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Case:12-24882-ABC Doc#:229 Filed:07/24/12

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF COLORADO In re: CORDILLERA GOLF CLUB, LLC, Debtor. ) ) ) ) )

Case No. 12-24882-ABC Chapter 11

OBJECTION OF THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS TO DEBTOR'S APPLICATION FOR AN ORDER (I) AUTHORIZING RETENTION OF GA KEEN REALTY ADVISORS, LLC AS REAL ESTATE ADVISOR FOR THE DEBTOR AND DEBTOR IN POSSESSION NUNC PRO TUNC TO THE PETITION DATE AND (II) WAIVING CERTAIN REQUIREMENTS OF LOCAL RULE 2016-2
The Official Committee of Unsecured Creditors ("Committee") appointed in the above captioned, Chapter 11 bankruptcy case of Cordillera Golf Club, LLC ("Debtor"), by and through its (proposed) undersigned counsel, respectfully files this Objection (this "Objection") to the Debtor's Application for an Order (I) Authorizing the Retention of GA Keen Realty Advisors, LLC ("GA Keen") as Real Estate Advisor for the Debtor and Debtor in Possession Nunc Pro Tunc to the Petition Date and (II) Waiving Certain Requirements of Local Rule 2016-2 [Docket No. 111] ("Application"), and in support, would respectfully show the Court as follows: I. BACKGROUND 1. On June 26, 2012 ("Petition Date"), the Debtor filed with the United States

Bankruptcy Court for the District of Delaware its voluntary for relief under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code), thereby initiating its bankruptcy case (assigned Case No. 12-11893), with the Delaware Bankruptcy

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Court (the Bankruptcy Case). The Debtor remains in control of its business and affairs as a debtor-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. 2. On July 6, 2012, the United States Trustee filed its Notice of Appointment of

Committee of Unsecured Creditors [Docket No. 86], thereby forming the Committee. 3. The Debtor is the owner and operator of "The Club at Cordillera" (the "Club"),

located in Edwards Colorado in Eagle County. The Club includes three 18-hole golf courses, a short course, three tennis centers, fitness facilities, five indoor and outdoor pools, a summer camp with clubhouse for children, and riding, hiking and cross-country ski trails. See Declaration of Daniel L. Fitchett, Jr. in Support of Chapter 11 Petitions and First Day Relief [Docket No. 4] (Fitchett Declaration), 7. 4. The Club is located within the Cordillera residential community in Edwards

County, and derives revenues through fees and dues related to Club memberships and marketed to community residents and others. Fitchett Declaration, 5, 6, 8-12. 5. On July 16, 2012, following a hearing conducted on several motions and joinders

filed by a class of the Debtor's member creditors, secured lender Alpine Bank, the Committee, and other parties in interest seeking to transfer the venue of the Bankruptcy Case to this Court (as well as responses and oppositions filed by the Debtor and other persons and parties), the Delaware Bankruptcy Court entered its Order transferring venue of this case to this Court. See Docket Nos. 75, 76, 95, 116-123, 125. A. The Application 6. Prior to the transfer of this case to this Court, on July 10, 2012, the Debtor filed its

Application, seeking to retain GA Keen as its "real estate" advisors pursuant to Sections 327 and

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328 of the Bankruptcy Code, for the purposes of, inter alia, assisting the debtor with a proposed "capital infusion needed for its business." Application, at 5. Specifically, the Application proposes that GA Keen would assist the Debtor in raising debt, equity or venture capital in order to: (i) fund a chapter 11 plan; (ii) refinance the Debtor's Club; (iii) recapitalize the Debtor; (iv) provide post-petition debtor-in-possession financing; and/or (v) the sale of one or more of the Debtor's properties. Application, at 10. In connection with same, the Debtor proposes to assign to GA Keen responsibility to: (i) provide due diligence disclosures; (ii) develop financing plans; (iii) market the debtor and identify and correspond with potential suitors; and (iv) advise the Debtor with respect to structuring negotiating and implementing proposed transactions, and negotiating with creditors with respect to same. Application, at 10. 7. The Application proposes that the structure of GA Keen's compensation be based

on a percentage transaction fee ("Transaction Fee") ranging from 2% to 6% of the "gross proceeds" of a transaction. Application, at 11.1 Notwithstanding the foregoing, the Application provides for an automatic minimum transaction fee ("Minimum Fee") of at least $350,000.00 (in addition to out of pocket expenses), which GA Keen will earn upon the conclusion of its service to Debtor, and even if GA is never requested to do anything. Application, at Exh. C (3). 8. Also on July 10, 2012, the Debtor filed its Application for an Order Authorizing

the Retention of PriceWaterhouse Coopers, LLP ("PwC") as Financial Advisor to the Debtor Nunc Pro Tunc to the Petition Date and Waiving Certain Requirements Pursuant to Local Rule 2016-2 [Docket No. 110] ("PwC Application"). In the PwC Application, the Debtor proposes to engage PwC to serve as its "financial advisor," for the purpose of performing, inter alia, the

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following duties: (i) evaluating restructuring, financing and capital alternatives; (ii) assisting with cash flow projections and forecasts, and performing forensic accounting analyses; (iii) assisting with proposed sales and other transactions; (iv) negotiations with potential lenders for exitfinancing, "stakeholders" and other critical parties; (v) witness testimony and litigation consultation; (vi) assisting with schedules, operating reports and other financial disclosures; and (vii) advising the Debtor on golf industry metrics and operations. PwC Application, at 9. II. OBJECTIONS A. The Application is Duplicative 9. Contemporaneously herewith, the Committee has filed its companion objection to

the PwC Application, raising concerns over the substantial overlap of the services and duties that the Debtor proposes PwC and GA Keen to perform, and the burden and costs of duplication that would improperly result. The Committee respectfully incorporates that discussion herein for all purposes and objects that GA Keen and PwC should not both be approved as professionals to be compensated from the estate for performing the same, or substantially overlapping services. B. The Application is Premature 10. The concern over unnecessary duplication is magnified here, where the

circumstances leading to the Debtor's Application and the proposal to retain GA Keen apparently no longer apply. At the outset of this case, the Debtor's intended approach to restructuring its affairs involved, first, a proposed sale of its "Mountain Course" to fund additional costs of administration. See Fitchett Declaration, at 41-42.

Gross Proceeds are defined as the "total consideration" transferred to or for the benefit of the Debtor, including contingent and indirect consideration. Application, at Exh. C ( 2).

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11.

Apparently, that approach no longer applies, and the Debtor is not proposing any

present sale of the estate's real property assets.2 Therefore, the Debtor similarly has no need or basis to presently propose that the estate incur the burden of GA Keen's engagement, especially one that is substantially duplicative, for this same purpose. 12. This is also particularly the case where the Debtor is also proposing a Minimum

Fee to GA Keen that would cost the estate $350,000 as soon as GA Keen is approved. C. The Minimum Fee Structure Should Be Denied or Made Expressly Subject to Section 330 of the Bankruptcy Code 13. The Committee further objects that the Minimum Fee proposed to GA Keen,

which can be earned even if GA Keen does absolutely nothing for the benefit of the estate, and therefore, runs directly counter to the general standards and purposes applicable to bankruptcy engagements. In re Kusler, 224 B.R. 180, 184-85 (Bankr. N.D. Okla. 1998) (explaining that the critical, threshold issue in evaluating fee requests is the benefit conferred to the estate). See also In re Hernandez, 2007 WL 1886279, *3-*4 (S.D. Tex. 2007) (fixed fee arrangement must be specifically justified to be allowable); In re Rogers, 401 B.R. 490, 494 (10th Cir. B.A.P. 2009) (a fixed fee allowed without a detailed application is typically approved as a maximum, and not a minimum, fee). 14. Accordingly, the Minimum Fee to GA Keen should not be allowed by this Court

absent a specific justification and explanation for why it is appropriate under these circumstances and how this structure is designed to benefit the estate. For a similar reason, any order approving the Application should do so based on section 327 of the Bankruptcy Code, and not section 328, or otherwise expressly providing that this Court and all parties in interest reserve all of their
2

See Debtor's Status Report as Requested by the Court [Docket No. 193], at pp. 2-3.

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rights and authority pursuant to section 330 of the Bankruptcy Code, or otherwise, to evaluate and oppose the compensation requested by GA Keen, including but not limited to any Minimum Fee request. See In re Commercial Financial Services, Inc., 298 B.R. 733, 743-44 (10th Cir. B.A.P. 2003) (discussing professional's argument that its compensation could not be revisited by the Court once that compensation structure has been "unconditionally" approved under Section 328); In re Yates, 217 B.R. 296, 301 (Bankr. N.D. Okla. 1998) ("The use of 'flat' or 'customary' fees does not relieve the bankruptcy court of its statutory duty to review the fees incurred to determine their reasonableness."). Presently approving the Application under section 328, absent such an express reservation, only creates an argument that this Court and parties in interest may not thereafter revisit the terms of their compensation, if any. 15. The Committee accordingly, respectfully requests that the Application be denied,

or approved only subject to the resolution of the concerns raised herein. DATED: July 24, 2012. HOLLAND & HART LLP

Respectfully submitted, s/Risa Lynn Wolf-Smith Risa Lynn Wolf-Smith, #15835 Clarissa M. Raney, #40374 HOLLAND & HART LLP 555 Seventeenth Street, Suite 3200 Denver, Colorado 80202 Telephone: 303-295-8000 Facsimile: 303-295-8261 rwolf@hollandhart.com cmraney@hollandhart.com -and-

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MUNSCH HARDT KOPF & HARR, P.C. Russell L. Munsch Texas Bar No. 14671500 Joseph J. Wielebinski Texas Bar No. 21432400 Jay H. Ong Texas Bar No. 24028756 3800 Lincoln Plaza 500 N. Akard Street Dallas, Texas 75201-6659 Telephone (214) 855-7500 Facsimile (214) 978-4335 (PROPOSED) ATTORNEYS FOR THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS

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CERTIFICATE OF SERVICE The undersigned hereby certifies that, on July 24, 2012, in addition to service via the Court's CM/ECF system, she personally caused to be served a true and correct copy of this filed document, to be served, via First Class U.S. Mail, postage prepaid and properly addressed, on the parties shown on the attached service list.

Arthur J. Abramowitz, Esq. Cozen O'Connor, PC LibertyView, Suite 300 457 Haddonfield Road Cherry Hill, NJ 08002 Garry R. Appel, Esq. Appel & Lucas, P.C. 1660 17th Street, Suite 200 Denver, CO 80202 William P. Bowden, Esq. Ashby & Geddes, P .A. 500 Delaware avenue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 Brad W. Breslau, Esq. Cozen O'Connor, PC 707 17th Street, Suite 3100 Denver, CO 80202

Zachery Z. Annable, Esq. Munsch Hardt Kopf & Harr, P.C. 3800 Lincoln Plaza 500 N. Akard Street Dallas, Texas 75201-6659 Joseph M. Barry, Esq. Young Conaway Stargatt & Taylor LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Donald J. Bowman, Esq. Young Conaway Stargatt & Taylor LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Mikel Bistrow, Esq. Foley Lardner LLP 402 W. Broadway, Suite 2100 San Diego, CA 92101

Travis G. Buchanan, Esq. Young Conaway Stargatt & Taylor, LLP 1000 N. King St. Wilmington, DE 19801

Peter A. Cal, Esq. Sherman & Howard L.L.C. 633 17th Street, Suite 3000 Denver, CO 80202

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Kathryn M.S. Catherwood, Esq. Foley & Lardner LLP 402 W. Broadway, Ste. 2100 San Diego, CA 92101-3542

Christopher Celentino, Esq. Foley Lardner LLP 402 W. Broadway, Suite 2100 San Diego, CA 92101 Service Via e-mail and ECF Tobey M. Daluz, Esq. Ballard Spahr LLP 919 N. Market Street, 11th Floor Wilmington, DE 19801

Shaun A. Christensen, Esq. Appel & Lucas, P.C. 1660 17th Street, Suite 200 Denver, CO 80202

Carl A. Eklund, Esq. Ballard Spahr, LLP 1225 17th Street, Suite 2300 Denver, CO 80202

Mark L. Fulford, Esq. Sherman & Howard L.L.C. 633 17th Street, Suite 3000 Denver, CO 80202

James J. Holman, Esq. Duane Morris LLP 30 South 17th Street Philadelphia, PA 19103

Ericka F. Johnson, Esq. Womble Carlyle Sandridge & Rice, LLP 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801 Benjamin W. Keenan, Esq. Ashby & Geddes, P.A. 500 Delaware Avenue P.O. Box 1150 Wilmington DE 19899 David L. Lenyo, Esq. Garfield & Hecht, P.C. 601 E. Hyman Ave. Aspen, CO 81611

Kristi A. Katsma, Esq. Dickinson Wright PLLC 500 Woodward Avenue, Suite 4000 Detroit, MI 48226

Michael S. Kogan, Esq. Kogan Law Firm, APC 1901 Avenue of the Stars, Suite 1050 Los Angeles, CA 90067

Vincent J. Marriott, III, Esq. Ballard Spahr, LLP 1735 Market Street, 51st Floor Philadelphia, PA 19103

Melissa Maxman, Esq. Cozen O'Connor, PC 1627 I Street, NW, Suite 1100 Washington, DC 20006

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Dawn Messick, Esq. Foley & Lardner LLP 402 W. Broadway, Suite 2100 San Diego, CA 92101

Mark Minuti, Esq. Saul Ewing LLP 222 Delaware Ave., Ste. 1200 Wilmington, DE 19899

Erika L. Morabito, Esq. Foley Lardner LLP 3000 K Street, N.W., Suite 600 Washington, DC 20007 Russell L. Munsch, Esq. Munsch Hardt Kopf & Harr, P.C. 3800 Lincoln Plaza 500 N. Akard Street Dallas, Texas 75201-6659 Jay H. Ong, Esq. Munsch Hardt Kopf & Harr, P.C. 600 Congress Ave., Ste. 2900 Austin, Texas 78701-3057

Paul Moss, Esq. Office of U.S. Trustee 999-18th Street, Ste. 1551 Denver, CO 80202

Brittany J. Nelson, Esq. Foley Lardner LLP 3000 K Street, N.W., Suite 600 Washington, DC 20007 Ricardo Palacio, Esq. Ashby & Geddes, P .A. 500 Delaware Avenue, 8th Floor P.O. Box 1150 Wilmington, DE 19899 Richard W. Riley, Esq. Duane Morris LLP 222 Delaware Avenue, Suite 1600 Wilmington, DE 19801-1659

Jon T. Pearson, Esq. Ballard Spahr 100 North City Parkway, Suite 1750 Las Vegas, NV 89106-4617

Matthew J. Riopelle Foley & Lardner LLP 402 W. Broadway, Ste. 2100 San Diego, CA 92101-3542

Harlan W. Robins, Esq. Dickinson Wright PLLC 15 N. 4th Street Columbus, OH 43215 Harvey Sender, Esq. Sender & Wasserman, P.C. 1660 Lincoln St., Ste. 2200 Denver, CO 80264 Service Via e-mail and ECF

Sara Schindler-Williams, Esq. Ballard Spahr, LLP 1735 Market Street, 51st Floor Philadelphia, PA 19103

10

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Zachary I. Shapiro, Esq. Richards, Layton & Finger, P.A. One Rodney Square 920 N. King Street Wilmington, DE 19801 Ann Marie Uetz, Esq. Foley & Lardner LLP One Detroit Center 500 Woodward Avenue, Suite 2700 Detroit, Michigan 48226-3489 Matthew P. Ward, Esq. Womble Carlyle Sandridge & Rice, LLP 222 Delaware Avenue, Suite 1501 Wilmington, DE 19801

Darnien Tancredi, Esq. Cozen O'Connor, PC 1201 N. Market Street, Suite 1400 Wilmington, DE 19801

David V. Wadsworth, Esq. Sender & Wasserman, P.C. 1660 Lincoln Street, Suite 2200 Denver, CO 80264 Gregory W. Werkheiser, Esq. Morris, Nichols, Arsht & Tunnell LLP 1201 N. Market St., 18th Floor P.O. Box 1347 Wilmington, DE 19899-1347 Joseph J. Welebinski, Esq. Munsch Hardt Kopf & Harr, P.C. 3800 Lincoln Plaza 500 N. Akard Street Dallas, Texas 75201-6659 Dan White Cordillera Golf Club, LLC 97 Main Street, Suite E202 Edwards, CO 81632

Ronald Wick, Esq. Cozen O'Connor, PC 1627 I Street, NW, Suite 1100 Washington, DC 20006

Joshua E. Zugerman, Esq. Ballard Spahr LLP 919 N. Market Street, 11th Floor Wilmington, DE 19801

Centralized Insolvency Section 2970 Market Street Philadelphia, PA 19104

Colorado Department of Revenue Attn: Bankruptcy Unit 1375 Sherman Street, Room 1375 Denver, CO 80261

Internal Revenue Service Centralized Insolvency Section P.O. Box 7346 Philadelphia, PA 19101-7346

Internal Revenue Service Department of Treasury Ogden, UT 84201-0030 Internal Revenue Service

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George S. Canellos, Regional Director Securities & Exchange Commission New York Office 3 World Financial Center, Suite 400 New York, NY 10281-1022 Secretary of State Division of Corporations Franchise Tax John G. Townsend Building 401 Federal Street- Suite 4 P.O. Box 898 Dover, DE 19903

Securities & Exchange Commission Central Regional Office Attn: Office of General Counsel (Bankruptcy) 1801 California Street, Suite 1500 Denver, CO 80202 Secretary of Treasury 820 Silver Lake Boulevard, Suite 100 P.O. Box 7040 Dover, DE 19903

July 24, 2012 s/Lela Lopez Velasquez Lela Lopez Velasquez


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