hahn & hessen llp 488 madison avenue · 2019-02-13 · retention of ssg advisors, llc...

HAHN & HESSEN LLP 488 Madison Avenue

New York, New York 10022 Telephone: (212) 478-7200 Facsimile: (212) 478-7400

Mark T. Power, Esq. Janine M. Figueiredo, Esq.

Proposed Counsel to the Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK

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In re:

Décor Holdings, Inc., et al.,1

Debtors.

:

: :

: : :

: :

: :

Chapter 11

Case No. 19-71020 (REG) Case No. 19-71022 (REG) Case No. 19-71023 (REG)

Case No. 19-71024 (REG) Case No. 19-71025 (REG)

Joint Administration Requested

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DEBTORS’ APPLICATION FOR ENTRY OF AN ORDER

AUTHORIZING THE EMPLOYMENT AND RETENTION OF

SSG ADVISORS, LLC AS INVESTMENT BANKER FOR THE

DEBTORS NUNC PRO TUNC TO THE PETITION DATE

Décor Holdings, Inc. and its affiliated debtors and debtors-in-possession (collectively,

the “Debtors”), by and through their proposed counsel, Hahn & Hessen LLP, hereby submit

this application (the “Application”) for entry of an order, substantially in the form as

annexed hereto as Exhibit A (the “Retention Order”), (a) authorizing the employment and

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax

identification number, are: Décor Holdings, Inc. (4174); Décor Intermediate Holdings LLC (5414); The

Robert Allen Duralee Group, Inc. (8435); The Robert Allen Duralee Group, LLC (1798); and The Robert

Allen Duralee Group Furniture, LLC (2835). The corporate headquarters and the mailing address for the

Debtors listed above is 49 Wireless Boulevard, Suite 150, Hauppauge, NY 11788. The Debtors also maintain

a separate corporate office at 2 Hampshire Street, Suite 300, Foxboro, MA 02035.

Case 8-19-71020-reg Doc 9 Filed 02/12/19 Entered 02/12/19 18:47:55

retention of SSG Advisors, LLC (“SSG”) as investment banker to the Debtors nunc pro tunc

to the Petition Date (defined below) to provide investment banking services during the

Debtors’ chapter 11 cases (the “Chapter 11 Cases”), pursuant to and in accordance with the

terms and conditions set forth in that certain engagement agreement dated January 28, 2019

(the “Engagement Agreement”),2 annexed hereto as Exhibit B, (b) approving the provisions

of the Engagement Agreement, including the proposed compensation arrangement set forth

therein, under section 328(a) of title 11 of the United States Code (the “Bankruptcy Code”),

and (c) exempting SSG from the time-keeping requirements. In support of this Application,

the Debtors rely on the Declaration of J. Scott Victor (the “Victor Declaration”) attached

hereto as Exhibit C and incorporated herein by reference, and respectfully represent as

follows:

JURISDICTION AND VENUE

1. The United States Bankruptcy Court for the Eastern District of New York

(this “Court”) has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and 1334.

This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue of this proceeding and this

Application is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

2. The statutory bases for the relief requested in this Application are sections

327(a) and 328(a) of the Bankruptcy Code, rule 2014(a) and 2016 of the Federal Rules of

Bankruptcy Procedure (the “Bankruptcy Rules”), and rules 2014-1 and 2016-1 of the Local

Bankruptcy Rules for the Eastern District of New York (the “Local Rules”).

2 Any references to, or summaries of, the Engagement Letter in this Application are qualified by the express

terms of the Engagement Letter, which shall govern if there is any conflict between the Engagement Letter and

such summaries or references herein. Additionally, any initially capitalized terms used in this Application and

not otherwise defined herein shall have the meaning ascribed to them in the Engagement Letter.


BACKGROUND

3. On the date hereof (the “Petition Date”), each of the Debtors filed a voluntary

petition for relief under chapter 11 of the Bankruptcy Code commencing the Chapter 11

Cases.

4. The Debtors continue to operate their business and manage their properties as

debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

5. As of the date hereof, no trustee, examiner, or official committee of unsecured

creditors or other official committee has been appointed in the Chapter 11 Cases.

6. A more detailed description of the Debtors’ business, capital structure, and

the circumstances leading to the filing of the Chapter 11 Cases is set forth in the Declaration

of Lee Silberman in Support of Chapter 11 Petitions and First Day Motions and Applications filed

contemporaneously herewith and incorporated herein by reference.

SSG’S QUALIFICATIONS

7. The Debtors have determined, in the exercise of their business judgment, that

the challenges they face require them to employ an investment banker with knowledge of

the Debtors’ industry and businesses and experience with the chapter 11 process to advise

them with respect to their restructuring options. The Debtors believe that SSG is well

qualified to provide its services to the Debtors in a cost-effective, efficient and timely

manner. SSG will coordinate with the Debtors’ other retained professionals in the Chapter

11 Cases to eliminate unnecessary duplication or overlap of work.

8. SSG is well suited to provide the investment banking services that the Debtors

require in the Chapter 11 Cases. SSG is a nationally recognized investment bank that helps

middle market companies, as well as its stakeholders, complete challenging financial


transactions. SSG has (a) substantial experience with, and knowledge of, companies

involved in the same or similar industries as the Debtors, (b) extensive knowledge of

potential buyers interested in the Debtors’ industry, and (c) substantial special situation

investment banking experience. Since 2001, SSG has completed over three hundred and

fifty (350) investment banking assignments around the country and in Europe. SSG has

served as an investment banker for debtors in numerous chapter 11 proceedings. See, e.g., In

re Samuel Jewelers, Inc., Case No. 18-11818 (KJC) (Bankr. D. Del. 2018); In re ABT Molecular

Imaging, Inc., Case No. 18-11398 (CSS) (Bankr. D. Del. 2018); In re Nighthawk Royalties,

LLC, Case No. 18-10989 (BLS) (Bankr. D. Del. 2018); In re Vitamin World, Inc., Case No.

17-11933 (KJC) (Bankr. D. Del. 2017); In re Peekay Acquisition, LLC, Case No. 17-11722

(BLS) (Bankr. D. Del. 2017); In re Short Bark Indus., Inc., Case No. 17-11502 (KG) (Bankr.

D. Del. 2017); In re Unilife Corp., Case No. 17-10805 (LSS) (Bankr. D. Del. 2017); In re

Verengo, Inc., Case No. 16-12098 (BLS) (Bankr. D. Del. 2016); In re Canal Asphalt, Inc., Case

No. 15-23094 (RDD) (Bankr. S.D.N.Y. 2015); In re Corporate Resource Servs., Inc., Case No.

15-12329 (MG) (Bankr. S.D.N.Y. 2015); In re DNL Indus., LLC, Case No. 13-22079 (RDD)

(Bankr. S.D.N.Y. 2013); In re Journal Register Co., Case No. 12-13774 (SMB) (Bankr.

S.D.N.Y. 2012).

9. The Debtors, in the exercise of their business judgment, have selected SSG as

their investment banker based upon, inter alia, (a) the Debtors’ need to retain an investment

banking firm to provide advice with respect to their restructuring options, and (b) SSG’s

extensive experience and excellent reputation in providing investment banking services in

the Chapter 11 Cases.


SERVICES TO BE PROVIDED

10. Subject to Court approval, and as more fully described in the Engagement

Agreement, the services being provided by SSG during the Chapter 11 Cases include

investment banking services in connection with one or more of the following: (a) an

acquisition transaction for all or part of the Debtors’ business (“Sale Transaction”); and (b) a

restructuring of the Debtors’ balance sheet (“Restructuring” and together with Sale

Transaction, a “Transaction”). Such services may include, inter alia,:

Preparing an information memorandum describing the Debtors, their

historical performance and prospects;

Assisting the Debtors in developing a list of suitable potential buyers who

will be contacted;

Coordinate the execution of confidentiality agreements for potential

buyers wishing to review the information memorandum;

Assist the Debtors in coordinating site visits for interested buyers and

work with the management team to develop appropriate presentations for such visits;

Solicit competitive offers from potential buyers;

Advise and assist the Debtors in structuring the Transaction and negotiating the Transaction agreements;

Assist the Debtors and its professionals with the structuring of sale procedures, the conduct of any auction that may result therefrom and/or a

plan of reorganization;

Otherwise assist the Debtors and their other professionals through closing

on a best efforts basis; and

Assist the Debtors in any negotiation with various stakeholders in regards

to a possible Restructuring Transaction of existing claims and equity.

11. It is necessary for the reorganization efforts of the Debtors that the Debtors

employ SSG to render the foregoing professional services. The Debtors believe that the

services will not duplicate the services that the Debtors’ other professionals will be providing


in the Chapter 11 Cases. Specifically, SSG will carry out unique functions and will use

reasonable efforts to coordinate with the Debtors and their other professionals to avoid the

unnecessary duplication of services.

PROFESSIONAL COMPENSATION

12. Prior to the Petition Date and pursuant to the terms of the Engagement

Letter, the Debtors paid SSG the Initial Fee (as defined below).

13. As more fully described in the Engagement Agreement, in consideration of

the services provided by SSG, the Debtors have agreed to pay SSG as follows:

(a) Initial Fee: An initial fee (the “Initial Fee”) equal to $40,000 due upon signing the Engagement Agreement.

(b) Monthly Fees: Monthly fees (the “Monthly Fees”) of $40,000 per month payable beginning March 1, 2019 and on the first (1st) of each

month thereafter throughout the Engagement Term.

(c) Transaction Fee: Upon the consummation of a Sale Transaction or Restructuring Transaction, SSG shall be entitled to a fee (the

“Transaction Fee”), payable in cash, in federal funds via wire transfer or certified check, at and as a condition of closing of such Transaction,

equal to the greater of (a) $475,000 or (b) two and one half percent (2.5%) of Total Consideration (as such term is hereafter defined), in

each case less a credit equal to fifty percent (50%) of the previously paid Monthly fees, except as set forth below.

Notwithstanding the foregoing, with respect to a Sale Transaction with a counterparty with which RAD has had substantial prior interactions listed on Attachment B (the “Special Counterparties”), the Transaction

Fee shall be modified as follows: (a) if any one (1) of the Special Counterparties is the successful bidder and no other qualified bids are

received, the Transaction Fee shall be reduced by fifty percent (50%) and not credit for Monthly Fees shall apply; (b) if two or more of the

Special Counterparties submit bids and one becomes the successful bidder, the Transaction Fee shall be reduced by twenty-five percent (25%) and a credit of fifty percent (50%) of the Monthly Fees shall

apply; and (c) if parties other than the Special Counterparties submit


qualified bids at the auction, regardless of the successful bidder, there shall be no reduction of the Transaction Fee.3

In the event there is no Sale Transaction or Restructuring Transaction and the Company determines to liquidate its assets, then SSG’s Fee

shall be $250,000 and a credit of fifty percent (50%) of the Monthly Fees shall apply (“Liquidation Fee”).

(d) Expenses. In addition to the foregoing Initial Fee, Monthly Fee and Transaction Fee noted above, whether or not a Transaction is consummated, SSG will be entitled to reimbursement for all of SSG’s

reasonable documented out-of-pocket expenses incurred in connection with the subject matter of this Engagement Agreement, provided that

expenses aggregating more than $5,000 shall be subject to prior approval by Company and air travel under three hours shall be

charged at economy class rates.

14. The Debtors believe that the compensation structure described above is (a)

comparable to compensation generally charged by investment banking firms of similar

stature to SSG for comparable engagements, both in and out of bankruptcy proceedings,

and (b) reflects a typical fee structure for SSG and other leading investment banking firms

which do not bill their clients on an hourly basis, but are generally compensated on a

transactional basis.

15. The hours worked, the results achieved and the ultimate benefit to the

Debtors of the work performed by SSG in connection with this engagement may vary and

the Debtors have taken this into account in setting the above fees.

16. SSG’s restructuring expertise, as well as its capital markets knowledge,

financing skills, knowledge and experience within the Debtors’ industry and mergers and

acquisitions capabilities, some or all of which may be required by the Debtors during the

term of SSG’s engagement hereunder, were important factors to the Debtors in determining

the amount of SSG’s fees, and the Debtors believe that the ultimate benefit to the Debtors of

3 Even if a Special Counterparty is the successful bidder, if it was in competition with one or more bidders

from SSG, the Company pays the whole Fee.


SSG’s services hereunder cannot be measured merely by reference to the number of hours to

be expended by SSG’s professionals in the performance of such services.

17. The Debtors propose that all compensation and expenses will be sought in

accordance with section 328(a) of the Bankruptcy Code and will not be subject to the

standard of review in section 330 of the Bankruptcy Code.

MODIFICATION OF COMPLIANCE WITH REQUIREMENTS

REGARDING TIME ENTRY DETAIL

18. Consistent with its ordinary practice and the practice of investment bankers

and financial advisors in other chapter 11 cases whose fee arrangements are typically not

hours based, SSG does not ordinarily maintain contemporaneous time records in one-tenth

hour (0.10) increments (similar to those customarily kept by attorneys and required by the

guidelines of the United States Trustee) or provide or conform to a schedule of hourly rates

for its professionals. Accordingly, SSG requests that it be excused from such timekeeping

and information requirements. SSG will maintain records in support of any actual,

necessary costs and expenses incurred in connection with the rendering of its services in

these cases.

SSG’S DISINTERESTEDNESS

19. To the best of the Debtors’ knowledge, (a) SSG is a “disinterested person,” as

such term is defined in section 101(14) of the Bankruptcy Code, as modified by section

1107(b) of the Bankruptcy Code, and, as required by section 327(a) and referenced by

section 328(c) of the Bankruptcy Code, neither holds nor represents any interest adverse to

the Debtors and their estates, and (b) except as disclosed in the Victor Declaration, has no


connection to the Debtors or to their significant creditors or certain other potential parties-

in-interest (“Parties-In-Interest”) whose names were supplied to SSG by the Debtors.4

20. Also, to the best of the Debtors’ knowledge, information and belief, and based

entirely and in reliance upon the Victor Declaration: (a) to the best of Mr. Victor’s

knowledge, information and belief, none of SSG’s past or current engagements would or

does appear to create an interest materially adverse to the interests of the Debtors, creditors,

or equity security holders in the Chapter 11 Cases and, as such the Debtors believe that SSG

is disinterested and holds no materially adverse interest as to the matters upon which they

are to be retained; and (b) to the extent SSG discovers any facts bearing on the matters

described herein during the period of SSG’s retention, SSG will supplement the information

contained in the Victor Declaration.

21. As described in more detail in the Victor Declaration, SSG, inter alia, searched

its conflict databases to determine whether it represents, or has represented, certain of the

Debtors’ creditors or other Parties-In-Interest in these proceedings, and/or matters wholly

unrelated to those proceedings. Due to the size of SSG and the number of creditors and

other parties-in-interest involved in the Chapter 11 Cases, however, SSG may have

represented certain of the Debtors’ creditors or other Parties-In-Interest in matters wholly

unrelated to the Chapter 11 Cases. Except as may be described in the Victor Declaration,

SSG does not, to its knowledge, represent any party with an interest materially adverse to

the Debtors or their estates.

4 The list of Parties-In-Interest supplied to SSG by the Debtors is attached as Schedule 1 to the Victor

Declaration. To the extent that SSG’s research of relationships with these Parties-In-Interest indicated that

SSG has provided in the recent past or is currently providing services to any of these entities in matters

unrelated to the Chapter 11 Cases, SSG has so indicated in Schedule 2 to the Victor Declaration.


22. Also, in accordance with section 504 of the Bankruptcy Code, SSG has

informed the Debtors that there is no agreement or understanding between SSG and any

other entity, other than an employee of SSG, for the sharing of compensation received or to

be received for services rendered in connection with the Chapter 11 Cases.

INDEMNIFICATION

23. Pursuant to the Engagement Agreement, the Debtors have agreed (a) to

indemnify, defend and hold harmless SSG or SSG Capital Advisors, LLC (“SCA”) and

their affiliates, the respective partners, members, directors, officers, agents and employees of

SSG, SCA, and their affiliates and each other person, if any, controlling SSG, SCA and

their affiliates (collectively, the “Indemnified Parties”) from and against any and all losses,

claims, liabilities or costs, as and when incurred, to which such Indemnified Party may

become subject to or which are asserted against any Indemnified Party, directly or

indirectly, in any way related to SSG acting for the Debtors under the Engagement

Agreement, and (b) to reimburse the Indemnified Parties for any legal or other expenses

incurred by them, as and when incurred, in connection with investigating, preparing or

defending any such losses, claims, damages or liabilities; provided, however, that the

Debtors shall not be liable for any such liability found in a final judgment to have resulted

from SSG’s gross negligence or willful misconduct in the performance of duties under the

Engagement Agreement.

RETENTION PURSUANT TO BANKRUPTCY CODE SECTION 328(A)

24. Section 327(a) of the Bankruptcy Code provides that a debtor, subject to

Court approval, “may 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 [debtor] in carrying out the

[debtor]’s duties under this title.” 11 U.S.C. § 327(a).

25. Additionally, under section 328(a) of the Bankruptcy Code, the Debtors,

“with the court’s approval, may employ or authorize the employment of a professional

person under section 327 . . . on any reasonable terms and conditions of employment,

including on a retainer, on an hourly basis, on a fixed or percentage fee basis, or on a

contingent fee basis.” 11 U.S.C. § 328(a). Accordingly, section 328 of the Bankruptcy Code

permits the compensation of professionals, including investment bankers, on more flexible

terms that reflect the nature of their services and market conditions. As the United States

Court of Appeals for the Fifth Circuit recognized in Donaldson Lufkin & Jenrette Sec. v. Nat’l

Gypsum (In re Nat’l Gypsum Co.):

Prior to 1978 the most able professionals were often unwilling to work for bankruptcy estates where their compensation would be subject to the uncertainties of what a judge thought the work

was worth after it had been done. That uncertainty continues under the present § 330 of the Bankruptcy Code, which

provides that the court award to professional consultants “reasonable compensation” based on relevant factors of time

and comparable costs, etc. Under present § 328 the professional may avoid that uncertainty by obtaining court approval of compensation agreed to with the trustee (or debtor

or committee).

123 F.3d 861, 862 (5th Cir. 1997) (internal citations and emphasis omitted).

26. Bankruptcy Rule 2014 further requires that an application for retention of a

professional person include:

[S]pecific facts showing the necessity for the employment, the

name of the person 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 person’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.

See FED. R. BANKR. P. 2014(a).

27. As discussed in this Application and the Victor Declaration, SSG satisfies the

disinterestedness standard in section 327(a) of the Bankruptcy Code. Additionally, given

the numerous issues that SSG may be required to address in the performance of its services

for the Debtors pursuant to the Engagement Agreement, SSG’s commitment to the variable

level of time and effort necessary to address all such issues as they arise, and the market

prices for SSG’s services for engagements of this nature, the Debtors believe that the terms

and conditions of the Engagement Agreement are fair, reasonable, and market-based under

the standards set forth in section 328(a) of the Bankruptcy Code.

28. Indeed, the Debtors submit that the fee structure, expense reimbursement and

indemnification provisions are reasonable terms and conditions of employment under

Bankruptcy Code section 328(a) in light of the following: (a) the nature and scope of

services to be provided by SSG; (b) industry practice with respect to the fee structures and

indemnification provisions typically utilized by leading investment banks and investment

bankers that do not bill their clients on an hourly basis; (c) market rates charged for

comparable services both in and out of the chapter 11 context; (d) SSG’s substantial

experience with respect to financial restructuring and investment banking; and (e) the nature

and scope of work already performed by SSG.

29. The terms of the Engagement Agreement were negotiated in good faith and at

arm’s-length between the Debtors and SSG and reflect the Debtors’ evaluation of the

substantial work that will be performed by SSG and its financial advisory expertise.


30. Furthermore, the fee structure is consistent with and typical of compensation

arrangements entered into by SSG and other comparable firms in connection with the

rendering of similar services under similar circumstances. SSG’s strategic and financial

expertise as well as its capital markets knowledge, financing skills, restructuring capabilities,

and mergers and acquisitions expertise, some or all of which may be required by the Debtors

during the term of SSG’s engagement, were all important factors in determining the fee

structure. The Debtors believe that the ultimate benefit of SSG’s services cannot be

measured by reference to the number of hours to be expended by SSG’s professionals in the

performance of such services. Accordingly, the Debtors submit that the fee structure is both

fair and reasonable under the standards set forth in section 328(a) of the Bankruptcy Code.

31. The Debtors propose that, notwithstanding SSG’s retention under section

328(a) of the Bankruptcy Code, the United States Trustee will retain the right to object to

the compensation to be paid to SSG pursuant to the Engagement Agreement based on the

reasonableness standard provided for in Bankruptcy Code section 330, provided that

reasonableness for this purpose shall include, inter alia, an evaluation by comparing the fees

payable in the Chapter 11 Cases to the fees paid to other investment banking firms for

comparable services in other chapter 11 cases and outside of chapter 11 cases, and shall not

be evaluated primarily on the basis of time committed or the length of these cases.

32. As set forth above, notwithstanding approval of the Engagement Agreement

under section 328(a) of the Bankruptcy Code, SSG intends to apply for compensation for

professional services rendered and reimbursement of expenses incurred in connection with

these cases, subject to the Court’s approval and in compliance with applicable provisions of

the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any other applicable


procedures and orders of the Court and consistent with the fee structure set forth in the

Engagement Agreement.

NUNC PRO TUNC RELIEF IS WARRANTED

33. The Debtors believe that employment of SSG effective nunc pro tunc to the

Petition Date is warranted under the circumstances of the Chapter 11 Cases so that SSG

may be compensated for its services prior to entry of an order approving SSG’s retention.

Further, the Debtors believe that no party-in-interest will be prejudiced by the granting of

nunc pro tunc employment because SSG provided, and will continue to provide, valuable

investment banking services to the Debtors’ estates, and has been doing so since the Petition

Date.

NOTICE

34. Notice of this Application shall be provided to: (a) the Office of the United

States Trustee for the Eastern District of New York; (b) The United States Attorney for the

Eastern District of New York; (c) the Debtors’ consolidated top thirty (30) largest unsecured

creditors; (d) Counsel to Wells Fargo Bank, N.A. and PNC Bank, N.A.; (f) the Internal

Revenue Service; and (g) all other parties required to receive service under Rules 2002-2 of

the Local Bankruptcy Rules for the Eastern District of New York and the Guidelines for First Day

Motions adopted by the Board of Judges for the United States Bankruptcy Court for the

Eastern District of New York. Due to the urgency of the circumstances surrounding this

Application and the nature of the relief in it, the Debtors respectfully submit that no further

notice of this Application is required.

NO PRIOR REQUEST

35. No prior Application for the relief requested herein has been made to this or

any other court.


WHEREFORE, the Debtors respectfully request that the Court enter an order,

substantially in the form annexed hereto as Exhibit A, (a) granting the relief sought herein

and (b) granting such other and further relief as the Court may deem proper.

Dated: February 12, 2019 New York, New York

Respectfully submitted,

HAHN & HESSEN LLP

/s/ Mark T. Power

Mark T. Power, Esq. Janine M. Figueiredo, Esq.

488 Madison Avenue

New York, New York 10022 Telephone: (212) 478-7200

Facsimile: (212) 478-7400 E-mail: [email protected] [email protected]

Proposed Counsel to the Debtors and Debtors in Possession


EXHIBIT A

(Proposed Order)


UNITED STATES BANKRUPTCY COURT

EASTERN DISTRICT OF NEW YORK ---------------------------------------------------------------------- X

In re:


Debtors.

: :

: : :

: :

: :

:

Chapter 11



Case No. 19-71025 (REG)

Joint Administration Requested ---------------------------------------------------------------------- X

ORDER AUTHORIZING DEBTORS’ APPLICATION FOR ENTRY OF

AN ORDER AUTHORIZING EMPLOYMENT AND RETENTION OF SSG

ADVISORS, LLC AS INVESTMENT BANKER FOR THE DEBTORS

NUNC PRO TUNC TO THE PETITION DATE

Upon consideration of the application (the “Application”)2 of Décor Holdings, Inc.

and its affiliated debtors and debtors in possession (collectively, the “Debtors”) for an order

pursuant to sections 327(a) and 328(a) of the Bankruptcy Code, Bankruptcy Rules 2014 and

2016, and Local Rules 2014-1 and 2016-1, authorizing and approving the employment and

retention of SSG Advisors, LLC (“SSG”) as investment banker for the Debtors nunc pro tunc

to the Petition Date; and the Court having reviewed the Application and the Victor

Declaration in support of the Application; and the Court having jurisdiction over this matter

pursuant to 28 U.S.C. §§ 157 and 1334; and this matter being a core proceeding pursuant to

28 U.S.C. § 157(b)(2); and venue being proper in this district pursuant to 28 U.S.C. §§ 1408







2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to those terms in the

Application.


and 1409; and notice of the Application being sufficient under the circumstances and that no

further notice need be given; and after due deliberation the Court having determined that

the legal and factual bases set forth in the Application and at the hearing thereon establish

just cause for the relief granted herein; and good and sufficient cause appearing therefor;

IT IS HEREBY ORDERED THAT:

1. The Application is GRANTED as set forth in this Order.

2. The Debtors are authorized pursuant to sections 327(a) and 328(a) of the

Bankruptcy Code, Bankruptcy Rule 2014(a) and 2016, and Local Bankruptcy Rules 2014-1

and 2016-1 to employ and retain SSG as their investment banker in accordance with the

terms and conditions set forth in the Engagement Agreement effective nunc pro tunc to the

Petition Date.

3. SSG shall file a final fee application for the allowance of compensation for

services rendered and reimbursement of expenses incurred in accordance with applicable

provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, any applicable

orders of this Court and the Guidelines promulgated by the United States Trustee for

Region 2 (the “Guidelines”).

4. SSG’s compensation shall be subject to the standard of review provided in

section 328(a) of the Bankruptcy Code and not subject to any other standard of review

under section 330 of the Bankruptcy Code.

5. SSG does not hold or represent any interest adverse to the Debtors’ estates

with respect to the matters upon which it is to be employed and is a “disinterested person”

as that term is defined in section 101(14) of the Bankruptcy Code.


6. The terms of the Engagement Agreement are approved in all respects except

as limited or modified herein.

7. The compensation provisions of the Engagement Agreement, including with

respect to the Monthly Fees and Transaction Fees, and the other fees and expenses are

reasonable terms and conditions of employment as required under section 328(a) of the

Bankruptcy Code, and are hereby approved pursuant to section 328(a) of the Bankruptcy

Code and that SSG’s fees shall be compensated and reimbursed pursuant to section 328(a)

of the Bankruptcy Code in accordance with the terms of, and at the times specified by, the

Engagement Agreement. For the avoidance of doubt, SSG shall be entitled to the payment

of its Monthly Fees without the need to file monthly or interim applications for

compensation.

8. Notwithstanding anything to the contrary in the Engagement Agreement, the

Application or the Victor Declaration, to the extent that the Debtors request SSG to perform

any services other than those detailed in the Engagement Agreement, the Debtors shall seek

further application for an order of approval by the Court for a supplement to the retention

and any related modification to the Engagement Agreement and such application shall set

forth, in addition to the additional services to be performed, the additional fees sought to be

paid.

9. Notwithstanding anything to the contrary in the Bankruptcy Code, the

Bankruptcy Rules, the Local Rules, orders of this Court, the Guidelines or any other

guidelines regarding submission and approval of fee applications, in light of services to be

provided by SSG and the structure of SSG’s compensation pursuant to the Engagement

Agreement, SSG and its professionals shall be excused from maintaining time records as set


forth in the Bankruptcy Rules, the Local Rules, and the Guidelines in connection with the

services to be rendered pursuant to the Engagement Agreement. SSG shall maintain

records in support of any actual, necessary costs and expenses incurred in connection with

the rendering of its services in the Chapter 11 Cases.

10. None of the fees payable to SSG under the Engagement Agreement shall

constitute a “bonus” or fee enhancement under applicable law.

11. The indemnification provisions in the Engagement Agreement are approved,

subject during the pendency of these cases to the following:

(a) Subject to the provisions of subparagraphs (b) and (c), the Debtors are authorized to indemnify, and to provide contribution and

reimbursement to, and shall indemnify, and provide contribution and reimbursement to, SSG and its present and former partners, principals

and employees in accordance with the terms of the Engagement Agreement for any claim arising from, related to, or in connection with the services provided for in the Engagement Agreement, but not

for any claim arising from, related to, or in connection with SSG’s postpetition performance of any other services other than those in

connection with the engagement, unless such post-petition services and indemnification, contribution and reimbursement therefore are

approved by the Court.

(b) Notwithstanding any indemnification provisions of the Engagement Agreement to the contrary, the Debtors shall have no obligation to

indemnify SSG and provide contribution and reimbursement to SSG (i) for any claim or expense that is judicially determined (the

determination having become final) to have arisen from SSG’s bad faith, gross negligence, or willful misconduct, (ii) for a contractual

dispute in which the Debtors allege the breach of SSG’s contractual obligations unless the Court determines that indemnification or reimbursement would be permissible pursuant to In re United Artists

Theatre Co., 315 F.3d 217 (3d Cir. 2003), or (iii) for any claim or

expense that is settled prior to a judicial determination as to the

exclusions set forth in clauses (i) and (ii) above, but determined by the Court, after notice and a hearing pursuant to subparagraph (c),

beneath, to be a claim or expense for which SSG should not receive indemnity, contribution and reimbursement under the terms of the

Engagement Agreement, as modified by this Order.


(c) If, before the earlier of (i) the entry of an order confirming a chapter 11 plan in the Chapter 11 Cases (that order having become final and no

longer subject to appeal), and (ii) the entry of an order closing the Chapter 11 Cases, SSG believes that it is entitled to the payment of any

amounts by the Debtors on account of the Debtors’ indemnification, contribution and/or reimbursement obligations under the Engagement

Agreement (as modified by this Order), including without limitation the advancement of defense costs, SSG must file an application therefore in this Court, and the Debtors may not pay any such

amounts to SSG before the entry of an order by this Court approving the payment. This subparagraph (c) is intended only to specify the

period of time during which the Court shall have jurisdiction over any request for compensation and expenses by SSG for indemnification,

contribution or reimbursement and is not a provision limiting the duration of the Debtors’ obligation to indemnify SSG.

12. Notwithstanding anything in this Order to the contrary, the United States

Trustee shall retain all rights to respond or object to SSG’s interim and final applications for

compensation based on the reasonableness standard provided for in section 330 of the

Bankruptcy Code; provided, that, with respect to the United States Trustee’s retention of

rights under section 330 of the Bankruptcy Code, it is understood and agreed that

reasonableness for this purpose shall be evaluated by comparing the fees payable in these

cases to fees paid to other firms offering comparable services in other chapter 11 cases and

shall not be evaluated primarily on the basis of time committed or the length of these cases.

13. Notwithstanding anything contained in the Engagement Agreement to the

contrary, (a) the portion of the Transaction Fee payable with respect to the portion of Total

Consideration, if any, that consists of the assumption or payoff of unsecured indebtedness

and/or payables, equipment leases (operating and capitalized), real estate leases (operating

and capitalized) or the value of any asset left behind in the estate, shall not be paid unless

and until all amounts payable under the incremental DIP Financing, not including any roll

up of pre-petition indebtedness, have been paid, (b) absent the express written consent of the


Debtors to an extension, the term of SSG’s engagement shall be the earlier of (i) ninety (90)

days from the date of the Engagement Agreement or (ii) consummation of a sale of

substantially all of the Debtors’ assets, or (iii) the occurrence of an Event of Default under

the DIP Financing, which Event of Default has not been waived. Nothing contained herein

shall affect SSG’s “tail” rights as set forth in the Engagement Agreement.

14. To the extent that there is any inconsistency between the terms of the

Application, the Engagement Agreement, or this Order, the terms of this Order shall

govern.

15. The relief granted herein shall be binding upon any chapter 11 trustee

appointed in these chapter 11 cases, or upon any chapter 7 trustee appointed in the event of

a subsequent conversion of these chapter 11 cases to cases under chapter 7.

16. Notwithstanding any Bankruptcy Rule (including, without limitation,

Bankruptcy Rule 6004(h)) or Local Rule that might otherwise delay the effectiveness of this

Order, the terms and conditions of this Order shall be immediately effective and enforceable

upon its entry.

17. The Debtors are authorized and empowered to take all actions necessary to

effectuate the relief granted by this Order.

18. This Court shall retain jurisdiction to hear and determine all matter arising

from or relating to the implementation or interpretation of this Order.


EXHIBIT B

(Engagement Agreement)


Five Tower Bridge, Suite 420 • 300 Barr Harbor Drive • West Conshohocken, PA 19428

Phone: (610) 940-1094 • Fax: (610) 940-3875 www.ssgca.com

280553/008-7064294.3

January 28, 2019 Timothy D. Boates Chief Restructuring Officer The Robert Allen Duralee Group, Inc. 49 Wireless Boulevard, Suite 150 Hauppauge, NY 11788 Dear Mr. Boates: This agreement (“Engagement Agreement”) will serve as the contract between Décor Holdings, Inc., Décor Intermediate Holdings LLC, The Robert Allen Duralee Group, LLC, The Robert Allen Duralee Group, Inc., The Robert Allen Duralee Group Furniture, LLC, Techstyle Contract Fabrics LLC, B. Berger Company LLC, Gaetano Fabrics LLC, Robert Allen Fabrics (Canada) Ltd., Suburban Home Fabrics (Shanghai) Trading Co., Ltd. and each other direct or indirect subsidiary of Décor Holdings, Inc. (collectively, “RAD” or the “Company”) and SSG Advisors, LLC ("SSG") regarding the retention of SSG as exclusive investment banker to RAD for the purposes outlined in this Engagement Agreement. SSG’s responsibilities hereunder involve providing investment banking services to the Company, on an exclusive basis, focusing on: (i); the sale of all or part of the Company (the “Sale Transaction”, as further defined below) or (ii) the restructuring of the Company’s balance sheet with existing stakeholders (“Restructuring” and, together with a Sale Transaction, a “Transaction”).

A. SSG’s Role:

1. SSG’s role in connection with the Sale Transaction will include the following:

• Prepare an information memorandum describing the Company, its

historical performance and prospects, including existing contracts, marketing and sales, labor force, and management and anticipated financial results of the Company;

• Assist the Company in developing a list of suitable potential buyers

who will be contacted on a discreet and confidential basis after approval by the Company;

• Coordinate the execution of confidentiality agreements for potential

buyers wishing to review the information memorandum; • Assist the Company in coordinating site visits for interested buyers

and work with the management team to develop appropriate presentations for such visits;

• Solicit competitive offers from potential buyers;


Mr. Timothy D. Boates January 28, 2019 Page 2

• Advise and assist the Company in structuring the Transaction, as the term is hereafter defined, and negotiating the Transaction agreements, including, without limitation, advising and negotiating with respect to Transaction structures;

• Assist the Company and its professionals with the structuring of sale

procedures, the conduct of any auction that may result therefrom and/or a plan of reorganization, should the Company determine to pursue the approval of a Transaction in the context of a proceeding pursuant to Chapter 11 of the United States Bankruptcy Code (a “Bankruptcy Case”)

• Be available for presentations to the Company’s Board of Directors and meetings and court appearances in a Bankruptcy Case, including, without limitation, providing testimony in or out of court in furtherance and support of the Transaction process and Transaction; and

• Otherwise assist the Company, its attorneys and accountants, as necessary, through closing on a best efforts basis.

2. SSG’s role in connection with a Restructuring will include the following:

• SSG, on a best effort basis, shall assist the Company in any negotiation with various stakeholders in the Company (the “Existing Stakeholders”), including, but not limited to any of the Company’s lenders, general unsecured creditors and shareholders in regard to a possible Restructuring Transaction of existing claims and equity.

In performing the services described above, the Company will furnish or cause to be furnished to SSG such information as SSG reasonably believes appropriate to the execution of its engagement hereunder (all such information so furnished being the "Information"). The Company represents to SSG that all Information furnished by it or its agents will be complete and correct in all material respects, to the best of its knowledge, and that until the expiration of SSG’s engagement hereunder, it will advise the Company and SSG immediately of the occurrence of any event or any other change known by it or its agents that results in the Information ceasing to be complete and correct in all material respects. The Company recognizes and confirms that SSG: (a) will use and rely primarily on the Information and on information available from generally recognized public sources in performing the services contemplated hereby without having independently verified any of the same; (b) does not assume responsibility for accurateness or completeness of the Information and such other information; and (c) will not make an appraisal of any of the assets or liabilities of the Company.

The Company agrees that SSG shall be its exclusive investment banker in connection with any Transaction undertaken with respect to the Company during the Engagement Term, as defined below, of this Engagement Agreement. The Company agrees to identify to SSG: (a) all prospective purchasers and investors who have been in contact with the Company prior to the date hereof and (b) all



prospective purchasers and investors who come in contact with the Company during the Engagement Term.

SSG will consult with and advise the Company with respect to the financial aspects of any proposed Transaction, including price, terms and conditions of a Transaction. SSG will not, however, have any authority to bind the Company with respect to any proposed Transaction. Likewise, nothing contained herein shall require the Company to accept the terms of any proposal and the Company shall at all times have the right in his sole and absolute discretion to reject any proposed Transaction regardless of the terms proposed.

B. SSG’s Compensation

As compensation for providing the foregoing services, SSG shall receive the following: 1. Initial Fee. An initial fee (the “Initial Fee”) equal to $40,000 due upon signing

this Engagement Agreement;

2. Monthly Fees. Monthly fees (the “Monthly Fees”) of $40,000 per month payable beginning March 1, 2019 and on the first (1st) of each month thereafter throughout the Engagement Term.

3. Transaction Fee. Upon the consummation of a Sale Transaction or

Restructuring Transaction, SSG shall be entitled to a fee (the “Transaction Fee”), payable in cash, in federal funds via wire transfer or certified check, at and as a condition of closing of such Transaction, equal to the greater of (a) $475,000 or (b) two and one half percent (2.5%) of Total Consideration (as such term is hereafter defined), in each case less a credit equal to fifty percent (50%) of the previously paid Monthly Fees, except as set forth below.

Notwithstanding the foregoing, with respect to a Sale Transaction with a

counterparty with which RAD has had substantial prior interactions listed on Attachment B (the “Special Counterparties”), the Transaction Fee shall be modified as follows: (a) if any one (1) of the Special Counterparties is the successful bidder and no other qualified bids are received, the Transaction Fee shall be reduced by fifty percent (50%) and no credit for Monthly Fees shall apply; (b) if two or more of the Special Counterparties submit bids and one becomes the successful bidder, the Transaction Fee shall be reduced by twenty-five percent (25%) and a credit of fifty percent (50%) of the Monthly Fees shall apply; (c) if parties other than the Special Counterparties submit qualified bids at the auction, regardless of the successful bidder, there shall be no reduction in the Transaction Fee.1

In the event there is no Sale Transaction or Restructuring Transaction and

the Company determines to liquidate its assets, then SSG’s Fee shall be





$250,000 and a credit of fifty percent (50%) of the Monthly Fees shall apply (“Liquidation Fee”).

4. In addition to the foregoing Initial Fee, Monthly Fee and Transaction Fee

noted above, whether or not a Transaction is consummated, SSG will be entitled to reimbursement for all of SSG’s reasonable documented out-of-pocket expenses incurred in connection with the subject matter of this Engagement Agreement, provided that expenses aggregating more than $5,000 shall be subject to prior approval by Company and air travel under three hours shall be charged at economy class rates.

C. Definitions

For the purpose of this Engagement Agreement: Sale Transaction means and includes any transaction involving the sale or transfer, directly or indirectly, of all or a significant portion of the assets, secured debt or equity of Company.

Restructuring Transaction means and includes any restructuring of existing and prospective Company stakeholder claims, including but not limited to the Company’s secured lenders, unsecured claims and shareholder interests. Total Consideration shall mean the purchase price paid at the time of the effective date of the Sale Transaction after giving effect to the Sale Transaction, net of any escrow, for the equity, assets or any portion of either, plus the assumption or payoff of indebtedness (secured and unsecured) and/or payables, equipment leases (operating and capitalized), real estate leases (operating and capitalized) as well as the value of any asset left behind in the estate. For purposes of computing any fees payable to SSG hereunder, non-cash consideration shall be valued as follows: (a) publicly traded securities shall be valued at the average of their closing prices (as reported in The Wall Street Journal) for the five (5) trading days (on which closing prices are recorded) prior to the closing of the Sale Transaction; and (b) any other non-cash consideration shall be valued at the fair market value thereof as determined in good faith by the Company and SSG. If such aggregate consideration may be increased by contingent payments such as an “earnout”, release of escrow amounts or other monetary agreement in the transaction, the portion of SSG’s fee relating thereto shall be calculated and paid when and as such contingent payments or other monetary amounts are received. Transaction shall mean and include a Sale Transaction or Restructuring Transaction, as determined above. Transaction Fee shall mean and include a Sale Fee, Restructuring Fee and Liquidation Fee.


Mr. Timothy D. Boates January 28, 2019 Page 5 D. Term of Engagement

This Engagement Agreement shall remain in force (the “Engagement Term”) for a period of six (6) months from the date of signing this Engagement Agreement and will continue thereafter for an additional period of six (6) months unless terminated at any time by either party upon thirty (30) days prior written notice to the other; provided, however, that either party may terminate this Engagement Agreement by written notice immediately upon the closing of a Transaction. Upon the termination of this Engagement Agreement, neither party shall have any further obligations to the other except that: (a) termination of the Engagement Agreement shall not affect SSG’s right to indemnification under the Indemnification paragraph below; (b) the Company shall remain obligated to pay SSG any unpaid Monthly Fees and to reimburse SSG for any expenses incurred through the date of the termination of the Engagement Agreement; and (c) if a Transaction is consummated within twelve (12) months (“Trailer Term”) of the termination of this Engagement Agreement, the Company shall remain obligated to pay a Restructuring Fee, Sale Fee or Liquidation Fee, as calculated above. Sections B, D, E, F and G (entitled Compensation, Term of Engagement, Indemnification, Miscellaneous, and Scope of SSG’s Duties, respectively) of this Engagement Agreement shall survive the expiration or termination of this Engagement Agreement indefinitely.

E. Indemnification

The Company hereby acknowledges and agrees to the indemnification arrangements between the parties hereto as described on Attachment A hereto, which Attachment is incorporated herein and forms an integral part hereof.

F. Miscellaneous

No fee payable to any other financial advisor or finder by the Company or the Company in connection with the subject matter of this Engagement Agreement shall reduce or otherwise affect any fee payable to SSG hereunder. This Engagement Agreement sets forth the entire understanding of the parties relating to the subject matter hereof and supersedes and cancels any prior communications, understandings and agreements between the parties hereto. This Engagement Agreement cannot be modified or changed, nor can any of its provisions be waived, except by written agreement signed by both parties. The benefits of this Engagement Agreement shall inure to the respective successors and assigns of the parties hereto and of the Indemnified Parties and their respective successors, assigns and representatives, and the obligations and liabilities assumed in this Engagement Agreement by the parties hereto shall be binding upon their respective successors and assigns. This Engagement Agreement may be executed in any number of counterparts, which counterparts, taken together, shall constitute one and the same Engagement Agreement.

G. Scope of Duties

The Company hereby acknowledges and agrees that: (a) it has retained SSG for the purposes set forth in the Engagement Agreement and that the rights and



obligations of the parties hereto are contractual in nature, and (b) SSG has not made any warranties or guarantees of any nature with respect to the success or satisfactory conclusion of any Transaction or as to the economic, financial or other results which may be obtained or experienced by the Company as a result thereof.

H. Bankruptcy Court Proceedings

In the event the Company files one or more Chapter 11 Bankruptcy proceedings, either voluntary or involuntary, during the Engagement Term, the Company shall use its best commercially reasonable efforts to have SSG employed upon the same or substantially similar terms and shall have this Engagement Agreement and SSG’s retention as the Company’s exclusive investment banker approved by a Court of competent jurisdiction. SSG has disclosed to Company all potential conflicts relating to this engagement and will disclose such conflicts to the court in any Chapter 11 Bankruptcy proceedings.

I. Other Matters

SSG has the right, following the Transaction closing, to place advertisements in financial and other newspapers and journals and to send email blasts at its own expense describing its services to the Company hereunder.

In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001), SSG is required to obtain, verify and record information that identifies its clients, which information may include the name and address of the Company, the Company and its senior management team as well as other information that will allow SSG to properly identify its clients. Additionally, SSG maintains important disclosures on its web site www.ssgca.com. These disclosures may be updated periodically on an as-needed basis. The Company agrees to accept and receive all of these disclosures by electronically accessing the website referenced above and acknowledges that printed hard copies of these disclosures are available upon request by contacting SSG directly at (610) 940-1094.

J. Securities Platform

All transactions involving the sale or purchase of any security (as defined by the Securities Exchange Act of 1934 or the rules and regulations promulgated there under) are offered through SSG Capital Advisors, LLC. (“SCA”) which is an affiliated registered Broker-Dealer in good standing with the Financial Industry Regulatory Authority (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Principals of SSG are registered representatives of SCA. Therefore, SCA is included collectively as “SSG” with all the rights and obligations thereto under the terms of this Engagement Agreement. To the extent a Transaction Fee is payable to SSG in connection with a Transaction including the purchase or sale of any security (as defined by the Securities Exchange Act of 1934 or the rules and regulations promulgated there under), such Transaction Fee (excluding the Initial Fee and Monthly Fees) shall be specifically paid to SCA.



[Signature page follows]


Mr. Timothy D. Boates January 28, 2019 Page 8 Any amendment, modification or other changes to this Engagement Agreement must be in writing and signed by both parties to be enforceable. Please indicate your acceptance of the foregoing by executing and returning the enclosed copy of this letter. SSG ADVISORS, LLC

By:

J. Scott Victor Teresa Kohl Managing Director Managing Director ACCEPTED: DÉCOR HOLDINGS, INC. DÉCOR INTERMEDIATE HOLDINGS LLC THE ROBERT ALLEN DURALEE GROUP, LLC THE ROBERT ALLEN DURALEE GROUP, INC. THE ROBERT ALLEN DURALEE GROUP FURNITURE, LLC, TECHSTYLE CONTRACT FABRICS LLC B. BERGER COMPANY LLC GAETANO FABRICS LLC ROBERT ALLEN FABRICS (CANADA) LTD. SUBURBAN HOME FABRICS (SHANGHAI) TRADING CO., LTD. By: Timothy D. Boates Date Chief Restructuring Officer

02-02-19



ATTACHMENT A INDEMNIFICATION PROVISIONS

The Company agrees to indemnify, defend and hold harmless SSG or SCA, and their affiliates, the respective partners, members, directors, officers, agents and employees of SSG, SCA, and their affiliates and each other person, if any, controlling SSG, SCA, and their affiliates (the foregoing being referred to herein individually as an “Indemnified Party” and collectively as the “Indemnified Parties”) from and against any and all losses, claims, damages, liabilities or costs, as and when incurred, to which such Indemnified Party may become subject to or which are asserted against any Indemnified Party, directly or indirectly, in any way related to SSG acting for the Company under the Engagement Agreement of which this Attachment A forms a part, including, without limitation, in connection with: (a) any act or omission by SSG related to its engagement as financial advisor under the Engagement Agreement; or (b) SSG’s acceptance, or its performance or non-performance, of its obligations under said Engagement Agreement. The Company will reimburse the Indemnified Parties for any legal or other expenses incurred by them, as and when incurred, in connection with investigating, preparing or defending any such losses, claims, damages or liabilities or any action in respect thereof, whether or not in connection with pending or threatened litigation, and whether or not any Indemnified Party is a party thereto; provided, however, that the Company shall not be liable under the foregoing indemnity agreement in respect of any liability to the extent that such liability is found in a final judgment by a court of competent jurisdiction, not subject to further appeal, to have resulted primarily from SSG’s gross negligence or willful misconduct in the performance of its duties under said Engagement Agreement. The Company agrees that reliance by SSG on any publicly-available information, the information supplied by the Company to SSG in connection with said Engagement Agreement or any directions furnished by the Company shall not constitute negligence, bad faith or willful misconduct by SSG.

In order to provide for just and equitable contribution, if a claim for indemnification is made pursuant to said Engagement Agreement but it is found in a final judgment by a court of competent jurisdiction, not subject to further appeal, that such indemnification may not be enforced in such case, the Indemnified Parties, on the one hand, and the Company, on the other hand, shall each contribute to the amount paid or payable as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties, on the one hand, and the Company, on the other hand, and the relative benefits to the Indemnified Parties, on the one hand, and the Company, on the other hand, arising out of the particular matter or transaction which gave rise to such loss, claim, damage, liability or costs, and all other relevant equitable considerations shall also be taken into account. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for such fraudulent misrepresentation.

The provisions of this Attachment A shall survive any termination of said Engagement Agreement.



ANNEX B

Counterparties Harbour Group and any of its subsidiaries or affiliates Kravet Inc. and any of its subsidiaries or affiliates Springs Window Fashions and any of its subsidiaries or affiliates


EXHIBIT C

(Victor Declaration)


UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK

---------------------------------------------------------------------- X

In re:


Debtors.

:

: :

: : :

: :

: :

Chapter 11

Case No. 19-71020 (REG) Case No. 19-71022 (REG) Case No. 19-71023 (REG)


Joint Administration Requested

---------------------------------------------------------------------- X

DECLARATION OF J. SCOTT VICTOR IN SUPPORT OF DEBTORS’

APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING EMPLOYMENT

AND RETENTION OF SSG ADVISORS, LLC AS INVESTMENT BANKER FOR

THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE

I, J. Scott Victor, declare under penalty of perjury as follows:

1. I am a Managing Director of SSG Advisors, LLC (“SSG”) and its registered

broker/dealer affiliate, SSG Capital Advisors, LLC. I have over thirty-five (35) years of

experience in advising businesses facing operational or financial challenges, including

bankruptcy proceedings.

2. I submit this Declaration in support of the application (the “Application”)2 of

the above-captioned debtors and debtors in possession (collectively, the “Debtors”) for an

order authorizing the employment and retention of SSG as investment banker to the

Debtors nunc pro tunc to the Petition Date pursuant to sections 327 and 328 of title 11 of the







2 Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms in the

Application.


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 2016-1 of the Local

Bankruptcy Rules of the Eastern District of New York (the “Local Rules”). I am duly

authorized to submit this Declaration on behalf of SSG. Except as otherwise noted, I have

personal knowledge of the matters set forth herein and, if called as a witness, I could and

would testify thereto.

3. This Declaration is also submitted as the statement required pursuant to

sections 328(a) and 504 of the Bankruptcy Code and Rule 2014(a) of the Bankruptcy Rules.

DISINTERESTEDNESS

4. To check and clear potential conflicts of interest in the Chapter 11 Cases, as

well as determine all “connections” (as such term is used in Bankruptcy Rule 2014) with

parties-in-interest, SSG conducted a review of the interested parties in the Chapter 11 Cases

as provided to SSG by the Debtors and annexed hereto as Schedule 1 (collectively, the

“Potential Parties-in-Interest”). To the extent that SSG’s search of its relationships with the

Potential Parties-in-Interest indicated that SSG currently represents, previously represented,

or has a connection with any of the Potential Parties-in-Interest, the identities of such

Potential Parties-in-Interest and relationship to the Debtors and connection to SSG are set

forth in Schedule 2 hereto.

5. Except as set forth in Schedule 2, to the best of my knowledge, information

and belief after reasonable inquiry, SSG (a) does not hold or represent any interest adverse

to the Debtors’ estates in matters upon which it has been engaged, and (b) is a “disinterested

person” within the meaning of section 101(14) of the Bankruptcy Code. Furthermore,

except as set forth in Schedule 2, to the best of my knowledge, information and belief after


reasonable inquiry, neither I nor SSG, nor any member or employee thereof, has any

connections with the Debtors, their creditors, any parties-in-interest, their respective

attorneys and accountants, the United States Trustee, or any attorney employed in the

Office of the United States Trustee for this district, and the Bankruptcy Judges for the

Eastern District of New York.

6. As part of its diverse practice, SSG has appeared in numerous cases,

proceedings and transactions that involve may different professionals, including attorneys,

accountants and financial consultants, who may represent claimants and parties-in-interest

in the Chapter 11 Cases. Also, SSG has performed in the past, and may perform in the

future, investment banking and financial consulting services for various attorneys and law

firms, lenders, and creditors, some of whom may be involved in these proceedings. In

addition, SSG has in the past and will likely in the future be working with or against other

professional involved in the Chapter 11 Cases in matters unrelated to the Debtors and the

Chapter 11 Cases. Based on my current knowledge of the professionals involved, and to the

best of my knowledge, none of these relationships create interests materially adverse to the

Debtors in matters upon which SSG is to be employed, and none are in connection with the

Chapter 11 Cases.

7. Accordingly, I believe that SSG 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.

8. To the extent that SSG discovers any facts or additional information during

the period of SSG’s retention that requires disclosure, SSG will supplement this Declaration

to disclose such information.


PROFESSIONAL COMPENSATION

9. Prior to the Petition Date and pursuant to the terms of the Engagement

Letter, the Debtors paid SSG the Initial Fee (as defined below).

10. Subject to the Court’s approval, the Debtors have agreed to pay SSG during

the Chapter 11 Cases as follows:

(a) Initial Fee: An initial fee (the “Initial Fee”) equal to $40,000 due upon signing the Engagement Agreement.

(b) Monthly Fees: Monthly fees (the “Monthly Fees”) of $40,000 per

month payable beginning March 1, 2019 and on the first (1st) of each month thereafter throughout the Engagement Term.

(c) Transaction Fee: Upon the consummation of a Sale Transaction or Restructuring Transaction, SSG shall be entitled to a fee (the “Transaction Fee”), payable in cash, in federal funds via wire transfer

or certified check, at and as a condition of closing of such Transaction, equal to the greater of (a) $475,000 or (b) two and one half percent

(2.5%) of Total Consideration (as such term is hereafter defined), in each case less a credit equal to fifty percent (50%) of the previously paid Monthly fees, except as set forth below.

Notwithstanding the foregoing, with respect to a Sale Transaction with a counterparty with which RAD has had substantial prior interactions

listed on Attachment B (the “Special Counterparties”), the Transaction Fee shall be modified as follows: (a) if any one (1) of the Special

Counterparties is the successful bidder and no other qualified bids are received, the Transaction Fee shall be reduced by fifty percent (50%)

and not credit for Monthly Fees shall apply; (b) if two or more of the Special Counterparties submit bids and one becomes the successful bidder, the Transaction Fee shall be reduced by twenty-five percent

(25%) and a credit of fifty percent (50%) of the Monthly Fees shall apply; and (c) if parties other than the Special Counterparties submit

qualified bids at the auction, regardless of the successful bidder, there shall be no reduction of the Transaction Fee.3

In the event there is no Sale Transaction or Restructuring Transaction and the Company determines to liquidate its assets, then SSG’s Fee shall be $250,000 and a credit of fifty percent (50%) of the Monthly

Fees shall apply (“Liquidation Fee”).




(d) Expenses. In addition to the foregoing Initial Fee, Monthly Fee and Transaction Fee noted above, whether or not a Transaction is

consummated, SSG will be entitled to reimbursement for all of SSG’s reasonable documented out-of-pocket expenses incurred in connection

with the subject matter of this Engagement Agreement, provided that expenses aggregating more than $5,000 shall be subject to prior

approval by Company and air travel under three hours shall be charged at economy class rates.

11. This compensation structure is typical of SSG’s fee arrangement (as well as

those of other leading investment banking firms) for work of this nature. These rates are set

at a level designed to fairly compensate SSG for work it performs and to cover fixed costs

and routine overhead expenses in these circumstances. SSG believes that this compensation

structure is reasonable and comparable to compensation generally charged by investment

banking and financial advisory firms of similar stature to SSG for comparable engagements,

both in and out-of-court.

12. To the best of my knowledge, (a) no commitments have been made or

received by SSG with respect to compensation or payment in connection with the Chapter

11 Cases other than in accordance with the provisions of the Bankruptcy Code and (b) SSG

has no agreement with any other entity to share with such entity any compensation received

by SSG in connection with the Chapter 11 Cases.

13. All employees, directors, managing directors, managers, senior managers,

and senior associates of SSG who shall render services in the Chapter 11 Cases shall receive

compensation on account of their services in the Chapter 11 Cases solely in their individual

capacities, and not through any corporation, professional corporation, or limited liability

company that such an employee, director, managing director, manager, senior manager, or

senior associate may control or be a member of.


14. Neither SSG nor any of its affiliates (including SSG Capital Advisors, LLC

(“SCA”) will trade in any of the Debtors’ equity or debt securities during this engagement.

Any employees working on this engagement will not trade in debt or equity of the Debtor

(or its creditors and equity holders) and will not share any confidential information with

those that may engage in such trading.

INDEMNIFICATION

15. The Engagement Agreement includes a provision for the indemnification of

SSG by the Debtors. I believe that the indemnification provision in the Engagement

Agreement is generally consistent in all material respects with the indemnification provision

contained in SSG’s standard engagement agreement for both in-and out-of-court investment

banking services. Further, similar indemnification arrangements have been approved by

courts as part of SSG’s retention in other bankruptcy matters.

16. The indemnification provisions contained in the Engagement Agreement are

important and necessary to limit the exposure of advisors to potential future liability for

decisions made based on all material information reasonably available. Further, to the best

of my knowledge, such indemnification provisions are consistent with the marketplace. I

believe that the indemnification provisions contained in the Engagement Agreement are

appropriate and reasonable for the engagement of SSG as investment banker in the Chapter

11 Cases.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is

true and correct to the best of my information, knowledge and belief.

Dated: February 12, 2019

By: /s/J. Scott Victor

J. Scott Victor Managing Director

SSG Advisors, LLC


Schedule 1

(Conflict Search – Potential Parties-in-Interest)


List of Potential Parties in Interest

Debtors Décor Holdings, Inc. Décor Intermediate Holdings LLC The Robert Allen Duralee Group, Inc. The Robert Allen Duralee Group, LLC The Robert Allen Duralee Group Furniture, LLC

Other Names of Debtors

Duralee Fabrics

Highland Court Suburban Fabrics Clarke & Clarke The Robert Allen Group The RAD Group The Robert Allen Duralee Group Duralee Furniture

Non-Debtor Affiliates Techstyle Contract Fabrics, LLC Gaetano Fabrics, LLC B. Berger Company, LLC Robert Allen Fabrics (Canada) Ltd.

Robert Allen Europe Ltd. Ramm, Son & Crocker Suburban Home Fabrics (Shanghai) Trading Co., Ltd. Altamont Capital Partners Leonard Silberman Estate ACP Décor Holdings LLC

Counterparties to License Agreements Multiply Media LLC Thomas Paul LLC Lonni Paul Design LLC John Loecke, Inc. (d/b/a Madcap Cottage)

John Robshaw, Inc. Brian Patrick Flynn Flynnside Out Productions Tobi Fairley Interior Design Tilton Fenwick Camille Shaheen-Tunberg LKD Acquisition Jalenekanani, Inc.

Gorrivan Fine Arts, Ltd. Eileen Kathryn Boyd Interiors, Inc. Lulu DK LLC

Current and Former Directors and Officers Timothy Boates Lee Silberman Bill Fuchs Steve Brownlie Kevin Mason Katherine Rice

Kerry Galloway Marty Rosenberger Bill Hargreaves Randall Eason Brian Sharp Thomas Fish

Professionals Hahn & Hessen LLP RAS Management Advisors, LLC Omni Management Group SSG Capital Advisors, LLC Halperin Battaglia Benzija, LLP

Otterbourg P.C. (secured lender counsel)

Banking Institutions Wells Fargo Bank, N.A. Citibank, N.A. TD Canada Trust Fidelity Investments, Inc.

Secured Lenders and Agents Wells Fargo Bank, N.A. PNC Bank, N.A. Corber Corp.

Ronald H. Cordover Jeffrey A. Cordover Valerie J. Cordover Katz Cisco Systems Capital Corporation CIT Bank, N.A. Key Equipment Finance Susquehanna Commercial Finance, Inc.


Insurance Providers & Brokers Travelers Corp. Chubb Affiliated FM Insurance Co. Liberty Mutual Insurance Co. Cigna Transamerica Premier Life Insurance Co. Krauter & Company LLC Brown & Brown Insurance Employee Benefits Corporation First Insurance Funding, Inc. The Magnes Group, Inc.

Judges in the United States Bankruptcy

Court for the Eastern District of New York Craig, Carla E. Grossman, Robert E. Lord, Nancy Hershey Scarcella, Louis A. Stong, Elizabeth S. Trust, Alan S.

Office of the United States Trustee –

(Region 2) New York Harrington, William K.

Black, Christine H.

Major Vendors Ceridian HCM, Inc. Litle & Co. First Merchant Data Services, LLC All Covered IT Services IBM Konica Minolta Carr Business Systems Dialogtech Iron Mountain

Landlords Boston Design Center 34 South 11th St LP National Real Estate Advisors, LLC BSD 80 Broad LLC 80 Broad Street Development, LLC D&D Building Company, LLC

Cohen Brothers Realty Corporation

Decorative Center of Houston LP Design Center of the Americas, LLC Dezer Properties 146 LLC Dunhill Partners, Inc. Franklin Court, Inc. Lincoln Property Company Jamestown 1 Design Place, L.P. Market Square AC IV, LLC RXR 220 Crossways Park West Owner LLC RXR Realty LLC San Francisco Design Center Investors, LLC RREEF Management Company STAG Industrial Holdings, LLC Stag Industrial Management, LLC Tritec Asset Management, Inc. Morganton Realty Corp. Canal Center Properties LLC Michigan Design Center, LP Michael Drive Partners LLC Pacific Design Center 1 LLC Merchandise Mart LLC Quincy Foxboro, LLC Morris & Morse Co., Inc. South Florida Design Park ADAC, L.P.

Top 30 Unsecured Creditors Valdese Weavers LLC Sumec Textile Company Ltd. Triplex Shanghai Enterprises EDPA USA, Inc. P. Kaufmann, Inc. Fleuron Enterprises United Parcel Service V.I.P. Incorporated LA Mills MTL Global Ventures LLC IPM US World Linen & Textile Co., Inc. Swavelle Mill/Creek Fabrics, Inc. American Express Co.

Wearbest Sil-Tex Mills, Ltd. Classical Elements, LLC Parthenon Prints, Inc. Swan Dyeing and Printing Corp. Samplex, S.A. De C.V. Sunbury Textile Mills, Inc. Shangai Chenglong Textile Arts Co. Ltd. Kets Tekstil Turizm TIC A.S. Covington Fabric & Design, LLC


Parry Murray & Co. Ltd.

Richloom Fabrics Group, Inc. Agolab Studio SRL Source Asia Trading Company Heritage Fabrics, LLC Nassimi, LLC Applied Textiles, Inc. Createx, Inc.

Parties to Threatened & Pending Lawsuits Source Asia Trading (Shanghai) Co., Ltd, a Wholly Owned Subsidiary of Creative Solutions International, Inc.

Bank of America, N.A. McGreen, Linda Peterson/Puritan Inc. Superfund Site Milberg Factors, Inc.

Utility Providers Consumers Energy Granite Telecommunications North State Communications Verizon Verizon Fios Republic Service AT&T Mobility

AT&T Board of Public Works, Gaffney, SC Georgia Power Stanley Convergent Dialog Tech, Inc. Consolidated Edison Piedmont Natural Gas Hudson Energy Atmos Energy Florida Power & Light PSEG Long Island DTE Energy National Grid Optimum

Flowroute Airespring ACC Business XO Communications Comcast Crown Castle (Lightower) Cablevision LightPath WOW Business

Century Link

Spectrum (TWC) GTT City of Morganton, NC


Schedule 2

(Connections with Potential Parties-in-Interest)

SSG Advisors, LLC has (a) worked on wholly unrelated matters in the past, (b) may currently work on wholly unrelated matters, and (c) may work on wholly unrelated matters

in the future, with or on behalf of the following parties: Hahn & Hessen LLP (proposed Debtors’ lead counsel)

RAS Management Advisors, LLC (proposed Debtors’ chief restructuring officer and

financial advisor)

Omni Management Group (proposed Debtors’ claims and noticing agent) Halperin Battaglia Benzija, LLP (proposed Debtors’ conflicts and special counsel)

Otterbourg P.C. (counsel to Debtors’ secured lender)

Wells Fargo Bank, N.A. (secured lender)

Citibank, N.A. (secured lender)

PNC Bank, N.A. (secured lender)

CIT Bank, N.A. (secured lender)

Valdese Weavers LLC (unsecured lender)


hahn & hessen llp 488 madison avenue · 2019-02-13 · retention of ssg advisors, llc...

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