Document Page 1 of 8 UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS EASTERN DIVISION ) In re: ) ) Chapter 11 TRANS NATIONAL COMMUNICATIONS ) INTERNATIONAL, INC., ) ) Case No. 11-19595-WCH Debtor. ) ) THIRD INTERIM AND FINAL FEE APPLICATION OF MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. FOR ALLOWANCE AND PAYMENT OF COMPENSATION AND REIMBURSEMENT OF EXPENSES AS SPECIAL TELECOMMUNICATIONS COUNSEL TO THE DEBTOR The law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. ( Mintz Levin or Counsel ) hereby applies (the Application ), pursuant to 11 U.S.C. 330, Fed. R. Bankr. P. 2016 and MLBR 2016-1, for interim and final allowance and payment of the unpaid balance of compensation for legal services rendered as special telecommunications counsel to the debtor and debtor-in-possession in the above-captioned case. This Application seeks interim and final approval of fees and expenses incurred by Counsel during the Third Application Period (as defined herein) and final approval of previously awarded interim fees and expenses. Specifically, Counsel seeks final approval of the sum of the following: (i) $326,120.33 1 representing the fees and expenses that were incurred between October 9, 2011 and February 29, 2012 (the First Application Period ) and allowed on an interim basis pursuant to this Court s Order of May 5, 2012 [Docket No. 588] (the First Application Order ), of which all amounts except for a portion of the 10% holdback amount 1 The Courtesy Discount referenced below has been deducted from the amount requested in the First Application Period. The $2,362.50 in fees erroneously charged to the Debtor during the First Application Period and noted below has not been deducted from this amount. The deduction is reflected in the final allowance of fees requested.
Document Page 2 of 8 have been paid; (ii) $60,180.99 representing the fees and expenses that were incurred between March 1, 2012 and June 30, 2012 (the Second Application Period ) and allowed on an interim basis pursuant to this Court s Order of September 18, 2012 [Docket No. 783] (the Second Application Order ), of which no fees or expenses have been paid as of yet; and (iii) $14,886.55 representing $14,748.00 in fees and $138.55 in expenses that were incurred between July 1, 2012 and December 14, 2012 (the Third Application Period ), of which no fees or expenses have been paid as of yet. The total amount of (i) through (iii) above for which approval is sought by this Application is $398,825.37 in payment for the services rendered and reimbursement of expenses incurred by Mintz Levin as special counsel to the Debtor for the compensation period from October 9, 2011 through December 14, 2012, of which $384,785.46 is for fees, and $14,039.91 is for expenses. 2/ Mintz Levin also seeks permission to apply the retainer it holds, in the amount of $100,000 (the Retainer ), to offset the currently outstanding amounts $92,532.21. In support of this Application, Mintz Levin respectfully states as follows: 1. This is a core proceeding. The Court has jurisdiction to enter a final order on this Application pursuant to 28 U.S.C. 1408 and 1409. 2. On October 9, 2011 (the Petition Date ), Trans National Communications International, Inc. ( TNCI or the Debtor ) commenced its bankruptcy case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code. 3. Founded in 1995, the Debtor is a telecommunications reseller, which provides local and long distance services as well as data communication services (primarily viewed as 2/ During the preparation of Counsel s First Fee Application, Counsel discovered that certain fees, in the amount of $2,362.50, were erroneously charged to the Debtor, as disclosed in that fee application. Therefore, this amount is deducted from the total amount originally invoiced. 2
Document Page 3 of 8 telephone and internet services) to small and medium sized businesses throughout the United States. Prior to the Petition Date, counsel represented the Debtor s parent, Trans National Group Services, in corporate and tax matters. 4. As of the Petition date, Mintz Levin held a retainer in the amount of $100,000 as security for allowed fees and expenses in connection with its representation of the Debtor in this Chapter 11 case (the Retainer ). Mintz Levin is holding the Retainer in a segregated account. 5. On October 20, 2011, the Office of the United States Trustee appointed an official committee of unsecured creditors. 6. On December 7, 2011, this Court entered an Order authorizing the Debtor to employ Mintz Levin as its legal counsel. Copies of the Debtor s application to employ Mintz Levin and the Order allowing the Debtor s application to employ Mintz Levin are attached hereto as Exhibit A. 7. On or about April 20, 2012, Kemal Hawa, Esq., the responsible attorney providing legal services to the Debtor with regards to telecommunications issues, joined the law firm of Greenberg Traurig LLP ( Greenberg ) and ceased his association with Mintz Levin. Consequently, the Debtor moved to replace Mintz Levin with Greenberg as special communications counsel. 8. As a result of the termination of Counsel s representation, during the Third Application Period, Counsel s fees were primarily related to the preparation of invoices and fee applications. Consequently, and in consultation with the Debtor s bankruptcy counsel, Counsel determined that it would be in the best interest of the Debtor s estate to file this Application as a final fee application, thus negating the need for any invoicing or fee application work and billing going forward. 3
Document Page 4 of 8 9. As noted, the Application is the third and final application. Exhibit B hereto is meant to provide a synopsis of the major tasks and issues addressed by Counsel throughout the three interim periods of the case. Through this summary, Counsel has attempted to provide a broad overview of the relevant proceedings and the manner by which Counsel undertook its special representation of the Debtor. Because this Application is a final application, the individual narratives include not only a description of the services rendered during the Third Application Period but also the services rendered during the First and Second Application Periods. 10. Throughout this case, Counsel has endeavored to staff its legal services for the Debtor in an efficient manner. To the extent possible, partners and/or other experienced attorneys, at rates lower than the senior attorneys for Mintz Levin on the matter, have provided services to the Debtor. At all times, Mintz Levin endeavored to use the most efficient means of accomplishing a given task or service, taking into account the experience and billing rate of the person to be employed for that project. 11. The nature of the services rendered by Counsel to the Debtor and the time incurred with respect to those services have been divided into three (3) separate categories based upon subject matter and are summarized in the narrative of services as required by MLBR 2016-1(a)(1)(G). Through this summary, Counsel has attempted to provide a broad overview of the proceedings and the manner by which Counsel undertook its representation of the Debtor. 12. Attached hereto as Exhibit C is a summary chart in conformance with MLBR 2016-1(a)(2), setting forth the names and initials of all attorneys and paraprofessionals who performed services for which compensation is requested in this Application, the hourly rates charged by each person, the total hours and the total amount of fees by each person. 4
Document Page 5 of 8 13. Attached hereto as Exhibit D are the invoices reflecting the time billed by Counsel throughout the Third Application Period. The invoices contain a detailed description of the work performed by Counsel on behalf of the Debtor during such period. 14. A description of the professional background of each lawyer who rendered significant services in Mintz Levin s representation of the Debtor is attached hereto as Exhibit E as required by MLBR 2016-1(a)(1)(I). For purposes of this Application, the term significant services means a lawyer or paraprofessional who billed in excess of 10 hours of billable time on the Debtor s matters. 15. During the course of rendering legal services to the Debtor, Mintz Levin disbursed funds and incurred expenses. A summary of these disbursements and expenses is attached hereto as Exhibit F. All such expenses either represented the actual cost incurred by Mintz Levin for such expenses or are charged at the rate no greater than that authorized by MLBR 2016-1(a)(2)(F). All disbursements were actual and necessary costs of representing the Debtor. All expenses for which reimbursement is sought are customarily charged to nonbankruptcy clients of Mintz Levin. 16. Counsel seeks allowance of the fees and expenses set forth above incurred during the Third Application Period on an interim and final basis pursuant to Bankruptcy Code Section 331. Further, Counsel seeks final allowance of the fees and expenses incurred during the First and Second Application Periods. Counsel believes that the fees and expenses requested herein are reasonable and were necessary for the administration of this estate. 17. Mintz Levin respectfully submits that the amounts applied for herein for legal services rendered in these proceedings are fair and reasonable. Section 330(a)(3) of the Bankruptcy Code sets forth a list of five nonexclusive factors to consider in determining the amount of reasonable compensation to be awarded, including (1) the time spent on such services, 5
Document Page 6 of 8 (2) the rates charged for such services, (3) whether the services were necessary to the administration of the estate or beneficial at the time they were rendered, (4) whether the services were performed in a reasonable amount of time commensurate with the complexity, importance and nature of the problem, issue or task, and (5) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in non-bankruptcy cases. 11 U.S.C. 330(a)(3). 18. As illustrated in the narratives attached as Exhibit B, Counsel submits that each of these factors has been satisfied. Counsel s time was spent on matters of critical importance to this case, primarily pursuing litigation against Qwest. 19. Counsel does not have any agreements or understandings with any other entities for the sharing of compensation to be received for services rendered in or in connection with this case except among the members and associates of Mintz Levin. All of Counsel s allowed fees and expenses are to be paid by the Debtor. 20. On November 16, 2011, the Court entered an order (the Interim Compensation Order ) granting the Debtor s Motion to Establish Procedures for Interim Compensation, which outlines the procedures by which professionals employed in these proceedings may receive interim payment for legal services rendered and expenses incurred. Since the inception of its representation of the Debtor, Mintz Levin submitted its invoices for legal fees and expenses, which absent objection were to be paid at the rate of 90% of legal fees and 100% of expenses. However, none of Counsel s invoices have been paid since the beginning of the Second Interim Period. To date, Counsel has submitted monthly invoices to the Debtor, but has not been fully paid by the Debtor pursuant to these invoices, as detailed in the following chart: 6
Document Page 7 of 8 Month Fees Expenses Amount Paid 10% Fee Holdback 10% Courtesy Discount Amount still owed October 94,633.00 5,259.97 90,729.67 9,463.30 8,516.97 646.33 November 69,897.00 1,957.96 64,404.01 6,989.70 6,290.73 1,160.22 December 56,409.50 1,461.86 47,153.56 5,640.95 5,076.86 5,640.95 January 54,752.50 1,218.78 45,568.31 5,475.25 4,927.73 5,475.25 February 70,190.50 1,583.30 58,437.61 7,019.05 6,317.14 7,019.05 March 35,496.00 2,045.91 0.00 3,549.60 0.00 37,541.91 April 20,608.00 324.03 0.00 2,060.80 0.00 20,932.03 May 1,657.50 49.55 0.00 165.75 0.00 1,707.05 June 0.00 0.00 0.00 0.00 0.00 0.00 July 2,506.00 11.25 0.00 250.60 0.00 2,517.25 August 2,435.00 13.35 0.00 243.50 0.00 2,448.35 September 2,398.00 1.20 0.00 239.80 0.00 2,399.20 October 1,057.00 112.00 0.00 105.70 0.00 1,169.00 November 1,193.50 0.75 0.00 119.35 0.00 1,194.25 December 5,158.50 0.00 0.00 0.00 0.00 5,158.50 (up to and including 12/14/2013) 3/ Totals $418,392.00 $14,039.91 $306,293.16 $40,262.41 $31,244.04 $92,532.21 4 3/ This amount has not yet been invoiced, but represents work on this Third and Final Fee Application up to and including the day of its filing. 4/ As mentioned above, during the preparation of Counsel s First Fee Application, Counsel discovered that certain fees, in the amount of $2,362.50, were erroneously charged to the Debtor. Therefore, this amount is deducted from the total amount originally invoiced. 7
Document Page 8 of 8 By this Application, Counsel seeks final allowance of $398,825.37 in fees and expenses, of which $306,293.16 has already been paid by the Debtor, and payment of $92,532.21, in fees and expenses held back or otherwise not yet paid. Further, Counsel seeks permission to apply the Retainer to offset the unpaid amount. WHEREFORE, Mintz Levin respectfully requests that this Court (i) grant final allowance of all fees and expenses incurred by Counsel during the First Application Period and Second Application Period in the amount of $383,938.82, representing fees of $370,037.46 and expenses of $13,901.36; (ii) grant interim and final allowance of all fees and expenses incurred by Counsel during the Third Application Period in the amount of $14,886.55, representing fees of $14,748.00 and expenses of $138.55; (iii) authorize Counsel to apply the Retainer, in the amount of $100,000, to the outstanding balance of $92,532.21; and (iv) grant such other and further relief as the Court deems appropriate in the circumstances. December 14, 2012 Respectfully submitted, /s/ Ella Shenhav Richard E. Mikels, Esq. (BBO #345620) Ella Shenhav, Esq. (BBO #675320) MINTZ, LEVIN, COHN, FERRIS, GLOVSKY AND POPEO, P.C. One Financial Center Boston, Massachusetts 02111 Tel: 617-542-6000 Fax: 617-542-2241 Email: rmikels@mintz.com E-mail: eshenhav@mintz.com 7432777v.3 8