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Case 15-10585-LSS
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
Quicksilver Resources Inc., et al.,1
Debtors.
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)
)
)
)
)
)
)
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Chapter 11
Case No. 15-10585 (LSS)
Jointly Administered
Hearing Date: April 15, 2015 at 2:00 p.m. (EDT)
Obj. Deadline: April 8, 2015 at 4:00 p.m. (EDT)
DEBTORS’ MOTION FOR AN ORDER ESTABLISHING
PROCEDURES FOR INTERIM COMPENSATION AND
REIMBURSEMENT OF EXPENSES OF PROFESSIONALS
The debtors and debtors in possession in the above-captioned chapter 11 cases
(collectively, the “Debtors”) respectfully submit this Debtors’ Motion for an Order Establishing
Procedures for Interim Compensation and Reimbursement of Expenses of Professionals (the
“Motion”). In support of the Motion, the Debtors represent and set forth as follows:
JURISDICTION
1.
The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and
1334. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2).2
2.
Venue in this Court is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax
identification number, are: Quicksilver Resources Inc. [6163]; Barnett Shale Operating LLC [0257]; Cowtown
Drilling, Inc. [8899]; Cowtown Gas Processing L.P. [1404]; Cowtown Pipeline Funding, Inc. [9774]; Cowtown
Pipeline L.P. [9769]; Cowtown Pipeline Management, Inc. [9771]; Makarios Resources International Holdings LLC
[1765]; Makarios Resources International Inc. [7612]; QPP Holdings LLC [0057]; QPP Parent LLC [8748];
Quicksilver Production Partners GP LLC [2701]; Quicksilver Production Partners LP [9129]; and Silver Stream
Pipeline Company LLC [9384]. The Debtors’ address is 801 Cherry Street, Suite 3700, Unit 19, Fort Worth, Texas
76102.
2 Under rule 9013-1(f) of the Local Rules of Bankruptcy Practice and Procedure of the United States
Bankruptcy Court for the District of Delaware (the “Local Rules”), the Debtors hereby confirm their consent to the
entry of a final order by this Court in connection with this Motion if it is later determined that this Court, absent
consent of the parties, cannot enter final orders or judgments in connection therewith consistent with Article III of
the United States Constitution.
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The predicates for the relief requested herein are Bankruptcy Code sections
105(a) and 331, rule 2016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy
Rules”), and Local Rules 2016-1 and 2016-2.
BACKGROUND
A.
General Background
4.
On March 17, 2015 (the “Petition Date”), each of the Debtors filed a voluntary
petition for relief under chapter 11 of the Bankruptcy Code in this Court. The Debtors continue
to operate their businesses and manage their properties as debtors in possession pursuant to
Bankruptcy Code sections 1107(a) and 1108. These chapter 11 cases have been consolidated for
procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015
and Local Rule 1015-1. No request for the appointment of a trustee or examiner has been made
in these chapter 11 cases. No committees have been appointed or designated.
B.
Specific Background
5.
The Debtors have filed or intend to file applications to retain Akin Gump Strauss
Hauer & Feld LLP and Richards, Layton & Finger, P.A. as counsel; Houlihan Lokey as financial
advisor and investment banker; Ernst & Young LLP as auditor; KPMG LLP as tax consultants;
and Garden City Group, LLC as claims and noticing agent and administrative agent. The
Debtors may need to retain additional professionals in connection with the continued prosecution
of the chapter 11 cases.3
In addition, an official committee of unsecured creditors (the
“Committee”) may be appointed in these cases and may wish to retain professionals.
3 Other professionals may also be retained in accordance with the Debtors’ Motion for an Order
Authorizing the Employment and Compensation of Professionals Utilized in the Ordinary Course of Business, Nunc
Pro Tunc to the Petition Date (the “Ordinary Course Professionals Motion”) filed contemporaneously herewith. If
the Ordinary Course Professionals Motion is granted, such professionals will not need to file individual retention
applications and will, subject to certain limitations, be paid in full each month without the requirement to file interim
or final fee applications.
2
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The Debtors believe that establishing orderly procedures for payment of the
professionals whose retentions are approved by this Court pursuant to Bankruptcy Code sections
327 or 1103 and who will be required to file applications for allowance of compensation and
reimbursement of expenses pursuant to Bankruptcy Code sections 330 and 331 (each a
“Professional” and, collectively, the “Retained Professionals”) will streamline the administration
of these chapter 11 cases and otherwise promote efficiency for the Court, the U.S. Trustee, and
other parties in interest. A streamlined process for serving fee applications is in the best interest
of the Debtors because it will facilitate efficient review of the Retained Professionals’ fees and
expenses while saving the Debtors unnecessary copying and mailing expenses.
7.
Accordingly, the Debtors request the entry of an order authorizing and
establishing procedures for the compensation and reimbursement of Retained Professionals on a
monthly basis on terms comparable to the procedures established in other large chapter 11 cases
in this District. Specifically, the Debtors propose that, except as otherwise provided in an order
of the Court authorizing the retention of a particular Professional, the Retained Professionals be
permitted to seek interim payment of compensation and reimbursement of expenses in
accordance with the following procedures (collectively, the “Compensation Procedures”):
(a)
On or after the 20th day, or the next business day if such day is not a
business day, of each month following the month for which compensation
is sought (the “Compensation Period”), each Professional seeking interim
allowance of its fees and expenses may file an application which will
include the relevant time entry and description and expense detail for
interim allowance of compensation and services rendered and
reimbursement of expenses incurred during the preceding month (a
“Monthly Fee Application”) with the Court, pursuant to Bankruptcy Code
section 331, for interim approval and allowance of compensation for
services rendered and reimbursement of expenses incurred during the
Compensation Period. Each Professional shall serve the Monthly Fee
Application on the following parties (the “Notice Parties”):
(i)
the Debtors, Quicksilver Resources Inc., et al., 801 Cherry Street,
Suite 3700, Unit 19, Fort Worth, Texas 76102;
3
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(ii)
proposed counsel to the Debtors, Akin Gump Strauss Hauer &
Feld LLP, 1700 Pacific Ave., Suite 4100, Dallas, Texas 75201,
Attn: Charles R. Gibbs and Sarah Link Schultz;
(iii)
proposed Delaware counsel to the Debtors, Richards, Layton &
Finger, P.A., One Rodney Square, 920 North King Street,
Wilmington, DE 19801, Attn: Paul N. Heath and Amanda R.
Steele;
(iv)
counsel to the global administrative agent for the first lien lenders,
Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New
York, NY 10017, Attn: Steven M. Fuhrman;
(v)
counsel to second lien agent, Latham & Watkins LLP, 885 Third
Avenue, New York, NY 10022, Attn: Mitchell A. Seider and
David A. Hammerman
(vi)
counsel to the ad hoc group of second lienholders, Milbank,
Tweed, Hadley & McCloy LLP, 28 Liberty Street, New York, NY
10005, Attn: Dennis F. Dunne and Samuel A. Khalil
(vii)
the Office of the United States Trustee for the District of Delaware,
844 King Street, Room 2207, Lockbox #35, Wilmington, Delaware
19899-0035, Attn: Jane Leamy; and
(viii) counsel to any statutory committee appointed in these cases.
(b)
The first Monthly Fee Application submitted by each Retained
Professional shall cover the period from the effective date of such
Retained Professional’s retention through and including the last day of the
month following such date. For the avoidance of doubt, the first Monthly
Fee Application for Retained Professionals whose retentions are approved
by the Court on or prior to April 30, 2015 shall be on or after May 20,
2015.
(c)
Any Retained Professional who fails to file a Monthly Fee Application for
a particular month(s) may subsequently submit a consolidated Monthly
Fee Application for a particular month(s). All Monthly Fee Applications
shall comply with the Bankruptcy Code, the Bankruptcy Rules, and the
Local Rules.
(d)
Each Notice Party will have 21 calendar days, or the next business day if
such day is not a business day, after service of a Monthly Fee Application
to object thereto (the “Objection Deadline”). Upon the expiration of the
Objection Deadline: (i) if no objections have been filed, each Retained
Professional shall file a certificate of no objection, or a certificate of
partial no objection with the Court, whichever is applicable, after which
the Debtors shall be authorized to pay such Retained Professional an
amount equal to 80% of the fees and 100% of the expenses requested in its
Monthly Fee Application (the “Maximum Interim Payment”); or (ii) if an
objection is properly filed, the Retained Professional shall be entitled to
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80% of the fees and 100% of the expenses not subject to an objection (the
“Actual Interim Payment”).4
(e)
If any Notice Party objects to a Retained Professional’s Monthly Fee
Application (the “Affected Professional”), it must, on or before the
expiration of the Objection Deadline, file with the Court and serve on the
Affected Professional and each other Notice Party a written objection (an
“Objection”) so as to be received on or before the Objection Deadline.
The Objection shall specifically identify the objectionable fees and
expenses, including the amount of the applicable fees and expenses, and
the basis for the Objection. Thereafter, the objecting party and the
Affected Professional may attempt to resolve the Objection on a
consensual basis. If the parties are able to resolve their dispute, the
Affected Professional shall serve on the Notice Parties a statement
indicating that the Objection has been withdrawn or settled, and the
Debtors shall promptly pay, in accordance with subparagraph (d) that
portion of the Monthly Fee Application which is no longer subject to an
Objection up to the Maximum Interim Payment. If the parties are unable
to resolve their dispute within 21 calendar days, or the next business day if
such day is not a business day, after service of the Objection, the affected
Retained 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 Interim Payment and the Actual Interim Payment
made to such 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
rule on the Objection if necessary.
(f)
Approximately 120 calendar days, but no more than 150 calendar days,
after the Petition Date, and for each subsequent three-month period (each,
an “Interim Fee Period”), each Retained Professional shall file with the
Court and serve on the Notice Parties an application (an “Interim Fee
Application”) for interim approval and allowance of compensation and
reimbursement of expenses sought in the Monthly Fee Applications,
including any holdbacks, filed during the Interim Fee Period, pursuant to
Bankruptcy Code section 331. The Interim Fee Application must include
a summary of: (i) the Monthly Fee Applications that are the subject of the
request, (ii) the amount of fees and expenses requested, (iii) the amount of
fees and expenses paid to date or subject to an Objection, (iv) the deadline
for other parties and the Notice Parties to file objections (the “Additional
Objections”) to the Interim Fee Application and (v) any other information
requested by the Court or required by the Local Rules. All Interim Fee
Applications shall comply with the Bankruptcy Code, the Bankruptcy
Rules, the Local Rules and applicable Third Circuit law.
(g)
Each Retained Professional shall file its Interim Fee Application on or
before the 45th day, or the next business day if such day is not a business
day, after the end of the applicable Interim Fee Period.
4
The Debtors intend to make the Maximum Interim Payment or Actual Interim Payment, as applicable, on
the Thursday following the filing of a certificate of no objection or certificate of partial no objection by a Retained
Professional.
5
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(h)
Additional Objections to any Interim Fee Application shall be filed and
served upon the affected Retained Professional and the Notice Parties so
as to be received on or before the 20th day, or the next business day if
such day is not a business day, following service of the applicable Interim
Fee Application.
(i)
Service of the Monthly Fee Applications, Interim Fee Applications, final
fee applications and notices of any hearing thereon (the “Hearing
Notices”) shall be limited as follows: (i) the Notice Parties shall be
entitled to receive the Monthly Fee Applications, Interim Fee
Applications, final fee applications and Hearing Notices; and (ii) parties in
interest requesting notice pursuant to Bankruptcy Rule 2002 shall be
entitled to receive the Hearing Notices and, only upon request of the
appropriate Retained Professional, the Monthly and Interim Fee
Applications and final fee applications.
(j)
The Debtors shall request that the Court schedule a hearing on Interim Fee
Applications at least once every six months or at such other intervals as
the Court deems appropriate. If no Objections are pending and no
Additional Objections are timely filed, the Court may grant an Interim Fee
Application without a hearing.
(k)
The pendency of an Objection or an Additional Objection to payment of
compensation or reimbursement of expenses shall not disqualify a
Retained Professional from the future payment of compensation or
reimbursement of expenses, unless the Court orders otherwise.
(l)
Any Retained Professional who fails to file a Monthly Fee Application or
an Interim Fee Application when due will be ineligible to receive further
interim payments of fees or expenses under the Compensation Procedures
until such time as a Monthly Fee Application or Interim Fee Application is
submitted by the Retained Professional. There will be no other penalties
for failing to file a Monthly Fee Application or an Interim Fee Application
in a timely manner.
(m)
Neither (i) the payment of or the failure to pay, in whole or in part,
monthly interim compensation and reimbursement of expenses under the
Compensation Procedures nor (ii) the filing of or the failure to file an
Objection to any Monthly Fee Application or Interim Fee Application will
bind any party in interest or the Court with respect to the allowance of
interim or final applications for compensation for services rendered and
reimbursement of expenses of Retained Professionals. All fees and
expenses paid to Retained Professionals in accordance with the
Compensation Procedures are subject to disgorgement until final
allowance by the Court.
(n)
Any statutorily appointed committee in these chapter 11 cases is permitted
to submit statements of expenses (excluding the fees and expenses of
third-party counsel to the individual committee members) and supporting
vouchers to the committee’s counsel which counsel shall collect and
submit the committee members’ request for reimbursement in accordance
with the Compensation Procedures as if such committee members were
Professionals; provided, however, that the approval of the Compensation
Procedures does not authorize payment of such expenses to the extent that
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such authorization does not exist under the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules or other applicable law.
(o)
8.
No Professional may serve a Monthly Fee Application or file an Interim
Fee Application until the Court enters an order approving the retention of
such Professional pursuant to Bankruptcy Code sections 327 or 1103.
In addition, the Debtors request that the Court limit service of the Monthly Fee
Applications, Interim Fee Applications, final fee applications, and notices of any hearing thereon
(the “Hearing Notices”) as follows: (i) the Notice Parties shall be entitled to receive the Monthly
Fee Applications, Interim Fee Applications, final fee applications, and Hearing Notices; and
(ii) parties in interest requesting notice pursuant to Bankruptcy Rule 2002 shall be entitled to
receive the Hearing Notices and, upon specific request, the Monthly and Interim Fee
Applications. Providing notice of fee applications in this manner will permit the parties most
active in these chapter 11 cases to monitor the fees and expenses incurred by Professionals, and
it will avoid unnecessary duplication and mailing expenses.
9.
The Debtors will include all payments made to Professionals in accordance with
the Compensation Procedures in their monthly operating reports identifying the amounts paid to
each of the Professionals.
RELIEF REQUESTED
10.
By this Motion and to Bankruptcy Code sections 105(a) and 331, the Debtors
request entry of an order, substantially in the form attached hereto as Exhibit A (the “Proposed
Order”), establishing an orderly, streamlined process for the allowance and payment of
compensation and reimbursement of expenses for Professionals who will be required to file
applications for allowance of compensation and reimbursement of expenses pursuant to
Bankruptcy Code sections 330 and 331. Such an order would enable the Court, the U.S. Trustee,
and other parties in interest to effectively monitor the Professionals’ fees and expenses incurred
during these cases.
7
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SUPPORTING AUTHORITY
11.
Pursuant to Bankruptcy Code section 331, all Professionals are entitled to submit
applications for interim compensation and reimbursement of expenses every 120 days, or more
often if the Court permits. Specifically, Bankruptcy Code section 331 provides, in relevant part,
as follows:
A trustee, an examiner, a debtor’s attorney, or any professional person employed
under section 327 or 1103 of this title may apply to the court not more than once
every 120 days after an order for relief in a case under this title, or more often if
the court permits, for such compensation for services rendered before the date of
such an application or reimbursement for expenses incurred before such date as is
provided under section 330 of this title. After notice and a hearing, the court may
allow and disburse to such applicant such compensation or reimbursement.
11 U.S.C. § 331. Absent an order of this Court, Bankruptcy Code section 331 limits payment of
fees and expenses to Professionals rendering services in these chapter 11 cases to only three
times per year.
12.
Congress’s intent in enacting Bankruptcy Code section 331 is expressed
unequivocally in the House and Senate Reports accompanying enactment of the Bankruptcy
Code, which provides as follows:
The court may permit more frequent applications if the circumstances warrant,
such as in very large cases where the legal work is extensive and merits more
frequent payments. The court is authorized to allow and order disbursement to
the applicant of compensation and reimbursement that is otherwise allowable
under section 330.
H.R. Rep. No. 595, 95th Cong. 1st Sess. 330 (1977); S. Rep. No. 989, 95th Cong., 2d Sess. 4142 (1978).
13.
Bankruptcy Code section 105(a) provides, in pertinent part, that “[t]he court may
issue any order, process, or judgment that is necessary or appropriate to carry out the provisions
of this title.” 11 U.S.C. § 105(a). As set forth below, courts have regularly entered orders, in
accordance with Bankruptcy Code section 105(a), establishing procedures providing for the
8
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interim compensation and expense reimbursement of professionals on a monthly basis. Factors
generally considered by the courts in determining whether such relief is warranted include “the
size of [the] reorganization cases, the complexity of the issues involved, and the time required on
the part of the attorneys for the debtors in providing services necessary to achieve a successful
reorganization of the debtors.” In re Int’l Horizons, Inc., 10 B.R. 895, 897 (Bankr. N.D. Ga.
1981).
In considering these factors, courts have determined that interim compensation
procedures are appropriate to avoid having the professionals fund a debtor’s reorganization
proceedings. See id. at 897.
14.
The Compensation Procedures are appropriate and consistent with interim
compensation procedures established in other large chapter 11 cases in this District. See, e.g., In
re Tuscany Int'l Holdings (U.S.A.) LTD., No. 14-10193 (KG) (Bankr. D. Del. Mar. 20, 2014); In
re Event Rentals, Inc., No. 14-10282 (PJW) (Bankr. D. Del. Mar. 14, 2014); In re Quantum
Foods, LLC, No. 14-10318 (KJC) (Bankr. D. Del. Mar. 12, 2014); In re F & H Acquisition
Corp., No. 13-13220 (KG) (Bankr. D. Del. Jan. 28, 2014); In re EWGS Intermediary, LLC, No.
13-12876 (MFW) (Bankr. D. Del. Dec. 20, 2013); In re Global Aviation Holdings Inc., No. 1312945 (MFW) (Bankr. D. Del. Dec. 19, 2013); In re Solar Trust of America, LLC, No. 12-11136
(KG) (Bankr. D. Del. May 9, 2012); and In re Buffets Restaurants Holdings, Inc., No. 12-10237
(MFW) (Bankr. D. Del. Feb. 14, 2012).5
NOTICE
15.
No trustee, examiner, or creditors’ committee has been appointed in the Debtors’
chapter 11 cases. The Debtors have provided notice of this Motion to (a) the Office of the
5
Because of the voluminous nature of the orders cited herein, such orders are not attached to this Motion.
Copies of these orders are available upon request of the Debtors’ proposed counsel.
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United States Trustee for the District of Delaware, Attn: Jane Leamy, Esq.; (b) the entities listed
on the Consolidated List of Creditors Holding the 30 Largest Unsecured Claims filed pursuant to
Bankruptcy Rule 1007(d); (c) counsel to the agents under the Debtors’ pre-petition credit
facilities; (d) counsel to the Ad Hoc Group of Second Lienholders; (e) counsel to the indenture
trustees under the Debtors’ pre-petition indentures; (f) the United States Securities and Exchange
Commission; (g) the United States Internal Revenue Service; and (h) any parties entitled to
notice pursuant to Local Rule 2002-1(b). In light of the nature of the relief requested in this
Motion, the Debtors respectfully submit that no further notice is necessary.
NO PRIOR MOTION
16.
No prior motion for the relief requested herein has been made by the Debtors to
this or any other Court.
WHEREFORE, for the reasons set forth herein, the Debtors respectfully request that the
Court (a) enter the Proposed Order substantially in the form annexed as Exhibit A hereto
granting the relief requested in the Motion and (b) grant such other and further relief as may be
just and proper.
10
Case 15-10585-LSS
Wilmington, Delaware
Date: March 25, 2015
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/s/ Amanda R. Steele
RICHARDS, LAYTON & FINGER, P.A.
Paul N. Heath (DE 3704)
Amanda R. Steele (DE 5530)
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
– and –
AKIN GUMP STRAUSS HAUER & FELD LLP
Charles R. Gibbs (admitted pro hac vice)
Sarah Link Schultz (admitted pro hac vice)
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Telephone: (214) 969-2800
Facsimile: (214) 969-4343
Ashleigh L. Blaylock (admitted pro hac vice)
Kevin M. Eide (admitted pro hac vice)
Robert S. Strauss Building
1333 New Hampshire Avenue, N.W.
Washington, DC 20036-1564
Telephone: (202) 887-4000
Facsimile: (202) 887-4288
PROPOSED COUNSEL FOR DEBTORS AND
DEBTORS IN POSSESSION
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
Quicksilver Resources Inc., et al.,1
Debtors.
)
)
)
)
)
)
)
)
)
Chapter 11
Case No. 15-10585 (LSS)
Jointly Administered
Hearing Date: April 15, 2015 at 2:00 p.m. (EDT)
Obj. Deadline: April 8, 2015 at 4:00 p.m. (EDT)
NOTICE OF MOTION AND HEARING
PLEASE TAKE NOTICE that, on March 25, 2015, the above-captioned debtors and
debtors in possession (collectively, the “Debtors”) filed the Debtors’ Motion for an Order
Establishing Procedures for Interim Compensation and Reimbursement of Expenses of
Professionals (the “Motion”) with the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”).
PLEASE TAKE FURTHER NOTICE that, any responses or objections to the Motion
must be filed in writing with the Bankruptcy Court, 824 N. Market Street, 3rd Floor, Wilmington,
Delaware 19801, and served upon and received by the undersigned proposed counsel for the
Debtors on or before April 8, 2015 at 4:00 p.m. (Eastern Daylight Time).
PLEASE TAKE FURTHER NOTICE that, if an objection is timely filed, served and
received and such objection is not otherwise timely resolved, a hearing to consider such
objection and the Motion will be held before The Honorable Laurie Selber Silverstein at the
1
The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax
identification number, are: Quicksilver Resources Inc. [6163]; Barnett Shale Operating LLC [0257]; Cowtown
Drilling, Inc. [8899]; Cowtown Gas Processing L.P. [1404]; Cowtown Pipeline Funding, Inc. [9774]; Cowtown
Pipeline L.P. [9769]; Cowtown Pipeline Management, Inc. [9771]; Makarios Resources International Holdings LLC
[1765]; Makarios Resources International Inc. [7612]; QPP Holdings LLC [0057]; QPP Parent LLC [8748];
Quicksilver Production Partners GP LLC [2701]; Quicksilver Production Partners LP [9129]; and Silver Stream
Pipeline Company LLC [9384]. The Debtors’ address is 801 Cherry Street, Suite 3700, Unit 19, Fort Worth, Texas
76102.
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Bankruptcy Court, 824 N. Market Street, 6th Floor, Courtroom 2, Wilmington, Delaware 19801
on April 15, 2015 at 2:00 p.m. (Eastern Daylight Time).
IF NO OBJECTIONS TO THE MOTION ARE TIMELY FILED, SERVED AND
RECEIVED IN ACCORDANCE WITH THIS NOTICE, THE BANKRUPTCY COURT
MAY GRANT THE RELIEF REQUESTED IN THE MOTION WITHOUT FURTHER
NOTICE OR HEARING.
Wilmington, Delaware
Date: March 25, 2015
/s/ Amanda R. Steele
RICHARDS, LAYTON & FINGER, P.A.
Paul N. Heath (DE 3704)
Amanda R. Steele (DE 5530)
Rachel L. Biblo (DE 6012)
One Rodney Square
920 North King Street
Wilmington, Delaware 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
– and –
AKIN GUMP STRAUSS HAUER & FELD LLP
Charles R. Gibbs (admitted pro hac vice)
Sarah Link Schultz (admitted pro hac vice)
1700 Pacific Avenue, Suite 4100
Dallas, Texas 75201
Telephone: (214) 969-2800
Facsimile: (214) 969-4343
Ashleigh L. Blaylock (admitted pro hac vice)
Kevin M. Eide (admitted pro hac vice)
Robert S. Strauss Building
1333 New Hampshire Avenue, N.W.
Washington, DC 20036-1564
Telephone: (202) 887-4000
Facsimile: (202) 887-4288
PROPOSED COUNSEL FOR DEBTORS AND
DEBTORS IN POSSESSION
2
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Exhibit A
Proposed Order
204238294
Page 1 of 8
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
Quicksilver Resources Inc., et al.,1
Debtors.
)
)
)
)
)
)
)
Chapter 11
Case No. 15-10585 (LSS)
Jointly Administered
ORDER ESTABLISHING
PROCEDURES FOR INTERIM COMPENSATION AND
REIMBURSEMENT OF EXPENSES OF PROFESSIONALS
Upon the Motion2 of the above-captioned debtors and debtors in possession (collectively,
the “Debtors”) for entry of this Order pursuant to Bankruptcy Code sections 105(a) and 331,
Bankruptcy Rule 2016, and Local Rules 2016-1 and 2016-2, requesting entry of an order
establishing procedures for the interim compensation and reimbursement of expenses of
professionals as further described in the Motion; and the Court having jurisdiction to consider
this Motion and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; and
consideration of the Motion and the relief requested therein being a core proceeding in
accordance with 28 U.S.C. § 157(b)(2); and venue being proper in this District pursuant to 28
U.S.C. §§ 1408 and 1409; and due and proper notice of the Motion being adequate and
appropriate under the particular circumstances; and a hearing having been held to consider the
1
The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax
identification number, are: Quicksilver Resources Inc. [6163]; Barnett Shale Operating LLC [0257]; Cowtown
Drilling, Inc. [8899]; Cowtown Gas Processing L.P. [1404]; Cowtown Pipeline Funding, Inc. [9774]; Cowtown
Pipeline L.P. [9769]; Cowtown Pipeline Management, Inc. [9771]; Makarios Resources International Holdings LLC
[1765]; Makarios Resources International Inc. [7612]; QPP Holdings LLC [0057]; QPP Parent LLC [8748];
Quicksilver Production Partners GP LLC [2701]; Quicksilver Production Partners LP [9129]; and Silver Stream
Pipeline Company LLC [9384]. The Debtors’ address is 801 Cherry Street, Suite 3700, Unit 19, Fort Worth, Texas
76102.
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All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such
terms in the Motion.
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relief requested in the Motion; and upon the record of the hearing and all proceedings had before
the Court; and the Court having found and determined that the relief sought in the Motion is in
the best interests of the Debtors’ estates, their creditors and other parties in interest and that the
legal and factual bases set forth in the Motion establish just cause for the relief granted herein;
and any objections to the requested relief having been withdrawn or overruled on the merits; and
after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED:
1.
The Motion is granted to the extent provided herein.
2.
Except as otherwise provided in an order of the Court authorizing the retention of
a particular professional, the Retained Professionals specifically retained pursuant to an order of
the Court in these chapter 11 cases may seek interim payment of compensation and
reimbursement of expenses in accordance with the following Compensation Procedures:
(a)
On or after the 20th day, or the next business day if such day is not a
business day, of each month following the month for which compensation
is sought (the “Compensation Period”), each Professional seeking interim
allowance of its fees and expenses may file an application which will
include the relevant time entry and description and expense detail for
interim allowance of compensation and services rendered and
reimbursement of expenses incurred during the preceding month (a
“Monthly Fee Application”) with the Court, pursuant to Bankruptcy Code
section 331, for interim approval and allowance of compensation for
services rendered and reimbursement of expenses incurred during the
Compensation Period. Each Professional shall serve the Monthly Fee
Application on the following parties (the “Notice Parties”):
(i)
the Debtors, Quicksilver Resources Inc., et al., 801 Cherry Street,
Suite 3700, Unit 19, Fort Worth, Texas 76102;
(ii)
proposed counsel to the Debtors, Akin Gump Strauss Hauer &
Feld LLP, 1700 Pacific Ave., Suite 4100, Dallas, Texas 75201,
Attn: Charles R. Gibbs and Sarah Link Schultz;
(iii)
proposed Delaware counsel to the Debtors, Richards, Layton &
Finger, P.A., One Rodney Square, 920 North King Street,
Wilmington, DE 19801, Attn: Paul N. Heath and Amanda R.
Steele;
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(iv)
counsel to the global administrative agent for the first lien lenders,
Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New
York, NY 10017, Attn: Steven M. Fuhrman;
(v)
counsel to second lien agent, Latham & Watkins LLP, 885 Third
Avenue, New York, NY 10022, Attn: Mitchell A. Seider and
David A. Hammerman
(vi)
counsel to the ad hoc group of second lienholders, Milbank,
Tweed, Hadley & McCloy LLP, 28 Liberty Street, New York, NY
10005, Attn: Dennis F. Dunne and Samuel A. Khalil
(vii)
the Office of the United States Trustee for the District of Delaware,
844 King Street, Room 2207, Lockbox #35, Wilmington, Delaware
19899-0035, Attn: Jane Leamy; and
(viii) counsel to any statutory committee appointed in these cases.
(b)
The first Monthly Fee Application submitted by each Retained
Professional shall cover the period from the effective date of such
Retained Professional’s retention through and including the last day of the
month following such date. For the avoidance of doubt, the first Monthly
Fee Application for Retained Professionals whose retentions are approved
by the Court on or prior to April 30, 2015 shall be on or after May 20,
2015.
(c)
Any Retained Professional who fails to file a Monthly Fee Application for
a particular month(s) may subsequently submit a consolidated Monthly
Fee Application for a particular month(s). All Monthly Fee Applications
shall comply with the Bankruptcy Code, the Bankruptcy Rules, and the
Local Rules.
(d)
Each Notice Party will have 21 calendar days, or the next business day if
such day is not a business day, after service of a Monthly Fee Application
to object thereto (the “Objection Deadline”). Upon the expiration of the
Objection Deadline: (i) if no objections have been filed, each Retained
Professional shall file a certificate of no objection, or a certificate of
partial no objection with the Court, whichever is applicable, after which
the Debtors shall be authorized to pay such Retained Professional an
amount equal to 80% of the fees and 100% of the expenses requested in its
Monthly Fee Application (the “Maximum Interim Payment”); or (ii) if an
objection is properly filed, the Retained Professional shall be entitled to
80% of the fees and 100% of the expenses not subject to an objection (the
“Actual Interim Payment”).
(e)
If any Notice Party objects to a Retained Professional’s Monthly Fee
Application (the “Affected Professional”), it must, on or before the
expiration of the Objection Deadline, file with the Court and serve on the
Affected Professional and each other Notice Party a written objection (an
“Objection”) so as to be received on or before the Objection Deadline.
The Objection shall specifically identify the objectionable fees and
expenses, including the amount of the applicable fees and expenses, and
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the basis for the Objection. Thereafter, the objecting party and the
Affected Professional may attempt to resolve the Objection on a
consensual basis. If the parties are able to resolve their dispute, the
Affected Professional shall serve on the Notice Parties a statement
indicating that the Objection has been withdrawn or settled, and the
Debtors shall promptly pay, in accordance with subparagraph (d) that
portion of the Monthly Fee Application which is no longer subject to an
Objection up to the Maximum Interim Payment. If the parties are unable
to resolve their dispute within 21 calendar days, or the next business day if
such day is not a business day, after service of the Objection, the affected
Retained 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 Interim Payment and the Actual Interim Payment
made to such 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 rule on
the Objection if necessary.
(f)
Approximately 120 calendar days, but no more than 150 calendar days,
after the Petition Date, and for each subsequent three-month period (each,
an “Interim Fee Period”), each Retained Professional shall file with the
Court and serve on the Notice Parties an application (an “Interim Fee
Application”) for interim approval and allowance of compensation and
reimbursement of expenses sought in the Monthly Fee Applications,
including any holdbacks, filed during the Interim Fee Period, pursuant to
Bankruptcy Code section 331. The Interim Fee Application must include
a summary of: (i) the Monthly Fee Applications that are the subject of the
request, (ii) the amount of fees and expenses requested, (iii) the amount of
fees and expenses paid to date or subject to an Objection, (iv) the deadline
for other parties and the Notice Parties to file objections (the “Additional
Objections”) to the Interim Fee Application and (v) any other information
requested by the Court or required by the Local Rules. All Interim Fee
Applications shall comply with the Bankruptcy Code, the Bankruptcy
Rules, the Local Rules and applicable Third Circuit law.
(g)
Each Retained Professional shall file its Interim Fee Application on or
before the 45th day, or the next business day if such day is not a business
day, after the end of the applicable Interim Fee Period.
(h)
Additional Objections to any Interim Fee Application shall be filed and
served upon the affected Retained Professional and the Notice Parties so
as to be received on or before the 20th day, or the next business day if
such day is not a business day, following service of the applicable Interim
Fee Application.
(i)
Service of the Monthly Fee Applications, Interim Fee Applications, final
fee applications and notices of any hearing thereon (the “Hearing
Notices”) shall be limited as follows: (i) the Notice Parties shall be
entitled to receive the Monthly Fee Applications, Interim Fee
Applications, final fee applications and Hearing Notices; and (ii) parties in
interest requesting notice pursuant to Bankruptcy Rule 2002 shall be
entitled to receive the Hearing Notices and, only upon request of the
appropriate Retained Professional, the Monthly and Interim Fee
Applications and final fee applications.
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(j)
The Debtors shall request that the Court schedule a hearing on Interim Fee
Applications at least once every six months or at such other intervals as
the Court deems appropriate. If no Objections are pending and no
Additional Objections are timely filed, the Court may grant an Interim Fee
Application without a hearing.
(k)
The pendency of an Objection or an Additional Objection to payment of
compensation or reimbursement of expenses shall not disqualify a
Retained Professional from the future payment of compensation or
reimbursement of expenses, unless the Court orders otherwise.
(l)
Any Retained Professional who fails to file a Monthly Fee Application or
an Interim Fee Application when due will be ineligible to receive further
interim payments of fees or expenses under the Compensation Procedures
until such time as a Monthly Fee Application or Interim Fee Application is
submitted by the Retained Professional. There will be no other penalties
for failing to file a Monthly Fee Application or an Interim Fee Application
in a timely manner.
(m)
Neither (i) the payment of or the failure to pay, in whole or in part,
monthly interim compensation and reimbursement of expenses under the
Compensation Procedures nor (ii) the filing of or the failure to file an
Objection to any Monthly Fee Application or Interim Fee Application will
bind any party in interest or the Court with respect to the allowance of
interim or final applications for compensation for services rendered and
reimbursement of expenses of Retained Professionals. All fees and
expenses paid to Retained Professionals in accordance with the
Compensation Procedures are subject to disgorgement until final
allowance by the Court.
(n)
Any statutorily appointed committee in these chapter 11 cases is permitted
to submit statements of expenses (excluding the fees and expenses of
third-party counsel to the individual committee members) and supporting
vouchers to the committee’s counsel which counsel shall collect and
submit the committee members’ request for reimbursement in accordance
with the Compensation Procedures as if such committee members were
Professionals; provided, however, that the approval of the Compensation
Procedures does not authorize payment of such expenses to the extent that
such authorization does not exist under the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules or other applicable law.
(o)
No Professional may serve a Monthly Fee Application or file an Interim
Fee Application until the Court enters an order approving the retention of
such Professional pursuant to Bankruptcy Code sections 327 or 1103.
Each member of a Committee may submit statements of expenses (excluding
third-party counsel’s fees and expenses of individual Committee members) and supporting
vouchers to the Committee’s counsel, which counsel will collect and submit the Committee
members’ requests for reimbursement in accordance with the Compensation Procedures,
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provided, however, that payment of such expenses is not authorized to the extent that such
authorization does not exist under the Bankruptcy Code, applicable Third Circuit law, the
Bankruptcy Rules, the Local Rules, or the practices of this Court.
4.
In each Interim Fee Application and final fee application, all attorneys who have
been or are hereafter retained pursuant to sections 327 or 1103 of the Bankruptcy Code (i) shall
apply for compensation for professional services rendered and reimbursement of expenses
incurred in connection with the Debtors’ chapter 11 cases in compliance with sections 330 and
331 of the Bankruptcy Code and applicable provisions of the Bankruptcy Rules, Local Rules and
any other applicable procedures and orders of the Court, and (ii) intend to make a reasonable
effort to comply with the U.S. Trustee’s requests for information and additional disclosures as set
forth in the Guidelines for Reviewing Applications for Compensation and Reimbursement of
Expenses Filed under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases Effective as of
November 1, 2013.
5.
Service of the Monthly Fee Applications, Interim Fee Applications, final fee
applications, and notices of any hearing thereon (the “Hearing Notices”) shall be limited as
follows: (i) the Notice Parties shall be entitled to receive the Monthly Fee Applications, Interim
Fee Applications, final fee applications, and Hearing Notices; and (ii) parties in interest
requesting notice pursuant to Bankruptcy Rule 2002 shall be entitled to receive the Hearing
Notices and, upon specific request, the Monthly and Interim Fee Applications.
6.
All time periods set forth in this Order shall be calculated in accordance with
Bankruptcy Rule 9006(a).
7.
Notwithstanding the possible applicability of Bankruptcy Rules 6004(h), 7062,
9014 or otherwise, this Order shall be immediately effective and enforceable upon its entry.
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The Debtors are authorized to take all actions necessary to effectuate the relief
granted pursuant to this Order in accordance with the Motion.
9.
The Court retains jurisdiction with respect to all matters arising from or related to
the interpretation or implementation of this Order.
Wilmington, Delaware
Date: ___________, 2015
THE HONORABLE LAURIE S. SILVERSTEIN
UNITED STATES BANKRUPTCY JUDGE
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