Opinion
Case No. 01-42217 (REG), Jointly Administered.
May 11, 2005
Upon consideration of the applications of (i) Weil, Gotshal Manges LLP ("WGM"), as attorneys for Ames Department Stores, Inc. and its subsidiaries, as debtors and debtors in possession (collectively, the "Debtors"), (ii) Togut, Segal Segal, LLP ("TSS"), as bankruptcy co-counsel for the Debtors, and (iii) Otterbourg, Steindler, Houston Rosen, P.C. ("OSHR"), as attorneys for the Official Committee of Unsecured Creditors (the "Creditors' Committee"), seeking (a) allowances of interim compensation for professional services rendered and reimbursement of actual and necessary expenses incurred in connection therewith in the above-captioned chapter 11 cases for the period commencing September 1, 2004 through January 31, 2005 (the "Compensation Period"), and (b) allowances of compensation, with respect to WGM and TSS, for legal services rendered (the "Preference Actions Legal Services") in connection with the prosecution and settlement of certain preference actions during the period commencing November 1, 2004 through January 31, 2005 (the "Preference Actions Compensation Period") (collectively, the "Applications"); and an objection to the Applications having been filed by the Office of the United States Trustee for the Southern District of New York (the "U.S. Trustee"), dated April 14, 2005 (the "Objection"); and a response to the Objection having been filed by WGM, dated April 19, 2005; and a hearing having been held on April 20, 2005 to consider the Applications (the "Hearing") with appearances of all parties in interest present noted on the record; and it appearing that the requested compensation and expense reimbursement reflected in the Applications are reasonable; and the Court having jurisdiction to consider and determine the Applications in accordance with 28 U.S.C. §§ 157 and 1334; and due notice of the Applications having been provided pursuant to Rule 2002(a)(6) of the Federal Rules of Bankruptcy Procedure, and it appearing that no other or further notice need be given; and for the reasons set forth on the record of the Hearing, and after due deliberation and sufficient cause appearing therefor, it is hereby
FTI Consulting, Inc. ("FTI"), Financial Advisors to the Official Committee of Unsecured Creditors, did not file an application for allowance of interim compensation and reimbursement of expenses incurred during the Compensation Period. However, FTI has reserved its right to submit applications for future fees and expenses incurred during the Compensation Period and to participate in amounts previously held back by order of this Court. Deloitte Tax LLP, Tax Advisors for the Debtors, did not file an application for allowance of interim compensation and reimbursement of expenses incurred during the Compensation Period.
ORDERED that, pursuant to sections 327, 328, 330, and 331 of title 11 of the United States Code, the requests for allowances of interim compensation and reimbursement of expenses contained in the Applications and reflected on Exhibit "A" annexed hereto are granted in full; and it is further
ORDERED that the Debtors are directed and authorized to pay each Applicant by wire transfer or check, upon the entry of this Order, the compensation and reimbursement allowed herein; and it is further
ORDERED that the Debtors shall continue to retain seven percent (7%) of all prior awards of compensation (as such amounts are reflected on Exhibit "B" annexed hereto) (the "Prior Holdback"); provided, however, that the Debtors, upon consultation with WGM, OSHR, and the U.S. Trustee, shall be authorized to reduce the Prior Holdback, without the need for further application to or order of the Court, in the event that the foregoing parties determine the Debtors do not need to borrow under that certain Revolving Credit, Guaranty, and Security Agreement, dated as of September 27, 2002, between the Debtors and Kimco Funding LLC, modified by that certain Amendment and Waiver Agreement, dated October 15, 2002 (the "Credit Agreement"), in order to make payments to the Applicants as a result of the reduction of the Prior Holdback; and it is further
ORDERED that the relief granted herein is without prejudice to the right of any Applicant to seek payment of all or a portion of the Prior Holdback in a subsequent application to be heard on a future date; and it is further
ORDERED that (i) fees for Preference Actions Legal Services shall be allowed to WGM in the amount of $224,386.06 (21% of the $1,068,505.05 collected), and (ii) WGM shall have an administrative expense claim (the "WGM Administrative Expense Claim") in the amount of $101,960.86 (21% of the dividend value of the Administrative Expense Claim Reductions (as defined in WGM's Application) obtained by WGM during the Preference Actions Compensation Period, which totals $485,527.93) and shall be paid with respect to the WGM Administrative Expense Claim at the same time other administrative expense claimholders receive such distributions in the same pro rata amount as such administrative expense claimholders; and it is further
ORDERED that (i) fees for Preference Actions Legal Services shall be allowed to TSS in the amount of $68,467.15 (21% of $326,034.03 collected), and (ii) TSS shall have an administrative expense claim (the "TSS Administrative Expense Claim") in the amount of $8,742.47 (21% of the dividend value of the Administrative Expense Claim Reductions (as defined in the Application) obtained by TSS during the Preference Actions Compensation Period which totals $41,630.80) and shall be paid with respect to the TSS Administrative Expense Claim at the same time other administrative expense claimholders receive such distributions in the same pro rata amount as such administrative expense claimholders; and it is further
ORDERED that the Debtors are directed to make the first interim distribution with respect to the WGM Administrative Expense Claim and the TSS Administrative Expense Claim promptly from funds of the Debtors' estates, including without limitation collections from preference actions, attained without borrowing under the Credit Agreement, in no event later than May 15, 2005, unless such date is extended by WGM and TSS; provided, however, that nothing contained herein shall be deemed to prejudice the rights of any other party in the cases; and it is further
ORDERED that the allowed compensation during the Preference Actions Compensation Period shall not prejudice the rights of WGM and TSS to seek additional compensation for services performed during the Preference Actions Compensation Period which were not processed at the time of the Applications.
EXHIBIT A 5/11/2005 REG
Case Number: 01-B 42217 (REG) Case Name: In re Ames Department Stores, Inc., et al. CURRENT FEE PERIOD Applicant App. Fees Fees Fees Held Fees Preference Preference Expenses Expenses Expenses Expenses Date Requested Allowed Back Payable by Fees Fees Requested Allowed Held Back Payable by Docket # Debtors Requested Payable the Debtors Weil, Gotshal Manges LLP 03/25/05 $434,168.00 $434,168.00 $0.00 $434,168.00 $224,386.06 $326,346.92 $12,036.15 $12,036.15 $0.00 $12,036.15 Co-Counsel for Debtors 2778 (plus $101,960.86 administrative expense claim) Togut, Segal Segal, LLP 03/22/05 $167,236.00 $167,236.00 $0.00 $167,236.00 $68,467.15 $77,209.62 $15,081.55 $10,108.85 $4,972.70 $10,108.85 Co-Counsel for Debtors 2777 (plus $8,742.47 administrative expense claim) Otterbourg, Steindler, Houston Rosen, P.C. 03/22/05 $155,807.00 $155,807.00 $0.00 $155,807.00 N/A N/A $2,203.94 $1,707.45 $496.51 $1,707.45 Counsel to the Official Committee of 2774 Unsecured Creditors Date: Initials: USBJ EXHIBIT B 5/11/2005 REG Case Number: 01-B 42217 (REG) Case Name: In re Ames Department Stores, Inc., et al. ALL FEE PERIODS (INCLUDING THIS PERIOD) Applicant Fees Fees Fees Held Fees Preference Preference Expenses Expenses Expenses Expenses Requested Allowed Back Payable by Fees Fees Requested Allowed Held Back Payable by Debtors Requested Payable Debtors Weil, Gotshal Manges $7,215,950.00 $7,214,155.05 $543,301.09 $6,670,853.96 $1,202,259.89 $1,815,849.38 $1,108,657.47 $1,108,533.87 $55,530.45 $1,053,003.42 LLP (plus Co-Counsel for Debtors $613,589.49 administrative expense claim) Togut, Segal Segal, LLP $2,422,376.00 $2,422,376.00 $281,749.91 $2,140,626.09 $196,163.57 $300,375.20 $264,124.03 $264,124.03 $52,455.33 $211,668.70 Co-Counsel for Debtors (plus $104,211.63 administrative expense claim) Deloitte Tax LLP $2,371,537.00 $2,371,537.00 $251,622.96 $2,119,914.04 N/A N/A $0.00 $0.00 $0.00 $0.00 Tax Advisors for Debtors Otterbourg, Steindler, $2,881,653.50 $2,881,653.50 $190,839.57 $2,690,813.44 N/A N/A $102,667.92 $102,667.92 $7,408.27 $95,259.65 Houston Rosen, P.C. Counsel to the Official Committee of Unsecured Creditors FTI Consulting, Inc. $3,136,376.60 $3,087,208.60 $367,199.81 $2,720,008.79 N/A N/A $31,182.10 $31,182.10 $0.00 $31,182.10 (formerly Price Waterhouse Coopers LLP) Financial Advisors for the Official Committee of Unsecured Creditors Date: Initials: USBJ