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Gottesman (LG-7061) Michelle McMahon (MM-8130) 1290 Avenue of the Americas New York, New York 10104 (212) 541-2000 And DUANE MORRIS LLP Phillip K. Wang, Esq. (admitted pro hac vice) One Market Plaza, Spear Tower, Suite 2200 San Francisco, CA 94105-1127 (415) 957-3185
Attorneys for Wells Fargo Bank, N.A., as trustee for the registered holders of Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates, Series 2007-C1 and U.S. Bank National Association, as successor to LaSalle Bank N.A., formerly known as LaSalle National Bank, as Trustee for the registered holders of ML-CFC Commercial Mortgage Trust 2006-4, Commercial Mortgage Pass-Through Certificates, Series 2006-4 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re: INNKEEPERS USA TRUST, et al., Debtors. : : (Jointly Administered) : Chapter 11 Case No.: 10-13800 (SCC)
x RESERVATION OF RIGHTS OF WELLS FARGO BANK, N.A., AS TRUSTEE FOR THE REGISTERED HOLDERS OF CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-C1 AND U.S. BANK NATIONAL ASSOCIATION, AS SUCCESSOR TO LASALLE BANK N.A., FORMERLY KNOWN AS LASALLE NATIONAL BANK, AS TRUSTEE FOR THE REGISTERED HOLDERS OF ML-CFC COMMERCIAL MORTGAGE TRUST 2006-4, COMMERCIAL MORTGAGE PASSTHROUGH CERTIFICATES, SERIES 2006-4 TO MONTHLY APPLICATION OF KIRKLAND & ELLIS LLP FOR COMPENSATION FOR SERVICES AND REIMBURSEMENT OF EXPENSES AS ATTORNEYS FOR THE DEBTORS IN POSSESSION FOR THE PERIOD FROM JULY 19, 2010 THROUGH JULY 31, 2010 Wells Fargo Bank, N.A., as trustee for the registered holders of Credit Suisse First
Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates, Series 2007-C1 and U.S. Bank National Association, as successor to LaSalle Bank N.A., formerly known as LaSalle National Bank, as Trustee for the registered holders of ML-CFC Commercial Mortgage Trust 2006-4, Commercial Mortgage Pass-Through Certificates, Series 2006-4 (collectively, the Property Level Lenders), by their undersigned counsel, hereby reserve their rights with respect to the relief requested in the Monthly Application of Kirkland & Ellis LLP for Compensation for Services and Reimbursement of Expenses as Attorneys for the Debtors in Possession for the Period from July 19, 2010 Through July 31, 2010 (the Application). The Application seeks allowance and payment of attorneys fees and expenses incurred for the period from July 19, 2010 through July 31, 2010. In support of this Reservation of Rights, the Property Level Lenders state as follows: BACKGROUND General Background 1. On July 19, 2010, the above-captioned debtors (collectively, the Debtors) filed
voluntary petitions for relief under chapter 11 of the Bankruptcy Code commencing these bankruptcy cases. 2. The Debtors are debtors-in-possession and continue to operate their businesses
pursuant to 11 U.S.C. 1107 and 1108. 3. July 28, 2010. The Property Level Loans 4. The Property Level Lenders hold secured debt with an aggregate unpaid principal An official committee of unsecured creditors (the Committee) was appointed on
balance of approximately $160 million (the Property Level Loans). A complete description of
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the Property Level Loans is set forth in the Declaration of Edward C. Brown in Support of the Objections of Certain Prepetition Lenders [Docket No. 258] (the Brown Decl.) 1-5 and incorporated herein.1 RESERVATION OF RIGHTS 5. The Property Level Lenders hereby reserve their rights to make substantive
objections to the final allowance of all fees and expenses sought by Kirkland & Ellis LLP (K&E) in the Application, and in any future fee applications filed by K&E or any other professionals retained by the Debtors, the Committee or any other official committee formed in these cases and compensated by the Debtors estates (collectively, the Professionals), including the fees and expenses incurred in the negotiation, formulation, drafting, and prosecution of the plan support agreement. Bankruptcy Code 506(c). 6. Final allowance of the Professionals fees and expenses, including the fees and
expenses sought by K&E in the Application, is only appropriate if the Professionals are able to satisfy the requirements of Section 330 of the Bankruptcy Code, including demonstrating that such fees are reasonable.2 7. The Property Level Lenders also contend that the Debtors must show direct
benefit to the Hotel Properties securing The Property Level Lenders loans resulting from the payment of the fees and expenses of the Professionals. Section 506(c) provides that in order for
Defined terms not otherwise defined herein shall have the meanings set forth in the Brown Decl.
The fees and expenses related to the plan support agreement sought by K&E in the Application are substantial, particularly given the relatively brief period covered by the Application. The significant fees and expenses incurred by the Professionals are only a portion of the equation. The Property Level Lenders also incurred significant fees and expenses in opposing the plan support agreement, which, if allowed, will also be paid from the secured lenders cash collateral. The plan support agreement provided only distraction and disruption of the normal chapter 11 process to the detriment, not benefit, of the Property Level Debtors.
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the administrative costs of these Cases to be charged to the Property Level Lenders cash collateral, without the Property Level Lenders consent, such costs must be incurred for and directly benefit the Hotel Properties securing the Property Level Lenders loans. In re Compton Impressions, Ltd., 217 F.3d 1256 (9th Cir. 2000); In re Flagstaff Foodservice Corp., 739 F.2d 73 (2d Cir. 1984). This standard will be particularly hard to meet in these cases where the allocation developed by the Debtors is based on EBITDA and imposes a greater proportion of the costs of these cases, including fees and expenses of the Professionals, on the Debtors that benefit from these cases the least. 8. The Debtors must satisfy the requirements of Section 506(c) that would permit
them to surcharge the Property Level Lenders cash collateral. The Debtors must prove that the Property Level Lenders cash collateral is being used to preserve and/or dispose of the specific properties securing the Property Level Lenders loans and that such use has benefited the Property Level Lenders. 11 U.S.C. 506(c). Moreover, the amount that the Debtors may apportion as a chapter 11 administrative expense is limited to the actual administrative costs specifically incurred to preserve or dispose of the properties securing the Property Level Lenders loans to the extent of any benefit to [the Property Level Lenders]. Id. The Debtors have not demonstrated that any surcharge of the Property Level Lenders cash collateral is permissible under Section 506(c). Accordingly, the cash collateral securing the Property Level Lenders loans should not be used to pay the fees and expenses requested by the Professionals. 9. The Property Level Lenders reserve all their rights to seek disgorgement to the
extent necessary and appropriate to recover any fees paid to Professionals in this case, pursuant to Section 507(b) of the Bankruptcy Code or otherwise.
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10.
The Property Level Lenders reserve their right to amend and supplement this
Objection, and incorporate to the extent applicable objections to the Motion filed by other parties in interest. 11. The Property Level Lenders reserve their rights to object to final allowance of the
fees and expense sought in the Applications and all future fee applications to be filed by the Professionals. Dated: September 20, 2010 New York, New York /s/ Michelle McMahon BRYAN CAVE LLP Lawrence P. Gottesman (LG-7061) Michelle McMahon (MM-8130) 1290 Avenue of the Americas New York, New York 10104 Tel: 212-541-2000; Fax: 212-541-4630 lawrence.gottesman@bryancave.com michelle.mcmahon@bryancave.com and DUANE MORRIS LLP Phillip K. Wang, Esq. (admitted pro hac vice) San Francisco, CA 94105-1127 Tel: (415) 957.3185; Fax: (415) 358.4725 pwang@duanemorris.com Attorneys for Wells Fargo Bank, N.A., as Trustee for the registered holders of Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage Pass-Through Certificates, Series 2007C1 and U.S. Bank National Association, as successor to LaSalle Bank N.A., formerly known as LaSalle National Bank, as Trustee for the registered holders of ML-CFC Commercial Mortgage Trust 2006-4, Commercial Mortgage Pass-Through Certificates, Series 2006-4
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CERTIFICATE OF SERVICE I, Michelle K. McMahon, hereby certify that on September 20, 2010, I caused copies of the foregoing Reservation Of Rights Of Wells Fargo Bank, N.A., As Trustee For The Registered Holders Of Credit Suisse First Boston Mortgage Securities Corp. Commercial Mortgage PassThrough Certificates, Series 2007-C1 And U.S. Bank National Association, As Successor To Lasalle Bank N.A., Formerly Known As Lasalle National Bank, As Trustee For The Registered Holders Of Ml-Cfc Commercial Mortgage Trust 2006-4, Commercial Mortgage Pass-Through Certificates, Series 2006-4 To Monthly Application Of Kirkland & Ellis Llp For Compensation For Services And Reimbursement Of Expenses As Attorneys For The Debtors In Possession For The Period From July 19, 2010 Through July 31, 2010 to be served upon the parties on the attached service list by first class United States mail.
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Arnold & Porter LLP Counsel to Five Mile Attn: Alan Lawrence 399 Park Avenue New York, NY 10022
Arnold & Porter LLP Counsel to Five Mile Attn: Marc Daniel 399 Park Avenue New York, NY 10022
Arnold & Porter LLP Counsel to Five Mile Attn: Michael Canning 399 Park Avenue New York, NY 10022
Best Western International, Inc. 6201 North 24th Parkway Phoenix, AZ 85016
Bryan Cave LLP c/ Michelle McMahon, Esq 1290 Avenue of the Americas New York, NY 10104
Bryan Cave LLP c/o Lawrence P. Gottesman, Esq 1290 Avenue of the Americas New York, NY 10104
Capmark Finance Inc. Attn: Portfolio Manager, Specialty Asset Management 1600 Tysons Blvd Suite 1100 McLean, VA 22102
Carrollton- Farmers Branch Independent Scholl District c/o Andrea Sheehan, Esq. Law Offices of Robert E. Luna, P.C. 4411 N. Centeral Expressway Dallas, TX 75205
Centerline Servicing, Inc. Attn: Steve Oltmann 5221 N OConnor Blvd, Suite 600 Irving, TX 75039
Counsel to Apollo Investment Group Alan W. Kornberg, Esq. Paul, Weiss, Rifkand, Wharton & Garrison, LLP 1285 Avenue of the Americas New York, NY 10019-6064
CSE Mortgage, LLC 4445 Willard Avenue 12th Floor Chevy Chase, MD 20815
CW Capital Asset Management LLC 18500 Von Karman Avenue, Suite 515 Attn: Ira Haynie Irvine, CA 92612
CWCapital Performing Loan Management- CMBS Ira Haynie, Associate-Asset Manager 18500 Von Karman Avenue, Suite 515 Irvine, CA 92612
Dechert LLP Attn: Nicole B. Herther-Spiro 1095 Avenue of the Americas NewYork, NY 10036
Dechert LLP c/o Stephanie M. Tita 30 Rockefeller Plaza New York, NY 10112
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Dechert LLP Counsel to Lehman Attn: Michael J. Sage 1095 Avenue of the Americas New York, NY 10036
Deutsche Banc Mortgage Capital, LLC Attn: Director, Mortgage Backed Securities 60 Wall Street 10th Floor New York, NY 10005
Deutsche Bank Securities Inc. Attn: General Counsel 1301 Avenue of the Americas 8th Floor New York, NY 10019
Dewey & Leboeuf LLP c/o Irena M. Goldstein, Esq. 1301 Avenue of the Americas New York, NY 10019
Dewey & Leboeuf LLp c/o Martin J. Bienenstock, Esq 1301 Avenue of the Americas New York, NY 10019
Dewey & Leboeuf LLP c/o Timothy Q. Karcher, Esq. 1301 Avenue of the Americas New York, NY 10019
Doubletree Hotel Systems, Inc. 9336 Civic Center Drive Attn: General Counsel Beverly Hills, CA 90210
Duane Morris LLP Attn: Phillip K. Wang Counsel for LNR Partners, LLC, One Market Plaza, Spear Tower Suite 2200 San Francisco, CA 94105-1127
Ecolab Pets Elimination 3535 S 31st Street PO Box 6007 Grand Forks, ND 58206
Global Restaurant Design, Corp 31368 Via Colinas Suite #108 Westlake Village, CA 91362
Goldenbock EisemanAssor Bell & Peskoe LLP c/o Jonathan L. Flaxer, ESQ. 437 Madison Avenue New York, NY 10022
Haynes and Boone, LLP Attn: John D. Penn, Esq. Counsel for Midland Loan Services, Inc. 201 Main Street, Suite 2200 Fort Worth, TX 76102
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Hilton Inns, Inc. 9336 Civic Center Drive Attn: General Counsel Beverly Hills, CA 90210
Iron Mountain Information Management, Inc. c/o Frank F. McGinn Barlett Hackett Feinberg P.C. 155 Federal Street 9th Floor Boston, MA 02110
Jackson Walker LLP re: Constellation NewEnergy, Inc. c/o Bruce J. Ruzinsky - D. Elaine Conway 1401 McKinney Street, Suite 1900 Houston, TX 77010
Jackson Walker LLP re: Constellation NewEnergy, Inc. c/o Heather M. Forrest 901 Main Street, Suite 6000 Dallas, TX 75202
Jenkins/Gales & Martinez 5933 West Century Blvd Suite #1000 Los Angeles, CA 90045
Kasowitz Benson, Torres & Friedman LLP c/o Daniel A. Fliman Counsel for Five Mile Capital Partners LLC 1633 Broadway New York, NY 10019
Kasowitz, Benson, Torres & Friedman LLP c/o Adam L. Shiff, Esq. Counsel for Five Mile Capital Partners LLC 1633 Broadway New York, NY 10019
Kasowitz, Benson, Torres & Friedman LLP c/o David M. Friedman Counsel for Five Mile Capital Partners LLC 1633 Broadway New York, NY 10019
Kaufmann Gildin Robbins & Oppenheim LLP Counsel to Hilton Worldwide, Inc. c/o Bruce R. Alter, Esq. 550 Mamaroneck Avenue, Suite 510 Harrison, New York 10528
Kaufmann Gildin Robbins & Oppenheim LLP David J. Kaufmann, Esq. Kevin M. Shelley, Esq. Counsel for Hilton Worldwide, Inc. 777 Third Avenue, 24th Floor New York, New York 10017
Kilpatrick & Associates, P.C. Counsel for Creditor Oakland County Treasurer c/o Richardo I. Kilpatrick 903 North Opdyke Road, Suite C Auburn Hills, MI 48326
Kilpatrick Stockton LLP Counsel for TriMont Real Estate Advisors, Inc. Jonathan E. Polonsky, Esq. 31 West 52nd Street 14th Floor New York, NY 10019
Kilpatrick Stockton LLP Counsel for TriMont Real Estate Advisors, Inc. Mark A. Fink, Esq. Suite 2800 1100 Peachtree Street, NE Atlanta, GA 30309-4530
Kilpatrick Stockton LLP Counsel for TriMont Real Estate Advisors, Inc. Rex R. Veal, Esq. Suite 2800 1100 Peachtree Street, NE Atlanta, GA 30309-4530
Kilpatrick Stockton LLP Counsel for TriMont Real Estate Advisors, Inc. Todd C. Meyers, Esq. Suite 2800 1100 Peachtree Street, NE Atlanta, Georgia 30309-4530
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LaSalle Bank National Association Attn: Global Securities and Trust Services LB-UBS Commercial Mortgage Trust 2007-C6 135 South LaSalle Street Suite 1625 Chicago, IL 60603
Lasalle Bank National Association C/O Wells Fargo Comm Mortgage Servicing 1320 Willow Pass Road, Suite 210 Concord, CA 94520
Lehman ALI, Inc. Attn: Charlene Thomas 399 Park Avenue New York, NY 10022
Lehman ALI, Inc. Attn: Michael E. Lascher 1271 Avenue of the Americas 39th Floor NEW YORK, NY 10020
Lehman ALI, Inc. Attn: Michael E. Lascher 1271 Avenue of the Americas, 39th Floor New York, NY 10020
Lehman ALI, Inc. c/o David Forti, Esq. 2929 Arch Street Philadelphia, PA 19103
Linebarger Goggan Blair & Sampson, LLP Attn: Elizabeth Weller 2323 Bryan Street Suite 1600 Dallas, TX 75201
Linebarger Goggan Blair & Sampson, LLP Counsel for Bexar County 711 Navarro, Suite 300 San Antonio, TX 78205
LNR Partners, Inc. Attn: Chris Brown 1601 Washington Avenue, Suite 700 Miami Beach, FL 33139
LNR Partners, Inc. Attn: Director of Servicing 1601 Washington Avenue Suite 700 Miami, FL 33139
LNR Property Corporation 1601 Washington Avenue, Suite 800 Miami Beach, FL 33139
Marriott International, Inc. 10400 Fernwood Road Franchise Attorney Law Department 52/923.25 Bethesda, MD 20817
Marriott International, Inc. 10400 Fernwood Road VP Owner and Franchise Services Bethesda, MD 20817
Marx Realty & Improvement Co. 708 Third Ave. 21st Floor New York, NY 10017-4146
Merrill Lynch Mortgage Lending Inc. Four World Financial Center 16th Floor New York, NY 10080
Midland Loan Services, Inc. 10851 Mastin Suite 700 Overland Park, KS 66210
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Morrison & Foerster, LLP Counsel for Official Committee of Unsecured Creditors c/o Brett H. Miller 1290 Avenue of the Americas New York, NY 10104-0050
National Assn. of Attorneys General Karen Cordry 750 First St., N.E., Suite 1100 Washington, DC 20570
Office of Attorney General State of Florida The Capitol PL-01 Tallahassee, FL 32399-1050
Office of the Attorney General 100 West Randolph Street Chicago, IL 60601
Office of the Attorney General 1125 Washington Street SE PO Box 40100 Olympia, WA 98504-0100
Office of the Attorney General 1300 I Street, Suite 1740 Sacramento, CA 95814
Office of the Attorney General 1412 Main Street Suite 810 Dallas, TX 75202
Office of the Attorney General 1525 Sherman St., 5th Floor Denver, CO 80203
Office of the Attorney General 200 St. Paul Place Baltimore, MD 21202
Office of the Attorney General 900 East Main Street Richmond, VA 23219
Office of the Attorney General 9001 Mail Service Center Raleigh, NC 27699-9001
Office of the Attorney General California Department of Justice Attn: Public Inquiry Unit PO Box 944255 Sacramento, CA 94244-2550
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Office of the Attorney General McCormack Building One Ashburton Place Boston, MA 02108
Office of the Attorney General The Capitol 2nd Floor Albany, NY 12224-0341
Office of the Attorney General The Capitol, Room 116 700 Capitol Avenue Frankfort, KY 40601-3449
Paul, Weiss, Rifkind, Wharton & Garrison LLP Attn: Alan W. Kornberg 1285 Avenue of the Americas New York, New York 10019-6064
Paul, Weiss, Rifkind, Wharton & Garrison LLP Attn: Andrew J. Ehrlich 1285 Avenue of the Americas New York, New York 10019-6064
Paul, Weiss, Rifkind, Wharton & Garrison LLP Attn: Lauren Shumejda 1285 Avenue of the Americas New York, New York 10019-6064
Pennsylvania Office of the Attorney General 16th Floor, Strawberry Square Harrisburg, PA 17120
Perkins Coie Counsel for Centerline Attn: Mark Birnbaum 1888 Century Park E. Suite 1700 Los Angeles, CA 90067-1721
Perkins Coie Counsel for CWCapital Performing Loan Management- CMBS Attn: Beth Understahl 2901 North Central Avenue Suite 2000 Phoenix, AZ 85012-2788
Perkins Coie Counsel for CWCapital Performing Loan Management Attn: Mark Birnbaum 1888 Century Park E. Suite 1700 Los Angeles, CA 90067-1721
Perkins Coie LLP Attn: David Neff 131 South Dearborn Street Suite 1700 Chicago, IL 60603
Promus Hotels, Inc. 9336 Civic Center Drive Attn: General Counsel Beverly Hills, CA 90210
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Saul Ewing LLP Counsel for U.S. Foodservice, Inc. c/o Melissa W. Rand, Esq. Centre Square West 1500 Market Street, 38th Floor Philadelphia, PA 19102
Sheppard Mullin Richter & Hampton LLP Attn: Jane Qin 30 Rockefeller Plaza, Suite 2400 New York, NY 10112
Sheppard Mullin Richter & Hampton LLP Carren Shulman, Esq. 30 Rockefeller Plaza, Suite 2400 New York, NY 10112
Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036
Starwood Hotels & Resorts Worldwide Inc. Attn: Sandy Olson 9841 Airport Blvd., Ste 812 Los Angeles, CA 90045
State of Michigan, Department of Treasury Michael A. Cox, Attorney General Juandisha M. Harris, Assistant Attorney General Cadillac Place, Ste. 10-200 3030 W. Grant Blvd. Detroit, MI 48202
Summerfield Hotel Company LLC Attn: SVP Franchising 20 West Monroe 8th Floor Chicago, IL 60606
Swank Audio Visuals, LLC 639 E. Garvois Bluffs St. Louis, MO 63026
Tashjian & Padian Gerald Padian, Esq. & Bradley M. Rank, Esq. Counsel for CWCapital Asset Management, LLC and C-III Asset Management LLC 15 West 36th Street, 15th Fl. New York, New York 10018
Texas Attorney General's Office Hal F. Morris & Ashley F. Bartram Bankruptcy & Collections Div. PO Box 12548, MC-008 Austin, TX 78711-2548
The Sheraton LLC 600 Galleria Parkway Suite 1700 Attn: General Counsel - Franchise Division Atlanta, GA 30339
The Sheraton LLC c/o Starwood Hotels and Resorts Worldwide 1111 Westchester Ave Attn: General Counsel White Plains, NY 10604
United States Trustees Office Region 2 33 Whitehall Street, 21st Floor New York, NY 10004
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Wells Fargo, N.A. c/o Christopher J. Hart, Esq. Locke Liddle & Sapp LLP 401 9th Street, N.W. Suite 400 Washington, DC 20004
Creditors:
152
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