DEBTORS’ APPLICATION FOR AN ORDER AUTHORIZING THE ... file2 recovery of certain avoidance actions...
Transcript of DEBTORS’ APPLICATION FOR AN ORDER AUTHORIZING THE ... file2 recovery of certain avoidance actions...
IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE
In re
DRAW ANOTHER CIRCLE, LLC, et al.,1
Debtors.
Chapter 11
Case No.: 16-11452
(Jointly Administered)
Objection Deadline: August 9, 2016 at 4:00 p.m. (ET)Hearing Date: September 6, 2016 at 1:30 p.m. (ET)
DEBTORS’ APPLICATION FOR AN ORDERAUTHORIZING THE EMPLOYMENT AND RETENTION OF
KELLEY DRYE & WARREN LLP AS SPECIAL COUNSEL FOR THE DEBTORS
Draw Another Circle, LLC and its chapter 11 affiliates, the debtors and debtors in
possession (the “Debtors”) in the above-captioned jointly-administered chapter 11 cases (the
“Cases”), hereby submit this application (this “Application”), for entry of an order, substantially
in the form attached hereto as Exhibit D (the “Retention Order”), pursuant to sections 327(a),
328, and 330 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 2016-2 of the Local Rules of Bankruptcy Practice and Procedure of the United States
Bankruptcy Court for the District of Delaware (the “Local Rules”), and consistent 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 (the “U.S. Trustee
Guidelines”), authorizing the employment and retention of Kelley Drye & Warren (“Kelley
Drye” or the “Firm”) as special counsel for the Debtors for the investigation, prosecution, and
1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: DrawAnother Circle, LLC (2102); Hastings Entertainment, Inc. (6375); MovieStop, LLC (9645); SP Images, Inc. (7773);and Hastings Internet, Inc. (0809). The Debtors’ executive headquarters are located at 3601 Plains Boulevard,Amarillo, TX 79102.
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recovery of certain avoidance actions (the “Avoidance Actions”) under chapter 5 of the
Bankruptcy Code in the Cases. In support of this Application, the Debtors rely on the
Declaration of Robert L. LeHane (the “LeHane Declaration”) and the Declaration of Duane A.
Huesers (the “Huesers Declaration”) attached hereto as Exhibit A and Exhibit C, respectively,
and incorporated by reference herein. In further support of the Application, the Debtors
respectfully represent as follows:
JURISDICTION
1. The United States Bankruptcy Court for the District of Delaware (the
“Court”) has jurisdiction over the Cases and the Application pursuant to 28 U.S.C. §§ 157 and
1334 and the Amended Standing Order of Reference from the United States District Court for
the District of Delaware dated as of February 29, 2012. This is a core proceeding within the
meaning of 28 U.S.C. § 157(b)(2). Venue of the Cases and the Application in this district is
proper under 28 U.S.C. §§ 1408 and 1409.
2. Pursuant to Local Rule 9013-1(f), the Debtors consent to the entry of a
final judgment or order with respect to the 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. The statutory and legal predicate for the relief requested herein is sections
327(a), 328, and 330, Bankruptcy Rules 2014 and 2016, and Local Rules 2014-1 and 2016-2.
BACKGROUND
4. On June 13, 2016 (the “Petition Date”), each of the Debtors commenced a
voluntary case under chapter 11 of the Bankruptcy Code. The Debtors are operating their
businesses and managing their properties as debtors in possession pursuant to sections 1107(a)
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and 1108 of the Bankruptcy Code. The Court has entered an order for joint administration of the
Cases [Docket No. 57].
5. On June 21, 2016, the Office of the United States Trustee appointed an
Official Committee of Unsecured Creditors [Docket No. 132].
6. Further information regarding the Debtors’ business operations is set forth
in the Declaration of Duane A. Huesers in Support of the Debtors’ First Day Pleadings [Docket
No. 18] (the “First Day Declaration”).
7. On July 20, 2016, the Debtors held an auction for the sale of certain of the
Debtors’ assets. On July 22, 2016, the Court entered the Order Authorizing (I) the Sale of
Certain of the Debtors’ Assets Free and Clear of All Claims, Liens, Liabilities, Rights, Interests
and Encumbrances, (II) the Debtors to Enter Into and Perform Their Obligations Under the
Agency Agreement, and (III) Granting Related Relief [Docket No. 449].
8. An initial review by the Debtors’ proposed financial advisor, FTI
Consulting, Inc., 2 found certain transfers made by the Debtors before the Petition Date
potentially subject to avoidance and recovery as preferential transfers under chapter 5 of the
Bankruptcy Code. Recovery from these potential preference actions in the near term will help
mitigate the liquidity concerns of the Debtors. The Debtors seek assistance from special counsel
to pursue these potential avoidance actions.
RELIEF REQUESTED
9. By this Application, the Debtors seek entry of the Retention Order
authorizing the employment and retention of Kelley Drye pursuant to sections 327(a), 328, and
330 of the Bankruptcy Code, Bankruptcy Rules 2014(a) and 2016, and Local Rules 2014-1 and
2 The Debtors’ schedules and statements of affairs were filed on July 7, 2016. [Docket Nos. 266-275].
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2016-2 as the Debtors’ special counsel for the investigation, prosecution, and recovery of the
Avoidance Actions, in accordance with the terms and conditions set forth in that certain
engagement letter between the Debtors Hastings Entertainment LLC and MovieStop, Inc. and
Kelley Drye, attached hereto as Exhibit B and incorporated herein by reference (the
“Engagement Letter”).
QUALIFICATIONS
10. Kelley Drye is one of the country’s leading law firms in the area
investigation, prosecution, and recovery of chapter 5 avoidance actions, including preferences.
Among some of the cases where Kelley Drye has prosecuted, or currently is prosecuting,
avoidance actions are: In re CWC Liquidation Inc. (f/k/a Coldwater Creek Inc.) et al., Case No.
14-10867 (BLS) (Bankr. D. Del.), In re Exide Technologies, Case No. 13-11482 (KJC) (Bankr.
D. Del.), In re KSL Media Inc. et al., Case No. 13-15929-MB (Bankr. C.D. Cal.), In re Women’s
Apparel Group, LLC, Case No. 11-16217 (JNF) (Bankr. D. Mass.), In re Getty Petroleum
Marketing Inc., et al., Case No. 11-15606 (SCC) (Bankr. S.D.N.Y.), In re Fleetwood Enterprises
Inc., et al., Case No. 09-14254-MJ (Bankr. C.D. Cal.) and In re VeraSun Energy Corporation et
al., Case No. 08-12606 (BLS) (Bankr. D. Del.). In light of Kelley Drye’s experience with
avoidance actions and recoveries, the Debtors’ estates and creditors clearly will benefit from the
retention of Kelley Drye as special counsel to pursue the Avoidance Actions.
SCOPE OF SERVICES
11. The Debtors propose to retain Kelley Drye on the terms and conditions set
forth in the Engagement Letter. Under the Engagement Letter, Kelley Drye will provide legal
advice to, consultation with and representation of the Debtors, in connection with the
investigation and the prosecution of the Avoidance Actions (the “Services”).
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12. Kelley Drye will only prosecute those Avoidance Actions as specifically
identified by the Debtors. The Debtors may elect to have additional counsel pursue certain other
Avoidance Actions.3
COMPENSATION
13. The Debtors propose to compensate Kelley Drye on a contingency fee
basis in accordance with the Engagement Letter, which sets forth a contingency fee schedule (the
“Contingency Fee Schedule”) as follows:
(a) Pre-suit: Contingency fee of 15% of recoveries fromAvoidance Actions obtained before a formal complaint isfiled with the Court.
(b) Litigation: Contingency fee of 25% of recoveries fromAvoidance Actions obtained after a formal complaint isfiled with the Court, but before judgment is entered.
(c) Post-Judgment: Contingency fee of 30% of recoveries fromAvoidance Actions obtained after the entry of a judgment.
14. The Debtors believe that the rates to be charged by Kelley Drye according
to the Contingency Fee Schedule for its Services are competitive and are in line with the rates
charged by its competitors. Indeed, the Debtors conducted a review and competitive comparison
of other firms and reviewed the rates of other firms before selecting Kelley Drye as special
counsel. The Debtors believe that Kelley Drye’s rates are reasonable given the quality of Kelley
Drye’s services and its professionals’ bankruptcy expertise related to the Avoidance Actions.
15. Kelley Drye will charge for expenses in a manner and at rates consistent
with charges made generally to its other clients in accordance with the U.S. Trustee Guidelines,
3 Substantially contemporaneous with this Application, the Debtors filed the Debtors’ Application for an OrderAuthorizing the Retention and Employment of ASK LLP as Special Counsel to the Debtors, seeking to retain ASKLLP (“ASK”) as special counsel to pursue certain of the Avoidance Actions. Because both Kelley Drye and ASKwill be receiving contingency fees for their work on the Avoidance Actions, and because both firms will be pursuingAvoidance Actions against different subsets of defendants, there is no concern that work by additional firms on theAvoidance Actions will create any duplication of services or additional burden on the Debtors’ estates.
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the Bankruptcy Rules, the Local Rules, and any applicable orders of this Court. Such expenses
include, among other things, long-distance telephone, fax (outgoing only), mail and express mail
charges, special or hand delivery charges, photocopying charges at the rate of $0.10 per page,
travel expenses, expenses for computerized research, and transcription costs.
16. As noted above, the Debtors seek to retain Kelley Drye pursuant to a
Contingency Fee Schedule, such that Kelley Drye’s contingency fees will be earned only to the
extent recoveries are obtained by the Debtors’ estates with respect to Avoidance Actions. In
turn, recoveries are obtained only after any underlying settlement is approved by this Court
pursuant to Bankruptcy Rule 9019, or absent settlement, upon payment of a judgment entered by
this Court. Because the compensation to be paid Kelley Drye under the Engagement Letter is
simply a mathematical function of the applicable percentage according to the Contingency Fee
Schedule multiplied by the amount for which any Avoidance Action is resolved – both of which
are subject to this Court’s approval after notice to parties in interest – the Debtors submit that
that there should be no requirement for Kelley Drye to apply to the Court monthly and/or
quarterly for allowance of compensation for professional services rendered. Instead, the Debtors
respectfully request that they be authorized to compensate Kelley Drye for professional services
and reimburse Kelley Drye’s out-of-pocket expenses on an interim basis as an ongoing
administrative expense of the estate as and when recoveries are obtained, subject to the filing of
a final fee application consistent with section 328 of the Bankruptcy Code, the Bankruptcy
Rules, the Local Rules, and any orders entered in the Cases governing professional compensation
and reimbursement for services rendered and charges incurred. Kelley Drye has further
indicated its intent to comply with the U.S. Trustee’s requests for information and additional
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disclosures as set forth in the U.S. Trustee Guidelines, both in connection with this Application
and the final fee application to be filed by Kelley Drye in the Cases.
17. Kelley Drye performed no services for the Debtors prior to the Petition
Date and received no retainer for the Services to be performed during the Cases. Additionally,
Kelley Drye has not agreed to share (a) any compensation it may receive with another party or
person, other than with the partners of Kelley Drye, or (b) in any compensation another person or
party may have receive.
BASIS FOR REQUESTED RELIEF
18. The Debtors seek authority to employ and retain Kelley Drye as their
special counsel pursuant to section 327(a) of the Bankruptcy Code, which provides that a debtor
is authorized to employ professional persons “that do not hold or represent an interest adverse to
the estate, and that are disinterested persons, to represent or assist the [Debtor] in carrying out the
[Debtor’s] duties under this title.” 11 U.S.C. § 327(a). Section 1107(b) of the Bankruptcy Code
elaborates upon sections 101(14) and 327(a) of the Bankruptcy Code in cases under chapter 11
of the Bankruptcy Code and provides that “a person is not disqualified for employment under
section 327 of [the Bankruptcy Code] by a debtor in possession solely because of such person’s
employment by or representation of the debtor before the commencement of the case.” 11
U.S.C. § 1107(b).
19. Section 328(a) of the Bankruptcy Code empowers a trustee to employ,
subject to court approval, an attorney to perform services for the Debtors under any reasonable
terms and conditions of employment, including on retainer, on an hourly basis or on a contingent
fee basis.
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20. In light of the truncated sale timeline and need for liquidity, the Debtors
respectfully submit that retaining and employing Kelley Drye pursuant to the terms of the
Engagement Letter is necessary and in the best interests of the Debtors’ estates and all parties in
interest to the Cases. The Debtors also believe that the terms and conditions of the Engagement
Letter are reasonable in light of the anticipated high volume of creditors and other parties in
interest that will be involved in the Cases.
21. Accordingly, to help mitigate liquidity concerns through pursuance of the
Avoidance Actions, the Debtors respectfully request the Court enter an order appointing Kelley
Drye as special counsel in the Cases pursuant to sections 327(a), 330, and 331 of the Bankruptcy
Code, Bankruptcy Rules 2014 and 2016, and Local Bankruptcy Rules 2014-1 and 2016-2.
DISINTERESTEDNESS; RULE 5002
22. To the best of the Debtors’ knowledge, information, and belief, and except
as otherwise set forth herein and in the accompanying LeHane Declaration, 4 the attorneys
comprising or employed by Kelley Drye have not represented and do not have any connection
with any of the Debtors, their affiliates, their creditors, or any other party in interest, or their
respective attorneys and accountants, the U.S. Trustee, or any person employed by the U.S.
Trustee, or any judge in the Bankruptcy Court for the District of Delaware, or any person
employed in the offices of the same.
23. As set forth in the LeHane Declaration, Kelley Drye has in the past
represented, currently represents, and likely in the future will represent certain parties in interest
4 As more fully set forth in the LeHane Declaration, due to the narrow focus of Kelley Drye’s representation asspecial counsel with respect to Avoidance Actions, and in particular, because Kelley Drye will only be pursuingspecific actions designated by the Debtors, Kelley Drye’s search with respect to its connections to certain categoriesof entities or individuals related to the Cases was limited in scope. However, Kelley Drye has indicated that (i) tothe extent required, it will broaden its search and file a supplemental declaration (if necessary), and (ii) should aconflict arise for Kelley Drye with respect to any Avoidance Action defendant, that action will be handled by ASKLLP.
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in the Cases in matters unrelated to the Debtors, the Cases, or such entities’ claims against or
interests in the Debtors. Kelley Drye is free to be adverse to such parties in connection with the
Debtors’ Cases.
24. The Debtors understand that except as otherwise set forth in the LeHane
Declaration:
(a) Neither Kelley Drye nor any attorney at the Firm holds orrepresents an interest adverse to the Debtors’ estates.
(b) Neither Kelley Drye nor any attorney at the Firm is or was acreditor, an equity security holder, or an insider of the Debtors
(c) Neither Kelley Drye nor any attorney at the Firm is or ever was adirector, officer, or employee of the Debtors.
(d) Kelley Drye does not have an interest materially adverse to theinterest of the estates or of any class of creditors or equity securityholders, by reason of any direct or indirect relationship to,connection with, or interest in the Debtors, or for any otherreason.5
25. In view of the foregoing and in light of the limited scope of Kelley Drye’s
role as special counsel with respect to Avoidance Actions, the Debtors believe that Kelley Drye
is a “disinterested person” within the meaning of section 101(14) of the Bankruptcy Code, as
modified by section 1107(b) of the Bankruptcy Code, and does not hold or represent any interest
adverse to the Debtors’ estates.
26. Kelley Drye has informed the Debtors that Kelley Drye will continue to
conduct periodic conflicts analyses to determine whether it is performing or has performed
services for any significant parties in interest in this case and that Kelley Drye will promptly
update the LeHane Declaration to disclose any pertinent relationships that come to Kelley Drye’s
attention.
5 See supra n. 4.
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NOTICE
27. The Debtors will provide notice of this Application to: (i) the U.S.
Trustee; (ii) holders of the thirty (30) largest unsecured claims on a consolidated basis against
the Debtors; (iii) the Official Committee of Unsecured Creditors; (iv) Bank of America, N.A.;
(v) Pathlight Capital, LLC; (vi) the landlords under the Debtors’ unexpired leases of
nonresidential real property; and (vii) all parties who, as of the filing of the Application, have
filed a notice of appearance and request for service of papers pursuant to Bankruptcy Rule 2002.
In light of the nature of the relief requested herein, the Debtors submit that no other or further
notice is necessary.
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CONCLUSION
WHEREFORE, the Debtors respectfully request that the Court enter an order,
substantially in the form of the proposed Retention Order, granting the relief requested herein
and such other and further relief as may be equitable and just.
Dated: July 26, 2016 Respectfully submitted,Wilmington, Delaware
/s/ Duane A. HuesersDuane A. HuesersChief Financial OfficerHastings Entertainment, Inc.(on behalf of itself and the other Debtors)
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EXHIBIT A
LeHane Declaration
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IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE
In re
DRAW ANOTHER CIRCLE, LLC, et al.,1
Debtors.
Chapter 11
Case No.: 16-11452
(Jointly Administered)
DECLARATION OF ROBERT L. LEHANEIN SUPPORT OF DEBTORS’ APPLICATION FOR AN ORDERAUTHORIZING THE EMPLOYMENT AND RETENTION OF
KELLEY DRYE & WARREN LLP AS SPECIAL COUNSEL FOR THE DEBTORS
I, Robert L. LeHane, hereby declare that the following is true and correct to the
best of my knowledge, information, and belief:
1. I am a Partner of Kelley Drye & Warren (“Kelley Drye”) and I am
authorized to submit this declaration on behalf of Kelley Drye. I submit this Declaration in
Support of the Debtors’ Application for an Order Authorizing Employment and Retention of
Kelley Drye & Warren as Special Counsel for the Debtors (the “Application”).2 Except as
otherwise noted, I have personal knowledge of the matters set forth herein.
QUALIFICATIONS
2. I am informed that the Debtors selected Kelley Drye as their special
counsel to investigate, prosecute, and recover Avoidance Actions because of Kelley Drye’s
1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: DrawAnother Circle, LLC (2102); Hastings Entertainment, Inc. (6375); MovieStop, LLC (9645); SP Images, Inc. (7773);and Hastings Internet, Inc. (0809). The Debtors’ executive headquarters are located at 3601 Plains Boulevard,Amarillo, TX 79102.
2 Capitalized terms used herein by not defined herein shall have the meaning ascribed to such terms in theApplication.
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extensive experience and knowledge of such claims. Kelley Drye is one of the country’s leading
law firms in the area investigation, prosecution, and recovery of chapter 5 avoidance actions,
including preferences. Among some of the cases where Kelley Drye has prosecuted, or currently
is prosecuting, such avoidance actions are: In re CWC Liquidation Inc. (f/k/a Coldwater Creek
Inc.) et al., Case No. 14-10867 (BLS) (Bankr. D. Del.), In re Exide Technologies, Case No. 13-
11482 (KJC) (Bankr. D. Del.), In re KSL Media Inc. et al., Case No. 13-15929-MB (Bankr. C.D.
Cal.), In re Women’s Apparel Group, LLC, Case No. 11-16217 (JNF) (Bankr. D. Mass.), In re
Getty Petroleum Marketing Inc., et al., Case No. 11-15606 (SCC) (Bankr. S.D.N.Y.), In re
Fleetwood Enterprises Inc., et al., Case No. 09-14254-MJ (Bankr. C.D. Cal.) and In re VeraSun
Energy Corporation et al., Case No. 08-12606 (BLS) (Bankr. D. Del.).
3. In light of Kelley Drye’s experience with avoidance actions and
recoveries, I believe the Debtors’ estates and creditors will clearly benefit from the retention of
Kelley Drye as special counsel to pursue the Avoidance Actions, and Kelley Drye is well-
qualified to represent the Debtors and to address both effectively and efficiently pursuance of the
Avoidance Actions.
SCOPE OF SERVICES
4. The Debtors propose to retain Kelley Drye on the terms and conditions set
forth in the Engagement Letter. Under the Engagement Letter, Kelley Drye will provide legal
advice to, consultation with and representation of the Debtors, in connection with the
investigation and the prosecution of the Avoidance Actions (the “Services”).
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5. Kelley Drye will only prosecute those Avoidance Actions as specifically
identified by the Debtors. The Debtors may elect to have additional counsel pursue certain other
Avoidance Actions.3
COMPENSATION
6. Kelley Drye will perform the Services on a contingency fee basis in
accordance with the Engagement Letter, which sets forth a contingency fee schedule (the
“Contingency Fee Schedule”) as follows:
(a) Pre-suit: Contingency fee of 15% of recoveries fromAvoidance Actions obtained before a formal complaint isfiled with the Court.
(b) Litigation: Contingency fee of 25% of recoveries fromAvoidance Actions obtained after a formal complaint isfiled with the Court, but before judgment is entered.
(c) Post-Judgment: Contingency fee of 30% of recoveries fromAvoidance Actions obtained after the entry of a judgment.
7. I believe that the rates to be charged by Kelley Drye under the
Contingency Fee Schedule for its Services are competitive and are at the rates charged by its
competitors. It is my understanding that the Debtors conducted a review and competitive
comparison of other firms and reviewed the rates of other firms before selecting Kelley Drye as
special counsel. It is my further understanding that the Debtors believe that Kelley Drye’s rates
are reasonable given the quality of Kelley Drye’s services and its professionals’ bankruptcy
expertise related to the Avoidance Actions.
3 Substantially contemporaneous with this Application, the Debtors filed the Debtors’ Application for an OrderAuthorizing the Retention And Employment of ASK LLP as Special Counsel to the Debtors seeking to retain ASKLLP (“ASK”) as special counsel to pursue certain of the Avoidance Actions. Because both Kelley Drye and ASKwill be receiving contingency fees for their work on the Avoidance Actions, and because both firms will be pursuingAvoidance Actions against different subsets of defendants, there is no concern that work by additional firms on theAvoidance Actions will create any duplication of services or additional burden on the Debtors’ estates.
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8. Kelley Drye will charge for expenses in a manner and at rates consistent
with charges made generally to its other clients, in accordance with the Bankruptcy Code, the
U.S. Trustee Guidelines, the Bankruptcy Rules, the Local Rules, and any other applicable orders
of this Court. Such expenses include, among other things, long-distance telephone, fax
(outgoing only), mail and express mail charges, special or hand delivery charges, photocopying
charges at the rate of $0.10 per page, travel expenses, expenses for computerized research, and
transcription costs.
9. The compensation to be paid Kelley Drye under the Engagement Letter is
a mathematical function of the applicable percentage according to the Contingency Fee Schedule
multiplied by the amount for which any Avoidance Action is resolved, either by settlement or
judgment, all of which are subject to approval by the Court after notice and an opportunity to be
heard. As such, I believe that there should be no requirement for Kelley Drye to apply to the
Court monthly and/or quarterly for allowance of compensation for professional services
rendered. Instead, Kelley Drye respectfully requests that it be compensated for professional
services and reimbursed for its out-of-pocket expenses on an interim basis as an ongoing
administrative expense of the estate, as and when recoveries are obtained, subject to the filing of
a final fee application with the Court and service on applicable parties in interest. Kelley Drye
also intends to comply with the U.S. Trustee’s requests for information and additional
disclosures as set forth in the U.S. Trustee Guidelines.
10. The following information is provided in response to the request for
additional information set forth in Paragraph D.1 of the U.S. Trustee Guidelines:
Question: Did you agree to any variations from, or alternatives to, yourstandard or customary billing arrangements for this engagement?
Response: No.
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Question: Do any of the professionals included in this engagement vary theirrate based on the geographic location of the bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months prepetition, discloseyour billing rates and material financial terms for the prepetitionengagement, including any adjustments during the 12 monthsprepetition. If your billing rates and material financial terms havechanged postpetition, explain the difference and the reasons for thedifference.
Response: Kelley Drye did not represent any of the Debtors in the 12 monthsprepetition.
Question: Has your client approved your prospective budget and staffingplan, and, if so for what budget period?
Response: Kelley Drye is being compensated pursuant to a Contingency FeeSchedule, plus reimbursement of expenses.
11. Additionally, Kelley Drye performed no services for the Debtors prior to
the Petition Date and received no retainer for the Services to be performed during the Cases.
Moreover, Kelley Drye has not agreed to share (a) any compensation it may receive with another
party or person, other than with the partners of Kelley Drye, or (b) in any compensation another
person or party may receive.
DISINTERESTEDNESS; RULE 5002
12. In connection with this proposed retention, Kelley Drye conducted a
search with respect to its connections to certain categories of entities or individuals (the
“Identified Parties”), as identified by the Debtors or as ascertained from a review of available
documents, a list of which is attached hereto as Schedule 1. The Identified Parties include: (i)
the Debtors and non-Debtor affiliates; (ii) DIP parties; (iii) lienholders; (iv) officers and directors
(current and former); (v) professionals; (vi) secured lenders; (vii) landlords and (viii) significant
vendors, including some vendors that received payments during the 90-day period prior to the
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Petition Date. To the extent that I have been able to ascertain that Kelley Drye has been recently
retained to represent any of the Identified Parties in matters unrelated to the Cases, such
Identified Parties are disclosed on Schedule 2 attached hereto. In addition, included on
Schedule 2 are other parties in interest, not included among the Identified Parties searched in
Kelley Drye’s database, that I am aware are currently represented by Kelley Drye in matters
unrelated to the Debtors’ chapter 11 Cases.
13. Due to the narrow focus of Kelley Drye’s representation as special counsel
with respect to Avoidance Actions, and in particular, because Kelley Drye will only be pursuing
specific actions designated by the Debtors, Kelley Drye’s database search was limited in scope
and did not include certain categories of parties in interest, such as taxing authorities and
utilities, among others. However, to the extent required, Kelley Drye will broaden its search and
file a supplemental declaration. Should a conflict arise for Kelley Drye with respect to any
Avoidance Action defendant, that action will be not be handled by Kelley Drye, but rather will
be handled by proposed co-counsel, ASK LLP.
14. Further, in compliance with Bankruptcy Rule 3002, an e-mail was sent to
each attorney of Kelley Drye to verify whether any such attorney (a) has a connection to (i) the
Debtors or (ii) current and former directors or officers of the Debtors, or (b) is a relative of (i)
any of the Judges of the United States Bankruptcy Court for the District of Delaware or (ii) any
members of the Office of the United States Trustee for the District of Delaware. No affirmative
responses were received to these e-mail communications.
15. In view of the foregoing and in light of the limited scope of Kelley Drye’s
role as special counsel with respect to Avoidance Actions, to the best of my knowledge, Kelley
Drye is a “disinterested person” within the meaning of section 101(14) of the Bankruptcy Code,
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as modified by section 1107(b) of the Bankruptcy Code, in that Kelley Drye, its partners,
counsel, and associates:
(a) are not creditors, equity security holders, or insiders of theDebtors;
(b) are not and were not, within two (2) years before the Petition Date,a director, officer, or employee of the Debtors; and
(c) do not have an interest materially adverse to the interests of theDebtors’ estates or of any class of creditors or equity securityholders of the Debtors, by reason of any direct or indirectrelationship to, connection with, or interest in the Debtors or forany other reason.
16. As set forth above, and subject to any explanations and/or exceptions
contained herein, Kelley Drye (a) does not hold or represent any interest adverse to the Debtors
in connection with the matters upon which Kelley Drye is to be engaged, and (b) is disinterested.
If the results of further investigation reveal any additional connections, Kelley Drye will make
any further disclosures as may be appropriate at that time.
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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, information and belief.
Dated: July 26, 2016 Respectfully submitted,Wilmington, Delaware
/s/ Robert L. LeHaneRobert L. LeHanePartnerKelley Drye & Warren LLP
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 9 of 17
SCHEDULE 1
Bank of America, N.A. Banks
Pathlight Capital, LLC Banks
ABG Aliepe LLC Debtor Affiliates
Auction A Circle, LLC Debtor Affiliates
Completely Independent Distribution Limited Debtor Affiliates
Draw Another Circle, LLC Debtor Affiliates
Drawing Perfect Circle Holdings Debtor Affiliates
Emanon Aviation L.P. Debtor Affiliates
EPE Inc. Debtor Affiliates
Exhibit A Circle, LLC Debtor Affiliates
Fly In A Circle, LLC Debtor Affiliates
GHG Holdings LLC Debtor Affiliates
GL SPE, LLC Debtor Affiliates
Graceland Air LLC Debtor Affiliates
Graceland Authenticated, LLC Debtor Affiliates
Graceland Holdings, LLC Debtor Affiliates
Hastings Entertainment, Inc. Debtor Affiliates
Hastings Internet, Inc. Debtor Affiliates
Kid Robot Inc. Debtor Affiliates
KR Purchase LLC / Kidrobot LLC Debtor Affiliates
Magic In A Circle, LLC Debtor Affiliates
MGIP LLC Debtor Affiliates
MovieStop, LLC Debtor AffiliatesNational Entertainment Collectibles Association,Inc. Debtor Affiliates
NECA Films LLC Debtor Affiliates
NECA, Inc. Debtor Affiliates
SP Images Inc. Debtor Affiliates
The Guesthouse At Graceland Debtor Affiliates
Wizkids/Neca LLC Debtor Affiliates
CT Lien Solutions Lienholders
Fleet Retail Finance Inc Lienholders
Forsythe Solutions Group, Inc. Lienholders
IBM Credit LLC Lienholders
Merchant Factory Group Lienholders
DSS Professionals
Johnson & Sheldon Professionals
Sprouse, Shrader, Smith Professionals
Alan Van Ongevalle Recent and former officers and directors
Angie Knight Recent and former officers and directors
Ann S. Lieff Recent and former officers and directors
Cathy Hershcopf Recent and former officers and directors
Dan Crow Recent and former officers and directors
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 10 of 17
2
Danny Gurr Recent and former officers and directors
Duane Huesers Recent and former officers and directors
Frank Marrs Recent and former officers and directors
Jeff Shrader Recent and former officers and directors
Jeff Twait Recent and former officers and directors
Jim Litwak Recent and former officers and directors
Joel Weinshanker Recent and former officers and directors
John Marmaduke Recent and former officers and directors
John Merklein Recent and former officers and directors
Kenneth Simon Recent and former officers and directors
Kevin Ball Recent and former officers and directors
Phil McConnell Recent and former officers and directors
ACD Distribution LLC Significant vendors
Alliance Entertainment Corp. (music) Significant vendors
Bethesda Softworks LLC Significant vendors
Bioworld Significant vendors
Buena Vista Video Significant vendors
Diamond Book Distributors Significant vendors
DPI Inc. Significant vendors
Fox Home Entertainment Significant vendors
Funko Inc Significant vendors
Grant Thornton Significant vendors
Hachette Book Group USA Significant vendors
Harpercollins Publishers Significant vendors
Hasbro Inc Significant vendors
Incomm Inc. Significant vendors
Ingram Book Company Significant vendors
Ingram Entertainment Significant vendors
Ingram Periodicals Significant vendors
MPS / VHPS Significant vendors
Penguin Random House LLC Significant vendors
Perseus Distribution Significant vendors
Rentrak Corp / Vobile Inc. Significant vendors
Scholastic Inc Significant vendors
Simon & Schuster Significant vendors
Skullcandy Significant vendors
Sony Computer Entertainment America LLC Significant vendors
Sony Music Significant vendors
Sony Pictures Home Entertainment Significant vendors
UMGD / Universal Music Group Distribution Significant vendors
Universal Studios Home Video Significant vendors
Warner Home Video Significant vendors
WEA Corp Music Significant vendors
ABF Freight System Inc. Significant vendors
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 11 of 17
3
AT&T Significant vendors
Books For Less LLC Significant vendors
Buena Vista Home Entertainment Significant vendors
Catamaran Inc Significant vendors
Coca Cola Bottlers’ Sales & Service Co Significant vendors
Diamond Comic Distributors Significant vendors
Dillanos Coffee Roasters Inc Significant vendors
Eastern Skateboard Supply Significant vendors
Empire Paper Company Significant vendors
Fox Video Rental Rev/Share Significant vendors
Hartford Fire Insurance Significant vendors
IBM Informix Significant vendors
Mcgriff, Seibels & Williams, Inc Significant vendors
Mediocre Corporation Significant vendors
Mighty Fine Significant vendors
Modern Marketing Concepts Inc/Crosley Ra Significant vendors
Multimedia Sales Significant vendors
NECA Significant vendors
Omni Capital Corporation Significant vendors
Prime Rate Premium Finance Corp Inc. Significant vendors
Saia Motor Freight Line Significant vendors
Solutions 2 Go LLC Significant vendors
Sony Interactive Entertainment America Significant vendors
Sony Music Entertainment Significant vendors
Southeastern Freight Lines In (SEFL) Significant vendors
UNVD / Universal Studios Home Entertainment Significant vendors
UPS Supply Chain Solutions Significant vendors
Verifone Significant vendors
Warner Video Games Significant vendors
YRC Inc. Significant vendors
American Express Significant vendors
United Parcel Service Significant vendors
Blue Cross Blue Shield Of Texas Significant vendors
1340 East 9th Street Realty Corp. Landlords
1666 N. Avalon, LLC Landlords
6051 Winter Haven, LLC Landlords
95 Palma LLC Landlords
Abilene Frenchmans Creek 93, LTD Landlords
ACV Albuquerque, LLC Landlords
ACV-Argo, CDA, LLC Landlords
Alpha Lake Ltd. Landlords
Amarillo Gem Lake 2 LLC Landlords
Ardmore Commerce Partners, L.P. Landlords
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 12 of 17
4
Arlington Bear Downs Investments LLC Landlords
BBTSJ, LLC Landlords
Benefit 592 Trust Landlords
Bennett Investment Properties Landlords
Black Enterprises Landlords
BOP Teller, LLC Landlords
Bosque River Associates Landlords
Bozeman Main Shopping Center, LLC Landlords
Broadmoor Properties Limited Partnership Landlords
CA New Plan Venture Fund Texas I, L.P. Landlords
Canyon 23rd Street #2, Limited Partnership Landlords
CAP II - 10th/With Sands, LLC Landlords
Centro NP Holdings 2 SPE, LLC Landlords
Century Financial Services LLC Landlords
Chisholm SC Landlords
Choice Land Corp and CLR Properties, Inc. Landlords
Clovis Shopping Center, L.L.C. Landlords
Colorado Square Joint Venture Landlords
Comanche Plaza Landlords
Commercial Net Lease Realty, Inc. Landlords
Cooke & Grace Properties Landlords
Country Square Lease LLC Landlords
Cuthbert Plaza, LLC Landlords
Devargas Center Associates, LP Landlords
Dillon Companies, Inc. Landlords
DLH, LLC Landlords
Drop-HT, LLC Landlords
Eagle-North Hills Shopping Centre, LP Landlords
Eastgate, LLP Landlords
Eckstein Properties Landlords
English Village Joint Venture Landlords
Fair Plaza, Inc. Landlords
Fairview Lakes--BTS, L.L.C. Landlords
Fawcett Rentals Landlords
Fountain-Ozarks, LLC Landlords
Frank C. Robson and Ludmila Robson, co-trustees Landlords
Fremont Mall LLC Landlords
FRT-TARO Stillwater, L.L.C. Landlords
Fury Lane LLC Management Landlords
Gershman Properties LLC Landlords
Glendean Shopping Center, LLC Landlords
Gordman Grand Island, LLC Landlords
Grand Island Joint Venture, LLC Landlords
Greater Missouri Builders, Inc. Landlords
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 13 of 17
5
H.E. Butt Store Property Company No. One Landlords
Hal M. Shaw and Ruth Kay Shaw Landlords
Harold G. Martin & Joe P. Shelton Landlords
Harrisville-Rogers II, LLC Landlords
Hillcrest Plaza 1998, LLC Landlords
Horizon Partners, LLC Landlords
HRR LLC Landlords
IF Retail, LLC Landlords
J.W. Franklin Co. Landlords
Jack Berg Family LP Landlords
JBT Third Avenue, LLC Landlords
JMLP Spokane, LLC Landlords
JT Development LLC Landlords
Kalik Investors Landlords
Kelley J. Shay & Patricia A. Shay Landlords
Kimco Joplin 707, Inc. Landlords
Kingman Square, LLC Landlords
KPS King Properties of Seguin, L.P. Landlords
L.N.N. Enterprises Incorporated Landlords
Las Pampas Square, LLC Landlords
Lawrence F. Kolb, et al Landlords
Limantzakis Properties Landlords
Linden Real Estate Holdings, L.L.C. Landlords
Lone Ranger, LLC Landlords
Lubbock Inn Investment Corp. Landlords
M.L. Hull Investments, LLC, T. Hull Investments,LLC
Landlords
MacArthur Village Limited Partnership Landlords
Manzano Plaza Partners Landlords
Martin H. and Julita A. Michel Landlords
Mathias Shopping Centers, Inc. Landlords
Mexsan LLC Landlords
Mid America Associates Landlords
Military Road Properties, LLC Landlords
Morris Venture Partners V, LLC Landlords
Mt. Pleasant Partners, Ltd. Landlords
Muskogee Property Shopping Center, LLC Landlords
New Braunfels Marketplace, L.P. Landlords
Nicholas Investment Company Landlords
North City Center, LLC Landlords
North Park Associates, LLC Landlords
Northfield Crossing Partners, L.P. Landlords
NPK Cordova, LLC Landlords
Oak Forest Group, Ltd. Landlords
Omni Capital Corporation Landlords
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 14 of 17
6
Pacific Resources Associates LLC Landlords
Palouse Mall LLC Landlords
Perkins, L.L.C. Landlords
Peterson Properties & Associates Landlords
PK Hastings LLC Landlords
Ponca Shopping Center, LLC Landlords
R & B Properties Landlords
RDF 209 Sunset San Angelo, TX P1 LLC Landlords
Retail Properties-Logan, LLC Landlords
Retail Properties-Prescott, LLC Landlords
Richmond Centre - FCA, LLC Landlords
Richmond Enterprises, LLC Landlords
Rock Springs Plaza, LLC Landlords
RPM Management Company, Inc. Landlords
Sam Roosth, et al Landlords
San Mar Dunhill Ratel LLC Landlords
Schwab Investment VII, LLC Landlords
Shannon, Inc. Landlords
Sherman Hastings, LLC Landlords
Sierra Services Group LLC Landlords
Southwest Commons 05 A, LLC Landlords
Southwest Properties, L.L.C. Landlords
Spirit Master Funding, LLC Landlords
Square Deal Income, LLC Landlords
S-T Properties Landlords
Steven Enterprises, LLC Landlords
Stewart/Belf Asset Management Co. Landlords
Swarts Family Investment Co., LLC Landlords
Tejas Center Corporation Landlords
Tenalok Partners, Ltd. Landlords
The Estate of Mary Lou Cossey Landlords
The Fitzhugh Company Landlords
Thomas B. Horne Landlords
Thomas F James Realty Limited Partnership, LLLP Landlords
TKG Powder Basin, LLC Landlords
Tom Sneva Landlords
Towne Center Venture, L.L.P. Landlords
TPRF/The Falls, L.P. Landlords
TS Greenville, LLC Landlords
TSCA-50 (DEL), LLC Landlords
UFPTFC, LLC/FFPTFC, LLC Landlords
Valencia Plaza, LLC Landlords
Verlin and Elaine Pfannensteil Landlords
Vision 23rd LLC Landlords
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 15 of 17
7
W.A. Mays and Agnes Mays Trust II Landlords
Wal-Mart Stores East, LP Landlords
West Park Shopping Center LLC Landlords
Western Square Investments Landlords
WHLR-Forrest Gallery LLC Landlords
Wilshire Property Co., LLC Landlords
WL Nampa LLC Landlords
Wood Maryville Center, LLC Landlords
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 16 of 17
SCHEDULE 2
Alliance Entertainment Corp.Bank of America, N.A.DDR Corp.Fox Home Entertainment (client - Twentieth Century Fox)National Retail Properties, Inc.VerifoneWal-Mart Stores, Inc.Warner Home Video (client – Warner Bros./Warner Bros. Entertainment Inc.)Weingarten Realty Investors
Case 16-11452-KJC Doc 465-1 Filed 07/26/16 Page 17 of 17
EXHIBIT B
Engagement Letter
Case 16-11452-KJC Doc 465-2 Filed 07/26/16 Page 1 of 1
EXHIBIT C
Huesers Declaration
Case 16-11452-KJC Doc 465-3 Filed 07/26/16 Page 1 of 4
IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE
In re
DRAW ANOTHER CIRCLE, LLC, et al.,1
Debtors.
Chapter 11
Case No.: 16-11452
(Jointly Administered)
DECLARATION OF DUANE A. HUESERSIN SUPPORT OF DEBTORS’ APPLICATION FOR AN ORDERAUTHORIZING THE EMPLOYMENT AND RETENTION OF
KELLEY DRYE & WARREN LLP AS SPECIAL COUNSEL FOR THE DEBTORS
I, Duane A. Huesers, hereby declare that the following is true and correct to the
best of my knowledge, information, and belief:
1. I am Chief Financial Officer of Hastings Entertainment, Inc. (“Hastings”),
one of the above-captioned debtors (the “Debtors”). I submit this Declaration in support of the
Debtors’ chapter 11 petitions and the first day pleadings described herein. I am familiar with the
Debtors’ day-to-day operations, businesses and financial affairs.
2. I have served as Hastings’ Chief Financial Officer since joining the
company in March 2016, and was appointed as acting Chief Executive Officer and Chief
Financial Officer of MovieStop, LLC (“MovieStop”) two weeks after the liquidation of
MovieStop’s inventory began and as MovieStop’s former officers were terminated. Prior to my
employment by the Debtors, I served as the Chief Financial Officer of United Fashions of Texas,
a discount retailer. I also previously served as the Senior Vice President of Finance for National
1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: DrawAnother Circle, LLC (2102); Hastings Entertainment, Inc. (6375); MovieStop, LLC (9645); SP Images, Inc. (7773);and Hastings Internet, Inc. (0809). The Debtors’ executive headquarters are located at 3601 Plains Boulevard,Amarillo, TX 79102.
Case 16-11452-KJC Doc 465-3 Filed 07/26/16 Page 2 of 4
2
Stores, Inc., a discount apparel retailer, and as Vice President of Finance at both Coldwater
Creek Inc. and Tuesday Morning Corporation. In all, I have 40 years of accounting and finance
experience at various retailers. I received a Bachelor’s of Business Administration degree from
Washburn University and a Master’s of Business Administration degree from the University of
Kansas. I am a Certified Public Accountant in the State of Texas.
3. I submit this declaration in support of the Debtors’ Application for an
Order Authorizing Employment and Retention of Kelley Drye & Warren as Special Counsel for
the Debtors (the “Application”), filed concurrently herewith by the Debtors.
4. If called as a witness, I could and would competently testify to the matters
set forth herein based on my personal knowledge. As a result of my tenure with the Debtors, I
have become familiar with the Debtors’ day-to-day operations, business affairs, financial
condition, and books and records. My testimony herein is based on my service as an officer of
certain of the Debtors currently and in the past, my review of the Debtors’ books and records and
other relevant documents of which I am custodian, and my review of information compiled and
communicated to me, at my request, by other employees of the Debtors.
DEBTORS’ SELECTION OF KELLEY DRYE AS SPECIAL COUNSEL
5. Kelley Drye & Warren (“Kelley Drye”) is proposed to serve as special
counsel to the Debtors to investigate, prosecute, recover the Avoidance Actions. I am aware that
Kelley Drye has extensive experience in pursuing such avoidance actions.
6. The Debtors retained Kelley Drye because of its extensive experience and
knowledge of pursuing actions like the Avoidance Actions. I believe Kelley Drye is qualified to
represent the Debtors in the Cases in an efficient, competent, and timely manner.
Case 16-11452-KJC Doc 465-3 Filed 07/26/16 Page 3 of 4
3
BILLING RATE STRUCTURE
7. Kelley Drye has informed the Debtors that its contingency rates set forth
in the Contingency Rate Schedule are competitive and are in line with the rates charged by its
competitors.
COST SUPERVISION
8. The Debtors recognize that it is their responsibility to closely monitor the
billing practices of their counsel to ensure the fees and expenses paid by their estates remain
consistent with the Debtors’ expectations and the exigencies of the Cases. As they did
prepetition, the Debtors will continue to bring discipline, client involvement, and accountability
to the counsel fees and expense reimbursement process. Kelley Drye will be compensated on a
contingency fee basis as outlined in the Engagement Letter and will submit a final fee
application for final allowance of compensation and reimbursement for its services.
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, information and belief.
Dated: July 26, 2016 Respectfully submitted,Wilmington, Delaware
/s/ Duane A. HuesersDuane A. HuesersChief Financial OfficerHastings Entertainment, Inc. (on behalf of itselfand the other Debtors)
Case 16-11452-KJC Doc 465-3 Filed 07/26/16 Page 4 of 4
EXHIBIT D
Retention Order
Case 16-11452-KJC Doc 465-4 Filed 07/26/16 Page 1 of 4
IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE
In re
DRAW ANOTHER CIRCLE, LLC, et al.,1
Debtors.
Chapter 11
Case No.: 16-11452
(Jointly Administered)
Re: Docket No. __
ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OFKELLEY DRYE & WARREN LLP AS SPECIAL COUNSEL FOR THE DEBTORS
Upon the application (the “Application”)2 of Draw Another Circle, LLC and its
chapter 11 affiliates, the debtors and debtors in possession (the “Debtors”) in the above-
captioned jointly administered chapter 11 cases (the “Cases”), for entry of an order(the “Order”)
under sections 327(a), 328, and 330 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 2016-2 of the Local Rules of Bankruptcy Practice and Procedure
of the Bankruptcy Court for the District of Delaware (the “Local Rules”), and consistent 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 (the “U.S. Trustee
Guidelines”), authorizing the employment and retention of Kelley Drye & Warren LLP (“Kelley
Drye”) as special counsel for the Debtors for the investigation, prosecution, and recovery of
certain avoidance actions (the “Avoidance Actions”) under chapter 5 of the Bankruptcy Code in
1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows: DrawAnother Circle, LLC (2102); Hastings Entertainment, Inc. (6375); MovieStop, LLC (9645); SP Images, Inc. (7773);and Hastings Internet, Inc. (0809). The Debtors’ executive headquarters are located at 3601 Plains Boulevard,Amarillo, TX 79102.
2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Application.
Case 16-11452-KJC Doc 465-4 Filed 07/26/16 Page 2 of 4
2
the Cases; and upon the declaration of Robert L. LeHane in support of the Application (the
“LeHane Declaration”) and the Declaration of Duane A. Huesers (the “Huesers Declaration” and
together with the LeHane Declaration, the “Declarations”), and it appearing that this Court has
jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334(b) and 157, and the Amended
Standing Order of Reference from the United States District Court for the District of Delaware
dated as of February 29, 2012; and it appearing that venue of the Cases and the Application in
this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and it appearing that this matter is
a core proceeding pursuant to 28 U.S.C. § 157(b); and it appearing that this Court may enter a
final order consistent with Article III of the United States Constitution; and it appearing that
proper and adequate notice of the Application has been given and that no other or further notice
is necessary; and after due deliberation thereon; and the Court having found that the relief sought
by the Application is in the best interests of the Debtors and their estates, creditors and interest
holders; therefore, it is hereby ORDERED, ADJUDGED and DECREED THAT:
1. The Application is GRANTED as set forth herein.
2. Pursuant to section 327(a) of the Bankruptcy Code, the Debtors are
authorized to employ and retain Kelley Drye as special counsel on the terms set forth in the
Application and the Engagement Letter.
3. Because of the disclosure of the Contingency Fee Schedule approved in
connection with the Application, and the manner of payment of those fees, Kelley Drye is not
required to file interim fee applications; however, Kelley Drye shall file a final fee application
for final allowance of compensation for its services and reimbursement of its expenses, in
accordance with sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the Local
Rules, and such other procedures as may be fixed by order of this Court.
Case 16-11452-KJC Doc 465-4 Filed 07/26/16 Page 3 of 4
3
4. The Debtors are authorized to take all actions necessary to effectuate the
relief granted pursuant to this Order in accordance with the Application and the Declarations.
5. Notice of the Application shall be deemed good and sufficient notice of
such Application, and the requirements of the Local Rules are satisfied by the contents of the
Application.
6. Kelley Drye is authorized and empowered to take all actions necessary to
comply with all duties set forth in the Application and this Order.
7. In the event of an inconsistency between the Application, the Engagement
Letter, and this Order, this Order shall govern.
8. Notwithstanding the possible applicability of Bankruptcy Rules 6004,
7062, or 9014, or otherwise, the terms and conditions of this Order shall be immediately
effective and enforceable upon its entry.
9. This Court shall retain jurisdiction and power with respect to all matters
relating to the interpretation or implementation of this Order.
Dated: Wilmington, Delaware______________, 2016
THE HONORABLE KEVIN J. CAREYUNITED STATES BANKRUPTCY JUDGE
Case 16-11452-KJC Doc 465-4 Filed 07/26/16 Page 4 of 4
IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWARE
In re:
DRAW ANOTHER CIRCLE, LLC, et al.,
Debtors.1
Chapter 11
Case No. 16-11452 (KJC)
(Jointly Administered)
Objection Deadline: August 9, 2016 at 4:00 p.m. (ET)Hearing Date: September 6, 2016 at 1:30 p.m. (ET)
NOTICE OF DEBTORS’ APPLICATION FOR AN ORDERAUTHORIZING THE EMPLOYMENT AND RETENTION OF
KELLEY DRYE & WARREN LLP AS SPECIAL COUNSEL FOR THE DEBTORS
PLEASE TAKE NOTICE that on July 26, 2016, the above-captioned debtors
and debtors in possession (collectively, the “Debtors”) filed the Debtors’ Application for an
Order Authorizing the Employment and Retention of Kelley Drye & Warren LLP as Special
Counsel for the Debtors (the “Application”). A copy of the Application is attached hereto.
PLEASE TAKE FURTHER NOTICE that any responses or objections to the
Application must be (i) filed with the Clerk of the United States Bankruptcy Court for the
District of Delaware, 824 Market Street, Wilmington, Delaware 19801, on or before
August 9, 2016 at 4:00 p.m. (prevailing Eastern Time) (the “Objection Deadline”) and (ii)
served so as to be actually received no later than the Objection Deadline by the undersigned
proposed counsel to the Debtors.
PLEASE TAKE FURTHER NOTICE that, if any objections or responses are
received, a hearing with respect to the Application will be held before the Honorable Kevin J.
Carey, United States Bankruptcy Judge, at the United States Bankruptcy Court for the District of
1 The Debtors and the last four digits of their respective federal taxpayer identification numbers are as follows:Draw Another Circle, LLC (2102); Hastings Entertainment, Inc. (6375); MovieStop, LLC (9645); SP Images, Inc.(7773); and Hastings Internet, Inc. (0809). The Debtors' executive headquarters are located at 3601 PlainsBoulevard, Amarillo, TX 79102.
Case 16-11452-KJC Doc 465-5 Filed 07/26/16 Page 1 of 2
2
Delaware, 5th floor, Courtroom No. 5, 824 Market Street, Wilmington, Delaware 19801 on
September 6, 2016 at 1:30 p.m. (prevailing Eastern Time).
IF NO OBJECTIONS TO THE APPLICATION ARE TIMELY FILED,
SERVED AND RECEIVED IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY
GRANT THE RELIEF REQUESTED IN THE APPLICATION WITHOUT FURTHER
NOTICE OR HEARING.
Dated: July 26, 2016 Respectfully submitted,
Wilmington, Delaware
/s/ Christopher M. SamisChristopher M. Samis (No. 4909)L. Katherine Good (No. 5101)Chantelle D. McClamb (No. 5978)WHITEFORD, TAYLOR & PRESTON LLCThe Renaissance Centre, Suite 500405 North King StreetWilmington, Delaware 19801Telephone: (302) 353-4144Facsimile: (302) 661-7950Email: [email protected]
[email protected]@wtplaw.com
Counsel for the Debtors and Debtors inPossession
Case 16-11452-KJC Doc 465-5 Filed 07/26/16 Page 2 of 2