2021-03-16_GENERAL DOCUMENTS - C1980004

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Case 1:20-bk-12043 Doc 643 Filed 03/03/21 Entered 03/03/21 18:42:10 Desc Main Document Page 13 of 20 Case 1:20-bk-12043 Doc 643 Filed 03/03/21 Entered 03/03/21 18:42:10 Desc Main Document Page 14 of 20 contingent (sic] precedent that the various agents sign a release consistent with Paragraph 4(a), which they did .... As such, any fee claim as against the estates by any lender or agent has been released." 38. Cortland/AD responded to the Committee the same day, contesting the Committee's characterization of the release in Section 4(a) of the Settlement Agreement and the Joinder, and further pointing out the "Paragraph 8 of the stipulation itself provides that 'the terms and provisions of the Sale Order shall remain in full force and effect." A true copy of Cortland/AD's response to the Committee's December 23 E-Mail, which includes the December 23 E-Mail in the chain, is attached to this Application as Exhibit F. 39. Neither the Debtors nor the Committee responded further to Cortland/AD's e-mail. Instead, on December 29, 2020, Stmock e-mailed Holland & Knight (the "December 29 E-Mail") with the following: We discussed the payment of your fees with the Debtors' counsel, and we received this response: Hi Samantha: Geoff and I spoke yesterday aftemoon. After talking with him and reviewing the settlement and related documents, we think Cortland released these fees. A release of the fees was definitely an intent of the settlement from the Creditors' Committee and Debtors' perspectives. Based on our conversation yesterday, I let Geoffknow that Cortland's total fee request is expected to be between $35,000 and $40,000. Under the Plan, administrative expense requests and final fee applications must be filed no later than 30 days after the Effective Date. We expect the Effective Date to occur on or around January 29, 2021. The estate has sufficient funds to pay all administrative expenses and allowed professional fees in full, including these Cortland fees if a timely administrative expense request is filed and the fees are allowed. As of yesterday, I know Geoff had not spoken to Phil. I'll follow up with Geoff about that. Let me know if you want to discuss further. Doug. A true copy of the December 29 E-Mail is attached as Exhibit G Case 1:20-bk-12043 Doc 643 Filed 03/03/21 Entered 03/03/21 18:42:10 Desc Main Document Page 15 of 20 Paragraph 61.c(iii) but refers only to the Prepetition Lenders and the DIP Lenders, which does not include Cortland/AD. Further, the Sale Order does not otherwise amend or abrogate the Final DIP Order, and while perhaps redundant, certain paragraphs of the Sale Order specifically make that point. (See Final DIP Order 99 60 and 63 ("Except as expressly provided herein, all of the rights of the DIP Secured Parties and their assignees and designees under the DIP Facility and the Final DIP Order remain in full force and effect.").) 43. The only articulated basis for the Debtors' refusal to pay Cortland/AD's fees and expenses, is that Cortland/AD's rights under the Final DIP Order were somehow released by the Settlement Agreement and the Joinder. This is incorrect. 44. First, the Settlement Agreement did not address the right of the DIP Lenders and the Prepetition Lenders —to say nothing of the DIP Secured Parties or the Prepetition Secured Parties more broadly-4o have their professional fees paid pursuant to the Final DIP Order, nor did it amend the provisions of Paragraph 61.c(iii) in the Sale Order. Instead, the Settlement Agreement left the settlement with respect to the DIP Lenders' and the Prepetition Lenders' professional fees set forth in Paragraph 61.c(iii) in the Sale Order in place. (See Settlement Agreement 18 ("The terms and provisions of the Sale Order shall remain in full force and effect, including all releases therein.").) This point was implicitly acknowledged by the Committee in the December 15 E-Mail to Stroock: it did not argue that the lenders' and agents' claims for professional fees had been released pursuant to the Settlement Agreement but instead assumed, incorrectly, that the budget worked out in the Sale Order with respect to the DIP Lenders' and Prepetition Lenders' professional fees also applied to the agents, and `the full amount of the lenders' fees under the budgets have already been paid. Per our settlement, there would be nothing more payable to the agent." (Ex. D.) As noted above, however, Cortland/AD was not a party to the 40. Recognizing that the Debtors and the Committee preferred to have the Court resolve this dispute, Cortland/AD has followed their suggestion and filed this Application, which includes Holland & Knight's additional fees for time spent (a) addressing the Debtors' and the Committee's various objections to Cortland/AD's original $24,000 fee request and (b) preparing this Application. As of the date of this Application, Cortland/AD is owed $22,500 for the DIP Fee and $50,000 for the reimbursable expenses of its counsel. To the extent that the Debtors or the Committee continue to challenge Cortland/AD's right to be paid under the Final DIP Order and cause it to incur additional expenses, Cortland/AD reserved the right to supplement this Application. Basis for Relief 41. The Debtors and the Committee do not dispute, nor could they, that the Final DIP Order entitles Cortland/AD to have its fees and expenses in this case paid as administrative expenses of the Debtors' estates, whether characterized as the DIP Fees and Expenses or the Adequate Protection Fees and Expenses, without the need for Cortland/AD to file payment applications such as this one. 42. While the Debtors and the Committee have appeared to drop the argument, it is worth noting that there is no merit to the Committee's original position that the Sale Order limits Conland/AD's right to have its fees and expenses reimbursed pursuant to the Final DIP Order. As noted above and in Cortland/AD's correspondence with the Debtors and the Committee, Paragraph 61.c(iii) of the Sale Order establishes a budget or cap with respect to the lenders' professional fees by providing that "the Prepetition Lenders' and DIP Lenders' professionals' fees shall be paid by the Debtors only to the extent set forth in the Approved Cash Flow Forecast" While the Sale Order incorporates the defined terms of the Final DIP Order by reference (see Sale Order 160 n.9.), it advisedly does not use the terms "DIP Secured Parties" or "Prepetition Secured Parties," in F Case 1:20-bk-12D43 Doc 643 Filed 03/03/21 Entered 03/03/21 18:42:10 Desc Main Document Page 16 of 20 settlement between the Committee and the lenders' set forth in the Sale Order, and the Sale Order is, therefore, appropriately silent as to the agents' fees and leaves the applicable provisions of the Final DIP Order in place. 45. Second, Corilmd/AD executed the Joinder as an accommodation to the settlement between the Debtors, the Committee, and the lenders. It released any claims it might hold on behalf of the DIP Lenders and the Prepetition Lenders as their agent. 'This is why the preamble to the Joinder provides that it is being executed by Alter Domus (US) LLC "solely in its capacity as Administrative Agent and Collateral Agent under the DIP Documents" and Cortland "solely in its capacity as Administrative Agent and Collateral Agent under the Prepetition Credit Documents" The Joinder makes not reference to Cm1land/AD releasing its right to reimbursement of fees and expenses pursuant to the Final DIP Order. 46. Third, the Committee's assertion in the December 23 E-Mail that "Paragraph 4(a) of the Settlement Agreement contains a broad release of any claim, with limited exceptions not relevant to a claim for attorneys' fees" gets its precisely backward. Both Paragraph 4(a) of the Settlement Agreement and the Joinder excepted Cortland/AD's right to have its fees and expenses reimbursed under the Final DIP Order. Specifically, Paragraph 4(a) provides that the release by the DIP Lenders and the Prepetition Lenders excepts "(ii) any and all rights and claims of the DIP Secured Parties and the Prepetition Secured Parties and any of their respective assignees and designees relating to the sale of assets from certain of the Debtors pursuant to the terms of the Amended and Restated Asset Purchase Agreement by and between the Debtors and Pledge Servicing Partners, LLC dated August 28, 2020, as amended and approved at the Sale Hearing and by the Sale Order." (Settlement Agreement ¶ 4(a).) That Sale, of course, is governed by the Sale Order —which, as noted above, sets for the settlement with respect to the DIP Lenders' and the