2024-08-21 Debtors App - Armstrong Teasdale (Doc 48)Case 24-11647-MFW Doc 48 Filed 08/21/24 Page 1 of 11
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SilverRock Development Company, et al.,
Debtors.'
Chapter 11
Case No. 24-11647 (MFW)
(Jointly Administered)
Objection Deadline: September 4, 2024 at 4:00 p.m.
Hearing Date: September 11, 2024 at 2:00 p.m. (ET)
DEBTORS' APPLICATION FOR ENTRY OF AN ORDER
UNDER 11 U.S.C. §§ 327(a), 328(a), AND 1107(b), FED. R. BANKR. P. 2014 AND 2016,
AND DEL. BANKR. L.R. 2014-1 AND 2016-1, AUTHORIZING RETENTION AND
EMPLOYMENT OF ARMSTRONG TEASDALE LLP AS BANKRUPTCY CO -
COUNSEL FOR THE DEBTORS,, NUNC PRO TUNC TO THE PETITION DATE
The above -captioned debtors and debtors in possession (collectively, the "Debtors")
hereby submit this application "Application") for entry of an order, substantially in the form
attached hereto as Exhibit A (the "Proposed Order"), approving the retention and employment of
Armstrong Teasdale LLP ("Armstrong" or "AT") as bankruptcy co -counsel in the above -captioned
cases. In support of this Application, the Debtors submit the declaration of Jonathan M.
Stemerman, attached hereto as Exhibit B and incorporated herein by reference. In further support
of this Application, the Debtors respectfully state as follows:
Jurisdiction and Venue
1. The United States Bankruptcy Court for the District of Delaware (the "Court") has
jurisdiction over these chapter 11 cases (the "Chapter 11 Cases"), the Debtors and their estates and
this matter under 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from
'The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's 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 1, 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 48 Filed 08/21/24 Page 2 of 11
the United States District Court for the District of Delaware, dated February 29, 2012. This is a
core proceeding within the meaning of 28 U.S.C. § 157(b)(2).
2. Pursuant to rule 9013-1(f) of the Local Rules of Bankruptcy Practice and Procedure
of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"), the Debtors
consent to the entry of a final order with respect to this Application if it is determined that the
Court, absent consent of the parties, cannot enter final orders or judgments consistent with Article
III of the United States Constitution.
3. Venue of these Chapter 11 Cases and this Application in this district is proper under
28 U.S.C. §§ 1408 and 1409.
4. The statutory basis for the relief requested herein are sections 327(a), 328(a), and
1107(b) of title 11 of the United States Code (the "Bankruptcy Code"), as supplemented by rules
2014(a) and 2016 of the Federal Rules of Bankruptcy Procedures (the Bankruptcy Rules"), and
Local Rules 2014-1 and 2016-1.
Background
5. On August 5, 2024 (the "Petition Date"), the Debtors commenced the above -
captioned Chapter 11 Cases by each filing voluntary petitions for relief under chapter 11 of the
Bankruptcy Code with the Court. Through a separate motion, Debtors have requested that all the
Chapter 11 Cases be jointly administered for procedural purposes only pursuant to Bankruptcy
Rule 1015(b) and Local Rule 1015-1. No trustee or examiner has been appointed in the Chapter
11 Cases.
6. The Debtors are authorized to continue to operate their business and manage their
properties as debtors in possession, pursuant to Bankruptcy Code sections 1107(a) and 1108.
2
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7. Additional information regarding the circumstances leading to the commencement
of these Chapter 11 Cases and information regarding the Debtors' business and capital structure is
set forth in detail in the Declaration of Robert S. Green Jr. Pursuant to 28 U.S.C. §1746 in Support
of the Debtors' Chapter 11 Petitions and First Day Pleadings (the "First Day Declaration") and
incorporated herein by reference.
Relief Requested
8. The Debtors seek entry of an order authorizing the retention and employment of
Armstrong as bankruptcy co -counsel to the Debtors, nunc pro tunc to the Petition Date.
9. In support of the Application, the Debtors rely upon and incorporate by reference
(i) the Declaration of Jonathan M. Stemerman in Support of the Debtors' Application for Entry of
an Order Under 11 U.S.C. §§ 327(A), 328(A), and 1107(B), Fed. R. Bankr. P. 2014 and 2016, and
Del. Bankr. L.R. 2014-1 and 2016-1, Authorizing Retention and Employment of Armstrong
Teasdale LLP as Bankruptcy Co -Counsel for the Debtors, Nunc Pro Tunc to the Petition Date (the
"Stemerman Declaration"), attached hereto as Exhibit B (ii) the Statement of Armstrong Teasdale
LLP Pursuant to 11 U.S.C. § 329, Fed. R. Bankr. P. 2016 and Bankr. D. Del. L.R. 2016-1 (the
"Rule 2016 Statement"), attached hereto as Exhibit C, and (iii) the Declaration of Douglas Wilson,
Proposed Chief Restructuring Officer of the Debtors, in Support of the Debtors ' Application for
Entry of an Order Under 11 U.S.C. §' 327(A), 328(A), and 1107(B), Fed. R. Bankr. P. 2014 and
2016, and Del. Bankr. L.R. 2014-1 and 2016-1, Authorizing Retention and Employment of
Armstrong Teasdale LLP as Bankruptcy Co -Counsel for the Debtors, Nunc Pro Tunc to the
Petition Date (the "Wilson Declaration"), attached hereto as Exhibit D.
3
Case 24-11647-MFW Doc 48 Filed 08/21/24 Page 4 of 11
Basis for Relief
10. Under section 327(a) of the Bankruptcy Code, a debtor in possession may employ
one or more attorneys to represent it in carrying out its duties under the Bankruptcy Code, provided
that such Attorneys are disinterested persons and do not hold or represent an interest adverse to
the estate. Section 101(14) of the Bankruptcy Code defines "disinterested person" as one who:
is not a creditor, an equity security holder, or an insider; [or] is not
and was not, within 2 years before the date of filing of the petition,
a director, officer or employee of the debtor; and ... does not have
an interest materially adverse to the interest of 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 debtor,
or for any other reason.
11 U.S.C. § 101(14).
11. Prior to the commencement of these Chapter 11 Cases, the Debtors retained AT to
provide advise regarding, among other things, preparing for, commencing, and prosecuting these
cases under chapter 11 of the Bankruptcy Code. The Debtors have engaged AT as their bankruptcy
co -counsel in connection with the filings and, subject to the entry of an order approving the
retention of AT, the prosecution of these Chapter 11 Cases.
12. The Debtors request approval of the employment of AT, nunc pro tunc to the
Petition Date. Given the Debtors needed to have AT commence work immediately, the Debtors
were unable to seek approval of AT's retention before AT began work on these Chapter 11 Cases.
Under the circumstances, no party will be prejudiced, and nunc pro tunc retention should be
approved. The Third Circuit has identified "time pressure to begin service" and absence of
prejudice as factor favoring nunc pro tunc retention. See Matter of Arkansas Co., 798 F.2d 645,
650 (3d Cir. 1986); see also In re Indian River Homes, Inc., 108 B.R. 46, 52 (D. Del. 1989).
4
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13. Accordingly, the Debtors believe that the retention of AT, nunc pro tunc to the
Petition Date, on the terms and conditions proposed herein, is appropriate.
Services To Be Provided By Armstrong Teasdale LLP
14. The Debtors believe that the services of AT are necessary to enable them to
faithfully execute their duties as debtors in possession. Subject to further order of this Court, AT
will render the following professional services to the Debtors, in coordination with the Debtors'
other advisors:
a. Perform all necessary services as the Debtors' bankruptcy co -counsel, including,
without limitation, providing the Debtors with advice, representing the Debtors,
and preparing necessary documents on behalf of the Debtors in the areas of
restructuring and bankruptcy;
b. take all necessary actions to protect and preserve the Debtors' estates during these
Chapter 11 Cases, including the prosecution of actions by the Debtors, the defense
of any actions commenced against the Debtors, negotiations concerning litigation
in which the Debtors are involved and objecting to claims filed against the estates;
c. prepare or coordinate preparation on behalf of the Debtors, as debtors in possession,
necessary motions, applications, answers, orders, reports and papers in connection
with the administration of these Chapter 11 Cases;
d. counsel the Debtors with regard to their rights and obligations as debtors in
possession;
e. coordinate with the Debtors' other professionals in representing the Debtors in
connection with these Chapter 11 Cases; and
f. perform all other necessary legal services.
15. The Debtors believe that AT's employment is in the best interests of
the Debtors, their estates, and their creditors.
16. Subject to the Court's approval of the Application, AT is willing to
serve as the Debtors' co -counsel and to perform the services described above.
5
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Disinterestedness of Armstrong Teasdale LLP
17. To the best of the Debtors' knowledge, information and belief, and except to the
extent otherwise indicated in the Stemerman Declaration, AT does not hold or represent any
interest adverse to the Debtors' estates or their creditors, and AT is a "disinterested person," as
defined in section 101(14) of the Bankruptcy Code.
18. Other than the Debtors, AT does not, and has not, represented any entities in matters
related to these Chapter 11 Cases. AT may represent or may have represented certain parties with
interests in the Debtors' cases, on matters unrelated to these Chapter 11 Cases. As set forth in the
Stemerman Declaration, AT has conducted, and continues to conduct, research into its relations
with the Debtors, the Debtors' creditors and equity security holders, and other parties interested in
these Chapter 11 Cases. As part of this inquiry, AT obtained the names of individuals or entities
that may be parties in interest in these Chapter 11 Cases (the "Potential Parties in Interest," attached
to the Stemerman Declaration as Schedule 1). AT searched the names of Potential Parties in
Interest in a computer database containing the names of all clients and conflict information
concerning the clients of AT.
19. This inquiry has revealed that certain of the Potential Parties in Interest are current or
former AT clients (the list of such clients is referred to herein as the "Client Match List"). Current
clients are listed on Schedule 2 attached to the Stemerman Declaration and former clients are listed
on Schedule 3 attached to the Stemerman Declaration. Through the information generated from the
above -mentioned computer inquiry, and through follow-up inquiries with AT attorneys responsible
for certain clients listed on the Client Match List, AT determined that the representation of the clients
on the Client Match List concerned matters unrelated to these Chapter 11 Cases, except to the extent
6
Case 24-11647-MFW Doc 48 Filed 08/21/24 Page 7 of 11
otherwise indicated in the Stemerman Declaration. Although AT values all of its clients, none of
the entities listed on the Client Match List represents significant financial revenues for AT.2
20. While AT has undertaken, and continues to undertake, efforts to identify
connections with the Debtors and other parties in interest, it is possible that connections with some
parties in interest have not yet been identified. Should AT, through its continuing efforts or as
these cases progress, learn of any new connections of the nature described above, AT will so advise
the Court.
Compensation
21. In connection with these Chapter 11 Cases, AT was retained by the Debtors
pursuant to the certain engagement letter dated July 26, 2024 (the "Engagement Agreement").
22. In the ninety days before the Petition Date, AT received the following
payments from the Debtors:
Type of
Transaction
Invoice
Date
Invoice
Amount
Advance Date
Payment
Amount
Advance Balance
Initial
Advance
July 29, 2024
$100,000
$100,000
Invoice
July 30, 2024
$25,000
$25,000
$75,000
Invoice
July 31, 2024
$3,000
$3,000
$72,000
Invoice
August 5, 2025
$2,500
$2,500
$$69,500
Additional
Advance
August 5, 2024
$25,000.00
$94,500
z None of the entities listed on the Client Match List represent greater than 1% of AT's revenue over the last 2 years.
7
Case 24-11647-MFW Doc 48 Filed 08/21/24 Page 8 of 11
23. Following the Petition Date, AT applied $767 (the "Final Billed Amount") against
the advanced balances for fees and expenses incurred prior to the Petition Date.3 As a result, AT
currently holds a balance of $93,733 as an advance payment for services to be rendered and
expenses to be incurred in connection with its representation of the Debtors (the "Advance
Payment"). The balance of the Advance Payment will be held as a postpetition advance payment
to be applied against any unpaid fees and expenses approved by the Court with respect to AT's final
fee application in these cases.
24. AT has not been paid any other compensation by the Debtors within the ninety
days before the Petition Date and AT is not a creditor of the Debtors.
25. In these cases, the Advance Payment held by AT is appropriate. See In re Insilco
Techs., Inc., 291 B.R. 628, 634 (Bankr. D. Del. 2003) ("Factors to be considered, include ... whether
terms of an engagement agreement reflect normal business terms in the marketplace; . . . the
relationship between the Debtor and the professionals, i.e., whether the parties involved are
sophisticated business entities with equal bargaining power who engaged in an arms -length
negotiation [and] ... whether the retention, as proposed, is in the best interests of the estate ...").
First, agreements regarding retainers are commonplace and "reflect normal business terms in the
marketplace." See id. Second, the Debtors and AT are sophisticated entities that have negotiated the
Advance Payment at arm's length. Third, the Advance Payment is in the best interest of the Debtors
and their estates because the Engagement Agreement and the Advance Payment allow the Debtors
and AT to maintain their prepetition relationship and assure continuity of legal advice and
representation through the prosecution of these bankruptcy cases. Thus, under the factors described
3 AT reserves and preserves the right to apply the Advance Payment against prepetition amounts not captured in the
final Billed Amount, following any subsequent true -up.
8
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by the Insilco court, the facts and circumstances of these cases support the Court's approval of the
Advance Payment.
26. In addition, compensation for professional services rendered to the Debtors will be
based upon the hours actually expended by each assigned professional at each professional's
hourly billing rate, as detailed further in the Stemerman Declaration. Subject to Court approval in
accordance with sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the Local
Rules, and the orders of this Court, the Debtors propose to compensate AT for professional services
rendered at its normal and customary hourly rates in effect from time to time as set forth in the
Stemerman Declaration.
27. AT will also seek reimbursement for reasonable and necessary expenses incurred,
which shall include travel, photocopying, delivery service, postage, vendor charges and other out-
of-pocket expenses incurred in providing professional services.
28. AT intends to apply to the Court for the allowance of compensation for
professional services rendered and reimbursement of expenses incurred in accordance with the
applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules.
Statement Regarding U.S. Trustee Guidelines
28. AT intends to use its reasonable best efforts to comply with the Guidelines for
Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11
U.S.C. § 330 by Attorneys in Larger chapter 11 cases, effective as of November 1, 2013 (the
"Appendix B Guidelines"). To that end, AT provides the following statements in response to the
request for additional information set forth in Part D.1. of the Appendix B Guidelines:
Question: Did you agree to any variations from, or alternatives to, your
standard or customary billing arrangements for this engagement?
9
Case 24-11647-MFW Doc 48 Filed 08/21/24 Page 10 of 11
Response: No.
Question: Do any of the professionals included in this engagement vary their
rate based on the geographic location of the bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months prepetition, disclose
your billing rates and material financial terms for the prepetition
engagement, including any adjustments during the 12 months
prepetition. If your billing rates and material financial terms have
changed postpetition, explain the difference and the reasons for the
difference.
Response: In connection with the chapter 11 cases, AT was retained by the
Debtors pursuant to the Engagement Agreement dated July 26,
2024. The material terms of the prepetition restructuring
engagement are the same as the terms described in the Stemerman
Declaration.
For work performed for the Debtors in 2024, AT's hourly rates are
as follows:
Partners and Of Counsel $365—$1,100
Associates $350—$575
Paraprofessionals $180—$390
Question:, Has your client approved your prospective budget and staffing plan,
and, if so, for what budget period?
Response: AT and the Debtors are working on a budget and staffing plan for
the Chapter 11 Cases.
NOTICE
32. Notice of this Application will be provided to: (i) the Office of the U.S. Trustee for
the District of Delaware (the "U.S. Trustee") (Attn: Malcolm Bates
(Malcolm.M.Bates@usdoj.gov>)); (ii) the parties included on the Debtors' list of their 20 largest
unsecured unsecured creditors; and (iii) those parties requesting notice pursuant to Bankruptcy Rule
2002. The Debtors submit that, in light of the nature of the relief requested, no other or further
notice need be provided.
10
Case 24-11647-MFW Doc 48 Filed 08/21/24 Page 11 of 11
CONCLUSION
WHEREFORE, the Debtors respectfully request that this Court (i) grant this Application
and the relief requested herein; (ii) enter the Proposed Order attached hereto as Exhibit A; and
(iii) grant such other and further relief as it deems just and proper.
Dated: August 21, 2024
/s/Douglas Wilson
Douglas Wilson
Chief Restructuring Officer
11
Case 24-11647-MPW Doc 48-1 Filed 08/21/24 Page 1 of 2
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SilverRock Development Company, et al.,
Debtors.4
Chapter 11
Case No. 24-11647 (MFW)
(Joint Administration Requested)
Objection Deadline: September 4, 2024 at 4:00 p.m.
Hearing Date: September 11, 2024 at 2:00 p.m. (ET)
NOTICE OF HEARING REGARDING DEBTORS' APPLICATION FOR ENTRY OF
AN ORDER UNDER 11 U.S.C. §§ 327(a), 328(a), AND 1107(b), FED. R. BANKR. P. 2014
AND 2016, AND DEL. BANKR. L.R. 2014-1 AND 2016-1, AUTHORIZING RETENTION
AND EMPLOYMENT OF ARMSSTRONG TEASDALE LLP AS
BANKRUPTCY CO -COUNSEL FOR THE DEBTORS,
NUNC PRO TUNC TO THE PETITION DATE
PLEASE TAKE NOTICE that on August 21, 2024, the above -captioned debtors
and debtors in possession (the "Debtors") filed the Debtors' Application For Entry Of An Order
Under 11 U.S.C. §' 327(A), 328(A), And 1107(B), Fed. R. Bankr. P. 2014 And 2016, And Del.
Bankr. L.R. 2014-1 And 2016-1, Authorizing Retention And Employment Of Armstrong Teasdale
LLP As Bankruptcy Co -Counsel For The Debtors, Nunc Pro Tunc To The Petition Date (the
"Application") with the United States Bankruptcy Court for the District of Delaware (the "Court").
PLEASE TAKE FURTHER NOTICE that objections, if any, to the Application
must be (a) in writing; (b) filed with the Clerk of the Bankruptcy Court, 824 Market Street, 3rd
Floor, Wilmington, Delaware 19801, on or before September 4, 2024, at 4:00 p.m. (ET) (the
"Objection Deadline"); and (c) served so as to be received on or before the Objection Deadline by
the undersigned counsel to the Debtors.
PLEASE TAKE FURTHER NOTICE THAT A HEARING ON THE APPLICATION
WILL BE HELD ON September 11, 2024, AT 2:00 P.M. (ET) BEFORE THE HONORABLE
MARY F. WALRATH AT THE UNITED STATES BANKRUPTCY COURT FOR THE
DISTRICT OF DELAWARE, 824 MARKET STREET, 5th FLOOR, COURTROOM #4,
WILMINGTON, DELAWARE 19801.
'The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's 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 1, 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 48-1 Filed 08/21/24 Page 2 of 2
PLEASE TAKE FURTHER NOTICE THAT ONLY OBJECTIONS MADE IN
WRITING AND TIMELY FILED AND RECEIVED IN ACCORDANCE WITH THE
PROCEDURES ABOVE WILL BE CONSIDERED BY THE COURT AT SUCH HEARING.
IF YOU FAIL TO RESPOND IN ACCORDANCE WITH THIS NOTICE, THE COURT
MAY GRANT THE RELIEF REQUESTED IN THE APPLICATION WITHOUT FURTHER
NOTICE OR HEARING.
Dated: August 21, 2024 ARMSTRONG TEASDALE, LLP
Wilmington, Delaware
/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@atlIp.com
esutty@atllp.com
dguevara@atllp.com
-and-
Victor A. Vilaplana (Pro Hac Vice)
P.O. Box 9038
La Jolla, CA 92037
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@benjamincarson.com
Proposed Counsel to the Debtors and
Debtors in Possession
2
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 1 of 27
Exhibit A
Proposed Order
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 2 of 27
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SilverRock Development Company, et al.,
Debtors.5
Chapter 11
Case No. 24-11647 (MFW)
(Joint Administration Requested)
Re: Docket No.
ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT
OF ARMSTRONG TEASDALE LLP AS BANKRUPTCY CO -COUNSEL
FOR THE DEBTORS, NUNC PRO TUNC TO THE PETITION DATE
Upon the application (the "Application")2 of the above -captioned debtors and debtors in
possession (the "Debtors"), for entry of an order, pursuant to sections 327(a), 328(a), and 1107(b)
of the Bankruptcy Code, Bankruptcy Rules 2014 and 2016, and Local Rules 2014-1 and 2016-1,
authorizing the retention and employment of Armstrong Teasdale LLP ("Armstrong Teasdale") as
bankruptcy co -counsel to the Debtors, nunc pro tunc to the Petition Date; and upon the Stemerman
Declaration, as attached to the Application; and the Court being satisfied that Armstrong Teasdale
does not represent any interest adverse to the Debtors' estates, that Armstrong Teasdale is a
"disinterested person" within the meaning of section 101(14) of the Bankruptcy Code and that the
retention and employment of Armstrong Teasdale is in the best interests of the Debtors and their
estates; and the Court having jurisdiction over the Application pursuant to 28 U.S.C. §
157(b)(2)(A); and sufficient notice of the Application having been given; and the Court having
determined that the relief requested in the Application is just and proper; and after due deliberation
and sufficient cause appearing therefor;
'The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's 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 1, 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
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 3 of 27
IT IS HEREBY ORDERED THAT:
1. The Application is GRANTED as set forth herein.
2. The Debtors are authorized to retain and employ Armstrong Teasdale as their
attorneys in these Chapter 11 Cases, nunc pro tunc to the Petition Date.
3. In connection with these Chapter 11 Cases, Armstrong Teasdale shall be
compensated for professional services, and reimbursed for expenses incurred, in accordance with
Bankruptcy Code sections 330 and 331, the applicable provisions of the Bankruptcy Rules and the
Local Rules, and with any other applicable procedures and orders of this Court. Armstrong
Teasdale also intends to make a reasonable effort to comply with the Appendix B-Guidelines for
Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C.
§ 330 by Attorneys in Large Chapter 11 Cases, Effective as of November 1, 2013 (the "U.S. Trustee
Fee Guidelines"), both in connection with the Application and in the interim and final fee
applications to be filed by Armstrong Teasdale in these Chapter 11 Cases.
4. AT is authorized to hold the Advance Payment as security throughout the Debtors'
bankruptcy cases until Armstrong Teasdale's final fees and expenses are awarded and payable to
AT pursuant to section 330 of the Bankruptcy Code, at which point Armstrong Teasdale shall
apply the Advance Payment to any unpaid allowed fees and expenses and return any unearned
portion of the Advance Payment to the Debtors.
5. AT shall provide ten (10) business days' notice to the Debtors and the U.S. Trustee
before any increases in the rates set forth in the Application are implemented and shall file such
notice with the Court. The U.S. Trustee retains all rights to object to any rate increase on all
grounds, including the reasonableness standard set forth in section 330 of the Bankruptcy Code,
3
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and the Court retains the right to review any rate increase pursuant to section 330 of the
Bankruptcy Code.
6. Armstrong Teasdale shall use reasonable efforts to avoid unnecessary duplication
of services provided by any of the Debtors' retained professionals in these Chapter 11 Cases.
7. Notwithstanding anything to the contrary in the Application, any order entered in
connection therewith, or any agreement entered into in connection with the Debtors' retention of
Armstrong Teasdale, Armstrong Teasdale shall not seek reimbursement of expenses for office
supplies.
8. Notwithstanding anything in the Application to the contrary, Armstrong Teasdale
shall (i) to the extent that Armstrong Teasdale uses the services of independent contractors,
subcontractors, or employees of foreign affiliates or subsidiaries (collectively, the "Contractors")
in these cases, pass -through the cost of such Contractors to the Debtors at the same rate that
Armstrong Teasdale pays the Contractors; (ii) seek reimbursement for actual costs only; (iii)
ensure that the Contractors are subject to the same conflicts checks as required for Armstrong
Teasdale; and (iv) file with this Court such disclosures required by Bankruptcy Rule 2014.
9. The Debtors are authorized and empowered to take such actions as may be
necessary and appropriate to implement the terms of this Order.
10. This Court shall retain jurisdiction with respect to all matters relating to the
interpretation or implementation of this Order.
4
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 5 of 27
EXHIBIT B
Stemerman Declaration
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 6 of 27
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SilverRock Development Company, et al.,
Debtors.6
Chapter 11
Case No. 24-11647 (MFW)
(Jointly Administered)
DECLARATION OF JONATHAN M. STEMERMAN IN SUPPORT
OF THE DEBTORS' APPLICATION FOR ENTRY OF AN ORDER UNDER
11 U.S.C. §§ 327(a), 328(a), AND 1107(b), FED. R. BANKR. P. 2014 AND 2016, AND DEL.
BANKR. L.R. 2014-1 AND 2016-1, AUTHORIZING RETENTION AND EMPLOYMENT
OF ARMSTRONG TEASDALE LLP AS BANKRUPTCY CO -COUNSEL FOR
THE DEBTORS, NUNC PRO TUNC TO THE PETITION DATE
I, Jonathan M. Stemerman, hereby declare under penalty of perjury:
1. I am a partner in the firm of Armstrong Teasdale LLP ("AP"), which maintains an
office for the practice of law at 1007 North Market Street, Third Floor, Wilmington, Delaware
19801. I am an attorney at law, duly admitted and in good standing to practice in the state of
Delaware, as well as the United States District Court for the District of Delaware and U.S. Court
of Appeals for the Third Circuit.
2. I submit this declaration (the "Declaration") in connection with the Debtors'
Application for Entry of an Order Under 11 U.S.C. sC§ 327(a), 328(a), and 1107(b), Fed. R. Bankr.
P. 2014 and 2016, and Del. Bankr. L.R. 2014-1 and 2016-1, Authorizing Retention and Employment
of Armstrong Teasdale LLP as Bankruptcy Co -Counsel for the Debtors, Nunc Pro Tunc to the
'The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's 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 1, 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
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 7 of 27
Petition Date (the "Application")7 and to provide certain disclosures under sections 327(a) and
328(a) of title 11 of the United States Code (the "Bankruptcy Code"), Rules 2014 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").
3. Except as otherwise indicated, I have personal knowledge of the matters set forth
herein and, if called as a witness, would testify competently hereto.8
4. AT's attorneys have knowledge and experience in bankruptcy, reorganization,
litigation, corporate governance and other areas that are or may be relevant to these Chapter 11
Cases.
5. Insofar as I have been able to ascertain to date, AT does not have any material
connection with the Debtors, their significant creditors, or any other parties in interest herein or
their respective attorneys or accountants, other than as described in this Declaration.
6. Furthermore, to the best of my knowledge, upon reasonable inquiry, neither I nor
any professional of the AT team that is providing services to the Debtors are a creditor of the
Debtors.
7. Due to the size and diversity of AT's practice, AT may have represented or otherwise
dealt with or may now be representing or otherwise dealing with certain entities or persons (and their
attorneys or accountants or both) who are or may consider themselves to be creditors, equity security
7 Capitalized terms not defined in this Declaration are defined in the Application. AT does not waive by the
Application and this Declaration and their contents, and hereby reserves and preserves, all privileges.
8 Certain of the disclosures herein relate to matters within the knowledge of other attorneys at AT and are based on
information provided by them.
3
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 8 of 27
holders, or parties interested in these Chapter 11 Cases. However, AT does not and will not represent
any entity other than the Debtors in connection with these cases.
8. In addition, AT is or has been engaged in a number of matters in which attorneys and
other professionals representing various parties in interest in these cases are also involved; in a
number of cases AT and those professionals represent or have represented the same clients.
Moreover, due to the nature and size of its practice, AT has or has had relationships as Delaware
counsel, co -counsel, or referring counsel with many major law firms in most, if not all, major cities
in the United States, which includes law firms representing creditors or other parties in interest in
these cases; all such relationships are on matters unrelated to these cases. AT is also a member of
certain lawyer associations and networks, including the United States Law Firm Group network,
which may include law firms representing creditors or other parties in interest in these cases.
Furthermore, AT, as part of its practice, also has and continues to represent agents, trustees and
similar entities in bankruptcy cases in which participants in the related facilities may be or believe
they are creditors or other parties in interest in these cases; AT does not represent these participants
and they are not generally part of AT's conflict system.
9. AT has conducted, and continues to conduct, research into its relations with the
Debtors, their creditors, and other parties interested in these cases. As part of this inquiry, AT
obtained the names of individuals or entities that may be parties in interest in these Chapter 11
Cases (the "Potential Parties in Interest") annexed hereto as Schedule 1. AT searched the names
of the Potential Parties in Interest in a computer database containing the names of all clients and
conflict information concerning the clients of AT. This inquiry has revealed that certain of the
4
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 9 of 27
Potential Parties in Interest are current or former AT clients (the list of such clients is referred to
herein as the "Client Match List").9
10. Through the information generated from the above -mentioned computer inquiry, and
through follow-up inquiries with AT attorneys responsible for certain clients listed on the Client
Match List, AT determined that the representation of the clients on the Client Match List concerned
matters unrelated to these Chapter 11 Cases. In particular, to the best of my knowledge, information
and belief, (a) AT currently serves as counsel to those entities, and/or affiliates of those entities,
identified on the schedule annexed hereto as Schedule 2 on matters unrelated to these Chapter 11
Cases; and (b) AT formerly represented those entities, and/or affiliates of those entities, identified
on the schedule annexed hereto as Schedule 3 on matters unrelated to these cases since August 5,
2022. Although AT values all of its clients, none of the entities listed on the Client Match List
represent significant financial revenues for AT.10 AT's computer database covers a period of time
prior to August 5, 2022; however, as a matter of practice, AT has not listed on Schedule 3 former
clients for such prior period (consistent with the disinterested time frame of two years). Should AT,
through its continuing efforts or as these cases progress, learn of any new connections of the nature
described above, AT will so advise the Court.
11. Other than as set forth herein, AT is neither a creditor of the Debtors, an equity
holder of the Debtors nor an insider of the Debtors. For so long as it represents the Debtors, AT
will not represent any entities other than the Debtors in connection with these Chapter 11 Cases.
9 To the extent that a Client Match Entity disclosed in either Schedule 2 or Schedule 3 attached to this Declaration is
not an "affiliate" (as such term is defined in section 101(2) of the Bankruptcy Code) of or is otherwise unrelated to a
Potential Party in Interest, such Client Match Entity shall not be construed as an affiliate of or entity related to such
Potential Part in Interest and AT reserves all rights with respect thereto.
10 None of the entities listed on the Client Match List represent greater than 1% of AT's revenue over that last 2
years.
5
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 10 of 27
12. AT does not represent any interest adverse to the Debtors or the Debtors' estates in
the matters upon which AT is proposed to be engaged.
13. AT is a "disinterested person" as that term is defined in 11 U.S.C. § 101(14) in that
it:
a. Is not a creditor (including by reason of unpaid fees and expenses for
prepetition services), equity security holder or insider of the Debtors;
b. Is not and was not, within two (2) years before the date of the filing of the
Debtors' chapter 11 petitions, a director, officer, or employee of any of the
Debtors; and
c. Does not have an interest materially adverse to the interest of the estates 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 other reason. In connection with these Chapter 11 Cases, AT was
retained by the Debtors under an advance payment retainer pursuant to an
engagement letter executed by the Debtors on July 26, 2024 (the
"Engagement Agreement").
14. In the ninety days before the Petition Date, AT received the following payments
from the Debtors:
Type of
Transaction
Invoice
Date
Invoice
Amount
Advance Date
Payment
Amount
Advance Balance
Initial
Advance
July 29, 2024
$100,000
$100,000
Invoice
July 30, 2024
$25,000
$25,000
$75,000
Invoice
July 31, 2024
$3,000
$3,000
$72,000
Invoice
August 5, 2025
$2,500
$2,500
$$69,500
Additional
Advance
August 5, 2024
$25,000.00
$94,500
6
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 11 of 27
15. Following the Petition Date, AT applied $767 (the "Final Billed Amount") against
the advanced balances for fees and expenses incurred prior to the Petition Date.11 As a result, AT
currently holds a balance of $93,733 as an advance payment for services to be rendered and
expenses to be incurred in connection with its representation of the Debtors (the "Advance
Payment"). The balance of the Advance Payment will be held as a postpetition advance payment
to be applied against any unpaid fees and expenses approved by the Court with respect to AT's final
fee application in these cases.
16. AT has not been paid any other compensation by the Debtors within the ninety days
before the Petition Date and AT is not a creditor of the Debtors.
17. Subject to Court approval in accordance with sections 330 and 331 of the Bankruptcy
Code, the Bankruptcy Rules, and the orders and Local Rules of this Court, the Debtors propose to pay
AT the following hourly rates in effect from time to time as set forth herein, plus reimbursement of
actual, necessary expenses incurred by AT on the Debtors' behalf. The following are AT's currently
hourly rates for work of this nature:
Partners and Of Counsel $365—$1,100
Associates $350—$575
Paraprofessionals $180—$390
18. The following are AT's currently hourly rates for the professionals currently staffed
on this matter:
Professional Rate
Eric M. Sutty - Partner $795
Jonathan M. Stemerman - Partner $775
Denisse Guevara - Associate $400
Marylou Sinko - Paralegal $375
" AT reserves and preserves the right to apply the Advance Payment against prepetition amounts not captured in the
Final Billed Amount, following any subsequent true -up.
7
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 12 of 27
19. These hourly rates are adjusted from time to time, typically at the beginning of the
year.
20. AT will comply with all of the requirements of this Court, the Bankruptcy Code
and the Bankruptcy Rules with respect to fee and expense applications of professionals employed
by bankruptcy estates. AT will seek interim and final approval of payment of compensation and
reimbursement of expenses in connection with these cases pursuant to sections 330 and 331 of the
Bankruptcy Code, the Bankruptcy Rules, and the applicable orders and Local Rules of this Court.
21. All filing fees in these Chapter 11 Cases have been paid.
22. AT intends to use its reasonable best efforts to comply with the Guidelines for
Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C.
§ 330 by Attorneys in Larger Chapter 11 Cases, effective as of November 1, 2013 (the "Appendix
B Guidelines"). To that end, AT provides the following statements in response to the request for
additional information set forth in Part D.1. of the Appendix B Guidelines:
Question: Did you agree to any variations from, or alternatives to, your
standard or customary billing arrangements for this engagement?
Response: No.
Question: Do any of the professionals included in this engagement vary their
rate based on the geographic location of the bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months prepetition, disclose
your billing rates and material financial terms for the prepetition
engagement, including any adjustments during the 12 months
prepetition. If your billing rates and material financial terms have
changed postpetition, explain the difference and the reasons for the
difference.
Response: In connection with the chapter 11 cases, AT was retained by the
Debtors pursuant to the Engagement Agreement dated July 26,
8
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 13 of 27
2024. The material terms of the prepetition restructuring
engagement are the same as the terms described in the Stemerman
Declaration.
For work performed for the Debtors in 2024, AT's hourly rates are
as follows:
Partners and Of Counsel $365—$1,100
Associates $350—$575
Paraprofessionals $180—$390
Question: Has your client approved your prospective budget and staffing plan,
and, if so, for what budget period?
Response: AT and the Debtors are working on a budget and staffing plan for
the Chapter 11 Cases.
23. AT and its partners, counsel and associates have not received, agreed to, or been
promised any compensation in connection with its representation of the Debtors in these cases
other than as set forth in the Application.
24. AT has neither shared nor agreed to share (a) any compensation it has received or
may receive with another party or person, other than with the partners, counsel and associates of
AT, or (b) any compensation another person or party has received or may receive.
27. The proposed employment of AT is not prohibited by or improper under
Bankruptcy Rule 5002. Except as disclosed herein, I am not related, and to the best of my
knowledge, information, and belief, no attorney at AT is related, to any United States Bankruptcy
Judge or District Court Judge for the District of Delaware or to the United States Trustee for such
district or any employee in the office thereof.
28. By reason of the foregoing, I believe that AT is eligible for retention and
employment as bankruptcy co -counsel for the Debtors pursuant to sections 327(a) and 1107(b) and
the applicable Bankruptcy Rules and Local Rules.
[SIGNATURE PAGE FOLLOWS]
9
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 14 of 27
Executed on: August 21, 2024
Wilmington, Delaware
/s/Jonathan M. Stemerman
Jonathan M. Stemerman
10
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 15 of 27
Schedule 1
Potential Parties in Interest List
Debtors
SilverRock Development Corporation LLC
SilverRock Phase I, LLC
SilverRock Lodging, LLC
SilverRock Luxury Residences, LLC
SilverRock Lifestyle Residences LLC
RGC PA 789, LLC
Non -Debtor Affiliates
Robert Green Company
Current and Former Officers
Robert S. Green, Jr.
Fred Schuster
Douglas Wilson
Douglas Wilson Companies
Bankruptcy Professionals
Law office of Benjamin M. Carson, P.C.
Victor A. Vilaplana
Bankruptcy Judges — District of Delaware
Chief Judge Laurie Selber Silverstein
Judge John T. Dorsey
Judge Craig T. Goldblatt
Judge Karen B. Owens
Judge Thomas M. Horan
Judge Brendan L. Shannon
Judge J. Kate Stickles
Judge Mary F. Walrath
Office of the United States Trustee —
District of Delaware
Joseph McMahon
Lauren Attix
Malcolm M. Bates
Fang Bu
Linda Casey
Joseph Cudia
Holly Dice
Shakima L. Dortch
Timothy J. Fox, Jr.
Diane Giordano
Michael Girello
Christine Green
Benjamin Hackman
Nyanquoi Jones
Jane Leamy
Jonathan Lipshie
Hannah M. McCollum
Jonathan Nyaku
James R. O'Malley
Linda Richenderfer
Richard Schepacarter
Edith A. Serrano
Rosa Sierra -Fox
Elizabeth Thomas
Dion Wynn
Top 20 Unsecured Creditors
Imperial Irrigation District
City of La Quinta
Manatt, Phelps & Phillips
First Insurance Funding
Southern California Gas Company
IOA Insurance Services
Montage International
Crosbie Gliner Schiffman Southard & Swans
Jacobsson Engineering Construction Inc
Project Dynamics, Inc
BAR Architects
Williams Scotsman
Caldarelli Hejmanowski
BMP Contractors Inc
Sunrise Golf Construction
SMDM, LLC
DLA Piper LLP
NV5, Inc
Lieef Real Estate Energy Partners
Mobile Modular
Coachella Valley Water District
Magnus Blue LLP
11
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 16 of 27
Potential Secured Creditors
Poppy Bank
Cypress Point Holdings, LLC
CMG Financial
RD Olson Construction, Inc.
Granite Construction Company
Axia Talus LLC
George Heuser
SVR Capital Trust (BJ Delzer)
Jon and Linda Kurtin
Ken Green Family Trust
Larry Duclos
Bryan Holker
Diane Cimarusti
Claire Fruhwirth 2014 Trust
Jason Parr
Jon Fredricks
David Mack
Kevin and Lindy Welk
Larry Welk
Eric Leitstein
Susan Hoehn
Ritch Goetz
Parekh Family Trust (Sumeet),
Jeff McCoy
Naveen Yalamanchi
George Heuser
Eric Beranek
Young Holdings
Dan Kloiber
Other Potential Creditors and Contract
Counterparties
10 Gauge Sheet Metal
20/20 Plumbing & Heating Inc.
Aces Construction Clean Up
Al Miller & Sons Roofing Co, Inc.
AMS Connect
Andrew Lauren Interiors, Inc.
ASSA ABLOY Global Solutions, Inc.
BAR Architects
Bay City Electric Works
Bill and Susan Hoehn Family Trust
Billings Realty, LLC
BMP Contractors Inc.
Burrtec Waste & Recycling - See RGR
Burton Landscape Architecture
Caldarelli Hejmanowski
California Barricade, Inc.
California Builder Services
CAPO Building Specialties
Castillo & Ruig Communications LLC
CBRE, Inc.
CDR Dry Utilities
Cecilian Partners, Inc.
Century & Superior Ready Mix (joint)
Century West Concrete Inc.
Cislo & Thomas LLP
Claire Fruhwirth Trust
Claybrook Distribution, LLC
Coachella Horse Park, LLC
Cogency Global
Comtron Systems Inc
Const. Testing & Eng/Team UES
Construction Loan Services II, LLC
CSC
Deans & Homer
DeLageLanden Financial Services
Department of Motor Vehicles
Development Solutions & Svcs
Diamond Environmental Services, LP
Diane Cimarusti
DPFG, LLC
Duane Morris LLP
Duclos Family Revocable Trust
EKSC Corporation
EPA
Eric and Hector Beranek
Executive Landscape, Inc.
First Insurance Funding
Ford Motor Credit
Foster and Sons Termite and Pest Control
Franchise Tax Board
Gensler
Global Geo-Engineering, Inc.
Gouvis Engineering Consulting Group Inc.
Granite Construction Company
H&E Equipment Services, Inc.
HEITEC
Herc Rentals Inc.
Hill Crane Service, Inc.
Imerza, LLC
12
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 17 of 27
Inland Contractors Inc.
Inland Valley Sladden, Inc.
Interior Specialists Inc (now ILG)
IOA Insurance Services
IRAR Trust FBO Bryan D Holker
Jacobsson Eng. Const. Inc.
Jason Parr
JMBM LLP
John Deere Financial
Jonathan P. Fredricks
Kloiber Real Estate Holdings, LLC
Koolfog, Inc.
Kurtin Family Trust
La Quinta Realty Properties, LLC
Lendrum Fine Art, Inc.
Liberty Mutual Insurance
Lieef Real Estate Energy Partners
Liquid Gold Dust Control
Little Consulting Group, Inc.
LTMDP Living Family Trust
M&J Grading Services, Inc.
Mack Revocable Trust
Maria & Ben's Cleaning Services
Marlin Capital Solutions
McCoy Revocable Trust No. 92
MDoors, Inc.
Michael Baker International
MLN Partners, LLC
Mobile Modular
Montage International
MSA Consulting, Inc.
NP Mechanical Inc.
NV5, Inc.
Officel
Oppenheimer & Co Inc.
Pacific Lightwave - See RGR
Pavilion
P1anIT Print Works
Platinum Filings
Power Plus
Procore Technologies, Inc.
Project Dynamics, Inc.
RAF Pacifica Loan Opportunity Fund I, LLC
The Arnold Fishman Revocable Trust
RB Consulting Engineering (now Enginova)
RD Olson Construction, Inc.
RGC Santa Barbara Hotel, LLC
Riverside County Treasurer
Robert Green Residential, Inc.
Rowan Electric
SilverRock Resort Investment M, LLC
SilverRock Resort Investment, LLC
SMDM, LLC
South Coast AQMD
Southern CA Regional Center, LLC
Southern California Gas Company
Sparkletts
Spartan Concrete & Asphalt Cutting, Inc.
SSS Fence
Sunrise Golf Construction
SVR Capital Trust
SWRCB
Taylor Underground, Inc.
Temp Power Systems
Teserra
The Planning & Zoning
Traub Family Revocable Trust
Trimont Real Estate Advisors, LLC
Ultimate Communication Sys.
United Production Framing, LLC
URSA General Building, Inc.
US Legal Support, Inc.
Valley Office Equipment
Williams Scotsman
YH-MCSV Fund I, LLC
13
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 18 of 27
Schedule 2
AT represents the Potential Parties in Interest and/or affiliates thereof identified below on
matters unrelated to these Chapter 11 Cases.
CBRE
DLA Piper UK LLP
Liberty Mutual Insurance
Power Plus Cleaning Systems
14
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 19 of 27
Schedule 3
AT formerly represented the Potential Parties in Interest and/or affiliates thereof identified
below on matters unrelated to these Chapter 11 Cases.
Ford Motor Company
15
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 20 of 27
EXHIBIT C
Rule 2016 Statement
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 21 of 27
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SilverRock Development Company, et al.,
Debtors.12
Chapter 11
Case No. 24-11647 (MFW)
(Joint Administration Requested)
STATEMENT OF ARMSTRONG TEASDALE LLP PURSUANT TO
11 U.S.C. $ 329, FED. R. BANKR. 2016, AND DEL. BANKR. L.R. 2016-1
Armstrong Teasdale LLP ("AT"), pursuant to section 329 of Title 11 of the United States
Code, Rule 2016 of the Federal Rules of Bankruptcy Procedure, and Rule 2016-1 of the Local
Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District
of Delaware, respectfully states as follows:
1. AT is the proposed bankruptcy co -counsel for the above -captioned debtors and
debtors in possession (the "Debtors") in these Chapter 11 Cases.
2. This Statement is made and submitted in connection with the Debtors' Application
for Entry of an Order Under 11 U.S.C. §s' 327(a), 328(a), and 1107(b), Fed. R. Bankr. P. 2014
and 2016, and Del. Bankr. L.R. 2014-1 and 2016-1, Authorizing Retention and Employment of
Armstrong Teasdale LLP as Bankruptcy Co -Counsel for the Debtors, Nunc Pro Tunc to the
Petition Date (the "Application").13
12The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's 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 1, LLC (2247). The location of the Debtors' principal place of business and the Debtors'
mailing address is 343 Fourth Avenue, San Diego, CA 92101.
13 Capitalized terms not defined herein are defined in the Application. AT does not waive by the Application and the
Declaration and their contents, and hereby reserves and preserves, all privileges.
2
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 22 of 27
3. The Debtors have agreed to pay AT for the legal services rendered or to be rendered
on the Debtors' behalf by AT attorneys and paralegals, which include those services set forth in the
Application. The Debtors also have agreed to reimburse AT for its actual and necessary expenses
incurred in connection with these Chapter 11 Cases.
4. In connection with these Chapter 11 Cases, AT was retained by the Debtors under
an advance payment retainer pursuant to an engagement letter executed by the Debtors on July 26,
2024 (the "Engagement Agreement").
25. In the ninety days before the Petition Date, AT received the following payments
from the Debtors:
Type of
Transaction
Invoice
Date
Invoice
Amount
Advance Date
Payment
Amount
Advance Balance
Initial
Advance
July 29, 2024
$100,000
$100,000
Invoice
July 30, 2024
$25,000
$25,000
$75,000
Invoice
July 31, 2024
$3,000
$3,000
$72,000
Invoice
August 5, 2025
$2,500
$2,500
$$69,500
Additional
Advance
August 5, 2024
$25,000.00
$94,500
5. Following the Petition Date, AT applied $767 (the "Final Billed Amount") against
the advanced balances for fees and expenses incurred prior to the Petition Date.14 As a result, AT
currently holds a balance of $93,733 as an advance payment for services to be rendered and
expenses to be incurred in connection with its representation of the Debtors (the "Advance
Payment"). The balance of the Advance Payment will be held as a postpetition advance payment
14 AT reserves and preserves the right to apply the Advance Payment against prepetition amounts not captured in the
Final Billed Amount, following any subsequent true -up.
3
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 23 of 27
to be applied against any unpaid fees and expenses approved by the Court with respect to AT's
final fee application in these cases.
6. AT has not been paid any other compensation by the Debtors within the ninety days
before the Petition Date and AT is not a creditor of the Debtors.
7. AT will comply with all of the requirements of this Court, the Bankruptcy Code
and the Bankruptcy Rules with respect to fee and expense applications of professionals employed
by bankruptcy estates. AT will seek interim and final approval of payment of compensation and
reimbursement of expenses in connection with these cases pursuant to sections 330 and 331 of the
Bankruptcy Code, the Bankruptcy Rules, and the applicable orders and Local Rules of this Court.
8. All filing fees in these Chapter 11 Cases have been paid.
9. AT has neither shared nor agreed to share (a) any compensation it has received or
may receive with another party or person, other than with the partners, counsel and associates of
AT, or (b) any compensation another person or party has received or may receive.
Dated: August 21, 2024 ARMSTRONG TEASDALE, LLP
Wilmington, Delaware
/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
j s temermanA aellp.com
esutty(a atlip.cor
dguevara(a atiip.com
Proposed Co -Counsel to the Debtors
and Debtors in Possession
4
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 24 of 27
EXHIBIT D
Wilson Declaration
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 25 of 27
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
SilverRock Development Company, et al.,
Debtors.15
Chapter 11
Case No. 24-11647 (MFW)
(Joint Administration Requested)
DECLARATION OF DOUGLAS WILSON, PROPOSED CHIEF
RESTRUCTURING OFFICER OF THE DEBTORS, IN SUPPORT OF THE
DEBTORS' APPLICATION FOR ENTRY OF AN ORDER UNDER 11 U.S.C. §§ 327(a),
328(a), AND 1107(b), FED. R BANKR P. 2014 AND 2016, AND DEL. BANKR. L.R 2014-1
AND 2016-1, AUTHORIZING RETENTION AND EMPLOYMENT OF ARMSTRONG
TEASDALE LLP AS BANKRUPTCY CO -COUNSEL FOR THE DEBTORS, NUNCPRO
TUNC TO THE PE'1 11'ION DATE
I, Douglas Wilson, proposed Chief Restructuring Officer ("CRO") of the Debtors, being
duly sworn, state the following under penalty of perjury:
1. I submit this declaration (the "Declaration") in support of the Debtors ' Application
for Entry of an Order Under 11 U.S.C. §§ 327(a), 328(a), and 1107(b), Fed. R. Bankr. P. 2014 and
2016, and Del. Bankr. L.R. 2014-1 and 2016-1, Authorizing Retention and Employment of
Armstrong Teasdale LLP as Bankruptcy Co -Counsel for the Debtors Nunc Pro Tunc to the Petition
Date (the "Application").16 Except as otherwise noted, all facts in this Declaration are based on my
personal knowledge of the matters set forth herein, information gathered from my review of
relevant documents, and information supplied to me by other members of the Debtors'
management and the Debtors' advisors.
15The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's 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 1, LLC (2247). The location of the Debtors' principal place of business and the Debtors'
mailing address is 343 Fourth Avenue, San Diego, CA 92101.
16 Capitalized terms not otherwise defined herein are to be given the meanings ascribed to them in the Application.
2
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 26 of 27
The Debtors' Selection of Counsel
2. The Debtors recognize that a comprehensive review process is necessary when
selecting and managing chapter 11 counsel to ensure that bankruptcy professionals are subject to
the same client -driven market forces, scrutiny, and accountability as professionals in non -
bankruptcy engagements.
3. To that end, the review process utilized by the Debtors here assessed potential
counsel based on their expertise in the relevant legal issues and in similar proceedings. AT has
extensive experience representing debtors in chapter 11 cases before this Court.
4. In addition, AT has become familiar with the Debtors' business and many of the
legal issues that may arise in the context of these Chapter 11 Cases through preparing these
Chapter 11 Cases for filing. I believe that for those reasons, AT is both well qualified and uniquely
able to represent the Debtors in these Chapter 11 Cases in an efficient and timely manner. Thus,
the Debtors decided to continue to retain AT as the Debtors' bankruptcy co -counsel during these
Chapter 11 Cases.
Rate Structure
5. In my capacity as CRO, I am responsible for supervising outside counsel retained
by the Debtors in the ordinary course of business. AT has informed the Debtors that its rates for
bankruptcy representations are comparable to the rates it charges for non -bankruptcy
representations. As discussed below, I am also responsible for reviewing the invoices regularly
submitted by AT and, based upon the Engagement Agreement, the rates AT charged the Debtors
in the prepetition period are the same as the regular, annually adjusted rates AT will charge the
Debtors in the postpetition period.
3
Case 24-11647-MFW Doc 48-2 Filed 08/21/24 Page 27 of 27
Cost Supervision
6. The Debtors recognize that they have the responsibility to closely monitor the
billing practices of their counsel to ensure the fees and expenses paid by the estates remain
consistent with the Debtors' expectations and the exigencies of these Chapter 11 Cases. As they
did prepetition, the Debtors will continue to bring discipline, predictability, client involvement,
and accountability to the counsel fees and expenses reimbursement process. To that end, the
Debtors will review and monitor the invoices that AT submits.
Dated: August 21, 2024
/s/Douglas Wilson
Douglas Wilson
Proposed Chief Restructuring Officer
4