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<br />23. In addition to authorizing the sale of certain of the Debtors' assets to assignees and
<br />designees of the DIP Secured Parties and the Prepetition Secured Parties, the Sale Order included
<br />certain provisions reflecting agreements among the Committee, the Debtors, and the Stalking
<br />Horse Bidder. Specifically, Paragraph 61 provides, in relevant part:
<br />In order [to] facilitate the Sale Transaction and the corollary value to the Estates,
<br />the Committee, the Debtors and the Stalking Horse Bidder reached certain
<br />agreements reflected in this Order as follows:
<br />C. The Committee agrees that the entire availability under the DIP Facility (as
<br />defined in the Final DIP Order) has been funded by the DIP Lenders. The
<br />Prepetition Lenders and DIP Lenders hereby stipulate that, effective as of
<br />the Closing of the Sale Transaction, (i) all of the Debtors' cash from the DIP
<br />Facility, including any unused professional fee carve -out amounts (if any),
<br />will remain available in the Debtors' estates unencumbered by any liens or
<br />claims of the Prepetition Lenders and DIP Lenders; (ii) any cash held in the
<br />Debtors' deposit accounts held at East West Bank and BB&T (the
<br />"Unencumbered Deposit Accounts") may be used to fund administrative
<br />and/or priority claims; and (iii) the Prepetition Lenders' and DIP Lenders'
<br />professionals' fees shall be paid by the Debtors only to the extent set forth
<br />in the Approved Cash Flow Forecast.
<br />24. Further, Paragraph 63 of the Sale Order provides:
<br />Reservation of Riebts. Except as expressly provided herein, all of the rights of the
<br />DIP Secured Parties and their assignees and designees under the DIP Facility and
<br />the Final DIP Order remain in full force and effect.
<br />25. On November 2, 2020, this Court entered the Order Approving Settlement
<br />Agreement with Prepention Secured Parties and DIP Secured Parties Pursuant to Bomi-pity
<br />Rule 9019 (Doc. 483) (the "Settlement Order").
<br />26. The Settlement Order approved a Settlement Agreement by and among the
<br />Committee, the Debtors, the Prepetition Lenders, and the DIP Lenders resolving certain issues (the
<br />"Sd(lement Agreement'). Among other things, the Settlement Agreement provided that:
<br />Except as set forth herein, the DIP Lenders and the Prepetition Lenders waiver and
<br />release all claims against the Debtors' estates including, without limitation, any
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<br />provided that (i) any and all rights and claims relating to the Agreement or the
<br />Settlement Payment Recovery Amount shall he preserved, and (ii) any and all rights
<br />and claims of the DIP Secured Parties and the Poepetition Secured Parties and any
<br />of their respective assignees and designees relating to the sale ofassets from certain
<br />of the Debtors pursuant to the terms of the APA shall be preserved; and provided,
<br />further, that any such assignees and designees shall be treated as third -party
<br />beneficiaries under the Agreement and all rights of such parties are expressly
<br />preserved.
<br />29, True copies of the Settlement Order, together with the Settlement Agreement and
<br />the Joinder are attached to this Application as Exhibit C.
<br />30. On December 14, 2020, Cortland/AD submitted the invoice of its counsel, Holland
<br />& Knight LLP ("Holland & SnighP), for payment pursuant to the Paragraph 25 of the Final DIP
<br />Order to the Debtors and the other Review Parties via e-mail (the "December 14 E-Mall. A true
<br />copy of that e-mail and the invoice are atached to this Application as Exhibit D.
<br />31. The following day, counsel to the Committee forwarded the December 14 E-Mail
<br />to Stroock & Stroock & L sail LLP taking the position that "the full amount of the lenders' fees
<br />under the budgets have already been paid. Per our settlement, there would be nothing more payable
<br />to the agent. Can you please advise them as such and have this withdrawn? If you have any
<br />questions about the economics, please feel free to call A.J.," presumably meaning A.J. Webb, an
<br />attorney for the Debtors copied on the e-mail (the "December 15 E-Mail").
<br />32. Stroock forwarded the Committee's December 15 E-Mail to Holland & Knight,
<br />explaining that the Committee's allusion in that e-mail to the "lenders' fees under the budgets"
<br />referred to Paragraph 61.c(iii) ofthe Sale Order quoted above, which provides that "the Prepetition
<br />Lenders' and DIP Lenders' professionals' fees shall be paid by the Debtors only to the extent set
<br />forth in the Approved Cash Flow Forecast."
<br />33. As the December 15 E-Mail recommended, Cortland/AD's counsel at Holland &
<br />Knight reached out to the Debtors' counsel on December 17, 2020 (the "December 17E-Mail'),
<br />unsecured deficiency claims, and also waive and release the Debtors' current and
<br />former officers, managers, directors, attorneys, accountants, investment bankers,
<br />consultants, representatives, and other professionals from all claims, rights and
<br />causes of action in any way related to the Debtors or their estates; provided that (i)
<br />any and all rights and claims relating to this Agreement or the Settlement Payment
<br />Recovery Amount shall be preserved, and (ii) any and all rights and claims offthe
<br />DIP Secured Parties and the Prepetition Secured Parties and any of their respective
<br />assignees and designees relating to the sale of assets from certain of the Debtors
<br />pursuant to the terms of the Amended and Restated Purchase Agreement by and
<br />between the Debtors and Pledge Servicing Partners, LLC dated August 28, 2020,
<br />as amended, as approved at the Sale Hearing and by the Sale Order (the "APN')
<br />shall be preserved; and provided, further, that any such assignees and designees
<br />shall be treated as third party beneficiaries under this Agreement an all rights of
<br />such parties are expressly preserved.
<br />Settlement Agreement ¶ 4(a).
<br />27. Cortland/AD was not a party to the Settlement Agreement and did not participate
<br />in the negotiation of its terms. Nevertheless, Paragraph 7 of the Settlement Agreement, provides
<br />that "[i]t shall be a condition precedent to the Settlement Effective Date that the Prepetition Agent,
<br />Prepetition Collateral Agent, Origination Agent, and DIP Agents execute a release of claims
<br />against the Debtors' estates consistent with the release provided by the DIP Lenders and the
<br />Pmpetition Lenders under paragraph 4(a) hereof"
<br />28. Accordingly, to accommodate the parties' settlement, on October 30, 2020, Alter
<br />Domus (US) LLC "solely in its capacity as Administrative Agent and Collateral Agent under the
<br />DIP Documents" and Cortland "solely in its capacity as Administrative Agent and Collateral Agent
<br />under the Prepetition Credit Documents" executed a Joinder to Settlement Agreement (the
<br />'Joinder") that contains the following
<br />Pursuant to Paragraph 7 of the Agreement and in consideration for the concessions
<br />made in favor of the Joinder Parties as set forth in the Agreement, as of the
<br />Settlement Effective Date and except as set forth in the Agreement, the Joinder
<br />Parties waive and release all claims against the Debtors' estates including, without
<br />limitation, any unsecured deficiency claims, and also waive and release the
<br />Debtors' current and former officers, managers, directors, attorneys, accountants,
<br />investment bankers, consultants, representatives, and other professionals form all
<br />claims, rights, and causes of action in anyway related to the Debtors or their estates;
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<br />asking to discuss the dispute over Cortland/AD's fees directly. A true copy of the December 17 E-
<br />Mail, which includes the December 14 E-Mail and the December 15 E-Mail in the same chain, is
<br />attached as Exhibit E.
<br />34. Among other things, the December 17 E-Mail points out that the settlement with
<br />respect to the Prepetition Lenders' and the DIP Lenders' fees set forth in Paragraph 61.c(iii) did
<br />not include the Prepetition Agent or the DIP Agents "nor was Cortland or its counsel involved in
<br />negotiating this settlement" The December 17 E-Mail further pointed out that the total requested
<br />fees "for approximately $24,000 represents H&K's postpetition fees w the agents' counsel from
<br />July 22, 2020 through December 14, 2010," and concludes that "We are sensitive to the fact that
<br />this case is on a tight budget. 1 think the amount of the invoice reflects that. But Cortland is entitled
<br />to its fees and expenses under the Final DIP Order, and the Creditors' Committee's settlement with
<br />the lenders with respect to the lenders' professionals' fees does not change that." (Ex. D at I
<br />(emphasis added).)
<br />35. Debtors counsel responded to Holland & Knight later that morning with an email
<br />saying "we are in receipt of your email and will review. We will also pass this along to the UCC."
<br />36. On December 23, 2020, after further inquiries from Holland & Knight, the
<br />Committee responded by e-mail (the "December 23 E-Mall"), which attached the Settlement
<br />Order, Settlement Agreement, and Joinder attached to this Application at Exhibit C.
<br />37. Recognizing that its initial position—i.e., that the budget with respect to the
<br />lenders' fees set forth in the Sale Order also applied to Cortland/AD's fees —was, on its face,
<br />incorrect the Committee changed tack. Instead, it now asserted that "Paragraph 4(a) of the
<br />Settlement Agreement contains a broad release of any claim, with limited exceptions not relevant
<br />to a claim for attorneys' fees. Paragraph 7 of the Settlement Agreement provided that it was a
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