UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE

Transcription

1 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE In re: Kingsbury Corporation Donson Group, Ltd. Ventura Industries, LLC Debtors. Bk. No JMD Bk. No JMD Bk. No JMD Jointly Administered APPLICATION FOR ORDER, PURSUANT TO SECTIONS 327 AND 328 OF THE BANKRUPTCY CODE, AUTHORIZING THE EMPLOYMENT OF BERNSTEIN, SHUR, SAWYER & NELSON, P.A., AS ATTORNEYS FOR THE DEBTORS Kingsbury Corporation ( Kingsbury ), Donson Group, Ltd. ( Donson ), and Ventura Industries, LLC ( Ventura ) (collectively, the Debtors ), the above-captioned debtors and debtors-in-possession, by and through their undersigned attorneys, hereby request that this Court enter an order approving the employment of Bernstein, Shur, Sawyer & Nelson, P.A. ( BSSN ) as counsel for the Debtors. JURISDICTION, VENUE AND STATUTORY BASIS 1. This Court has jurisdiction to entertain this motion pursuant to 28 U.S.C. 157 and Venue is proper in this district pursuant to 28 U.S.C and The statutory predicates and applicable rules for the relief sought herein are sections 327(a) and 328(a) of the United States Bankruptcy Code, Rule 2014(a) of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ) and Rule of the Local Bankruptcy Rules for the District of New Hampshire (the Local Rules ). 1

2 BACKGROUND 2. On September 30, 2011 (the Petition Date ), Kingsbury and Ventura filed voluntary petitions for relief under chapter 11 of 11 U.S.C. 101 et seq. (the Bankruptcy Code ). 3. On October 3, 2011, Donson filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. Pursuant to an Order entered by this Court on October 6, 2011, the Debtors bankruptcy cases are jointly administered. 4. Kingsbury continues to operate its business, and Donson and Ventura continue to administer their estates, as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in the Debtors chapter 11 cases, and no official committee has been appointed. 5. Additional background information regarding the Debtors is set forth in the Affidavit of Iris A. Mitropoulis in Support of First Day Motions, which was filed on the Petition Date and which is incorporated by reference herein. RELIEF REQUESTED 6. Subject to the approval of this Court, the Debtors seek to employ BSSN to serve as their bankruptcy counsel in connection with the commencement and prosecution of the abovecaptioned chapter 11 cases, effective as of the commencement of the Petition Date. Accordingly, pursuant to sections 327(a) and 328(a) of the Bankruptcy Code and Bankruptcy Rule 2014(a), the Debtors request that this Court approve the employment of BSSN to perform necessary legal services on their behalf during these chapter 11 cases. 7. Because the Debtors are corporate entities, they are not permitted to represent themselves in federal court. To avoid immediate and irreparable harm, the Debtors request that 2

3 the requirements of Bankruptcy Rule 6003(a) be waived and this Application be approved nunc pro tunc to the Petition Date. BASIS FOR RELIEF 8. Under section 327(a) of the Bankruptcy Code, a debtor in possession is authorized to employ one or more attorneys that do not hold or represent an interest adverse to the estate and that are disinterested persons, as that term is defined in section 101(14) of the Bankruptcy Code, to represent or assist the debtor in carrying out its duties under the Bankruptcy Code. See 11 U.S.C. 101(14) and 327(a). Section 1107(b) of the Bankruptcy Code modifies sections 101(14) and 327(a) in cases under chapter 11 of the Bankruptcy Code, providing that a person is not disqualified for employment under section 327(a) of the Bankruptcy Code by a debtor in possession solely because of such person s employment by, or representation of, the debtor before the commencement of the case. See 11 U.S.C. 1107(b). Under section 328(a) of the Bankruptcy Code, an attorney retained under section 327(a) may, with the Court s approval, be employed on any reasonable terms and conditions, including on retainer or on an hourly basis. See 11 U.S.C. 328(a). 9. When it became clear that the Debtors would need to seek relief under the Bankruptcy Code, the Debtors selected BSSN to serve as their general bankruptcy counsel. The Debtors selected BSSN because of its recognized expertise in the field of business reorganizations under Chapter 11 of the Bankruptcy Code, as well as all areas of law that typically arise in the context of a case under Chapter 11. In particular, BSSN has substantial experience in complex cases involving the representation of debtors and debtors-in-possession under the Bankruptcy Code. Accordingly, BSSN (i) has the necessary background to deal 3

4 effectively with the potential legal issues and problems that may arise in the context of the cases, and (ii) is well-qualified to represent the Debtors in their cases in an efficient and timely manner. 10. The professional services that BSSN will render to the Debtors may include some or all of the following: (a) Advising the Debtors with respect to their powers and duties as debtors-inpossession in the continued management and operation of their businesses and property; (b) Representing the Debtors at all hearings and matters pertaining to their affairs as debtors and debtors-in-possession; (c) Attending meetings and negotiating with representatives of the Debtors creditors and other parties-in-interest, as well as responding to creditor inquiries; (d) Taking all necessary action to protect and preserve the Debtors estates; (e) Preparing on behalf of the Debtors all necessary and appropriate motions, applications, answers, orders, reports and papers necessary for the administration of Debtors estates; (f) Reviewing applications and motions filed in connection with the chapter 11 cases; (g) Negotiating and preparing on the Debtors behalf any plans of reorganization, disclosure statements, and all related agreements and/or documents, and taking any necessary action on behalf of the Debtors to obtain confirmation of such plans; (h) Advising the Debtors in connection with any potential sale or sales of assets, or in connection with any other strategic alternatives; (i) Reviewing and evaluating the Debtors executory contracts and unexpired leases, and representing the Debtors in connection with the rejection, assumption or assignment of such leases and contracts; (j) Consulting with and advising the Debtors regarding labor and employment matters; (k) Representing the Debtors in connection with any adversary proceedings or automatic stay litigation which may be commenced by or against the Debtors; 4

5 (l) Reviewing and analyzing various claims of the Debtors creditors and treatment of such claims, and preparing, filing or prosecuting any objections thereto; and (m) Performing all other necessary legal services and providing all other necessary legal advice to the Debtors in connection with the chapter 11 cases. A. BSSN Is Disinterested and Does Not Have an Adverse Interest 11. To the best of the Debtors knowledge, the shareholders and employees of BSSN do not have any connection with or any interest adverse to the Debtors, their creditors, any other party in interest, their respective attorneys and accountants, the United States Trustee, or any person employed in the office of the United States Trustee, except to the extent certain connections are set forth herein or in the Affidavit of Robert J. Keach, Esq. in Support of the Application of the Debtor for Authority to Retain Bernstein, Shur, Sawyer & Nelson, P.A. as Attorneys for the Debtors (the BSSN Statement ) filed contemporaneously herewith. Accordingly, the Debtors believe that BSSN does not hold or represent any interest adverse to the Debtors estates and is a disinterested person as that phrase is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. B. Arrangement for Compensation and Reimbursement of BSSN 12. Any pre-petition fees and costs related to the preparation for and filing of the chapter 11 cases, or that were incurred but not posted in BSSN's accounting system as of the filing of the chapter 11 cases, will be paid subject to the applicable sections of the Bankruptcy Code, the Bankruptcy Rules and this Court s Local Rules. Upon approval by the Court, such fees and costs will be paid from the Debtors operating revenues, unencumbered proceeds from the sale of assets, if any, and, failing that, out of the first-priority carve-out (the Carve-Out ) established for the benefit of the Debtors professionals by the Order (A) Approving Incurrence 5

6 of Post-Petition Debt to Diamond Business Credit, LLC in the Ordinary Course of Business; (B) Granting to Diamond Business Credit, LLC Post-Petition Security Interests; (C) Authorizing the Use of Cash Collateral; (D) Granting Adequate Protection in the Form of Replacement Liens; and (E) Setting a Final Hearing, dated October 11, 2011 (the DIP Order ). 13. The Debtors understand that BSSN intends to apply to the Court for compensation for professional services rendered and reimbursement of expenses incurred in connection with the chapter 11 cases in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, this Court s Local Rules, the United States Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. 330, and any applicable orders of the Court. 14. The Debtors, subject to approval by this Court, propose to pay BSSN its customary hourly rates for representation of debtors in reorganization cases in effect as set forth in the BSSN Statement. These hourly rates are subject to change from time to time in accordance with BSSN s established billing practices and procedures. The Debtors submit that such rates are reasonable and should be approved by the Court, subject to a determination of amounts to be paid to BSSN upon application for allowance of compensation. The Debtors, subject to Court approval, also propose to reimburse BSSN for its court-approved, actual and necessary expenses incurred in representing the Debtors. BSSN professionals will maintain detailed records of time spent and any actual and necessary expenses incurred in connection with the rendering of their services by category and nature of the services rendered. BSSN also reserves the right to seek fee enhancements or bonuses to the extent permitted under applicable law. 15. BSSN s hourly rates are set at a level designed to fairly compensate it for the 6

7 work of its attorneys and paralegals, and to cover fixed and routine overhead expenses. Hourly rates vary with the experience and seniority of the individuals assigned and may be adjusted by BSSN from time to time. It is BSSN s policy in all areas of practice to charge its clients for all other expenses incurred in connection with a client s case. The expenses charged to clients include, among other things, photocopying, witness fees, travel expenses, filing and recording fees, postage, express mail and messenger charges, computerized legal research charges and other computer services. BSSN will charge the Debtors for these expenses in a manner and at rates consistent with charges made generally to its other clients, consistent with its standard practices and consistent with applicable local and administrative rules. BSSN believes that it is more equitable to charge these expenses to individual clients who incur them, rather than increasing the hourly rates and spreading the expenses among all clients. 16. Because of the variety and complexity of the services that will be required, BSSN is unable to precisely estimate the total cost of services to be rendered in these chapter 11 cases, but BSSN expects that the total cost of services will likely exceed the Carve-Out, as established by the DIP Order. NOTICE 17. Notice of this Application was served on the following parties on the date on which it was filed by regular mail: (1) the United States Trustee; (2) the Debtors secured creditors, or, if applicable, the lawyers representing such creditors; (3) the non-insider holders of the twenty (20) largest unsecured claims against the Debtors or, if applicable, the lawyers representing such holders; and (4) applicable federal and state taxing authorities. 7

8 CONCLUSION 18. The services of BSSN are necessary to enable the Debtors to execute faithfully their duties as debtors and debtors in possession. Based upon BSSN s extensive experience and expertise in representing debtors, BSSN is both well-qualified and uniquely able to represent the Debtors as debtors and debtors in possession under the Bankruptcy Code in an efficient, costeffective and timely manner. Dated: October 13, 2011 KINGSBURY CORPORATION By its President: /s/ Iris A. Mitropoulis Iris A. Mitropoulis DONSON GROUP, LTD. By its President: /s/ Iris A. Mitropoulis Iris A. Mitropoulis VENTURA INDUSTRIES, LLC By its Manager: /s/ Iris A. Mitropoulis Iris A. Mitropoulis 8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27 UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW HAMPSHIRE In re: Kingsbury Corporation Donson Group, Ltd. Ventura Industries, LLC Debtors. Bk. No JMD Bk. No JMD Bk. No JMD Jointly Administered ORDER AUTHORIZING THE EMPLOYMENT OF BERNSTEIN, SHUR, SAWYER & NELSON, P.A. AS ATTORNEYS FOR THE DEBTORS Upon the Application for Order, Pursuant to Sections 327 and 328 of the Bankruptcy Code, Authorizing the Employment of Bernstein, Shur, Sawyer & Nelson, P.A. as Attorneys for the Debtors (the Application ), and upon the Affidavit of Robert J. Keach, Esq. in Support of the Application of for Authority to Retain Bernstein, Shur, Sawyer & Nelson, P.A. as Attorneys for the Debtors (the Affidavit ), and it satisfactorily appearing that attorney Robert J. Keach, Esq. and the firm of Bernstein, Shur, Sawyer & Nelson, P.A. ( BSSN ) are disinterested and do not represent or hold any interest adverse to the Debtors or their estates in the matters upon which BSSN is to be engaged, and that the employment will be in the best interest of the Debtors and their estates, and no objection having been raised within fourteen (14) days of the date of service of the Application, it is hereby ORDERED, ADJUDGED, and DECREED that: 1. The Application is granted. 2. The Debtors are hereby authorized to employ Robert J. Keach, Esq. and BSSN as their attorneys in all matters which require the services of such counsel on the terms set forth in the Application, nunc pro tunc to the Petition Date. 1

28 3. Service of the Application, the Affidavit and proposed order was sufficient notice to parties under the circumstances of these cases. Dated: The Honorable J. Michael Deasy United States Bankruptcy Judge 2

29

30

31

32

33