Case Document 134 Filed in TXSB on 09/23/16 Page 1 of 14

Transcription

1 Case Document 134 Filed in TXSB on 09/23/16 Page 1 of 14 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In re: LIGHT TOWER RENTALS, INC., et al., 1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No (DRJ) (Jointly Administered) DEBTORS APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF PROSKAUER ROSE LLP AS ATTORNEYS FOR THE DEBTORS EFFECTIVE NUNC PRO TUNC TO THE PETITION DATE This motion seeks an order that may adversely affect you. If you oppose the motion, you should immediately contact the moving party to resolve the dispute. If you and the moving party cannot agree, you must file a response and send a copy to the moving party. You must file and serve your response within 7 days of the date this was served on you. Your response must state why the motion should not be granted. If you do not file a timely response, the relief may be granted without further notice to you. If you oppose the motion and have not reached an agreement, you must attend the hearing. Unless the parties agree otherwise, the court may consider evidence at the hearing and may decide the motion at the hearing. Represented parties should act through their attorney. TO THE HONORABLE U.S. BANKRUPTCY JUDGE DAVID R. JONES: The above-captioned debtors and debtors in possession (collectively, the Debtors ) file this application (this Application ) for the entry of an order (the Order ), substantially in the form attached hereto as Exhibit A, authorizing and approving the retention and employment of 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: Light Tower Rentals, Inc. (4893); LTR Holdco, Inc. (8813); LTR Shelters, Inc. (5396); and LTR Investco, Inc. (3819). The location of the Debtors service address is: 2330 E. Interstate 20 S. Service Road, Odessa, Texas

2 Case Document 134 Filed in TXSB on 09/23/16 Page 2 of 14 Proskauer Rose LLP ( Proskauer ) as counsel to the Debtors nunc pro tunc to August 30, 2016 (the Petition Date ). In support of this Application, the Debtors submit the declaration of Philip M. Abelson (the Abelson Declaration ), which is attached hereto as Exhibit B, and the declaration of Keith Muncy (the Muncy Declaration ), which is attached hereto as Exhibit C. In further support of this Application, the Debtors respectfully represent as follows: Jurisdiction and Venue 1. The United States Bankruptcy Court for the Southern District of Texas (the Court ) has jurisdiction over this matter pursuant to 28 U.S.C This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). 2. Venue is proper pursuant to 28 U.S.C and The bases for the relief requested herein are sections 327 and 328(a) of title 11 of the United States Code, 11 U.S.C (the Bankruptcy Code ), Rules 2014(a) and 2016 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rules , 2016, and of the Local Rules of the United States Bankruptcy Court for the Southern District of Texas (the Local Bankruptcy Rules ). Background 4. On the Petition Date, each of the Debtors filed voluntary petitions for relief 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) and 1108 of the Bankruptcy Code. On August 31, 2016, the Court entered an order [Dckt. No. 24] authorizing the joint administration and procedural consolidation of the chapter 11 cases pursuant to Bankruptcy Rule 1015(b). 5. The factual background regarding the Debtors, including their business operations, their capital and debt structure and the events leading to the filing of these chapter 11 2

3 Case Document 134 Filed in TXSB on 09/23/16 Page 3 of 14 cases are set forth in the Disclosure Statement for the Debtors Joint Prepackaged Chapter 11 Plan, filed on August 31, 2016 [Dckt. No. 18], and the Declaration of Keith Muncy in Support of the Debtors Chapter 11 Petitions and First Day Motions, filed on August 31, 2016 [Dckt. No. 20] (the First Day Declaration ), incorporated herein by reference. 6. On August 30, 2016, the board of directors of each Debtor resolved to retain Proskauer as its general bankruptcy counsel, subject to Court approval. The Debtors are requesting that Proskauer s retention be approved nunc pro tunc to the Petition Date, as Proskauer has been actively advising the Debtors since the commencement of these chapter 11 cases. Relief Requested 7. By this Application, the Debtors seek entry of the Order authorizing the retention and employment of Proskauer, as their general bankruptcy counsel, nunc pro tunc to the Petition Date, to perform legal services necessary during these Chapter 11 Cases, in accordance with Proskauer s normal hourly rates and reimbursement policies in effect when services are rendered. The Debtors request that the Court approve the employment of Proskauer in accordance with the terms and conditions set forth in this Application and the Abelson Declaration. Proskauer s Qualifications 8. The Debtors seek to retain Proskauer because of Proskauer s recognized expertise and extensive experience and knowledge in the field of debtor representation, creditor rights, and business reorganization under chapter 11 of the Bankruptcy Code, as well as Proskauer s familiarity with the Debtors business, finances, and operations from well before the Petition Date. 3

4 Case Document 134 Filed in TXSB on 09/23/16 Page 4 of Proskauer is an international firm with more than 708 lawyers in multiple countries, including the United States, United Kingdom, China, France, and Brazil. Within the United States, Proskauer has offices in New York, New York; Boca Raton, Florida; Boston, Massachusetts; Chicago, Illinois; Los Angeles, California; New Orleans, Louisiana; Newark, New Jersey; and Washington, D.C. Proskauer s attorneys provide a wide range of legal services, including corporate, litigation, regulatory, and employment law. 10. Proskauer s attorneys have extensive experience representing debtors, creditors committees, creditors, trustees, and others in a wide variety of bankruptcy cases. Proskauer s attorneys currently represent, or have represented, debtors and creditors in multiple large and complex chapter 11 cases, and have been involved in some of the largest chapter 11 cases of the past decades, including Caesars, Energy Future Holdings, Enron, G-I Holdings, Lehman Brothers, Refco, Ambac, MF Global, Capmark, Texaco, NewPage and Chrysler, as well as other complex restructurings, both in and out of court. 11. The attorneys from Proskauer who will be employed in these chapter 11 cases are each members in good standing in the jurisdictions in which such attorneys are admitted. 12. Proskauer is familiar with the proposed restructuring and many of the potential legal issues that may arise in the context of these chapter 11 cases. Based on these facts, the Debtors believe that Proskauer is both well-qualified and uniquely able to represent the Debtors in these chapter 11 cases in an efficient and timely manner. Services to be Provided 13. The Debtors anticipate that Proskauer will, among other things, render the following legal services: (i) provide legal advice with respect to the Debtors powers and duties as debtors in possession in the operation of their businesses and the management of estate property; 4

5 Case Document 134 Filed in TXSB on 09/23/16 Page 5 of 14 (ii) (iii) advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; attend meetings and negotiate with representatives of creditors and other parties in interest; (iv) take all necessary steps to protect and preserve the Debtors bankruptcy estates; (v) serve as counsel of record for the Debtors in all aspects of these chapter 11 cases, including, without limitation, the prosecution of actions on behalf of the Debtors, the defense of any actions commenced against the Debtors, and objections to claims filed against the Debtors estates; (vi) prepare on behalf of the Debtors all necessary motions, answers, orders, reports, and other legal papers in connection with the administration of their bankruptcy estates; (vii) assist in the confirmation of the Debtors chapter 11 plan and disclosure statement, as well as facilitating the consummation of the chapter 11 plan; (viii) advise the Debtors regarding tax matters; (ix) (x) (xi) (xii) represent the Debtors in connection with obtaining authority to continue using cash collateral; advise the Debtors with respect to corporate and litigation matters; consult with the United States Trustee for the Southern District of Texas (the U.S. Trustee ), any other committees appointed in these chapter 11 cases, and all other creditors and parties in interest concerning the administration of these chapter 11 cases; and provide representation and all other legal services required by the Debtors in discharging their duties as debtors in possession or otherwise in connection with these chapter 11 cases. Compensation of Proskauer 14. Proskauer intends to apply for compensation for professional services rendered on an hourly basis and reimbursement of expenses incurred in connection with these chapter 11 cases, subject to the Court s approval and in compliance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and any other applicable procedures and orders of the Court. The hourly rates and corresponding rate structure Proskauer will use in these chapter 11 cases are the same as the hourly rates and corresponding rate structure that Proskauer uses in other restructuring matters, as well as similar complex corporate, 5

6 Case Document 134 Filed in TXSB on 09/23/16 Page 6 of 14 securities, and litigation matters whether in court or otherwise, regardless of whether a fee application is required. These rates and the rate structure reflect that such restructuring and other complex matters typically are national in scope and involve great complexity, high stakes, and severe time pressures. 15. Proskauer operates in a national marketplace for legal services in which rates are driven by multiple factors relating to the individual lawyer, his or her area of specialization, the firm s expertise, performance, and reputation, the nature of the work involved, and other factors. 16. The billing rates of the Proskauer attorneys principally expected to work on this matter range as follows 2 : Billing Category 3 U.S. Range Partners $1,040-$1,300 Counsel $980-$1070 Associates $495-$930 Paraprofessionals $205-$ Proskauer s hourly rates are set at a level designed to compensate Proskauer fairly for the work of its attorneys and paraprofessionals and to cover fixed and routine expenses. Hourly rates vary with the experience and seniority of the individuals assigned. These hourly rates are subject to periodic adjustments to reflect economic and other conditions. 4 2 To the extent that attorneys with higher rates perform services for the Debtor, Proskauer will supplement this Application with a notice of such attorney s rate. 3 Although Proskauer does not anticipate using contract attorneys during these chapter 11 cases, in the unlikely event that it becomes necessary to use contract attorneys, Proskauer will not charge a markup to the Debtors with respect to fees billed by such attorneys. Moreover, any contract attorneys or non-attorneys who are employed by the Debtors in connection with work performed by Proskauer will be subject to conflict checks and disclosures in accordance with the requirements of the Bankruptcy Code. 4 In the ordinary course of business, the standard hourly billing rates for Proskauer professionals and paraprofessionals are adjusted annually as of the commencement of the firm s fiscal year on November 1 to reflect advancing seniority and promotion. As set forth in the Order, Proskauer will provide ten business-days notice to the Debtors, the U.S. Trustee, and any other official committee (if any) before implementing any periodic increases, and shall file any such notice with the Court. 6

7 Case Document 134 Filed in TXSB on 09/23/16 Page 7 of Prior to the Petition Date, Proskauer received certain amounts in the ordinary course of business (as set forth in the Abelson Declaration) from the Debtors as compensation for professional services relating to general corporate matters. Proskauer also received several retainer fees and advances against fees and expenses for services to be performed in the preparation for and prosecution of these Chapter 11 Cases, in the aggregate amount of approximately $1.85 million, as disclosed in the Abelson Declaration. All amounts received and retainers applied since November 1, 2015 (Proskauer s last price increase) were calculated using the hourly rates described above. The rate structure provided by Proskauer is appropriate and not significantly different from (a) the rates that Proskauer charges for other similar types of representations or (b) the rates that other comparable counsel would charge to do work substantially similar to the work Proskauer will perform in these chapter 11 cases. 19. The Debtors also understand that Proskauer is customarily reimbursed for all actual and necessary expenses incurred in connection with the representation of a client in a given matter, including, but not limited to, photocopying charges, travel expenses, filing fees, delivery charges, postage, long distance telephone charges, transcription charges, and computerized legal research charges. Proskauer will seek reimbursement for its actual and necessary costs and expenses incurred in connection with its representation of the Debtors, and will maintain detailed records of all such costs and expenses. 20. Based on the foregoing, the Debtors believe the employment of Proskauer, on the terms set forth herein, is necessary, in the best interests of the Debtors, and will enable the Debtors to carry out its duties under the Bankruptcy Code. Events Leading To Chapter The Debtors engaged Proskauer as transactional counsel for approximately 2 years before the Petition Date. In April 2016, after almost two years of deteriorating market 7

8 Case Document 134 Filed in TXSB on 09/23/16 Page 8 of 14 conditions, the Debtors engaged Credit Suisse, as investment banker, to analyze its financial condition and assist the Debtors in pursuing restructuring options to address their liquidity challenges. During this period, the Debtors anticipated having sufficient runway and liquidity to pursue various restructuring options without the need for a near-term chapter 11 filing. Unfortunately, while Credit Suisse presented a number of out-of-court restructuring alternatives to the Debtors, 5 market conditions continued to worsen and the Debtors liquidity became much tighter than previously anticipated. 22. After it became clear that a new-money proposal was not an option, the Debtors restructuring focus shifted to the holders of the Debtors secured notes and their willingness to engage in discussions on a potential transaction. Ultimately, in mid-summer 2016, the Debtors began a series of good-faith, arms-length negotiations with the Ad Hoc Committee of Noteholders (as defined in the First Day Declaration) over the terms of a restructuring that could be accomplished by an out-of-court exchange offer (with the possibility of a combined exchange offer with a pre-pack (otherwise known as a stapled pre-pack)) to be implemented in early Unfortunately, time interceded, as the Debtors August interest payment, declining financial performance and the length of these negotiations meant that the exchange offer could not be fully solicited and closed before the expiration of the grace period (August 31, 2016) leaving the Debtors vulnerable to potential creditor enforcement actions. At this point, in late-july/early- August 2016, the options were limited and the Debtors pivoted to the pursuit of only a prepackaged chapter 11 plan of reorganization, largely incorporating the same terms that were contemplated for the exchange offer. To this end, Proskauer s restructuring professionals acted 5 These alternatives included (i) a comprehensive recapitalization, (ii) a new money plan, which would include a partial equitization, an exchange of secured notes for new notes and a new equity contribution from the existing stockholders, and (iii) an out-of-court exchange offer that would replace the secured notes with new PIK notes. 8

9 Case Document 134 Filed in TXSB on 09/23/16 Page 9 of 14 with urgency to prepare the Debtors for a prepackaged chapter 11 plan before expiration of the grace period on the August 1, 2016 interest payment. 23. A chart identifying the fees and the expenses incurred by Proskauer and paid by the Debtors, as well as the advance payment retainers transferred by the Debtors to Proskauer, prior to the Petition Date is included in the Abelson Declaration. 24. Pursuant to Bankruptcy Rule 2016(b), Proskauer 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, associates, and contract attorneys associated with Proskauer (if any) or (b) any compensation another person or party has received or may receive. 25. As of the Petition Date, the Debtors did not owe Proskauer any amounts for legal services rendered before the Petition Date. approval: Basis for Relief 26. Section 327(a) of the Bankruptcy Code provides that a Debtor, subject to Court [M]ay employ one or more attorneys, accountants, appraisers, auctioneers, or other professional persons, that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee s duties under this title. 27. Bankruptcy Rule 2014(a) requires that an application for retention include: Fed. R. Bankr. P [S]pecific facts showing the necessity for the employment, the name of the [firm] to be employed, the reasons for the selection, the professional services to be rendered, any proposed arrangement for compensation, and, to the best of the applicant s knowledge, all of the [firm s] connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee. 9

10 Case Document 134 Filed in TXSB on 09/23/16 Page 10 of The Debtors submit that for all the reasons stated herein and in the Abelson Declaration, the retention and employment of Proskauer as the Debtors counsel pursuant to section 327(a) of the Bankruptcy Code and Bankruptcy Rule 2014(a) is warranted. A. Proskauer s Retention is Necessary and is in the Best Interests of the Debtors Estates. 29. The Debtors submit, in light of Proskauer s vast restructuring and transactional experience and its institutional knowledge of the Debtors operations, Proskauer s retention as Debtors counsel is both necessary and in the best interests of the Debtors estates. Indeed, if the Debtors are required to retain different counsel to replace Proskauer, the Debtors will need to locate, educate, and integrate new counsel and expend significant resources in doing so, rather than devoting their time and focus to their reorganization efforts. In this respect, retaining Proskauer will avoid unnecessary administrative expenses and delays, result in cost efficiencies, and will assist in facilitating the Debtors reorganization efforts. 30. The Debtors are subject to a tight schedule that was negotiated with the Consenting Noteholders as part of the RSA, pursuant to which the Debtors are required, among other things, to emerge from bankruptcy within [75] days. Replacing counsel at this late stage of the case may seriously impair the Debtors ability to reorganize in chapter 11. B. Proskauer Neither Holds nor Represents any Interest Adverse to the Debtors Estates and is a Disinterested Person within the meaning of Section 101(14) of the Bankruptcy Code. 31. To the best of the Debtors knowledge and except as disclosed herein and in the Abelson Declaration, Proskauer: (a) does not represent, and does not hold, any interest adverse to the Debtors estates; and (b) is a disinterested person within the meaning of section 101(14) of the Bankruptcy Code and has no connection to the Debtors, their creditors, or other parties in interest. 10

11 Case Document 134 Filed in TXSB on 09/23/16 Page 11 of As noted, Proskauer represented the Debtors as general corporate/transactional counsel since mid When it was clear that the Debtors only option was to pursue a prepack chapter 11 plan, Proskauer received an initial retainer (like all other professionals that were involved in the case) and additional retainers as needed from time to time and ensure that the amounts under the retainer exceeded the amounts the Debtors owed Proskauer. The amounts due to Proskauer were setoff against the retainer prior to the filing of these chapter 11 cases. As of the Petition Date Proskauer continues to hold $146, of the retainer and shall either return this amount to the Debtors or, if retained, after approval by the Court will apply these amounts to Proskauer s postpetition fees and expenses. 33. Proskauer will use reasonable efforts to see that no conflicts or other disqualifying circumstances exist or arise during the pendency of these chapter 11 cases. If any new material facts or relationships are discovered or arise, Proskauer will use reasonable efforts to identify them and will promptly file a supplemental declaration, as required by Bankruptcy Rule 2014(a). 34. Proskauer represented, represents, and in the future will likely be involved in other cases that are unrelated to these cases in which professionals involved in this case are involved. Proskauer, however, is not representing any of those entities in these cases. 35. Proskauer may represent, or may have represented, parties in interest in matters unrelated to these chapter 11 cases. Proskauer will not represent any such parties with respect to any matters in these chapter 11 cases. Prior to Proskauer s representation of the Debtors with respect to its restructuring efforts, Proskauer represented both the Debtors and their largest shareholder Clairvest Equity Partners III Limited Partnership (together with certain other affiliates, Clairvest ) on matters relating to the Debtors, but not these chapter 11

12 Case Document 134 Filed in TXSB on 09/23/16 Page 12 of cases (the Clairvest representation closed in spring 2016). Proskauer may continue to provide services to Clairvest (though it is not an active client at the time of filing of this Application), but these services will not pertain to any matters relating directly or indirectly to these chapter 11 cases. Notice 36. The Debtors will provide notice of this Application to the U.S. Trustee pursuant to Local Rule A copy of this Application is also available on the website of the Debtors notice and claims agent at In light of the nature of the relief requested, the Debtors submit that no other or further notice is required. No Prior Request 37. No prior request for the relief sought in this Application has been made to this or any other court. 12

13 Case Document 134 Filed in TXSB on 09/23/16 Page 13 of 14 WHEREFORE, the Debtors respectfully request that the Court enter the Order, substantially in the form attached hereto as Exhibit A, and grant such other and further relief to which the Debtors may be justly entitled. Dated: September 23, 2016 LIGHT TOWER RENTALS, INC. et al. /s/ Keith Muncy Keith Muncy Chief Financial Officer 13

14 Case Document 134 Filed in TXSB on 09/23/16 Page 14 of 14 CERTIFICATE OF SERVICE I hereby certify that on the 23rd day of September 2016, a true and correct copy of the foregoing was service electronically via the Court s CM/ECF electronic notification system upon the following: Hector Duran United States Trustee Office 515 Rusk Houston, Texas /s/ Patricia B. Tomasco Patricia B. Tomasco 14

15 Case Document Filed in TXSB on 09/23/16 Page 1 of 5 EXHIBIT A Proposed Order 15

16 Case Document Filed in TXSB on 09/23/16 Page 2 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In re: LIGHT TOWER RENTALS, INC., et al., 1 Debtors. ) ) ) ) ) ) ) ) ) Chapter 11 Case No (DRJ) (Jointly Administered) Re: Docket No. ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF PROSKAUER ROSE LLP AS ATTORNEYS FOR THE DEBTORS EFFECTIVE NUNC PRO TUNC TO PETITION DATE Upon the Application for Entry of an Order Authorizing the Retention and Employment of Proskauer Rose LLP as Attorneys for the Debtors Nunc Pro Tunc to the Petition Date (the Application ); 2 and the Abelson Declaration filed in support of the Application; and the Court having found that the Court has jurisdiction over this matter pursuant to 28 U.S.C. 1334; and the Court having found that the Application is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and it appearing that venue of this proceeding and the Application in this district is proper pursuant to 28 U.S.C and 1409; and the Court having found based on the representations made in the Application and in the Abelson Declaration that Proskauer is a disinterested person as defined in section 101(14) of the Bankruptcy Code and as required by section 327(a) of the Bankruptcy Code; and the Court having found that the relief requested in 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: Light Tower Rentals, Inc. (4893); LTR Holdco, Inc. (8813); LTR Shelters, Inc. (5396); and LTR Investco, Inc. (3819). The location of the Debtors service address is: 2330 E. Interstate 20 S. Service Road, Odessa, Texas Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Application. 1

17 Case Document Filed in TXSB on 09/23/16 Page 3 of 5 the Application is in the best interests of the Debtors estates, their creditors, and other parties in interest; and the Court having found that the Debtors provided adequate and appropriate notice of the Application under the circumstances and that no other or further notice is required; and the Court having reviewed the Application and having heard statements in support of the Application at a hearing held before the Court (the Hearing ); and the Court having determined that the legal and factual bases set forth in the Application and at the Hearing establish just cause for the relief granted herein; and any objections to the relief requested herein having been withdrawn or overruled on the merits; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. The Application is approved and granted to the extent set forth herein. 2. Pursuant to sections 327 and 328 of the Bankruptcy Code, the Debtors are authorized and empowered to retain and employ Proskauer Rose LLP ( Proskauer ) as its counsel in these chapter 11 cases nunc pro tunc to the Petition Date. 3. Proskauer is authorized to render professional services to the Debtors as described in the Application and Abelson Declaration. Specifically, but without limitation, Proskauer will render the following legal services: (i) (ii) (iii) provide legal advice with respect to the Debtors powers and duties as debtors in possession in the operation of their businesses and the management of estate property; advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; attend meetings and negotiate with representatives of creditors and other parties in interest; (iv) take all necessary steps to protect and preserve the Debtors bankruptcy estates; (v) serve as counsel of record for the Debtors in all aspects of these chapter 11 cases, including, without limitation, the prosecution of actions on behalf of the Debtors, the defense of any actions commenced against the Debtors, and objections to claims filed against the Debtors estates; 2

18 Case Document Filed in TXSB on 09/23/16 Page 4 of 5 (vi) prepare on behalf of the Debtors all necessary motions, answers, orders, reports, and other legal papers in connection with the administration of their bankruptcy estates; (vii) assist in the confirmation of the Debtors chapter 11 plan and disclosure statement, as well as facilitating the consummation of the chapter 11 plan; (viii) advise the Debtors regarding tax matters; (ix) (x) (xi) (xii) represent the Debtors in connection with obtaining authority to continue using cash collateral; advise the Debtors with respect to corporate and litigation matters; consult with the United States Trustee for the Southern District of Texas (the U.S. Trustee ), any other committees appointed in these chapter 11 cases, and all other creditors and parties in interest concerning the administration of these chapter 11 cases; and provide representation and all other legal services required by the Debtors in discharging their duties as debtors in possession or otherwise in connection with these chapter 11 cases. 4. Proskauer shall apply for compensation for professional services rendered and reimbursement of expenses incurred in connection with the Debtors chapter 11 cases in compliance with sections 330 and 331 of the Bankruptcy Code and applicable provisions of the Bankruptcy Rules, Local Bankruptcy Rules, and any other applicable procedures and orders of the Court. Proskauer also intends to make a reasonable effort to comply with the U.S. Trustee s requests for information and additional disclosures as set forth in the Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. 330 by Attorneys in Larger Chapter 11 Cases Effective as of November 1, 2013 (the Revised UST Guidelines ), both in connection with the Application and the interim (if any) and final fee applications to be filed by Proskauer in these chapter 11 cases. 5. Proskauer shall not charge a markup to the Debtors with respect to fees billed by contract attorneys who are hired by Proskauer to provide services to the Debtors (if any) and 3

19 Case Document Filed in TXSB on 09/23/16 Page 5 of 5 shall ensure that any such contract attorneys are subject to conflict checks and disclosures in accordance with the requirements of the Bankruptcy Code and Bankruptcy Rules. 6. Proskauer shall provide ten business-days notice to the Debtors, the U.S. Trustee, and any other official committee (if any) 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, and the Court retains the right to review any rate increase pursuant to section 330 of the Bankruptcy Code. 7. The Debtors and Proskauer are authorized to take all actions necessary to effectuate the relief granted pursuant to this Order in accordance with the Application. 8. Notice of the Application as provided therein is deemed to be good and sufficient notice of such Application, and the requirements of the Local Bankruptcy Rules are satisfied by the contents of the Application. 9. To the extent the Application or the Abelson Declaration is inconsistent with this Order, the terms of this Order shall govern. 10. The terms and conditions of this Order shall be immediately effective and enforceable upon its entry. 11. The Court retains jurisdiction with respect to all matters arising from or related to the implementation of this Order. Dated:, 2016 Houston, Texas DAVID R. JONES UNITED STATES BANKRUPTCY JUDGE 4

20 Case Document Filed in TXSB on 09/23/16 Page 1 of 114 EXHIBIT B Abelson Declaration

21 Case Document Filed in TXSB on 09/23/16 Page 2 of 114 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In re: LIGHT TOWER RENTALS, INC., et al., 1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No (DRJ) (Jointly Administered) DECLARATION OF PHILIP M. ABELSON IN SUPPORT OF THE APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF PROSKAUER ROSE LLP AS ATTORNEYS FOR THE DEBTORS EFFECTIVE NUNC PRO TUNC TO THE PETITION DATE I, Philip M. Abelson, being duly sworn, state the following under penalty of perjury: 1. I am a member of the law firm of Proskauer Rose LLP ( Proskauer ), located at Eleven Times Square, New York, New York I am the lead attorney from Proskauer working on behalf of the above-captioned debtors and debtors in possession in these chapter 11 cases. I am a member in good standing of the Bars of the State of New York and the State of California (voluntarily inactive). I am admitted to practice in the United States District Court for the Southern District of New York, the United States Court of Appeals for the Second Circuit, and the United States Supreme Court. 1. I submit this declaration (the Declaration ) in support of the Debtors Application for Entry of an Order Authorizing the Retention and Employment of Proskauer Rose LLP as Attorneys for the Debtors Effective Nunc Pro Tunc (the Application ). 2 Except as otherwise stated in this Declaration, I have personal knowledge of the matters set forth herein. 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, include: Light Tower Rentals, Inc. (4893); LTR Holdco, Inc. (8813); LTR Shelters, Inc. (5396); and LTR Investco, Inc. (3819). The location of the Debtors service address is: 2330 E. Interstate 20 S. Service Road, Odessa, Texas Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Application. 1

22 Case Document Filed in TXSB on 09/23/16 Page 3 of 114 To the extent any information disclosed herein requires amendment, supplement, or modification upon Proskauer s completion of further review, or as additional party in interest information becomes available, a supplemental declaration (by me, or another member of Proskauer) will be submitted to the Court reflecting such amended, supplemented, or modified information. Proskauer s Qualifications 2. Proskauer is an international firm with more than 708 lawyers in multiple countries, including the United States, United Kingdom, China, France, and Brazil. Within the United States, Proskauer has offices in New York, New York; Boca Raton, Florida; Boston, Massachusetts; Chicago, Illinois; Los Angeles, California; New Orleans, Louisiana; Newark, New Jersey; and Washington, D.C. Proskauer s attorneys provide a wide range of legal services, including corporate, litigation, regulatory, and employment law. 3. Proskauer s attorneys have extensive experience representing debtors, creditors committees,, creditors, trustees, and others in a wide variety of bankruptcy cases. Proskauer s attorneys currently represent, or have represented, debtors and creditors in multiple large and complex chapter 11 cases, and have been involved in some of the largest chapter 11 cases of the past decades, including Caesars, Energy Future Holdings, Enron, G-I Holdings, Lehman Brothers, Refco, Ambac, MF Global, Capmark, Texaco, NewPage and Chrysler, as well as other complex restructurings, both in and out of court. 4. The attorneys from Proskauer who will be employed in these chapter 11 cases are each members in good standing in the jurisdictions in which such attorneys are admitted. 5. Proskauer is familiar with the Debtors businesses, finance, operations, the proposed restructuring, and many of the potential legal issues that may arise in the context of these chapter 11 cases. 2

23 Case Document Filed in TXSB on 09/23/16 Page 4 of 114 Services to be Provided 6. The Debtors anticipate that Proskauer will, among other things, render the following legal services: (i) (ii) (iii) provide legal advice with respect to the Debtors powers and duties as debtors in possession in the operation of their businesses and the management of estate property; advise and consult on the conduct of these chapter 11 cases, including all of the legal and administrative requirements of operating in chapter 11; attend meetings and negotiate with representatives of creditors and other parties in interest; (iv) take all necessary steps to protect and preserve the Debtors bankruptcy estates; (v) serve as counsel of record for the Debtors in all aspects of these chapter 11 cases, including, without limitation, the prosecution of actions on behalf of the Debtors, the defense of any actions commenced against the Debtors, and objections to claims filed against the Debtors estates; (vi) prepare on behalf of the Debtors all necessary motions, answers, orders, reports, and other legal papers in connection with the administration of their bankruptcy estates; (vii) assist in the confirmation of the Debtors chapter 11 plan and disclosure statement, as well as facilitating the consummation of the chapter 11 plan; (viii) advise the Debtors regarding tax matters; (ix) (x) (xi) (xii) represent the Debtors in connection with obtaining authority to continue using cash collateral; advise the Debtors with respect to corporate and litigation matters; consult with the United States Trustee for the Southern District of Texas (the U.S. Trustee ), any other committees appointed in these chapter 11 cases, and all other creditors and parties in interest concerning the administration of these chapter 11 cases; and provide representation and all other legal services required by the Debtors in discharging their duties as debtors in possession or otherwise in connection with these chapter 11 cases. Proskauer s Rates and Billing Practices 7. Proskauer intends to apply for compensation for professional services rendered on an hourly basis and reimbursement of expenses incurred in connection with these chapter 11 3

24 Case Document Filed in TXSB on 09/23/16 Page 5 of 114 cases, subject to the Court s approval and in compliance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and any other applicable procedures and orders of the Court. The hourly rates and corresponding rate structure Proskauer will use in these chapter 11 cases are the same as the hourly rates and corresponding rate structure that Proskauer uses in other restructuring matters, as well as similar complex corporate, securities, and litigation matters whether in court or otherwise, regardless of whether a fee application is required. These rates and the rate structure reflect that such restructuring and other complex matters typically are national in scope and involve great complexity, high stakes, and severe time pressures. 8. Proskauer operates in a national marketplace for legal services in which rates are driven by multiple factors relating to the individual lawyer, his or her area of specialization, the firm s expertise, performance, and reputation, the nature of the work involved, and other factors. 9. The billing rates of the Proskauer attorneys principally expected to work on this matter range as follows 3 : Billing Category 4 U.S. Range Partners $1,040-$1,300 Counsel $980-$1070 Associates $495-$930 Paraprofessionals $205-$ Proskauer s hourly rates are set at a level designed to compensate Proskauer fairly for the work of its attorneys and paraprofessionals and to cover fixed and routine expenses. 3 To the extent that attorneys with higher rates perform services for the Debtors, Proskauer will supplement this Application with a notice of such attorney s rate. 4 Although Proskauer does not anticipate using contract attorneys during these chapter 11 cases, in the unlikely event that it becomes necessary to use contract attorneys, Proskauer will not charge a markup to the Debtors with respect to fees billed by such attorneys. Moreover, any contract attorneys or non-attorneys who are employed by the Debtors in connection with work performed by Proskauer will be subject to conflict checks and disclosures in accordance with the requirements of the Bankruptcy Code. 4

25 Case Document Filed in TXSB on 09/23/16 Page 6 of 114 Hourly rates vary with the experience and seniority of the individuals assigned. These hourly rates are subject to periodic adjustments to reflect economic and other conditions The rate structure provided by Proskauer is appropriate and not significantly different from (a) the rates that Proskauer charges for other similar types of representations or (b) the rates that other comparable counsel would charge to do work substantially similar to the work Proskauer will perform in these chapter 11 cases. 12. Proskauer is customarily reimbursed for all actual and necessary expenses incurred in connection with the representation of a client in a given matter, including, but not limited to, photocopying charges, travel expenses, filing fees, delivery charges, postage, long distance telephone charges, transcription charges, and computerized legal research charges. Proskauer will seek reimbursement for its actual and necessary costs and expenses incurred in connection with its representation of the Debtors, and will maintain detailed records of all such costs and expenses. Events leading to Chapter I am advised that Proskauer has represented LTR in the ordinary course of business since 2014 in connection with general corporate matters. The Debtors engaged Proskauer as transactional counsel for approximately 2 years before the Petition Date. In April 2016, after almost two years of deteriorating market conditions, the Debtors engaged Credit Suisse, as investment banker, to analyze its financial condition and assist the Debtors in pursuing restructuring options to address their liquidity challenges. During this period, the Debtors anticipated having sufficient runway and liquidity to pursue various restructuring options without 5 In the ordinary course of business, the standard hourly billing rates for Proskauer professionals and paraprofessionals are adjusted annually as of the commencement of the firm s fiscal year on November 1 to reflect advancing seniority and promotion. As set forth in the Order, Proskauer will provide ten business-days notice to the Debtors, the U.S. Trustee, and any other official committee before implementing any periodic increases, and shall file any such notice with the Court. 5

26 Case Document Filed in TXSB on 09/23/16 Page 7 of 114 the need for a near-term chapter 11 filing. Unfortunately, while Credit Suisse presented a number of out-of-court restructuring alternatives to the Debtors, 6 market conditions continued to worsen and the Debtors liquidity became much tighter than previously anticipated. 14. After it became clear that a new-money proposal was not an option, the Debtors restructuring focus shifted to the holders of the Debtors secured notes and their willingness to engage in discussions on a potential transaction. Ultimately, in mid-summer 2016, the Debtors began a series of good-faith, arms-length negotiations with the Ad Hoc Committee of Noteholders (as defined in the First Day Declaration) over the terms of a restructuring that could be accomplished by an out-of-court exchange offer (with the possibility of a combined exchange offer with a pre-pack (otherwise known as a stapled pre-pack)) to be implemented in early Unfortunately, time interceded, as the Debtors August interest payment, declining financial performance and the length of these negotiations meant that the exchange offer could not be fully solicited and closed before the expiration of the grace period (August 31, 2016) leaving the Debtors vulnerable to potential creditor enforcement actions. At this point, in late-july/early- August 2016, the options were limited and the Debtors pivoted to the pursuit of only a prepackaged chapter 11 plan of reorganization, largely incorporating the same terms that were contemplated for the exchange offer. To this end, Proskauer s restructuring professionals acted with urgency to prepare the Debtors for a prepackaged chapter 11 plan before expiration of the grace period on the August 1, 2016 interest payment. 15. Proskauer is not a creditor of the Debtors. In the one year prior to the Petition Date, Proskauer received payment (a) for professional services rendered in the ordinary course of 6 These alternatives included (i) a comprehensive recapitalization, (ii) a new money plan, which would include a partial equitization, an exchange of secured notes for new notes and a new equity contribution from the existing stockholders, and (iii) an out-of-court exchange offer that would replace the secured notes with new PIK notes. 6

27 Case Document Filed in TXSB on 09/23/16 Page 8 of 114 business and in connection with a potential out-of-court restructuring, in the aggregate amount of $996,091.25, and an expense reimbursement in the amount of approximately $23,754.52; 7 (b) on August 1, 2016, of an initial retainer and advance against fees and expenses in the amount of $500,000, on account of professional services performed in preparation for and prosecution of these chapter 11 cases; (c) on August 5, 2016, of an additional retainer in the amount of $500,000; (d) on August 17, 2016, of an additional retainer in the amount of $500,000; and (e) on August 23, 2016, of an additional retainer in the amount of $350,000 (all the additional retainers are for the same purposes as the initial retainer). As of the Petition Date, after applying prepetition amounts due, Proskauer currently holds a retainer in the approximate amount of $146, A chart identifying the payments made by the Debtors to Proskauer in the 90 days prior to the Petition Date is set forth below: Type of Transaction Payment Date/ Date Retainer was Funded Payment Amount/Application of the Retainer Retainer Balance Invoice Payment 7/12/2016 $197, N/A Invoice Payment 8/15/2016 $822, N/A Initial Advance Payment Retainer Additional Advance Payment Retainer Additional Advance Payment Retainer Application of the Retainer 8/1/2016 $500,000 $500,000 8/5/2016 $500,000 $1,000,000 8/17/2016 $500,000 $1,500,000 8/23/2016 $1,098, $401, These amounts include only payments in the ordinary course and exclude payment covered by the retainers (detailed in the table below). 7

28 Case Document Filed in TXSB on 09/23/16 Page 9 of 114 Type of Transaction Payment Date/ Date Retainer was Funded Payment Amount/Application of the Retainer Retainer Balance Additional Advance Payment Retainer Application of the Retainer 8/23/2016 $350,00.00 $751, /30/2016 $604, $146, As of the Petition Date, the Debtors did not owe Proskauer any prepetition amounts for legal services rendered. 17. As mentioned above, Proskauer represented the Debtors as general corporate/transactional counsel since mid When it was clear that the Debtors only option was to pursue a prepack chapter 11 plan, Proskauer received an initial retainer (like all other professionals that were involved in the case) and additional retainers as needed from time to time and ensure that the amounts under the retainer exceeded the amounts the Debtors owed Proskauer. The amounts due to Proskauer were setoff against the retainer prior to the filing of these chapter 11 cases. As of the Petition Date Proskauer continues to hold $146, of the retainer and shall either return this amount to the Debtors or, if retained, after approval by the Court will apply these amounts to Proskauer s postpetition fees and expenses. 18. Pursuant to Bankruptcy Rule 2016(b), Proskauer has not shared nor agreed to share (a) any compensation it has received or may receive from the Debtors with another party or person, other than with Proskauer s professionals or (b) any compensation another person or party has received or may receive. Attorney Statement Regarding Revised U.S. Trustee Guidelines 19. Proskauer shall apply for compensation for professional services rendered and reimbursement of expenses incurred in connection with its representation of the Debtors in these 8

29 Case Document Filed in TXSB on 09/23/16 Page 10 of 114 chapter 11 cases in compliance with sections 330 and 331 of the Bankruptcy Code and applicable provisions of the Bankruptcy Rules, Local Bankruptcy Rules, and any other applicable procedures and orders of the Court. Proskauer also intends to make a reasonable effort to comply with the U.S. Trustee s requests for information and additional disclosures as set forth in the Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. 330 by Attorneys in Larger Chapter 11 Cases Effective As of November 1, 2013 (the Revised UST Guidelines ), both in connection with this application and the interim and final fee applications to be filed by Proskauer in these chapter 11 cases. 20. The following is provided in response to the request for additional information set forth in Paragraph D.1. of the Revised UST Guidelines: Question: Response: Question: Response: Question: Response: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? No. Proskauer and the Debtors have not agreed to any variations from, or alternatives to, Proskauer s standard billing arrangements for this engagement. Do any of the professionals included in the engagement vary their rate based on the geographic location of the bankruptcy case? No. 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. Proskauer represented the Debtors as general transactional counsel in the 12 months prepetition. Other than annual rate increase every year on November 1, Proskauer did not vary its hourly rates during the prepetition period and will continue to use its customary hourly rates during the pendency of these chapter 11 cases. 9