united states bankruptcy court southern district...

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK

) In re: ) Chapter 11 ) HOLLANDER SLEEP PRODUCTS, LLC, et al.,1 ) Case No. 19-11608 (MEW) ) Debtors. ) (Jointly Administered) )

ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF PROSKAUER

ROSE LLP AS ATTORNEYS FOR THE DEBTORS AND DEBTORS IN POSSESSION EFFECTIVE NUNC PRO TUNC TO THE PETITION DATE

Upon the application (the “Application”)2 of the above-captioned debtors and debtors in

possession (collectively, the “Debtors”), for the entry of an order (this “Order”) authorizing the

Debtors to retain and employ Proskauer Rose LLP (“Proskauer”) as their attorneys, at the direction

of Matthew R. Kahn (the “Disinterested Director”) solely with respect to matters pertaining to the

Debtors’ chapter 11 cases where a conflict exists between the Debtors and their shareholders,

affiliates, or the Debtors’ directors and officers (collectively, the “Conflict Matters”), effective

nunc pro tunc to the Petition Date, pursuant to sections 327(a) and 330 of title 11 of the United

States Code (the “Bankruptcy Code”), Rules 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

of the United States Bankruptcy Court for the Southern District of New York (the “Local Rules”);

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, are: Dream II Holdings, LLC (7915); Hollander Home Fashions Holdings, LLC (2063); Hollander Sleep Products, LLC (2143); Pacific Coast Feather, LLC (1445); Hollander Sleep Products Kentucky, LLC (4119); Pacific Coast Feather Cushion, LLC (3119); and Hollander Sleep Products Canada Limited (3477). The location of the Debtors’ service address is: 901 Yamato Road, Suite 250, Boca Raton, Florida 33431.

2 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Application.

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and the Court having reviewed the Application, the declaration of David M. Hillman, a partner of

Proskauer (the “Hillman Declaration”) and the declaration of Matthew R. Kahn (the “Kahn

Declaration”); and the Court having found that the Court has jurisdiction over this matter pursuant

to 28 U.S.C. §§ 157 and 1334; and the Court having found that the Application is a core proceeding

pursuant to 28 U.S.C. § 157(b)(2); and the Court having found that venue of this proceeding and

the Application in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and the Court

having found based on the representations made in the Application and in the Hillman Declaration

that (a) Proskauer does not hold or represent an interest adverse to the Debtors’ estates and (b)

Proskauer is a “disinterested person” as defined in section 101(14) of the Bankruptcy Code and as

required by section 327(a) of the Bankruptcy Code; and the Court having found that the relief

requested in the Application is in the best interests of the Debtors’ estates, their creditors, and other

parties in interest; and the Court having found that the Debtors provided adequate and appropriate

notice of the Application under the circumstances and that no other or further notice is required;

and the Court having reviewed the Application and having heard statements in support of the

Application at a hearing held before the Court (the ”Hearing”); and the Court having determined

that the legal and factual bases set forth in the Application and at the Hearing establish just cause

for the relief granted herein; and any objections to the relief requested herein having been

withdrawn or overruled on the merits; and after due deliberation and sufficient cause appearing

therefor, it is HEREBY ORDERED THAT:

1. The Application is granted to the extent set forth herein.

2. The Debtors are authorized to retain and employ Proskauer as their attorneys, at the

direction of the Disinterested Director solely with respect to Conflict Matters, nunc pro tunc to the


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Petition Date in accordance with the terms and conditions set forth in the Application and in the

Engagement Letter attached hereto as Exhibit 1 and the Resolutions attached hereto as Exhibit 2.

3. Proskauer is authorized to provide the Debtors with the professional services as

described in the Application, the Engagement Letter and the Resolutions. Specifically, but without

limitation, Proskauer will render the following legal services:

a. advising the Disinterested Director with respect to investigating and determining whether any matter arising in or related to the chapter 11 cases constitutes a Conflict Matter;

b. conducting investigations and analyses related to Conflict Matters necessary or desirable in order to fully advise the Disinterested Director with regard to such Conflict Matters;

c. taking any and all actions to negotiate, resolve and implement the decisions and actions of the Disinterested Director with respect to Conflict Matters, which may include, but are not limited to:

i. fact investigations;

ii. legal research;

iii. briefing;

iv. argument;

v. discovery;

vi. negotiation regarding proposed settlements of Conflict Matters, motions and orders regarding Conflict Matters and the terms of the reorganization and related plan of reorganization and disclosure statement solely with respect to the terms of any such reorganization or related plan of reorganization or disclosure statement that constitute Conflict Matters;

d. appearing before the Court and any appellate courts to represent the interests of the Debtors’ estates with respect to Conflict Matters;

e. communications and meetings with parties in interest in connection with the chapter 11 cases and the foregoing; and

f. performing all other necessary legal services for the Debtors, as related to Conflict Matters, in connection with the prosecution of these chapter 11 cases.


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4. Proskauer shall apply for compensation for professional services rendered and

reimbursement of expenses incurred in connection with the Debtors’ chapter 11 cases in

compliance with sections 330 and 331 of the Bankruptcy Code and applicable provisions of the

Bankruptcy Rules, Local Rules, and any other applicable procedures and orders of the Court.

Proskauer also intends to make a reasonable effort to comply with the requests of the Office of the

United States Trustee for the Southern District of New York (the “U.S. Trustee”) for information

and additional disclosures as set forth in the Guidelines for Reviewing Applications for

Compensation and Reimbursement of Expenses Filed under 11 U.S.C. § 330 by Attorneys in

Larger Chapter 11 Cases Effective as of November 1, 2013 (the “Revised UST Guidelines”), both

in connection with the Application and the interim and final fee applications to be filed by

Proskauer in these chapter 11 cases.

5. Notwithstanding anything in the Engagement Letter to the contrary, Proskauer shall

apply any remaining amounts of the Retainer as a credit toward postpetition fees and expenses,

after such postpetition fees and expenses are approved pursuant to an order of the Court awarding

fees and expenses to Proskauer. Proskauer is authorized without further order of the Court to

reserve and apply amounts from the Retainer that would otherwise be applied toward payment of

postpetition fees and expenses as are necessary and appropriate to compensate and reimburse

Proskauer for fees or expenses incurred on or prior to the Petition Date consistent with its ordinary

course billing practices. At the conclusion of Proskauer’s engagement by the Debtors, if the

amount of the Retainer held by Proskauer is in excess of the amount of Proskauer’s outstanding

and estimated fees, expenses and costs, Proskauer will pay to the Debtors the amount by which the

Retainer exceeds such fees, expenses and costs, in each case in accordance with the Engagement

Letter.


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6. Proskauer shall not charge a markup to the Debtors with respect to fees billed by

contract attorneys who are hired by Proskauer to provide services to the Debtors and shall ensure

that any such contract attorneys are subject to conflict checks and disclosures in accordance with

the requirements of the Bankruptcy Code and Bankruptcy Rules.

7. Proskauer shall provide ten business days’ notice to the Debtors, the U.S. Trustee,

the Committee, and any other official committee that may be appointed before any increases in the

rates set forth in the Application or the Engagement Letter are implemented and shall file such

notice with the Court. The U.S. Trustee retains all rights to object to any rate increase on all

grounds, including the reasonableness standard set forth in section 330 of the Bankruptcy Code,

and the Court retains the right to review any rate increase pursuant to section 330 of the Bankruptcy

Code.

8. Proskauer shall not withdraw as Debtors’ counsel before the effective date of any

chapter 11 plan confirmed in these chapter 11 cases without prior approval of the Court in

accordance with Local Rule 2090-1(e).

9. The Debtors and Proskauer are authorized to take all actions necessary to effectuate

the relief granted pursuant to this Order in accordance with the Application.

10. Notice of the Application as provided therein is deemed to be good and sufficient

notice of such Application, and the requirements of the Local Rules are satisfied by the contents

of the Application.

11. To the extent the Application, the Hillman Declaration, the Kahn Declaration or the

Engagement Letter is inconsistent with this Order, the terms of this Order shall govern.

12. The terms and conditions of this Order shall be immediately effective and

enforceable upon its entry.


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13. Notwithstanding any provision to the contrary in the Engagement Letter, the Court

retains exclusive jurisdiction with respect to all issues arising from or related to the implementation

of this Order, the Application, and/or the Engagement Letter, as well as any services provided by

Proskauer in the course of the Debtors’ chapter 11 cases, including without limitation the fees to

be paid, the expenses to be reimbursed and any dispute over the quality of services performed.

Dated: July 2, 2019 s/Michael E. Wiles New York, New York THE HONORABLE MICHAEL E. WILES

UNITED STATES BANKRUPTCY JUDGE


Exhibit 1

Engagement Letter


Exhibit 2

Resolutions


WRITTEN CONSENT REGARDING DISINTERESTED DIRECTORMAY 3, 2019

Effective as of the date written above, the members the board of managers (collectively, the “Board”) of Dream II Holdings, LLC (the “Company”) HEREBY CONSENT to the taking of the following actions and HEREBY ADOPT the following resolutions by unanimous written consent (this “Written Consent”) pursuant to such Company’s limited liability company agreement and the applicable laws of the jurisdiction in which such Company is organized:

WHEREAS, the Company and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) are considering restructuring options related to their debt facilities, including filing voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Chapter 11 Cases”);

WHEREAS, the members of the Board have appointed a disinterested director, Matthew R. Kahn (the “Disinterested Director”), to the Board to make decisions related to the Chapter 11 Cases on behalf of the Company related to Conflict Matters (as defined below);

WHEREAS, the Disinterested Director shall have the authority to direct the Company to retain independent counsel (the “Independent Counsel”) to represent the Company and to advise the Disinterested Director in fulfilling its responsibilities;

WHEREAS, the members of the Board desire to explicitly delegate to the Disinterested Director certain rights, authority, and powers in connection with the Conflict Matters;

NOW, THEREFORE, BE IT,

RESOLVED, that, to the fullest extent permitted by applicable law, the Board hereby delegates to the Disinterested Director the authority to review and act upon (as set forth herein) any matters pertaining to the Chapter 11 Cases in which a conflict exists between the Company and its shareholders, affiliates (as applicable), or the Company’s directors and officers (the “Conflict Matters”); and further

RESOLVED, that, if the Disinterested Director determines, upon the advice of counsel to the Board and the Independent Counsel, that a particular Conflict Matter does not pose any conflict with respect to any of the directors that is not a Disinterested Director, then such director shall be permitted to participate in all actions and deliberations relating to such Conflict Matter on the same basis as the Disinterested Director; and further

RESOLVED, that, to the fullest extent permitted by applicable law, the Board hereby delegates to the Disinterested Director the authority to investigate and determine, in the Disinterested Director’ business judgment and with the advice of Independent Counsel, whether any matter arising in or related to the Chapter 11 Cases constitutes a Conflict Matter, and that any such determination shall be binding on the Company; and further

RESOLVED, that, to the fullest extent permitted by applicable law, the Board hereby delegates


to the Disinterested Director the authority to conduct all investigations and analyses related to the Conflict Matters necessary or desirable to be fully advised with regard to such Conflicts Matter, in the Disinterested Director’s business judgment and with the advice of the Independent Counsel, and to act on behalf of the Company and bind the Company in connection therewith, including taking any and all actions to negotiate, resolve, abide by, and implement the decisions and actions of the Disinterested Director with respect to Conflict Matters, which responsibilities may include, but are not limited to, fact investigation, legal research, briefing, discovery, negotiation regarding proposed settlements of Conflict Matters, motions and orders regarding Conflict Matters, and the terms of the reorganization and related plan of reorganization and disclosure statement solely with respect to the terms of any such reorganization or related plan of reorganization or disclosure statement that constitute Conflict Matters, and communications and meetings with parties in interest in connection with the foregoing; and further

RESOLVED, that the Disinterested Director will update the Board at board meetings regarding (i) any review of and decisions on whether any matter constitutes a Conflict Matter and (ii) any investigation, analysis, and decisions made with regard to any Conflict Matters, in each case in the manner that the Disinterested Director determines appropriate and necessary to fulfill its duties and obligations, taking into account the confidentiality of the Disinterested Director’s work including its communications with the Independent Counsel; and further

RESOLVED, that any officers, employees, advisors, and agents of the Company (collectively, the “Authorized Officers”), acting alone or with one or more other Authorized Officers be, and hereby are, authorized, empowered, and directed to take any and all action that they deem necessary, proper, or advisable consistent with this Written Consent or to carry out fully the intent and purposes of this Written Consent, including furnishing to the Disinterested Director and the Independent Counsel all information as the Disinterested Director or the Independent Counsel may request, in a manner that shall not effect a waiver of any applicable privilege, and to cooperate with the Disinterested Director and the Independent Counsel in all respects; and further

RESOLVED, that any Authorized Person, acting alone or with one or more other Authorized Persons be, and hereby is, authorized, empowered, and directed to implement any decision made by the Disinterested Director in respect of a Conflict Matter on behalf of the Company as directed by the Disinterested Director, provided that the Disinterested Director retains the right to implement any such decision on behalf of the Company on their own or through the Independent Counsel; and further

RESOLVED, that any Authorized Person, acting alone or with one or more other Authorized Persons be, and hereby is, authorized, empowered, and directed to take any and all action that he or she deems necessary or proper to assist the Disinterested Director in carrying out the foregoing, in each case as requested by and under the direction of the Disinterested Director; and further

RESOLVED, that the Disinterested Director shall control any attorney-client work product, or other privilege belonging to the Company in connection with the Independent Counsel or its work or privileged communications on the Conflict Matters and on whether any matter constitutes a Conflict Matter; and further


RESOLVED, that each member of the Board has agreed and hereby agrees that he or she shall not have access to, and shall not seek access to, and hereby directs that each Authorized Person shall not have access to and shall not seek access to, the work of or communications to and from the Independent Counsel regarding Conflict Matters or on whether any matter constitutes a Conflict Matter, except as permitted by the Disinterested Director; and further

RESOLVED, that the Disinterested Director be, and hereby is, authorized to take all such further action, at the Company’s expense, as the Disinterested Director shall deem necessary, proper, or advisable consistent with this Written Consent or to carry out fully the intent and purposes of this Written Consent; and further

RESOLVED, that all actions previously done or approved, or caused to be done or approved, by the Disinterested Director or the Authorized Persons, in each case only to the extent consistent with this Written Consent, or to otherwise carry out the intent of this Written Consent, be and hereby are approved, adopted, confirmed, and ratified in all respects.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


IN WITNESS WHEREOF, the undersigned have executed this consent as of the date first written above.

/s/ Matthew KahnMatthew Kahn

/s/ Christopher BakerChristopher Baker

/s/ Michael FabianMichael Fabian

/s/ Steven CumbowSteven Cumbow

/s/ Eric BrommerEric Brommer


LEGAL_CAL:14072413.3

HOLLANDER SLEEP PRODUCTS CANADA LIMITED(the “Company”)

RESOLUTIONS OF THE DIRECTORS

The undersigned, being all of the directors of the Company (the “Board”), hereby consent to and adopt the following resolutions, pursuant to the Business Corporations Act (British Columbia), as of May17th, 2019.

WHEREAS, certain affiliates of the Company are considering restructuring options related to their debt facilities, including filing voluntary petitions for relief under chapter 11 of title 11 of the United States Code (the “Chapter 11 Cases”) and commencing proceedings under the Companies’ Creditors Arrangement Act in Canada (the “CCAA Proceedings”);

WHEREAS, the Board, in accordance with section 19.2(1) of its articles, wishes to establish an independent committee of the board (the “Independent Committee”);

WHEREAS, the Independent Committee shall have the authority to direct the Company to retain independent counsel (the “Independent Counsel”) to represent the Company and to advise the Independent Committee in fulfilling its responsibilities; and

WHEREAS, the Board wishes to explicitly delegate to the Independent Committee certain rights, authority and powers in connection with the Conflict Matters (as defined below).

NOW THEREFORE, IT IS RESOLVED THAT:

1. The Independent Committee is hereby established.

2. Matthew R. Kahn is hereby appointed as the sole member of the Independent Committee.

3. To the fullest extent permitted by applicable law, the Board hereby delegates to the Independent Committee the authority to review and act upon (as set forth herein) any matters pertaining to the Chapter 11 Cases and the CCAA Proceedings in which a conflict exists between the Company and its shareholders, affiliates (as applicable), or the Company’s directors and officers (the “Conflict Matters”).

4. To the fullest extent permitted by applicable law, the Board hereby delegates to the Independent Committee the authority to investigate and determine, with the advice of the Independent Counsel, whether any matter arising in or related to the Chapter 11 Cases or the CCAA Proceedings constitutes a Conflict Matter, and that any such determination shall be binding on the Company.

5. To the fullest extent permitted by applicable law, the Board hereby delegates to the Independent Committee the authority to conduct all investigations and analyses related to the Conflict Matters necessary or desirable to be fully advised with regard to such Conflicts Matter, with the advice of the Independent Counsel, and to act on behalf of the Company and bind the Company in connection therewith, including taking any and all actions to negotiate, resolve, abide by, and implement the decisions and actions of the Independent Committee with respect to Conflict Matters, which responsibilities may include, but are not limited to, fact investigation, legal research, briefing, discovery,


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negotiation regarding proposed settlements of Conflict Matters, motions and orders regarding Conflict Matters, and the terms of the reorganization and related plan of reorganization and disclosure statement solely with respect to the terms of any such reorganization or related plan of reorganization or disclosure statement that constitute Conflict Matters, and communications and meetings with interested parties in connection with the foregoing.

6. The Independent Committee will update the Board at board meetings regarding: (i) any review of and decisions on whether any matter constitutes a Conflict Matter; and (ii) any investigation, analysis, and decisions made with regard to any Conflict Matters, in each case in the manner that the Independent Committee determines appropriate and necessary to fulfill its duties and obligations, taking into account the confidentiality of the Independent Committee’s work including its communications with the Independent Counsel.

7. The Independent Committee shall control any attorney-client or solicitor-client work product, or other privilege belonging to the Company in connection with the Independent Counsel or its work or privileged communications on the Conflict Matters and on whether any matter constitutes a Conflict Matter.

8. The Independent Committee be, and hereby is, authorized to take all such further action, at the Company’s expense, as the Independent Committee shall deem necessary, proper, or advisable consistent with these resolutions or to carry out fully the intent and purposes of these resolutions.

9. Any one officer or director of the Company (collectively, the “Authorized Persons”), is hereby authorized and directed, in the name and on behalf of the Company, to execute and deliver such other agreements, certificates, documents and instruments and take such other actions as any such Authorized Person determines necessary or desirable to carry out the purposes of these resolutions, including furnishing to the Independent Committee and the Independent Counsel all information as the Independent Committee or the Independent Counsel may request, in a manner that shall not effect a waiver of any applicable privilege, such determination to be conclusively established by the execution or taking thereof by such Authorized Person, and all actions taken heretofore by the Authorized Persons to carry out the purposes of these resolutions be, and they hereby are, approved, ratified and confirmed in all respects as the acts and deeds of the Company.

10. Any Authorized Person, acting alone or with one or more other Authorized Persons be, and hereby is, authorized, empowered, and directed to implement any decision made by the Independent Committee in respect of a Conflict Matter on behalf of the Company as directed by the Independent Committee, provided that the Independent Committee retains the right to implement any such decision on behalf of the Company on their own or through the Independent Counsel.

11. Any Authorized Person, acting alone or with one or more other Authorized Persons be, and hereby is, authorized, empowered, and directed to take any and all action that he or she deems necessary or proper to assist the Independent Committee in carrying out the foregoing, in each case as requested by and under the direction of the Independent Committee.


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12. No member of the Board shall have access to, and each Authorized Person shall not have access to and shall not seek access to, the work of or communications to and from the Independent Counsel regarding Conflict Matters or on whether any matter constitutes a Conflict Matter, except as permitted by the Independent Committee.

13. All actions previously done or approved, or caused to be done or approved, by the Independent Committee or the Authorized Persons, in each case only to the extent consistent with these resolutions, or to otherwise carry out the intent of these resolutions be and hereby are approved, adopted, confirmed, and ratified in all respects.

[Signature Page Follows.]


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