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  1. 1. IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 Cordillera Golf Club, LLC, 1 Case No. 12-11893 (CSS) dba The Club at Cordillera, Hearing Date: July 27,2012 at 1:00 p.m. (ET) Objection Deadline: July 20, 2012 at 4:00 p.m. (ET) Debtor. DEBTORS APPLICATION FOR AN ORDER AUTHORIZING THE RETENTION OF PRICEWATERHOUSECOOPERS LLP AS FINANCIAL ADVISOR TO THE DEBTOR NUNC PRO TUNC TO THE PETITION DATE AND WAIVING CERTAIN REQUIREMENTS PURSUANT TO LOCAL RULE 2016-2 Cordillera Golf Club, LLC, the debtor and debtor in possession in the above-captioned case (the "Debtor"), by and through its proposed undersigned counsel, hereby submits this application (the "Application") for entry of an order, substantially in the form attached hereto as Exhibit A (the "Order"), pursuant to sections 327(a) and 328(a) of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the "Bankruptcy Code"), authorizing the retention and employment of PricewaterhouseCoopers LLP ("PwC") as financial advisor to the Debtor nunc pro tunc to the Petition Date (as defined below) and waiving certain requirements pursuant to Rule 2016-2 of the Local Rules ofBankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"). In support of this Application, the Debtor relies on the Declaration of Daniel Williams (the "Williams Declaration"), a copy of which is attached hereto as Exhibit B. In further support of the Application, the Debtor respectfully states as follows: 1 The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is: XX- XXX1317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202, Edwards, CO 81632.01:12258158.4
  2. 2. JURISDICTION 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated as of February 29, 2012. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2), and the Court may enter a final order consistent with Article III of the United States Constitution. Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409. The statutory and legal predicates for the relief requested herein are sections 327(a) and 328(a) of the Bankruptcy Code, Rules 2014 and 2016 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and Local Rules 2014-1 and 2016-2. BACKGROUND 2. On June 26, 2012 (the "Petition Date"), the Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The Debtor has continued in possession of its properties and has continued to operate and maintain its business as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 3. On July 6, 2012, the Office of the United States Trustee for the District of Delaware (the "U.S. Trustee") appointed an official committee of unsecured creditors (the "Committee") [Docket No. 86]. No request has been made for the appointment of a trustee or examiner in this case. 4. A description of the Debtors business, the reasons for commencing this chapter 11 case, and the relief sought from the Court to allow for a smooth transition into chapter 11 are set forth in the Declaration of DanielL. Fitchett, Jr. in support of Chapter II Petitions and First Day Relief[Docket No. 2] (the "First Day Declaration"), filed on the Petition Date and incorporated by reference herein.01:12258158.4 4
  3. 3. RELIEF REQUESTED 5. By this Application, the Debtor requests that the Court enter an Order pursuant to sections 327(a) and 328(a) of the Bankruptcy Code, Bankruptcy Rules 2014 and 2016, and Local Rules 2014-1 and 2016-2 authorizing the Debtor to employ and retain PwC as financial advisor to the Debtor nunc pro tunc to the Petition Date, in accordance with the terms and conditions contained in that certain engagement letter (the "Engagement Letter"), dated June 22, 2012, between PwC and the Debtor, a copy of which is attached hereto as Exhibit C and incorporated herein by reference. PwCs QUALIFICATIONS 6. The Debtor chose PwC to serve as its financial advisor, in part, because of PwC s substantial expertise in providing financial advisory services to companies in financial distress. Accordingly, the Debtor believes that PwC is well-qualified to perform all services contemplated by the Engagement Letter, and to represent the Debtors interests in its chapter 11 case. 7. PwC has acted as financial advisor in both in-court and out-of-court restructurings of companies of various sizes across a wide array of industries. PwCs clients include debtors, creditors, corporate parents, financial sponsors, and indenture trustees. Of relevance to the Debtors circumstances, PwC has considerable experience providing financial advisory services to businesses in a chapter 11 environment, and has been employed in numerous chapter 11 cases within this district, including: : In re AbitibiBowater Inc., Case No. 09-11296 (KJC); In re Aleris International, Inc., Case No. 09-104 78 (BLS); In re American Home Mortgage Holdings, Inc., Case No. 07-11047 (CSS); In re Appleseeds Intermediate Holdings LLC, Case No. 11- 10160 (KG); In re Autobacs Strauss, Inc., Case No. 09-10358 (CSS); In re Buffets Restaurants Holdings, Inc., Case No. 12-10237 (MFW); In reBuilding Materials Holding Coi]J., Case No. 09-12074 (KJC); In re Coach Am Group Holdings Coi]J., Case No. 12-10010 (KG); In re01:12258158.4 5
  4. 4. Filenes Basement, LLC, Case No. 11-13511 (KJC); In re Foamex International Inc., Case No. 09-10560 (KJC); In re HUB Holding Corp., Case No. 09-11770 (PJW); In re JERIJameson Mezz Borrower I LLC, Case No. 11-13392 (MFW); In re Local Insight Media Holdings, Inc., Case No. 10-13677 (KG); In re Muzak Holdings LLC, Case No. 09-10422 (KJC); In re Nassau Broadcasting Partners, L.P., Case No. 11-12934 (KG); In re NewPage Corporation, Case No. 11- 12804 (KG); In re OTC Holdings Corporation, Case No. 10-12636 (BLS); In re Orleans Homebuilders, Inc, Case No. 10-10684 (PJW); In re Pemco World Air Services, Inc., Case No. 12-10799 (MFW); In re Smurfit-Stone Container Corp., Case No. 09-10235 (BLS); In re Townsends, Inc., Case No. 10-14092 (CSS); In re Tribune Co., Case No. 08-13141 (KJC); In re Trico Marine Services, Inc., Case No. 10-12653 (BLS); In re Trident Microsystems, Inc., Case No. 12-10069 (CSS); In re Urban Brands, Inc., Case No. 10-13005 (KJC); and In re Visteon ~Case No. 09-11786 (CSS). 8. In view ofPwCs experience, the Debtor believes that the retention ofPwC is necessary to enable the Debtor to execute faithfully its duties as debtor-in-possession and to confront issues that may arise in the context of the chapter 11 case in an efficient and timely manner. The Debtor believes that PwC is well qualified to serve in the chapter 11 case and that the retention ofPwC is in the best interest of the Debtors estates and its creditors. SERVICES TO BE PROVIDED 9. Pursuant to the terms ofthe Engagement Letter, PwC has agreed to act as financial advisor to the Debtor. As financial advisor, PwC will assist the Debtor in discussions with its various creditors, lenders, and investors, as the case may be, and in the marketing and sale of the Debtors assets. The services that PwC may provide under the Engagement Letter include, but are not limited to, the following::01:12258158.4 6
  5. 5. a) Evaluating strategic alternatives, including restructuring options, capital raising, sale of assets, etc ... ; b) Advising and assisting with the Debtors development of cash flow projections and business restructuring plans, including related financial forecasts; and sensitivity analyses relating to the Debtors forecasts and assumptions; c) Advising and analyzing any proposed asset sales and other proposed transactions in which the Debtor seeks Court approval; d) Advising the Debtor in connection with its negotiations with: (i) lenders regarding debtor-in-possession and exit financing facilities; and (ii) key vendors regarding post-petition shipments and critical vendor payments and assistance in preparation thereof; e) Testifying as a "fact or percipient witness" in the Debtors bankruptcy court proceedings based on PwCs direct knowledge of the estate arising from or relating to the services performed; f) Advising the Debtor on tactics and strategies for negotiating with the stakeholders; g) Advising and assisting the Debtor in connection with the Debtors accumulation of data and preparation of various schedules, operating reports, account analyses, and reconciliations, including reconciliations of claims, bankruptcy petitions, the plan of reorganization and other reports required by the Court, bankruptcy schedules and statements of financial affairs, monthly operating reports, and such other documentation that is customarily issued by a debtor; h) Advising regarding golf course industry metrics and operations; i) Providing forensic accounting assistance, as needed, relating to financial records of the Debtor or any other party; j) Consulting relating to litigation matters, as requested; k) Providing other forensic accounting and advisory services as requested; and 1) Providing other general restructuring advice, as requested. 10. The Debtor and PwC intend that all of the services that PwC will provide to the Debtor will be: (a) appropriately directed by the Debtor so as to avoid duplicative efforts among the01:12258158.4 7
  6. 6. other professionals retained in this chapter 11 case and (b) performed in accordance with applicable standards of the profession. 11. To the extent the Debtor requests that PwC perform additional services not contemplated by the Engagement Letter or directly related to services detailed in the Engagement Letter, the Debtor shall seek further application for an order of approval by the Court for any such additional services, and such application shall set forth, in addition to the additional services to be performed, the additional fees sought to be paid. 12. In connection with each of its engagements, PwC may use employees from its U.S. and non-U.S. subsidiary affiliates, depending on the needs of the engagement. PwC may also utilize third-party contractors or subcontractors (each, an "Independent Contractor") in this chapter 11 case. IfPwC utilizes such Independent Contractors, then (a) PwC will file, and require the Independent Contractor to file, declarations indicating that the Independent Contractor has reviewed the list of the interested parties in this case, disclosing the Independent Contractors relationships, if any, with the interested parties, and indicating that the Independent Contractor is disinterested, (b) the Independent Contractor will remain disinterested during the time that PwC is involved in providing services on behalf of the Debtor, and (c) the Independent Contractor will represent that he/she will not work for the Debtor or other parties in interest in this chapter 11 case during the time PwC is involved in providing services to the Debtor. PwCs standard practice is to charge for an Independent Contractors services at the rate PwC pays the Independent Contractor for such services.01:12258158.4 8
  7. 7. TERMS OF RETENTION 13. The terms ofPwCs proposed compensation are fully set forth in the Engagement Letter, and the Debtor respectfully refers this Court to the Engagement Letter for a full recitation of such terms. 14. PwC seeks the Courts approval of its compensation and reimbursement of its actual, necessary expenses and other charges incurred by PwC upon the filing of appropriate applications for interim and final compensation and reimbursement pursuant to sections 330 and 331 ofthe Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the guidelines established by the U.S. Trustee, and any other applicable procedures and orders of this Court. As compensation for the financial advisory services to be rendered, PwC requests the following payment amounts pursuant to the Engagement Letter: a) Fees: Fees for services will be based on the following agreed upon hourly rates, which will be revised from time to time. Adjusted rates will be reflected in billings. The current hourly rates are: Partner $670-$790 Director $535-$580 Manager $410-$450 Senior Associate $325-$375 Associate $270-$315 Secretarial $75-$125 b) Expenses. PwC will also bill the Debtor for reasonable, documented, out-of-pocket expenses and internal per-ticket charges for booking travel. 15. PwCs hourly rates are subject to periodic adjustment from time to time in accordance with PwCs established billing practices and procedures. PwC will provide notice of any changes to its hourly rates within ten (10) business days thereofto the U.S. Trustee and the Committee and file such notice with this Court.01:12258158.4 9
  8. 8. 16. The PwC professionals providing the financial advisory services will consult with internal PwC bankruptcy retention and billing advisors (the "PwC Retention Advisors") to ensure compliance with the requirements of the Bankruptcy Code, as well as decrease the overall fees associated with the administrative aspects ofPwCs engagement. The services provided by these PwC Retention Advisors shall include, but are not limited to: assistance with the bankruptcy retention documents; assistance with the disinterestedness disclosures; assistance with completion of the requisite fee applications; and assistance with compliance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the guidelines established by the U.S. Trustee, and the orders of this Court. Due to the specialized nature of these services, and consistency between bankruptcy venues, specific billing rates have been established for these PwC Retention Advisors? 17. During the ninety (90) days prior to the Petition Date, on June 22, 2012, PwC received from the Debtor an initial advance retainer of$75,000 (the "Retainer"), of which $13,500 was drawn by PwC to pay fees incurred in providing services to the Debtor in contemplation of, and in connection with, prepetition financial advisory activities. As of the Petition Date, the Retainer was $61,500. 18. Due to the ordinary course and unavoidable reconciliation of fees and submission of expenses immediately prior to, and subsequent to, the Petition Date, PwC has incurred unbilled fees and reimbursable expenses which relate to the prepetition period. PwC hereby seeks this Courts approval to apply the Retainer to these amounts and any further prepetition fees and expenses PwC becomes aware of during its ordinary course billing review and 2 The rate per hour for these PwC Retention Advisors by level of experience will be as follows: Partner: $790; Director: $550; Manager: $400; Senior Associate: $290; Associate: $225 and Paraprofessional: $125- $150. These rates are subject to periodic adjustments.01:12258158.4 10
  9. 9. reconciliation. Upon the proposed applications of the Retainer, the Debtor would not owe PwC any sums for pre-petition services. 19. The Debtor requests that the remainder-if any-of the Retainer following application against pre-petition fees and expenses will constitute a retainer as security for post- petition services and expenses. In the chapter 11 case, a general security retainer is appropriate for several reasons. See In re Insilco Techs., Inc., 291 B.R. 628, 634 (Bankr. D. Del. 2003) ("Factors to be considered, include ... whether terms of an engagement agreement reflect normal business terms in the marketplace; ... the relationship between the Debtor and the professionals, i.e., whether the parties involved are sophisticated business entities with equal bargaining power who engaged in an arms-length negotiation[] [and] ... whether the retention, as proposed, is in the best interests ofthe estate[] .... "). First, these types of retainer agreements reflect normal business terms in the marketplaces. See Id. ("[I]t is not disputed that the taking of [security] retainers is a practice now common in the market place."). Second, PwC and the Debtor are sophisticated business entities that have negotiated the Retainer at arms length. Third, the retention ofPwC is in the best interests of the Debtors estate because the retention agreement and retainer allow the Debtor to maintain the prepetition relationship established with PwC. Thus, under the standards articulated in Insilco, the facts and circumstances of this case support the approval of the security retainer. 20. Notwithstanding anything to the contrary in the Engagement Letter, PwC intends to apply for compensation for professional services rendered and reimbursement of expenses incurred in connection with the Debtors chapter 11 case on an hourly basis, subject to Court approval and in compliance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the U.S. Trustee Guidelines and any other applicable procedures or01:12258158.4 11
  10. 10. orders of the Court. However, it is not the general practice ofPwC professionals to keep detailed time records (i.e., increments of one-tenth of an hour (six minutes)) similar to those customarily kept by attorneys compensated through the Court. PwC professionals customary practice provides a description of the services rendered and the amount of time spent on each date in rendering services on behalf of their clients rather than breaking it into separate tasks throughout each date. 21. PwC will file interim and final fee applications for the allowance of compensation for services rendered and reimbursement of expenses incurred in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the guidelines of the U.S. Trustee, and any applicable orders of this Court. PwC will keep time records, and include these records as an exhibit to each fee application, which shall set forth a description of the services rendered by each professional and the amount of time spent on each date, in half-hour (0.5) increments, by each such individual in rendering services on behalf of the Debtor. The Debtor believes that PwCs customary practice with respect to time descriptions will still provide this Court with the ability to appropriately review and evaluate the services provided by PwC. Furthermore, because it would be more efficient for PwC to continue in its customary time- keeping practices, the Debtor respectfully seeks a waiver of Local Rule 2016-2(d) to permit PwC to submit its time records in half-hour increments. 22. PwC has agreed not to share with any person or firm the compensation to be paid for services rendered in connection with this chapter 11 case. 23. The above fee structure and terms are consistent with and typical of arrangements entered into by PwC and other comparable firms in connection with the rendering of similar services under similar circumstances. The Debtor believes that the Engagement Letter and01:12258158.4 12
  11. 11. retention ofPwC is in fact reasonable, market-based, and designed to fairly compensate PwC for its work and to cover fixed and routine overhead expenses. INDEMNIFICATION AND LIMITATION OF LIABILITY 24. Pursuant to the terms of the Engagement Letter, the Debtor has agreed to indemnify and hold PwC, its affiliates, and Independent Contractors, and their partners, principals, and employees harmless from and against any and all third party claims resulting from any of the Services and Deliverables (as defined in the Engagement Letter), except to the extent determined to have resulted from PwCs gross negligence or intentional misconduct relating to the Services and/or Deliverables. 25. Pursuant to the terms of the Engagement Letter, the Debtor agreed that PwCs liability to pay damages, except to the extent finally determined to have resulted from PwCs gross negligence or intentional misconduct, for any losses incurred by the Debtor as a result of breach of contract, negligence, or other tort committed by PwC, regardless of the theory of liability assets, is limited to no more than the total amount of fees paid to PwC for the particular Service giving rise to the liability. In addition, pursuant to the terms ofthe Engagement Letter, PwC will not be liable in any event for lost profits, consequential, indirect, punitive, exemplary or special damages and shall have no liability to the Debtor arising :from or relating to any third party hardware, software, information, or materials selected by the Debtor or its counsel. 26. Consistent with the prevailing standards for retention of professionals in chapter 11 cases in the Third Circuit, however, the Debtor requests (and PwC agrees) that the order approving PwCs retention provide that, notwithstanding anything to the contrary in the engagement letter: (a) PwC shall not be entitled to indemnification, contribution, or reimbursement pursuant to the Engagement Letter for services other than those described in the01:12258158.4 13
  12. 12. Engagement Letter, unless such services and indemnification therefor are approved by the Bankruptcy Court notwithstanding anything to the contrary in the Engagement Letter; (b) the Debtor shall have no obligation to indemnify any person, or provide contribution or reimbursement to any person, for any claim or expense to the extent that it is either : (i) judicially determined (the determination having become final) to have arisen from PwCs gross negligence, willful misconduct, breach of fiduciary duty, if any, bad faith or self-dealing; (ii) for a contractual dispute in which the Debtor alleges the breach ofPwCs contractual obligations, unless the Court determines that indemnification, contribution, or reimbursement would be permissible pursuant to In reUnited Artists Theatre Company, et al., 315 F.3d 217 (3d Cir. 2003); or (iii) settled prior to a judicial determination as to the exclusions set forth in clauses (i) and (ii) above, but determined by the Court, after notice and a hearing to be a claim or expense for which PwC should not receive indemnity, contribution, or reimbursement under the terms of the Engagement Letter as modified by the Order; and (c) if, before the earlier of (i) the entry of an order confirming a chapter 11 plan in this chapter 11 case (that order having become a final order no longer subject to appeal), and (ii) the entry of an order closing this chapter 11 case, PwC believes that it is entitled to the payment of any amounts by the Debtor on account of the Debtors indemnification, contribution, and/or reimbursement obligations under the Engagement Letter (as modified by this Order), including without limitation the advancement of defense costs, PwC must file an application therefor in this Court, and the Debtor may not pay any such amounts to PwC before the entry of an order by this Court approving such payments, and that this subparagraph (c) is intended only to specify the period of time under which the Court shall have jurisdiction over any request for fees and expenses by PwC for indemnification, contribution, or reimbursement, and not a provision limiting the duration of the Debtors01:12258158.4 14
  13. 13. obligation to indemnify PwC, and that all parties in interest shall retain the right to object to any demand by PwC for indemnification, contribution, or reimbursement. PwCS DISINTERESTEDNESS 27. PwC has reviewed its electronic database and, to the best of its knowledge and except to the extent disclosed in the Williams Declaration, PwC: (a) is a "disinterested person" within the meaning of section 101 (14) of the Bankruptcy Code; (b) does not hold or represent an interest adverse to the Debtors estate; and (c) has no connection to the Debtor, its creditors, or their related parties that would negatively impact PwCs disinterestedness. 28. To the extent that PwC discovers any facts during the course of its retention that could impact the truthfulness of the statements made herein or in the Williams Declaration, PwC will supplement the information contained in the Williams Declaration. BASIS FOR RELIEF REQUEST 29. Section 327(a) of the Bankruptcy Code provides that a debtor, subject to court approval: May employ one or more attorneys, accountants, appraisers, auctioneers, or other professional persons, that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the [debtor] in carrying out the [debtor] s duties under this title. 11 U.S.C. § 327(a). 30. Section 328(a) of the Bankruptcy Code provides, in relevant part, as follows: The trustee ... with the courts approval, may employ or authorize the employment of a professional person under section 327 ... of this title ... on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, or on a contingent fee basis. Notwithstanding such terms and conditions, the court may allow compensation different from the compensation provided under such terms and conditions after the conclusion of such employment, if such terms and conditions prove to have been01:12258158.4 15
  14. 14. improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions. 11 U.S.C. § 328(a). 31. Bankruptcy Rule 2014 provides, in relevant part, as follows: An order approving the employment of financial advisors ... or other professionals pursuant to § 327 ... of the Code shall be made only on application of the trustee or committee. Fed. R. Bankr. P. 2014. 32. Local Rule 2014-1 provides, in relevant part, as follows: Any entity seeking approval of employment of a professional person pursuant to 11 U.S. C. § 327 ... shall file with the Court a motion, a supporting affidavit or verified statement of the professional person, and a proposed order for approval. Del. Bankr. L.R. 2014-1(a). 33. For the reasons discussed above, the Debtor believes that the retention ofPwC satisfies the requirements of sections 327(a) and 328(a) of the Bankruptcy Code, and the applicable Bankruptcy Rules and Local Rules. Moreover, the Debtor submits that the employment ofPwC on the terms and conditions set forth herein and in the Engagement Letter is in the best interests of the Debtor, its estate, its creditors, and all parties in interest. NOTICE 34. Notice of this Motion has been provided to: (i) the Office of the United States Trustee; (ii) the Office of the United States Attorney for the District of Delaware; (iii) counsel to the Official Committee of Unsecured Creditors; (iv) counsel to prepetition secured lenders; (v) counsel to proposed post-petition secured lender; and (vi) all parties requesting notice pursuant to Bankruptcy Rule 2002. In light of the nature of the relief requested herein, the Debtor submits that no other or further notice is necessary.01:12258158.4 16
  15. 15. NO PRIOR REQUEST 35. No prior application for the relief requested herein has been made to this or any other court. WHEREFORE, the Debtor respectfully requests the entry of an order, substantially in the form attached hereto as Exhibit A, (a) approving the employment and retention of PwC as financial advisor to the Debtor and (b) granting such other and further relief as the Court deems appropriate. Dated: Wilmington, Delaware FOLEY & LARDNER LLP July 10, 2012 Christopher Celentino Erika Moribita Mikel Bistrow Admitted Pro Hac Vice 402 West Broadway, Suite 2100 San Diego, California 92101 Telephone: (619) 234-6655 Facsimile: (619) 234-3510 -and- YOUNG CONAWAY STARGATT & TAYLOR, LLP Is/ Donald J Bowman Jr. Michael R. Nestor (No. 3526) JosephM. Barry (No. 4221) Donald J. Bowman, Jr. (No. 4383) Justin P. Duda (No. 5478) Rodney Square 1000 N. King Street Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Proposed Counsel for Debtor and Debtor in Possession01:12258158.4 17
  16. 16. IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE Inre: Chapter 11 Cordillera Golf Club, LLC, 1 Case No. 12-11893 (CSS) dba The Club at Cordillera, Hearing Date: July 27,2012 at 1:00 p.m. (ET) Objection Deadline: July 20, 2012 at 4:00 p.m. (ET) Debtor. NOTICE OF APPLICATION TO: (A) THE OFFICE OF THE UNITED STATES TRUSTEE; (B) THE OFFICE OF THE UNITED STATES ATTORNEY FOR THE DISTRICT OF DELAWARE; (C) COUNSEL TO THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS; (D) COUNSEL TO PREPETITION SECURED LENDERS; (E) COUNSEL TO PROPOSED POST-PETITION SECURED LENDER; AND (F) ALL PARTIES THAT HAVE REQUESTED NOTICE PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 2002 PLEASE TAKE NOTICE that the above-captioned debtor and debtor in possession (the "Debtor") filed the attached Debtors Application for an Order Authorizing the Retention PricewaterhouseCoopers 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 "Application"). PLEASE TAKE FURTHER NOTICE that responses, if any, to the Application must be filed with the United States Bankruptcy Court for the District of Delaware, 824 N. Market Street, 3rd Floor, Wilmington, Delaware 19801 on or before July 20,2012 at 4:00P.M. (ET) (the "Objection Deadline"). At the same time, you must serve a copy of your response upon the undersigned counsel. PLEASE TAKE FURTHER NOTICE THAT A HEARING ON THE APPLICATION WILL BE HELD ON JULY 27,2012 AT 1:00 P.M. (ET) BEFORE THE HONORABLE CHRISTOPHER S. SONTCHI, IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE, 824 N. MARKET STREET, 5TH FLOOR, COURTROOM NO. 6, WILMINGTON, DELAWARE 19801. 1 The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is: XX- XXX1317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202, Edwards, CO 81632.01:12258158.4
  17. 17. PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND TO THE APPLICATION IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED THEREIN WITHOUT FURTHER NOTICE OR A HEARING. Dated: Wilmington, Delaware FOLEY & LARDNER LLP July 10, 2012 Christopher Celentino Erika Moribita Mikel Bistrow Admitted Pro Hac Vice 402 West Broadway, Suite 2100 San Diego, California 92101 Telephone: (619) 234-6655 Facsimile: (619) 234-3510 -and- YOUNG CONAWAY STARGATT & TAYLOR, LLP Is/ Donald J Bowman Jr. Michael R. Nestor (No. 3526) Joseph M. Barry (No. 4221) Donald J. Bowman, Jr. (No. 4383) Justin P. Duda (No. 5478) Rodney Square 1000 N. King Street Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Proposed Counsel for Debtor and Debtor in Possession01:12258158.4
  18. 18. EXHIBIT A Proposed Order01:12258158.4
  19. 19. IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 Cordillera Golf Club, LLC, 1 Case No. 12-11893 (CSS) dba The Club at Cordillera, Ref. Docket No. Debtor. ORDER AUTHORIZING THE RETENTION OF PRICEWATERHOUSECOOPERS LLP AS FINANCIAL ADVISOR TO THE DEBTOR NUNC PRO TUNC TO THE PETITION DATE AND WAIVING CERTAIN REQUIREMENTS PURSUANT TO LOCAL RULE 2016-2 Upon consideration of the Application2 of the above-captioned debtor and debtor-in- possession (the "Debtor"), for entry of an Order pursuant to sections 327(a) and 328(a) of the Bankruptcy Code authorizing the retention and employment of PricewaterhouseCoopers LLP ("PwC") as financial advisor to the Debtor nunc pro tunc to the Petition Date and granting relief under and Local Rule 2016-2; and upon consideration of the Williams Declaration; and due and proper notice of the Application having been give; and it appearing that no other or further notice is required; and it appearing that the Court has jurisdiction to consider the Application in accordance with 28 U.S.C. §§ 157 and 1334; and it appearing that this is a core proceeding pursuant to 28 U.S.C.§ 157(b)(2); and it appearing that venue ofthis proceeding and this Application is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and it appearing that the relief requested is in the best interest of the Debtor, its estate, and creditors and after due deliberation, and sufficient cause appearing therefor, IT IS HEREBY ORDERED THAT: 1 The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is: XX- XXX1317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202, Edwards, CO 81632.Ol:1 ; .fapitalized terms not otherwise defined herein shall have the meaning ascribed in the Application. 22581 8
  20. 20. 1. The Application is GRANTED. 2. The Debtor is authorized pursuant to sections 327(a) and 328(a) of the Bankruptcy Code to employ and retain PwC as its financial advisor in accordance with the terms and conditions set in forth in the Application and the Engagement Letter attached to the Application as Exhibit C. 3. PwC will file fee applications for interim and final allowance of compensation and reimbursement of expenses pursuant to the procedures set forth in Sections 330 and 331 of the Bankruptcy Code; provided, however, that PwC shall be compensated in accordance with the terms of the Engagement Letter and subject to the procedures set forth in the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any other applicable orders of the Court. 4. Notwithstanding anything to the contrary in the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, orders of this Court or any guidelines regarding submission and approval of fee applications, in light of services to be provided by PwC, and the structure of PwC s compensation pursuant to the Engagement Letter, PwC and its professionals shall be granted a limited waiver of the information requirements set forth in Local Bankruptcy Rule 2016-2 and shall maintain time records in one-half (1/2) hour increments. 5. PwC shall apply the amounts remaining from the Retainer, if any, to its first monthly application for postpetition fees and expenses, and thereafter to each subsequent monthly application for postpetition fees and expenses, until the Retainer is fully exhausted. 6. The indemnification obligations of the Debtor are set forth on page 8 of the Engagement Letter are approved, during the pendency of this chapter 11 case, subject to the following: a. PwC shall not be entitled to indemnification, contribution, or reimbursement pursuant to the Engagement Letter for services other than those described in the Engagement Letter, unless such services and indemnification therefor are approved by the Bankruptcy Court;01:12258158.4 2
  21. 21. b. The Debtor shall have no obligations to indemnify PwC, or provide contribution or reimbursement to PwC, for any claim or expense that is either: (i) judicially determined (the determination having become final) to have arisen from PwCs gross negligence, willful misconduct, breach of fiduciary duty, if any, bad faith or self-dealing; (ii) for a contractual dispute in which the Debtor alleges the breach ofPwCs contractual obligations, unless the Court determines that indemnification, contribution, or reimbursement would be permissible pursuant to In reUnited Artists Theatre Company, et al., 315 F.3d 217 (3d Cir. 2003); or (iii) settled prior to a judicial determination as to the exclusions set forth in clauses (i) and (ii) above, but determined by the Court, after notice and a hearing to be a claim or expense for which PwC should not receive indemnity, contribution, or reimbursement under the terms of the Engagement Letter as modified by this Order; and c. If, before the earlier of (i) the entry of an order confirming a chapter 11 plan in this chapter 11 case (that order having become a final order no longer subject to appeal), and (ii) the entry of an order closing this chapter 11 case, PwC believes that it is entitled to the payment of any amounts by the Debtor on account of the Debtors indemnification, contribution, and/or reimbursement obligations under the Engagement Letter (as modified by this Order), including without limitation the advancement of defense costs, PwC must file an application therefor in this Court, and the Debtor may not pay any such amounts to PwC before the entry of an order by this Court approving such payments. This subparagraph (c) is intended only to specify the period of time under which the Court shall have jurisdiction over any request for fees and expenses by PwC for indemnification, contribution, or reimbursement, and not a provision limiting the duration of the Debtors obligation to indemnify PwC. All parties in interest shall retain the right to object to any demand by PwC for indemnification, contribution, or reimbursement. 7. During the pendency of this chapter 11 case, any limitation of liability or limitation on any amounts to be contributed by the parties to the Engagement Letter under the terms of the Engagement Letter shall be eliminated. 8. The Debtor is authorized and empowered to take all actions necessary to implement the relief granted in this Order. 9. The terms and conditions of this Order shall be immediately effective and enforceable upon its entry.01:12258158.4 3
  22. 22. 10. This Court shall retain jurisdiction with respect to all matters arising from or related to the implementation of this Order. Dated: Wilmington, Delaware July _ _, 2012 Christopher S. Sontchi United States Bankruptcy Judge01:12258158.4 4
  23. 23. EXHIBITB Williams Declaration01:12258158.4
  24. 24. IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 Cordillera Golf Club, LLC, 1 Case No. 12-11893 (CSS) dba The Club at Cordillera, Debtor. DECLARATION OF DANIEL WILLIAMS IN SUPPORT OF THE DEBTORS APPLICATION FOR AN ORDER AUTHORIZING THE RETENTION OF PRICEWATERHOUSECOOPERS LLP AS FINANCIAL ADVISOR TO THE DEBTOR NUNC PRO TUNC TO THE PETITION DATE AND WAIVING CERTAIN REQUIREMENTS UNDER LOCAL RULE 2016-2 I, Daniel Williams, under penalty of perjury, declare as follows: 1. I am a partner in the firm ofPricewaterhouseCoopers LLP ("PwC"), located at One North Wacker, Chicago, IL 60606. I submit this declaration in support of the application (the "Application") of the above-captioned debtor and debtor-in-possession (the "Debtor") for entry of an order pursuant to sections 327(a) and 328(a) of the Bankruptcy Code2 authorizing the retention and employment ofPwC as financial advisor to the Debtor nunc pro tunc to the Petition Date and granting relief under Local Rule 2016-2. Except as otherwise noted, I have personal knowledge of the matters set forth herein. 3 Professional Qualifications 2. For the purposes of this declaration, PwC is the United States firm of the global network of separate and independent member firms, which operate locally in countries around 1 The Debtor in this chapter 11 case, and the last four digits of its employer tax identification number, is: XX- XXX1317. The corporate headquarters address for the Debtor is 97 Main Street, Suite E202, Edwards, CO 81632. 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed in the Application. 3 Certain of the disclosures herein relate to matters within the personal knowledge of other professionals at PwC and are based on information provided by them.01:12258158.4
  25. 25. 4 the world. PwC has over 30,000 employees in the United States and has a wealth of experience in providing accounting, tax and advisory services with chapter 11 restructuring and other distressed company circumstances, advising both debtors and creditors throughout the United States. 3. PwC has acted as financial advisor in both in-court and out-of-court restructurings of companies of various sizes across a wide array of industries. PwCs clients include debtors, creditors, corporate parents, financial sponsors and indenture trustees. Of relevance to the Debtors circumstances, PwC has considerable experience providing financial advisory services to businesses in a chapter 11 environment, and has been employed in numerous chapter 11 cases within this district including: In re AbitibiBowater Inc., Case No. 09-11296 (KJC); In re Aleris International, Inc., Case No. 09-10478 (BLS); In re American Home Mortgage Holdings, Inc., Case No. 07-11047 (CSS); In re Appleseeds Intermediate Holdings LLC, Case No. 11-10160 (KG); In re Autobacs Strauss, Inc., Case No. 09-10358 (CSS); In re Buffets Restaurants Holdings, Inc., Case No. 12-10237 (MFW); In reBuilding Materials Holding Corp., Case No. 09-12074 (KJC); In re Coach Am Group Holdings Corp., Case No. 12-10010 (KG); In re Filenes Basement, LLC, Case No. 11-13511 (KJC); In re Foamex International Inc., Case No. 09-10560 (KJC); In re HUB Holding Corp., Case No. 09-11770 (PJW); In re JER/Jameson Mezz Borrower I LLC, Case No. 11-13392 (MFW); In re Local Insight Media Holdings, Inc., Case No. 10-13677 (KG); In re Muzak Holdings LLC, Case No. 09-10422 (KJC); In re Nassau Broadcasting Partners, L.P., Case No. 11-12934 (KG); In re NewPage Corporation, Case No. 11- 12804 (KG); In re OTC Holdings Corporation, Case No. 10-12636 (BLS); In re Orleans Homebuilders, Inc, Case No. 10-10684 (P JW); In re Pemco World Air Services, Inc., Case No. 4 The member fmns are linked together through membership in PricewaterhouseCoopers International Limited, a UK membership-based company (the "PwC Worldwide Organization.").01:12258158.4 2
  26. 26. 12-10799 (MFW); In re Smurfit-Stone Container Corp., Case No. 09-10235 (BLS); In re Townsends, Inc., Case No. 10-14092 (CSS); Inre Tribune Co., Case No. 08-13141 (KJC); Inre Trico Marine Services, Inc., Case No. 10-12653 (BLS); In re Trident Microsystems, Inc., Case No. 12-10069 (CSS); In re Urban Brands, Inc., Case No. 10-13005 (KJC); and In re Visteon ~ Case No. 09-11786 (CSS). PwC is well qualified to assist the Debtor as its financial advisor. 4. PwC will render services to the Debtor as needed throughout the course of the chapter 11 case as described in the Engagement Letter and the Application. PwCs service as financial advisor does not duplicate the services provided to the Debtor by any ofthe Debtors other professionals. PwC will undertake to work with the Debtor and their other professionals to make every reasonable effort to avoid duplication between PwCs services and the services provided by any other professionals employed by the Debtor. 5. The Debtor believes that the services ofPwC are necessary to enable the Debtor to maximize the value of its estate. Further, PwC is well qualified and able to represent the Debtor in a cost-effective, efficient and timely manner. Services to Be Provided 6. The Debtor retained PwC pursuant to the terms of the Engagement Letter, a copy of which is annexed to the Application as Exhibit B. Pursuant to the Engagement Letter, the Debtor retained PwC to provide the following services, without limitation: a) Evaluating strategic alternatives, including restructuring options, capital raising, sale of assets, etc ... ; b) Advising and assisting with the Debtors development of cash flow projections and business restructuring plans, including related financial forecasts; and sensitivity analyses relating to the Debtors forecasts and assumptions; c) Advising and analyzing any proposed asset sales and other proposed01:12258158.4 3
  27. 27. transactions in which the Debtor seeks Court approval; d) Advising the Debtor in connection with its negotiations with: (i) lenders regarding debtor-in-possession and exit financing facilities; and (ii) key vendors regarding post-petition shipments and critical vendor payments and assistance in preparation thereof; e) Testifying as a "fact or percipient witness" in the Debtors bankruptcy court proceedings based on PwC s direct knowledge of the estate arising from or relating to the services performed; f) Advising the Debtor on tactics and strategies for negotiating with the stakeholders; g) Advising and assisting the Debtor in connection with the Debtors accumulation of data and preparation of various schedules, operating reports, account analyses, and reconciliations, including reconciliations of claims, bankruptcy petitions, the plan of reorganization and other reports required by the Court, bankruptcy schedules and statements of financial affairs, monthly operating reports, and such other documentation that is customarily issued by a debtor; h) Advising regarding golf course industry metrics and operations; i) Providing forensic accounting assistance, as needed, relating to financial records of the Debtor or any other party; j) Consulting relating to litigation matters, as requested; k) Providing other forensic accounting and advisory services as requested; and 1) Providing other general restructuring advice, as requested. 7. To the extent the Debtor request that PwC perform additional services not contemplated by the Engagement Letter or directly related to services detailed in the Engagement Letter, the Debtor shall seek further application for an order of approval by the Court for any such additional services, and such application shall set forth, in additional to the additional services to be performed, the additional fees sought to be paid. Professional Compensation During the Chapter 11 Case 8. The compensation structure described below is consistent with PwCs normal and01:12258158.4 4
  28. 28. customary billing practices for engagements of this size and complexity, and reflects the difficulty of the extensive assignments PwC expects to undertake. PwCs rate structure is equivalent to the hourly rates and corresponding rate structure predominantly used by PwC for restructuring, workout, bankruptcy, insolvency and comparable matters, as well as similar complex corporate, securities and litigation matters whether in court or otherwise, regardless of whether a fee application is required. This rate structure reflects that restructuring and other complex matters are typically national in scope and involve great intricacy, high stakes and severe time pressures. PwC believes that the foregoing compensation arrangement is (a) reasonable, (b) market-based and (c) merited by PwCs extensive knowledge and experience, and its successful provision of financial advisory services to other troubled companies. 9. Pursuant to the terms and conditions of the Engagement Letter, and subject to the Courts approval, PwC intends to (a) seek compensation for the hourly services in accordance with its ordinary and customary rates in effect on the date such services are rendered, and (b) seek monthly reimbursement of actual and necessary out-of-pocket expenses and internal per ticket charges for booking travel. 10. PwCs hourly rates are set at a level designed to fairly compensate PwC for the work of its partners and professionals and to cover fixed and routine overhead expenses. Hourly rates vary with the experience and seniority of the individuals assigned. These hourly rates are subject to periodic adjustments to reflect economic and other conditions and are consistent with the rates charged elsewhere. In particular, PwC hourly rates in the United States for matters related to these services range as follows: Partner $670-$790 Director $535-$580 Manager $410-$450 Senior Associate $325-$375 Associate $270-$315 Secretarial $75-$12501:12258158.4 5
  29. 29. 11. PwCs hourly rates are subject to periodic adjustment from time to time in accordance with PwCs established billing practices and procedures. PwC will provide notice of any changes to its hourly rates within ten (10) business days thereof to the U.S. Trustee and the Committee and file such notice with this Court. 12. It is PwCs policy to charge its clients in all areas of practice for identifiable, non- overhead expenses incurred in connection with the representation of that particular client. It is also PwCs policy to charge its clients only the amount actually incurred by PwC in connection with such items. Examples of such expenses include postage, overnight mail, courier delivery, transportation, overtime expenses, computer assisted legal research, photocopying, airfare, meals and lodging. 13. During the ninety (90) days prior to the Petition Date, on June 22, 2012, PwC received from the Debtor an initial advance retainer of$75,000 (the "Retainer"). $13,500 of the Retainer was drawn by PwC to pay fees incurred in providing services to the Debtor in contemplation of, and in connection with, prepetition financial advisory activities. As of the Petition Date, the Retainer was $61,500. 14. Due to the ordinary course and unavoidable reconciliation of fees and submission of expenses immediately prior to, and subsequent to, the Petition Date, PwC has incurred unbilled fees and reimbursable expenses which relate to the prepetition period. PwC seeks to apply the Retainer to these amounts and any further prepetition fees and expenses PwC becomes aware of during its ordinary course billing review and reconciliation. Upon the proposed applications of the Retainer, the Debtor would not owe PwC any sums for pre-petition services. 15. The PwC professionals providing the financial advisory services will consult with internal PwC bankruptcy retention and billing advisors (the "PwC Retention Advisors") to01:12258158.4 6
  30. 30. ensure compliance with the requirements of the Bankruptcy Code, as well as decrease the overall fees associated with the administrative aspects ofPwCs engagement. The services provided by these PwC Retention Advisors shall include, but are not limited to, assistance with the bankruptcy retention documents; assistance with the disinterestedness disclosures; assistance with completion of the requisite fee applications; and assistance with compliance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the guidelines of the U.S. Trustee, and the orders of this Court. Due to the specialized nature of these services, and consistency between bankruptcy venues, specific billing rates have been established for these PwC Retention Advisors. 5 16. Notwithstanding anything to the contrary in the Engagement Letter.PwC intends to apply for compensation for professional services rendered and reimbursement of expenses incurred in connection with the Debtors Chapter 11 case on an hourly basis, subject to Court approval and in compliance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the U.S. Trustee Guidelines and any other applicable procedures or orders of the Court. However, it is not the general practice ofPwC professionals to keep detailed time records (i.e., increments of one-tenth of an hour (six minutes)) similar to those customarily kept by attorneys compensated through the Bankruptcy Court. PwC professionals customary practice provides a description of the services rendered and the amount of time spent on each date in rendering services on behalf of their clients rather than breaking it into separate tasks throughout each date. 17. PwC will file interim and final fee applications for the allowance of compensation for services rendered and reimbursement of expenses incurred in accordance with applicable provisions ofthe Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the guidelines of the 5 The rate per hour for these PwC Retention Advisors by level of experience will be as follows: Partner: $790; Director: $550; Manager: $400; Senior Associate: $290; Associate: $225 and Paraprofessional: $125- $150. TheseOl:ll2SSI5i.!fs are subject to periodic adjustments. 7
  31. 31. U.S. Trustee, and any applicable orders of this Court. PwC will keep time records, and include these records as an exhibit to each fee application, which shall set forth a description of the services rendered by each professional and the amount of time spent on each date, in half-hour (0.5) increments, by each such individual in rendering services on behalf of the Debtor. I believe that these time descriptions still provide the ability to review the time entries and evaluate the services provided by our professionals. Accordingly, to the extent necessary based on the foregoing, PwC respectfully requests that the information requirements set forth in Local Rule 2016-2(d) be modified and waived, to the extent necessary. PwCs Disinterestedness 18. In connection with the preparation of this Declaration, PwC professionals conducted a review of their contacts with the Debtor and certain entities holding claims against or interests in the Debtor and parties otherwise involved in the chapter 11 case that were reasonably known to PwC (the "Interested Parties"). PwCs review, completed under my supervision, consisted of a query of the Interested Parties within an internal computer database containing names of individuals and entities that are present or recent former clients of PwC. PwC is continuing to review the Interested Parties and based upon its review as of this date, PwC has determined that it does not represent any party in these proceedings with a material adverse interest with respect to the Debtor. A summary of such relationships that PwC identified during this process is set forth on Appendix 1 to this Declaration. 19. PwC confirms it is not providing and will not provide services to any of the clients that are listed on Appendix 1 that are adverse to the Debtor or related to issues connected to the Debtors bankruptcy. Further, PwC is not providing and will not provide services to the Debtor that would be adverse to any of the entities listed on Appendix 1. Despite the size or significance of the relationships with the entities listed on Appendix 1, none of those01:12258158.4 8
  32. 32. relationships will compromise in any way PwCs ability to serve as the Debtors financial advisor. 20. PwC has provided and likely will continue to provide services umelated to the Debtors case for the various entities shown on Appendix 1. Our assistance to these parties has been primarily related to auditing, tax, and/or other consulting services. To the best of my knowledge, no services have been provided to these creditors or other parties in interest, which could impact their rights in the Debtors chapter 11 case, nor does PwCs involvement in the chapter 11 case compromise its ability to continue such auditing, tax and/or consulting services. 21. Further, as part of its diverse practice, PwC appears in numerous cases, proceedings and transactions that involve many different professionals, including attorneys, accountants and financial consultants, who may represent claimants and parties-in-interest in the Debtors chapter 11 case. In addition, PwC has performed in the past, and may perform in the future, audit, tax and consulting services for various attorneys and law firms in the legal community, and has been represented by several attorneys and law firms in the legal community, some of whom may be involved in the chapter 11 case. In addition, PwC has in the past, may currently and will likely in the future be working with or against other professionals involved in this case in matters umelated to the Debtor and the chapter 11 case. Based on our current knowledge of the professionals involved, and to the best of my knowledge, none of these business relationships create interests materially adverse to the Debtor herein in matters upon which PwC is to be employed, and none are in connection with this case. 22. Despite the efforts described above to identify and disclose PwCs connections with Interested Parties, PwC is unable to state with certainty that every client relationship or other connection has been disclosed. In this regard, if PwC discovers additional information that requires disclosure, PwC will file a supplemental disclosure with the Court as promptly as01:12258158.4 9
  33. 33. possible. 23. Additionally, in connection with each of its engagements, PwC may use employees from its U.S. and non-U.S. subsidiary affiliates, depending on the needs of the engagement PwC may also utilize third-party contractors or subcontractors (each, an "Independent Contractor") in this chapter 11 case. IfPwC utilizes such Independent Contractors, then (a) PwC will file, and require the Independent Contractor to file, declarations indicating that the Independent Contractor has reviewed the list of the Interested Parties in this case, disclosing the Independent Contractors relationships, if any, with the Interested Parties, and indicating that the Independent Contractor is disinterested, (b) the Independent Contractor will remain disinterested during the time that PwC is involved in providing services on behalf of the Debtor, and (c) the Independent Contractor will represent that he/she will not work for the Debtor or other parties in interest in this chapter 11 case during the time PwC is involved in providing services to the Debtor. Also, it is PwCs standard practice is to charge for an Independent Contractors services at the rate PwC pays the Independent Contractor for such services. 24. PwC does not believe it is a "creditor" with respect to fees and expenses ofthe Debtor within the meaning of§ 101(10) of the Bankruptcy Code. 25. Further, to the best of my knowledge and except as set forth in this Declaration, PwC does not have any connection to the Debtors attorneys, the U.S. Trustee, or any judge in the United States Bankruptcy Court for the District of Delaware. 26. As such, to the best of my knowledge, if engaged PwC will be a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) ofthe Bankruptcy Code, in that PwC: a. is not a creditor, equity security holder, or insider of the Debtor;01:12258158.4 10
  34. 34. b. is not and was not, within two years before the date of the filing of the Debtors chapter 11 case, a director, officer, or employee ofthe Debtor; and c. does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtor, or for any other reason. 27. In addition, to the best of my knowledge and based upon the results ofthe relationship search described above and disclosed herein, PwC neither holds nor represents any interest adverse to the Debtor within the meaning of section 327(a) ofthe Bankruptcy Code. 28. It is PwCs policy and intent to update and expand its ongoing relationship search for additional parties in interest in an expedient manner. If any new material facts or relationships are discovered or arise, PwC will promptly file a supplemental declaration pursuant to Bankruptcy Ru1e 2014(a) Pursuant to 28 U.S.C. § 1746, I declare un and correct. Date: July 9, 201201:12258158.3 11
  35. 35. APPENDIX 1 TO DECLARATION OF DANIEL WILLIAMS In addition to the work performed for the Debtor, PwC: (a) currently performs or has previously performed services as described in the Williams Declaration in matters umelated to the chapter 11 case, to the individuals or entities disclosed in this Appendix 1; or (b) has other relationships with such entities, such as banking relationships. Out of an abundance of caution, where it is unclear whether a party in interest is the same entity or affiliated with an entity that is or was represented by PwC, such parties in interest are listed below. RELATIONSHIPS KNOWN AS OF JULY 2, 2012: Professionals McMaster-Carr Supply Co. Foley & Lardner LLP Nike USA, Inc. Crowe Horwath Oakley, Inc. Office Depot, Inc. Vendors, Service Providers I Other Parties Philadelphia Insurance Co. in Interest Ping, Inc. Acushnet Company Pitney Bowes Global Fin. Aggreko LLC Polo Ralph Lauren American Express Sage Software Inc. AT&T Mobility Source gas Bankserv Taylor Made Inc. Bridgestone Golf, Inc. TCF Equipment Finance Callaway Golf Textron Financial Corp. Centurylink United Parcel Service Cigna - Great West Health US Bank Comcast Cable W.W. Grainger CSC Corporate Svc. Co. Waste Management Delta Dental Greenberg Traurig Ecolab, Inc. John Deere HD Supply Facilities Maint. John Deere Credit Toyota Financial Services Ford Motor Credit In the Swim Integrated Technology K2 Corporation Lawson Products, Inc. Level 3 Communications Marmot Mountain LLC01:12258158.4
  36. 36. EXHIBITC Engagement Letter01:12258158.4
  37. 37. pwc PricewaterhouseCoope~:s One North Wacker Chicago, IL 6o6o6 LLP Telephone (312) 298 2000 Facsimile (312) 298 2001 PRIVILEGED AND CONFIDENTIAL June 21, 2012 Mr. Christopher Celentino Foley & Lardner LLP 402 West Broadway, Suite 2100 San Diego, CA 92101 Mr. Dan Fitchett, CEO Cordillera Golf Club, LLC 0097 Main Street, Ste E 202 Edwards CO, 81632 Dear Gentlemen: This agreement confirms the parties understanding of the terms of engagement betvveen PricewaterhouseCoopers LLP, a Delaware limited liability partnership ("PwC" or ve") and Foley & Lardner LLP ("Counsel") to perform the advisory services tlescribed below (the "Services") in connection with Counsels provision oflegal advice to Cordillera Golf Club, LLC ("Client"). Services PwC will petform the folloV~>ing advisory Services in connection v,rith Clients contemplated proceeding under Chapter 11 1 of the U.S Bankruptcy Code (the "Bankruptcy"). Restructuring Advisory Services PwCs Services may include the following restructuring advisory Services: " Evaluate strategic alternatives including restructuring options, capital raising, sale of assets, etc.; • Advice and assistance with Clients development of cash flow projections and business restructuring plans, including related financial forecasts; and sensitivity analyses relating to Clients forecasts and assumptions; • Advice and analyses relating to any proposed asset sales and other proposed transactions in V•.rhich Client seeks Comt approval; • Advise Client in connection with its negotiations ·with: a lenders regarding debtor~iwpossession and exit financing facilities and
  38. 38. -pwc o key vendors regarding post-petition shipments and critical vendor payments and assistance in the preparation thereof; " Testifying as a "fact or percipient witness" in Clients bankruptcy court proceedings based on PwCs direct knowledge of the estate arising from or relating to the Services performed; • Advise the Client on tactics and strategies for negotiating with the stakeholders; and " Provide other general restructuring advice as requested. Other Restructuring Services " PwC >>ill provide advice and assistance to Client in connection with Clients accumulation of data and preparation of various schedules, operating reports, account analyses, and reconciliations, including reconciliations of claims, bankruptcy petitions, the plan of reorganization and other reports required by the bankruptcy court, bankruptcy schedules and statements of financial affairs, monthly operating reports and such other documentation that is customarily issued by a debtor. If requested by Client, PwC will accumulate data and prepare certain schedules and reports based upon Clients instructions, however, Client is responsible for the procedures and methods used to accumulate data and prepare all schedules, analyses and reconciliations. These Services will be based upon information provided by Client. The resulting materials prepared by PwC will be reviewed and approved by the member of Clients management team responsible for the information and its 11se; and " General advice around golf course industry metrics and operations. Forensic Accounting; & Advisory Services In connection vlith litigation specifically identified by Client, if requested, PwCs Services may include the follo>ving forensics accounting and advisory Services: .. Forensics accounting assistance, as needed, relating to financial records of Client or any other party; " Consulting assistance relating to any litigation matters as requested; and • Provide other forensic accounting and advisory Services as requested. PwCs observations and advice on accounting and financial reporting matters do not represent PwCs concurrence, conclusion or opinion. Client should consult with its independent auditors on the application of accounting principles. Any observations PwC makes on what may be the views of the staff of the Securities and Exchange Commission or the independent auditors may be without any prior discussion with the staff of the Securities and Exchange Commission or the independent auditors and may not reflect their actual views. 2
  39. 39. pwc Deliverables PwCs reporting to Counsel and Client >viii include oral advice and various written outlines, executive summaries, presentations, memoranda, analysis of issues, and schedules prepared in connection with the engagement as requested (collectively, "Deliverables"). Counsel and Client will own all Deliverables prepared for and delivered by PwC under this agreement and PwC IVill own its working papers, preexisting materials and software, as well as any general skills, lmow-how, processes or other intellectual property (including a non-Client specific vetsion of any Deliverables) which PwC may have discovered or created as a result of the Services ("PwC Materials"). Counsel and Client have a nonexclusive, non-transferable license to use any PwC Materials included in the Deliverables for their own internal use as part ofthose Deliverables. Preliminary advice and draft Deliverables are works in progress and neither Counsel nor Client should rely on these until PwC confirms its advice or provides Counsel and Client with a final Deliverable. In addition to Deliverables, P;vC may develop spreadsheets, electronic materials, software, databases and other tools to assist it with an engagement. If PwC makes these available to Counsel and/or Client, they are provided "as is" and Counsels and Clients use of these materials is at their own risk. Use ofDeliverables PwC is providing the Services and Deliverables solely for Counsels and Clients internal use and benefit. The Services and Deliverables are not for a third partys use, benefit or reliance and PwC disclaims any contractual or other responsibility or duty of care to others based upon the Services or Deliverables. Except as described below, Counsel and Client shall not discuss the Services with or disclose Deliverables to any third party, or otherwise disclose the Services or Deliverables without PwCs prior written consent. The Services and DeHverables, including any oral advice or comments, should not be associated with,.referred to or quoted in any manner in any financial statements or any offering memorandum, prospectus, registration statement, public filing, loan or other agreements. Counsel and Client may disclose Deliverables to or discuss information relating to the Services with Clients third party professional advisors (including accountants, auditors, attorneys, financial and other advisors) which are acting solely for Clients benefit and on Clients behalf and whieh have a need to lmow such information in order to provide adviee or services to Client, provided that such advisors agree: (i) that PwC did not pelform the Services or prepare Deliverables for such advisors use, benefit or reliance and PwC assumes no duty, liability or responsibility to such advisors, and (ii) to not disclose the Services or Deliverables to any other party without PwCs prior written consent. Third party professional advisors do not include any parties that are providing or may provide insurance, financing, capital in any form, a fairness opinion, or selling or underwriting securities in connection vvith any transaction that is the subject of the Services or any counterparty to an anticipated transaction or dispute or any parties which have or may obtain a financial interest in Client or an anticipated transaction. If the Deliverables are to be distributed to or information relating to the Services discussed with any third party (other than Clients professional advisors), Counsel and Client shall first obtain PwCs consent, and an executed third party access letter in P•vCs standard form. 3
  40. 40. pwc PwC is performing the Services at the direction of Counsel, and in performing the Services, PwC may communicate or interact with Clients officers, directors, employees, representatives, agents or advisors and others. Client or PwC may disclose the Services or Deliverables to the extent required by law (including bankruptcy law), rule, regulation or professional standards, or as compelled by legal process, provided that (other than for disclosures to routine supervisory examinations by regulatory authorities v.ith jurisdiction) the disclosing party provides the other party with prompt written notice of a request to disclose such information (so long as such notice is not prohibited by law), so that the other party may, at its option, object to and/or seek an appropriate protective order. Counsel and Client may disclose any materials that do not contain P1,vCs name or other information that could identify PwC as the source Ceither because PwC provided a Deliverable without identifying information or because Counsel or Client subsequently removed it) to any third party if Counsel or Client (as applicable) first accepts and represents them as its o>vn and makes no reference to PwC in connection vrith such materials. PwCs Responsibilities PwCs role is advisory only. PwC performs advisory Services in accordance with the American Institute of Certified Public. Accountants {AICPA") Standards for Consulting Serviees. PwC performs tax Services in accordanee with AICPA Statements on Standards for Tax Services. PwC performs accounting advisory Services for non-audit clients in accordance with the AI CPA Standards for Reports on the Application of Accounting Principles. PwC performs valuation Services which represent an estimate of value in accordance v.ith the AICPA Statement on Standards for Valuation Services ("Valuation Standards"), PwC performs the Services on the basis that information provided is accurate and complete. PwC v..illnot provide an audit, accounting, tax or attest opinion or other form of assurance. PwC will not audit or verify any information provided to it. The Services cannot provide assurance that matters of significance to Counsel or Client will be disclosed and the Services are not intended or likely to reveal fraud or misrepresentation. The Services and Deliverables do not include the provision oflegal or investment advice; afairness or solvency opinion or a recommendation to purchase, sell, or transfer an interest in an entity or any securities or assets. PwC is not a registered broker/dealer or investment advisor as defined by federal securities laws and will not perform broker/dealer or investment advisor services. Counsels and. Clients Responsibilities Client is responsible for all management functions and decisions relating to the Services. Counsel and Client are responsible for evaluating and accepting the adequacy of the scope of Services in addressing their needs. Counsel and Client are responsible for the results achieved from using the Services or Deliverables. Counsel and Client will designate competent members of management to oversee the Services. Counsel and Client will proyjde accurate and complete information, and reasonable assistance, and PwC will perform the Services on that basis. It is Clients responsibility to establish and maintab its internal controls. 4
  41. 41. pwc Client is responsible for the preparation of its financial statements and any proposed acquisition, investment, transfer, disposal or divestment including the process of conducting and sh-ucturing any transaction, setting the price, making decisions to purchase, sell or transfer an interest in an entity or any secmities or assets and the information provided to third parties in connection therewith. PwC understands that Counsel and CUent may seek to assert attorney-client privilege or apply the attorney work product doctrine to the Services and Deliverables. PwC makes no representation as to whether the privilege or doctrine will apply, as the application of privilege or doctrine are legal questions. Counsel and Client are solely responsible for determining whether or not the attorney- client privilege, attomey work product doctrine or other privilege may apply and Counsel and Client are solely responsible for managing the establishment and maintenance of any such privilege or protection. Client hereby undertakes to hold PwC harmless from and be responsible forany expenses (including attorneys fees, court costs, costs incurred by outside advisors, and any other costs imposed whether byway of a penalty or othervvise) incurred byPwC as a result of Counsel andjor Clients assertion of the privilege or their direction of PwC to assert the privilege on their behalf. Client is responsible for the pteparation of its bankmptcy petitions and plan of reorganization. Client is also responsible for the development or restatement of any pmspective financial information and cash flows ("PFI") and for making any assumptions or projections relating to Clients PFI. PwC will not make any predictions or provide any opinion or other assurance with respect to PFI. Any Senices performed by PwC in connection with PFI are solely to assist Client to fulfil its responsibilities. As events and circumstances frequently do not occur as expected, there may be material differences between PFI and actual results. PwC disclaims responsibility and liability for PFI and any results achieved. If Client engages a third party to act as its Chief Restructming Officer ("CRO"), the parties understand and agree that the CRO has the requisite authority to act on behalf of and as a fiduciary agent of Client and to direct the reorganization process and PwCs Services. PwC may discuss the Services and share information with Clients management and/or the CRO jointly or separately. It is Clients managements and the CROs responsibility to share any information received from PwC with each other. PwC is not responsible or liable for any communication v:ith Clients management and/or the CRO that is not communicated to the other. Confidentiality "Confidential Information" means non-public information marked "confidential" or proprietary" or that othervvise should be understood by a reasonable person to be confidential in nature, provided by a party or on its behalf. All terms of this agreement, including but not limited to fee and expense structure, are considered Confidential Information. Confidential Information does not include any information which (i) is rightfully known to the recipient prior to its disclosure; (ii) is released to any other person or entity (including governmental agencies) without restriction; (iii) is independently developed by recipient without use of or reliance on Confidential Information; or (iv) is or later beeomes publicly available without violation of this agreement or may be la~~;fully obtained by a party from a non-party. Each party will protect the confidentiality of Confidential Information that it receives and the parties will not use or disclose any Confidential Information for any purpose otl1er than to perform this agreement, or as required by applicable law, statute, rule, regulation or 5
  42. 42. pwc professional standard, including Vrtthout limitation bankruptcy lavs and related rules, without the other patties prior consent If disclosure is required by law, statute, rule, or regulation (including any subpoena or other similar form of process), or by professional standards, the party to which the request for disclosure is made shall (other than in connection lith routine supervisory examinations by regulatory authorities with jurisdiction and without breaching any legal or regulatory requirement) prmide the other parties with prior ptompt written notice thereof and, if practicable under the circumstances, allow the other parties to seek a restraining order or other appropriate relief. Tax Services Notwithstanding any provisions to the contrary in this agreement, Counsel and Client have no obligation of confidentiality ·with respect to any portion of any materials, advice or Deliverables to the extent that they concern the tax structure or tax treatment of any transaction, If Counsel or Client makes a disclosure pursuant to this paragraph, Counsel and Client ·will only disclose information directly related to the tax structure or tax treatment of the transaction and Counsel or Client will (a) provide PwC with the name of the person to whom the disclosure was made and a description of the information and materials disclosed; (b) notifY such person that they may not rely upon such information and that PwC has no obligation, duty, liability or responsibility to such person; and (c) use commercially reasonable efforts to obtain an executed third party access letter from such person, as determined by PwC, other than Clients professional advisors as provided for above. Unless agreed in writing that PwC will provide a Covered Opinion, as defined in U.S. Treasury Circular 230 ("Circular 230"), any written tax-related adrtce in connection with the Services <ill be Otl1er Written Advice, as defined in Circular 230. PwCs Other Written Advice is not intended to be used to avoid tax penalties and it must not be used to avoid tax penalties. Relationships with Other Parties This is a non-exclusive agreement and, subject to PwCs confidentiality obligations, PwC and the Other PwC Firms (defined below) are not prevented or restricted from providing services to other clients. Counsel and Client each consent to PwC and the Other PwC Firms providing these services. 6

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