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2024-12-16 Supplemental Declaration (Doc 248, received 2025-01-02)Case 24-11647-MFW Doc 248 Filed 12/16/24 Page 1 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) In re: ) ) SilverRock Development Company, LLC, et al., ) ) Debtors) ) ) ) ) Chapter 11 Case No. 24-11647 (MFW) (Jointly Administered) Re: Docket No. 225 SUPPLEMENTAL DECLARATION OF AMANDA R. STEELE IN SUPPORT OF APPLICATION OF DEBTORS FOR ENTRY OF AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF RICHARDS, LAYTON & FINGER, P.A., AS COUNSEL TO THE SOLE MANAGER OF THE DEBTORS EFFECTIVE AS OF OCTOBER 19. 2024 Pursuant to Bankruptcy Rule 2014(a), I, Amanda R. Steele, hereby declare as follows: 1. I am an attorney admitted to practice in the State of Delaware and before this Court, and a director of the firm of Richards, Layton & Finger, P.A. ("RL&F"). RL&F is a Delaware law firm with offices at One Rodney Square, 920 North King Street, Wilmington, Delaware 19801. 2. I submit this supplemental declaration (the "Supplemental Declaration") in response to certain inquiries and informal comments received from the Office of the United States Trustee and to supplement the Declaration of Amanda R. Steele in Support of Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Richards, Layton & Finger, P.A., as Counsel to the Sole Manager Effective as of October 19, 2024 (the "Original Declaration"), which I submitted in support of the application [Docket No. 225] of the above- 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtors' federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247). The location of the Debtors' principal place of business and the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101. RLF 132005613v.2 Case 24-11647-MFW Doc 248 Filed 12/16/24 Page 2 of 5 captioned debtors and debtors in possession for an order approving the employment and retention of RL&F as counsel to the Sole Manager of the Debtors effective as of October 19, 2024. 3. Unless otherwise stated in this Supplemental Declaration, I have personal knowledge of the facts hereinafter set forth. To the extent any information disclosed herein requires amendment or modification upon RI.&F's completion of further analysis or as additional creditor information becomes available to it, a further supplemental declaration will be submitted to the Court. Supplemental Disclosures and RL&F's Disinterestedness 4. As I previously disclosed in the Original Declaration, in 2023, RL&F was engaged to provide Delaware law opinions for, or in connection with, the Robert Green Company, in matters wholly unrelated to the Debtors and such matter has been closed. To supplement my prior disclosures concerning RL&F's representation of the Robert Green Company, I respectfully state as follows: (1) although the matter was opened in January 2023, RL&F was never required to give such opinions; and (2) no time or fees were billed to the matter and, as a result, the matter was closed on November 11, 2023. RL&F has no other matters with the Robert Green Company or any of its affiliates. 5. In addition, as disclosed in the Original Declaration, certain related affiliates of Construction Loan Services II, LLC (dba Builders Capital) ("Builders Capital") are current clients of RL&F. These representations are in connection with RL&F's representation of U.S. Bank, N.A, as trustee, related to various financings and securitizations in which affiliates of Builders Capital are depositors of such trusts. RL&F does not represent the trust itself and RL&F's representation of Builders Capital is wholly unrelated to the Debtors. RLF 132005613v.2 Case 24-11647-MFW Doc 248 Filed 12/16/24 Page 3 of 5 6. Except as set forth herein and the Original Declaration, and based upon the information available to me, neither I, RI.&F, nor any attorney employed by RI,&F, including any director, counsel or associate thereof, insofar as I have been able to ascertain, holds or represents any interest adverse to the Debtors or their estates. Therefore, based upon the information available to me, I believe that RL&F is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code. 7. RL&F will conduct an ongoing review of its files to ensure that no conflicts or other disqualifying circumstances exist or arise. Pursuant to Local Rule 2014-1, to the extent that RL&F learns of any additional material information relating to its employment (such as potential or actual conflicts of interest), RI &F will file and serve a further supplemental affidavit or declaration with the Court setting forth the additional information. Services to be Provided to Sole Manager 8. As previously disclosed in the Original Declaration, the Sole Manager engaged RI_&F to provide advisory services, and if needed litigation and investigation services, to the Sole Manager in these Chapter 11 Cases. As a condition to his appointment as sole independent manager of the Debtors, the Sole Manager required that he be authorized to engage independent counsel to maintain his independences from certain professionals that were originally hired by the Robert Green Company. In addition, he required that such independent counsel be funded by the Debtors' estates. The Debtors agreed to such terms as a condition of the Sole Manager's appointment. As disclosed in the Original Declaration, the Sole Manager selected RL&F for (i) the firm's extensive experience and knowledge in the field of debtors' and creditors' rights, business reorganizations and liquidations under chapter 11 of the Bankruptcy Code, and (ii) its expertise, experience, and knowledge in practicing before this Court. RL&F's services will enable 3 RLFI 32005613v.2 Case 24-11647-MFW Doc 248 Filed 12/16/24 Page 4 of 5 the Sole Manager to faithfully execute his duties. 9. RL&F's services will not be duplicative of the worked performed by the Debtors' professionals. The Debtors, the Sole Manager, the Debtors' professionals, and RL&F have allocated responsibilities between the firms based on each firm's respective experience and expertise and to minimize the duplication of work. Specifically, RL&F has focused on matters advising the Sole Manager on his fiduciary duties, facilitating meetings among the Sole Manager, creditors and stakeholders, providing Delaware law expertise with to the appointment of the independent manager, providing advice and negotiating debtor in possession financing documents consistent with the practice in this district, and advising the Sole Manager on other matters that may be necessary in furtherance of his duties. 10. RL&F recognizes the importance of maximizing efficiency and reducing unnecessary costs to the estates. Given the complexity of these cases and RL&F and the Debtors' professionals close working relationship, no unnecessary duplication of work should occur. Retention Effective as of October 19, 2024 11. RL&F seeks employment effective as of October 19, 2024. On October 19, 2024, RI_&F was engaged, subject to his official appointment, by the Sole Manager with respect to these Chapter 11 Cases. Due to the complexities of the structure of the Debtors and other operational challenges, the Sole Manager was not formally appointed as the Sole Manager of the Debtors until or around November 12, 2024. Immediately upon his appointment, on November 13, 2024, the Sole Manager and RL&F entered into an engagement letter that provided that RL&F's engagement was nunc pro tunc to October 19, 2024. From the period from October 19, 2024 through November 13, 2024, RL&F assisted the Sole Manager with, among other things, formalizing his appointment, drafting and advising on the amendments to the various organizational documents necessary for 4 RLFI 32005613v.2 Case 24-11647-MFW Doc 248 Filed 12/16/24 Page 5 of 5 his appointment, and facilitating and attending meetings with the major constituents. Given the Sole Manager's need to have RL&F commence work immediately, the Sole Manager was not able to seek approval of RL&F's retention before RL&F began work. Accordingly, I believe that RI .&F's retention effective as of October 19, 2024 is appropriate. Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge and belief. Dated: December 12, 2024 /s/Amanda R. Steele Wilmington, Delaware Amanda R. Steele (No. 5530) RLF l 32005613v.2 Case 24-11647-MFW Doc 249 Filed 12/16/24 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) In re: ) ) SilverRock Development Company, LLC, et al., ) ) Debtors) ) ) ) ) Chapter 11 Case No. 24-11647 (MFW) (Jointly Administered) Re: Docket No. 225 CERTIFICATION OF COUNSEL REGARDING APPLICATION OF DEBTORS FOR ENTRY OF AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF RICHARDS, LAYTON & FINGER, P.A, AS COUNSEL TO THE SOLE MANAGER OF THE DEBTORS EFFECTIVE AS OF OCTOBER 19, 2024 The undersigned counsel to the above -captioned debtors and debtors in possession (collectively, the "Debtors") hereby certifies as follows: 1. On November 21, 2024, the Debtors filed the Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Richards, Layton & Finger, P.A., as Counsel to the Sole Manager of the Debtors Effective as of October 19, 2024 [Docket No. 225] (the "Application"). Attached to Application as Exhibit A was a proposed form of order (the "Proposed Order") granting the relief sought in the Application. 2. Pursuant to the Notice of Hearing Regarding Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Richards, Layton & Finger, P.A., as Counsel to the Sole Manager of the Debtors Effective as of October 19, 2024 that was attached to the Application, objections or responses to the relief requested in the Application, if any, were to be The Debtors in these chapter 11 cases, along with the last four digits of each Debtors' federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247). The location of the Debtors' principal place of business and the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101. Case 24-11647-MFW Doc 249 Filed 12/16/24 Page 2 of 3 made in writing and filed with the Court on or before December 5, 2024 at 4:00 p.m. (ET) (the "Objection Deadline"). 3. Prior to the Objection Deadline, the Debtors received certain informal comments (the "Comments") to the Application and Proposed Order from the Office of the United States Trustee for the District of Delaware (the "U.S. Trustee"). Other than the Comments, the Debtors received no other informal responses to the Application, and no objection or responsive pleading to the Application has appeared on the Court's docket in these chapter 11 cases. 4. To resolve the comments, (i) on December 16, 2024, the Debtors filed the Supplemental Declaration of Amanda R. Steele in Support of Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Richards, Layton & Finger, P.A., as Counsel to the Sole Manager of the Debtors Effective as of October 19, 2024 [Docket No. 248] and (ii) revised the Proposed Order (the "Revised Proposed Order"). The Revised Proposed is attached hereto as Exhibit A. For the convenience of the Court and all parties in interest, a blackline of the Revised Proposed Order marked against the Proposed Order is attached hereto as Exhibit B. 5. The Revised Proposed Order has been circulated to the U.S. Trustee and the City of La Quinta, and the aforementioned parties do not object to the entry of the Revised Proposed Order. Case 24-11647-MFW Doc 249 Filed 12/16/24 Page 3 of 3 WHEREFORE, Debtors respectfully request that the Court enter the Revised Proposed Order at its earliest convenience. Dated: December 16, 2024 Wilmington, Delaware Respectfully submitted, ARMSTRONG TEASDALE LLP /s/Jonathan M. Stemerman Jonathan M. Stemerman (No. 4510) Eric M. Sutty (No. 4007) Denisse Guevara (No. 7206) 1007 North Market Street, Third Floor Wilmington, Delaware 19801 Telephone: (302) 416-9670 jstemerman@atllp.com esutty@atllp.com dguevara@atllp.com 3 -and- Victor A. Vilaplana (Pro Hac Vice) P.O. Box 9038 Telephone: (619) 840-4130 vavilaplana@gmail.com -and- Benjamin M. Carson (Pro Hac Vice) 5965 Village Way, STE E105 San Diego, CA 92130 Telephone: (858) 255-4529 ben(iuben jamincarson law.com Counsel to the Debtors and Debtors in Possession Case 24-11647-MFW Doc 249-1 Filed 12/16/24 Page 1 of 5 EXHIBIT A Revised Proposed Order Case 24-11647-MFW Doc 249-1 Filed 12/16/24 Page 2 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) In re: ) ) SilverRock Development Company, LLC, et al. ) ) Debtors) I ) ) ) ) Chapter 11 Case No. 24-11647 (MFW) (Jointly Administered) Re: Docket Nos. 225 & 248 ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF RICHARDS, LAYTON & FINGER, P.A., AS COUNSEL TO THE SOLE MANAGER EFFECTIVE AS OF OCTOBER 19, 2024 This matter coming before the Court on the Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Richards, Layton & Finger, P.A., as Counsel to the Sole Manager Effective as of October 19, 2024 (the "Application"),2 filed by the above -captioned debtors and debtors in possession (collectively, the "Debtors"); the Court having reviewed the Application, the Steele Declaration, the Wilson Declaration, and the Supplemental Declaration of Amanda R. Steele in Support of Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Richards, Layton & Finger, P.A., as Counsel to the Sole Manager of the Debtors Effective as of October 19, 2024 [Docket No. 248] (the "Supplemental Steele Declaration"), and having considered the statements of counsel with respect to the Application at a hearing before this Court (the "Hearing"), if any; the Court having found that (i) the Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing ' The Debtors in these chapter 11 cases, along with the last four digits of each Debtors' federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247). The location of the Debtors' principal place of business and the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101. 2 Capitalized terms not otherwise defined herein have the meanings given to them in the Application. RLF 132005621 v.3 Case 24-11647-MFW Doc 249-1 Filed 12/16/24 Page 3 of 5 Order of Reference from the United States District Court for the District of Delaware, dated as of February 29, 2012; (ii) this is a core proceeding pursuant to 28 U.S.C. § 157(b); (iii) venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; (iii) notice of the Application and the Hearing was sufficient under the circumstances; (iv) Richards, Layton & Finger, P.A. ("RL&F") does not hold or represent any interest adverse to the Debtors' estates as required by section 327(a) of the Bankruptcy Code; and (v) retention pursuant to section 327(a) of the Bankruptcy Code is appropriate given the specific scope of the proposed retention and RL&F's representation; and (vi) the Court having determined that the relief requested in the Application is in the best interests of the Debtors, their estates and their creditors and the legal and factual bases set forth in the Application, the Steele Declaration, the Wilson Declaration, the Supplemental Steele Declaration, and at the Hearing, establish just cause for the relief granted herein; IT IS 1lEREBY ORDERED THAT: 1. The Application is GRANTED as set forth herein. 2. The Debtors are authorized, pursuant to section 327(a) of the Bankruptcy Code, to employ and retain RL&F as counsel to the Sole Manager to the Debtors on the terms and conditions set forth in the Application, the Steele Declaration, and the Supplemental Steele Declaration (except as modified by this Order) effective as of October 19, 2024. 3. RL&F shall apply for compensation for professional services rendered and reimbursement of expenses incurred in connection with these Chapter 11 Cases in compliance with the applicable provisions of the Bankruptcy Code, Bankruptcy Rules, Local Rules, and any other applicable procedures and orders of the Court. RL&F shall make reasonable efforts to comply with the U.S. Trustee's requests for information and additional disclosures as set forth in the Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed 2 RLF 132005621 v.3 Case 24-11647-MFW Doc 249-1 Filed 12/16/24 Page 4 of 5 Under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases Effective as of November 1, 2013, in connection with any interim and/or final fee application(s) to be filed by RL&F in these Chapter 11 Cases. The United States Trustee expressly preserves the right to object to any of RL&F's applications for compensation and reimbursement of expenses incurred submitted in this matter on the grounds of duplicative services provided by RL&F. 4. RL&F shall use its reasonable efforts and coordinate with the Debtors and the Debtors' professionals to avoid the duplication of services provided by other professionals retained by the Debtors in these Chapter 11 Cases. 5. RL&F shall provide ten business days' notice to the Sole Manager, the Debtors and the U.S. Trustee in connection with any increase of the hourly rates listed in the Application. The Sole Manager, the U.S. Trustee and the Debtors retain all rights to object to any rate increase on all grounds, including, but not limited to, the reasonableness standard provided in section 330 of the Bankruptcy Code, and the Court retains the right to review any rate increase pursuant to section 330 of the Bankruptcy Code. 6. Notice of the Application as provided therein is deemed to be good and sufficient notice of such Application, and the requirements of the Local Rules are satisfied by the contents of the Application. 7. The terms and conditions of this Order shall be immediately effective and enforceable upon its entry. 8. The Debtors are authorized to take all actions necessary or appropriate to effectuate the relief granted in this Order. 9. In the event of any inconsistency between the Application, the Steele Declaration, the Wilson Declaration, the Supplemental Steele Declaration, and this Order, this Order shall 3 RLF 1 32005621v.3 govern. Case 24-11647-MFW Doc 249-1 Filed 12/16/24 Page 5 of 5 10. The Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation, interpretation, or enforcement of this Order. 4 RLF 1 32005621v.3 Case 24-11647-MFW Doc 250 Filed 12/16/24 Page 1 of 4 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ) In re: ) Chapter 11 ) SilverRock Development Company, LLC, et al. ) Case No. 24-11647 (MFW) ) Debtors) ) (Jointly Administered) ) ) Re: Docket Nos. 225 & 248 ) ORDER AUTHORIZING TILE EMPLOYMENT AND RETENTION OF RICHARDS, LAYTON & FINGER, P.A., AS COUNSEL TO THE SOLE MANAGER EFFECTIVE AS OF OCTOBER 19, 2024 This matter coming before the Court on the Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Richards, Layton & Finger, P.A., as Counsel to the Sole Manager Effective as of October 19, 2024 (the "Application"),2 filed by the above -captioned debtors and debtors in possession (collectively, the "Debtors"); the Court having reviewed the Application, the Steele Declaration, the Wilson Declaration, and the Supplemental Declaration of Amanda R. Steele in Support of Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Richards, Layton & Finger, P.A., as Counsel to the Sole Manager of the Debtors Effective as of October 19, 2024 [Docket No. 248] (the "Supplemental Steele Declaration"), and having considered the statements of counsel with respect to the Application at a hearing before this Court (the "Hearing"), if any; the Court having found that (i) the Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing The Debtors in these chapter 11 cases, along with the last four digits of each Debtors' federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247). The location of the Debtors' principal place of business and the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101. 2 Capitalized terms not otherwise defined herein have the meanings given to them in the Application. RLF 132005621 v.3 Case 24-11647-MFW Doc 250 Filed 12/16/24 Page 2 of 4 Order of Reference from the United States District Court for the District of Delaware, dated as of February 29, 2012; (ii) this is a core proceeding pursuant to 28 U.S.C. § 157(b); (iii) venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; (iii) notice of the Application and the Hearing was sufficient under the circumstances; (iv) Richards, Layton & Finger, P.A. ("RL&F") does not hold or represent any interest adverse to the Debtors' estates as required by section 327(a) of the Bankruptcy Code; and (v) retention pursuant to section 327(a) of the Bankruptcy Code is appropriate given the specific scope of the proposed retention and RL&F's representation; and (vi) the Court having determined that the relief requested in the Application is in the best interests of the Debtors, their estates and their creditors and the legal and factual bases set forth in the Application, the Steele Declaration, the Wilson Declaration, the Supplemental Steele Declaration, and at the Hearing, establish just cause for the relief granted herein; IT IS HEREBY ORDERED TILAT: 1. The Application is GRANTED as set forth herein. 2. The Debtors are authorized, pursuant to section 327(a) of the Bankruptcy Code, to employ and retain RL&F as counsel to the Sole Manager to the Debtors on the terms and conditions set forth in the Application, the Steele Declaration, and the Supplemental Steele Declaration (except as modified by this Order) effective as of October 19, 2024. 3. RL&F shall apply for compensation for professional services rendered and reimbursement of expenses incurred in connection with these Chapter 11 Cases in compliance with the applicable provisions of the Bankruptcy Code, Bankruptcy Rules, Local Rules, and any other applicable procedures and orders of the Court. RL&F shall make reasonable efforts to comply with the U.S. Trustee's requests for information and additional disclosures as set forth in the Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed 2 RLF 1 32005621v.3 Case 24-11647-MFW Doc 250 Filed 12/16/24 Page 3 of 4 Under 11 U.S.C. § 330 by Attorneys in Larger Chapter 11 Cases Effective as of November 1, 2013, in connection with any interim and or final fee application(s) to be filed by RL&F in these Chapter 11 Cases. The United States Trustee expressly preserves the right to object to any of RL&F's applications for compensation and reimbursement of expenses incurred submitted in this matter on the grounds of duplicative services provided by RL&F. 4. RL&F shall use its reasonable efforts and coordinate with the Debtors and the Debtors' professionals to avoid the duplication of services provided by other professionals retained by the Debtors in these Chapter 11 Cases. 5. RL&F shall provide ten business days' notice to the Sole Manager, the Debtors and the U.S. Trustee in connection with any increase of the hourly rates listed in the Application. The Sole Manager, the U.S. Trustee and the Debtors retain all rights to object to any rate increase on all grounds, including, but not limited to, the reasonableness standard provided in section 330 of the Bankruptcy Code, and the Court retains the right to review any rate increase pursuant to section 330 of the Bankruptcy Code. 6. Notice of the Application as provided therein is deemed to be good and sufficient notice of such Application, and the requirements of the Local Rules are satisfied by the contents of the Application. 7. The terms and conditions of this Order shall be immediately effective and enforceable upon its entry. 8. The Debtors are authorized to take all actions necessary or appropriate to effectuate the relief granted in this Order. 9. In the event of any inconsistency between the Application, the Steele Declaration, the Wilson Declaration, the Supplemental Steele Declaration, and this Order, this Order shall 3 RLF 132005621 v.3 Case 24-11647-MFW Doc 250 Filed 12/16/24 Page 4 of 4 govern. 10. The Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation, interpretation, or enforcement of this Order. :\N\C&tar--s Dated: December 16th, 2024 MARY F. WATRATH Wilmington, Delaware 4 UNITED STATES BANKRUPTCY JUDGE RLF 132005621 v.3