of the effectiveness of this

order, including, without limitation, the fourteen (14) day stay provided in Rule 6004(h) of the Bankruptcy Rules, the terms and conditions of this order shall be immediately effective and enforceable upon its entry. 6. The Debtors are authorized to take all actions necessary to effectuate the relief

granted pursuant to this Order in accordance with the Application. 7. The Court shall retain jurisdiction over any and all issues arising from or related

to the implementation and interpretation of this Order.

Dated:

, 2012 Wilmington, Delaware THE HONORABLE CHRISTOPHER S. SONTCHI UNITED STATES BANKRUPTCY JUDGE

Capitalized terms not otherwise defmed herein have the meaning ascribed to them in the Application.

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Exhibit B
Collins Affidavit

RLF I 6086973v. I

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ALLIED SYSTEMS HOLDINGS, INC., et al., 1 Debtors. Chapter 11 Case No. 12-11564 (CSS) (Jointly Administered)

AFFIDAVIT OF MARK D. COLLINS IN SUPPORT OF APPLICATION TO EMPLOY AND RETAIN RICHARDS, LAYTON & FINGER, P.A. AS CO-COUNSEL TO THE DEBTORS NUNC PRO TUNC TO JUNE 10, 2012

STATE OF DELAWARE COUNTY OF NEW CASTLE

) ) SS: )

Mark D. Collins, being first duly sworn to oath, deposes and says: 1. I am an attorney admitted to practice in the State of Delaware and before this

Court, and a director of the firm of Richards, Layton & Finger, P.A. ("RL&F"). RL&F is a Delaware law firm with offices at One Rodney Square, 920 North King Street, Wilmington, Delaware 19801. 2. I submit this affidavit in support of the Application (the "Application") of the

above-captioned debtors (collectively, the "Debtors") for an order approving the employment and retention of RL&F as their co-counsel in the Debtors' bankruptcy cases, in compliance with and to provide disclosure pursuant to sections 329 and 504 of title 11 of the United States Code (the "Bankruptcy Code"), Rules 2014(a) and 2016(b) of the Federal Rules of Banlauptcy Procedure (the "Bankruptcy Rules"), and Rules 2014-1 and 2016-1 of the Local Rules of

The Debtors in these cases, along with the federal tax identification number (or Canadian business number where applicable) for each of the Debtors, are: Allied Systems Holdings, Inc. (58-0360550); Allied Automotive Group, Inc. (58-2201081); Allied Freight Broker LLC (59-2876864); Allied Systems (Canada) Company (900169283); Allied Systems, Ltd. (L.P.) (58-1710028); Axis Areta, LLC (45-5215545); Axis Canada Company (87568828); Axis Group, Inc. (58-2204628); Commercial Carriers, Inc. (38-0436930); CT Services, Inc. (382918187); Cordin Transport LLC (38-1985795); F.J. Boutell Driveway LLC (38-0365100); GACS Incorporated (58-1944786); Logistic Systems, LLC (45-4241751); Logistic Technology, LLC (45-4242057); QAT, Inc. (592876863); RMX LLC (31-0961359); Transport Support LLC (38-2349563); and Terminal Services LLC (910847582). The location of the Debtors' corporate headquarters and the Debtors' address for service of process is 2302 Parklake Drive, Bldg. 15, Ste. 600, Atlanta, Georgia 30345.
RLFl 6086973v. l

Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"). Unless otherwise stated in this affidavit, I have personal

knowledge of the facts hereinafter set forth. To the extent that any information disclosed herein requires amendment or modification upon RL&F's completion of further analysis, or as additional creditor information becomes available to it, a supplemental affidavit will be submitted to the Court. 3. Subject to approval of this Court and in compliance with the applicable provisions

of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules, RL&F intends to apply for compensation for professional services rendered in connection with the Debtors' bankruptcy cases, plus reimbursement of actual, necessary expenses, and other charges incurred by RL&F during the Debtors' bankruptcy cases. The principal professionals and paraprofessionals

designated to represent the Debtors and their current standard hourly rates are as follows: a) b) c)
d)

Mark D. Collins Chris Samis Marisa A. Terranova Janel Gates

$750 per hour $375 per hour $325 per hour $200 per hour

4.

The hourly rates set forth above are RL&F' s standard hourly rates for work of this

nature. These rates are set at a level designed to compensate RL&F fairly for the work of its attorneys and paralegals and to cover fixed and routine overhead expenses. The hourly rates set forth above are subject to periodic adjustments to reflect economic and other conditions. Other attorneys and paralegals within RL&F may from time to time serve the Debtors in connection with the matters described herein. 5.
It is RL&F's policy to charge its clients in all areas of practice for all other

expenses incurred in connection with the client's case. The expenses charged to clients include,
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RLFI 6086973v. I

among other things, telephone and telecopier toll and other charges, regular mail and express mail charges, special or hand delivery charges, document processing charges,

printing/photocopying charges, travel expenses, expenses for "working meals," computerized research charges, transcription costs as well as non-ordinary overhead expenses such as secretarial and other overtime. RL&F will charge the Debtors for these expenses in a manner and at rates consistent with charges made generally to RL&F' s other clients or as previously fixed by this Court. RL&F believes that it is more fair to charge these expenses to the clients incurring them instead of increasing hourly rates and spreading these expenses among all clients. 6. Neither I, RL&F, nor any director or associate of RL&F, insofar as I have been

able to ascertain, has in the past represented the Debtors' largest creditors, any significant beneficiaries of the Debtors (holding 5% or more of the beneficial interests in the Debtors) or any Potential Party in Interest (as defined below). In preparing this affidavit, we used a set of procedures established by RL&F to insure compliance with the requirements of the Bankruptcy Code and the Bankruptcy Rules regarding retention of professionals by a debtor or official committee under the Bankruptcy Code. In that regard, RL&F requested and obtained from the Debtors a list of the names of entities who may be parties in interest in the chapter 11 cases, including but not limited to, the Debtors' secured creditors, the Debtors' largest unsecured creditors, present officers and directors and parties holding equity interests in the Debtors (the
"Potential Parties in Interest").

7.

RL&F maintains and systematically updates its conflict check system in the

regular course of its business and it is the regular practice of RL&F to make and maintain these records. The conflict system maintained by RL&F is designed to include (i) every active matter on which RLF is engaged, (ii) every closed matter on which RLF has been engaged since 1990, (iii) the entity by which it is now or has been engaged, (iv) the identity of related parties, (v) the
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identity of adverse parties and (vi) the attorney at RL&F that is knowledgeable about the matter.
It is the policy of RL&F that no new matter may be accepted or opened within the firm without

completing and submitting to those charged with maintaining the conflict check system the information necessary to check each such matter for conflicts, including the identity of the prospective client, the matter, and the related and adverse parties. Accordingly, the database is updated for every new matter undertaken by RL&F. The scope of the system is a function of the completeness and accuracy of the information submitted by the attorney opening a new matter. 8. RL&F has in the past represented, currently represents, and/or may in the future

represent, in matters wholly unrelated to the Debtors' chapter 11 cases, certain Potential Parties in Interest (including, without limitation, those entities set forth on Exhibit 1 attached hereto who are current clients or are related-parties thereof, and those entities or related-parties thereof set forth on Exhibit 2 attached hereto who have been represented by RL&F within the last five (5) years). I do not believe that any single matter is a major engagement that would involve either the billing of fees in excess of one half of one percent (l %) of RL&F's annual fees billed, or that, in the aggregate for any related group of entities, exceeds one percent (I%) of RL&F's annual fees billed. In any event, RL&F will not represent any Potential Party in Interest in any facet of the Debtors' Chapter ll Cases. 2 In any event, RL&F will not represent any Potential Party in Interest in any facet of the Debtors' Chapter ll Cases. 9. I do not believe there is any connection or interest (as such terms are used in

section l OJ (14) of the Bankruptcy Code and Bankruptcy Rule 2014(a)) between RL&F and (i) the United States Trustee or any person employed by the Office of the United States Trustee or (ii) any counsel, accountants, financial consultants and investment bankers who represent or may represent claimants or other parties in interest in the Debtors' Chapter 11 Cases, except as
2

Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Application.

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otherwise described herein.

In addition, as part of its practice, RL&F appears in cases,

proceedings and transactions involving many different attorneys, counsel, accountants, financial consultants, and investment bankers, some of which now or may in the future represent claimants and parties in interest in the Debtors' Chapter II Cases. RL&F has not represented and will not represent any such entities in relation to the Debtors and their Chapter II Cases, nor does RL&F have any relationship with any such entities that would be adverse to the Debtors or their estates in the matters upon which RL&F is to be employed in these cases. 10. Prior to the Petition Date, RL&F rendered legal services to the Debtors in RL&F received,

connection with and in contemplation of the Debtors' chapter 11 filings.

pursuant to two wire transfers, a total retainer of $85,000.00 (the "Retainer") to cover fees and expenses actually incurred, as well as anticipated to occur prior to the commencement of the bankruptcy cases. Throughout RL&F's representation of the Debtors prior to the Petition Date, RL&F drew down certain amounts of the Retainer that corresponded with work performed and expenses incurred pursuant to RL&F's representation of the Debtors. An accounting summary of payments made to RL&F and estimated amounts incurred by RL&F is attached hereto as
Exhibit 3. The Debtors propose that any Retainer monies paid to RL&F and not expended for

prepetition services and disbursements be treated as an evergreen retainer to be held by RL&F as security throughout the bankruptcy cases until RL&F's fees and expenses are awarded by final order and are then payable to RL&F.
11.

Except as set forth herein, and based upon the information available to me, neither

I, RL&F, nor any director or associate thereof, insofar as I have been able to ascertain, holds or represents any interest adverse to the Debtors or their estates in the matters upon which RL&F is to be employed in these cases. Based upon the information available to me, I believe that RL&F

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is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) ofthe Bankruptcy Code. 12. No promises have been received by RL&F, or by any director or associate

thereof, as to compensation in connection with these cases other than in accordance with the provisions of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules. RL&F has no agreement with any other entity to share with such entity any compensation received by RL&F. 13. To the best of my knowledge, no director or associate ofRL&F is a relative of, or

has been so connected with, any judge of the bankruptcy court for this district. Accordingly, I understand that the appointment of RL&F is not prohibited by Bankruptcy Rule 5002.

Dated: July 2, 2012 SWORN TO AND SUBSCRIBED

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Exhibit 11 - Current Clients 2 Agents and Lenders under Senior Secured First Priority Credit Facilities Certain affiliates of The CIT Group Certain affiliates ofNewstart Factors, Inc. (Bennett Management) Certain affiliates of Vista Leveraged Income Fund

Agents and Lenders under Senior Secured Second Priority Credit Bank of New York Mellon and certain affiliates thereof Certain affiliates of Spectrum Investment Partners LP

Major Customers Ally Financial and certain affiliates thereof Certain affiliates of Chrysler Certain affiliates of Enterprise Certain affiliates of Ford Motor Corporation Hertz and certain affiliates thereof Certain affiliates of Hyunda Canada Certain affiliates of Manheim, Inc. Certain affiliates of Mazda Canada Certain affiliates of Mitsubishi Canada Certain affiliates ofMitsubishi Fuso Certain affiliates ofNissan Canada Certain affiliates of UPS Autologistics

Forty Largest Unsecured Creditors (Consolidated) Certain affiliates of Chartis Certain affiliates of CSX Transportation IBM Corporation and certain affiliates thereof Certain affiliates of OM of Canada LTD CANG National Union Fire Insurance and certain affiliates thereof Certain affiliates of Tokio Marine and Nichido Fire Insurance Certain affiliates of Toyota Motors Sales, Inc.

Liability and Property Insurers Certain affiliates of AIG Environmental Insurance Company of Canada Certain affiliates of Chartis Excess Limited Certain affiliates of Chartis Insurance Co.
Parties that are both current clients and former clients of RL&F are only listed on Exhibit !-Current Clients.
2

Due to the similarity of names of certain entities, RL&F was not able to determine if all entities listed herein are actually affiliates of current clients. However, out of an abundance of caution, RL&F has listed those entities which it reasonably believes may be affiliates of current clients.

RLFI 6086973v. 1

Liability and Property Insurers (continued) Certain affiliates of Federal Insurance Company (Chubb) Certain affiliates of Harford Fire Insurance Co. Lexington Insurance Company and certain affiliates thereof

Depository Banks Bank of America and certain affiliates thereof The Bank of Nova Scotia and certain affiliates thereof Certain affiliates of Fidelity National Bank JPMorgan Chase Bank and certain affiliates thereof

Letter of Credit Banks Wells Fargo Bank and certain affiliates thereof

Accountants and Financial Advisors Price Waterhouse Coopers and certain affiliates thereof

Utilities AT&T and certain affiliates thereof Avaya, Inc. and certain affiliates thereof Certain affiliates ofEntergy New Orleans Certain affiliates ofFPL Certain affiliates of GXS Certain affiliates of the Halifax Regional Water Commission Paetec and certain affiliates thereof Verizon and certain affiliates thereof

2
RLFl 6086973v. 1

Exhibit 2- Former Clients 1


Agents and Lenders under Senior Secured First Priority Credit Facilities Certain affiliates of Avenue CLO Fund, Ltd. (Avenue Capital Group) Certain affiliates of Avenue CLO IV, Ltd. Certain affiliates of Avenue CLO V, Ltd. Certain affiliates of Avenue CLO VI, Ltd. Certain affiliates of Black Diamond CLO 2005-1 Ltd. (Black Diamond Capital Management)

Liability and Property Insurers Illinois National Insurance Co. Certain affiliates of Illinois Union Insurance Co. (ACE) Certain affiliates of XL Specialty Insurance Co.

Terminal Landlords Certain affiliates ofBNSF Certain affiliates of Canadian Pacific Limited Certain affiliates of Union Pacific Railroad Company

Litigation Counterparties Jack Cooper Transport Co., Inc. and certain affiliates thereof

Utilities Certain affiliates of Bell Aliant Bell Canada and certain affiliates thereof Certain affiliates of Bell Mobility Certain affiliates of Bell Motor Express, Inc. Certain affiliates of Centurylink Certain affiliates of Direct Energy Regulated Services Certain affiliates of DTE Energy Certain affiliates of Duke Energy Certain affiliates of Frontier Telephone Certain affiliates of Georgia Natural Gas Services Certain affiliates of Georgia Power Certain affiliates of Progress Energy Certain affiliates of Sprint

Due to the similarity of names of certain entities, RL&F was not able to determine if all entities listed herein are actually affiliates of former clients. However, out of an abundance of caution, RL&F has listed those entities which it reasonably believes may be affiliates of former clients.

RLFI 6086973v. I

Exhibit 3 ACCOUNTING SUMMARY OF PAYMENTS Transaction Retainer received by RL&F via wire 5/23/12 transfer from the Debtors Retainer received by RL&F via wire 6/6/12 transfer from the Debtors Retainer amount drawn down based on services perfom1ed and anticipated to be performed through the filing of the petitions on June 10, 2012. This amount represents $40,014.96 for fees and expenses associated with services rendered through May 31, 6/8/12 2012 and a good faith estimate of the fees and expenses associated with services rendered from June 1, 2012 through June 9, 2012, including fees and expenses already recorded in RL&F's billing system and those not yet recorded in the system. Reconciliation of the actual prepetition fees 6/27/12 and expenses incurred through June 9, 2012. Date Amount
$50,000.00 $35,000.00

Retainer Balance
$50,000.00 $85,000.00

($85,000.00)

$0.00

$6,386.76

$6,386.76

2
RLFI 6086973v. I

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