Upload
others
View
2
Download
0
Embed Size (px)
Citation preview
4829-8723-8855.3
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
www.flmb.uscourts.gov
In re:
STEIN MART, INC.1
STEIN MART BUYING CORP.
STEIN MART HOLDING CORP.,
Debtors.
Chapter 11
Case No. 3:20-bk-2387
Case No. 3:20-bk-2388
Case No. 3:20-bk-2389
Joint Administration Requested
APPLICATION OF DEBTORS TO EMPLOY AND RETAIN
FISHER, TOUSEY, LEAS & BALL ATTORNEYS AT LAW
AS DEBTORS’ CONFLICTS COUNSEL
Stein Mart, Inc. (“SM”), Stein Mart Buying Corp. (“SMB”) and Stein Mart Holding
Corp. (“SMHC” and together with SM and SMB, the “Debtors” or the “Company”), as Debtors
and Debtors-in-Possession, hereby submit this application (the “Application”) seeking entry of
an order authorizing the Debtors’ retention of Fisher, Tousey, Leas & Ball Attorneys at Law
(“FTLB”) as their conflicts counsel in these chapter 11 cases (collectively, the “Chapter 11
Case”) to provide advice to the Debtors during the Chapter 11 Case, on specific request of the
Debtors from time to time, regarding matters where Foley & Lardner LLP may have a conflict of
interest. In support of this Application, the Debtors rely on the Declaration of W. Hamilton
Traylor Pursuant to Sections 327(a) and 331 of the Bankruptcy Code and Rule 2014 of the
Bankruptcy Rules in Support of Debtors’ Application to Employ and Retain Fisher, Tousey, Leas
1 The tax identification numbers of the Debtors are as follows: Stein Mart, Inc. 6198; Stein Mart Buying
Corp. 1114; and Stein Mart Holding Corp. 0492. The address of the Debtors’ principal offices: 1200 Riverplace
Blvd., Jacksonville, FL 32207. The Debtors’ claims agent maintains a website, https://cases.stretto.com/SteinMart,
which provides copies of the Debtors’ first day pleadings and other information related to the case.
Case 3:20-bk-02387-JAF Doc 41 Filed 08/12/20 Page 1 of 8
2 4829-8723-8855.3
& Ball Attorneys at Law as Debtors’ Conflicts Counsel (the “Traylor Declaration” or
“Declaration”), attached as Exhibit A. In further support of this Application, the Debtors
respectfully state as follows:
III. JURISDICTION AND VENUE
30. This Court has jurisdiction to consider this matter pursuant to 28 U.S.C. §§
157(a)-(b) and 1334(b). This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is
proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
31. The bases for the relief requested herein are sections 327(a), 330, and 331 of title
11 of the United States Code, 11 U.S.C. §§ et seq. (the “Bankruptcy Code”) and Rule 2014 of
the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”).
IV. BACKGROUND
32. On August 12, 2020 (the “Petition Date”), Debtors filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code, creating bankruptcy estates for each Debtor
(collectively, the “Estate”). Debtors are currently operating as debtors-in-possession pursuant to
Sections 1107 and 1108 of the Bankruptcy Code.
33. On the Petition Date, the Debtors filed a motion requesting joint administration of
this Chapter 11 Case pursuant to Bankruptcy Rule 1015(b).
34. Information regarding the Debtors’ business, capital structure, and the
circumstances leading to the commencement of these chapter 11 cases is set forth in the Debtors’
Chapter 11 Case Management Summary (the “Case Management Summary”), which was filed
with the Court on the Petition Date.
35. No trustee or examiner has been appointed in this chapter 11 case (the “Chapter
11 Case”) pursuant to Section 1104 of the Bankruptcy Code. No official committee of unsecured
creditors has been appointed in this Chapter 11 Case.
Case 3:20-bk-02387-JAF Doc 41 Filed 08/12/20 Page 2 of 8
3 4829-8723-8855.3
V. RELIEF REQUESTED
36. To ensure appropriate compliance with their duties and obligations as debtors-in-
possession, the Debtors seek to employ FTLB to serve as conflicts counsel in this Chapter 11
Case and request approval of that employment pursuant to Section 327(a) of the Bankruptcy
Code and Bankruptcy Rules 2014 and 2016. The Debtors have been informed that W. Hamilton
Traylor, the FTLB attorney who will be primarily working on the Chapter 11 Case, is a member
in good standing with the state of Florida.
37. By this Application, the Debtors seek entry of an order authorizing the
employment and retention of FTLB, effective as of the Petition Date, in accordance with the
provisions of this Application and the Traylor Declaration, as counsel to perform certain
necessary legal services during this case, as is more fully described in the Application and the
Traylor Declaration.
38. The Debtors believe that FTLB has considerable experience in matters of this
character and is a firm well-qualified to represent them in connection with this Chapter 11 Case,
due to the firm’s expertise in the field of bankruptcy and debtor-creditor rights.
D. Services to be Rendered
39. The professional services that FTLB will render to the Debtors in this Chapter 11
Case include, in accordance with FTLB’s engagement letter with the Debtors, certain matters
where proposed lead counsel for the Debtors, Foley & Lardner LLP (“Foley”), may not be able
to act as a result of an actual or potential conflict of interest.
40. The Debtors do not believe that FTLB has any relationship that would (a) raise a
disqualification or conflict of interest or (b) otherwise render it ineligible to serve as counsel for
the Debtors pursuant to Section 327 of the Bankruptcy Code. FTLB’s compliance with the
requirements of Section 327 of the Bankruptcy Code and Bankruptcy Rules 2014 and 2016 is set
Case 3:20-bk-02387-JAF Doc 41 Filed 08/12/20 Page 3 of 8
4 4829-8723-8855.3
forth in greater detail in the Declaration Of W. Hamilton Traylor Pursuant To Rule 2014 of the
Federal Rules of Bankruptcy Procedure in Support of Debtors’ Application to Employ and
Retain Fisher, Tousey, Leas & Ball Attorneys At Law as Debtors’ Conflicts Counsel (the
“Declaration”), which is attached as Exhibit A.
B. Compensation
41. FTLB currently holds a retainer from the Debtors in the amount of $40,000.00.
42. FTLB is not a creditor of the Debtors.
43. The Debtors understand that Foley intends to apply to the Court for allowance of
compensation for professional services rendered and reimbursement of expenses incurred in this
Chapter 11 Case in accordance with the applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules, the United States Trustee Fee Guidelines, and any orders
entered in this case governing professional compensation and reimbursement for services
rendered and charges and disbursements incurred.
44. Additionally, FTLB will also seek compensation for all time and expenses
associated with its retention as a Section 327(a) professional, including the preparation of the
Application, the Traylor Declaration, and related documents, as well as any monthly fee
statements and/or interim and final fee applications.
45. Other than as set forth above, no arrangement is proposed between the Debtors
and FTLB for compensation to be paid in this case.
46. Except for such sharing arrangements among FTLB, its affiliated law-practice
entities, and their respective members, FTLB has no agreement with any other entity to share any
compensation received, nor will any be made, except as permitted pursuant to Section 504(b)(1)
of the Bankruptcy Code.
Case 3:20-bk-02387-JAF Doc 41 Filed 08/12/20 Page 4 of 8
5 4829-8723-8855.3
47. Subject to the provisions of the Bankruptcy Code, the Bankruptcy Rules, the
Local Rules and further orders of this Court, the Debtors propose to pay FTLB its customary
hourly rates for services rendered that are in effect from time to time (or in certain cases
negotiated discounted rates), as set forth in the Traylor Declaration, and to reimburse FTLB
according to its customary reimbursement policies, and submit that such rates are reasonable.
48. The Debtors submit that the retention of FTLB on the terms and conditions set
forth in this Application is necessary and in the best interests of the Debtors, the Estate, and its
creditors and should be approved.
49. The names and positions of the FTLB professionals presently expected to have
primary responsibility for providing services to the Debtors are listed below. Also listed is the
hourly rate that FTLB has agreed to charge for each professional’s time in connection with the
services identified above:
Name Position Hourly Rate
W. Hamilton
Traylor
Partner $460
50. In addition, FTLB will utilize such other professionals and paraprofessionals as
the demands of the Chapter 11 Case requires and as the substantive issues that arise may dictate.
51. The hourly rates applicable to FTLB professionals differ based on, among other
things, the professional’s level of experience and the rates normally charged in the location of the
office in which the professional is a resident.
52. Hourly rates may change from time to time in accordance with FTLB’s
established billing practices and procedures. FTLB will maintain detailed, contemporaneous
records of time and any actual and necessary expenses incurred in connection with the rendering
of the legal services described above by category and nature of the services rendered.
Case 3:20-bk-02387-JAF Doc 41 Filed 08/12/20 Page 5 of 8
6 4829-8723-8855.3
53. In addition, FTLB will seek reimbursement for costs and expenses incurred in
connection with this Chapter 11 Case at FTLB’s normal and customary rates and charges.
FTLB’s routine policy with respect to expenses is to charge its clients in all areas of practice for
expenses incurred in connection with this Chapter 11 Case. The expenses charged to clients
include, among other things, regular and express-mail charges, special or hand-delivery charges,
document-processing charges, photocopying charges, travel expenses, computerized-research
charges, and transportation costs.
54. FTLB understands that any compensation and expenses paid to it must be
approved by this Court upon application consistent with the Bankruptcy Code, the Bankruptcy
Rules, the Local Bankruptcy Rules, and all Orders of this Court.
C. FTLB’s Disinterestedness
55. To the best of the Debtors’ knowledge, and except as disclosed in the Traylor
Declaration, FTLB does not hold or represent any interest adverse to the Estate. FTLB is a
“disinterested person,” as that phrase is defined in § 101(14) of the Bankruptcy Code as modified
by § 1107(b) of the Bankruptcy Code, and FTLB’s employment referenced herein is necessary
and in the best interests of the Debtors and the Estate.
D. Disclosures of Proposed Counsel
56. In connection with its potential retention in this Chapter 11 Case, FTLB
conducted an investigation to ascertain conflicts and connections with the Debtors’ creditors and
equity security holders (the “Conflicts Investigation”). The procedures used in, and results of,
the Conflicts Investigation are provided in the Traylor Declaration filed, both of which are
incorporated herein by reference.
E. No Prior Request
Case 3:20-bk-02387-JAF Doc 41 Filed 08/12/20 Page 6 of 8
7 4829-8723-8855.3
57. No prior application for the relief requested herein has been made to this or any
other court.
WHEREFORE, the Debtors respectfully request that the Court enter an Order
authorizing them to employ FTLB as their conflicts counsel in this Chapter 11 Case, and for such
other and further relief as is just and proper in the circumstances.
(Signature page follows)
Case 3:20-bk-02387-JAF Doc 41 Filed 08/12/20 Page 7 of 8
Case 3:20-bk-02387-JAF Doc 41 Filed 08/12/20 Page 8 of 8
4814-5566-2535.3
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
www.flmb.uscourts.gov
In re:
STEIN MART, INC.1
STEIN MART BUYING CORP.
STEIN MART HOLDING CORP.,
Debtors.
Chapter 11
Case No. 3:20-bk-2387
Case No. 3:20-bk-2388
Case No. 3:20-bk-2389
Joint Administration Requested
DECLARATION OF W. HAMILTON TRAYLOR PURSUANT TO
RULE 2014 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE
IN SUPPORT OF DEBTORS’ APPLICATION TO EMPLOY AND RETAIN
FISHER, TOUSEY, LEAS & BALL ATTORNEYS AT LAW
AS DEBTORS’ CONFLICTS COUNSEL
I, W. Hamilton Traylor, declare as follows under penalty of perjury:
1. I am a shareholder with the law firm of Fisher, Tousey, Leas & Ball Attorneys at
Law (“FTLB” or the “Firm”)2 and practice law at FTLB’s office at 501 Riverside Ave, Suite
600, Jacksonville, Florida 32202.
2. I am a member in good standing of the State Bar of Florida. I am in all respects
competent to make this declaration (the “Declaration”) in connection with the Application of
1 The tax identification numbers of the Debtors are as follows: Stein Mart, Inc. 6198; Stein Mart Buying
Corp. 1114; and Stein Mart Holding Corp. 0492. The address of the Debtors’ principal offices: 1200 Riverplace
Blvd., Jacksonville, FL 32207. The Debtors’ claims agent maintains a website, https://cases.stretto.com/SteinMart,
which provides copies of the Debtors’ first day pleadings and other information related to the case.
2 All defined terms not defined herein shall have the meaning given to them in the Application of Debtors to Employ
and Retain Fisher, Tousey, Leas & Ball Attorneys at Law as Debtors’ Conflicts Counsel.
Case 3:20-bk-02387-JAF Doc 41-1 Filed 08/12/20 Page 1 of 6
4814-5566-2535.3
Debtors to Employ and Retain Fisher, Tousey, Leas & Ball Attorneys at Law as Debtors’
Conflicts Counsel (the “Application”).
3. I make this Declaration from information derived from the business records of the
Firm and the Conflict Investigation (as defined below). I will supplement this Declaration as
required by Rule 2014 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”)
when additional information becomes available concerning any relationship or connection
between the Debtors, their creditors or interest holders, and FTLB, based on information that
comes to my attention.
Scope of Employment
4. The Debtors have sought authority from the Bankruptcy Court to retain FTLB as
their conflict attorney in the Chapter 11 Case. Subject to the Court’s approval, and in accordance
with FTLB’s engagement letter with the Debtors, the Firm will render professional services to
Debtors for certain matters where proposed lead counsel for the Debtors, Foley & Lardner LLP,
may not be able to act as a result of an actual or potential conflict of interest.
Disclosures
5. FTLB has conducted a search of its electronic-client database to ascertain its
connections with parties-in-interest in this Chapter 11 Case (“Conflict Investigation”) and to
ensure that it is in compliance with the Bankruptcy Code, Bankruptcy Rules, and the Local
Bankruptcy Rules for the United States Bankruptcy Court for the Middle District of Florida
regarding employment of professionals by Debtors and Debtors-in-Possession under the
Bankruptcy Code.
6. Insofar as I have been able to ascertain, neither FTLB nor any partner, counsel,
associate, or professional of FTLB – insofar as I have been able to ascertain – has any current
connection with the Debtors or any of their creditors, parties-in-interest, the United States
Case 3:20-bk-02387-JAF Doc 41-1 Filed 08/12/20 Page 2 of 6
4814-5566-2535.3
Trustee, or the respective attorneys or accountants of the foregoing, except as set forth in this
Declaration.
7. Neither FTLB nor any partner, counsel, associate, or professional of FTLB –
insofar as I have been able to ascertain – holds or represents any interest adverse to the Debtors
or the Estate in matters on which FTLB is to be engaged. I am not aware of any claims that
FTLB holds or would hold against the Debtors. To the extent that I become aware of any
additional relationship that may be relevant prior to the Court’s determination of the Application,
I will promptly file a supplemental declaration disclosing such information.
8. FTLB will not represent any person or entity in a transaction with the Debtors that
may conflict with FTLB’s representation of the Debtors in the Chapter 11 Case.
9. Other than as described herein, to the best of my knowledge and FTLB’s
knowledge, information, and belief, based on the current status of the Conflict Investigation,
FTLB has no interest in or connection with any creditor or other party-in-interest in the Chapter
11 Case, their respective attorneys, accountants, the United States Trustee, or any person
employed in the office of the United States Trustee, and does not hold or represent any interest
materially adverse to the Estate or of any class of creditors or equity security holders, by reason
of any direct or indirect relationship to, connection with, or interest in the Debtors, or for any
reason with respect to the matters on which FTLB is to be employed.
10. To the extent that I become aware of any additional relationship that may be
relevant to FTLB’ representation of the Debtors, I will promptly file a supplemental affidavit.
Compensation
11. FTLB currently holds a retainer from the Debtors in the amount of $40,000.00.
12. FTLB is not a creditor of the Debtors.
Case 3:20-bk-02387-JAF Doc 41-1 Filed 08/12/20 Page 3 of 6
4814-5566-2535.3
13. The Debtors understand that FTLB hereafter intends to apply to the Court for
allowance of compensation for professional services rendered and reimbursement of expenses
incurred in the Chapter 11 Case in accordance with the applicable provisions of the Bankruptcy
Code, the Bankruptcy Rules, the Local Rules, the United States Trustee Fee Guidelines, and any
orders entered in the Chapter 11 Case governing professional compensation and reimbursement
for services rendered and charges and disbursements incurred.
14. Additionally, FTLB will also seek compensation for all time and expenses
associated with its retention as a Section 327(a) professional, including the preparation of the
Application, the Traylor Declaration, and related documents, as well as any monthly fee
statements and/or interim and final fee applications.
15. Other than as set forth above, no arrangement is proposed between the Debtors
and FTLB for compensation to be paid in the Chapter 11 Case.
16. Except for such sharing arrangements among FTLB, its affiliated law-practice
entities, and their respective members, FTLB has no agreement with any other entity to share any
compensation received, nor will any be made, except as permitted pursuant to Bankruptcy Code
section 504(b)(1).
17. The names and positions of the FTLB professionals and paraprofessionals
presently expected to have primary responsibility for providing services to the Debtors are listed
below. I have also listed the hourly rate that FTLB has agreed to charge for each professional’s
time in connection with the services identified above:
Name Position Hourly Rate
W. Hamilton
Traylor
Shareholder $460
Case 3:20-bk-02387-JAF Doc 41-1 Filed 08/12/20 Page 4 of 6
4814-5566-2535.3
18. In addition, FTLB will utilize such other professionals and paraprofessionals as
the demands of the Chapter 11 Case requires and as the substantive issues that arise may dictate.
19. The hourly rates applicable to FTLB professionals differ based on, among other
things, the professional’s level of experience and the rates normally charged in the location of the
office in which the professional is a resident. The FTLB lawyers in the Jacksonville office have
agreed to provide Debtors a discount from the standard hourly rate.
20. Hourly rates may change from time to time in accordance with FTLB’s
established billing practices and procedures. FTLB will maintain detailed, contemporaneous
records of time and any actual and necessary expenses incurred in connection with the rendering
of the legal services described above by category and nature of the services rendered.
21. In addition, FTLB will be reimbursed for costs and expenses incurred in
connection with the Chapter 11 Case at FTLB’s normal and customary rates and charges.
FTLB’s routine policy with respect to expenses is to charge its clients in all areas of practice for
expenses, other than professional time, incurred in connection with the Chapter 11 Case. The
expenses charged to clients include, among other things, regular and express-mail charges,
special or hand-delivery charges, document-processing charges, photocopying charges, travel
expenses, computerized-research charges, and transportation costs.
22. FTLB has not shared or agreed to share any compensation received in the Chapter
11 Case with any other entity other than its partners and associates in accordance with the
partnership agreement of the firm.
23. By reason of the foregoing, I believe that FTLB is eligible for employment and
retention by the Debtors pursuant to Sections 327(a) and 331 and of the Bankruptcy Code and
the applicable Bankruptcy Rules.
Case 3:20-bk-02387-JAF Doc 41-1 Filed 08/12/20 Page 5 of 6
Case 3:20-bk-02387-JAF Doc 41-1 Filed 08/12/20 Page 6 of 6
4844-6279-4951.1
UNITED STATES BANKRUPTCY COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
www.flmb.uscourts.gov
In re:
STEIN MART, INC.1
STEIN MART BUYING CORP.
STEIN MART HOLDING CORP.,
Debtors.
Chapter 11
Case No. 3:20-bk-2387
Case No. 3:20-bk-2388
Case No. 3:20-bk-2389
Joint Administration Requested
ORDER APPROVING THE RETENTION AND EMPLOYMENT
FISHER, TOUSEY, LEAS & BALL ATTORNEYS AT LAW
AS DEBTORS’ CONFLICTS COUNSEL
Upon the Application (the “Application”)2 of the above captioned debtors and debtors in
possession (the “Debtors”) for an order, pursuant to Sections 328 and 1103 of title 11 of the United
States Code (the “Bankruptcy Code”), Rules 2014(a) and 2016 of the Federal Rules of Bankruptcy
1 The tax identification numbers of the Debtors are as follows: Stein Mart, Inc. 6198; Stein Mart Buying
Corp. 1114; and Stein Mart Holding Corp. 0492. The address of the Debtors’ principal offices: 1200 Riverplace Blvd.,
Jacksonville, FL 32207. The Debtors’ claims agent maintains a website, https://cases.stretto.com/SteinMart, which
provides copies of the Debtors’ first day pleadings and other information related to the case.
2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Application.
Case 3:20-bk-02387-JAF Doc 41-2 Filed 08/12/20 Page 1 of 3
2 4844-6279-4951.1
Procedure (the “Bankruptcy Rules”), and the Local Rules of the United States Bankruptcy Court
for the Middle District of Florida (the “Local Rules”), authorizing the Debtors to employ and retain
Fisher, Tousey, Leas & Ball Attorneys At Law (“FTLB”) as the Debtors’ conflicts counsel in these
Chapter 11 Cases, all as more fully described in the Application; and upon consideration of the
Application and the Traylor Declaration; and the Court having jurisdiction to consider the matters
raised in the Application pursuant to 28 U.S.C. § 1334; and it having authority to hear the matters
raised in the Application pursuant to 28 U.S.C. § 157; and it having venue pursuant to 28 U.S.C.
§§ 1408 and 1409; and the Court having found that notice of the Application has been given and
that such notice is adequate and sufficient and no further notice need to be given; and the Court
having reviewed the Application and the Traylor Declaration; and the relief requested in the
Application being in the best interests of the Debtors’ estates; and the Court having determined
that there exists the required basis for the relief requested in the Application; and after due
deliberation, and sufficient cause appearing therefor, it is hereby
ORDERED:
1. The Application is hereby granted to the extent set forth herein.
2. In accordance with sections 328(a) and 1103 of the Bankruptcy Code, Bankruptcy
Rules 2014(a) and 2016, and the Local Rules, the Debtors are hereby authorized and empowered
to employ FTLB as its counsel in these chapter 11 Cases, in accordance with the terms and
conditions set forth in the Application and in the Engagement Letter attached hereto as Exhibit A.
3. FTLB is authorized to perform the services set forth in the Application, the
Engagement Letter, and the Traylor Declaration.
4. FTLB shall be compensated for its services and reimbursed for any reasonable and
necessary expenses and disbursements in accordance with the procedures set forth in sections 330
Case 3:20-bk-02387-JAF Doc 41-2 Filed 08/12/20 Page 2 of 3
3 4844-6279-4951.1
and 331 of the Bankruptcy Code, the applicable Local Rules, and any other applicable procedures
and orders of the Court. FTLB also intends to make a reasonable effort to comply with the U.S.
Trustee’s Guidelines and any procedures or other orders of the Court as are applicable to these
Chapter 11 Cases.
5. The Committee is authorized and empowered to take all actions necessary to
effectuate the relief granted by this Order.
6. The terms and conditions of this Order shall be immediately effective and
enforceable upon its entry.
7. This Court shall retain exclusive jurisdiction to hear and determine all matters
arising from or related to the implementation, interpretation and/or enforcement of this Order.
Debtors’ counsel is directed to serve a copy of this order on interested parties who do not
receive service by CM/ECF and file a proof of service within three days of entry of this order.
Case 3:20-bk-02387-JAF Doc 41-2 Filed 08/12/20 Page 3 of 3
Case 3:20-bk-02387-JAF Doc 41-3 Filed 08/12/20 Page 1 of 2
Case 3:20-bk-02387-JAF Doc 41-3 Filed 08/12/20 Page 2 of 2