Wed 08/08/2018 11:29 AM
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Agenda

At today’s hearing in the Nine West chapter 11 cases, Judge Shelley Chapman granted the debtors’ motion to extend their plan filing and solicitation exclusivity periods by approximately 41 days to Sept. 14 and Nov. 13, respectively. The judge also granted the motion filed by Cross-Sound Management, Paloma Partners Management Co., Taconic Capital Advisors and Tennenbaum Capital Partners for payment of professional fees relating to their provision of an alternative DIP financing proposal.

At the outset of the hearing, Joe Graham of Kirkland & Ellis for the debtors provided a brief update on timing, noting that the debtors likely will seek another exclusivity extension at the Sept. 14 hearing. Judge Chapman asked if the disclosure statement hearing scheduled for Sept. 14 would still be going forward, and Graham stated that that is currently still the case. He also explained that the debtors would need to file an amended plan and disclosure statement by Aug. 22 for the amended version to be properly noticed for the Sept. 14 hearing. He clarified that as of now, the debtors would be noticing the Sept. 14 DS hearing for the DS that is currently on file.

Daniel Golden of Akin Gump for the unsecured creditors committee agreed with Graham on timing, noting that he would be “surprised” if the debtors filed a plan by next week, considering the current status of negotiations. He said that the UCC has been conducting its investigation into potential causes of action, including relating to the 2014 Sycamore-led LBO transaction, and that there are many creditor groups involved. According to Golden, the parties have done a significant amount of due diligence and will be negotiating over the next several weeks. He also said that the UCC’s goal is to reach a completely consensual plan. Judge Chapman remarked, “It would be unfortunate if the unexpectedly excellent results of the auction were allocated to [professional] fees.”

The judge then turned to the motion for professional fees filed by Cross-Sound, Paloma Partners, Taconic and Tennenbaum. In their motion for payment of professional fees for a substantial contribution to the case, the four funds asserted that they are managers or advisers for certain holders of 8.25% senior unsecured notes due 2019. According to the motion, the funds provided the alternative DIP financing proposal that was used as negotiating leverage by the debtors and UCC to improve the terms of the DIP provided by the initial DIP lenders. The motion argued that the funds’ provision of the alternative DIP proposal qualifies as a substantial contribution to the case because it allowed the debtors to obtain better terms on their ultimate DIP financing.

Andrew Goldman of WilmerHale for the noteholder group explained that after the DIP negotiations were completed, Cross-Sound left the group of 8.25% senior noteholders and Centerbridge joined the group. He also said that the total amount of fees for which the group would seek reimbursement is approximately $383,852, reflecting a minor negotiated reduction of fees.

No party objected to payment of the fees, and Judge Chapman granted the motion.
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