FOX ROTHSCHILD LLP Yann Geron Nicole N.

Santucci 100 Park Avenue, Suite 1500 New York, New York 10017 (212) 878-7900 Attorneys for Yann Geron, Chapter 7 Trustee

Hearing Date: December 15, 2009 Hearing Time: 10:00 a.m.

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------x In re : : THELEN LLP, : : Debtor. : ------------------------------------------------------x

Chapter 7 Case No. 09-15631 (ALG)

TRUSTEES APPLICATION FOR AN ORDER (i) AUTHORIZING TRUSTEE TO RETAIN ON-SITE ASSOCIATES, LLC AND CREDIT CLEARING HOUSE AS HIS COLLECTION AGENTS TO ASSIST WITH THE LIQUIDATION OF CERTAIN OF THE DEBTORS ACCOUNTS RECEIVABLE, (ii) APPROVING COMPENSATION STRUCTURE FOR SUCH AGENTS, AND (iii) AUTHORIZING TRUSTEE, PURSUANT TO BANKRUPTCY RULE 9019(b), TO EXERCISE HIS BUSINESS JUDGMENT IN COMPROMISING ANY RECEIVABLES TO THE HONORABLE ALLAN L. GROPPER, UNITED STATES BANKRUPTCY JUDGE: Yann Geron (the Trustee), as chapter 7 trustee of the estate of Thelen LLP (the Debtor or Thelen), the above-captioned debtor, by his attorneys, Fox Rothschild LLP, as and for his application (the Application), for an order (i) authorizing Trustee to retain On-Site Associates, LLC (On-Site) and Credit Clearing House (CCH) as his collection agents to assist with the liquidation of certain of the Debtors accounts receivable, (ii) approving compensation structure for such agents, and (iii) authorizing Trustee, pursuant to Bankruptcy Rule 9019(b), to exercise his business judgment in compromising any receivables, upon information and belief, respectfully sets forth and represents:

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Jurisdiction 1. This Court has jurisdiction over this case and Application pursuant to 28

U.S.C. 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). Venue is proper in this district and before this Court pursuant to 28 U.S.C. 1408 and 1409. Introduction 2. On September 18, 2009 (the Petition Date), the Debtor filed a voluntary

petition for relief under chapter 7 of Title 11 of the United States Code (the Bankruptcy Code), in the United States Bankruptcy Court for the Southern District of New York. Yann Geron was appointed interim chapter 7 trustee of the Debtors estate. Mr. Geron has since qualified as permanent chapter 7 trustee and is currently serving in that capacity. 3. Prior to the Petition Date, Thelen LLP, formerly known as Thelen Reid

Brown Raysman & Steiner, operated largely as a bicoastal law firm with principal offices in New York and San Francisco, and other offices located in 8 U.S. cities, England and China. At its peak, Thelen employed roughly 600 attorneys. Thelen was founded in 1924 in San Francisco as Thelen, Marrin, Johnson & Bridges. In June 1998, Thelen Marrin merged with New York-based Reid & Priest, a firm with approximately 160 attorneys. On December 1, 2006, Thelen Reid & Priest merged with Brown Raysman Millstein Felder & Steiner, LLP, creating the bicoastal structure of the firm. Thelen was ranked 70th in the National Law Journals 2007 survey of the nations largest firms. Upon information and belief, a number of factors caused the firms demise, including difficulties following the Brown Raysman merger, significant partner departures, and failed merger discussions. 4. In October 2008, the Debtor formally voted to dissolve the partnership.

Thereafter, the Debtor began its wind-down process under the guidance of a dissolution

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committee. Thelens dissolution committee appears to have focused its efforts on collection of Thelens accounts receivable, paying down its secured lines of credit with Citibank N.A. (Citibank), Thelens principal lender, and transitioning client files, using a skeleton staff in a small portion of Thelens San Francisco offices. After some months in dissolution, it appears that collections slowed and the Debtors pared-down operating costs became unsustainable under the Debtors arrangement with Citibank. As a result, the Debtor filed the instant bankruptcy proceeding. 5. Notwithstanding the slowdown on the collection front during the

dissolution phase, there still remains a significant number of outstanding accounts receivable due the Debtors estate. The Debtors bankruptcy schedules reflect remaining uncollected

receivables with a face value in excess of $27 million. One of the Trustees top priorities during the early stages of this bankruptcy proceeding is to focus collection efforts and promptly liquidate the Debtors receivables. 6. It appears that the dissolution committee retained several collection

agencies and attorneys pre-petition. These retentions were based primarily (though not entirely) on geographical location, so that receivables generated by the Debtors East Coast office were assigned to collection agencies and attorneys located in New York, and receivables generated by the Debtors West Coast office were assigned to attorneys and agencies located in San Francisco. The Trustee will keep this structure generally, so as to maximize recoveries and minimize disruption. Relief Requested Retention of Collection Agencies

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7.

By this application, the Trustee seeks authority to retain (i) On-Site as his

collection agent to assist with the collection of principally the Debtors West Coast receivables on a contingency fee basis and (ii) CCH as his collection agent to assist with the collection of principally the Debtors East Coast receivables on a contingency fee basis. a. On-Site Retention 8. The Trustee has selected On-Site because he believes that On-Site has

considerable experience in matters of this character. On-Site was retained pre-petition by the Debtors dissolution committee and is therefore fully familiar with the Debtors receivables and the tasks it is expected to perform. Additionally, On-Site has significant experience in providing collection services to dissolving law firms and their bankruptcy trustees, including for example the bankruptcy estate of Brobeck, Phleger & Harrison LLP1. Therefore, the Trustee believes that On-Site is well qualified to represent him as one of his collection agents in this case. 9. To the best of Trustees knowledge, except as is set forth herein and in the

affidavit of George Abodeely (the Abodeely Affidavit), President of On-Site, which is annexed hereto as Exhibit A, On-Site has no known connection with the Debtor, its creditors, or any other party in interest. 10. As detailed in the retainer agreement, dated November 2009 (the On-Site

Agreement), which is annexed hereto as Exhibit B2, the Trustee and On-Site have agreed that On-Site shall be entitled to receive a scaled commission of the gross recovery of any receivables collected. The contemplated commission scale is tied to a number of factors, including the
1

See In re Brobeck, Phleger & Harrison LLP, Debtor, Case No. 03-32715 (Bankr. NDCA 2003) (Montali,

B.J.)
2

Specific commission parameters are detailed in the On-Site Agreement. Simultaneously with the filing of this motion, the Trustee has filed a motion seeking to approve his request that all retainer agreements relating to the proposed collection agencies and attorneys be filed under seal. In the event that motion is denied, the Trustee will make the On-Site Agreement public.

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amount of the receivable and the nature of the receivables at issue. The requested commission structure is customary in the industry for services of the type contemplated herein. 11. Pursuant to Section 328 of the Bankruptcy Code, Trustee requests

authority to pay On-Sites commission upon On-Sites remitting of collected funds and its submission of invoices to, and approval by, the Trustee, without the need for On-Site to file fee applications. The On-Site Agreement requires On-Site to remit all gross collections on Debtors accounts to the Trustee for deposit in the Trustees estate accounts. On-Sites commission will then be paid by the Trustee on account of On-Sites invoices, upon confirmation by Trustee that such invoices comport with the formulas in the On-Site Agreement. All deposits and

commission payments from the estate will be reflected in the Trustees reports to the United States Trustee and to this Court. Therefore, Trustee requests that he be authorized to make these payments without the need for any further fee applications from On-Site. 12. The proposed On-Site Agreement expires on March 31, 2010, and

provides that On-Sites retention term can be extended on a monthly basis upon written consent of the parties and with the authorization of Citibank. b. CCH Retention 13. The Trustee has selected CCH because he believes that CCH has

considerable experience in matters of this character. CCH was retained pre-petition by the Debtors dissolution committee and is therefore fully familiar with the Debtors receivables and the tasks it is expected to perform. Therefore, the Trustee believes that CCH is well qualified to represent him as one of his collection agents in this case. 14. To the best of Trustees knowledge, except as is set forth herein and in the

accompanying affidavit of Dennis Casey (the Casey Affidavit), Vice President of CCH, which

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is annexed hereto as Exhibit C, CCH has no known connection with the Debtor, its creditors, or any other party in interest. 15. As detailed in the retainer agreement, dated November 17, 2009 (the

CCH Agreement), which is annexed hereto as Exhibit D3, the Trustee and CCH have agreed that CCH shall be entitled to receive a scaled commission of the gross recovery of any receivables collected. The contemplated commission scale is tied to a number of factors, including the amount of the receivable and the type of account at issue. The requested

commission structure is customary in the industry for services of the type contemplated herein. 16. Pursuant to Section 328 of the Bankruptcy Code, Trustee requests

authority to pay CCHs commission upon CCHs remitting of collected funds and its submission of invoices to, and approval by, the Trustee, without the need for CCH to file fee applications. The CCH Agreement requires CCH to remit all gross collections on Debtors accounts to the Trustee for deposit in the Trustees estate accounts. CCHs commission will then be paid by the Trustee on account of CCHs invoices, upon confirmation by Trustee that such invoices comport with the formulas in the CCH Agreement. All deposits and commission payments from the estate will be reflected in the Trustees reports to the United States Trustee and to this Court. Therefore, Trustee requests that he be authorized to make these payments without the need for any further fee applications from CCH. 17. The proposed CCH Agreement expires on March 31, 2010, and provides

that CCHs retention term can be extended on a monthly basis upon written consent of the parties and with the authorization of Citibank.

Specific commission parameters are detailed in the CCH Agreement. Simultaneously with the filing of this motion, the Trustee has filed a motion seeking to approve his request that all retainer agreements relating to the proposed collection agencies and attorneys be filed under seal. In the event that motion is denied, the Trustee will make the CCH Agreement public.

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Authority to Settle Accounts Receivable 18. By this application, the Trustee also seek authority, pursuant to

Bankruptcy Rule 9019(b), to compromise and settle the Debtors accounts receivable without further hearing and notice. 19. Bankruptcy Rule 9019(b) provides that: After a hearing on such notice as the court may direct, the court may fix a class of classes of controversies and authorize the trustee to compromise or settle such controversies within such class or classes without further hearing or notice. 20. The requested relief will enable the Trustee to collect the Debtors

remaining receivables in a prompt and efficient manner, thus maximizing the actual dollar amount of such recoveries. If the requested relief is granted, the Trustee will exercise his business judgment in connection with the compromise of any receivables. Trustee will review and approve all receivable compromises, subject to Citibanks approval. Since Citibank has a lien upon all the Debtors receivables, its prior approval is required because the proceeds on these receivables represents Citibanks cash collateral. 21. Citibank has provided the Trustee with a certain pre-approved framework

for discounts to be provided on accounts, and any further discounts will require Citibanks approval. If this case were in chapter 11, such exercise of business judgment on accounts receivable would likely rise to ordinary course of business of this estate, much as it had been in the Debtors ordinary course of business prior to the filing. 22. The Trustee further submits that it would be unmanageable to require

Bankruptcy Rule 9019 approval of the Trustees compromise of all receivables. Trustee has significant experience in the collection of receivables and maximization of estate assets and will

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use such experience when exercising his business judgment relating to the compromise of receivables. 23. For all the foregoing reasons, Trustee seeks approval from the Court to

exercise his business judgment, along the parameters described herein, in the compromise of any receivables until all receivables have been collected or deemed uncollectible. WHEREFORE, the Trustee respectfully requests that that this Court enter an order, substantially in the form annexed hereto as Exhibit E, (i) authorizing him to employ and retain On-Site and CCH as his collection agents to assist with the liquidation of certain of the Debtors receivables, (ii) approving compensation structure for such agents, and (iii) authorizing Trustee, pursuant to Bankruptcy Rule 9019(b), to exercise his business judgment in compromising any receivables, and that he be granted such other and further relief as is just. Dated: New York, New York November 18, 2009 FOX ROTHSCHILD LLP Attorneys for Yann Geron, Chapter 7 Trustee

By: /s/ Yann Geron Yann Geron Nicole N. Santucci 100 Park Avenue, Suite 1500 New York, New York 10017 (212) 878-7900

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------x In re : : THELEN LLP, : : Debtor. : --------------------------------------------------------x

Chapter 7 Case No. 09-15631 (ALG)

AFFIDAVIT OF GEORGE ABODEELY, PRESIDENT OF ON-SITE ASSOCIATES, LLC, PROPOSED COLLECTION AGENT TO TRUSTEE STATE OF CALIFORNIA COUNTY OF ) ) ) ss.:

GEORGE ABODEELY, being duly sworn, deposes and says: 1. I am a the President of On-Site Associates, LLCP (On-Site), with

offices at 300 Montgomery Street, San Francisco, California 94104. This affidavit is being made pursuant to Bankruptcy Rule 2014(a) upon On-Sites retention as collection agent to Yann Geron (the Trustee), as chapter 7 trustee of the estate of Thelen LLP (the Debtor), the abovecaptioned debtor, to assist the Trustee with the collection of certain of the Debtors outstanding accounts receivable. 2. To the best of my knowledge, except as specifically set forth herein,

neither I, nor any of the employees of On-Site who will be working with me on this matter, have any material connection with the Debtor, any creditor, or other party in interest in the instant case, which would affect our services in this case, other than that On-Site was retained by the Debtors dissolution committee pre-petition to assist with the liquidation the Debtors receivables.

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3.

On-Site has no material interest adverse to the estate and I believe On-Site

is a disinterested party as required by section 327(a) of the Bankruptcy Code and as that term is defined by section 101(14) of the Bankruptcy Code. Except as detailed herein, neither OnSite, nor any of its member, shareholders, or employees who will be working on this engagement (a) is a creditor of the Debtor or its estate, or (b) has an interest materially adverse, to the interests of the estate or any class of creditors. 4. On-Site is to be paid pursuant to the terms of the retainer agreement,

annexed to the accompanying application, which is subject to Bankruptcy Court approval and which provides, among other things, that On-Site will be paid upon submission of invoices to, and approval by, the Trustee, without the need to file fee applications.

/s/ George Abodeely George Abodeely Sworn to before me this 17th day of November, 2009 /s/ Jacob Koff Notary Public, State of California

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THELEN LLP, DEBTOR; CASE NO. 09-15631 (ALG) SIMULTANEOUSLY WITH THE FILING OF THE INSTANT MOTION, THE TRUSTEE HAS FILED A MOTION SEEKING TO FILE THE FOLLOWING EXHIBITS UNDER SEAL: EXHIBIT B ON-SITE RETAINER AGREEMENT EXHIBIT D CREDIT CLEARING HOUSE RETAINER AGREEMENT

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UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------x In re : : THELEN LLP, : : Debtor. : --------------------------------------------------------x

Chapter 7 Case No. 09-15631 (ALG)

AFFIDAVIT OF DENNIS CASEY, VICE PRESIDENT OF CREDIT CLEARING HOUSE, PROPOSED COLLECTION AGENT TO TRUSTEE STATE OF NEW YORK COUNTY OF WESTCHESTER ) ) ) ss.:

DENNIS CASEY, being duly sworn, deposes and says: 1. I am a the Vice President of Credit Clearing House (CCH), with offices

located at 925 Westchester Avenue, White Plains, New York 10604. This affidavit is being made pursuant to Bankruptcy Rule 2014(a) upon CCHs retention as collection agent to Yann Geron (the Trustee), as chapter 7 trustee of the estate of Thelen LLP (the Debtor), the abovecaptioned debtor, to assist the Trustee with the collection of certain of the Debtors outstanding accounts receivable. 2. To the best of my knowledge, except as specifically set forth herein,

neither I, nor any of the employees of CCH who will be working with me on this matter, have any material connection with the Debtor, any creditor, or other party in interest in the instant case, which would affect our services in this case, other than that CCH was retained by the Debtors dissolution committee pre-petition to assist with the liquidation the Debtors receivables.

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3.

CCH has no material interest adverse to the estate and I believe CCH is a

disinterested party as required by section 327(a) of the Bankruptcy Code and as that term is defined by section 101(14) of the Bankruptcy Code. Except as detailed herein, neither CCH, nor any of its member, shareholders, or employees who will be working on this engagement (a) is a creditor of the Debtor or its estate, or (b) has an interest materially adverse, to the interests of the estate or any class of creditors. 4. CCH is to be paid pursuant to the terms of the retainer agreement,

annexed to the accompanying application, which is subject to Bankruptcy Court approval and which provides, among other things, that CCH will be paid upon submission of invoices to, and approval by, the Trustee, without the need to file fee applications.

/s/ Dennis Casey Dennis Casey Sworn to before me this 16th day of November, 2009 /s/ Daniel Hammond Notary Public, State of New York

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THELEN LLP, DEBTOR; CASE NO. 09-15631 (ALG) SIMULTANEOUSLY WITH THE FILING OF THE INSTANT MOTION, THE TRUSTEE HAS FILED A MOTION SEEKING TO FILE THE FOLLOWING EXHIBITS UNDER SEAL: EXHIBIT B ON-SITE RETAINER AGREEMENT EXHIBIT D CREDIT CLEARING HOUSE RETAINER AGREEMENT

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Exhibit E UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------x In re : : THELEN LLP, : : Debtor. : ------------------------------------------------------x

Chapter 7 Case No. 09-15631 (ALG)

ORDER (i) AUTHORIZING TRUSTEE TO RETAIN ON-SITE ASSOCIATES, LLC AND CREDIT CLEARING HOUSE AS HIS COLLECTION AGENTS TO ASSIST WITH THE LIQUIDATION OF CERTAIN OF THE DEBTORS ACCOUNTS RECEIVABLE, (ii) APPROVING COMPENSATION STRUCTURE FOR SUCH AGENTS, AND (iii) AUTHORIZING TRUSTEE, PURSUANT TO BANKRUPTCY RULE 9019(b), TO EXERCISE HIS BUSINESS JUDGMENT IN COMPROMISING ANY RECEIVABLES Upon the application dated November 18, 2009 (the Application), of Yann Geron (the Trustee), chapter 7 trustee of the estate of Thelen LLP (the Debtor), the abovecaptioned debtor, for an order (i) authorizing Trustee to retain On-Site Associates, LLC (OnSite) and Credit Clearing House (CCH) as his collection agents to assist with the liquidation of certain of the Debtors accounts receivable, (ii) approving compensation structure for such agents, and (iii) authorizing Trustee, pursuant to Bankruptcy Rule 9019(b), to exercise his business judgment in compromising any receivables; and upon the affidavits of George Abodeely, President of On-Site (the Abodeely Affidavit), and Dennis Casey, Vice President of CCH (the Casey Affidavit), in support thereof; and it appearing that On-Site and CCH represent no interest adverse to the Trustee, the Debtor, its estate or creditors with respect to the matters for which they are to be engaged, that On-Site and CCH are disinterested persons as that term is defined in 11 U.S.C. 101(14), and that their employment is necessary and in the best

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interests of the estate; and it appearing that good and sufficient notice of the Application has been given; and due consideration having been given to any responses thereto; and a hearing on the Application having been held before this Court on December 15, 2009 (the Hearing); and upon record of the Hearing, which is incorporated herein by reference; and for good and sufficient cause; it is hereby ORDERED, that the Trustee be and he hereby is authorized to retain On-Site as his collection agent herein on the terms and conditions set forth in the Application and the Abodeely Affidavit; and it is further ORDERED, that the Trustee may compensate On-Site in accordance with 11 U.S.C. 328(a) and the terms set forth in Application and the Abodeely Affidavit directly from the estate, and that On-Site shall not be required to file interim or final fee applications; and it is further ORDERED, that the Trustee be and he hereby is authorized to retain CCH as his collection agent herein on the terms and conditions set forth in the Application and the Casey Affidavit; and it is further ORDERED, that the Trustee may compensate CCH in accordance with 11 U.S.C. 328(a) and the terms set forth in Application and the Casey Affidavit directly from the estate, and that On-Site shall not be required to file interim or final fee applications; and it is further ORDERED, that the Trustee is hereby authorized, pursuant to Bankruptcy Rule 9019(b), to compromise or settle of any of the Debtors accounts receivable along the lines detailed in the Application without the need for further hearing or notice; is further

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ORDERED, that this court shall retain jurisdiction to hear and determine all matters arising from the implementation of this Order. Dated: New York, New York December ___, 2009 HONORABLE ALLAN L. GROPPER UNITED STATES BANKRUPTCY JUDGE

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