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<br />IN THE UNITED STATES BANKRUPTCY COURT
<br />FOR THE SOUTHERN DISTRICT OF OHIO
<br />Chapter 11
<br />In re: )
<br />Case No. 20-12043 (GRH)
<br />HOPEDALE MINING LLC, et al.,' )
<br />(Jointly Administered)
<br />Debtors. )
<br />Honorable Guy R. Humphrey
<br />APPLICATION OF CORTLAND CAPITAL MARKET SERVICES LLC AND ALTER
<br />DOMUS (US) LLC FOR PAYMENT OF ADMINISTRATIVE EXPENSE
<br />PURSUANT TO FINAL ORDER (I) AUTHORIZING THE DEBTORS
<br />TO (A) OBTAIN POSTPETITION FINANCING AND (B) USE CASH
<br />COLLATERAL, (II) GRANTING LIENS AND PROVIDING SUPERPRIORITY
<br />ADMINISTRATIVE EXPENSE STATUS, (IH) GRANTING ADEQUATE
<br />PROTECTION TO THE PREPETITION SECURED PARTIES, (IV) MODIFYING
<br />THE AUTOMATIC STAY, AND (V) GRANTING RELATED RELIEF
<br />Cortland Capital Market Services LLC ("Cortland") and Alter Domus (US) LLC ("After
<br />Doenus (US)" and, together with Cortland, "Cortland/AD"), by and through their undersigned
<br />counsel, apply to this Court (this "Application") for an order directing the above -captioned debtors
<br />(the "Debtors") to pay the administrative expenses of Cortland as the "Prepetition Agent" and
<br />"Prepetition Collateral Agent" and Alter Domus (US) as the "DIP Administrative Agent" and
<br />"DIP Collateral Agent" pursuant to the Final Order (I) Authorizing the Debtors to (A) Obtain
<br />Posipention Financing and (B) Use Cash Collateral, (II) Granting Liens and Providing
<br />Superpriority Administrative Expense Status, (III) Granting Adequate Protection to the
<br />The Debtors in these Chapter 11 caves ere (with the last four digits of their federal tax idemificanen numbers in
<br />parentheses): Rhino GP LLC (9619), Rhino Resource Partners LP (7517), Rhino Energy LLC (6320), Rhino
<br />Tracking LLC (8773), Rhino Exploration LLC (8863), Triad RoofSuppon Systems LLC (1183), Springdale Land
<br />LLC (9916), McClave Canyon Mining LLC (3793), Rhino Northern Holdings LLC (1959), CAM -Ohio Rest
<br />Estate LLC (1859), CAM -Colorado LLC (4269), Taylorville Mining LLC (5106), CAM Coal Trading LLC
<br />(4143), Castle Valley Mining LLC (9495), Jewell Valley Mining LLC (0270), Rhino Services LLC (3356), Rhino
<br />Oilfield Seri- LLC (9939), Rhino Technologies LLC (0994), CAM Mining LLC (2498), Rhino Coalfield
<br />Services LLC (3924), Hopedale Mining LLC (9060), CAM Kentucky Rwl Esmte LLC (9099), CAM -BB LLC
<br />(9097). Leesville Land LLC (7794), CAM Aircnii LLC (5467), Pmnyrile Energy LLC (6095), Rhino Eastern
<br />LLC (1457), Reekhouse Land LLC (7702),
<br />7siEtarsl
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<br />fees established in connection with the Sale Order had been expended prior to Cortland/AD
<br />submitting its invoice, and so there was no more money to reimburse Cortland/AD. When it was
<br />pointed out that Cortland/AD was not involved in the negotiation of those provisions of the Sale
<br />Order and that, in fact, the language in the Sale Order only referenced the professional fees of the
<br />lenders, and not the agents, the Committee changed its approach, arguing that, instead,
<br />Cordand/AD's Joinder to the later Settlement Agreement had released Cortland/AD's right to have
<br />its professional fees reimbursed under the Final DIP Order. Despite Corthmd/AD'S attempts to
<br />resolve this issue with the Debtors, Cortland/AD was ultimately told to take the matter up with this
<br />Court.
<br />4. The DIP Fee is still and payable, and the Debtors and the Committee are in error in
<br />their assertions that Cortland/AD released its right to have its professional fees and expenses
<br />reimbursed by the estates. As an initial matter, the Final DIP Order is clear on the right of
<br />Corthmd/AD to be paid the DIP Fee and reimbursed for its professionals' expenses, and indeed
<br />neither the Debtors nor the Committee appear to dispute that, absent the language they have
<br />pointed to in the Sale Order and the Settlement Agreement, the Debtors are obligated to reimburse
<br />Cortland/AD's fees and expenses under the Final DIP Order. Neither the Sale Order nor the
<br />Settlement Agreement alter these rights.
<br />5. First, as noted above and discussed in detail below, the Sale Order does not alter
<br />Cortland/AD's rights under the Final DIP Order. Indeed, the Sale Order only establishes a budget
<br />for the "DIP Lenders" and the "Prepetition Lenders," not the "DIP Secured Parties" or the
<br />"Prepetition Secured Parties," which would have been the term to use to include Cortland/AD in
<br />its capacities as the lenders' agents. Indeed, it appears that the Committee ultimately abandoned
<br />its argument about the lenders' professional fee budget under Sale Order when it realized its error.
<br />Prepetition Secured Parties, (IV) Modifying the Automatic Stay, and (V) Granting Related Relief
<br />[Related to Docket Nos. 23 & 61] (Docket No. 238, the "Final DIP Order") in the amount of
<br />$75,500 and reserves the right to seek additional fees and expenses pursuant to the terms of the
<br />Final DIP Order.
<br />Preliminary Statement
<br />1. The Final DIP Orderprovided that Cortland/AD, in its capacity as agent for the DIP
<br />Lenders and separately as agent for the Prepetition Lenders would have its fees and expenses paid
<br />as administrative expenses of the Debtors' estates without the need for Cortland/AD to expend
<br />additional resources (and the time of the Court) in filing fee applications. This included its agency
<br />fee of $22,500 (the "DIP Fee") for administering the DIP Facility and the fees and expenses of its
<br />counsel. Due to an error on the flow of funds, the Debtors failed to pay the DIP Fee when the DIP
<br />Facility was funded. Rather than hold up funding of the DIP Facility, Cortland/AD accepted in
<br />good faith that the Debtors would work to resolve the issue and agreed that they could pay the DIP
<br />Fee later. They never did.
<br />2. Further, during the Chapter I I Cases, Cortland/AD engaged Holland & Knight
<br />LLP, regarding certain matters in connection with the chapter 11 cases, including arrangements
<br />with the lenders regarding potentially filing proofs of claim and voting on the plan. In December
<br />2020, with these chapter 11 cases coming to a close, Cortland/AD submitted its first and only bill
<br />for these professional expenses in the amount of $23,928.00, covering the period from July 22,
<br />2020 when these chapter I I cases began to December 14, 2020. Rather than pay these expenses,
<br />the Debtors, at the urging of the Committee, refused.
<br />3. Initially, the Committee objected to Holland & Knight's fees on the basis that "the
<br />full amount ofthe lenders' fees under the budgets have already been paid. Per our settlement, there
<br />would be nothing more payable to the agent." meaning that the budget for the lenders' professional
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<br />6. Second, neither the lenders' release in the Settlement Agreement, nor
<br />Conland/AD's Joinder to it, released Cortland/AD's right to have its professional fees reimbursed
<br />under the Final DIP Order and receive the DIP Fee. The Settlement Agreement does not purport
<br />to alter the parties' first settlement, with respect to the lenders' professional fees, set forth in the
<br />Sale Order. To the contrary, the Settlement Agreement exempts from the lenders' release in
<br />Paragraph 4(a) "any and all rights and claims of the DIP Secured Parties and the Prepetition
<br />Secured Parties and any of their respective assignees and designees relating to the sale of assets."
<br />The Sale Order governs the "rights and claims of the DIP Secured Parties and the Prepetition
<br />Secured Parties" relating to the sale, and Paragraph 8 of the Settlement Agreement provides that
<br />"[tjhe terms and provisions of the Sale Order shall remain in full force and effect, including all
<br />releases therein." Indeed, the Committee acknowledged this when, as noted above, it initially
<br />objected to Cortland/AD's invoice not on the basis that Cortland/AD had released its right to
<br />reimbursement but that "the full amount of the lenders' fees under the budgets have already been
<br />paid. Per our settlement, there would be nothing more payable to the agent." Further,
<br />Cortland/AD's Joinder grants a release of claims "solely in its capacity w Administrative Agent
<br />and Collateral Agent under the DIP Documents" and "solely in its capacity as Administrative
<br />Agent and Collateral Agent under the Prepetition Credit Documents." The purpose of the Joinder
<br />is to make clear that the agents did not retain the ability to assert claims on behalf of the lenders
<br />that they themselves were releasing. This was done as an accommodation to the lenders' settlement
<br />with the Committee and the Debtors.
<br />7. Finally, even aside from the fact that Cortland/AD executed the Joinder solely in
<br />its capacity as the lenders' agents, the language of the Joinder does not mlease Cortland/AD's
<br />rights under the Final DIP Order with respect to its fees and expenses. The Joinder mirrors the
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