Case KG Doc 82 Filed 12/19/13 Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE. Chapter 11

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1 Case KG Doc 82 Filed 12/19/13 Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: F & H ACQUISITION CORP., et al., 1 Debtors. Chapter 11 Case No (KG) Jointly Administered Hearing Date: January 7, 2014 at 12:00 p.m. (ET) Objection Deadline: December 30, 2013 at 4:00 p.m. (ET) APPLICATION OF THE DEBTORS PURSUANT TO SECTION 327(a) OF THE BANKRUPTCY CODE FOR AUTHORIZATION TO EMPLOY AND RETAIN OLSHAN FROME WOLOSKY LLP AS ATTORNEYS FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE F & H Acquisition Corp., ( F&H or, the Debtors ), as debtors and debtors in possession, hereby move this Court (the Application ) for entry of an order, substantially in the form attached hereto as Exhibit C (the Proposed Order ), pursuant to section 327(a) of title 11 of the United States Code (the Bankruptcy Code ) authorizing the Debtors to employ Olshan Frome Wolosky LLP ( Olshan ) as their attorneys nunc pro tunc to the Petition Date (as defined below). In support of this Application, the Debtors respectfully state as follows: 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: F & H Acquisition Corp. (2666); 505 Entertainment, Ltd. (4594); Alabama Fox & Hound, Inc. (5894); Bryant Beverage Corporation (0639); Champps Entertainment, Inc. (0491); Champps Entertainment of Texas, Inc. (7242); Champps of Maryland (1010); Champps Operating Corporation (5130); Downtown Beverage Corp. (3943); F & H of Iowa, Inc. (2434); F & H of Kennesaw, Inc. (5997); F & H Restaurant Corp. (8349); F & H Restaurant of Georgia, Inc. (2200); F & H Restaurant of Texas, Inc. (9871); Fox & Hound of Arizona, Inc. (3585); Fox & Hound of Colorado, Inc. (7166); Fox & Hound of Illinois, Inc. (3003); Fox & Hound of Indiana, Inc. (5676); Fox & Hound of Kansas, Inc. (7699); Fox & Hound of Kentucky, Inc. (0777); Fox & Hound of Littleton, Inc. (2894); Fox & Hound of Louisiana, Inc. (0477); Fox & Hound of Maryland, Inc. (7608); Fox & Hound of Nebraska, Inc. (5786); Fox & Hound of New Jersey, Inc. (0951); Fox & Hound of New Mexico, Inc. (5620); Fox & Hound of Ohio, Inc. (3963); Fox & Hound of Oklahoma, Inc. (2928); Fox & Hound of Texas, Inc. (0979); Fox & Hound Restaurant Group (6614); Fox & Hound, Inc. (9035); Fox & Hound II, Inc. (9540); Fuqua Beverage Corp. (4906); Jackson Beverage Corporation (3948); N. Collins Entertainment, Ltd. (4596); Raider Beverage Corporation (4993); Rocket Beverage Corporation (9829); Shenandoah Beverage Corporation (8087); Tent Finance, Inc. (5335); Tent Restaurant Operations, Inc. (5556); Willowbrook Beverage Corp. (1601); Winston-Salem Fox & Hound, Inc. (8319). The location of the Debtors corporate headquarters and the Debtors service address is: 1551 N. Waterfront Pkwy, Suite 310, Wichita, KS

2 Case KG Doc 82 Filed 12/19/13 Page 2 of 8 Background 1. On December 15, 2013 (the Petition Date ), each of the Debtors filed a petition with the Court under chapter 11 of the Bankruptcy Code in order to permit them to restructure their balance sheets and operations to restore profitability. The Debtors are operating their businesses and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request for the appointment of a trustee or examiner has been made in these chapter 11 cases, and no committees have been appointed or designated. 2. Additional information about the Debtors businesses and the events leading up to the Petition Date can be found in the Declaration of James Zielke in Support of Debtors Chapter 11 Petitions and First Day Motions [Docket No. 2], which is incorporated herein by reference. Jurisdiction and Venue 3. This Court has jurisdiction to consider this matter 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, 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 and The statutory predicates for the relief requested herein is section 327(a) of title 11 of the Bankruptcy Code, Rule 2014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rule of the Local Bankruptcy Rules for the District of Delaware (the Local Rules ). Relief Requested 5. By this Application, the Debtors seek approval to employ and retain Olshan as their attorneys in connection with the commencement and prosecution of their chapter 11 cases, nunc pro tunc to the Petition Date. Pursuant to section 327(a) of the Bankruptcy Code, Bankruptcy Rule 2014, and Local Rule , the Debtors request that the Court enter the 2

3 Case KG Doc 82 Filed 12/19/13 Page 3 of 8 Proposed Order authorizing the retention of Olshan, under a general retainer, as their attorneys, to perform the extensive legal services that will be necessary during their chapter 11 cases in accordance with Olshan s normal hourly rates, in effect when services are rendered and Olshan s normal reimbursement policies. In support of this Application, the Declaration of Steve Wolosky, a member of Olshan (the Wolosky Declaration ), is attached hereto as Exhibit A, and the engagement letter between Olshan and the Debtors, dated November 13, 2013 (the Engagement Letter ), is attached hereto as Exhibit B. Basis for Relief 6. The Debtors have been informed that the attorneys at Olshan who will be employed in these chapter 11 cases, are members in good standing of the Bar of the State of New York. Each attorney who Olshan intends to appear before the Court in these cases have previously appeared on a pro hac vice basis before this Court. Olshan will seek applications to appear pro hac vice for the Debtors for these attorneys. Without duplication of services, Olshan will work closely with proposed Delaware counsel, Young Conaway Stargatt & Taylor, LLP ( Young Conaway ). The Debtors are seeking to retain Young Conaway contemporaneously with this Application. 7. The Debtors have selected Olshan as their attorneys because of Olshan s knowledge of the Debtors business and financial affairs, their capital structure, and potential legal issues which may arise in the context of these chapter 11 cases, as well as Olshan s extensive general experience and knowledge in the field of debtors and creditors rights and business reorganizations under chapter 11 of the Bankruptcy Code. Olshan has served as the Debtors corporate counsel since Prior to the Petition Date, Olshan also provided restructuring advice and assisted the Debtors in preparing for the bankruptcy filings. 3

4 Case KG Doc 82 Filed 12/19/13 Page 4 of 8 8. By reason of the foregoing, the Debtors believe that Olshan is both well qualified and uniquely able to represent the Debtors in their chapter 11 cases in an efficient and timely manner. As such, Olshan should be retained as counsel to the Debtors. 9. In addition to this Application, the Debtors may also file applications to employ additional professionals, including the aforementioned Delaware counsel. Olshan has advised the Debtors that it intends to monitor carefully any other professionals retained by the Debtors in these chapter 11 cases and, if retained, will clearly delineate their respective duties so as to prevent duplication of effort, whenever possible. Scope of Services 10. The employment of Olshan under a general retainer and in accordance with its normal hourly rates and disbursement policies in effect from time to time is appropriate and necessary to enable the Debtors to execute faithfully their duties as debtors and debtors in possession and to prosecute their chapter 11 cases. Subject to further order of this Court, it is proposed that Olshan be employed to render the following professional services: a. advising the Debtors of their rights, powers and duties as debtors and debtors in possession continuing to operate and to manage their business under chapter 11 of the Bankruptcy Code; b. preparing on behalf of the Debtors all necessary and appropriate applications, motions, draft orders, other pleadings, notices, schedules and other documents, and reviewing all financial and other reports to be filed in these chapter 11 cases; c. advising the Debtors, concerning, and preparing responses to, applications, motions, other pleadings, notices and other papers that may be filed by other parties in these chapter 11 cases; d. advising the Debtors with respect to, and assisting in the negotiation and documentation of, financing agreements and related transactions; e. reviewing the nature and validity of any liens asserted against the Debtors property and advising the Debtors concerning the enforceability of such liens; 4

5 Case KG Doc 82 Filed 12/19/13 Page 5 of 8 f. advising the Debtors regarding its ability to initiate actions to collect and recover property for the benefit of their estates; g. advising and assisting the Debtors in connection with any commercial transactions; h. advising and assisting the Debtors in negotiations or communications with the Debtors customers, equity holders and other stakeholders, and government regulatory bodies; i. advising the Debtors concerning executory contract assumptions, assignments and rejections; j. advising the Debtors in connection with the formulation, negotiation and effectuation of a chapter 11 sale process; k. advising the Debtors in connection with the formulation, negotiation and promulgation of a chapter 11 plan or plans, and related transactional documents; l. assisting the Debtors in reviewing, estimating and resolving claims asserted against the Debtors estates; m. commencing and conducting litigation necessary and appropriate to assert rights held by the Debtors, protect assets of the Debtors chapter 11 estates or otherwise further the goal of completing the Debtors successful chapter 11 process, and to defend against any litigation brought against the Debtors; and n. performing all other necessary and appropriate legal services in connection with these chapter 11 cases for or on behalf of the Debtors. 11. Subject to Court approval in accordance with section 330(a) of the Bankruptcy Code, compensation will be payable to Olshan on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by Olshan, as discussed below and in the Wolosky Declaration. Olshan s Disinterestedness 12. Olshan has stated its desire and willingness to act in these chapter 11 cases and render the necessary professional services as attorneys for the Debtors. To the best of the Debtors knowledge, the members of, counsel, and associates of Olshan do not have any connection with or any interest adverse to the Debtors, their creditors, or any other party in 5

6 Case KG Doc 82 Filed 12/19/13 Page 6 of 8 interest, or their respective attorneys and accountants, except as set forth in the Wolosky Declaration. 13. Based upon the Wolosky Declaration, the Debtors submit that Olshan is a disinterested person, as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code and Olshan s employment is necessary and in the best interests of the Debtors and their estates. The Debtors have been informed that Olshan will conduct an ongoing review of its files to ensure that no disqualifying circumstances arise, and if any new relevant facts or relationships are discovered, Olshan will supplement its disclosure to the Court. The current disclosures by Olshan are set forth in the Wolosky Declaration, attached hereto. As also set forth in the Wolosky Declaration, in the event that any issue or claim arises between the Debtors and its Equity Sponsors (as defined in the Wolosky Declaration), the Debtors understand that Young Conaway will represent the Debtors therein. Compensation Paid by Debtors to Olshan 14. During 2013, Olshan has been providing restructuring and other advice to the Debtors and assisted the Debtors in the preparation of their chapter 11 filings. On account of such services, as of the Petition Date, Olshan has received approximately $511, from the Debtors on account of services rendered with regard to the Debtors restructuring. In addition, pursuant to the Engagement Letter, on December 3, 2013, the Debtors paid Olshan $175,000 as a chapter 11 retainer. 2 After applying a portion of the retainer to the outstanding balance as of the Petition Date, including fees and expenses associated with the filing of these cases, Olshan continues to hold a retainer in the amount of $59, as security for post-petition services and expenses in connection with these cases. 2 The total amount paid of $511, is inclusive of $115, drawn from this retainer amount. 6

7 Case KG Doc 82 Filed 12/19/13 Page 7 of The Debtors understand that Olshan hereafter intends to apply to the Court for allowances of compensation and reimbursement of expenses in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and further Orders of this Court for all services performed and expenses incurred after the Petition Date. 16. For services rendered by Olshan in these cases, the Debtors, subject to the provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and further Orders of this Court, propose to pay Olshan its customary hourly rates for services rendered that are in effect from time to time, set forth in the Wolosky Declaration, and to reimburse Olshan according to its customary reimbursement policies. 17. Olshan s hourly rates are set at a level designed to compensate Olshan fairly for the work of its attorneys and paralegals and to cover fixed and routine over head expenses. Hourly rates vary with the experience and seniority of the individuals assigned. These hourly rates are subject to periodic adjustments to reflect economic and other conditions and are consistent with the rates charged elsewhere. In particular, Olshan s current hourly rates before for matters related to these chapter 11 cases range as follows: Partners: $ Of Counsel: $ Associates: $ Paraprofessionals: $ The following professionals presently are expected to have primary responsibility for providing services to the Debtors: Steve Wolosky ($740); Adam H. Friedman ($630); Jordanna L. Nadritch ($550); Fredrick J. Levy ($520); Jonathan H. Deblinger ($495); and 7

8 Case KG Doc 82 Filed 12/19/13 Page 8 of 8 Jonathan T. Koevary ($490). In addition, as necessary, other Olshan professionals and paraprofessionals will provide services to the Debtors. reasonable. 19. The Debtors respectfully submit that Olshan s rates and policies are more than Notice 20. Notice of this Application has been provided to the following parties: (i) the Office of the United States Trustee for the District of Delaware; (ii) counsel to the agent for the Debtors prepetition first lien lenders; (iii) counsel to the agent for the Debtors prepetition second lien lenders; (iv) those creditors holding the thirty-five (35) largest unsecured claims against the Debtors estates (on a consolidated basis); and (v) all parties that, as of the filing of this Application, have requested notice in these chapter 11 cases pursuant to Bankruptcy Rule The Debtors submit that, in light of the nature of the relief requested herein, no other or further notice need be given. No Prior Request 21. The Debtors have not previously sought the relief requested herein from this or any other Court. Conclusion WHEREFORE, the Debtors request entry of the Proposed Order, granting the relief requested herein and such other and further relief as is just and proper. Dated: December 19, 2013 /s/ James K. Zielke James Zielke Chief Financial Officer and President F & H Acquisition Corp. 8