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EXHIBIT A
Application
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
------------------------------------------------------------ x
In re
:
Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., :
Case No. 22-10951 (CTG)
:
:
(Jointly Administered)
:
Debtors.1
:
Objection Deadline: TBD
:
Hearing Date: TBD
------------------------------------------------------------ x
APPLICATION OF DEBTORS TO RETAIN AND EMPLOY
RICHARDS, LAYTON & FINGER, P.A. AS CO-COUNSEL TO
THE DEBTORS EFFECTIVE AS OF PETITION DATE
Kabbage, Inc. d/b/a KServicing and its debtor affiliates, as debtors and debtors in
possession in the above-captioned chapter 11 cases (collectively, the “Debtors”), respectfully
move and represent as follows in support of this application (the “Application”):
Relief Requested
1.
By this Application, the Debtors request, pursuant to section 327(a) of title
11 of the United States Code (the “Bankruptcy Code”), Rules 2014(a) and 2016 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”), that the Court authorize the employment and retention of
Richards, Layton & Finger, P.A. (“RL&F”) as co-counsel to the Debtors effective as of the
Petition Date (as defined below).
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification
number, as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A);
Kabbage Asset Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding
2019-A LLC (8973); and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used
under license; Kabbage, Inc. d/b/a KServicing is not affiliated with American Express. The Debtors’ mailing and
service address is 925B Peachtree Street NE, Suite 383, Atlanta, GA 30309.
Docket No. 46
Filed: 10/4/22
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2.
A proposed form of order granting the relief requested herein is annexed
hereto as Exhibit A (the “Proposed Order”). The Debtors submit the declaration of Daniel J.
DeFranceschi, a director of RL&F, which is attached hereto as Exhibit B (the “DeFranceschi
Declaration”) and the declaration of Holly Loiseau, the General Counsel of the Debtors, which
is attached hereto as Exhibit C (the “Loiseau Declaration”).
Jurisdiction and Venue
3.
The 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 February 29, 2012. This is a core
proceeding pursuant to 28 U.S.C. § 157(b). Pursuant to Rule 9013-1(f) of the Local Rules, the
Debtors consent to the entry of a final order by the Court in connection with this Motion if it is
later determined that the Court, absent consent of the parties, cannot enter final orders or
judgments consistent with Article III of the United States Constitution. Venue is proper before
the Court pursuant to 28 U.S.C. §§ 1408 and 1409.
Background
4.
On October 3, 2022 (the “Petition Date”), the Debtors commenced with
the Court voluntary cases under chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”).
The Debtors are authorized to continue operating their business and managing their properties as
debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee,
examiner, or statutory committee has been appointed in these Chapter 11 Cases.
5.
Pursuant to Bankruptcy Rule 1015(b), the Chapter 11 Cases are being
jointly administered under the above-captioned case.
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6.
Additional information regarding the Debtors’ business, capital structure,
and the circumstances leading to the commencement of these Chapter 11 Cases is set forth in the
Declaration of Deborah Rieger-Paganis in Support of Debtors’ Chapter 11 Petitions and First
Day Relief [Docket No. 13] (the “First Day Declaration”) filed on the Petition Date.
Scope of Services
7.
The Debtors require RL&F to render a variety of legal services during the
pendency of these Chapter 11 Cases and to assist the Debtors in addressing the myriad issues that
may arise. Subject to further order of the Court, the Debtors request the employment and
retention of RL&F to render professional services, including, but not limited to:
a.
Assisting in pre-bankruptcy preparation and planning;
b.
assisting in preparing necessary petitions, motions, applications, answers,
orders, reports, and papers necessary to commence these Chapter 11
Cases;
c.
advising the Debtors of their rights, powers, and duties as debtors and
debtors in possession under chapter 11 of the Bankruptcy Code;
d.
taking all necessary actions to protect and preserve the Debtors’ estates,
including the prosecution of actions on the Debtors’ behalf, the defense of
any actions commenced against the Debtors in the Chapter 11 Cases, the
negotiation of disputes in which the Debtors are involved, and the
preparation of objections to claims filed against the Debtors’ estates;
e.
assisting with any sale or sales of assets, including preparing any
necessary motions and papers related thereto;
f.
assisting in preparing the Debtors’ disclosure statement and any related
motions, pleadings, or others documents necessary to solicit votes on any
plan of reorganization;
g.
assisting in preparing the Debtors’ chapter 11 plan;
h.
prosecuting on behalf of the Debtors any proposed plan and seeking
approval of all transactions contemplated therein and in any amendments
thereto; and
i.
performing all other necessary legal services in connection with the
prosecution of these Chapter 11 Cases.
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8.
In addition to the services set forth in paragraphs 7(a) through 7(i) above,
RL&F may perform all other services assigned to it by the Debtors, in consultation with Weil,
Gotshal & Manges LLP (“Weil”), the Debtors’ restructuring co-counsel. To the extent RL&F
determines that such services fall outside of the scope of services historically or generally
performed by RL&F as co-counsel in a bankruptcy case, RL&F will file a supplemental
declaration.
Basis for Relief
9.
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.” 11 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.”
11 U.S.C § 328(a).
10.
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
bankruptcy co-counsel because of, among other things, (i) the firm’s extensive experience and
knowledge in the field of debtors’ and creditors’ rights, business reorganizations and liquidations
under chapter 11 of the Bankruptcy Code, (ii) its expertise, experience, and knowledge in
practicing before this Court, (iii) its proximity to the Court, and (iv) 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.
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11.
To that end, RL&F has stated its desire and willingness to act in these
Chapter 11 Cases and to render the necessary professional services as co-counsel to the Debtors.
12.
In addition to this Application, the Debtors have filed, or expect to file
shortly, applications to employ (i) Weil, as general restructuring counsel; (ii) Omni Agent
Solutions, Inc., as claims and notice agent and administrative agent; and (iii) AlixPartners, LLP,
as financial advisor. The Debtors may also file applications to employ additional professionals.
The Debtors understand the division of responsibilities among these professionals and intend to
monitor carefully these and any other retained professionals to ensure a clear delineation of their
respective duties and roles to prevent duplication of effort. The Debtors recognize that efficient
coordination of efforts among the Debtors’ professionals will greatly add to the effective
administration of these Chapter 11 Cases.
Professional Compensation
A. Professional Fees
13.
The Debtors understand that RL&F intends to apply to the Court for
allowance of compensation and reimbursement of expenses in accordance with the applicable
provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any applicable
orders of this Court. In that regard, the Debtors and RL&F are developing a prospective budget
and staffing plan in a reasonable effort to comply with any requests for information and
additional disclosures that may be made by the Office of the United States Trustee for the
District of Delaware (the “U.S. Trustee”). Subject to the foregoing, the Debtors propose to pay
RL&F its customary hourly rates in effect from time to time as set forth in the DeFranceschi
Declaration. The Debtors submit that these rates are reasonable.
14.
RL&F’s current hourly rates for matters related to these Chapter 11 Cases
are expected to be within the following ranges:
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Position
Range of Hourly Rates
Directors
$850 to $1,300 an hour
Counsel
$725 to $750 an hour
Associates
$425 to $700 an hour
Paraprofessionals
$315 an hour
15.
The principal professionals and paraprofessionals designated to represent
the Debtors and their current standard hourly rates are as follows:
a.
Daniel J. DeFranceschi
$1,100 per hour
b.
Amanda R. Steele
$875 per hour
c.
Zachary I. Shapiro
$850 per hour
d.
Matthew P. Milana
$600 per hour
e.
Huiqi Liu
$475 per hour
f.
M. Lynzy McGee
$315 per hour
16.
The Debtors understand that RL&F’s hourly 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 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 (which adjustments will be reflected in the first RL&F fee application
following such adjustments) and are consistent with the rates charged elsewhere.
17.
Other than the periodic adjustments described above, RL&F’s hourly rates
of its attorneys and financial terms for the services performed prior to the Petition Date are
identical to the hourly rates and financial terms of the postpetition engagement proposed herein.
The Debtors understand that these hourly rates are consistent with the rates that RL&F charges
other comparable chapter 11 clients, regardless of the location of the chapter 11 case, and are not
significantly different from the rates that RL&F charges in non-bankruptcy representations.
None of RL&F’s professionals included in this engagement have varied their rate based on the
geographic location of these Chapter 11 Cases. Notwithstanding the consistent hourly rates,
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RL&F as a practice reviews all time charges and makes adjustments as necessary to correct any
inefficiency that may appear before billing.
18.
Prior to the Petition Date, the Debtors made total retainer payments to RL&F in
the amount of $235,428 (the “Retainer”). The Retainer was utilized as a retainer to cover fees
and expenses actually incurred, as well as anticipated to be incurred, prior to, and in connection
with, the Debtors’ restructuring and the commencement of these Chapter 11 Cases. The Debtors
propose that the remainder of the Retainer 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 these bankruptcy cases until RL&F’s fees and expenses are awarded by final order
and payable to RL&F.
19.
Given the extensive nature of the services that RL&F will provide to the
Debtors, the retention of RL&F under an evergreen retainer is appropriate and necessary to
enable the Debtors to faithfully execute their duties as debtors and debtors in possession and to
implement the reorganization of the Debtors.
20.
Other than as set forth in the DeFranceschi Declaration, no arrangement is
proposed between the Debtors and RL&F for compensation to be paid in these Chapter 11 Cases.
RL&F has informed the Debtors that it has no agreement with any other entity to share any
compensation received, nor will any be made, except as permitted under section 504(b)(1) of the
Bankruptcy Code.
B. Expenses
21.
The Debtors understand that it is RL&F’s policy to charge its clients in all
areas of practice for all expenses incurred in connection with clients’ cases. The expenses
charged to clients include, among other things, long-distance telephone charges, regular mail,
and express mail charges, special or hand delivery charges, document processing charges,
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printing and photocopying charges, travel expenses, expenses for “working meals,”
computerized research charges and transcription costs, as well as non-ordinary overhead
expenses such as secretarial and certain 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 the Local Rules. The Debtors understand that it is RL&F’s
belief that it is fair to charge these expenses to the client incurring them instead of increasing
hourly rates and spreading these expenses among all clients.
RL&F’s Disinterestedness
22.
To the best of the Debtors’ knowledge and except as is disclosed in the
DeFranceschi Declaration: (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) neither RL&F, nor any attorney (including any director, counsel or associate) of
RL&F, currently represents, or has in the past represented, or has any connection with, the
potential parties in interest set forth on Exhibit 3 to the DeFranceschi Declaration.
23.
RL&F will supplement its disclosure to the Court if any facts or
circumstances are discovered that would require such additional disclosure.
Bankruptcy Rule 5002
24.
As set forth in the DeFranceschi Declaration, and except as described
therein, no director, counsel, or associate of RL&F is a relative of, or has been so connected
with, any United States Bankruptcy Judge for the District of Delaware, any of the District Court
Judges for the District of Delaware who handle bankruptcy cases, the United States Trustee for
Region 3, the Assistant United States Trustee for the District of Delaware, the attorneys for the
United States Trustee assigned to these Chapter 11 Cases or any other employee of the United
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States Trustee that would render RL&F’s retention in these Chapter 11 Cases improper under
Bankruptcy Rule 5002. Accordingly, the appointment of RL&F is not prohibited by Bankruptcy
Rule 5002.
Notice
25.
Notice of this Application has been or will be provided to: (a) the Office
of the United States Trustee for the District of Delaware; (b) the holders of the 30 largest
unsecured claims against the Debtors on a consolidated basis; (c) the Federal Reserve; (d)
Customers Bank; (e) Cross River Bank; (f) the United States Department of Justice; (g) the
Federal Trade Commission; (h) the Small Business Administration; (i) the Internal Revenue
Service; (j) the Securities and Exchange Commission; (k) the United States Attorney’s Office for
the District of Delaware; and (l) any party that is entitled to notice pursuant to Bankruptcy Rule
2002. The Debtors believe that no further notice is required.
No Prior Request
26.
No previous request for the relief sought herein has been made by the
Debtors to this or any other court.
[Remainder of page intentionally left blank]
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WHEREFORE, the Debtors respectfully request entry of the Proposed Order
granting the relief requested herein and such other and further relief as the Court may deem just
and appropriate.
Dated: October 4, 2022
Atlanta, Georgia
KABBAGE, INC. d/b/a KSERVICING et al.
(on behalf of itself and each of its affiliated
Debtors)
/s/ Holly Loiseau
Name: Holly Loiseau
Title: General Counsel
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Exhibit A
Proposed Retention Order
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
------------------------------------------------------------ x
In re
:
Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., :
Case No. 22-10951 (CTG)
:
:
Debtors.1
:
(Jointly Administered)
------------------------------------------------------------ x
ORDER AUTHORIZING RETENTION
AND EMPLOYMENT OF RICHARDS,
LAYTON & FINGER, P.A. AS CO-COUNSEL
TO THE DEBTORS EFFECTIVE AS OF PETITION DATE
Upon the application (the “Application”)2 of the above-captioned debtors and
debtors in possession (the “Debtors”) for employment and retention of Richards, Layton &
Finger, P.A. (“RL&F”) as co-counsel for the Debtors effective as of the Petition Date pursuant
to section 327(a) of the Bankruptcy Code, Bankruptcy Rules 2014 and 2016(a) and Local Rule
2014-1, all as more fully described in the Application; and upon consideration of the First Day
Declaration and the DeFranceschi Declaration; and due and proper notice of the Application
having been given; and having determined that no other or further notice of the Application is
required; and having determined that this Court has jurisdiction to consider the Application in
accordance with 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, 2012; and
having determined that this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2); and having
determined that venue of this proceeding and the Application is proper pursuant to 28 U.S.C.
§§ 1408 and 1409; and due and proper notice of the Application having been provided in
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification
number, as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A);
Kabbage Asset Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding
2019-A LLC (8973); and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used
under license; Kabbage, Inc. d/b/a KServicing is not affiliated with American Express. The Debtors’ mailing and
service address is 925B Peachtree Street NE, Suite 383, Atlanta, GA 30309.
2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the
Application.
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accordance with the Bankruptcy Rules and the Local Rules, and it appearing that no other or
further notice need be provided; and a hearing, if any, having been held to consider the relief
requested in the Application (the “Hearing”); and upon consideration of the DeFranceschi
Declaration and the record of the Hearing, if any; and having found that RL&F is a “disinterested
person” within the meaning of section 101(14) of the Bankruptcy Code and that RL&F has the
capability and experience to provide the services described in the Application; and it appearing
that the employment of RL&F is in the best interests of the Debtors, their estates and creditors;
and after due deliberation and sufficient cause appearing therefor,
IT IS HEREBY ORDERED THAT:
1.
The Application is GRANTED as set forth herein.
2.
The Debtors are authorized pursuant to sections 327(a) and 328(a) of the
Bankruptcy Code to employ and retain RL&F as co-counsel to the Debtors on the terms and
conditions set forth in the Application and the DeFranceschi Declaration effective as of the
Petition Date.
3.
RL&F shall apply for compensation for professional services rendered and
reimbursement of expenses incurred in connection with the Debtors’ Chapter 11 Cases in
compliance with the applicable provisions of the Bankruptcy Code, Bankruptcy Rules, Local
Rules, and any other applicable procedures and orders of the Court. RL&F shall make
reasonable efforts to comply with the U.S. Trustee’s requests for information and additional
disclosures as set forth in the Guidelines for Reviewing Applications for Compensation and
Reimbursement of Expenses Filed Under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11
Cases Effective as of November 1, 2013, in connection with any interim and/or final fee
application(s) to be filed by RL&F in these Chapter 11 Cases.
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4.
RL&F shall, to the extent it has not previously done so, first apply the
Retainer to all prepetition invoices and, thereafter, any remaining balance of the Retainer shall be
held by RL&F as security throughout the Debtors’ Chapter 11 Cases until RL&F's fees and
expenses are awarded by final order and payable to RL&F.
5.
No agreement or understanding exists between RL&F and any other
person, other than as permitted by section 504 of the Bankruptcy Code, to share compensation
received for services rendered in connection with the Chapter 11 Cases, nor shall RL&F share or
agree to share compensation received for services rendered in connection with the Chapter 11
Cases with any other person other than as permitted by section 504 of the Bankruptcy Code.
6.
Notwithstanding anything in the Application to the contrary, RL&F shall
(i) to the extent that RL&F uses the services of independent contractors or subcontractors
(collectively, the “Contractors”) in the Chapter 11 Cases, pass-through the cost of such
Contractors at the same rate that RL&F pays the Contractors; (ii) seek reimbursement for actual
costs only; (iii) ensure that the Contractors are subject to the same conflicts check as required for
RL&F; and (iv) file with this Court such disclosures required by Bankruptcy Rule 2014.
7.
Notwithstanding anything to the contrary in the Application, any order
entered in connection therewith, or any agreement entered into in connection with the Debtors’
retention of RL&F, RL&F shall not seek reimbursement of expenses for office supplies.
8.
Notice of the Application as provided therein is deemed to be good and
sufficient notice of such Application, and the requirements of the Local Rules are satisfied by the
contents of the Application.
9.
The terms and conditions of this Order shall be immediately effective and
enforceable upon its entry.
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10.
The Debtors are authorized to take all actions necessary to effectuate the
relief granted pursuant to this Order in accordance with the Application.
11.
In the event of any inconsistency between the Application, the
DeFranceschi Declaration, and this Order, this Order shall govern.
12.
The Court shall retain jurisdiction to hear and determine all matters arising
from or related to the implementation, interpretation and/or enforcement of this Order.
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Exhibit B
DeFranceschi Declaration
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
------------------------------------------------------------ x
In re
:
Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., :
Case No. 22-10951 (CTG)
:
:
Debtors.1
:
(Jointly Administered)
------------------------------------------------------------ x
DECLARATION OF DANIEL J. DEFRANCESCHI
IN SUPPORT OF APPLICATION
OF DEBTORS TO RETAIN AND EMPLOY
RICHARDS, LAYTON & FINGER, P.A. AS CO-COUNSEL TO
THE DEBTORS EFFECTIVE AS OF PETITION DATE
I, Daniel J. DeFranceschi, pursuant to 28 U.S.C. § 1746, hereby declare that the
following is true and correct to the best of my knowledge, information, and belief:
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 declaration in support of the foregoing application
(the “Application”)2 to provide certain disclosures in accordance with the Bankruptcy Code, the
Bankruptcy Rules, and the Local Rules. Unless otherwise stated in this declaration, I have
personal knowledge of the facts set forth herein. To the extent that any information disclosed
herein requires amendment or modification upon RL&F’s completion of further analysis, or as
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification
number, as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A);
Kabbage Asset Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding
2019-A LLC (8973); and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used
under license; Kabbage, Inc. d/b/a KServicing is not affiliated with American Express. The Debtors’ mailing and
service address is 925B Peachtree Street NE, Suite 383, Atlanta, GA 30309.
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additional information becomes available to it, a supplemental affidavit or declaration will be
submitted to the Court.
3.
RL&F has extensive experience in the field of debtors’ and creditors’
rights and business reorganizations and liquidations under chapter 11 of the Bankruptcy Code
and expertise, experience, and knowledge practicing before this Court. RL&F’s proximity to the
Court enables RL&F to respond quickly to emergency hearings and other emergency matters
before this Court.
4.
RL&F has been actively involved in major chapter 11 cases and has
represented debtors in many cases, including recently: In re GenapSys, Inc., Case No. 22-10621
(BLS) (Bankr. D. Del. Aug. 17, 2022); In re Enjoy Tech., Inc., Case No. 22-10580 (JKS) (Bankr.
D. Del. Aug. 1, 2022); In re Ruby Pipeline, L.L.C., Case No. 22-10278 (CTG) (Bankr. D. Del.
May 24, 2022); In re Alpha Latam Management, LLC, Case No. 21-11109 (JKS) (Bankr. D. Del.
Sept. 15, 2021); In re TECT Aerospace Group Holdings, Inc., Case No. 21-10670 (Bankr. D.
Del. May 5, 2021); In re Mallinckrodt plc, Case No. 20-12522 (JTD) (Bankr. D. Del. Nov. 19,
2020); In re Energy Alloy Holdings, LLC, Case No. 20-12088 (MFW) (Bankr. D. Del. Oct. 9,
2020); In re Shiloh Industries, Inc., Case No. 20-12024 (LSS) (Bankr. D. Del. Aug. 30, 2020); In
re Brooks Brothers Grp., Inc., Case No. 20-11785 (CSS) (Bankr. D. Del. Aug. 19, 2020); In re
Exide Holdings, Inc., Case No. 20-11157 (CSS) (Bankr. D. Del. June 25, 2020); In re The Hertz
Corp., Case No. 20-11218 (MFW) (Bankr. D. Del. June 24, 2020); In re Longview Power, LLC,
Case No. 20-10951 (BLS) (Bankr. D. Del. May 18, 2020); In re Rentpath Holdings, Inc., Case
No. 20-10312 (BLS) (Bankr. D. Del. Mar. 10, 2020).
2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Application.
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5.
On or about September 9, 2022, the Debtors formally engaged RL&F in
connection with their restructuring efforts. In providing prepetition professional services to the
Debtors, RL&F has become familiar with the Debtors and their business, including the Debtors’
financial affairs, debt structure, operations, and related matters. Having provided such
professional services to the Debtors, RL&F has gained familiarity with the Debtors and their
business that will assist it in providing effective and efficient services in these Chapter 11 Cases.
Accordingly, RL&F is both well qualified and uniquely able to represent the Debtors in these
Chapter 11 Cases in an efficient and timely manner.
6.
RL&F understands that the Debtors are seeking to employ (i) Weil,
Gotshal & Manges LLP (“Weil”), as general restructuring counsel; (ii) Omni Agent Solutions,
Inc., as claims and notice agent and administrative agent; and (iii) AlixPartners, LLP, as financial
advisor. RL&F also understands that the Debtors intend to monitor carefully these and any other
retained professionals to ensure a clear delineation of their respective duties and roles so as to
prevent duplication of effort. RL&F recognizes that efficient coordination of efforts among the
Debtors’ professionals will greatly add to the effective administration of these Chapter 11 Cases.
Services to be Provided
7.
The Debtors require RL&F to render a variety of legal services during the
pendency of these Chapter 11 Cases and to assist the Debtors in addressing the myriad issues that
may arise. Subject to further order of the Court, the Debtors request the employment and
retention of RL&F to render professional services, including, but not limited to:
a.
Assisting in pre-bankruptcy preparation and planning;
b.
assisting in preparing necessary petitions, motions, applications, answers,
orders, reports, and papers necessary to commence these Chapter 11
Cases;
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c.
advising the Debtors of their rights, powers, and duties as debtors and
debtors in possession under chapter 11 of the Bankruptcy Code;
d.
taking all necessary actions to protect and preserve the Debtors’ estates,
including the prosecution of actions on the Debtors’ behalf, the defense of
any actions commenced against the Debtors in the Chapter 11 Cases, the
negotiation of disputes in which the Debtors are involved, and the
preparation of objections to claims filed against the Debtors’ estates;
e.
assisting with any sale or sales of assets, including preparing any
necessary motions and papers related thereto;
f.
assisting in preparing the Debtors’ disclosure statement and any related
motions, pleadings, or others documents necessary to solicit votes on any
plan of reorganization;
g.
assisting in preparing the Debtors’ chapter 11 plan;
h.
prosecuting on behalf of the Debtors any proposed plan and seeking
approval of all transactions contemplated therein and in any amendments
thereto; and
i.
performing all other necessary legal services in connection with the
prosecution of these Chapter 11 Cases.
8.
In addition to those services set forth in paragraphs 7(a) through 7(i)
above, RL&F may perform other services assigned by the Debtors, in consultation with Weil.
To the extent RL&F determines that such services, including those services set forth in
paragraph 7(i) above, fall outside of the scope of services historically or generally performed by
RL&F as counsel in a bankruptcy case, RL&F will file a supplemental declaration. RL&F has
and will continue to work closely with the Debtors’ other professionals, including Weil, to
prevent any duplication of efforts in the course of advising the Debtors. RL&F is willing and
able to act in the Debtors’ cases and render the necessary professional services as bankruptcy co-
counsel to the Debtors on the terms described herein, and subject itself to the jurisdiction of the
Court.
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Professional Compensation
9.
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 Chapter 11
Cases, plus reimbursement of actual, necessary expenses and other charges incurred by RL&F
during the Debtors’ bankruptcy cases.
10.
RL&F’s current hourly rates for matters related to these Chapter 11 Cases
are expected to be within the following ranges:
Position
Range of Hourly Rates
Directors
$850 to $1,300 an hour
Counsel
$725 to $750 an hour
Associates
$425 to $700 an hour
Paraprofessionals
$315 an hour
11.
The principal professionals and paraprofessionals designated to represent
the Debtors and their current standard hourly rates are as follows:
a.
Daniel J. DeFranceschi
$1,100 per hour
b.
Amanda R. Steele
$875 per hour
c.
Zachary I. Shapiro
$850 per hour
d.
Matthew P. Milana
$600 per hour
e.
Huiqi Liu
$475 per hour
f.
M. Lynzy McGee
$315 per hour
12.
RL&F’s hourly 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 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 (which
adjustments will be reflected in the first RL&F fee application following such adjustments) and
are consistent with the rates charged elsewhere. Other than these potential periodic adjustments,
RL&F does not expect any changes during the pendency of these Chapter 11 Cases.
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6
Notwithstanding the consistent hourly rates, RL&F as a practice reviews all time charges and
makes adjustments as necessary to correct any inefficiencies that may appear before billing.
13.
RL&F has not shared or agreed to share any of its compensation received
from the Debtors with any other persons, except as permitted by section 504 of the Bankruptcy
Code.
14.
The Debtors do not owe RL&F any amount for services rendered or
expenses incurred prior to the Petition Date, and thus RL&F is not a prepetition creditor of the
Debtors.
15.
In addition, consistent with the Guidelines for Reviewing Applications for
Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. § 330 by Attorneys in
Larger Chapter 11 Cases Effective as of November 1, 2013, I submit the following information:
a.
RL&F did not agree to any variations from, or alternatives to, its standard
or customary billing arrangements for this engagement;
b.
None of RL&F’s professionals, included in this engagement, have varied
their rate based on geographic location for these Chapter 11 Cases;
c.
RL&F has advised the Debtors in connection with their restructuring
efforts and in contemplation of these Chapter 11 Cases since on or about
September 9, 2022. The billing rates, except for RL&F’s standard and
customary periodic rate adjustments as set forth above, and material
financial terms have not changed postpetition from the prepetition
arrangement; and
d.
RL&F, in conjunction with the Debtors, is developing a prospective
budget and staffing plan for these Chapter 11 Cases.
16.
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, regular mail, and express mail charges, special or hand delivery charges,
document processing charges, printing/photocopying charges, travel expenses, expenses for
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7
“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 reasonable and fair to
charge these expenses to the clients incurring them instead of increasing hourly rates and
spreading these expenses among all clients.
Evergreen Retainer
17.
Prior to the Petition Date, RL&F received total payments from the Debtors
in the amount of $235,428 (the “Retainer”) to serve as a retainer and to cover fees and expenses
actually incurred, as well as anticipated to be incurred, prior to, and in connection with, the
Debtors’ restructuring and the commencement of these chapter 11 cases. Prior to the Petition
Date, RL&F drew down the entirety of the Retainer (the “Draw Down Amount”) for fees and
expenses actually incurred and anticipated to be incurred through the Petition Date. Thus, at the
time of filing these Chapter 11 Cases, the Retainer had a zero balance. RL&F intends to
promptly complete a final accounting of all amounts actually incurred as fees and expenses prior
to the Petition Date. To that end, RL&F also intends to complete a true-up against the Draw
Down Amount and credit back to the Retainer the excess amounts, if any, with all such amounts
to be held as an evergreen retainer in the bankruptcy cases as discussed in the Application.
18.
An accounting summary of payments made to RL&F during the 90-day
period prior to the Petition Date and the actual and estimated amounts incurred by RL&F is
attached hereto as Exhibit 4.
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8
RL&F’s Disinterestedness
19.
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 RL&F is engaged, (ii) every closed matter on which RL&F 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 identity of adverse parties, and (vi) the attorney at RL&F who 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: (a) the
identity of the prospective client, (b) the matter, and (c) 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.
20.
With the exception of those entities listed on Exhibit 1 and Exhibit 2,
insofar as I have been able to ascertain, neither I, RL&F, nor any other attorney, including any
director, counsel or associate of RL&F currently represents, or has in the past represented, or has
any connection with, the Debtors’ largest creditors, any significant beneficiaries of the Debtors
(holding 5% or more of the beneficial interests in the Debtors), or any of the potential parties in
interest, all as set forth on Exhibit 3 attached hereto (collectively, the “Parties in Interest”),
except as hereinafter set forth.
21.
Through the procedures set forth above, RL&F has determined that it has
in the past represented, currently represents, and/or may in the future represent, the Parties in
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9
Interest (or affiliates thereof) set forth on Exhibit 1 attached hereto (who are current clients) and
the Parties in Interest (or affiliates thereof) set forth on Exhibit 2 attached hereto (who are
former clients that RL&F has represented within the last five (5) years). With the exception of
Wilmington Savings Fund Society, FSB (“WSFS”) and a certain related affiliate of U.S. Bank
Trust National Association (“U.S. Bank”), 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
(0.5%) of RL&F’s annual fees billed, or that, in the aggregate for any related group of entities,
exceeds one percent (1%) of RL&F’s annual fees billed. RL&F currently represents WSFS and
U.S. Bank in general corporate and transactional matters wholly unrelated to the Debtors and
these Chapter 11 Cases.
22.
In addition, RL&F provided general Delaware corporate advice to
American Express Company (“AmEx”) related to the Debtors’ sale of their legacy online
lending platform to affiliates of American Express (the “AmEx Transaction”). RL&F advised
AmEx solely on issues of Delaware law. RL&F’s representation of AmEx in connection with
the AmEx Transaction concluded on or around September 2020. To address any potential
conflict of interest arising from RL&F’s past, current and future representations of AmEx and
certain related affiliates, RL&F obtained a written waiver from the Debtors. Pursuant to such
waiver, the Debtors, among other things, waived any actual or arguable conflict of interest in
connection with RL&F’s past representation of AmEx and continuing to represent AmEx and
certain affiliates in unrelated matters. Further, RL&F will not disclose any confidential
information belonging to AmEx to the Debtors and vice versa. To that end, RL&F has
established an internal ethical wall between this matter and any matters in which RL&F has
represented and currently represents AmEx and any affiliates thereof. In addition, none of the
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10
RL&F professionals involved in the representation of AmEx in the above referenced
representation or any other representation of AmEx or any affiliate thereof is or will be involved
in the representation of the Debtors in these Chapter 11 Cases. Further, RL&F has not
represented and will not represent AmEx or any affiliate thereof in connection with the Debtors’
current restructuring and these Chapter 11 Cases and, in fact, I believe AmEx is represented by
separate counsel in connection with all such matters. I do not believe this representation
precludes RL&F from being a disinterested party under the Bankruptcy Code.
23.
In any event, while RL&F currently represents, and in the past has
represented certain Parties in Interest, it will not represent any of the Parties in Interest or any
other party in interest (including, without limitation WSFS, U.S. Bank and AmEx), other than
the Debtors, in any facet relating to the Debtors or these Chapter 11 Cases.
24.
I do not believe there is any connection or interest (as such terms are used
in section 101(14) of the Bankruptcy Code and Bankruptcy Rule 2014(a)) between RL&F and (i)
the U.S. Trustee or any person employed by the U.S. Trustee or (ii) any counsel, accountants,
financial consultants, and investment bankers who represent or may represent claimants or other
parties in interest in the Chapter 11 Cases, except as 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 11 Cases. Except as set forth herein, RL&F has not represented and will not represent
any such entities in relation to the Debtors and their Chapter 11 Cases, nor does RL&F have any
relationship with any such entities where such relationship would be adverse to the Debtors or
their estates.
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11
25.
Except as set forth herein, and based upon the information available to me,
neither I, RL&F, nor any attorney employed by RL&F, including any director, counsel or
associate thereof, insofar as I have been able to ascertain, holds or represents any interest adverse
to the Debtors or their estates. In addition, RL&F is not a creditor of the Debtors. Therefore,
based upon the information available to me, I believe that RL&F 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.
26.
No promises have been received by RL&F, or by any director, counsel 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, other than the directors of RL&F.
27.
Based on the foregoing, except to the extent set forth in the next
paragraph, to the best of my knowledge, information and belief and in accordance with
Bankruptcy Rule 5002, no attorney, including any director, counsel or associate, of RL&F, has a
connection with any United States Bankruptcy Judge for the District of Delaware, any of the
District Court Judges for the District of Delaware who handle bankruptcy cases, the United
States Trustee for Region 3, the Assistant United States Trustee for the District of Delaware, the
attorney for the U.S. Trustee assigned to the Chapter 11 Cases or any other employee of the U.S.
Trustee that would render RL&F’s retention in the Chapter 11 Case improper. Accordingly, I
understand that the appointment of RL&F is not prohibited by Bankruptcy Rule 5002.
28.
Kevin Gross, who was elected as a director of RL&F effective as of April
1, 2020, was a bankruptcy judge for the Court between March 13, 2006 and March 12, 2020.
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While Mr. Gross is not one of the principal professionals expected to perform services on behalf
of the Debtors, if the circumstances warrant it, he may perform such services during the
pendency of the Chapter 11 Cases.
29.
In addition, as noted above, the Debtors have numerous creditors and
relationships with various individuals and entities that may be Parties in Interest in the Chapter
11 Cases. Consequently, although every reasonable effort has been made to discover all
connections with the Parties in Interest, including the efforts outlined herein, RL&F is unable to
state with certainty whether every possible connection has been discovered. If, however, RL&F
discovers any information that is contrary or pertinent to the statements made herein, including if
any attorney employed by RL&F, including any director, counsel or associate thereof, has any
connection with any of the Parties in Interest, RL&F will promptly disclose such information to
the Court.
30.
RL&F will conduct an ongoing review of its files to ensure that no
conflicts or other disqualifying circumstances exist or arise. Pursuant to Local Rule 2014-1, to
the extent that RL&F learns of any additional material information relating to its employment
(such as potential or actual conflicts of interest), RL&F will file and serve a supplemental
affidavit or declaration with the Court setting forth the additional information.
Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing
is true and correct to the best of my knowledge and belief.
Dated: October 4, 2022
Wilmington, Delaware
/s/ Daniel J. DeFranceschi
Daniel J. DeFranceschi (No. 2732)
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RLF1 27977256v.2
Exhibit 11 – Current Clients2
Banks/Bank Accounts
Synovus Bank
Certain related affiliates of Synovus Financial Corp.
Certain related affiliates of Stone Ridge
Benefit Providers (Workers Compensation/Pension Plans/Third Party Administrators)
Certain related affiliates of New York Life
Certain related affiliates of New York Life (f/k/a Cigna)
Non-Debtors Professionals (law firms, accountants, and other professionals)
Holland & Knight LLP
Contract Counterparties (includes patents and intellectual property)
Airbnb, Inc.
Certain related affiliates of A-Lign Assurance
A-Lign Compliance and Security, Inc.
Credit Suisse
CSC
Certain related affiliates of Emprise Bank
Certain related affiliates of Federal Reserve
five9 Inc.
Certain related affiliates of Fortis Advisors, LLC
Jones Day
Certain related affiliates of LexisNexis Risk Solutions FL Inc.
Certain related affiliates of Macquarie
MasterCard International Incorporated
Certain related affiliates of Option 1 Partners, LLC
Certain related affiliates of ReliaQuest Holdings, LLC
Certain related affiliates of Salesforce
Certain related affiliates of Sound Point Capital Management, LP
South State Bank
Stericycle Inc.
Certain related affiliates of Synovus
Visa U.S.A. Inc.
1
Parties that are both current clients and former clients of RL&F are only listed on Exhibit 1—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.
Case 22-10951-CTG Doc 51-1 Filed 10/05/22 Page 30 of 50
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RLF1 27977256v.2
Affiliations of Current Officers and Directors
Corporation Service Company (CSC)
National Association of Corporate Directors
Automatic Data Processing, Inc. (ADP)
Certain related affiliates of Libra Risk Management
Debtors’ Professionals (law firms, accountants and other professionals)
Certain related affiliates of AlixPartners, LLP
Jones Day
KPMG
McGuireWoods LLP
Weil, Gotshal & Manges LLP
Affiliation of Former Officers and Directors (as of last day with company)
Corporation Service Company (CSC)
Certain related affiliates of Tricolor Auto Group, LLC
Certain related affiliates of American Express
Insurance/Insurance Provider
Certain related affiliates of AIG Specialty Insurance Company
Certain related affiliates of Berkshire Hathaway Specialty Insurance Company
Certain related affiliates of Endurance American Insurance Company c/o Sompro Pro
Lenders, Noteholders, Administrative Agents and Indenture Trustees
Credit Suisse
Guggenheim
Certain related affiliates of Macquarie
Certain related affiliates of U.S. Bank
30 Top Unsecured Creditors
Certain related affiliates of Federal Reserve Bank of San Francisco
Certain related affiliates of Option 1 Partners LLC
Certain related affiliates of Libra Risk Management
Goodwin Proctor
Corporation Service Company
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RLF1 27977256v.2
Litigation Counterparties/Litigation Pending Lawsuits – includes threatened litigation
Holland & Knight, LLP
JP Morgan Chase Bank, N.A.
Other Professionals
Akin Gump Strauss Hauer & Feld LLP
Davis Polk & Wardwell LLP
Goodwin Procter LLP
Sidley Austin LLP
Regulatory and Government (Federal, State, and Local)
Federal Deposit Insurance Corporation
Certain related affiliates of Federal Reserve
Significant Customers
Certain related affiliates of Stone Ridge
Certain related affiliates of Provident Investment Realty, LLC
UCC Search Results/UCC Lien Search Results
Certain related affiliates of CIT
Certain related affiliates of CIT Bank, N.A.
CSC
Certain related affiliates of Federal Reserve Bank of San Francisco
Certain related affiliates of U.S. Bank
Wilmington Savings Fund Society, FSB
Utility Providers/Utility Brokers
Certain related affiliates of Cogent Communications, Inc.
Five9 Inc.
Vendors/Suppliers (includes critical, foreign, common carrier, shippers, warehousemen,
customs duties, brokers charges, facilities provider, etc.)
Certain related affiliates of A-Lign
Certain related affiliates of Five9
Certain related affiliates of Google Duo
Certain related affiliates of Google Workspace
Certain related affiliates of Libra Risk Management
Certain related affiliates of Option 1 Partners LLC
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RLF1 27977256v.2
Certain related affiliates of ReliaQuest Holdings, LLC
Salesforce.com
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Exhibit 2 – Former Clients
Benefit Providers (Workers Compensation/Pension Plans/Third Party Administrators)
Certain related affiliates of Blue Cross Blue Shield of Hawaii
Certain related affiliates of UnitedHealthcare
Certain related affiliates of UnitedHealthcare Dental
Certain related affiliates of UnitedHealthcare of California
Non-Debtors Professionals (law firms, accountants, and other professionals)
Cleary Gottlieb Steen & Hamilton LLP
Contract Counterparties (includes patents and intellectual property)
American Express and certain related affiliates
Endurance International Group, Inc.
Certain related affiliates of Farm Credit East, ACA
Certain related affiliates of Farm Credit West, ACA
Certain related affiliates of TransUnion Risk and Alternative Data Solutions, Inc. (TRADS)
Certain related affiliates of Zendesk
Affiliations of Current Officers and Directors
Certain related affiliates of CLP Holdings III, LLC
Debtors Professionals (law firms, accountants and other professionals)
Greenberg Traurig, LLP
Affiliation of Former Officers and Directors (as of last day with company)
American Express and certain related affiliates
Insurance/Insurance Provider
Certain related affiliates of National Union Fire Insurance Company of Pittsburgh, Pa.
Certain related affiliates of QBE Insurance Corporation
Landlords and Parties to Leases
Certain related affiliates of Lincoln Property Company
30 Top Unsecured Creditors
Certain related affiliates of Transunion Risk and Alternative Data Solutions
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RLF1 27977256v.2
Certain related affiliates of Allegis Group Holdings Inc
Certain related affiliates of Amazon Web Services
Certain related affiliates of Slack
Litigation Counterparties/Litigation Pending Lawsuits – includes threatened litigation
Greenberg Traurig
White & Williams, LLP
Other Professionals
Dentons US LLP
Significant Shareholders (more than 5% of equity)
Certain related affiliates of Softbank Vision Fund (AIV M2) L.P.
Certain related affiliates of SoftBank PriceVille Investments, L.P.
Vendors/Suppliers (includes critical, foreign, common carrier, shippers, warehousemen,
customs duties, brokers charges, facilities provider, etc.)
Certain related affiliates of Allegis Group Holdings Inc
Certain related affiliates of Slack
Certain related affiliates of Transunion Risk and Alternative Data Solutions
Certain related affiliates of Zendesk
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Exhibit 3 – Parties-in-Interest
Debtors
Kabbage, Inc.
Kabbage Canada Holdings, LLC
Kabbage Asset Securitization LLC
Kabbage Asset Funding 2017-A LLC
Kabbage Asset Funding 2019-A LLC
Kabbage Diameter, LLC
Non-Debtor Affiliates and Subsidiaries
(including any partnerships and JV
partners)
Kabbage Financial Services Limited (UK
entity)
Kabbage India Private Limited (India entity)
Debtors’ Trade Names and Aliases (up to
8 years) (a/k/a, f/k/a, d/b/a)
d/b/a KServicing
d/b/a KServicing Corp.
d/b/a KServicing, Inc.
Banks/Bank Accounts
Celtic Bank
Primis Bank
Synovus Bank (Synovus Financial Corp.)
Banks – Servicing
Celtic Bank
Cross River Bank
Customers Bank
HCG (a/k/a Home Capital Group Inc.)
Stone Ridge
Bankruptcy Judges and Staff for the
District of Delaware
Chief Judge Laurie Selber Silverstein
Cacia Batts
Lora Johnson
Judge John T. Dorsey
Laura Haney
Robert Cavello
Judge Craig T. Goldblatt
Demitra Yeager
Nickita Barksdale
Judge Karen B. Owens
Claire Brady
Marquietta Lopez
Judge Brendan L. Shannon
Jill Walker
Rachel Bello
Judge J. Kate Stickles
Paula Subda
Al Lugano
Judge Mary F. Walrath
Catherine Farrell
Laurie Capp
Judge Ashely M. Chan
Joan Ranieri
Benefit Providers (Workers
Compensation/Pension Plans/Third Party
Administrators)
Blue Cross Blue Shield of California
Hawaii Medical Service Association
(HMSA) - Blue Cross Blue Shield of Hawaii
Insperity, Inc.
Kaiser Permanente
New York Life
New York Life (f/k/a Cigna)
Optum Bank
UnitedHealthcare
UnitedHealthcare Dental
UnitedHealthcare of California
VSP Choice
Clerk of the Court
Una O’Boyle
Case 22-10951-CTG Doc 51-1 Filed 10/05/22 Page 36 of 50
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Non-Debtors Professionals (law firms,
accountants, and other professionals)
Cleary Gottlieb Steen & Hamilton LLP
Holland & Knight LLP
Quinn Emmanuel Urquhart & Sullivan LLP
Contract Counterparties (includes
patents and intellectual property)
Abel Commercial Funding
Airbnb, Inc.
American Nation Bank
Alexandra Schieren
A-Lign Assurance
A-Lign Compliance and Security, Inc.
Altabank
American Express Travel Related Services
Company, Inc.
Andy Mei
Anthony Gallucci
Apisero, Inc.
Aprio, LLP
Automation Anywhere, Inc.
Azlo Business, Inc.
Bank of Bird in Hand
Become Technological Solutions, Inc.
Better Impression Ltd.
Bhayva Brundavanam
Big Think Capital
Biz2credit
BlackLine Systems, Inc.
Bonduel State Bank
Bradley Wells
Carter Bank & Trust
Catherine Pargeter
Celtic Bank Corporation
CentSai
Cobbs Allen Capital, LLC d/b/a CAC
Specialty
CommerceOne Bank
Community Financial Services Bank
Community National Bank
CoreCard Software, Inc.
Credit Suisse
Crestmont Capital, LLC
Cross River Bank
CSC
Cullum Financial LLC d/b/a Walloot
Customer Bank
David Rodin
David Snitkof
David Stein d/b/a Law Office of David Stein
d/b/a David Stein Law Group
Daysmart
Debt Settlement Info Bank
Docusign
Dorado Real Estate, Inc d/b/a Host Financial
Dynamic Recovery Solutions, LLC
Endurance International Group, Inc.
East West Bank
Emprise Bank
Erik Goshin
Evangelical Christian Credit Union (ECCU)
Ernst & Young LLP
Farm Credit East, ACA
Farm Credit West, ACA
Federal Reserve
First Florida Credit Union
First National Bank of Syracuse
five9 Inc.
FNBC Bank and Trust
Forensic Risk Alliance Inc.
Fortis Advisors, LLC
Fortis Private Bank
Frank Sauer
Fraz Khalil
GoDaddy.com, LLC
Guggenheim Securities, LLC
Guideline
Guillaume Poirier
Hi Tech Capital
Hyperion Bank
Innovative Funding Solutions, Inc.
Investar Bank, National Association
Investment 360
InscribeAI, Inc.
Insperity
Invariant LLC
iAdvance Now Inc.
James Candalino
James Frohnhofer
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RLF1 27977256v.2
Jason Dolinger
Jason Hwa
Jonathan Kelfer
Jones Day
Karrot
KLDiscovery Ontrack, LLC
Kroll Associates, Inc.
Legacy Bank Colorado
Lendio, Inc.
Level Up Funding LLC
LexisNexis Risk Solutions FL Inc.
Lexolution, LLC
Liam Von Thien
LIG International LLC
Lincoln and Morgan, LLC
Llano National Bank
Macquarie
Major, Lindsey & Africa
Marqeta, Inc
MasterCard International Incorporated
Matt Burton
Mechanics Bank
Merchant and Manufacturers Bank
Mission Capital d/b/a SBG Funding
Moore Colson & Company, P.C.
MorganFranklin Consulting, LLC
Mountainseed Real Estate Services, LLC
National Check Resolution, Inc.
Natural Intelligence Ltd.
Nicholas DelZingaro
Northern California National Bank
Northwest Farm Credit Services, FLCA
Okta, Inc.
OnCourse Learning d/b/a BankersEdge
Option 1 Partners, LLC
Orchard App, Inc.
P.A.R. Consulting d/b/a US Business
Funding
People Bank
PharmaCentra LLC
Prospera Credit Union
Providence Bank
Quick Funding Solutions LLC
Radius Intelligence, Inc.
Redwood Growth Capital, LLC
Red River Bank
ReliaQuest Holdings, LLC
Resource Bank
Salesforce
Sam Zakalik
Sound Point Capital Management, LP
South State Bank
Stericycle Inc.
Strategic Capital
Synovus
The Law Office of Hayes & Welsh
The National Directory of Registered Tax
Return Preparers & Professionals Ltd
The Poplar Grove State Bank
The Provident Bank
TransUnion Risk and Alternative Data
Solutions, Inc. (TRADS)
Trevelino/Keller and Groovy Studios
TrustArc Inc.
United Capital Source Inc
United Resources Enterprise Corp. d/b/a
Brickell Capital Finance
Upwise Capital, LLC
URS Technologies Solutions LLC
Vaco LLC
Venture Lending & Leasing VII, Inc.
Venture Lending & Leasing VIII, Inc.
Visa U.S.A. Inc.
Vital Outsourcing Services, Inc.
Walker Morris
WeTravel, Inc.
Wheaten Financial, Inc.
Xact Data Discovery
Yuhui Yang
Zendesk
Zip Capital Group, LLC
ZMC & Associates LLC
Current Officers and Directors (include
senior management)
Salim Kafiti
Ian Cox
Holly Loiseau
David Walker
Laquisha Milner
Donna Evans
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Laquisha Milner
Robin Gregg
Eric Hartz (dba CorporateHartz, LLC)
John Hebert
Lawrence X. Taylor
John Hebert
Affiliations of Current Officers and
Directors
Solomon’s Temple
Vector Solutions
M2 Business Group, LLC
Point Predictive
DRUM Technologies
Roadsync
Lending Science
PadSplit
Emory Goizueta Business School
American Chemistry Council
Nexus Circular
Corporation Service Company (CSC)
1847 Holdings
Item 9 Labs
Barrie House Coffee Roasters
CLP Holdings III, LLC
Taylor Strategy Group
National Association of Corporate Directors
Arizona State University
Major Lindsey & Africa
Automatic Data Processing, Inc. (ADP)
Clairvoyant Ventures, LLC
Kafiti Real Estate Group, Inc.
Electrolux AB
Libra Risk Management
Creative Essentials, LLC
National Bar Association Executive
Committee, Commercial Law Section
Moore Colson
Magnolia Trust Company
Debtors Professionals (law firms,
accountants and other professionals)
AlixPartners, LLP
Forensic Risk Alliance Inc.
Greenberg Traurig, LLP
Jones Day
KPMG
McGuireWoods LLP
Omni Agent Solutions
Richard Layton & Finger
Weil, Gotshal & Manges LLP
Former Officers and Directors (include
senior management if readily available) (3
years)
Daniel Scott Eidson
Jon Hoffman
Julia McCullough
Kathryn Petralia
Kimberly Withrow
L. Scott Askins
Marc Gorlin
Oneal Bhambani
Robert Frohwein
Spencer Robinson
Troy Deus
Affiliation of Former Officers and
Directors (as of last day with company)
Julia McCullough
Corporation Service Company (CSC)
Kathryn Petralia
Keep Financial
DRUM Technologies, Inc.
Tricolor Auto Group, LLC
PadSplit
Kimberly WIthrow
Kimberly F. Withrow Law
eCapital Corp.
Bibby Financial Services
L. Scott Askins
American Express
Marc Gorlin
Roadie
Oneal Bhambani
Flutterwave
Robert Frohwein
Keep Financial Technologies, Inc.
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Spencer Robinson
Troy Deus
Keep Financial
DRUM Technologies
Insurance/Insurance Provider
AIG Specialty Insurance Company
Atlantic Specialty Insurance Company
Berkshire Hathaway Specialty Insurance
Company
Cobbs Allen Capital, LLC d/b/a CAC
Specialty
Endurance American Insurance Company
c/o Sompro Pro
Everest National Insurance Company
Marsh USA Inc.
National Union Fire Insurance Company of
Pittsburgh, Pa.
QBE Insurance Corporation
XL Specialty Insurance Company
Landlords and Parties to Leases
730 Midtown SVP, LLC (Lincoln Property
Company)
Lenders, Noteholders, Administrative
Agents and Indenture Trustees
Credit Suisse
Guggenheim
Macquarie
U.S. Bank
List of Secured Creditors
Reserve Bank of San Francisco
30 Top Unsecured Creditors
Cross River Bank
Customers Bank
Federal Reserve Bank of San Francisco
U.S. Department of Justice
Federal Trade Commission
Small Business Bureau
American Express Kabbage Inc.
Biz2Credit
Vital Outsourcing Services Inc
MorganFranklin Consulting, LLC
Vaco LLC
RSM US LLP
Transunion Risk and Alternative Data
Solutions
URS Technologies Solutions LLC
KLDiscovery Ontrack, LLC
Amazon Web Services
Allegis Group Holdings Inc
Google Workspace
Moore Colson
Option 1 Partners LLC
Libra Risk Management
Marcell Birk
Slack
Box
Goodwin Proctor
Marcus Carr
Kenny Ajetunmobi
Moyin Omotayo
Thomas E. Austin Jr. LLC
Corporation Service Company
Litigation Counterparties/Litigation
Pending Lawsuits – includes threatened
litigation
365 Sun LLC
Alison F. Kanne
Bosco Seungchul Baek
Calvin L. Erby, II
Candice Worthy
Carlton Morgan
Celtic Bank Corporation d/b/a Celtic Bank
Christina R. King
Cole Ratias
Customers Bank
Douglas Biviano
Edward Ford Services, LLC
Eric L. Lifschitz
Eva Merian Spahn
First Home Bank
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Florida Veterinary Behavior Service
George Pullen
Greenberg Traurig
Henry Anesthesia Associates, LLC
Holland & Knight, LLP
Jason Russell Carr
Jennifer Pullen
Jeremy Sternberg
John P. Mertens
Joshua Borger
JP Morgan Chase Bank, N.A.
Justin E. Proper
Keith W. Berglund
LaDonna Wiggins
Latoya Clark
Lauren B. Veggian
Law Office of James A. Flanagan
Law Offices of Eric L. Lifschitz
Leslie K. Rinaldi
Lexington National Insurance Corporation
Love Watch Hill & Sailors Haven, Inc.
Luxx Lashes by Lay, LLC
Marco Bell
MaryBeth V. Gibson
Melissa Davis Lowe
Ogier, Rothschild & Rosenfeld P.C.
Pia Hoyt Law Firm
Power Bail Bonds
Rice Pugatch Robinson Storfer & Cohen
PLLC,
Richard A. Marshack
Richard Storfer
Shulman Bastian Friedman & Bui LLP
SM Novelties
Smooth & EZ Merchant Funding
Squeeze-It Corp.
Strategic Elements, LLC
Tamara Miles Ogier, Chapter 11 Subchapter
V Trustee
Tastetunup, LLC
The Berglund Group
The Cardoza Law Corporation
The Finley Firm, P.C
Vicki LeMaster
Wandro & Associates, P.C.
White & Williams, LLP
Litigation - Governmental Investigations
Agencies
U.S. Federal Trade Commission
U.S. Department of Justice – Massachusetts
U.S. Department of Justice – Eastern
District of Texas
The Small Business Administration (SBA)
The United States House Representatives
Select Subcommittee on the Coronavirus
Crisis
Other Professionals
Akin Gump Strauss Hauer & Feld LLP
Bailey Duquette
Dentons US LLP
Davis Polk & Wardwell LLP
Goodwin Procter LLP
Green & Sklartz
Hayes & Welsh
Mandelbaum Salsburg, P.C.
RSM US LLP
Sidley Austin LLP
Thomas E. Austin
Windham Brannon
Regulatory and Government (Federal,
State, and Local)
Delaware Attorney General – Kathy
Jennings
Federal Deposit Insurance Corporation
Federal Reserve
Federal Trade Commission
Internal Revenue Service
Office of Foreign Assets Control
Small Business Administration
U.S. Securities and Exchange Commission
United States Attorney for the District of
Delaware – David C. Weiss
United States Department of Justice
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Significant Customers
Celtic Bank
Cross River Bank
Customers Bank
HCG (a/k/a Home Capital Group Inc.)
Stone Ridge
FleetCor Technologies, Inc.
Relief Without Borders LLC
SJ MEDICAL PLLC
Go Africa Global LLC
Cuisane 365 Mobile Inc
New Legend, Inc
Jlite Mortors
Boom Rewards LLC
David Horvath PA
Wiggins & Graham Enterprise LLC
Pink Lady Line
R and L ARCADE INC
Potomac Valley Operator LLC
Source Allies, Inc.
European Service at Home Inc
Tigris, LLC
AREPII SA Hotel LLC
Aspen River Candle Company
Big Shot LLC
Wesley Aron Mock LLC
Club One Casino, Inc
Brian Bui Inc
Repairo LLC
California Freight Solutions Corp
Torque Power Equipment Repairs
PG Medical Lab
Energy Efficient Construction Solutions
TrustedCommunications LLC
Horizon 5 Lakes LLC
Wingfield Leigh Industries, Inc
Allegro School, Inc.
Dog Training With Mario Holland LLC
A One Roof Management & Construction,
Inc.
Koger Industrial Staffing, LLC
Provident Investment Realty, LLC
Flair Group Inc
REX Therapeutics LLC
IMR Contracting Corp
Gods Anointed Youth Ministry
Showtime On The Piers, LLC.
Summit Truck Line
K Weaver Properties LLC
Ences Services Inc
Federal Credit Union
Heart Living Centers of Colorado, LLC
Agee Construction Corporation
1 Ponce De Leon LLC
Bustro Inc
Francis Joseph Capital Inc
DataSync Inc
SMELifestyle, inc
Crown Management Services, LLC
SUITE Media Productions & Management
LLC
Gourmet Nut Inc
Propel Opportunity Fund Inc.
Keystrokes Transcription Service Inc
E. Mishan & Sons
Russell Road Food and Beverage LLC
Significant Shareholders (more than 5%
of equity)
Softbank Vision Fund (AIV M2) L.P.
Blue Run Ventures IV, L.P.
Thomvest Ventures Ltd.
MDV Ix, L.P. c/o Mohr Davidow Ventures
SoftBank PriceVille Investments, L.P.
Taxing Authorities (Federal, State, and
Local; trust fund, use property, franchise,
sales)
Alabama Department of Revenue
California Franchise Tax Board
Georgia Department of Revenue
Internal Revenue Service
North Carolina Department of Revenue
New York State Department of Finance
New York City Department of Finance
Pennsylvania Department of Revenue
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UCC Search Results/UCC Lien Search
Results
CHTD Company
CIT
CIT Bank, N.A.
Cross River Bank
CSC
Direct Capital Corporation
Federal Reserve Bank of San Francisco
Financial Agent Services
Fulton County, Georgia Tax Commissioner
Secured Lender Solutions, LLC
U.S. Bank
Wilmington Savings Fund Society, FSB
United States Attorney’s Office for the
District of Delaware
David C. Weiss
United States Trustee and Staff for the
District of Delaware
Andrew R. Vara
Joseph McMahon
David Buchbinder
Linda Casey
Joseph Cudia
Timothy J. Fox, Jr.
Benjamin Hackman
Jane Leamy
Hannah M. McCollum
Linda Richenderfer
Juliet Sarkessian
Richard Schepacarter
Rosa Sierra-Fox
Lauren Attix
Shakima L. Dortch
Christine Green
Ramona Harris
Angelique Okita
Edith A. Serrano
Dion Wynn
Denis Cooke
Holly Dice
Nyanquoi Jones
James R. O'Malley
Michael Panacio
Diane Giordano
Utility Providers/Utility Brokers
Cogent Communications, Inc.
Five9 Inc.
Vendors/Suppliers (includes critical,
foreign, common carrier, shippers,
warehousemen, customs duties, brokers
charges, facilities provider, etc.)
A-Lign
Allegis Group Holdings Inc
American Express Kabbage Inc.
Biz2X LLC
BlackLine Systems, Inc.
Box
DataBricks
Five9
Fusion Cloud Services LLC
Google Duo
Google Workspace
HP Holdings, Inc. (dba Invariant LLC)
InscribeAI, Inc.
KLDiscovery Ontrack, LLC
Kroll Associates, Inc.
Lexolution
Libra Risk Management
MLA
Moore Colson
MorganFranklin Consulting, LLC
Option 1 Partners LLC
ReliaQuest Holdings, LLC
Salesforce.com
Sage Intacct, Inc.
Slack
TLO
Transunion Risk and Alternative Data
Solutions
URS Technologies Solutions LLC
Vaco LLC
Vital Outsourcing Services Inc.
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Willis Towers Watson US LLC
Zendesk
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Exhibit 4 - Accounting Summary of Payments
Date
Transaction
Amount
Retainer
Balance
9/19/2022
Wire Transfer Deposit of Retainer
$100,000
$100,000
9/29/2022
Wire Transfer Deposit of Retainer
$110,428
$210,428
9/30/2022
Wire Transfer Deposit of Retainer
$25,000
$235,428
10/3/2022
Retainer amount drawn down based on services
performed and anticipated to be performed
through the Petition Date. This amount
represented a good faith estimate of the fees and
expenses associated with all such services,
including fees and expenses already recorded in
RL&F’s billing system. Any portion of the
amounts drawn which, upon reconciliation, is
not attributed to prepetition fees and expenses,
will be held by RL&F as security throughout
the Debtors’ bankruptcy cases until RL&F’s
fees and expenses are awarded by final order
and are then payable to RL&F.
$235,428
($0.00)
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RLF1 27977256v.2
Exhibit C
Loiseau Declaration
Case 22-10951-CTG Doc 51-1 Filed 10/05/22 Page 46 of 50
RLF1 27977256v.2
UNITED STATES BANKRUPTCY COURT
DISTRICT OF DELAWARE
------------------------------------------------------------ x
In re
:
Chapter 11
:
KABBAGE, INC. d/b/a KSERVICING, et al., :
Case No. 22-10951 (CTG)
:
:
Debtors.1
:
(Jointly Administered)
------------------------------------------------------------ x
DECLARATION OF HOLLY LOISEAU IN
SUPPORT OF APPLICATION OF DEBTORS
TO RETAIN AND EMPLOY RICHARDS,
LAYTON & FINGER, P.A. AS CO-COUNSEL TO THE
DEBTORS EFFECTIVE AS OF PETITION DATE
I, Holly Loiseau, pursuant to 28 U.S.C. § 1746, hereby declare that the following
is true and correct to the best of my knowledge, information, and belief:
1.
I am the General Counsel (the “General Counsel”) of the above-
captioned debtors and debtors in possession (collectively, the “Debtors”). I submit this
declaration (the “Declaration”) in support of the Application of Debtors to Retain and Employ
Richards, Layton & Finger, P.A. as Co-Counsel to the Debtors Effective as of Petition Date (the
“Application”)2 for authority to retain and employ Richards, Layton & Finger, P.A. (“RL&F”),
as co-counsel for the Debtors effective as of the Petition Date. Except as otherwise noted, all
facts in this Declaration are based on my personal knowledge of the matters set forth herein,
information gathered from my review of relevant documents and information supplied to me by
other members of the Debtors’ personnel and the Debtors’ advisors.
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification
number, as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A);
Kabbage Asset Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding
2019-A LLC (8973); and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used
under license; Kabbage, Inc. d/b/a KServicing is not affiliated with American Express. The Debtors’ mailing and
service address is 925B Peachtree Street NE, Suite 383, Atlanta, GA 30309.
2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Application.
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SELECTION OF RL&F AS CO-COUNSEL
2.
The Debtors seek to retain Weil Gotshal & Manges LLP as their lead
bankruptcy counsel in connection with the Chapter 11 Cases. Upon determining that these
Chapter 11 Cases would be filed in the United States Bankruptcy Court for the District of
Delaware, the Debtors selected RL&F to serve as their Delaware co-counsel. RL&F was
selected because of the firm’s extensive experience and knowledge in the field of debtor’s and
creditor’s rights, business reorganizations and liquidations under chapter 11 of the Bankruptcy
Code, its expertise, experience and knowledge in practicing before this Court, its proximity to
the Court, its ability to respond quickly to emergency hearings and other emergency matters, and
its familiarity with the Debtors and their businesses due to RL&F’s prepetition representation of
the Debtors. As such, the Debtors believe that RL&F is uniquely qualified to represent them in
these Chapter 11 Cases.
RATE STRUCTURE
3.
In my capacity as General Counsel, I, and others acting under my
direction, are responsible for assisting the Debtors in supervising outside counsel retained by the
Debtors. In my experience working with other outside law firms on other matters, I believe that
RL&F’s rates are comparable to those of firms similar to RL&F. I, and others acting under my
direction, are also responsible for reviewing the invoices regularly submitted by RL&F, and I
understand that the rates RL&F charged the Debtors in the prepetition period are the same as the
rates RL&F will charge the Debtors in the postpetition period, subject to annual and customary
firm-wide adjustments in the ordinary course of RL&F’s business.
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COST SUPERVISION
4.
RL&F and the Debtors are in the process of developing a prospective
budget and staffing plan for the first interim period in these Chapter 11 Cases. The Debtors
recognize that in large chapter 11 cases such as this, it is possible there may be unforeseen fees
and expenses that will need to be addressed by the Debtors and RL&F. The Debtors also
recognize it is their responsibility to closely monitor the billing practices of RL&F to ensure that
fees and expenses paid by their estates remain consistent with the Debtors’ expectations taking
into account the exigencies of these Chapter 11 Cases. To that end, the Debtors will continue to
review and monitor the regular invoices submitted by RL&F and, together with RL&F,
periodically amend the budget and staffing plans to reflect developments in these cases as
applicable.
5.
The Debtors will continue to monitor the fees and expense reimbursement
process during these Chapter 11 Cases and ensure the Debtors are an active participant in that
process. Recognizing that every chapter 11 case is unique, the Debtors, together with RL&F,
will utilize the budgeting process to provide guidance on the period of time involved and the
level of attorneys and professionals who will work on various matters, as well as the projection
of average hourly rates for the attorneys and professionals for such matters.
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Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing
is true and correct to the best of my information, knowledge, and belief.
Dated: October 4, 2022
Atlanta, Georgia
/s/ Holly Loiseau
Name: Holly Loiseau
Title: General Counsel
Case 22-10951-CTG Doc 51-1 Filed 10/05/22 Page 50 of 50