Opinion
Case No. 04-33192 (Jointly Administered).
June 22, 2004.
Upon the motion (the "Motion") of the above-captioned debtors and debtors in possession (collectively, the "Debtors") seeking entry of an order pursuant to 11 U.S.C. §§ 105 and 331 establishing procedures for interim compensation and expense reimbursement for professionals and committee members; and it appearing that the relief requested is essential to the continued operation of the Debtors' businesses and is in the best interest of the Debtors' estates and creditors; and it appearing that this Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334; and it appearing that this Motion is a core proceeding pursuant to 28 U.S.C. §§ 1408 and 1409; and adequate notice of the Motion having been given; and it appearing that no other notice need be given; and after due deliberation and sufficient cause appearing therefor, it is hereby:
Capitalized terms not defined herein shall have the same meaning ascribed in the Motion.
ORDERED that the Motion is granted; and it is further
ORDERED that, except as may otherwise be provided in Court orders authorizing the retention of a specific professional, any professional retained in these Chapter 11 Cases pursuant to sections 327 or 1103 of the Bankruptcy Code ("Professional") may seek interim compensation in accordance with the following procedures:
No earlier than the 30th day of each calendar month (beginning with July 31, 2004), each Professional seeking interim compensation shall file an application (the "Monthly Fee Application") with the Court pursuant to section 331 of the Bankruptcy Code for interim approval and allowance of compensation for services rendered and reimbursement of expenses incurred during the immediately preceding month (the "Compensation Period"). The Monthly Fee Application due on or about July 31, 2004, shall cover the period between the commencement of the case until June 30, 2004.
Each Monthly Fee Application shall comply with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") and applicable Sixth Circuit law; and shall be served upon all parties set forth on the service list attached hereto as Exhibit A (the "Notice Parties").
Each Notice Party shall have twenty (20) days after filing and service of a Monthly Fee Application to object to such application (the "Objection Deadline"). Upon the expiration of the Objection Deadline, each Professional may file a certificate of no objection or a certificate of partial objection with the Court, whichever is applicable, after which the Debtors are authorized to pay each Professional an amount (the "Actual Interim Payment") equal to the lesser of (i) 80 percent of the fees and 100 percent of the expenses requested in the Monthly Fee Application (the "Maximum Payment") or (ii) 80 percent of the fees and 100 percent of the expenses not subject to an objection.
If any Notice Party objects to a Professional's Monthly Fee Application, it must file a written objection with the Court and serve it on the Professional and each of the Notice Parties so that it is received on or before the Objection Deadline. Thereafter, the objecting party and the Professional may attempt to resolve the objection on a consensual basis. If the parties are unable to reach a resolution of the objection within twenty (20) days after service of the objection, then the Professional may either (i) file a response to the objection with the Court, together with a request for payment of the difference, if any, between the Maximum Payment and the Actual Interim Payment made to the affected Professional (the "Incremental Amount"); or (ii) forego payment of the Incremental Amount until the next interim or final fee application hearing, at which time the Court will consider and dispose of the objection if requested by the parties.
Beginning with the period ending on August 31, 2004, and at three month intervals, or such other intervals convenient to the Court ("Interim Period"), each Professional shall file with the Court and serve upon the Notice Parties, pursuant to section 331 of the Bankruptcy Code, an interim application for allowance of compensation and reimbursement of expenses, of the amounts sought in the Monthly Fee Applications filed during such period (the "Interim Fee Application"). The Interim Fee Application must include a summary of the Monthly Fee Applications that are the subject of the request and any other information requested by the Court. An Interim Fee Application should be filed and served within forty-five (45) days of the conclusion of the Interim Period. The first Interim Fee Application should cover the time between the commencement of these Chapter 11 Cases through and including August 31, 2004. Any Professional who fails to file an Interim Fee Application when due will be ineligible to receive further interim payments of fees or expenses under the compensation procedures unt il such time as the Interim Fee Application is filed.
The Debtors shall request a hearing on the pending Interim Fee Applications at least every six months. The Debtors, however, may request that a hearing be held every three months or at such other intervals as the Court deems appropriate.
The pendency of an objection to payment of compensation or reimbursement of expenses will not disqualify a Professional from future payment of compensation or reimbursement of expenses, unless the Court orders otherwise.
Neither the payment of or the failure to pay, in whole or in part, monthly interim compensation and reimbursement of expenses, nor the filing of or failure to file an objection, will bind any party in interest or the Court with respect to the allowance of interim or final applications for compensation and reimbursement of expenses of Professionals.
All fees and expenses paid to Professionals are subject to disgorgement until final allowance by the Court.
ORDERED that notice of the interim and final fee applications shall be served on (a) the Notice Parties, as listed on Exhibit A, attached hereto and (b) all parties that filed a notice of appearance with the Clerk of this Court pursuant to Fed.R.Bankr.P. 2002. The Notice Parties shall be entitled to receive both the Monthly and Interim Fee Applications and the notice of hearing thereon (the "Hearing Notice"), and all other parties entitled to notice shall be entitled to receive only the Hearing Notice. Notice given in accordance with this paragraph is deemed sufficient and adequate and in full compliance with the applicable provisions of the Bankruptcy Code and the Bankruptcy Rules and other orders of this Court; and it is further
ORDERED that each member of any official committee of unsecured creditors appointed in these Chapter 11 Cases (the "Committee"), if any, is permitted to submit statements of expenses (excluding the Committee Member counsel fees and expenses) and supporting vouchers to counsel to the Committee, who shall collect and submit the Committee Members' requests for reimbursement to the Court pursuant to the procedure set forth in this Order; and it is further
ORDERED that this Court retains jurisdiction with respect to all matters arising from or related to the implementation of this Order.
EXHIBIT A Notice Parties
Debtors
Jillian's Entertainment Holdings, Inc. 4500 Bowling Boulevard, Ste. 200 Louisville, KY 40207 Attn: Greg Stevens J. Richard Walker
Co-Counsel for the Debtors
Kirkland Ellis LLP 200 East Randolph Drive Chicago, Illinois 60601 Attn: James H.M. Sprayregen, P.C. James W. Kapp III, Esq. Ryan S. Nadick, Esq.
Frost Brown Todd LLC 2200 PNC Center 201 East Fifth Street Cincinnati, OH 45202 Attn: Ronald E. Gold, Esq.
Counsel to the Official Committee of Unsecured Creditors
Morris, Nichols, Arsht Tunnell 1201 North Market Street PO Box 1347 Wilmington, DE 19899-1347 Attn: Eric D. Schwartz, Esq.
U.S. Trustee
Office of the United States Trustee 512 Gene Snyder Courthouse 601 West Broadway Louisville, KY 40202 Attn: Joseph Golden, Esq.
Counsel for the agent to the Prepetition Lenders and the Proposed Debtor in Possession Lenders
Proskauer Rose LLP 1585 Broadway New York, NY 10036 Attn: Vincenzo Paparo, Esq. Michael E. Fore man, Esq.