13 - Garden City Group

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------- x
:
:
In re:
: Chapter 11 Case No.
:
: 09-10244 (___)
STAR TRIBUNE HOLDINGS
:
CORPORATION, et al.,
: (Jointly Administered)
:
1
Debtors.
:
----------------------------------- x
APPLICATION FOR ORDER AUTHORIZING THE RETENTION
OF GARDEN CITY GROUP, INC. AS NOTICE AGENT
AND CLAIMS AGENT FOR THE DEBTORS
Star Tribune Holdings Corporation (“Star Tribune Holdings”) and The Star
Tribune Company (“Star Tribune” and, together with Star Tribune Holdings, the
“Debtors”) respectfully represent:
Background and Jurisdiction
1.
On the date hereof (the “Petition Date”), each Debtor commenced with
this Court a voluntary case under chapter 11 of title 11 of the United States Code (the
“Bankruptcy Code”). The Debtors are authorized to operate their businesses and
manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of
the Bankruptcy Code. The Debtors have filed a motion seeking joint administration of
these chapter 11 cases pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy
Procedure (the “Bankruptcy Rules”).
1
The Debtors are Star Tribune Holdings Corporation and The Star Tribune Company. The
employer tax identification numbers and addresses for each of the Debtors are set forth in the Debtors’
chapter 11 petitions.
2.
Additional information about the Debtors’ businesses and the events
leading up to the Petition Date can be found in the Affidavit of David W. Montgomery,
Chief Financial Officer of Star Tribune, which is incorporated herein by reference.
3.
The Court has subject matter jurisdiction to consider this matter pursuant
to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b) and may
be determined by the Bankruptcy Court. Venue is proper before this Court pursuant to 28
U.S.C. §§ 1408 and 1409.
Relief Requested
4.
By this application (the “Application”), the Debtors seek an order in the
form attached hereto as Exhibit A, pursuant to 28 U.S.C. § 156(c), the Protocol for the
Employment of Claims Agents dated May 8, 2006 (Farrell-Willoughby, Clerk of the
Court) and Local Bankruptcy Rule 5075-1(a), approving the retention of Garden City
Group, Inc. (“GCG”) as noticing agent in the Debtors’ chapter 11 cases. The Debtors
request that the Court approve the retention of GCG in accordance with the terms and
conditions set forth in that certain engagement letter, dated January 9, 2009 (the “Agent
Agreement”), a copy of which is annexed hereto as Exhibit B.
5.
Section 156(c) of title 28, United States Code, which governs the staffing
and expenses of the Bankruptcy Court, authorizes the Court to use facilities other than
those of the Clerk’s Office for the administration of bankruptcy cases. It provides:
Any court may utilize facilities or services, either on or off
the court’s premises, which pertain to the provision of
notices, dockets, calendars, and other administrative
information to parties in cases filed under the provisions of
title 11, United States Code, where the costs of such
facilities or services are paid for out of the assets of the
estate and are not charged to the United States.
2
28 U.S.C. § 156(c).
6.
The numerous creditors and other parties in interest involved in the
Debtors’ chapter 11 cases may impose heavy administrative and other burdens on the
Court and the Office of the Clerk of the Court (the “Clerk’s Office”). To relieve the
Clerk’s Office of these burdens, the Debtors propose to engage GCG as their noticing
agent in these chapter 11 cases. GCG was chosen by the Debtors after the review and
competitive comparison of proposals from three entities eligible to serve as noticing
agents in the Southern District of New York.
7.
GCG is one of the country’s leading chapter 11 administrators,
specializing in providing consulting and data processing services to chapter 11 debtors in
connection with, among other services, claims administration, reconciliation and
negotiations and administration of plan votes. GCG has substantial experience in the
matters upon which it is to be engaged. GCG has acted or is acting as official noticing
agent in recent notable cases, including: In re Lenox Sales, Inc., et al., Case No. 0814679, In re OTC International, Ltd., Case No. 08-11181 (AJG), In re Alper Holdings
USA, Inc., Case No. 07-12148 (BRL), In re Our Lady of Mercy Medical Center, Case No.
07-10609 (REG), In re The New York Racing Association Inc., Case No. 06-12618
(JMP), In re The Akadine Press, Inc., Case No. 06-22002 (ASH), In re Saltire Industrial,
Inc., Case No. 04-15389 (BRL), In re Sure Fit, Inc., Case No. 04-11495 (BRL), In re
General Media, Inc., Case No. 03-15078 (SMB), In re MGNH, Inc., Case No. 04-37133
(CGM), In re Dice Inc., Case No. 03-10877 (BRL), In re Interbank Funding Corp., Case
No. 02-41590 (BRL), In re Galey & Lord, Inc. et al., Case No. 02-40445 (ALG), In re
PSINet Consulting Solutions Holdings, Inc., Case No. 01-14916 (REG), In re NTL Inc.,
3
Case No. 02-41316 (ALG) and In re Regus Business Centre Corp., Case No. 03-20026
(ASH), which were filed in the Southern District of New York; In re Zurich Depository
Corp., Case No. 07-71352 (JBR), In re Copperfield Investment, LLC, Case No. 07-71327
(JBR), In re The Brunswick Hospital Center, Inc., Case No. 07-40290 (CEC), In re
Photocircuits Corporation, Case No. 05-89022 (SB), In re MetroTec Communications,
Inc., et al., Case No. 05-20953 (DEM), In re Allou Distributors Inc., et al., Case No.0382321 (ESS) and In re CyberRebate.com, Inc., Case No. 01-16534 (CEC), which were
filed in the Eastern District of New York; In re Printers Row, LLC, Case No. 08-17301
(ERW), In re Automotive Professionals, Inc., Case No. 07-06720 (CAD) and In re
Gateway Home Care Inc., et al., Case No. 03-17457 (JPC), which were filed in the
Northern District of Illinois; In re Jancor Companies Inc., et al., Case No. 08-12556
(MFW), In re Comfort Co., Inc., Case No. 08-12305 (MFW), In re DG Liquidation Corp.,
Case No. 08-10601 (CSS), In re Supplements LT Inc., Case No. 08-10446 (KJC), In re
ProRhythm, Inc., Case No. 07-11861 (KJC), In re S-Tran Holdings, Inc., et al., Case No.
05-11391 (RB), In re Flintkote Company, Case No. 04-11300 (JKF), In re Factory 2-U
Stores, Inc., Case No. 04-10111 (PJW), In re Magnatrax Corporation, Case No. 03-11402
(PJW), In re HQ Global Holdings, Inc., et al., Case No. 02-10760 (MFW), In re FederalMogul Global, Inc., Case No. 01-10578 (AMW) and In re ACandS, Inc., Case No. 0212687 (RJN), which were filed in the District of Delaware; In re Foxtons, Inc., et al., Case
No. 07-24496 (MBK), In re NJ Affordable Homes Corp., Case No. 05-60442 (DHS), In re
Omne Staffing Inc., et al., Case No. 04-22316 (RG), In re NorVergence, Inc., Case No.
04-32079 (RG), In re Muralo Company, Inc., Case No. 03-26723 (MS) and In re
AremisSoft, Case No. 02-32621 (RG), which were filed in the District of New Jersey; In
4
re O’Sullivan Industries, Inc., et al., Case No. 05-83049 (CRM) and In re Galey & Lord,
Inc., et al., Case No. 04-43098 (MGC), which were filed in the Northern District of
Georgia; In re United Producers, Inc., Case No. 05-55272 (CMC), which was filed in the
Southern District of Ohio; In re Boyds Collection, Ltd., et al., Case No. 05-43793 (DWK),
which was filed in the District of Maryland; In re Romacorp, Inc., Case No. 05-86818
(BJH), which was filed in the Northern District of Texas; and In re Hawaiian Airlines, Inc.,
Case No. 03-00817 (RJF), which was filed in the District of Hawaii.
8.
By appointing GCG as the noticing agent in these chapter 11 cases, the
Debtors’ estates and particularly creditors will benefit from GCG’s significant experience
in acting as a noticing agent in other cases and the efficient and cost-effective methods
that GCG has developed.
9.
GCG is fully equipped to handle the volume involved in properly sending
the required notices to and processing the claims of creditors and other interested parties
in these cases. GCG will follow notice and claim procedures that conform to the
guidelines promulgated by the Clerk of the Bankruptcy Court and the Judicial
Conference.
Scope of Services
10.
GCG, at the request of the Debtors or the Clerk’s Office, will provide the
following services as the noticing agent:
(a)
Prepare and serve required notices in these chapter 11 cases,
including:
5
(i)
Notice of the commencement of these chapter 11 cases and
the initial meeting of creditors under section 341(a) of the Bankruptcy
Code;
(ii)
Notice of the claims bar date;
(iii)
Notice of objections to claims;
(iv)
Notice of any hearings on a disclosure statement and
confirmation of a plan of reorganization; and
(v)
Other miscellaneous notices to any entities, as the Debtors
or the Court may deem necessary or appropriate for an orderly
administration of these chapter 11 cases;
(b)
After the service of a particular notice, file with the Clerk’s Office
a certificate or affidavit of service that includes a copy of the notice involved, an
alphabetical list of persons on whom the notice was served and the date and
manner of service;
(c)
Maintain copies of all proofs of claim and proofs of interest filed;
(d)
Maintain official claims registers, including, among other things,
the following information for each proof of claim or proof of interest:
(i)
the applicable Debtor;
(ii)
the name and address of the claimant and any agent thereof,
if the proof of claim or proof of interest was filed by an agent;
(iii)
the date received;
(iv)
the claim number assigned; and
(v)
the asserted amount and classification of the claim;
6
(e)
Implement necessary security measures to ensure the completeness
and integrity of the claims registers;
(f)
Transmit to the Clerk’s Office a copy of the claims registers on a
weekly basis, unless requested by the Clerk’s Office on a more or less frequent
basis;
(g)
Maintain an up-to-date mailing list (based on addresses provided
by filers) for all entities that have filed a proof of claim or proof of interest, which
list shall be available upon request of a party in interest or the Clerk’s Office;
(h)
Provide access to the public for examination of copies of the
proofs of claim or interest without charge during regular business hours;
(i)
Record all transfers of claims pursuant to Bankruptcy Rule 3001(e)
and provide notice of such transfers as required by Bankruptcy Rule 3001(e);
(j)
Comply with applicable federal, state, municipal and local statutes,
ordinances, rules, regulations, orders and other requirements;
(k)
Provide temporary employees to process claims, as necessary;
(l)
30 days prior to the close of these cases, an order dismissing GCG
shall be submitted terminating the services of GCG upon completion of its
services and upon the closing of these cases;
(m)
At the close of the case, box and transport all original documents
in proper format, as specified by the Clerk’s Office, to the Federal Records
Center; and
(n)
Promptly comply with such further conditions and requirements as
the Clerk’s Office or the Court may at any time prescribe.
7
11.
In connection with its appointment as noticing agent, GCG represents,
among other things, that:
(a)
GCG will not consider itself employed by the United States
government and shall not seek any compensation from the United States
government in its capacity as the noticing agent in these chapter 11 cases;
(b)
By accepting employment in these chapter 11 cases, GCG waives
any rights to receive compensation from the United States government;
(c)
In its capacity as the noticing agent in these chapter 11 cases, GCG
will not be an agent of the United States and will not act on behalf of the United
States; and
(d)
GCG will not employ any past or present employees of the Debtors
in connection with its work as the noticing agent in these chapter 11 cases.
12.
In addition to the foregoing, the Debtors seek to employ GCG to assist
them with, among other things, certain data processing and ministerial administrative
functions, including: (a) preparing their schedules, statement of financial affairs and
master creditor list, and any amendments thereto; (b) if necessary, reconciling and
resolving claims; and (c) acting as solicitation and disbursing agent in connection with
the chapter 11 plan process.
13.
In the event that GCG’s services are terminated, GCG shall perform its
duties until the occurrence of a complete transition with the Clerk’s Office or any
successor claims or noticing agent.
8
Compensation
14.
GCG’s compensation is set forth in the Agent Agreement annexed hereto
as Exhibit B. The Debtors respectfully submit that the compensation to be paid to GCG,
as set forth in the Agent Agreement, is reasonable in light of the services to be performed.
Furthermore, the Debtors request authorization to compensate GCG for services
rendered, without further order of this Court, upon the submission of monthly invoices by
GCG summarizing, in reasonable detail, the services for which compensation is sought.
GCG’s Disinterestedness
15.
To the best of the Debtors’ knowledge, GCG (a) 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, as required by section 327(a) and
referenced by section 328(c) of the Bankruptcy Code, neither holds nor represents any
interest adverse to the Debtors and their estates and (b) except as disclosed in the
Declaration of Jeffrey S. Stein, GCG’s Vice President Business Reorganizations, annexed
hereto as Exhibit C (the “Stein Declaration”), has no connection to the Debtors or to
their significant creditors or certain other potential parties-in-interest whose names were
supplied to GCG by the Debtors.
16.
GCG has represented to the Debtors that it will not represent any entities
or individuals in these chapter 11 cases other than the Debtors or in connection with any
matters that would be adverse to the interests of the Debtors.
17.
As set forth in the Stein Declaration, there are no amounts owed by the
Debtors to GCG.
9
18.
The Debtors have been informed that GCG 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, GCG will supplement its disclosure to the
Court.
19.
The Debtors are advised that other than with its own partners and
employees, GCG has agreed not to share with any person or firm the compensation it will
receive for professional services rendered in connection with these cases.
Interim Order
20.
The Debtors seek approval of the Application on an interim basis to
provide parties an opportunity to object to the relief requested herein. A copy of the
interim order as entered (the “Interim Order”) and the Application shall be served by
hand delivery or deposit with an overnight delivery service within three business days
after entry of the Interim Order upon the (a) the Office of the United States Trustee for
the Southern District of New York, (b) those creditors holding the five largest secured
claims against the Debtors’ estates on a consolidated basis, (c) those creditors holding the
30 largest unsecured claims against the Debtors’ estates on a consolidated basis, (d) the
Internal Revenue Service, (e) attorneys to the agent for the Debtors’ first lien pre-petition
lenders, (f) attorneys to an ad hoc committee of the Debtors’ second-lien pre-petition
lenders and (g) Avista Capital Partners (the “Notice Parties”).
21.
Objections to the Debtors’ retention of GCG on a permanent basis shall be
filed with the Court with a copy to Chambers, together with proof of service thereof, and
served, so as to be received no later than three business days before the hearing date set
forth in the Interim Order, upon (a) attorneys for the Debtors, Davis Polk & Wardwell,
10
450 Lexington Avenue, New York, New York 10017, Attn: Marshall S. Huebner and
Timothy E. Graulich; (b) the Garden City Group, Inc., 105 Maxess Road, Melville, New
York 11747, Attn: David A. Isaac, Chief Executive Officer; and (c) the Office of the
United States Trustee for the Southern District of New York, 33 Whitehall Street, 21st
Floor, New York, New York 10004, Attn: Brian Masumoto, (d) the attorneys for any
official committee of unsecured creditors then appointed in these cases and (e) attorneys
to the agent for the Debtors’ first lien pre-petition lenders, Latham & Watkins LLP, 885
Third Avenue, New York, NY 10022, Attn: Mark A. Broude.
22.
If no objections are timely filed and served as set forth herein, the Debtors
shall, on or after the objection deadline, submit to the Court a final order granting the
relief requested herein, which order shall be submitted and may be entered with no
further notice or opportunity to be heard afforded to any party.
23.
The foregoing notice procedures satisfy Bankruptcy Rule 9014 by
providing the counterparties with notice and an opportunity to object and be heard at a
hearing. See, e.g., In re Drexel Burnham Lambert, 160 B.R. 729, 734 (S.D.N.Y. 1993)
(an opportunity to present objections satisfies due process); In re Colorado Mountain
Cellars, Inc., 226 B.R. 244, 246 (D. Colo. 1998) (a hearing is not required to satisfy
Bankruptcy Rule 9014). Furthermore, the proposed notice procedures protect the due
process rights of the parties in interest without unnecessarily exposing the Debtors’
estates to unwarranted administrative expenses.
11
Notice
24.
No trustee, examiner, or creditors’ committee has been appointed in these
chapter 11 cases. The Debtors have served notice of this Application on the Notice
Parties.
No Previous Request
25.
No previous request for the relief sought herein has been made by the
Debtors to this or any other court.
WHEREFORE the Debtors respectfully request that the Court grant the Debtors
the relief requested herein and such other and further relief as is just and proper.
New York, New York
Dated: January 15, 2009
By: /s/ David W. Montgomery
David W. Montgomery
Chief Financial Officer
12
EXHIBIT A
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------- x
:
:
In re:
: Chapter 11 Case No.
:
: 09-10244 (___)
STAR TRIBUNE HOLDINGS
:
CORPORATION et al.,
: (Jointly Administered)
:
:
Debtors.1
----------------------------------- x
INTERIM ORDER AUTHORIZING THE RETENTION OF
GARDEN CITY GROUP, INC. AS NOTICE AGENT
AND CLAIMS AGENT FOR THE DEBTORS
Upon the application (the “Application”)2 of Star Tribune Holdings Corporation
(“Star Tribune Holdings”) and The Star Tribune Company (together with Star Tribune
Holdings, the “Debtors”), for an order authorizing the Debtors to retain Garden City
Group, Inc. (“GCG”) as their noticing agent pursuant to 28 U.S.C. § 156(c), the Protocol
for Employment of Claims Agents dated May 8, 2006 (Farrell-Willoughby, Clerk of the
Court) (the “Noticing Agent Protocol”), and Local Bankruptcy Rule 5075-1(a); and
upon the Declaration of Jeffrey S. Stein, GCG’s Vice President Business Reorganizations
(the “Stein Declaration”); and the Court being satisfied, based on the representations
made in the Application and the Stein Declaration, that GCG is “disinterested” as such
term is defined in section 101(14) of the Bankruptcy Code, as modified by section
1107(b) of the Bankruptcy Code, and represents no interest adverse to the Debtors’
1
2
The Debtors are Star Tribune Holdings Corporation and The Star Tribune Company.
Unless otherwise defined herein, each capitalized term shall have the same meaning ascribed to
such terms in the Application.
estates with respect to the matters upon which it is to be engaged; and upon consideration
of the Affidavit of David W. Montgomery filed in support of the Debtors’ first-day
pleadings; and the Court having jurisdiction to consider the Application and the relief
requested therein pursuant to 28 U.S.C. § 1334 and the Standing Order of Referral of
Cases to Bankruptcy Court Judges of the District Court for the Southern District of New
York dated July 10, 1984 (Ward, Acting C.J.); and consideration of the Application and
the requested relief being a core proceeding the Bankruptcy Court can determine pursuant
to 28 U.S.C. § 157(b); and venue being proper before this Court pursuant to 28 U.S.C.
§§ 1408 and 1409; and due and proper notice of the Application having been provided to
(a) the Office of the United States Trustee for the Southern District of New York, (b)
those creditors holding the five largest secured claims against the Debtors’ estates on a
consolidated basis, (c) those creditors holding the 30 largest unsecured claims against the
Debtors’ estates on a consolidated basis, (d) the Internal Revenue Service, (e) attorneys to
the agent for the Debtors’ first lien pre-petition lenders, (f) attorneys to an ad hoc
committee of the Debtors’ second-lien pre-petition lenders and (g) Avista Capital
Partners (collectively, the “Notice Parties”), and it appearing that no other or further
notice need be provided; and the relief requested in the Application being in the best
interests of the Debtors and their estates and creditors; and the Court having reviewed the
Application and having held a Hearing with appearances of parties in interest noted in the
transcript thereof (the “Hearing”); and the Court having determined that the legal and
factual bases set forth in the Application and at the Hearing establish just cause for the
relief granted herein; and upon all of the proceedings had before the Court and after due
deliberation and sufficient cause appearing therefor, it is
2
ORDERED that, pursuant to 28 U.S.C. § 156(c), the Noticing Agent Protocol and
Local Bankruptcy Rule 5075-1(a), the Application is approved on an interim basis; and it
is further
ORDERED that the Debtors are hereby authorized to retain GCG as their noticing
agent in the Debtors’ chapter 11 cases, as contemplated by the Application and on the
terms provided in the Agent Agreement; and it is further
ORDERED that GCG shall be compensated for its services and reimbursed for
any related expenses in accordance with GCG’s normal hourly rates and disbursement
policies as set forth in the Application, the Stein Declaration, the Agent Agreement, and
in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules,
the Local Bankruptcy Rules and any other applicable orders of this Court; and it is further
ORDERED that to the extent that there may be any inconsistency between the
terms of the Application, the Agent Agreement or this Order, the terms of this Order shall
govern; and it is further
ORDERED that a copy of this Order and the Application shall be served by hand
delivery or deposit with an overnight delivery service within three business days after
entry hereof upon the Notice Parties; and it is further
ORDERED that objections to the Debtors’ retention of GCG on a permanent basis
shall be filed with the Court with a copy to Chambers, together with proof of service
thereof, and served, so as to be received no later than three business days before the
hearing date set forth below, upon (a) attorneys for the Debtors, Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, Attn: Marshall S. Huebner and
Timothy E. Graulich, (b) The Garden City Group, Inc., 105 Maxess Road, Melville, New
3
York 11747, Attn: David A. Isaac, Chief Executive Officer, (c) the Office of the United
States Trustee for the Southern District of New York, 33 Whitehall Street, 21st Floor,
New York, New York 10004, Attn: Brian Masumoto, (d) the attorneys for any official
committee of unsecured creditors then appointed in these cases and (e) attorneys to the
agent for the Debtors’ first lien pre-petition lenders, Latham & Watkins LLP, 885 Third
Avenue, New York, NY 10022, Attn: Mark A. Broude; and it is further
ORDERED that any objections to the proposed retention must be filed with the
Court in accordance with General Order M-242, as amended by General Order M-269
(available at www.nysb.uscourts.gov); and it is further
ORDERED that in the event an objection is timely served and filed in accordance
with this Order, there shall be a hearing held on ___________, 2009 at _ __ _.m to
consider such objection, and pending entry of an order following the conclusion of said
hearing, GCG shall continue as noticing agent for the Debtors on an interim basis in
accordance with this Order; and it is further
ORDERED that if no objections are timely filed and served as set forth herein, the
Debtors shall, on or after the objection deadline, submit to the Court a final order
substantially in the form of this Order, which Order shall be submitted and may be
entered with no further notice or opportunity to be heard afforded to any party.
New York, New York
Dated: _________, 2009
UNITED STATES BANKRUPTCY JUDGE
4
EXHIBIT B
EXHIBIT C
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------- x
:
:
: Chapter 11 Case No.
:
: 09-10244 (___)
STAR TRIBUNE HOLDINGS
:
CORPORATION, et al.,
: (Jointly Administered)
:
Debtors.1
:
----------------------------------- x
In re:
DECLARATION OF JEFFREY S. STEIN IN SUPPORT OF THE
APPLICATION TO EMPLOY AND RETAIN THE GARDEN CITY
GROUP, INC. AS CLAIMS AND NOTICING AGENT FOR THE DEBTORS
STATE OF NEW YORK
)
)
COUNTY OF NEW YORK )
ss:
Jeffrey S. Stein, being duly sworn, deposes and says:
1.
I am Vice President Business Reorganizations at The Garden City
Group, Inc. (“GCG”), and I am authorized to make and submit this declaration on behalf
of GCG. This declaration is submitted in support of the Application (the “Application”)
for Order Authorizing the Retention of GCG as Noticing Agent for Star Tribune
Holdings Corporation and The Star Tribune Company (together, the “Debtors”) and to
approve a related agreement. The statements contained herein are based upon personal
knowledge.
1
The Debtors are Star Tribune Holdings Corporation and The Star Tribune Company. The
employer tax identification numbers and addresses for each of the Debtors are set forth in the Debtors’
chapter 11 petitions.
2.
GCG is one of the country’s leading chapter 11 administrators with
expertise in noticing, claims processing, balloting and distribution. GCG is well qualified
to provide the Debtors with experienced claims and noticing services in connection with
these cases. Among the large chapter 11 cases in which GCG is or was retained, as
claims and noticing agent to debtors (unless otherwise noted), are: In re Lenox Sales, Inc.,
et al., Case No. 08-14679, In re OTC International, Ltd., Case No. 08-11181 (AJG), In re
Alper Holdings USA, Inc., Case No. 07-12148 (BRL), In re Our Lady of Mercy Medical
Center, Case No. 07-10609 (REG), In re The New York Racing Association Inc., Case
No. 06-12618 (JMP), In re The Akadine Press, Inc., Case No. 06-22002 (ASH), In re
Calpine Corporation, et al., (in the capacity as Communications Agent for the Official
Committee of Unsecured Creditors), Case No. 05-60200 (BRL), In re Saltire Industrial,
Inc., Case No. 04-15389 (BRL), In re Sure Fit, Inc., Case No. 04-11495 (BRL), In re
General Media, Inc., Case No. 03-15078 (SMB), In re MGNH, Inc., Case No. 04-37133
(CGM), In re Dice Inc., Case No. 03-10877 (BRL), In re Interbank Funding Corp., Case
No. 02-41590 (BRL), In re Galey & Lord, Inc. et al., Case No. 02-40445 (ALG), In re
PSINet Consulting Solutions Holdings, Inc., Case No. 01-14916 (REG), In re NTL Inc.,
Case No. 02-41316 (ALG) and In re Regus Business Centre Corp., Case No. 03-20026
(ASH), which were filed in the Southern District of New York; In re Zurich Depository
Corp., Case No. 07-71352 (JBR), In re Copperfield Investment, LLC, Case No. 07-71327
(JBR), In re The Brunswick Hospital Center, Inc., Case No. 07-40290 (CEC), In re
Victory Memorial Hospital, et al., (in the capacity as Communications Agent for the
Official Committee of Unsecured Creditors), Case No. 06-44387 (CEC), In re
Photocircuits Corporation, Case No. 05-89022 (SB), In re MetroTec Communications,
2
Inc., et al., Case No. 05-20953 (DEM), In re Allou Distributors Inc., et al., Case No. 0382321 (ESS) and In re CyberRebate.com, Inc., Case No. 01-16534 (CEC), which were
filed in the Eastern District of New York; In re Printers Row, LLC, Case No. 08-17301
(ERW), In re Kimball Hill, Inc., (in the capacity as Communications Agent for the
Official Committee of Unsecured Creditors), Case No. 08-10095 (SPS), In re Automotive
Professionals, Inc., Case No. 07-06720 (CAD) and In re Gateway Home Care Inc., et al.,
Case No. 03-17457 (JPC), which were filed in the Northern District of Illinois; In re
Jancor Companies Inc., et al., Case No. 08-12556 (MFW), In re Comfort Co., Inc., Case
No. 08-12305 (MFW), In re DG Liquidation Corp., Case No. 08-10601 (CSS), In re
Supplements LT Inc., Case No. 08-10446 (KJC), In re ProRhythm, Inc., Case No. 0711861 (KJC), In re S-Tran Holdings, Inc., et al., Case No. 05-11391 (RB), In re Flintkote
Company, Case No. 04-11300 (JKF), In re Factory 2-U Stores, Inc., Case No. 04-10111
(PJW), In re Magnatrax Corporation, Case No. 03-11402 (PJW), In re HQ Global
Holdings, Inc., et al., Case No. 02-10760 (MFW), In re Federal-Mogul Global, Inc., Case
No. 01-10578 (AMW) and In re ACandS, Inc., Case No. 02-12687 (RJN), which were
filed in the District of Delaware; In re Foxtons, Inc., et al., Case No. 07-24496 (MBK), In
re NJ Affordable Homes Corp., Case No. 05-60442 (DHS), In re Omne Staffing Inc., et
al., Case No. 04-22316 (RG), In re NorVergence, Inc., Case No. 04-32079 (RG), In re
Muralo Company, Inc., Case No. 03-26723 (MS) and In re AremisSoft, Case No. 0232621 (RG), which were filed in the District of New Jersey; In re O’Sullivan Industries,
Inc., et al., Case No. 05-83049 (CRM) and In re Galey & Lord, Inc., et al., Case No. 0443098 (MGC), which were filed in the Northern District of Georgia; In re United
Producers, Inc., Case No. 05-55272 (CMC), which was filed in the Southern District of
3
Ohio; In re Boyds Collection, Ltd., et al., Case No. 05-43793 (DWK), which was filed in
the District of Maryland; In re Romacorp, Inc., Case No. 05-86818 (BJH), which was filed
in the Northern District of Texas; and In re Hawaiian Airlines, Inc., Case No. 03-00817
(RJF), which was filed in the District of Hawaii.
3.
Pursuant to the Agreement for Services dated January 9, 2009, a
copy of which is attached to the Application as Exhibit B (the “Agent Agreement”),
GCG will provide services regarding noticing, claims management and reconciliation,
plan solicitation, balloting, disbursements and any other services agreed upon by the
parties. GCG will perform these services, if necessary, at the request of the Debtors or
the Clerk’s Office.
4.
In particular, GCG will provide the following noticing, claims
management, plan solicitation, balloting and disbursement services:
(a)
assist the Debtors in the preparation and filing of the Debtors’
schedules of assets and liabilities and statement of financial affairs;
(b)
prepare and serve required notices in this chapter 11 case,
including:
(i) a notice of the commencement of this chapter 11 case and the
initial meeting of creditors under section 341(a) of the Bankruptcy Code;
(ii) a notice of the claims bar date;
(iii)notices of objections to claims;
(iv) notices of hearings on a disclosure statement and confirmation
of a plan; and
4
(v) such other miscellaneous notices as the Debtors or the Court
may deem necessary or appropriate for an orderly administration of this chapter 11 case;
(c)
assist with the publication of required notices, as necessary;
(d)
within five business days after the service of a particular notice,
prepare for filing with the Clerk’s Office an affidavit of service that includes (i) a copy of
the notice served, (ii) an alphabetical list of persons on whom the notice was served along
with their addresses and (iii) the date and manner of service;
(e)
maintain copies of all proofs of claim and proofs of interest filed in
(f)
maintain official claims registers in this case by docketing all
this case;
proofs of claim and proofs of interest in a claims database that includes the following
information for each claim or interest asserted:
(i) the name and address of the claimant or interest holder and any
agent thereof, if the proof of claim or proof of interest was filed by an agent;
(ii) the date the proof of claim or proof of interest was received by
GCG and/or the Court;
(iii)the claim number assigned to the proof of claim or proof of
interest; and
(iv) the asserted amount and classification of the claim;
(g)
implement necessary security measures to ensure the completeness
and integrity of the claims registers;
(h)
transmit to the Clerk’s Office a copy of the claims registers on a
weekly basis, unless requested by the Clerk’s Office on a more or less frequent basis;
5
(i)
maintain an up-to-date mailing list for all entities that have filed
proofs of claim or proofs of interest and make such list available to the Clerk’s Office or
any party in interest upon request;
(j)
provide access to the public for examination of copies of the proofs
of claim or proofs of interest filed in these cases without charge during regular business
hours;
(k)
create and maintain a public access website setting forth pertinent
case information and allowing access to certain documents filed in the Debtors’ chapter
11 cases;
(l)
record all transfers of claims pursuant to Bankruptcy Rule 3001(e)
and provide notice of such transfers to the extent required by Bankruptcy Rule 3001(e);
(m)
comply with applicable federal, state, municipal and local statutes,
ordinances, rules, regulations, orders and other requirements;
(n)
provide temporary employees, who are not past or present
employees of the Debtors, to process claims, as necessary;
(o)
promptly comply with such further conditions and requirements as
the Clerk’s Office or the Court may at any time prescribe;
(p)
provide balloting and solicitation services, including producing
personalized ballots and tabulating creditor ballots on a daily basis; and
(q)
provide such other claims processing, noticing, balloting and
related administrative services as may be requested from time to time by the Debtor
5.
The Debtors have selected GCG to serve as the Claims Agent for
the Debtors’ estates, as set forth in more detail in the Application filed
6
contemporaneously herewith. To the best of my knowledge, neither GCG, nor any of its
professional personnel, has any relationship with the Debtors that would impair GCG’s
ability to serve as Claims Agent. GCG does have relationships with some of the Debtors’
creditors, but they are in matters completely unrelated to these chapter 11 cases, either as
vendors or in cases where GCG serves in a neutral capacity as a class action settlement
claims administrator. GCG’s assistance in the cases where GCG acts as a class action
settlement claims administrator has been primarily related to the design and
dissemination of legal notice and other administrative functions in class actions.
6.
GCG has working relationships with certain of the professionals
retained by the Debtors and other parties herein, but such relationships are completely
unrelated to these chapter 11 cases. William A. Brandt, Assistant Vice President,
Compliance at GCG, formerly practiced as an attorney at Davis Polk & Wardwell from
1989 to 1996. Nonetheless, this past relationship is inconsequential to GCG’s retention
in the Debtors’ chapter 11 cases, because Mr. Brandt left Davis Polk long before these
cases were contemplated.
7.
In addition, GCG personnel may have relationships with some of
the Debtors’ creditors; however, such relationships are of a personal financial nature and
completely unrelated to these chapter 11 cases. GCG has and will continue to represent
clients in matters unrelated to these chapter 11 cases and has had and will continue to
have relationships in the ordinary course of its business with certain vendors and
professionals in connection with matters unrelated to these cases.
8.
Since 1999, GCG has been a wholly owned subsidiary of Crawford
& Company, an insurance risk-adjusting firm. I am advised that Crawford & Company
7
has no material relationship with the Debtors, and while it may have rendered services to
certain creditors, or have a vendor relationship with some creditors, such relationships
were (or are) in no way connected to GCG’s representation of the Debtors in these
chapter 11 cases.
9.
GCG is a “disinterested person,” as that term is defined in section
101(14) of the Bankruptcy Code, in that GCG and its professional personnel:
(a)
are not creditors, equity security holders or insiders of the
Debtors;
(b)
are not and were not, within two years before the date of
the filing of the Debtors’ chapter 11 petitions, directors,
officers or employees of the Debtors; and
(c)
do not have an interest materially adverse to the interests of
the Debtors’ estates or any class of creditors or equity
security holders, by reason of any direct or indirect
relationship to, connection with, or interest in, the Debtors.
10.
GCG has not been retained to assist any entity or person other than
the Debtors on matters relating to, or in connection with, these chapter 11 cases. If
GCG’s proposed retention is approved by this Court, GCG will not accept any
engagement or perform any service for any entity or person other than the Debtors in
these chapter 11 cases. GCG may, however, provide professional services to entities or
persons that may be creditors or parties in interest in these chapter 11 cases, which
services do not relate to, or have any direct connection with, these chapter 11 cases or the
Debtors.
8
11.
GCG represents, among other things, that:
(a)
It will not consider itself employed by the United States
government and shall not seek any compensation from the
United States government in its capacity as Claims Agent;
(b)
By accepting employment in this bankruptcy case, GCG
waives
any right to receive compensation from the United States
government;
(c)
In its capacity as Claims Agent, GCG will not be an agent
of the United States and will not act on behalf of the United
States; and
(d)
GCG will not employ any past or present employees of the
Debtors in connection with its work as Claims Agent.
12.
Subject to the Court’s approval, the Debtors have agreed to
compensate GCG for professional services rendered in connection with these chapter 11
cases pursuant to the Agent Agreement. Payments are to be based upon the submission to the
Debtors by GCG of a billing statement, which includes a detailed listing of services and
expenses, at the end of each calendar month. GCG has received a $50,000 retainer from
the Debtors and will apply same first against all pre-petition fees and expenses and then
against the last bill for fees and expenses that GCG will render in this case.
9
13.
GCG will comply with all requests of the Clerk of the
Bankruptcy Court and the guidelines promulgated by the Judicial Conference of the
United States for the implementation of 28 U.S.C. § 156(c).
/s/ Jeffrey S. Stein
Jeffrey S. Stein
10