2025-01-13 Supplemental Declaration of Douglas Wilson (Doc 301, received 2025-01-23Case 24-11647-MFW Doc 301 Filed 01/13/25 Page 1 of 4
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
Chapter 11
Case No. 24-11647 (MFW)
Jointly Administered
In re:
SilverRock Development Company, et al.,
Debtors.'
SUPPLEMENTAL DECLARATION OF DOUGLAS WILSON, CHIEF RESTRUCTURING
OFFICER OF THE DEBTORS, IN SUPPORT OF MOTION OF DEBTORS PURSUANT
TO SECTIONS 105, 361, 362,363, 364, AND 507 OF THE BANKRUPTCY CODE,
BANKRUPTCY RULE 4001, AND LOCAL RULE 4001-2, FOR AN ORDER (I)
AUTHORIZING DEBTORS TO OBTAIN POSTPETITION FINANCING; (II) GRANTING
DIP LENDER PRIMING LIENS AND SUPER -PRIORITY CLAIMS;
AND (III) GRANTING RELATED RELIEF
I, Douglas Wilson, declare as follows under penalty of perjury:
Background
1. I am the Chief Restructuring Officer (the "CRO") of the debtors and debtors -in -
possession (collectively, the "Debtors") in the above -captioned chapter 11 cases. Under the
supervision of the Independent Manager, Christopher S. Sontchi, and with the assistance of my
staff at Douglas Wilson Companies, I oversee the day-to-day operations of the Debtors' business.
2. I previously submitted a declaration (the "Original Declaration") in support of the
Motion of Debtors Pursuant to Sections 105, 361, 362, 363, 364, and 507 of the Bankruptcy Code,
Bankruptcy Rule 4001, and Local Rule 4001-2, for an Order (I) Authorizing Debtors to Obtain
Postpetition Financing; (II) Granting DIP Lender Priming Liens and Super -Priority Claims; and
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 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.
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(III) Granting Related Relief (the "DIP Motion"),2 which was attached to the DIP Motion as
Exhibit C and is incorporated herein by reference.
3. I hereby submit this supplemental declaration (the "Supplemental Declaration") in
further support of the DIP Motion.
4. Unless otherwise indicated, all statements in this Supplemental Declaration are
based on (i) my personal knowledge, (ii) information learned from my review of relevant
documents, and (iii) information I received from the Debtors or their advisors.
Qualifications
5. My qualifications, experience, background, and education are set forth in the
Original Declaration and incorporated herein.
Soliciting Proposals for Post -Petition Financing
6. As set forth in the Original Declaration, as CRO of the Debtors, I have personally
led the efforts to secure DIP financing terms that are in my professional opinion in the best interests
of the Debtors and their estates. In this capacity, I engaged with six credible financial institutions
with DIP financing experience, four of whom presented proposed term sheets for debtor in
possession financing. I also spoke with two of the Debtors' existing secured creditors (collectively
with the six financial institutions, the "Potential DIP Lenders") over possible terms.
7. After significant due diligence, negotiations with the Potential DIP Lenders, and
consultation with the Debtors' Independent Manager, legal counsel, and stakeholders, I determined
that the terms and structure of the proposed DIP Credit Facility provided by the City of La Quinta
2 Capitalized terms that are used but not otherwise defined herein shall have the meaning ascribed to such terms in the
Motion.
2
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(the "DIP Lender") represent the best available financing option for the Debtors and their estates
under the existing circumstances. Accordingly, on December 12, 2024, the Debtors filed the DIP
Motion, seeking entry of an order authorizing the Debtors' entry into the proposed DIP Credit
Facility.
8. Subsequent to the Debtors filing the DIP Motion, I re-engaged with the Potential
DIP Lenders to see if any such parties would be willing to provide a DIP facility on better terms
than those provided by the DIP Lender. None of the Potential DIP Lenders, however, were willing
to provide terms more favorable than those provided by the DIP Lender, including on a non -
priming basis.
9. In connection with the proposed DIP Credit Facility, the Debtors have engaged in
discussions with various constituents regarding the relief requested in the DIP Motion, and, after
extensive, hard-fought negotiations, it is my understanding that the parties set forth on Exhibit 3
to the to -be -filed revised proposed order approving the DIP Motion (the "Revised Proposed
Order") consent to the DIP Lender's proposed limited priming as set forth therein. I believe that
the resolutions between the Debtors, the DIP Lender, and the parties set forth on Exhibit 3 to the
Revised Proposed Order are in the best interests of the Debtors and their estates.
Appraisals
10. It is my understanding that, prior to the Petition Date, two appraisals were prepared
with respect to the value of the Project. One appraisal was conducted by Hospitality Valuation
Services ("HVS"), dated May 28, 2024, at the request of Oppenheimer and Company, Inc.
("Oppenheimer"), which I understand was requested by Oppenheimer in connection with a public
bond offering. The other appraisal was conducted by CBRE, Inc. ("CBRE"), dated June 3, 2024,
at the request of FirstPathway Partners LLC, one of the Debtors' secured creditors.
3
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11. As set forth in the Original Declaration, I have over 40 years of development,
receivership, and real estate management experience, including involvement in notable projects
across the country. In my experience, I am familiar with HVS and CBRE and the expert real estate
services that each firm is known for providing. HVS is a premiere services firm specializing in
valuations and appraisals in the hospitality space. CBRE is the world's largest real estate services
and investment firm with extensive experience in valuations and appraisals. In my experience, I
believe that both HVS and CBRE are qualified, credible and reliable valuation and appraisal
experts.
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 information, knowledge, and belief.
Respectfully submitted,
Dated: January 13, 2025
San Diego, California
4
SILVERROCK DEVELOPMENT
COMPANY, LLC
(for itself and on behalf of its
affiliated debtors as Debtors and
Debtors in Possession)
/s/Douglas Wilson
Name: Douglas Wilson
Title: Chief Restructuring Officer