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TARTER KRINSKY & DROGIN LLP Attorneys for The Christian Brothers Institute, et al. Debtors and Debtors-in-Possession 1350 Broadway, 11th Floor New York, New York 10018 (212) 216-8000 Scott S. Markowitz, Esq. Eric H. Horn, Esq. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------------- x In re: : : THE CHRISTIAN BROTHERS INSTITUTE, et al. : : Debtors. : ------------------------------------------------------------------- x

Chapter 11 Case No.: 11-22820 (RDD) (Jointly Administered)

DEBTORS APPLICATION FOR AN ORDER APPROVING THE RETENTION OF MCINNES COOPER AS SPECIAL CANADIAN LITIGATION COUNSEL, NUNC PRO TUNC, TO APRIL 29, 2011 TO: THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE The Christian Brothers Institute (CBI) and The Christian Brothers of Ireland, Inc. (CBOI), debtors and debtors-in-possession (the Debtors), respectfully represent as follows: PRELIMINARY STATEMENT 1. The Debtors make this application (the Application) for an order approving the

retention of McInnes Cooper (McInnes) as special Canadian litigation counsel, nunc pro tunc, to April 29, 2011. 2. McInnes was retained as CBIs Canadian litigation counsel since early 2000, in

connection with forty (40) lawsuits (collectively, the Lawsuits) pending against CBI in the Canadian Courts in Newfoundland and Labrador. The Lawsuits were brought by forty different plaintiffs (collectively, the Plaintiffs), asserting various claims, including physical and sexual abuse claims. As CBIs pre-petition litigation counsel, McInnes is familiar with the facts and

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legal bases for each of the Lawsuits and the Plaintiffs respective claims asserted therein. JURISDICTION, VENUE AND STATUTORY PREDICATES 3. This Court has jurisdiction to consider this Motion pursuant to 28 U.S.C. 157

and 1334 and the standing Order of Referral of Cases to Bankruptcy Judges of the District Court of New York, dated July 10, 1984 (Ward, Acting CJ). 4. 5. 6. This is a core proceeding pursuant to 28 U.S.C. 157(b). Venue is proper before this Court pursuant to 28 U.S.C. 1408 and 1409. The statutory predicates for the relief requested are 327(e) and 328 of Title 11,

United States Code (the Bankruptcy Code), Rule 2014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) and Rule 2014-1 of the Local Bankruptcy Rules of this Court. BACKGROUND 7. On April 28, 2011 (the Petition Date), each of the Debtors commenced their

Chapter 11 cases (the Cases) by filing a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. Pursuant to 1107(a) and 1108 of the Code, the Debtors continue to operate as debtors-in-possession. No trustee has been appointed. 8. On May 11, 2011, the United States Trustee appointed an Official Committee of

Unsecured Creditors (the Committee). The Committee has retained Pachulski Stang Ziehl & Jones LLP as its counsel. 9. CBI is a domestic not-for-profit 501(c)(3) corporation organized under 102(a)(5) The purpose for which CBI was, and

of the New York Not-for-Profit Corporation Law.

continues to be, formed was to establish, conduct and support Catholic elementary and secondary schools principally throughout New York State. As a not-for-profit corporation, the assets, and/or income are not distributable to, and do not inure to, the benefit of its directors or officers.

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CBI depends upon grants and donations to fund a portion of its operating expenses. 10. CBOI is a domestic not-for-profit 501(c)(3) corporation organized under the Not-

for-Profit Corporation Law of the State of Illinois. The purpose for which CBOI was, and continues to be, formed was to establish, conduct and support Catholic elementary and secondary schools principally throughout the State of Illinois, as well as other spiritual and temporal affairs of the former Brother Rice Province of the Congregation of Christian Brothers. As a not-forprofit corporation, the assets, and/or income are not distributable to, and do not inure to the benefit of its members, or officers. RETENTION OF MCINNES 11. The Debtors respectfully submit that it is necessary to employ and retain special

Canadian litigation counsel pursuant to 327(e) and 328 of the Bankruptcy Code to defend CBI in the Lawsuits. Subject to the Courts approval, McInnes has agreed to represent CBI as special litigation counsel in that capacity. Since it was necessary for McInnes to perform certain services on CBIs behalf in connection with the Lawsuits immediately after the Petition Date, the Debtors request that the Court approve McInnes retention nunc pro tunc to April 29, 2011. 12. CBI originally selected McInnes based upon, among other things, McInnes

reputation and expertise, particularly in the claims that have been asserted against CBI. McInness attorneys have been in practice for over 150 years, and have considerable experience in all phases of litigation in Canadian courts and have represented numerous clients on a broad range of issues for many years. 13. Prior to the Petition Date, Tarter Krinsky & Drogin LLP (TKD), the Debtors

general bankruptcy counsel, supervised McInnes in its defense of the Lawsuits, and will continue to do so during the Debtors Chapter 11 Cases. However, TKD cannot defend and/or represent CBI in connection with the Lawsuits for a number of reasons, including TKDs lack of

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familiarity with the laws, rules and regulations of courts in Canada governing the Lawsuits and the fact that none of TKDs attorneys are admitted to practice law in Canada. 14. McInnes and TKD will continue to coordinate their efforts and clearly delineate

their duties to prevent any duplication of effort. McInnes will only focus on defense of, and other related aspects of, the Lawsuits, while TKD will continue to supervise and consult with McInnes with respect to such matters. As a result, the Debtors believe that, rather than resulting in any extra expense to the Debtors estates, McInnes retention will actually reduce the expenses of the Debtors estates. 15. Upon information and belief, McInnes does not represent and does not hold any

interest adverse to the Debtors estates or their creditors in the matters upon which McInnes is to be engaged, except to the extent that may otherwise be set forth in the affidavit of J. David Eaton Q.C. annexed hereto. 16. Eatons affidavit specifically indicates that during the 90 day period prior to the

commencement of the Chapter 11 cases, McInnes received three (3) payments from CBI aggregating CDN$51,763.83. McInnes believes the payments were made in the ordinary course of business and are not subject to attack as preferences under 547 of the Bankruptcy Code. McInnes, however, has agreed to preserve the right of all parties in these cases to review said payments and assert such claims relating to those payments as they may deem appropriate. 17. The Debtors understand that McInnes will seek compensation from the Debtors

estates, subject to court approval after notice and a hearing. McInnes customary hourly rates are as follows: Attorneys and Associates Legal Clerks / Paralegal 18. CDN$175-450 CDN$100-125

The hourly rates set forth above are McInnes current customary hourly rates for

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work of this nature and are subject to periodic increase in the normal course of McInnes business. These rates are set at a level designated to fairly compensate McInnes for the work of its attorneys and paralegals, and to cover fixed and routine overhead expenses. David Eaton, Q.C. and Melissa Hill will primarily render all of the legal services to CBI, and their hourly rates are CDN$350 and CDN$200, respectively. 19. McInnes will be compensated, subject to the approval of this Court, in accordance

with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, Local Rules, and this Courts Order Establishing Procedures for Monthly Compensation and Reimbursement of Expenses of Professionals (Docket No. 64). 20. McInnes will also seek reimbursement for all out-of-pocket expenses incurred,

consistent with the rules and guidelines of this Court. It is McInnes policy to charge each client for all expenses incurred in connection with such clients case or matter. These expenses include, inter alia, telephone and telecopier toll and other charges, mail and express mail charges, hand delivery charges, photocopying charges, travel expenses, expenses for working meals and local transportation, computerized research, transcription costs, and non-ordinary overhead such as secretarial and other overtime. [remainder of page intentionally left blank]

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WHEREFORE, the Debtors respectfully request that this Court enter an order authorizing them to retain and employ McInnes as their special litigation counsel in connection with the Lawsuits, and granting such other and further relief as the Court may deem just and proper. Dated: New Rochelle, New York August 9, 2011 /s/ Brother Kevin Griffith Brother Kevin Griffith Vice-President

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TARTER KRINSKY & DROGIN LLP Attorneys for The Christian Brothers Institute, et al. Debtors and Debtors-in-Possession 1350 Broadway, 11th Floor New York, New York 10018 (212) 216-8000 Scott S. Markowitz, Esq. Eric H. Horn, Esq. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------------- x In re: : : THE CHRISTIAN BROTHERS INSTITUTE, et al. : : Debtors. : ------------------------------------------------------------------- x

Chapter 11 Case No.: 11-22820 (RDD) (Jointly Administered)

AFFIDAVIT OF J. DAVID EATON Q.C. PURSUANT TO 11 U.S.C. 329, LOCAL BANKRUPTCY RULE 2014-1 AND BANKRUPTCY RULES 2014 AND 2016 IN SUPPORT OF RETENTION OF MCINNES COOPER AS SPECIAL CANADIAN LITIGATION COUNSEL TO THE DEBTORS J. DAVID EATON Q.C., being duly sworn, deposes and says: 1. I am a partner of the firm of McInnes Cooper (the Firm). The Firms offices

are located throughout Atlantic Canada and my office is located at 10 Fort William Place 5th Floor, Baine Johnson Centre, St, Johns, NL A1C 1K4. I was duly admitted to practice in the courts of the Canada in Newfoundland and Labrador. 2. This affidavit is submitted in support of the accompanying application (the

Application) of The Christian Brothers Institute (CBI) and The Christian Brothers of Ireland, Inc. (CBOI) as debtors and debtors-in-possession (the Debtors), to retain the Firm as special Canadian litigation counsel in their Chapter 11 cases. 3. The Firm has performed a conflicts check prior to accepting the engagement,

which it updates on a regular basis. Neither the Firm nor any partner or associate thereof has any

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connection with the Debtors, their creditors, or any other party-in-interest or their respective attorneys or accountants, except for its representation of the Debtors in the Lawsuits (as defined in the Application). The Firm has been representing CBI in the Lawsuits since early 2000. 4. I will be the attorney primarily responsible for handling the Lawsuits. The Firm

will continue to provide legal advice and services to the Debtors, including such as matters as filing pleadings or papers related to the Lawsuits, litigation support as necessary in connection with the Lawsuits, and other miscellaneous services as necessary and as requested by the Debtors with respect to the Lawsuits. 5. During the 90 day period prior to the commencement of the chapter 11 cases the

Firm received three (3) payments from CBI aggregating CDN$51,763.83. The Firm believes the payments were made in the ordinary course of business and are not subject to attack as preferences under Section 547 of the Bankruptcy Code. Notwithstanding the Firms belief, the Firm agrees to preserve the right of all parties in these cases to review these payments and assert such claims relating to the payments as they may deem appropriate. 6. The Firm has not shared or agreed to share any compensation with any other

person other than a member or associate of the Firm, and it has not agreed to share in compensation received by another entity from the Debtors. 7. The Debtors have agreed to compensate the Firm at its usual hourly rates for

services rendered in connection with their Chapter 11 cases and to reimburse the Firm for expenses and disbursements made in connection therewith, upon proper application to the Court. The Firms current rates, which are subject to annual increases, are as follows: Attorneys and Associates Legal Clerks / Paralegal CDN$175-450 CDN$100-125

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8.

Neither I nor the Firm represent any adverse interest to the Debtors or their estates

in the matters upon which the Firm is to be engaged, except that as of the date hereof, the Firm is currently owed the total amount of CDN$19,328.14 on account of its services and legal advice rendered prior to the Petition Date. /s/ J. David Eaton Q.C. J. David Eaton Q.C. Sworn to before me this 2nd day of August, 2011

/s/ Kenneth J. Byrne Kenneth J. Byrne Notary Public Qualified in Newfoundland and Labrador

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