FOX ROTHSCHILD LLP Yann Geron Kathleen Aiello 100 Park Avenue, 15th Floor New York, New

York 10017 (212) 878-7900 Counsel to Yann Geron, Chapter 7 Trustee of the Estate of Thelen LLP

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------x In re : : THELEN LLP : : : : Debtors : ------------------------------------------------------x

Chapter 7

Case No. 09-15631 (ALG)

TRUSTEES APPLICATION FOR AN ORDER, PURSUANT TO SECTIONS 361, 363, 503, 506 AND 507(b)OF THE BANKRUPTCY CODE, APPROVING A STIPULATION BETWEEN THE CHAPTER 7 TRUSTEE AND CITIBANK N.A., PROVIDING FOR THE ESTATES LIMITED USE OF CITIBANK N.A.S CASH COLLATERAL PROVIDING CITIBANK WITH ADEQUATE PROTECTION AND OTHER RELATED RELIEF TO THE HONORABLE ALLAN L. GROPPER, UNITED STATES BANKRUPTCY JUDGE: Yann Geron, as chapter 7 trustee (the Trustee) of the estate of Thelen LLP (Thelen or the Debtor), the above-captioned debtor, by his attorneys, Fox Rothschild LLP, submits this application for an order (the Application), pursuant to Sections 361, 363, 503, 506 and 507(b) of Title 11 of the United States Code (the Bankruptcy Code), Rule 4001 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules), and Rule 4001-2 of the Local Rules of Bankruptcy Procedure for the Southern District of New York (the Local Rules), approving a stipulation between the Trustee and Citibank N.A. (Citibank), which: (1) authorizes Trustees

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limited use of Citibanks Cash Collateral (as defined in the Stipulation), on the terms and subject to the conditions set forth in the Stipulation; and (2) provides adequate protection and other related relief to Citibank. In support of this application, Trustee submits and represents, upon information and belief, follows: SUMMARY OF RELIEF SOUGHT 1. By this Application, Trustee seeks approval of a stipulation, dated

November 4, 2009, between Trustee and Citibank N.A., which is annexed to this application as Exhibit A (the Stipulation)1. As further detailed below, the Stipulation fixes and allows Citibanks claim, with certain limitations, as a lien against many of the assets of this estate, including the Debtors receivables. The Stipulation further allows the Trustee limited use of the proceeds generated from the collection of the Debtors accounts receivables, which are Citibanks cash collateral, in discharging the Trustees duties to liquidate the Debtors assets, including collecting receivables, and investigating and prosecuting any claims. To the extent Citibanks cash collateral is used to pay for these efforts, the proposed stipulation provides Citibank with a replacement lien and a super-priority claim, to the extent of such cash use in certain circumstances. 2. Approval of the proposed stipulation with Citibank is necessary in order to

permit the continued and orderly administration of this estate. The terms of this Stipulation are reasonable, and properly reflect Citibanks claim and interest in the assets which are to be liquidated. Therefore, Trustee seeks approval of the proposed stipulation.

Reference is made to the annexed Stipulation, which contains the actual and detailed terms of the proposed agreement between the Trustee and Citibank. To the extent there is inconsistency between the terms of the Stipulation and the description contained in this application, the terms of the Stipulation control.

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BACKGROUND a. Historical Background 3. On September 18, 2009 (the Petition Date), the Debtor filed a voluntary

petition for relief under chapter 7 of Title 11 of the United States Code (the Bankruptcy Code), in the United States Bankruptcy Court for the Southern District of New York. Yann Geron was appointed interim chapter 7 trustee of the Debtors estate. Mr. Geron has since qualified as permanent chapter 7 trustee and is currently serving in that capacity. 4. Prior to the Petition Date, Thelen LLP, formerly known as Thelen Reid

Brown Raysman & Steiner, operated largely as a bicoastal law firm with principal offices in New York and San Francisco, and other offices located in 8 U.S. cities, England and China. At its peak, Thelen employed roughly 600 attorneys. Thelen was founded in 1924 in San Francisco as Thelen, Marrin, Johnson & Bridges. In June 1998, Thelen Marrin merged with New York-based Reid & Priest, a firm with approximately 160 attorneys, creating the bicoastal structure of the firm. On December 1, 2006, Thelen Reid & Priest merged with Brown Raysman Millstein Felder & Steiner, LLP. Thelen was ranked 70th in the National Law Journals 2007 survey of the nations largest firms. Upon information and belief, a number of factors caused the firms demise, including difficulties following the Brown Raysman merger, significant partner departures, and failed merger discussions. 5. In October 2008, the Debtor formally voted to dissolve the partnership.

Thereafter, the Debtor began winding-down its affairs under the guidance of a dissolution committee. Thelens dissolution committee appears to have focused its efforts on mitigating Thelens liabilities, collection of its accounts receivable, paying down its secured lines of credit

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with Citibank, its principal lender, phasing down its staff, and transitioning client files, ultimately using a skeleton staff in a small portion of the firms prior San Francisco offices. After some months in dissolution, it appears that collections slowed and the Debtors pareddown operating costs became unsustainable under the Debtors arrangement with Citibank. As a result, the Debtor filed the instant bankruptcy proceeding. b. Citibanks Claim and Lien 6. Following the Petition Date, the Trustee undertook a detailed analysis the

Citibanks loan documents and evidence of perfection of Citibanks lien against Debtors assets. Details of the documents reviewed and analyzed by the Trustee in connection with his verification of Citibanks loan is annexed hereto as Exhibit B. 7. Based on this analysis, the Trustee has determined to his satisfaction that Citibank

is the holder of a valid, duly-perfected, unavoidable first priority lien in and against, among other things, all of the Debtors accounts receivable, contract rights, cash, securities, furniture, artwork, fixtures, equipment, books, records and proceeds of the sale of any such assets (the Collateral). 8. Citibank alleges that as of the Petition Date, the outstanding amount of its claim

was $6,865,252.26, and that to the extent this amount is over-secured, this claim continues to accrue post-petition interest, charges, costs and expenses (including professional fees and expenses) as provided for under the loan agreements (the Citibank Debt). The Trustee has received certain documents in connection with the amount of Citibanks claim, and is awaiting further documentation. As detailed below, the Trustee has reserved his right to review and validate the amount of Citibanks alleged lien upon receipt of certain additional account statements from Citibank.

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9.

As of the Petition Date, the Debtors bankruptcy schedules list receivables owed

to the Debtor in the face amount of approximately $27 million. 10. Citibanks liens do not extend to certain assets of the Debtor and certain rights,

claims and potential recoveries which the Trustee may obtain from third parties, including rights and potential recoveries pursuant to sections 544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code (collectively, the Unencumbered Assets). c. The Proposed Stipulation 11. Generally, the Stipulation provides for the Trustees limited use of Citibanks

cash collateral to pay for fees and expenses incurred in connection with his continued wind-down the Debtors affairs.2 The Stipulation recognizes the validity and extent (subject to verification) 3 of Citibanks lien, provides for the gradual repayment of Citibanks secured claim, and provides Citibank with a replacement liens and superpriority claim to the extent of the Trustees use of Citibanks Cash Collateral. 12. The salient provisions of the Stipulation are as follows: a) Use of Cash Collateral: The estate will be permitted to use Cash Collateral up to and including the Citibank Debt. Other than with prior Court approval, or as expressly provided for in the Stipulation, the Trustee shall not disburse Cash Collateral without Citibanks consent, upon reasonable notice to Citibank, until the Citibank debt is paid in full.

By separate application made simultaneously with the instant motion, the Trustee will seek approval of the Trustee retention of several accounts receivable professionals to continue the collection of Thelens accounts receivable. The retention of these professionals, as well as the respective terms of their retention, was reviewed with Citibank.
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Under the Stipulation, the Trustee has 60 days to challenge the amount of the Citibank Debt, which commences upon the date on which Citibank provides to the Trustee loan account statements reflecting the Citibank Debt and all debits and credits thereto for the 12 month period preceding the Petition Date. If the Trustee does not timely challenge the Citibank Debt by written notice to Citibank, care of its undersigned counsel, then the Citibank Debt shall be deemed fixed and allowed as of the Petition Date.

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b) Distribution of Cash Collateral/Cash Proceeds: Except as otherwise provided in the Stipulation, the Cash Collateral and additional cash proceeds acquired from the post-petition liquidation and/or disposition of the Collateral, shall be held by the Trustee in the dedicated estate accounts and distributed by the Trustee as follows: 1. To the extent Unencumbered Assets and the proceeds thereof shall be unavailable or inadequate and to the extent of the Carve-Out (as described below), to payment of Trustee Administrative Expenses; 2. In payment in full of the Citibank debt; and 3. To be disbursed pursuant to the orders of priorities set forth in Section 507(a) of the Bankruptcy Code. c) Adequate Protection: Notwithstanding section 552(a) of the Bankruptcy Code, and in order to provide adequate protection for, and to secure payment of, an amount equal to the aggregate of any diminution (including, without limitation, by depreciation, use, sale, loss or collection) in the value of the Cash Collateral, and as security for Citibank to consent Trustees use of same, the Trustee will grant Citibank security interests in and replacement lien upon the estates presently-owned and hereafter-acquired Cash Collateral, and such security interests and liens shall be valid, perfected, enforceable and effective as of the Petition Date without any further action by Citibank or the Trustee, and senior to any other security interest or lien, subject only to: (i) the valid and perfected liens and security interests, if any, of Citibank on such property, assets and rights existing before the Petition Date; and (ii) the payment of Trustee Administrative Expenses from the Carve-Out, including professionals retained for the purpose of litigating and collecting such Cash Collateral. d) The Trustee shall pay an amount to Citibank equal to any funds held in the Debtors estate bank account attributable to the liquidation of the Collateral in excess of one-hundred twenty-five (125%) percent of the estimated outstanding Trustee Administrative Expenses (the Administrative Reserve), on the last day of each month commencing on November 30, 2009, and continuing through to the

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Termination Date (as defined in 12 of the Stipulation) (Adequate Protection Payments).4 e) Carve-Out: Citibank shall provide a carve-out from the Cash Collateral for payment of chapter 7 administrative costs, including: (i) allowed commissions, fees and expenses of the Trustee and Trustee Professionals; (ii) tax obligations of the Debtors estate; (iii) costs of maintaining insurance on the Collateral and estate assets; and (iv) any reasonable costs of administering the Debtors estate (collectively, Trustee Administrative Expenses)5, as follows: (a) payment in full to all Trustee Professionals retained by the Trustee with Citibanks prior consent, for the exclusive purpose of collecting the Debtors accounts receivable or liquidating Citibanks Collateral, in accordance with their respective retention terms and as approved by the Court; (b) all other commissions, fees and expenses of the Trustee and Trustee Professionals, upon prior application to and award by the Bankruptcy Court, on notice to Citibank, subject to Citibanks rights to object as to the amounts sought, and subject to a 10% hold-back unless waived by Citibank; and (c) any individual disbursements incurred by the Trustee in the course of his administrative duties in this case, not exceeding $500 each. f) Replacement Lien: To the extent any of the Trustee Administrative Expenses are paid with Cash Collateral and directly attributable to Trustee activities, pursuit of assets and claims, and/or other estate administration activities that are not directly related to the maintenance and liquidation of Citibanks Collateral, the Trustee will grant Citibank a security interest in and replacement lien against the Unencumbered Assets and proceeds thereof, and such security interests and liens shall be valid, perfected, enforceable and effective as of the Petition Date, without any further action by Citibank or the Trustee, and senior to any other security interest or lien, subject only to the Carve-Out.

The Stipulation details the payment process and terms for Adequate Protection Payments. Citibank has reserved the right under the Stipulation to seek, by agreement with the Trustee or order of the Bankruptcy Court, a payment from the Administrative Reserve, if Citibank believes such reserve is higher than what is necessary in excess of the proceeds of Unencumbered Assets to provide for the payment of all Trustee Administrative Expenses. Trustee Administrative Expenses shall be paid first from Unencumbered Assets, and the Carve-Out shall be utilized only secondarily to cover Trustee Administrative Expenses.
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g) Citibanks Claim: To the extent the replacement liens do not provide adequate protection for the use of Cash Collateral, Citibank shall have a super-priority administrative expense claim under section 507(b) of the Bankruptcy Code, superior to all other claims except for the Carve-Out.

13.

As detailed below, the Stipulation ensures the Trustees liquidation of the

Debtors assets and claims, including (but not limited to) the collection of Thelens accounts receivable, with the limited use of Citibanks Cash Collateral. These efforts will result in recoveries which will inure to the benefit of all creditors of this estate. Therefore, as further detailed below, the Stipulation is in the best interest of this estate. THE INSTANT APPLICATION 14. Under the Citibank loan with Thelen, and pursuant to Section 506 of the

Bankruptcy Code, Citibank has a duly-perfected first-priority lien against the Debtors assets, including Debtors accounts receivable as of the Petition Date, and any income post-petition received from such receivables, which is Citibanks cash collateral, as defined under section 363(a) of the Bankruptcy Code. To the extent the collateral which secures Citibanks lien, exceeds the amount of Citibanks claim as of the Petition Date pursuant to Section 506(b) of the Bankruptcy Code, Citibanks secured claim includes all reasonable post-petition fees, costs and charges allowed under Citibanks loan agreement, and to the extent of the value of Citibanks collateral. Whether Citibank is oversecured will depend on the amount collected by the Trustee on account of Citibanks collateral. 15. Section 363 of the Bankruptcy Code requires Bankruptcy Court approval for the

Trustees use of property of the estate, which includes Citibanks Cash Collateral, outside the ordinary course of business. Because this is a chapter 7 liquidation, Court approval is required for the Trustees use of any assets of this estate, including notably Citibanks Cash Collateral. 8
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16.

Under Section 363(e) of the Bankruptcy Code, the Court may condition the

Trustees use of Citibanks cash collateral as is necessary to provide adequate protection (as defined in Section 361 of the Bankruptcy Code). 17. Finally, Section 507(b) of the Bankruptcy Code grants Citibank a super-priority

claim to the extent that the Trustee provides adequate protection to Citibank under Section 363 and Citibank is deemed to have an administrative claim under Section 503(b) of the Bankruptcy Code. 18. The Stipulation fully accords with the foregoing statutory provisions. Under the

Stipulation, Citibanks claim is acknowledged to be secured and therefore, the Trustees use of Citibanks Cash Collateral is expressly limited to, and conditioned upon, the granting to Citibank of adequate protection. Under the Stipulation, Citibanks adequate protection for the diminution in its cash collateral is comprised of the following: (i) post-petition liens on all the estates cash collateral, to the extent of Trustees use of cash collateral to liquidate Citibanks Collateral; (ii) liens against otherwise Unencumbered Assets of the estate, to the extent Trustee uses Cash Collateral to liquidate Unencumbered Assets; and (iii) a superpriority claim to the extent the replacement liens under the Stipulation do not provide adequate protection to Citibank. As further adequate protection, the Stipulation provides for the monthly payment of certain cash collateral proceeds to Citibank to the extent such funds are available and are not necessary to fund the ongoing administrative expenses of the estate. 19. Thus, the Stipulation details Citibanks and Trustees respective rights and

operating parameters for the Trustees post-petition use of Citibanks Cash Collateral and adequate protection of Citibanks claim consistent with the provisions of the Bankruptcy Code. 20. The Trustees use of Citibanks Cash Collateral is necessary to allow his

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administration of this estate, including collection of accounts receivable and investigation and prosecution of any other claims. These efforts will provide the maximum recovery to all

creditors, including Citibank. The Stipulation is advantageous to the estate and its creditors in that it ensure the preservation of the Debtors assets, avoids unnecessary and costly disputes regarding the Debtors use of Cash Collateral, and alleviates the need to litigate the extent, validity and priority of the alleged Citibank liens. 21. For all the foregoing reasons, approval of the Stipulation is warranted. NOTICE 22. In accordance with Bankruptcy Rule 4001(d)(1) and Local Rule 4001-2, notice of

this motion has been given to the United States Trustee, and all creditors listed on the Debtors schedules, including Citibank and its attorney. The Trustee respectfully submits that no other notice need be given and that such notice be deemed sufficient. NO PRIOR APPLICATION 23. Court. No previous request for the relief sought herein has been made to this or any other

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WHEREFORE, the Trustee respectfully requests that the Court enter an order in substantially the same form as the proposed order annexed here to as Exhibit C, approving the Stipulation between the Trustee and Citibank for the Trustees limited use of cash collateral and granting adequate protection, and granting such other and further relief as is just. Dated: New York, New York November 18, 2009 FOX ROTHSCHILD LLP
Counsel to Yann Geron, Chapter 7 Trustee of the Estate of Thelen LLP

By: /s/ Yann Geron Yann Geron Kathleen Aiello 100 Park Avenue, 15th Floor New York, New York 10017 (212) 878-7900

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re THELEN LLP, Debtor. : : : : :

Chapter 7 Case No. 09-15631 (ALG)

STIPULATION AND ORDER BETWEEN CHAPTER 7 TRUSTEE AND CITIBANK, N.A. REGARDING LIMITED USE OF CASH COLLATERAL BY TRUSTEE AND GRANTING ADEQUATE PROTECTION WHEREAS, on September 18, 2009 (the "Petition Date"), Thelen LLP, the above-captioned debtor (the "Debtor"), filed a voluntary petition for relief under chapter 7 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"); and WHEREAS, Yann Geron (the "Trustee") has been appointed and qualified as chapter 7 trustee of the Debtors bankruptcy estate and as of the date hereof, he is serving in that capacity; and WHEREAS, Trustee has been authorized to retain certain professionals, including Fox Rothschild LLP as his general counsel (Order at Docket No. 11), and CBIZ Accounting, Tax & Advisory of NY, LLC (Order at Docket No. 10), and Trustee intends to request from the Bankruptcy Court authority to retain a number of additional professionals including, but not necessarily limited to, auctioneers, and special litigation and debt collection counsel with respect to the Debtors outstanding accounts receivable (collectively, the "Trustee Professionals"); and WHEREAS, pursuant to certain promissory notes, credit agreements and security agreements (collectively, the "Loan Agreements") between the Debtor, or its predecessors-in-

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interest, and Citibank, N.A. (""Citi"), and certain financing statements filed by Citi with the California Department of State, Citi is the holder of valid, duly-perfected, unavoidable firstpriority liens in and against, among other things, all of the Debtors accounts-receivable, contract rights, cash, securities, furniture, artwork, fixtures, equipment, books, records and proceeds of the sale of any such assets (collectively, the ""Collateral"); and WHEREAS, the Collateral secures indebtedness of the Debtor to Citi of approximately $6.9 million as of the date of this Stipulation; and WHEREAS, the Collateral includes any cash collateral, as that term is used in section 363(a) of the Bankruptcy Code (the "Cash Collateral"), of the Debtor; and WHEREAS, the value of the Collateral has not been determined pursuant to section 506 of the Bankruptcy Code; and WHEREAS, Citis liens do not currently extend to, among other things, certain assets of the Debtor and certain rights, claims and potential recoveries which the Trustee may obtain from third parties, including rights and potential recoveries pursuant to sections 544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code (collectively, the "Unencumbered Assets"); and WHEREAS, the parties hereto wish to resolve any immediate issues regarding the preservation and liquidation of the Debtors assets which may constitute Citis Collateral, by and through this agreement which provides for (i) the Trustees use of Citis Cash Collateral upon the terms and conditions set forth herein, (ii) a carve-out from Citis Collateral with respect to certain costs of administration, and (iii) the granting to Citi of certain replacement liens and super-priority administration expense claims.

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IT IS THEREFORE, STIPULATED, CONSENTED AND AGREED by and among the Trustee and Citi as follows: 1. This Stipulation and Order shall have no force or effect unless and until it

is approved by the Bankruptcy Court. 2. The Trustee agrees and acknowledges that Citi holds a valid, enforceable

and allowed as a duly-perfected lien against the Collateral, including the Cash Collateral (the "Citi Lien"). Citis claim is fixed and allowed as a secured claim in the amount of $6,865,252.26 as of the Petition Date, and continues to accrue post-petition interest, charges, costs and expenses (including professional fees and expenses) as provided for under the Loan Agreements (collectively the "Citi Debt"). Notwithstanding the foregoing, the Trustee shall have 60 days to challenge the amount of the Citi Debt, which period shall commence upon the date on which Citi provides to the Trustee loan account statements reflecting the Citi Debt and all debits and credits thereto for the 12 month period preceding the Petition. Date. If the Trustee does not timely challenge the Citi Debt by written notice to Citi care of its undersigned counsel, then the Citi Debt shall be deemed fixed and allowed as of the Petition Date as stated above. 3. Citi shall provide a carve-out from the Cash Collateral (the "Carve-Out")

for payment of chapter 7 administrative costs including (i) allowed commissions, fees and expenses of the Trustee and Trustee Professionals, (ii) tax obligations of the Debtors estate, (iii) costs of maintaining insurance on the Collateral and estate assets, and (iv) any reasonable costs of administering the Debtors estate (collectively, "Trustee Administrative Expenses"), as follows: (a) payment in full to all Trustee Professionals retained by the Trustee with Citis prior consent, for the exclusive purpose of collecting the Debtors accounts receivable or liquidating Citis Collateral, in accordance with their respective retention terms and as approved by the

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Court; (b) all other commissions, fees and expenses of Trustee and Trustee Professionals, upon prior application to and award by the Bankruptcy Court, on notice to Citi, subject to Citis rights to object as to the amounts sought, and subject to a 10% hold-back unless waived by Citi; and (c) any individual disbursements incurred by the Trustee in the course of his administrative duties in this case, not exceeding $500 each. Other than with prior Court approval, or as expressly provided in this Stipulation, the Trustee shall not disburse Cash Collateral without Citis prior consent, upon reasonable notice to Citi, until the Citi Debt is paid in full. Trustee Administrative Expenses shall be paid first from Unencumbered Assets, and the Carve-Out shall be utilized only secondarily to cover Trustee Administrative Expenses. 4. Except as may otherwise be provided in this Stipulation, the Cash

proceeds acquired from the post-petition liquidation and/or Collateral and additional cash disposition of the Collateral, shall be held by the Trustee in the dedicated estate accounts and distributed by the Trustee as follows: a. First, to the extent Unencumbered Assets and the proceeds thereof shall be unavailable or inadequate and to the extent of the Carve-Out, to payment of Trustee Administrative Expenses;

b. Second, in payment in full of the Citi Debt; and c. Third, to be disbursed pursuant to the orders of priorities set forth in section 507(a) of the Bankruptcy Code.

5.

Notwithstanding anything to the contrary contained in section 552(a) of

the Bankruptcy Code, as adequate protection for, and to secure payment of, an amount equal to the aggregate of any diminution (including, without limitation, by depreciation, use, sale, loss or collection) in the value of the Cash Collateral, and as security for and an inducement to Citi to consent to the Trustees use of the Cash Collateral, the Trustee hereby grants to Citi, a security interests in and replacement lien upon the estates presently-owned and hereafter-acquired Cash 4
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Collateral, and such security interests and liens shall be valid, perfected, enforceable and effective as of the Petition Date without any further action by Citi or the Trustee, and senior to any other security interest or lien, subject only to (i) the valid and perfected liens and security interests, if any, of Citi on such property, assets and rights existing before the Petition Date, and (ii) the payment of Trustee Administrative Expenses from the Carve-Out, including professionals retained for the purpose of litigating of collecting such Cash Collateral. 6. In addition, as further inducement to Citi to permit the use of its Cash

Collateral, to the extent that any of the Trustee Administrative Expenses paid with Cash Collateral are directly attributable to Trustee activities, pursuit of assets and claims, and/or other estate administration activities that are not directly related to the maintenance and liquidation of Citis Collateral, Trustee hereby grants to Citi a security interest in and replacement lien against the Unencumbered Assets and proceeds thereof, and such security interests and liens shall be valid, perfected, enforceable and effective as of the Petition Date without any further action by Citi or the Trustee, and senior to any other security interest or lien, subject only to the Carve-Out. 7. As additional adequate protection for the Trustees use of Cash Collateral

and for any diminution in the value of the Cash Collateral, and as security for and an inducement to Citi to permit the use of the Cash Collateral, the Trustee shall pay an amount to Citi equal to any funds held in the Debtors estate bank account attributable to the liquidation of the Collateral in excess of one-hundred twenty-five (125%) percent of the estimated outstanding Trustee Administrative Expenses (the "Administrative Reserve") at the end of each month on the last day of each month commencing on November 30, 2009 and continuing through to the Termination Date, as defined below (collectively, the "Adequate Protection Payments"), as provided for below.

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8.

All Adequate Protection Payments shall be drawn on the Trustees estate

bank account and sent to Citi by Wire Transfer to: Citibank, N.A. 485 Lexington Ave, 9th floor New York, New York 10017 ABA 021000089 For Credit to: ITA - CPB Special Loan Region Account #37428705, and shall be due within seven (7) business days of the end of each monthly period along with an accounting showing how the amount of the Adequate Protection Payment was calculated. The receipt of the Adequate Protection Payments shall be without prejudice to Citis rights to seek, by agreement with Trustee or order of the Bankruptcy Court, a payment from the Administrative Reserve, if Citi believes such reserve is higher than what is necessary in excess of the proceeds of Unencumbered Assets to provide for the payment of all Trustee Administrative Expenses. 9. To the extent the replacement liens granted hereby do not provide

adequate protection for the use of Cash Collateral, Citi shall have a super-priority administration expense claim under 507(b) of the Bankruptcy Code superior to all other claims except the Carve-Out, and shall otherwise enjoy all rights and claims thereunder. 10. Citi shall not be required to take any other action in order to validate and perfect any security interests and liens granted pursuant to this Stipulation and Order. Nothing in this Stipulation and Order shall in any way restrict the scope of the pre-petition or post-petition liens or security interests, or~the priorities, rights of set-off, remedies or claims of Citi and the automatic stay under section 362(a) is deemed modified to permit Citi to take any such actions and/or to file financing statements or a copy of this Stipulation and Order or any other evidence of the granting of the replacement liens hereunder.

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11. In the event that this case is dismissed, neither the entry of this Stipulation and Order nor the dismissal of the case shall affect the rights of Citi under its respective liens, and all the rights and remedies of Citi shall remain in full force and effect as if the case had not been filed. 12. Notwithstanding anything to the contrary contained herein, the Trustees right to use and the use of Cash Collateral shall expire (other than the use of Cash Collateral to pay already approved and accrued Trustee Administrative Expenses) on the earliest to occur of (the first such occurrence being hereinafter referred to as the "Termination Event"): (i) the entry by the Bankruptcy Court or any other court reversing, amending, supplementing, staying, vacating or otherwise modifying the terms of this Stipulation and Order; (ii) the dismissal of this case; (iii) the entry by the Bankruptcy Court of an order granting relief from the automatic stay imposed by section 362 of the Bankruptcy Code to any entities other than Citi with respect to acts against any of the Collateral or Cash Collateral or replacement liens granted hereunder; or (iv) any material breach by the Trustee of the terms of this Stipulation and Order. On the date of the Termination Event (the "Termination Date") and thereafter, the Trustee shall immediately cease using any Cash Collateral (other than to pay approved Trustee Administrative Expenses that accrued prior to the Termination Date). 13. Nothing contained in this Stipulation and Order shall be deemed to be a consent by Citi to any charge, lien, assessment or claim against the Collateral or Cash Collateral under section 506(c) of the Bankruptcy Code or otherwise and the Trustee agrees that, in consideration for Citi providing the Carve-Out, no costs or expenses chargeable or alleged to be chargeable against the Collateral or Cash Collateral under section 506(c) of the Bankruptcy Code shall be incurred in these proceedings.

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14. This Stipulation and Order has been negotiated in good faith and at arms length among the Trustee and Citi, and each of the parties hereto has had the opportunity to receive independent legal advice from the attorneys of its choice with respect to the advisability of entering into this Stipulation and Order. 15. If any or all of the provisions of this Stipulation and Order are hereafter modified, vacated, or stayed by order of this or any other Court, such stay, modification, or vacation shall not affect in and of itself the validity and enforceability of any lien, priority, other benefit, or application of payment authorized hereby with respect to any indebtedness of the Debtor to Citi, 16. This Stipulation and Order cannot be amended or modified except by a writing executed by all the parties hereto and approved by the Court. 17. hereto. 18. The terms and provisions of this Stipulation and Order shall be binding This Stipulation and Order may be executed in counterparts by the parties

upon the Trustee, any assignee or successor in interest to the Trustee or Debtors estate (including, without limitation, any successor trustee appointed in the case) and all creditors and parties in interest with respect to the Debtor, and upon Citi and its successors and assigns.

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Dated:

New York, New York November ~/ , 2009

Dated: New York, New York November %t, 2009 FOX ROTHSCHILD LLP

By: \A,,fi~r~w~B. Ec~ste in Michael Z. Brownstein The Chrysler Building 405 Lexington Avenue New York, New York 10174-0208 Telephone: (212) 885-5000 Facsimile: (212) 885-5002 Attorneys for Citibank, N.A.

By:
Fred Sff6vens 100 Park Avenue, 15th Floor New York, New York 10017 Telephone: (212) 878-7900 Facsimile: (212) 692-0940 Attorneys for Yann Geron, Trustee

Dated:

New York, New York November __, 2009

Dated: New York, New York November ~[, 2009 YANN GERON, as Chapter 7 Trustee of the Estate of Thelen LLP

CITIBANK, N.A.

By: Yann G~ Cha~7 Trustee

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Thelen LLP, Debtor Case No. 09-15631 (ALG) Exhibit B Citibank Loan Documents and Terms Reviewed and Analyzed by Trustee Operative Documents Credit Agreement between Thelen Reid Brown Raysman & Steiner LLP (Borrower or TRBRS) and Citibank, N.A. (Citi or Bank), dated December 1, 2006 Security Agreement, dated December 1, 2006 Deposit Account and Lockbox Control Agreement, between Thelen Reid & Priest LLP (TRP), Bank of America, N.A. (BofA) (as account bank) and Citi, dated June 27, 2002 Amendment 1 to Deposit Account and Lockbox Control Agreement, between Borrower, BofA, and Citi, dated April 28, 2008 (*unsigned copy)

Credit Agreement Pre-existing Debt: as of November 27, 2006 (borrowing terminated via Credit Agreement) o TRP: $15,984,796.39 o Brown Raysman Millstein Felder & Steiner LLP (BRM): $14,292,561 Purpose: to pay in full and discharge pre-existing debt and obtain new credit facilities New Citi Commitment to Borrower1: o Line of Credit Commitment: $20,000,000 o Standby L/C Commitment: $22,000,000 o Term Advance Commitment: $26,000,000 Advances: o Line of Credit: minimum $100,000 Borrowing Base: sum of (i) 85% of A/R outstanding not more than 120 days from the date of billing, and (ii) 60% of unbilled time not more than 120 days old o Standby L/C Commitment: as needed for office lease obligations o Term Advance: minimum $250,000 Termination: o Line of Credit: 3 years, unless terminated earlier o Term Advance: May 1, 2007, unless terminated earlier
1

Pursuant to Section 2.02 of the Credit Agreement, the full amount of the pre-existing debt (approx. $30,277,357.39) was paid upon closing by the making of Line of Credit Advances and/or Term Advances by Citi. So the actual new money available under the Credit agreement was approximately $16 million.

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Thelen LLP, Debtor Case No. 09-15631 (ALG)

Interest: o Line of Credit & Term Advance: 2.3% below Base Rate (rate of interest announced by Bank of NY) Eurodollar Advance option: Eurodollar Rate (equal to the average of the rate per annum at which deposits in US dollars are offered by the principal office of Citi in London to prime banks in the interbank market for US dollar deposits 2 business days before an Eurodollar Advance) plus 0.60% o Default Interest: (i) interest on unpaid principal plus 2%, and (ii) on unpaid interest, fees and other amounts due at Base Rate plus 2%

Default & Remedies: see Credit Agreement, Article 7 Governing Law: California

Security Agreement Purpose: secure the obligations under the Credit Agreement Collateral whether owned or after acquired and whether existing or after arising: o all accounts, contract rights and obligations of any kind for services performed and for work in progress (including, but not limited to, Accounts Receivable, Unbilled Time, unbilled charges and time of the Borrower), all rights of the Borrower with respect to disbursements incurred or advanced for clients of the Borrower (whether or not billed), whether or not arising out of or in connection with the sale or lease of goods or the rendering of services, and all rights now or hereafter existing in and to all supporting obligations and other contracts securing or otherwise relating to any such accounts, contract rights or obligations o all money, securities accounts and deposit accounts (other than trust, escrow, client settlement, cost or similar accounts; as well as all funds now in or hereafter deposited into any such accounts o all goods, furnishings, furniture, equipment and fixtures, whether in the possession of the Borrower or any other person and whether located on the Borrower's property or elsewhere (and improvements, replacements, accessions and additions thereto, and including all of the foregoing which are now or hereafter affixed or to be affixed to, and whether or not severed and removed from, any real property) o all books and records (including computer software, computer storage media and electronically recorded data) directly relating to or containing or storing any of the foregoing

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Thelen LLP, Debtor Case No. 09-15631 (ALG) o all proceeds of any and all of the foregoing collateral (including, without limitation, proceeds which constitute property of the types described in the foregoing clauses) and, to the extent not otherwise included, all (i) payments under insurance (whether or not the Bank is the loss payee thereof); by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral and (ii) cash or cash equivalents. Governing Law: California, except to the extent that the validity or perfection of the security interest under the Security Agreement, or any remedies, in respect of any Collateral are governed by the laws of a jurisdiction other than California.

Amendments Amendment No. 1 to Credit Agreement: April 13, 2007 o Line of Credit Commitment: April 13, 2007 July 31, 2007 $30,000,000, thereafter $20,000,000 o Standby L/C Commitment: April 13, 2007 July 31, 2007 $18,700,000, thereafter $22,000,000 Amendment No. 2 to Credit Agreement: July 30, 2007 o Line of Credit Commitment: April 13, 2007 August 31, 2007 $30,000,000, thereafter $20,000,000 o Standby L/C Commitment: April 13, 2007 August 31, 2007 $18,700,000, thereafter $22,000,000

Amendment No. 3 to Credit Agreement: August 30, 2007 o Line of Credit Commitment: $30,000,000 o Standby L/C Commitment: $20,000,000

Amendment No. 4 to Credit Agreement: February 28, 2008 o o o o Default waiver by Citi Revised reporting requirements by Borrower Revised covenant regarding net income levels New DACA with BofA required by May 31, 2008

Amendment No. 5 to Credit Agreement: March 28, 2008 o Additional $10,000,000 line of credit facility available through July 31, 2008

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Thelen LLP, Debtor Case No. 09-15631 (ALG) Lien Search Results--UCCs2 New York: o MPC Insurance, Ltd. California: o MPC Insurance, Ltd. #08-7168602179 Financing statement appears to be for insurance premium financing whereby the insurer financed insurance and would then have a lien in any proceeds it had to pay out to the extent of the financing o U.S. Bancorp Oliver-Allen Technology Leasing o National City Vendor Finance LLC/ U.S. Bancorp o U.S. Bancorp Oliver-Allen Technology Leasing/Wells Fargo Equipment Finance o U.S. Bancorp Oliver-Allen Technology Leasing o National City Vendor Finance LLC/ U.S. Bancorp o National City Vendor Finance LLC/ U.S. Bancorp o U.S. Bancorp Oliver-Allen Technology Leasing o U.S. Bancorp Oliver-Allen Technology Leasing o U.S. Bancorp Oliver-Allen Technology Leasing/Wells Fargo Equipment Finance o National City Vendor Finance LLC/ U.S. Bancorp Oliver-Allen Technology Leasing o U.S. Bancorp Oliver-Allen Technology Leasing o Citibank, N.A. (see below) o Citibank, N.A./Citibank, N.A. (see below) Citibank UCCs Details 3: o July 16, 2002 #0219761422 Debtor: Thelen Reid & Priest LLP Citbank, F.S.B. o December 1, 2006 #06-70939748 Assignment from Citibank, F.S.B. to Citibank, N.A. o December 1, 2006 #06-70939757 Name Change: Thelen Reid & Priest LLP to Thelen Reid Brown Raysman & Steiner LLP o December 4, 2006 #06-70941963 Restated Collateral Description
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Copies of financing statements for Citi were obtained and reviewed. The other secured parties in this summary (other than MPC Insurance) are equipment lessors/financers do not impact Citis security interest.
3

Searches for BRM individually were not conducted because the BRM pre-existing debt was paid in full and satisfied under the Credit Facility upon closing, which occurred during the four month period that a creditor has to file an amendment after a name change by the Debtor under UCC 9-507 (see further discussion below on UCC 9-507). The merger and name change was effective December 1, 2006, and the Credit Agreement is dated December 4, 2006.

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Thelen LLP, Debtor Case No. 09-15631 (ALG) o December 4, 2006 #06-7094172531 Original financing statement filing for Credit Agreement Collateral description matches Security Agreement o January 17, 2007 #07-70988565 Continuation of #0219761422 (original TRP financing statement) This was filed notwithstanding that the TRP pre-existing debt was paid in full and satisfied under the Credit Facility upon closing. o October 8, 2008 #0871748340 Amendment for name change to Thelen LLP UCC 9-507(c) requires that if a debtor changes its name so that it becomes seriously misleading under 9-506, the original financing statement is not effective unless within four months an amendment is filed which renders the financing statement not seriously misleading. According to an article in the National Law Journal dated August 26, 2008, TRBRS announced that it was shortening its name to Thelen LLP, effective September 9, 2008. Whether or not the name change would have led to a misleading name on the financing statement, Citi filed the amendment within the fourmonth time frame. The reference to #0219761422 and not #06-7094172531 is not misleading under UCC 9- because the financing statement substantially satisfies the requirements of Part 5 of Article 9. A debtor search would reveal all of the financing statements, amendments and continuations, including this statement.

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------x In re : : THELEN LLP, : : Debtor. : ------------------------------------------------------x

Chapter 7 Case No. 09-15631 (ALG)

ORDER, PURSUANT TO 11 U.S.C. 361, 363, 503, 506 AND 507(b), APPROVING A CERTAIN STIPULATION BETWEEN CHAPTER 7 TRUSTEE AND CITIBANK, N.A., REGARDING LIMITED USE OF CASH COLLATERAL BY TRUSTEE AND GRANTING ADEQUATE PROTECTION Upon the application dated November 18, 2009 (the Application), of Yann Geron (the Trustee), Chapter 7 trustee of the estate of Thelen LLP, the above-captioned debtor (the Debtor or Thelen), pursuant to 11 U.S.C. 361, 363, 503, 506 and 507(b), for an order approving a stipulation between the Trustee and Citibank, N.A. (Citibank), for limited use of cash collateral by the Trustee and granting adequate protection to Citibank; and a hearing on the Application having taken place before this Court on December 15, 2009 (the Hearing); and upon the record of the Hearing, which is incorporated herein by reference; and with due consideration having been given to any responses received to the Application; and it appearing from the affidavit of service on file that proper and sufficient notice of the Application and Hearing have been given; after due deliberation and sufficient cause appearing therefore; it is hereby ORDERED, that the Court has determined that good and sufficient notice of the Application and Hearing has been given, and no other or further notice is required; and it is further

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ORDERED, that the Stipulation be, and it hereby is, approved; and it is further ORDERED, that Trustee and Citibank be, and they each hereby are, authorized and directed to take such further actions as are necessary to consummate the terms of the Stipulation. Dated: New York, New York _______________, 2009 HONORABLE ALLAN L. GROPPER UNITED STATES BANKRUPTCY JUDGE

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