IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ...

76 Pages·2015·0.3 MB·English

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
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In re Chapter 11

Allied Nevada Gold Corp., et al.1 Case No. 15-10503 (MFW)

Debtors. Jointly Administered

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APPLICATION FOR AN ORDER AUTHORIZING THE EMPLOYMENT
AND RETENTION OF ARENT FOX LLP AS CO-COUNSEL FOR THE OFFICIAL
COMMITTEE OF UNSECURED CREDITORS NUNC PRO TUNC TO MARCH 19, 2015

The Official Committee of Unsecured Creditors (the “Committee”) of Allied Nevada
Gold Corp. (“ANV”) and its debtor affiliates (collectively, the “Debtors”) appointed pursuant to
section 1102 of title 11 of the United States Code §§ 101 et seq. (the “Bankruptcy Code”) in the
above-captioned jointly administered Chapter 11 cases (the “Chapter 11 Cases”), by and through
its proposed undersigned counsel, hereby submits this application (the “Application”) for entry
of an order authorizing the employment and retention of Arent Fox LLP (“Arent Fox”) as co-
counsel to the Committee, nunc pro tunc to March 19, 2015, pursuant to sections 328(a) and
1103(a) of the Bankruptcy Code and Rules 2014(a) and 2016 of the Federal Rules of Bankruptcy
Procedure (the “Bankruptcy Rules”) and Rule 2014–1 of the Local Rules of Bankruptcy Practice
and Procedure of the United Bankruptcy Court for the District of Delaware (the “Local
Bankruptcy Rules”). In support of the Application, the Committee submits the Declaration of

1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are:
Allied Nevada Gold Corp. (7115); Allied Nevada Gold Holdings LLC (7115); Allied VGH Inc. (3601); Allied VNC
Inc. (3291); ANG Central LLC (7115); ANG Cortez LLC (7115); ANG Eureka LLC (7115); ANG North LLC
(7115); ANG Northeast LLC (7115); ANG Pony LLC (7115); Hasbrouck Production Company LLC (3601);
Hycroft Resources & Development, Inc. (1989); Victory Exploration Inc. (8144); and Victory Gold Inc. (8139). The
corporate headquarters for each of the above Debtors are located at, and the mailing address for each of the above
Debtors, except Hycroft Resources & Development, Inc., is 9790 Gateway Drive, Suite 200, Reno, NV 89521. The
mailing address for Hycroft Resources & Development, Inc. is P.O. Box 3030, Winnemucca, NV 89446.
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Robert M. Hirsh, Esq. (the “Hirsh Declaration”), annexed hereto as Exhibit A, and respectfully
represents as follows:
BACKGROUND2
The Debtors
1. On March 10, 2015, (the “Petition Date”), each of the Debtors filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code with the United States Bankruptcy
Court for the District of Delaware (the “Court”).
2. Pursuant to sections 1107 and 1108 of the Bankruptcy Code, the Debtors continue
to operate their business as debtors in possession. No trustee or examiner has been appointed in
the Chapter 11 Cases.
The Committee and Its Selection of Professionals
3. On March 19, 2015, the Office of United States Trustee for the District of
Delaware (the “U.S. Trustee”) appointed three (3) members to the Committee pursuant to
sections 1102(a) and 1102(b) of the Bankruptcy Code. A list of the members of the Committee
is annexed hereto as Exhibit B. The Committee selected Computershare Trust Company of
Canada as its Chair. On the same date, at a meeting during which all of the Committee members
participated, the Committee selected and formally voted to retain Arent Fox LLP and Polsinelli
PC as its proposed co-counsel, subject to the approval of the Court.
4. On March 23, 2015, the Committee selected and formally voted to retain Zolfo
Cooper, LLC (“Zolfo Cooper”) as its bankruptcy consultants and financial advisors. The

2 The background facts set forth herein are primarily based upon the representations contained in papers filed by the
Debtors in these proceedings. A detailed history and description of the Debtors and their operations, together with
the reasons for their Chapter 11 filings, are set forth in the Declaration of Stephen M. Jones in Support of Chapter
11 Petitions and Various First Day Applications and Motions (the “First Day Declaration”) [Docket No. 16]. As the
Committee was just organized and has not yet verified the accuracy of the Debtors’ statements, nothing contained
herein shall be deemed a waiver of the Committee’s right to dispute or challenge the facts set forth herein.
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Committee’s application for retention of Zolfo Cooper is being filed contemporaneously with
this Application.
JURISDICTION AND VENUE
5. This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and
1334(b). Venue of these proceedings is proper in this Judicial District pursuant to 28 U.S.C.
§§ 1408 and 1409. Sections 1103(a), 328(a), 330 and 504 of the Bankruptcy Code, Bankruptcy
Rules 2014(a), 2016 and 5002, and Local Bankruptcy Rules 2014–1 and 2016-1 are the statutory
predicates for the relief sought by this Application.
RELIEF REQUESTED
6. The Committee seeks to employ Arent Fox as its co-counsel in these Chapter 11
Cases. Arent Fox maintains an office for the practice of law at 1675 Broadway, New York, New
York 10019 and 1717 K Street, N.W., Washington, DC 20006, as well as offices in Los Angeles,
CA, San Francisco, CA, and St. Louis, MO.
7. The Committee selected Arent Fox because the partners and associates of Arent
Fox have considerable expertise in the fields of bankruptcy, insolvency, reorganizations,
liquidations, debtors’ and creditors’ rights, debt restructuring and corporate reorganizations,
commercial and bankruptcy litigation, corporate trust and public debt, and intellectual property
(including copyright and related litigation), and it has a strong and well-respected national
practice representing creditors’ committees throughout the United States. By way of examples,
Arent Fox has represented creditors’ committees in such chapter 11 cases as Passaic Healthcare
Services, LLC d/b/a Allcare Medical, et al., D.N.J. Bankr. Case No. 14-36129 (CMG); Cengage
Learning, Inc., et al., E.D.N.Y. Bankr. Case No. 13-44106 (ESS); Accredited Home Lenders
Holding Co., et al., D. Del. Bankr. Case No. 09-11516 (MFW); Peninsula Hospital Center, et
al., E.D.N.Y. Bankr. Case No. 11-47056-ESS; PPOA Holding, Inc., et al., S.D. Fla. Bankr. Case
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No. 10-10711-BKC-JKO; Fortunoff Holdings, LLC and Fortunoff Card Company, LLC,
S.D.N.Y. Bankr. Case No. 09-10497 (RDD); Luminent Mortgage Capital, Inc., et al., D. MD
Bankr. Case No. 08-21389-DK; Cross Media Marketing Corporation, et al., S.D.N.Y. Bankr.
Case No. 03-13901 (BRL); Fieldstone Mortgage Company, D. MD Bankr. Case No. 07-21814-
JFS; and Insilco Technologies, Inc., et al., D. Del. Bankr. Case No. 02-13672 (KJC).
Accordingly, the Committee believes that Arent Fox is well-qualified to represent it in these
Chapter 11 Cases. The Committee believes that Arent Fox possesses extensive knowledge and
experience in the areas of law relevant to these Chapter 11 Cases.
8. Robert M. Hirsh, Esq. and Jeffrey N. Rothleder, Esq. will be primarily responsible
for Arent Fox’s representation of the Committee in these matters.
9. Mr. Hirsh is a partner in Arent Fox’s Bankruptcy and Financial Restructuring
Group. He has extensive experience in all aspects of financial restructuring and bankruptcy
issues. Mr. Hirsh’s practice focuses on representation of both debtors and creditors in chapter 11
cases, work-outs, and restructuring, as well as secured lending, asset-based lending, and
commercial and equipment finance leasing. He also has significant experience representing
unsecured creditors’ committees throughout the United States. Mr. Hirsh is skilled at developing
unique solutions to complex matters. Mr. Hirsh received his J.D. from Brooklyn Law School
and his B.A. from Brandeis University.
10. Mr. Rothleder is a partner in Arent Fox’s Bankruptcy and Financial Restructuring
Group and has extensive experience in all aspects of financial restructuring and bankruptcy
issues. Mr. Rothleder’s practice focuses on financial restructuring, corporate trust matters, and
workout proceedings on behalf of financially distressed companies or their creditors, including
representation of debtors, indenture trustees, creditors and creditors’ committees, investors and
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purchasers in in-court and out-of-court restructurings. He represents a wide variety of clients in
the enforcement of the entire spectrum of creditors’ rights involving secured, unsecured, public
or private, and taxable and tax-exempt debt through his work with indenture trustees, lenders,
individual creditors, and official committees in chapter 11 cases. He also has experience
representing debtors, including the restructuring of large companies through the chapter 11
process or conducting the orderly liquidating and comprehensive asset sales for a diverse group
of companies, with a constant view toward balancing the maximization of recoveries for
creditors with the protection of the rights of debtors and sellers. Mr. Rothleder received his J.D.
from University of Maryland School of Law and his B.A. from University of Michigan.
11. The professional services Arent Fox will be required to render include, but are not
limited to, the following:
(a) to advise the Committee of its rights, duties, and powers in these Chapter
11 Cases;
(b) to assist, advise, and represent the Committee in its consultation with the
Debtors relative to the administration of these Chapter 11 Cases;
(c) to assist, advise, and represent the Committee in investigating and
analyzing the Debtors’ assets and liabilities, investigating the extent and
validity of liens and participating in and reviewing any proposed asset
sales or dispositions;
(d) to attend meetings and negotiate with the representatives of the Debtors
and secured creditors and other parties in interest;
(e) to assist and advise the Committee in its examination, investigation, and
analysis of the conduct of the Debtors’ affairs;
(f) to assist the Committee in the review, analysis, and negotiation of any plan
of reorganization or liquidation that may be filed and to assist the
Committee in the review, analysis, and negotiation of the disclosure
statement accompanying any plan of reorganization or liquidation;
(g) to assist the Committee in the review, analysis, and negotiation of any
financing or funding agreements;
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(h) to take all necessary actions to protect and preserve the interests of
unsecured creditors, including, without limitation, the prosecution of
actions on behalf of the Committee, negotiations concerning all litigation
in which the Debtors are involved, and review and analysis of all claims
filed against the Debtors’ estates;
(i) to generally prepare on behalf of the Committee all necessary motions,
applications, answers, orders, reports, and papers in support of positions
taken by the Committee;
(j) to appear, as appropriate, before this Court, the Appellate Courts, and
other courts in which matters may be heard and to protect the interests of
the Committee before said Courts and the United States Trustee;
(k) to perform such other legal services as may be required or deemed to be in
the interests of the Committee; and
(l) to perform all other necessary legal services in these Chapter 11 Cases.
12. Due to the size and potentially complex nature of these Chapter 11 Cases, the full
extent of services the Committee will require or ask Arent Fox to provide is not known at this
time. Accordingly, in addition to those services outlined above, Arent Fox may provide such
other and further services as is necessary for the Committee to fulfill its statutory and fiduciary
duties in these cases.
13. Arent Fox has indicated a willingness to act on behalf of the Committee and
render the necessary professional services as co-counsel for the Committee.
14. Subject to this Court’s approval in accordance with section 330(a) of the
Bankruptcy Code, Arent Fox will charge for its legal services on an hourly basis in accordance
with its ordinary and customary hourly rates for services of this type and nature and for this type
of matter in effect on the date such services are rendered, and for its actual, reasonable, and
necessary out-of-pocket disbursements incurred in connection therewith.
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15. Arent Fox has agreed to charge at what is known as its “Guideline Rates.” These
hourly rates represent a discount of approximately 10% from the Firm’s regular “National
Rates.” The following are Arent Fox’s current hourly Guideline Rates for work of this nature:
(a) Partners: $570 - $940
(b) Of Counsel: $555 - $910
(c) Associates: $320 - $620
(d) Paraprofessionals: $180 - $320
16. The rates set forth above are subject to periodic review and adjustment and are set
at a level designed to compensate Arent Fox fairly for the work of its attorneys and paralegals
and to cover fixed and routine overhead expenses. Generally, the rates are subject to an increase
at the beginning of each calendar year. It is Arent Fox’s policy to charge its clients in all areas of
practice for all other expenses incurred in connection with their clients’ cases. The expenses
charged to clients include, among other things, conference telephone, telecopier and other
charges, mail and express and overnight mail charges, special or hand delivery charges,
photocopying charges, travel expenses, expenses for “working meals,” computerized research,
transcription costs, as well as non-ordinary overhead expenses, such as secretarial and other
overtime. Arent Fox will charge the Debtors’ estates for these expenses in a manner and at rates
consistent with charges made generally to Arent Fox’s other clients. Arent Fox believes that it is
fairer to charge these expenses to the clients incurring them than to increase the hourly rates and
spread the expenses among all clients.
17. Arent Fox intends to apply to the Court for allowance of compensation and
reimbursement of expenses in accordance with the applicable provisions of the Bankruptcy
Code, the Bankruptcy Rules, the Local Bankruptcy Rules, and applicable procedures and Orders
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of this Court. Compensation will be payable to Arent Fox in compliance with the above rules
and provisions, on an hourly basis, plus reimbursement of actual and necessary costs and
expenses incurred by Arent Fox. It may become necessary for Arent Fox to redact privileged
portions of invoices submitted to the Court in connection with its seeking allowance of
compensation. In such a case, Arent Fox will supply non-redacted copies of the invoices and
applications to the Court and the U.S. Trustee.
18. The Committee has reviewed this Application, the Hirsh Declaration and Arent
Fox’s proposed budget for work to be completed during the first three months of these cases, and
believes that the retention and employment of Arent Fox nunc pro tunc to March 19, 2015 is in
the best interests of the Committee, the Debtors, the Debtors’ estates and creditors. Nunc pro
tunc relief should be granted because immediately upon its selection as co-counsel, Arent Fox
professionals began reviewing the numerous pleadings filed in these Chapter 11 Cases, as well as
all publicly available information, to gain a comprehensive understanding of the Debtors’
operations, debt structure and relationship with its pre- and post-petition secured creditors. Arent
Fox also reached out to the Debtors’ professionals to establish a meeting for the Debtors to
present and inform the Committee’s professionals regarding the facts and circumstances of these
cases. The Committee professionals also, among other things, began to prepare their retention
applications and conducted its initial complex and substantial conflict and connections check so
that it could comply with the Bankruptcy Code and requirements of Bankruptcy Rule 2014.
Accordingly, the undersigned respectfully asserts that retention nunc pro tunc requested by this
Application is appropriate.
19. No prior application has been made for the relief requested herein to this or any
other Court.
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DISINTERESTEDNESS OF PROFESSIONAL
20. To the best of the Committee’s knowledge, information and belief, and except as
otherwise set forth in the Hirsh Declaration: (i) Arent Fox does not hold or represent any interest
adverse to the Committee with respect to the matters for which it is being retained; (ii) Arent Fox
is a “disinterested person” as that phrase is defined in section 101(14) of the Bankruptcy Code
(as modified by section 1103(b) of the Bankruptcy Code); (iii) neither Arent Fox nor its
professionals have any connection with the Debtors, their estates, or creditors; and (iv) Arent
Fox’s employment is necessary and in the best interest of the Debtors’ estates, their creditors and
other parties in interest.
NOTICE
21. Notice of this Application has been given to: (i) the Office of the United States
Trustee for the District of Delaware; (ii) Akin Gump Strauss Hauer & Feld LLP and Blank Rome
LLP, as proposed counsel for the Debtors; (iii) Stroock & Stroock & Lavan LLP, as lead
counsel, and Young Conaway Stargatt & Taylor, LLP, as Delaware counsel, to the proposed DIP
Lenders, DIP Agent and Noteholders Ad Hoc Group; (iv) the proposed DIP Agent; (v) The Bank
of Nova Scotia, as the administrative and co-collateral agent under the Third Amended and
Restated Credit Agreement, dated as of May 8, 2014; (vi) Wachtell, Lipton, Rosen & Katz, as
counsel to the Administrative Agent; (vii) Wells Fargo Bank, National Association, as co-
collateral agent under the Credit Agreement; (viii) Paul Hastings LLP, as counsel to the Co-
Collateral Agent; and (ix) all parties that filed a request for notice pursuant to Bankruptcy Rule
2002. In light of the nature of the relief requested, the Committee respectfully submits that such
notice is sufficient and requests that this Court find that no further notice of the relief requested
herein is necessary or appropriate.

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