Source: https://www.scribd.com/document/113464486/10000018743
Timestamp: 2019-02-18 10:08:22
Document Index: 364210844

Matched Legal Cases: ['§ 101', '§ 157', '§ 157', '§ 1408', '§ 327', '§ 327', '§ 327', '§ 330', '§ 157', '§ 157']

10000018743 | Indemnity | Chapter 11
10000018743
Objection Deadline: November 23, 2011 at 4:00 p.m. (ET) Hearing Date: December 28, 2011 at 4:00 p.m. (ET)
DEBTORS’ APPLICATION PURSUANT TO SECTIONS 327, 328, AND 330 OF THE BANKRUPTCY CODE, BANKRUPTCY RULES 2014 AND 2016, AND LOCAL RULES 2014-1 AND 2016-1 FOR AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF DELOITTE & TOUCHE LLP TO PROVIDE AUDIT SERVICES NUNC PRO TUNC TO OCTOBER 10, 2011 Perkins & Marie Callender’s Inc. (f/k/a The Restaurant Company) (“PMCI”) and its above-captioned affiliated debtor entities (collectively, with PMCI, the “Debtors”), by and through their undersigned counsel, respectfully submit this application (the “Application”) for entry of an order, pursuant to sections 327(a), 328(a) and 330 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”), Rules 2014(a) and 2016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules 2014-1 and 2016-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local Rules”), authorizing the retention and employment of Deloitte & Touche LLP (“Deloitte & Touche”) to provide audit services, nunc pro tunc to October 10, 2011, pursuant to the terms and conditions set forth in the engagement letters, dated October 12, 2011, attached to this Application as Exhibit B (each, an “Engagement Letter,” and together, the
01: 11585100.2
“Engagement Letters”).2 In support of this Application, the Debtors rely on and incorporate by reference herein the Declaration of Thomas Corona, a Partner with Deloitte & Touche (the “Corona Declaration”), which is attached hereto as Exhibit A. Application, the Debtors respectfully state as follows: Jurisdiction and Venue 1. This Court has jurisdiction to consider this Application under 28 U.S.C. §§ 157 In further support of this
and 1334. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). 2. Venue of the above-captioned chapter 11 cases and this Application are proper in
this District pursuant to 28 U.S.C. §§ 1408 and 1409. 3. The statutory predicates for the relief requested herein are sections 327(a), 328(a)
and 330 of the Bankruptcy Code, Bankruptcy Rules 2014(a) and 2016, and Local Rules 2014-1 and 2016-1. General Background 4. On June 13, 2011 (the “Petition Date”), each of the Debtors filed a voluntary
petition for relief under chapter 11 of the Bankruptcy Code, and each thereby commenced chapter 11 cases (collectively, the “Chapter 11 Cases”) in this Bankruptcy Court (the “Court”). No request has been made for the appointment of a trustee or examiner, and the Debtors continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On June 24, 2011, the Office of the United States Trustee for the District of Delaware (the “U.S. Trustee”) appointed an Official Committee of Unsecured Creditors (the “Committee”) in the Chapter 11 Cases.
Any descriptions contained in this Application of the Engagement Letters are only a summary and provided for ease of reference and the Court’s convenience. To the extent that any such description and the actual terms and conditions of the Engagement Letters are inconsistent, the latter shall control.
01: 11585100.2 070242.1001
On September 9, 2011, the Debtors filed the Debtors’ Second Amended
Disclosure Statement for Debtors’ Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code [Docket No. 923] (including all exhibits thereto and as may be amended, modified or supplemented from time to time, the “Disclosure Statement”). That same day, the Court entered an order [Docket No. 935] approving the Disclosure Statement as containing “adequate information” within the meaning of section 1125 of the Bankruptcy Code. 6. On November 1, 2011, the Court entered an order [Docket No. 1287] confirming
the Debtors’ Second Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code [Docket No. 922] (including all exhibits thereto and as may be amended, modified or supplemented from time to time, and as supplemented by the Plan Supplement,3 the “Plan”) pursuant to section 1129 of the Bankruptcy Code and Bankruptcy Rule 3020. 7. 8. The Effective Date (as defined in the Plan) of the Plan has not yet occurred. Additional information about the Debtors’ businesses, the events leading up to the
Petition Date, and the facts and circumstances surrounding the Debtors and the Chapter 11 Cases can be found in the Declaration of Joseph F. Trungale in Support of Debtors’ Chapter 11 Petitions and First Day Motions [Docket No. 19] filed on the Petition Date and incorporated by reference herein. Relevant Background 9. On July 15, 2011, the Debtors filed the Debtors’ Application Pursuant to 11
U.S.C. §§ 327, 328 and 330, Fed. R. Bankr. P. 2014 and 2016, and Del. Bankr. L.R. 2014-1 and 2016-1 for an Order Authorizing the Retention and Employment of Deloitte Tax LLP as their Tax Services Provider Nunc Pro Tunc to June 15, 2011 [Docket No. 266] (the “Initial Deloitte Tax Application”).
As defined in the Plan (as hereinafter defined).
On July 29, 2011, this Court entered an order [Docket No. 471] approving the
Initial Application (the “Initial Deloitte Tax Retention Order”). Specifically, the Initial Deloitte Tax Retention Order approved the retention of Deloitte Tax LLP (“Deloitte Tax”) to provide the Debtors with, among other services, income tax advisory services related to debt discharge and other tax issues arising in connection with the Debtors restructuring in these Chapter 11 Cases pursuant to the terms and conditions set forth in that certain engagement letter dated as of June 27, 2011 (the “Initial Deloitte Tax Engagement Letter”). 11. On August 17, 2011, the Debtors filed the Debtors’ Supplemental Application
Pursuant to Sections 327, 328, and 330 of the Bankruptcy Code, Bankruptcy Rules 2014 and 2016, and Local Rules 2014-1 and 2016-1 for an Order Expanding the Scope of the Retention and Employment of Deloitte Tax LLP as the Debtors’ Tax Services Provider to Include Further Tax Services, Nunc Pro Tunc July 18, 2011 [Docket No. 755] (the “Supplemental Deloitte Tax Application”). Pursuant thereto, the Debtors sought to expand the scope of the employment and retention of Deloitte Tax, nunc pro tunc to July 18, 2011, to include the review and execution of certain 2010 federal income tax returns for the Debtors (the “Additional Deloitte Tax Services”), upon the full terms and conditions contained in that certain addendum letter dated August 1, 2011 (the “Deloitte Tax Addendum Letter”). The Deloitte Tax Addendum Letter set forth the provisions relating to the Additional Deloitte Tax Services to be provided by Deloitte Tax pursuant to the terms and conditions of the Initial Deloitte Tax Engagement Letter. Except for certain revisions to the Initial Deloitte Tax Engagement Letter provided for in the Deloitte Tax Addendum Letter, all terms and conditions of the Initial Deloitte Tax Engagement Letter continued in full force and effect.4
The foregoing descriptions of the Initial Deloitte Tax Retention Order, the Supplemental Deloitte Tax Application, the Additional Deloitte Tax Services, and the Deloitte Tax Addendum Letter are only a summary and provided for
On September 14, 2011, the Court entered an order [Docket No. 961] approving
the Supplemental Deloitte Tax Application. 13. Deloitte Tax. Relief Requested 14. By this Application, the Debtors seek entry of an order, substantially in the form As set forth in the Corona Declaration, Deloitte & Touche is an affiliate of
attached hereto as Exhibit C, pursuant to sections 327(a), 328(a) and 330 of the Bankruptcy Code, Bankruptcy Rules 2014(a) and 2016, and Local Rules 2014-1 and 2016-1, authorizing the retention and employment of Deloitte & Touche to provide audit services, nunc pro tunc to October 10, 2011, pursuant to the terms and conditions set forth in the Engagement Letters. Basis for Relief Requested 15. Section 327 (a) of the Bankruptcy Code provides, in relevant part, as follows: Except as otherwise provided in this section, the trustee, with the court’s approval, may employ one or more attorneys, accountants, appraisers, auctioneers, or other professional persons, that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee’s duties under this title. 11 U.S.C. § 327(a). 16. Section 328 (a) of the Bankruptcy Code provides, in relevant part, as follows: The trustee . . . with the court’s approval, may employ or authorize the employment of a professional person under section 327 . . . of this title . . . on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, or on a contingent fee basis. Notwithstanding such terms and conditions, the court may allow compensation different from the compensation provide under such terms and conditions after the conclusion of such employment, if such terms and conditions prove to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions.
ease of reference and the Court’s convenience. To the extent that such descriptions and the actual terms and conditions of such documents are inconsistent, the latter shall control.
Id. at 328(a). 17. Bankruptcy Rule 2014 provides, in relevant part, as follows: An order approving the employment of attorneys, accountants, appraisers, auctioneers, agents, or other professionals pursuant to § 327 . . . of the Code shall be made only on application of the trustee or committee. Fed. R. Bankr. P. 2014. 18. Deloitte & Touche is a well-known and experienced accounting firm. Deloitte &
Touche has been providing audit services to the Debtors for five years, and thus is familiar with the Debtors’ business. Now, the Debtors required experienced audit professionals of the caliber of Deloitte & Touche to provide the audit services set forth in the Engagement Letters. The Debtors believe that Deloitte & Touche is well qualified and able to advise and assist the Debtors in a cost-effective, efficient, and timely manner with respect to such services. Scope of Services 19. The Engagement Letters set forth the scope of the services to be provided to the
Debtors by Deloitte & Touche. The services to be provided (collectively, the “Services”) are expected to include the following, as agreed to by the Debtors and Deloitte & Touche: A. consistent with the terms and conditions of the applicable Engagement Letter, perform an audit of Debtor Perkins & Marie Callender’s Inc.’s (the “Company”) financial statements for the year ended December 26, 2010; and B. consistent with the terms and condition of the applicable Engagement Letter, perform an audit to express an opinion on the fairness of the presentation of the Company’s balance sheet as of December 25, 2011 (Successor Company Balance Sheet), and the related consolidated statements of operations, stockholders’ equity and cash flows for the ten months ending October 30, 2011 (Predecessor Operations) and the two months ending December 25, 2011 (Successor Operations). Terms of Retention 20. Subject to the Court’s approval, Deloitte & Touche has agreed to provide services
for compensation at the amounts agreed upon between the parties pursuant to the Engagement Letters. As more fully described in the Engagement Letters, in consideration of the Services to be provided by Deloitte & Touche, the Debtors have agreed to pay Deloitte & Touche based upon the time spent by Deloitte & Touche’s professionals at the hourly rates provided for in the Engagement Letters for those professionals, subject to periodic adjustment of those rates. The agreed-upon-hourly billing rates are as follows: Title Partner, Principal or Director Senior Manager Manager Senior Staff 21. Rate $335 $280 $260 $210 $140
The Debtors will also reimburse Deloitte & Touche for all reasonable and
documented out-of-pocket expenses, including, without limitation, reasonable legal fees and expenses that may be incurred in considering or responding to discovery requests or other requests for documents or information, or in participating as a witness or otherwise in any legal, regulatory or other proceeding, including but not limited to those relating to the Engagement Letters. 22. Pursuant to sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules,
the Local Rules, and the United States Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under § 330 (the “U.S. Trustee Guidelines”), Deloitte & Touche will apply to the Court for the interim and final allowance of compensation and reimbursement of expenses in accordance with any order of this Court approving procedures for interim compensation and reimbursement of expenses, and shall file a final fee application as required by the Local Rules and any order of this Court.
The Engagement Letters are hereby modified to allow reasonable accommodation
for Court procedures to approve payment of invoices. Indemnification Provisions 24. Appendix B of each of the Engagement Letters, under the heading
“Representation Letters,” provides for an indemnity of Deloitte & Touche, its subcontractors and their respective personnel by the Debtors (together, the “Indemnification Provision”). Notwithstanding the Indemnification Provision, such indemnity shall be modified to the extent set forth below (the “Modified Indemnification Provision”): A. Deloitte & Touche shall not be entitled to indemnification, contribution or reimbursement pursuant to the Engagement Letters for services other than those described in the Engagement Letters, unless such services and indemnification therefore are approved by the Court; B. The Debtors shall have no obligation to indemnify Deloitte & Touche, or provide contribution or reimbursement to Deloitte & Touche, for any claim or expense that is either: (i) judicially determined (the determination having become final) to have arisen from the gross negligence or willful misconduct of Deloitte & Touche; (ii) for a contractual dispute in which the Debtors allege the breach of contractual obligations of Deloitte & Touche unless the Court determines that indemnification, contribution or reimbursement would be permissible pursuant to In re United Artists Theatre Co., 315 F.3d 217 (3d Cir. 2003); or (iii) settled prior to a judicial determination as to the exclusions set forth in clauses (i) and (ii) above, but determined by the Court, after notice and a hearing to be a claim or expense for which Deloitte & Touche should not receive indemnity, contribution or reimbursement under the terms of the Engagement Letters as modified by the order of this Court approving this Application; and C. If, before the earlier of (i) the entry of an order confirming a chapter 11 plan in these cases (that order having become a final order no longer subject to appeal), and (ii) the entry of an order closing these Chapter 11 Cases, Deloitte & Touche believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors’ indemnification, contribution and/or reimbursement obligations under the Engagement Letters (as modified by the order of this Court approving this Application), including without limitation the advancement of defense costs, Deloitte & Touche must file an application therefor in this Court, and the Debtors may not pay any such amounts to Deloitte & Touche 8
before the entry of an order by this Court approving the payment. This subparagraph (c) is intended only to specify the period of time under which the Court shall have jurisdiction over any request for fees and expenses by Deloitte & Touche for indemnification, contribution or reimbursement, and not a provision limiting the duration of the Debtors’ obligation to indemnify Deloitte & Touche. All parties in interest shall retain the right to object to any demand by Deloitte & Touche for indemnification, contribution or reimbursement. 25. The Debtors believe that the Modified Indemnification Provision is customary
and reasonable for auditors, both out-of-court and in chapter 11 proceedings. See e.g., In re United Artists Theatre Co., 315 F.3d 217 (3d Cir. 2003) (authorizing the indemnification of Houlihan Lokey by the debtors); In re Joan & David Halpern, Inc., 248 B.R. 43 (Bankr. S.D.N.Y. 2000). The Modified Indemnification Provision is also similar to other
indemnification provisions that have been routinely approved by bankruptcy courts in the District, including this Court in the Initial Deloitte Tax Retention Order. Deloitte & Touche’s Disinterestedness 26. Deloitte & Touche provided prepetition services to the Debtors. Deloitte &
Touche received $430,000 from the Debtors in the ninety (90) days prior to the Petition Date. As of the Petition Date, Deloitte & Touche was not owed any amounts with respect to invoices issued by Deloitte & Touche prior to the Petition Date. 27. As set forth in the Initial Deloitte Tax Application and the Corona Declaration,
Deloitte Tax, an affiliate of Deloitte & Touche, provided prepetition services to the Debtors. Deloitte Tax received $40,000 from the Debtors in the ninety (90) days prior to the Petition Date. As of the Petition Date, Deloitte Tax was owed approximately $125,000 with respect to invoices issued by Deloitte Tax prior to the Petition Date. Deloitte Tax has previously agreed not to seek or take any recovery with respect to such amount. 28. Also, as further set forth in the Initial Deloitte Tax Application and the Corona
Declaration, in the past Deloitte Consulting LLP, an affiliate of Deloitte Tax and Deloitte & Touche, incorrectly issued an invoice to the Debtors in the amount of approximately $250,000. This invoice has been cancelled. 29. If any new facts or relationships are discovered, the Debtors have been advised by
Deloitte & Touche that Deloitte & Touche will supplement their disclosures to the Court. Notice 30. The Debtors will serve notice of this Application upon: (i) the U.S. Trustee; (ii)
counsel to the Committee; (iii) counsel to the agent for the Debtors’ pre-petition Credit Facility and post-petition debtor-in-possession financing facility; (iv) counsel to the indenture trustee for the Senior Secured Notes; (v) counsel to the indenture trustee for the Senior Notes; (vi) counsel to the Restructuring Support Parties; and (vii) all parties that, as of the filing of this Application, have requested notice in these Chapter 11 Cases pursuant to Bankruptcy Rule 2002. In light of the nature of the relief requested, the Debtors submit that no other or further notice is necessary. Remainder of page intentionally left blank
Conclusion WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form attached hereto as Exhibit C, authorizing the retention and employment of Deloitte & Touche to provide audit services, nunc pro tunc to October 10, 2011, pursuant to the terms and conditions set forth in the Engagement Letters, and granting the Debtors such other and further relief as the Court may deem just and proper. Dated: November 9, 2011 Wilmington, DE YOUNG CONAWAY STARGATT & TAYLOR, LLP By: /s/ Robert F. Poppiti, Jr. Robert S. Brady (No. 2847) Robert F. Poppiti, Jr. (No. 5052) The Brandywine Building, 1000 West Street, 17th Floor Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 - AND TROUTMAN SANDERS LLP Mitchel H. Perkiel Hollace T. Cohen Brett D. Goodman The Chrysler Building, 405 Lexington Avenue New York, NY 10174 Telephone: (212) 704-6000 Facsimile: (212) 704-6288 COUNSEL FOR PERKINS & MARIE CALLENDER’S INC., ET AL., Debtors and Debtors-in-Possession
EXHIBIT A Corona Declaration
EXHIBIT B Engagement Letters
NOTICE OF DEBTORS’ APPLICATION PURSUANT TO SECTIONS 327, 328, AND 330 OF THE BANKRUPTCY CODE, BANKRUPTCY RULES 2014(a) AND 2016, AND LOCAL RULES 2014-1 AND 2016-1 FOR AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF DELOITTE & TOUCHE LLP TO PROVIDE AUDIT SERVICES NUNC PRO TUNC TO OCTOBER 10, 2011 TO: (I) THE U.S. TRUSTEE; (II) COUNSEL TO THE COMMITTEE; (III) COUNSEL TO THE AGENT FOR THE DEBTORS’ PRE-PETITION CREDIT FACILITY AND POST-PETITION DEBTOR-IN-POSSESSION FINANCING FACILITY; (IV) COUNSEL TO THE INDENTURE TRUSTEE FOR THE SENIOR SECURED NOTES; (V) COUNSEL TO THE INDENTURE TRUSTEE FOR THE SENIOR NOTES; (VI) COUNSEL TO THE RESTRUCTURING SUPPORT PARTIES; AND (VII) ALL PARTIES THAT, AS OF THE FILING OF THE APPLICATION, HAVE REQUESTED NOTICE IN THESE CHAPTER 11 CASES PURSUANT TO BANKRUPTCY RULE 2002.
PLEASE TAKE NOTICE that the debtors and debtors in possession in the above-captioned cases (collectively, the “Debtors”) have filed the attached Debtors’ Application Pursuant to Sections 327, 328, and 330 of the Bankruptcy Code, Bankruptcy Rules 2014(a) and 2016, and Local Rules 2014-1 and 2016-1 for an Order Authorizing the Retention and Employment of Deloitte & Touche LLP to Provide Audit Services Nunc Pro Tunc to October 10, 2011 (the “Application”). PLEASE TAKE FURTHER NOTICE that any objections to the relief requested in the Application must be filed on or before November 23, 2011 at 4:00 p.m. (ET) (the “Objection Deadline”) with the United States Bankruptcy Court for the District of Delaware, 824 N. Market Street, 3rd Floor, Wilmington, Delaware 19801. At the same time, you must serve
a copy of your objection upon the undersigned counsel to the Debtors so as to be received on or before the Objection Deadline. PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER THE APPLICATION WILL BE HELD ON DECEMBER 28, 2011 AT 4:00 P.M. (ET) BEFORE THE HONORABLE KEVIN GROSS IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE, 824 N. MARKET STREET, 6TH FLOOR, COURTROOM #3, WILMINGTON, DELAWARE 19801. PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND TO THE APPLICATION IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED THEREIN WITHOUT FURTHER NOTICE OR A HEARING. Dated: November 9, 2011 Wilmington, DE YOUNG CONAWAY STARGATT & TAYLOR, LLP By: /s/ Robert F. Poppiti, Jr. Robert S. Brady (No. 2847) Robert F. Poppiti, Jr. (No. 5052) The Brandywine Building, 1000 West Street, 17th Floor Wilmington, DE 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 - AND TROUTMAN SANDERS LLP Mitchel H. Perkiel Hollace T. Cohen Brett D. Goodman The Chrysler Building, 405 Lexington Avenue New York, NY 10174 Telephone: (212) 704-6000 Facsimile: (212) 704-6288 COUNSEL FOR PERKINS & MARIE CALLENDER’S INC., ET AL., Debtors and Debtors-in-Possession
Ref. Docket No. _____
ORDER PURSUANT TO SECTIONS 327, 328, AND 330 OF THE BANKRUPTCY CODE, BANKRUPTCY RULES 2014(a) AND 2016, AND LOCAL RULES 2014-1 AND 2016-1 AUTHORIZING THE RETENTION AND EMPLOYMENT OF DELOITTE & TOUCHE LLP TO PROVIDE AUDIT SERVICES NUNC PRO TUNC TO OCTOBER 10, 2011 Upon consideration of the Debtors’ Application Pursuant to Sections 327, 328, and 330 of the Bankruptcy Code, Bankruptcy Rules 2014(a) and 2016, and Local Rules 2014-1 and 20161 for an Order Authorizing the Retention and Employment of Deloitte & Touche LLP to Provide Audit Services Nunc Pro Tunc to October 10, 2011 (the “Application”)2 and the Corona Declaration submitted in support of the Application, the Court finds that: (i) it has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334; (ii) this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2); (iii) the relief requested in the Application is in the best interests of the Debtors, their estates and creditors; (iv) notice of the Application and the hearing thereon was sufficient under the circumstances; and (v) after due deliberation, good and sufficient cause exists for the relief requested in the Application. Accordingly, it is hereby
The Debtors, together with the last four digits of each Debtor’s federal tax identification number, are: Perkins & Marie Callender’s Inc. (4388); Perkins & Marie Callender’s Holding Inc. (3999); Perkins & Marie Callender’s Realty LLC (N/A); Perkins Finance Corp. (0081); Wilshire Restaurant Group LLC (0938); PMCI Promotions LLC (7308); Marie Callender Pie Shops, Inc. (7414); Marie Callender Wholesalers, Inc. (1978); MACAL Investors, Inc. (4225); MCID, Inc. (2015); Wilshire Beverage, Inc. (5887); and FIV Corp. (3448). The mailing address for the Debtors is 6075 Poplar Avenue, Suite 800, Memphis, TN 38119. Capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Application.
ORDERED, ADJUDGED AND DECREED that: 1. 2. The Application is granted. Pursuant to sections 327, 328, and 330 of the Bankruptcy Code, Bankruptcy Rules
2014(a) and 2016, and Local Rules 2014-1 and 2016-1, the Debtors are authorized to retain and employ and to compensate Deloitte & Touche, nunc pro tunc to October 10, 2011, to provide audit services pursuant to the terms and conditions set forth in the Engagement Letters as modified in this Order. 3. Deloitte & Touche shall be compensated pursuant to section 330 of the
Bankruptcy Code and shall file fee applications for interim and final allowance of compensation and reimbursement for reasonable and necessary expenses incurred in connection with the services performed for the Debtors in these Chapter 11 Cases in accordance with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the U.S. Trustee Guidelines, and any applicable Orders of this Court 4. Notwithstanding any terms of the Engagement Letters to the contrary, the
Indemnification Provision is modified to the extent set forth below: A. Deloitte & Touche shall not be entitled to indemnification, contribution or reimbursement pursuant to the Engagement Letters for services other than those described in the Engagement Letters, unless such services and indemnification therefore are approved by the Court; The Debtors shall have no obligation to indemnify Deloitte & Touche, or provide contribution or reimbursement to Deloitte & Touche, for any claim or expense that is either: (i) judicially determined (the determination having become final) to have arisen from the gross negligence or willful misconduct of Deloitte & Touche; (ii) for a contractual dispute in which the Debtors allege the breach of contractual obligations of Deloitte & Touche unless the Court determines that indemnification, contribution or reimbursement would be permissible pursuant to In re United Artists Theatre Co., 315 F.3d 217 (3d Cir. 2003); or (iii) settled prior to a judicial determination as to the exclusions set forth in 2
clauses (i) and (ii) above, but determined by the Court, after notice and a hearing to be a claim or expense for which Deloitte & Touche should not receive indemnity, contribution or reimbursement under the terms of the Engagement Letters as modified by this Order; and C. If, before the earlier of (i) the entry of an order confirming a chapter 11 plan in these cases (that order having become a final order no longer subject to appeal), and (ii) the entry of an order closing these Chapter 11 Cases, Deloitte & Touche believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors’ indemnification, contribution and/or reimbursement obligations under the Engagement Letters (as modified by this Order), including without limitation the advancement of defense costs, Deloitte & Touche must file an application therefor in this Court, and the Debtors may not pay any such amounts to Deloitte & Touche before the entry of an order by this Court approving the payment. This subparagraph (c) is intended only to specify the period of time under which the Court shall have jurisdiction over any request for fees and expenses by Deloitte & Touche for indemnification, contribution or reimbursement, and not a provision limiting the duration of the Debtors’ obligation to indemnify Deloitte & Touche. All parties in interest shall retain the right to object to any demand by Deloitte & Touche for indemnification, contribution or reimbursement.
This Court has and shall retain jurisdiction over any and all controversies arising
from or related to the Application, this Order, or the Debtors’ retention of Deloitte & Touche in these Chapter 11 Cases and, prior to the effective date of any chapter 11 plan confirmed in these Chapter 11 Cases (including, without limitation, the Plan), the Engagement Letters. Date: ______________, 2011 KEVIN GROSS CHIEF UNITED STATES BANKRUPTCY JUDGE
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