Lenard M. Parkins (NY Bar No. 4579124) John D. Penn (NY Bar No.

4847208) Mark Elmore (admitted pro hac vice) HAYNES AND BOONE, LLP 1221 Avenue of the Americas, 26th Floor New York, New York 10020 Telephone: (212) 659-7300 Facsimile: (212) 884-8211 Attorneys for Midland Loan Services, Inc. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: INNKEEPERS USA TRUST, et al., Debtors. ) ) ) ) ) ) Chapter 11 Case No. 10-13800 (SCC) Jointly Administered

LIMITED OBJECTION OF MIDLAND LOAN SERVICES, INC. TO THE MONTHLY APPLICATION OF KIRKLAND & ELLIS LLP FOR COMPENSATION FOR SERVICES AND REIMBURSEMENT OF EXPENSES AS ATTORNEYS FOR THE DEBTORS AND DEBTORS IN POSSESSION FOR THE PERIOD FROM AUGUST 1, 2010 THROUGH AUGUST 31, 2010 Midland Loan Services, Inc. (Midland)1 hereby files this Limited Objection of Midland Loan Services, Inc. to the Monthly Application of Kirkland & Ellis LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors and Debtors in Possession for the Period from August 1, 2010 through August 31, 2010 (the Limited Objection), and in support thereof, respectfully represents as follows:
1

Midland is the special servicer pursuant to the Pooling and Servicing Agreement dated as of August 13, 2007 (the Special Servicing Agreement) for that certain secured loan in the amount of not less than $825,402,542 plus interest, costs and fees (the Fixed Rate Mortgage Loan) owed by certain of the above captioned Debtors. The Fixed Rate Mortgage Loan is secured by cross-collateralized and crossdefaulted first priority mortgages, liens and security interests on forty-five (45) hotel properties and their contents and assets related thereto (collectively, the Midland Properties) and the other collateral, including all cash collateral as such term has meaning under section 363 of the Bankruptcy Code, generated by the Midland Debtors hotel and business operations with respect to the Midland Properties (the Midland Cash Collateral), as set forth in the Fixed Rate Mortgage Loan Agreement.
1905614_4.DOC 1

Preliminary Statement2 1. The Fee Application cannot be approved as filed. While Midland appreciates that

Kirkland deferred its request for compensation related to the Plan Support Agreement dispute (by deferring a request for payment of items in the Plan and Disclosure Statement matter number), its deferral is inadequate and should be substantially greater. As will be demonstrated below, fees and expenses related to the Plan Support Agreement litigation were posted into matter numbers other than Plan and Disclosure Statement and should not be paid where they were posted.3 2. Also, the fees and expenses incurred in connection with the Debtors dispute with

Marriott International, Inc. (Marriott) regarding the Troy Central location (and generally included within number 15 Franchise Issues) were not reasonable and in any event, should not be charged against Midlands Cash Collateral. That dispute solely involved the Floating Rate Pool and was apparently supported by the Floating Rate lender Lehman ALI, Inc. (Lehman). Any fees and expenses that may be allowed in connection with that litigation should be borne by Lehmans cash collateral, without any allocation against Midlands Cash Collateral. Background 3. On August 12, 2010, the Court entered its Order Authorizing the Retention and

Employment of Kirkland & Ellis LLP as Attorneys for the Debtor and Debtors in Possession Nunc Pro Tunc to the Petition Date (the Retention Order). Pursuant to the terms of the Retention Order, Kirkland & Ellis LLPs (Kirkland) retention was effective as of July 19, 2010.

Capitalized terms otherwise undefined in this Preliminary Statement have the meanings ascribed

below.
3

Alternatively, the amounts charged to the other matters are unreasonably large by at least 50%.
2

1905614_4.DOC

4.

On August 31, 2010, the Court entered its Order Authorizing the Establishment of

Procedures for Interim Compensation and Reimbursement of Expenses for Professionals and Official Committee Members (the Fee Procedures Order). Pursuant to the Fee Procedures Order, Notice Parties, as defined in the Fee Procedures Order, must file objections to monthly applications for compensation within twenty (20) days after service of the monthly application for compensation.4 The Fee Procedures Order provides further that nothing in this Order shall affect in any way any special servicers right to object to the use of its cash collateral to fund all or part of the fees and expenses of professionals compensated from the Debtors bankruptcy estates in monthly, interim, or final fee requests nor rule on the appropriateness of such cash collateral use or any entities rights with respect thereto. Fee Procedures Order at p. 7, 10. 5. On October 13, 2010, Kirkland filed its Monthly Application of Kirkland & Ellis

LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors and Debtors in Possession for the Period From August 1, 2010 Through August 31, 2010 (the Fee Application). The Fee Application indicated that during August 2010, Kirkland incurred fees of $2,851,240.50 and expenses of $153,021.48 for a total of $3,004,261.98. Kirkland deferred without explanation requesting payment of fees of $700,577.50 and $4,725.54 in expenses for a total of $705,303.04. Kirkland requested the payment of

$1,720,530.40 in fees and $148,295.94 in expenses, and corresponding payment of eighty percent (80%) of the fees and one hundred percent (100%) of the expenses. Pursuant to the Fee Procedures Order, objections to the Fee Application must be filed by November 5, 2010. 6. The use of Midlands Cash Collateral is governed by the Final Order Authorizing

the Debtors to (i) Use the Adequate Protection Parties Cash Collateral and (ii) Provide Adequate

Midland is a Notice Party under the Fee Procedures Order.

3

1905614_4.DOC

Protection to the Adequate Protection Parties Pursuant to 11 U.S.C. 361, 362, and 363 dated September 2, 2010 [Docket Entry #402] (as amended) (the Final Cash Collateral Order). Objection A. Midland Objects to Payment of Plan Support Agreement Litigation Costs, including Fees and Expenses in Categories other than Plan and Disclosure Statement 7. Midland objects to the payment of any fees and expenses related to the Plan

Support Agreement litigation as unreasonable and not allowable. The Debtors caused parties to incur millions of dollars of litigation expense in their ultimately futile effort to obtain the assumption of the Plan Support Agreement. No compensation should be allowed for those efforts especially since the fees would be funded from lenders cash collateral. 8. Some of the fees and expenses related to the Plan Support Agreement litigation

are noted in the Plan and Disclosure Statement matter number (which Kirkland indicates are being deferred). However, a significant amount of fees and expenses related to that litigation may also be found in other matter numbers. These may have been placed in the other matter numbers either by mistake or perhaps to reduce the fees billed to the Plan and Disclosure Statement matter number. 9. As will be more fully outlined below, there are a substantial number of entries

where the allocation of time for any given day either skews toward other matters or was allocated away from Plan and Disclosure Statement in favor of matters that were substantially less controversial. Whether that time is determined to be related to the Plan Support Agreement or simply well in excess of the reasonable amount of fees for their assigned matters, at least 50% of fees for the highlighted items should be denied and the amounts adjusted accordingly. 10. By way of example, the Cash Collateral and Debtor in Possession financing issues

presented in these cases were substantially less contentious than the Plan Support Agreement and should have resulted in substantially lower charges. Instead, the fees and expenses charged for
1905614_4.DOC 4

those are comparable to the fees and expenses charged for Plan and Disclosure Statement as noted below:
Matter Number Matter Description Total Billed Hours Total Fees Requested Total Expenses Requested Total Compensation

12 7 11

Disclosure Statement and Plan of Reorganization Issues Cash Collateral DIP and Exit Financing Issues

1,373.40 718.30 1,007.80

$700,577.50 $421,067.00 $551,474.50

$4,725.54 $1,818.48 $36,803.33

$705,303.04 $422,885.48 $588,277.83

A more appropriate allocation of time and charges indicates that additional amounts should be included in the Disclosure Statement and Plan of Reorganization Issues matter and both deferred and disallowed. B. Payment of Fees and Expenses in Connection with Litigation with Marriott Regarding Troy Central Location Should not be Funded from Midlands Cash Collateral 11. Midland further objects to the use of Midlands Cash Collateral for payment of

any fees incurred by the Kirkland in connection with the Marriott Dispute (as defined below). Additionally, and in the alternative, Midland objects to the use of Midlands Cash Collateral for payment of any fees incurred by Kirkland in connection with the Marriott Dispute on the basis that the fees are unreasonable. 12. On August 26, 2010, the Court entered the Stipulation Between Innkeepers USA

Trust and Marriott International, Inc. and Order Approving Settlement of Marriotts Motion for Limited Modification of the Automatic Stay and Debtors Motion to Assume the Troy Central Franchising Agreement (the Marriott Stipulation) resolving certain disputes between the Debtors and Marriott International, Inc. (the Marriott Dispute) in which the Debtors agreed to pay the reasonable expenses, attorneys fees and costs incurred by Marriott (the Marriott Fees). The Marriott Stipulation expressly provides that the Debtors payment of the Marriott Fees shall

1905614_4.DOC

be paid out of Lehman ALI Inc.s cash collateral.

Marriott Stipulation, at 3, 6.

Accordingly, Midlands Cash Collateral was not the source of payment for the Marriott Fees. C. In the Alternative, Midland Objects to Payment of the Marriott Fees with the Cash Collateral Because the Fees are not Reasonable 13. Section 330(a)(1) of title 11 of the United States Code (the Bankruptcy Code)

permits the Court to award reasonable compensation to an applicant based on the actual and necessary services provided by the applicant and to reimburse the applicant for the actual and necessary expenses incurred by the applicant. See 11 U.S.C 330(a)(1). When determining the reasonableness of fees under section 330 of the Bankruptcy Code, courts look to whether the services provided are reasonably likely to benefit the debtors estate. In re Angelika Films 57th Inc., 227 B.R. 29, 42 (Bankr. S.D.N.Y. 1998); see also Stalnaker v. DLC, Ltd. and DLC Family Trust, Ltd. (In re DLC, Ltd.), 295 B.R. 593, 608-09 (B.A.P. 8th Cir. 2003) (fees may be awarded for services that are reasonably likely to benefit the debtors estate and beneficial at the time at which the service was rendered). 14. situations. Section 330(a)(4) of the Bankruptcy Code prohibits compensation in certain See 11 U.S.C. 330(a)(4). Section 330(a)(4) prohibits compensation for (i)

unnecessary duplication of services; and (ii) services that were not reasonably likely to benefit the debtors estate or necessary to the administration of the case. 11 U.S.C. 330(a)(4). To the extent a request for compensation is not per se prohibited under section 330(a)(4), section 330(a)(3) of the Bankruptcy Code provides six (6) non-exclusive factors for the courts consideration in evaluating requests for compensation. 11 U.S.C. 330(a)(3). These factors include: (i) the time spent on such services; (ii) the rates charged for such services; (iii) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title; (iv) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance,
1905614_4.DOC 6

and nature of the problem, issue, or task addressed; (v) with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and (vi) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title. 11 U.S.C. 330(a)(3). 15. Further, the fee applicant bears the burden of proof on his claim for

compensation. Houlihan Lokey Howard & Zukin Capital v. High River Ltd. P'ship, 369 B.R. 111, 115 (S.D.N.Y. 2007); see also Gardere & Wynn v. Turoff ( In re Hunt), 196 B.R. 356, 359 (N.D. Tex. 1996); In re Gillett Holdings, Inc., 137 B.R. 462, 471 (Bankr. D. Colo. 1992). Accordingly, an application for compensation and reimbursement of expenses must demonstrate that the professionals services were necessary and made a beneficial contribution to the estate or its creditors. In re Engel, 124 F.3d 567, 573 (3d Cir. 1997). 16. The ultimate outcome of the dispute with Marriott demonstrates that the litigation In essence, Marriott received everything it requested

should never have been initiated.

including the payment of hundreds of thousands of dollars of its legal fees and the termination of the franchise agreement upon that location. Just as it was not charged with the Marriott fees and expenses, Midlands Cash Collateral should not be used to fund the Debtors litigation folly. 17. As noted in Kirklands request, approximately $360,000 was charged in one

month for that litigation. It is not compensable and should not be funded from Midlands Cash Collateral. D. Certain Fees Related to Plan Support Agreement Litigation are Categorized Improperly and Should be Denied 18. Attached hereto is a table that lists specific entries by professional for certain

dates by matter number. The Application, as prepared, might lead one to conclude that the cash collateral, debtor in possession financing and generic hearings category each represented
1905614_4.DOC 7

significant matters in August. Those who participated in the litigation in August know (and the Court could easily see) that the main event was the litigation over the Plan Support Agreement. 19. At least 50% of the fees reflected in the highlighted entries should be categorized

correctly into the Plan and Disclosure Statement matter and denied.5 It is difficult to understand items such as (a) the senior partner on these cases charging time to the relatively lightly contested DIP Financing and Cash Collateral Matters on may days where no time was charged to the heavily litigated and outcome determinative Plan Support Agreement; (b) the litigation partner equally dividing his time between Cash Collateral and Plan Support Agreement matters for many dates; and (c) litigation attorneys (Bryan & King) charging their time to Cash Collateral and other matters with none charged to the Plan Support Agreement litigation as that dispute became white hot at the end of August. 20. Whether the highlighted entries were placed in those matters by mistake need not

be determined at this time. At least 50% of the fees reflected in the highlighted entries should either be included among the time related to the Plan Support Agreement litigation and denied therein or denied in the matters where they are posted. The total amount of fees reflected by the highlighted entries is $182,499.00 and the amount in issue in this portion of this Limited Objection is $91,249.50. Reservation of Rights 21. Midland reserves its right to submit additional objections to the compensation

requested by Kirkland when Kirkland submits interim and final fee applications. The failure to raise additional objections at this time is not a wavier of any additional objections thereto. Local Rule 9013-1(a)

Alternatively, the amounts charged to the other matters are unreasonably large by at least 50%.
8

1905614_4.DOC

22.

This pleading includes citations to the applicable rules and statutory authorities

upon which relief requested herein is predicated and a discussion of their application to this pleading. Accordingly, Midland submits that this pleading satisfies Local Bankruptcy Rule 9013-1(a). WHEREFORE, Midland respectfully requests that the Court enter an order (i) sustaining this Limited Objection; (ii) substantially reducing the compensation requested under the Fee Application; and (iii) granting Midland such other and further relief as is equitable and just. Dated: November 5, 2010 New York, New York

HAYNES AND BOONE, LLP

/s/ John D. Penn Lenard M. Parkins (NY Bar #4579124) Mark Elmore (admitted pro hac vice) 1221 Avenue of the Americas, 26th Floor New York, NY 10020-1007 Telephone No.: (212) 659-7300 Facsimile No.: (212) 884-8211 - and John D. Penn, Esq. (NY Bar # 4847208) Haynes and Boone, LLP 201 Main Street, Suite 2200 Fort Worth, Texas 76102 Telephone No.: (817) 347-6610 Facsimile No.: (817) 348-2300 ATTORNEYS FOR MIDLAND LOAN SERVICES, INC.

1905614_4.DOC

Selected Time Entries

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 1.60 Correspond with J. Gould re discovery request re cash collateral (.1); review and revise discovery responses re same (.9); correspond with M. Beilinson re same (.5); correspond with A. Sathy re same (.1). .70 Telephone conference with working group re litigation strategy re cash collateral (.2); review pleadings re same (.5).

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12) 1.80 Review plan support agreement and exhibits thereto.

Hearings & Court (16)

8/15/10

Patrick M Bryan $600

8/16/10

Daniel T Donovan $695

.80 Telephone conference with working group re litigation strategy re plan support agreement (.3); review pleadings re same (.5). .80 Review discovery issues re plan support agreement (.3); telephone conferences with working group re litigation strategy re same. 1.30 Review discovery re plan support agreement (.3); telephone conferences with working group re same (.5); prepare for and attend telephone conference with court re same (.5).

8/17/10

Daniel T Donovan $695

.70 Review discovery issues re cash collateral (.2); telephone conferences with working group re litigation strategy re same (.5).

8/18/10

Daniel T Donovan $695

1.20 Review discovery issues re cash collateral (.2) ; telephone conferences with working group re same (.5); prepare for and attend telephone conference with court re same (.5).

1905614_4.DOC

10

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 2.10 Review and revise cash collateral order.

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12) .50 Revise order re approval of plan support agreement. .70 Review and revise plan support agreement outline to response. 1.10 Review and revise plan of reorganization.

8/18/10

Anup Sathy P.C. $895

Hearings & Court (16) 2.90 Prepare for and attend hearing in Lehman cases re approval of plan support agreement

8/18/10

James H M Sprayregen, P.C. $995

1.30 Review and analyze cash collateral issues (.7); comment on cash collateral order and response (.6). 2.00 Attend telephone conferences with working group re cash collateral response. .70 Review discovery issues re cash collateral (.5); correspond with working group re same (.2). .80 Review discovery issues re plan support agreement (.5); correspond with working group re same (.3).

8/19/10

Paul Basta $955

8/19/10

Daniel T Donovan $695

8/19/10

James H M Sprayregen, P.C. $995 James H M Sprayregen, P.C. $995

1.10 Review and analyze cash collateral and cash management issues. .80 Attend telephone conferences with the Company re cash collateral issues.

8/20/10

1905614_4.DOC

11

Date

Timekeeper

Litigation (3)

Cash Collateral (7) .70 Telephone conference with working group re cash collateral.

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12) .80 Telephone conference with working group re plan support agreement issues.

Hearings & Court (16)

8/21/10

Daniel T Donovan $695

8/22/10

Patrick J King $495

4.00 Review and respond to correspondence re cash collateral issues (1.5); draft cash collateral timeline exhibit (1.0); update draft cash collateral declaration (1.5). 6.00 Review and respond to correspondence re status of filings for cash collateral matters (1.0); conference with working group re draft declaration (.5); update draft cash collateral declaration re same (3.5); review and analyze documents in preparation for Midland and FTI depositions (1.0). 2.20 Telephone conference with working group re financing pleadings and documents (1.1); review same (1.1).

8/23/10

Patrick J King $495

8/23/10

James H M Sprayregen, P.C. $995

1905614_4.DOC

12

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 5.50 Review, revise reply re support and response for cash collateral motion (1.4); review cash collateral objections (1.4); review, revise chart re cash collateral reply (.6); prepare for and attend telephone conferences with working group re cash collateral objections, reply, declaration (1.3); prepare for and attend telephone conferences with working group, the Company re cash collateral objections, reply, declaration (.8). 2.70 Review, revise documents re cash collateral discovery issues (.4); correspond re same (.2); prepare for and attend telephone conferences with working group re same (.3); review, revise chart of objections re same (.8); prepare for and attend telephone conference with J. Zinman re cash collateral issues (.5); review, revise documents re same (.5).

8/24/10

Marc J Carmel $735

DIP & Exit Finan. (11) 3.30 Review Lehman debtor in possession financing objections (.6); telephone conferences with working group, Five Mile, LNR Partners re Five Mile debtor in possession financing (1.4); prepare for and attend telephone conference with working group, Moelis re debtor in possession financing replies (1.3).

Plan & Disc. Stmnt. (12) 2.10 Review objections re plan support agreement (.6); review, revise reply re plan support agreement (1.5).

Hearings & Court (16) .80 Prepare for and attend telephonic status conference.

1905614_4.DOC

13

Date

Timekeeper

Litigation (3) 3.40 Review objections to examiner motions (2.5); telephone conference with A. Sathy re same (.2); revise letter to J. Penn re document production (.2); telephone conference with N. Cook and M. Beilinson re declarations (.5).

Cash Collateral (7) 3.30 Telephone conference with Court re cash collateral matter (.3); telephone conference with A. Sathy, M. Carmel, and J. Zinman re same (2.0); office conference with D. Donovan, J. Gould, and P. King re same (1.0).

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12)

Hearings & Court (16)

8/24/10

Patrick M Bryan $600

8/24/10

Patrick J King $495

13.80 Draft updated cash collateral timeline (2.0); finalize review and analysis of Midland document production (7.0); update discovery notices to Midland (.6); conference with working group re cash collateral status and strategy (1.5); draft letter to Midland re document production issues (1.6); confer with cash collateral working group re reply to objections (.6); update cash collateral timeline for objection re same (.5).

1905614_4.DOC

14

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 5.20 Review and analyze cash collateral filings (3.3); prepare for and attend telephone conferences with working group re same (1.9).

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12)

Hearings & Court (16)

8/24/10

Paul Basta $955

8/24/10

Gary M Vogt $280

5.60 Compile and distribute pleadings re omnibus hearing (.8); compile, distribute additional objection materials (.7); review, revise objection chart re same (4.1). 9.00 Prepare for depositions and hearings re objections to cash collateral (6.0); telephone conferences re same (1.0); coordinate discovery re same (2.0). 2.80 Review revised cash collateral order. 4.30 Review and revise response to debtor in possession and cash collateral objections. 3.20 Review objections to debtor in possession financing. 1.90 Telephone conference with objectors re resolving debtor in possession financing objections.

2.50 Review precedent re disclosure statement (1.7); review revised TriMont plan support agreement objection (.8).

2.40 Review, revise agenda for September 1 hearing (1.3); draft proposed agenda for August 25 hearing (1.1).

8/25/10

Daniel T Donovan $695

3.90 Review and revise response to plan support agreement objections.

.20 Participate in court conference.

8/25/10

Anup Sathy. P.C. $895

1905614_4.DOC

15

Date 8/25/10

Timekeeper James H M Sprayregen, P.C. $995

Litigation (3)

Cash Collateral (7) 1.70 Telephone conference re cash collateral hearing. 9.90 Review, revise reply re cash collateral motion, objections (5.6); prepare for and attend telephone conferences with working group re depositions for cash collateral (.4); review, revise declaration re cash collateral motion (.8); review, revise chart re same (.3); correspond with working group, the Company re same (.2); prepare for and attend telephone conferences with working group, the Company re cash collateral reply, declarations (1.4); prepare for and attend telephone conferences with working group re cash collateral (1.2).

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12)

Hearings & Court (16)

8/26/10

Marc J Carmel $735

5.60 Review, revise reply re debtor in possession financing facilities motions, objections (4.3); prepare for and attend telephone conferences with working group re debtor in possession financing facilities (.8); review, revise declaration re debtor in possession financing facilities (.5). .30 Prepare for and attend telephone conference with working group re debtor in possession financing issues.

.80 Prepare for and attend office conferences with working group re plan of reorganization, disclosure statement.

1905614_4.DOC

16

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 8.10 Revise cash collateral declaration (4.0); correspond with N. Cook and cash collateral working group re declaration for cash collateral (.5); revise same (.5); finalize draft cash collateral declaration and timeline chart re same (1.8); prepare materials for deposition of K. Semon re same (1.3). 7.00 Finalize preparations for deposition of C. Dochat re cash collateral (3.5); conduct deposition of C. Dochat (2.5); draft discovery letter in response to Midland re same (1.0).

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12)

Hearings & Court (16)

8/26/10

Patrick J King $495

1905614_4.DOC

17

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 5.10 Review, revise reply re cash collateral motion, objections (3.1); review objections re same (1.1); prepare for and attend telephone conferences with working group, the Company re same (.9).

DIP & Exit Finan. (11) .60 Correspond with working group, lenders, objectors re resolution of objections to debtor in possession financing motions (.3); telephone conferences with working group re same (.3). 2.90 Review, revise reply re debtor in possession financing motions, objections (1.8); review objections re same (.6); prepare for and attend office conference with working group, the Company re same (.5).

Plan & Disc. Stmnt. (12) .80 Prepare for and attend office conferences with working group re reply to objections to plan support agreement.

Hearings & Court (16)

8/27/10

Marc J Carmel $735

8/27/10

Patrick M Bryan $600

3.20 Review and revise cash collateral reply and declaration in support (2.1); correspond with D. Donovan re same (.2); prepare for hearing re same (.9).

1905614_4.DOC

18

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 7.30 Prepare exhibits and background materials for deposition of K. Semon (2.0); assist D. Donovan re deposition of K. Semon (3.0); correspond with working group re same (1.5); review and analyze final cash collateral declaration (.8).

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12)

Hearings & Court (16)

8/27/10

Patrick J King $495

8/27/10

Gary M Vogt $280

4.30 Review, revise objection chart re September 1 hearing (1.8); compile materials in preparation for hearings (2.5).

6.60 Compile, organize unpublished materials cited in plan support agreement reply (3.3);prepare sealed versions of plan support agreement reply and declaration in support of same (1.5); finalize, file replies, coordinate service of same (1.8). 1.30 Telephone conference with working group re cash collateral hearing preparation. 6.60 Prepare for hearing of cash collateral motion (4.1); telephone conference with A. Sathy, P. Basta, M. Carmel, and D. Donovan re same (.3); draft testimony outlines (2.2).

1.20 Revise proposed agenda for August 31, September 1 hearings.

8/28/10

James H M Sprayregen, P.C. $995

8/29/10

Patrick M Bryan $600

1905614_4.DOC

19

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 6.80 Draft supplemental declaration for cash collateral motion (1.0); draft direct examination outline for cash collateral testimony at September 1 hearing (1.0); correspond with D. Donovan and P. Bryan re protective order discovery issue (.8); prepare exhibits for exhibit list for September 1 hearing (1.0); correspond with working group re September 1 hearing preparations (.8); review and analyze cash collateral filings in preparation for deposition of R. Greenspan (.7); prepare exhibits for deposition re same (1.5). 2.00 Review and analyze documents re cash collateral hearing preparation.

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12)

Hearings & Court (16)

8/29/10

Patrick J King $495

8/29/10

Paul Basta $955 8.30 Research, compile authorities cited by all parties re examiner motion, objections and reply.

8/29/10

Gary M Vogt $280

6.50 Compile, organize materials re August 31 and September 1 hearings.

1905614_4.DOC

20

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 6.60 Prepare for and attend office conference with working group, N. Cook re cash collateral response, hearing (1.3); prepare for and attend telephone conferences with lenders, creditors committee, working group re objections to cash collateral (1.8); review, revise documents re same (.8); correspond re same (.4); review, revise notes, documents re hearing (2.3).

8/30/10

Marc J Carmel $735

DIP & Exit Finan. (11) 2.40 Review, revise stipulation re resolution of LNR Partners objection to Five Mile debtor in possession financing (.4); prepare for and attend telephone conferences with working group re same (.3); correspond re same (.1); review, revise notes, documents re hearing on Five Mile debtor in possession financing (.8); review, revise notes, documents re hearing on Lehman debtor in possession financing (.8). 2.70 Prepare for and attend telephone conference with working group, W. Derrough re debtor in possession financing motions, hearing (.8); prepare for and attend conferences with lenders, creditors committee, working group re objections to debtor in possession financing motions (1.2); review, revise documents re same (.4); correspond re same (.3).

Plan & Disc. Stmnt. (12) .80 Prepare for and attend office conferences with working group re plan support agreement.

Hearings & Court (16)

1905614_4.DOC

21

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 13.40 Prepare for hearing on cash collateral and cash management motions (4.4); office conferences with D. Donovan, J. Gould, and P. King re same (1.1); office conference with N. Cook re same (5.6); correspond with A. Sathy re same (.4); office conference with B. Derrough, Z. Jamal and B. Bacal re same (1.9).

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12) 2.20 Review plan support agreement pleadings and objections.

Hearings & Court (16)

8/30/10

Patrick M Bryan $600

8/30/10

Jeffrey M Gould $545

6.20 Review and analyze issues re contested matters.

9.30 Prepare materials for September 1 hearings (7.4); correspond with working group re same (1.9).

8/30/10

Patrick J King $495

10.00 Prepare materials for deposition of R. Greenspan re cash collateral (3.5); prepare exhibits for September 1 hearing on cash collateral issues (3.5); deposition of R. Greenspan re cash collateral issues (3.0).

6.00 Prepare objections to Midland exhibit list re plan support agreement testimony (1.0); draft factual background for objection re testimony for plan support agreement hearing (2.0); prepare documents re same (2.0); conference with working group re same (1.0).

1905614_4.DOC

22

Date

Timekeeper

Litigation (3) 2.40 Review, revise objection chart re September 1 hearing. 2.00 Review, revise objection chart re September 1 hearing. .50 Assemble, distribute Midland motion to terminate exclusivity.

Cash Collateral (7) 3.10 Compile cash collateral materials requested for hearing preparations.

DIP & Exit Finan. (11) 1.10 Compile debtor in possession financing materials requested for hearing preparations. 1.50 Compile debtor in possession financing materials requested for hearing preparations.

Plan & Disc. Stmnt. (12) 1.50 Compile and distribute Midland proposed trial exhibits for plan support agreement hearing.

8/30/10

Gary M Vogt $280

Hearings & Court (16) 2.70 Review, revise agendas for August 31 and September 1 hearings (1.7); review, revise agendas for August 31 and September 1 hearings (1.0).

8/31/10

Clement Yee $505

9.70 Draft and revise talking points for contested cash collateral hearing (3.4); correspond with J. Zinman re same (.9); correspond with J. Zinman and G. Vogt re hearing preparation (.6); prepare documents for September 1 hearing (1.2); review materials for confirmation hearing (3.6). 12.10 Prepare for cash collateral and cash management hearing. 6.00 Prepare for plan support agreement hearing.

8/31/10

Patrick M Bryan $600

1905614_4.DOC

23

Date

Timekeeper

Litigation (3)

Cash Collateral (7) 8.00 Prepare for cash collateral hearing re witness preparation, exhibit preparation, and related support for D. Donovan and P. Bryan (8.0). 3.50 Prepare for and review issues re cash collateral hearing.

DIP & Exit Finan. (11)

Plan & Disc. Stmnt. (12) 7.00 Prepare graphics, potential pleadings, exhibits, and related materials for plan support agreement hearing.

Hearings & Court (16)

8/31/10

Jeffrey M Gould $545

8/31/10

Patrick J King $495

8.80 Prepare for debtor in possession financing hearings re witness preparation, exhibit preparation, and related support for D. Donovan and P. Bryan. 7.00 Prepare for hearings re debtor in possession financing (3.0); correspond with working group re same (1.0); attend hearings re same (3.0). 1.30 Prepare for hearing re debtor in possession financing (.6); office conferences with working group and the Company re same (.7).

6.20 Prepare graphics, potential pleadings, exhibits, and related materials for plan support agreement hearing.

1.80 Prepare for hearing re cash collateral (.8); office conferences with working group and the Company re same (1.0).

8/31/10

Daniel T Donovan $695

6.40 Prepare for hearings re plan support agreement (3.1); telephone conferences with opposing counsel (1.5); office conference with working group and witnesses re hearing preparation (1.8).

1905614_4.DOC

24

Date

Timekeeper

Litigation (3)

Cash Collateral (7) .80 Telephone conference with working group re cash management system modifications.

DIP & Exit Finan. (11) 1.40 Prepare for hearing re Lehman and Five Mile debtor in possession financing. 1.60 Prepare for hearing re Five Mile debtor in possession financing.

Plan & Disc. Stmnt. (12)

Hearings & Court (16) 1.20 Prepare for and participate in conferences re hearings.

8/31/10

Anup Sathy, P.C.

1.30 Review and revise cash collateral order. 2.90 Prepare for cash collateral hearing.

8/31/10

James H M Sprayregen, P.C. $995

2.30 Conferences with workng group re hearing on cash collateral, debtor in possession financing. 12.40 Attend hearing re cash collateral and debtor in possession financing (4.1); conferences with working group re preparation re same (1.3); review pleadings and other documents re September 1 omnibus hearing (3.4); conferences with working group re preparation re same (3.6).

8/31/10

Paul Basta $955

1905614_4.DOC

25

Date

Timekeeper

Litigation (3) 1.50 Compile, organize materials re examiner motion requested for hearing preparations.

Cash Collateral (7)

DIP & Exit Finan. (11) .80 Compile materials re Lehman debtor in possession financing motion re hearing preparations.

Plan & Disc. Stmnt. (12) 1.30 Compile, organize materials re plan support agreement matters re hearing preparations. 2.70 Compile, organize order materials re plan support agreement hearing.

Hearings & Court (16) 7.80 Assist attorneys at August 31 hearing (6.0); draft amended agenda for September 1 hearing (1.8).

8/31/10

Gary M Vogt $280

6.20 Compile documents re August 31 and September 1 hearings (4.2); compile, organize order materials for August 31 hearing (2.0).

1905614_4.DOC

26

1905614_4.DOC

27