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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 AUTHORIZING THE RETENTION OF PRICEWATERHOUSE COOPERS, LLP AS FINANCIAL ADVISOR TO THE DEBTOR NUNC PRO TUNC TO THE PETITION DATE AND WAIVING CERTAIN REQUIREMENTS PURSUANT TO 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 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] ("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.

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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 PwC as its financial advisors pursuant to Sections 327 and 328 of the Bankruptcy Code. 7. In the Application, the Debtor proposes to engage PwC to serve as its financial

advisor, for the purpose of performing, inter alia, the 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 exit-financing, "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. Application, at 9. 8. The Application discloses and proposes that, in performing its engagement by the

Debtor's estate, PwC "may use employees from its U.S. and non-U.S. subsidiary affiliates.PwC may also utilize third party contractors or subcontractors" Application, at 12. As to these third party contractors or subcontractors ("Independent Contractor(s)"), the Application further proposes that: (i) PwC would bill the estate for the cost of same, at cost; (ii) PwC would ensure that each such Independent Contractor files a declaration of disinterestedness, and disclosing relationships with parties in interest; (iii) such Independent Contractor shall remain disinterested during the period of PwC's engagement; and (iv) the Independent Contractor must agree not to work for the Debtor or other parties in interest during the period of PwC's engagement. Application, at 12.

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9.

Also on July 10, 2012, the Debtor filed a second application seeking to retain an

additional financial advisory firm, GA Keen Realty Advisors, LLC ("GA Keen") as the Debtor's "real estate" advisor [Docket No. 111] ("GA Keen Application"), The GA Keen Application proposes that this Court authorize the Debtors to retain GA Keen for the purposes of, inter alia, assisting the debtor with a proposed "capital infusion needed for its business." GA Keen Application, at 5. Specifically, the GA Keen 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-inpossession financing; and/or(v) the sale of one or more of the Debtor's properties. GA Keen 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. GA Keen Application, at 10. II. OBJECTIONS A. The Application is Duplicative and Appears Intended to Benefit the Debtor's Affiliates 10. As an initial matter, the size of this case and the issues presented do not justify the

Debtor's effort to saddle the estate with two separate financial advisors with seemingly overlapping duties. The Committee therefore objects to the Application on the basis of

duplication with respect to the GA Keen Application. Both firms are financial advisory firms and both are proposed to provide analysis and assistance with financing and restructuring alternatives, rendering and assisting with performance projections and analyses, and with

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negotiations with other parties in interest. Thus, the scope of their proposed engagements overlap, and are substantially duplicative. See In re Brundage-Bone Concrete Pumping, Inc., 471 B.R. 257, 260-61 (Bankr. D. Colo. 2012) (discussing the bankruptcy policy and need to avoid and minimize duplication of services compensated by the estate). 11. Based on the nature and complexity of the Debtor's assets, business and

operations, GA Keen, who purportedly specializes in the Debtor's particular industry, appears capable of performing the services and duties that are encompassed within the Application. Thus, there is no need for the Debtor to obtain PwC's "golf industry" expertise and metrics where the Debtor will have the services of GA Keen, which would themselves be directed towards marketing the Debtor's golf club and providing due diligence required by sophisticated potential bidders. 12. In fact, the only significant area in which the Application does not overlap with

the GA Keen Application appears to concern litigation consulting services and witness testimony that the Debtor proposes PwC to provide. The major pending litigation involving the Debtor other than the Debtor's claims against Alpine disputing Alpine's perfection of certain of its security interests, which does not appear to implicate PwC is comprised of the litigation proceedings commenced by and against the Debtor relating to the members of its golf Club. However, those litigation proceedings are largely stayed as to the Debtor.1 Moreover, the Debtor has already asserted a separate adversary proceeding seeking to protect the Debtor's officers and directors from continued prosecution of related claims as well. See Complaint filed July 2, 2012

To the extent that the Debtor claims that it requires PwC's testimony in connection with its claims against the Cordillera property owners association, it does not appear that PwC's testimony would be relevant other than with respect to issues of potential damages.

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[Docket No. 25], initiating Adv. Pro. No. 12-1443.2 Accordingly, it appears that the Debtor's primary purpose in seeking the services of PwC is to benefit the Debtor's nondebtor, codefendant affiliates at the expense of the estate. B. The Application Proposes to Allow Fee Splitting Without Prior Court Approval 13. Moreover, to the extent that the Debtor's Application proposes to cede to PwC the

authority to determine that unapproved employees of third party affiliates, or Independent Contractors, may perform portions of PwC's engagement without the advance authorization of this Court, such proposal is flatly prohibited under the Bankruptcy Code and applicable law.3 Professionals providing services to bankruptcy estates must expressly be approved by the Court, and may not share any compensation from the estate with unauthorized professionals. These concerns are especially significant here, where the Debtor's proposal would allow PwC to unilaterally determine the structure of compensation to be paid to such persons, without advance court approval. 14. Fee splitting among professionals of bankruptcy estates is "flatly" and expressly

prohibited by the Bankruptcy Code. 11 U.S.C. 504(a); In re Anderson, 936 F.2d 199, 203 (5th Cir. 1991); In re Tarasiak, 280 B.R. 791, 792-93 (Bankr. D. Mass. 2002) (professional could not receive compensation payable to outsourced paralegal where such outsourced professional is not expressly retained with bankruptcy court approval). 15. The Tarasiak Court explains that the prohibitions of Section 504 are necessary to

preserve the integrity of the bankruptcy process and prevent professionals from treating

The relief requested in that proceeding on an emergency basis was denied.

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bankruptcy compensation like "matters of traffic". Id., at 792. As more specifically explained in In re United Companies Financial Corp., 241 B.R. 521, 528 (Bankr. D. Del. 1999): Parties may not avoid the requirements of section 327(a) by entering into such subcontracting arrangements....Such a subcontracting arrangement, if approved would eviscerate the protections of section 327(a) and allow a third party (rather than the debtor or the Court) to determine who should render professional services for the estate. Id. See also In re Bernhardt, 2012 WL 646150, *5 (Bankr. D. Colo. 2012). 16. Accordingly, PwC's proposal to utilize Independent Contractors, or any third

person subcontractors for that matter, is prohibited. 17. PwC's commitment to obtain disclosures of disinterestedness from such

Independent Contractors is insufficient to ameliorate these concerns, because the structure and process proposed in the Application would still rob this Court of the authority to determine the terms of compensation to the estate, with notice and an opportunity for parties in interest to object, in advance of the rendition of such services. 18. 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 rights and authority pursuant to section 330 of the Bankruptcy Code, or otherwise, to evaluate and oppose the compensation requested by PwC. 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). PwC's engagement is not the type of contingency, special, or unusual engagement that would
3

The Committee recognizes that a distinction may be made as to employees of PwC's wholly owned subsidiaries, versus employees of other affiliates of PwC that may not be wholly owned subsidiaries, but the Application makes no such distinction.

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implicate any need for special or advance approval of a particular compensation arrangement. Therefore, approving the Application under section 328, absent such an express reservation, only creates the risk that PwC or an Independent Contractor may attempt to assert that this Court cannot thereafter revisit the terms of their compensation, if any. 19. 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 -andMUNSCH 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

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(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

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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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