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Mitchell Declaration in Support of Cash Collateral

Mitchell Declaration in Support of Cash Collateral

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Published by: JSmithWSJ on May 30, 2012
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05/30/2012

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TOGUT, SEGAL & SEGAL LLPOne Penn PlazaSuite 3335New York, New York 10119(212) 594-5000Albert TogutScott E. RatnerBrian F. MooreProposed Counsel to theDebtor and Debtor in Possession
UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK---------------------------------------------------------------X:In re: : Chapter 11:DEWEY & LEBOEUF LLP, : Case No. 12-12321 [MG]:Debtor. ::---------------------------------------------------------------X
AMENDED DECLARATION OF JONATHAN A. MITCHELLIN SUPPORT OF DEBTOR’S MOTION FOR ENTRY OF INTERIM ANDFINAL ORDERS PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 363 AND 507,RULES 2002, 4001 AND 9014 OF THE FEDERAL RULES OFBANKRUPTCY PROCEDURE ORDER (1) AUTHORIZING USE OF CASHCOLLATERAL, (2) GRANTING ADEQUATE PROTECTION, (3) MODIFYINGTHE AUTOMATIC STAY, AND (4) SCHEDULING A FINAL HEARING
Under 28 U.S.C. § 1746, I, Jonathan A. Mitchell declare as follows under penaltyof perjury:1.
 
I am the Chief Restructuring Officer of Dewey & LeBoeuf LLP(“DL,” also referred to herein as the “Firm” or the “Debtor”), a New York registeredlimited liability partnership.2.
 
I am a senior managing director of Zolfo Cooper Management, LLC(“Zolfo Cooper”). Zolfo Cooper has been retained to advise the Debtor on its wind-down.
12-12321-mg Doc 16-2 Filed 05/29/12 Entered 05/29/12 11:51:54 PleadingAmended Declaration of Jonathan A. Mitchell In Support Pg 1 of 6
 
23.
 
I am familiar with the day-to-day operations, business, andfinancial affairs of the Debtor. I submit this amended declaration (the “Declaration”) insupport of the Cash Collateral Motion.
1
Except as otherwise noted, I have personalknowledge of the matters set forth herein.4.
 
After extensive efforts to engage in a strategic transaction with athird party that would have preserved the core of DL as an operating law firm, DLdetermined to file for Chapter 11 protection to facilitate the wind down of its businessand affairs.5.
 
The Debtor has reached an agreement with the Collateral Agentand the Prepetition Secured Lenders for the consensual use of Cash Collateral to payvarious ongoing expenses to facilitate the wind-down, including the funding ofemployee payroll, insurance, file storage, and rent, as well as the investigation, analysisand either prosecution or defense (as the case may be) of claims asserted by or againstthe Debtor’s estate, in accordance with an agreed upon Budget. Paying these expensesis critical for the Debtor to continue to successfully wind down its business and affairsand to maximize the value of the Debtor’s assets for all creditors.6.
 
The Debtor’s Prepetition Secured Lenders are the only creditorsknown by the Debtor to have an interest in the Cash Collateral, and they haveconsented to the use of Cash Collateral in accordance with the terms of the proposedInterim Order and the Budget.7.
 
As of the Petition Date, the estimated amount of PrepetitionObligations owing by the Debtor under (i) the Revolver Documents was approximately$74,766,040.49 of principal and $1,688,658.85 face amount of letters of credit issued and

1
Unless otherwise defined herein, capitalized terms shall have the meaning ascribed in the CashCollateral Motion.
12-12321-mg Doc 16-2 Filed 05/29/12 Entered 05/29/12 11:51:54 PleadingAmended Declaration of Jonathan A. Mitchell In Support Pg 2 of 6
 
3outstanding under the Revolver Agreement (together with any amounts paid, incurredor accrued prior to the Petition Date in accordance with the Revolver Documents, plus,without limitation accrued and unpaid interest, any fees, expenses, and disbursements(including, without limitation, attorneys’ fees, consultant fees, related expenses anddisbursements), indemnification obligations , secured hedging, letter of creditreimbursement obligations, letter of credit fees, secured cash management obligations and other charges or amounts of whatever nature, whether or not contingent, wheneverarising, as each of the foregoing is provided in the Revolver Documents and (ii) theNote Documents was an aggregate principal amount of approximately $150,000,000,
 
(together with any amounts paid, incurred or accrued prior to the Petition Date inaccordance with the Prepetition Credit Documents, plus, without limitation, accruedand unpaid interest, any fees, expenses, and disbursements (including, withoutlimitation, attorneys’ fees, consultant fees, related expenses and disbursements), make-whole obligations,
 
indemnification obligations, and other charges or amounts ofwhatever nature, whether or not contingent, whenever arising, as each of the foregoingis provided in the Prepetition Credit Documents).8.
 
There are no alternative financing options available to facilitate theadministration of the Chapter 11 estate and continue the orderly wind-down of theDebtor’s affairs, including: (a) liquidation of the Firm’s assets, including approximately$255 million in face amount of accounts receivable and work in progress generated byDL’s U.S. offices and various pieces of artwork; (b) disposition of the Firm’s formerclients’ files; (c) closure of the Debtor’s offices and the return of leased propertythrough the rejection of office and equipment leases; (d) evaluation and administrationof claims against the Debtor’s estate; (e) investigation and pursuit of potential estateclaims and causes of action; and (f) confirmation of a Chapter 11 plan.
12-12321-mg Doc 16-2 Filed 05/29/12 Entered 05/29/12 11:51:54 PleadingAmended Declaration of Jonathan A. Mitchell In Support Pg 3 of 6

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