Case Document 400 Filed in TXSB on 05/22/20 Page 1 of 74

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

In re:

WALKER COUNTY HOSPITAL CORPORATION, D/B/A HUNTSVILLE MEMORIAL HOSPITAL,

Debtor.

Chapter 11

Case No. 19-36300 (DRJ)

SUMMARY OF SECOND INTERIM APPLICATION OF

GRAY REED & McGRAW LLP FOR ALLOWANCE OF COMPENSATION AND REIMBURSEMENT OF EXPENSES

Name of Applicant: Gray Reed & McGraw LLP

Applicant’s Role in Case: Local Counsel to the Official Committee of Unsecured Creditors Date Order of Employment Signed: February 2, 2020 [Docket No. 272]

Beginning of Period End of Period

Time period covered by this Application: 2/1/2020 4/30/2020

Time period(s) covered by prior Applications: 12/14/2019 1/31/2020

Total amounts awarded in all prior Applications: $26,404.04

Total fees requested in this Application: $18,507.50

Total professional fees requested in this Application: $14,183.00

Total actual professional hours covered by this Application: 22.90

Average hourly rate for professionals: $619.34

Total paraprofessional fees requested in this Application: $4,324.50

Total actual paraprofessional hours covered by this Application: 19.90

Average hourly rate for paraprofessionals: $217.31

Reimbursable expenses sought in this Application: $170.36

Total to be Paid to Priority Unsecured Creditors: Unknown

Anticipated % Dividend to Priority Unsecured Creditors: Unknown

Total to be Paid to General Unsecured Creditors: Unknown

Anticipated % Dividend to General Unsecured Creditors: Unknown

Date of Confirmation Hearing: Unknown

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APPLICATION PERIOD Attorney

Position with the Applicant and First Bar Admission

Date Hourly Billing Rate Total Billed Hours Total Compensation

Jason S. Brookner Partner 1995 $720.00 9.80 $7,056.00

W.D. Armer Partner 1994 $575.00 0.40 $230.00

Lydia R. Webb Associate 2012 $550.00 11.10 $6,105.00

Amber M. Carson Associate 2012 $495.00 1.60 $792.00

TOTAL FOR ATTORNEYS 22.90 $14,183.00

Paraprofessionals Position with the Applicant Hourly Rate Total Billed Hours Total Compensation

Clark D. Patterson Paralegal $300.00 7.20 $2,160.00

$0.00 1.00 $0.00

Veronica T. Salazar Legal Assistant $185.00 11.70 $2,164.50

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In re:

Debtor.

Chapter 11

Case No. 19-36300 (DRJ)

CERTIFICATION OF JASON S. BROOKNER ACCOMPANYING SECOND INTERIM APPLICATION OF GRAY REED & McGRAW LLP FOR ALLOWANCE

OF COMPENSATION AND REIMBURSEMENT OF EXPENSES

Jason S. Brookner, a partner in the law firm of Gray Reed & McGraw LLP, applicant herein (“Gray Reed”), pursuant to the Guidelines for Compensation and Expense Reimbursement of Professionals in the Southern District of Texas (the “Fee Guidelines”), hereby certifies as follows: 1. I have reviewed the Second Interim Application (the “Application”) of Gray Reed & McGraw LLP (“Gray Reed”) for Allowance of Compensation and Reimbursement of Expenses, and to the best of my knowledge, information and belief, formed after reasonable inquiry, the fees and disbursements sought by Gray Reed in the Application are in conformity with the Fee Guidelines and the United States Trustee’s Guidelines for Reviewing Applications for Compensation (reprinted at 28 C.F.R. Part 58, Appendix A) (the “UST Guidelines”).

2. The fees and disbursements sought by Gray Reed in the Application are not prohibited by the Fee Guidelines or the UST Guidelines, and are billed at rates and in accordance with the practices no less favorable than those customarily employed by Gray Reed and generally accepted by Gray Reed’s non-bankruptcy clients.

3. In providing a reimbursable service, Gray Reed does not make a profit on that service whether the service is performed by Gray Reed in-house or through a third party.

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4. Notice of this Application has been provided in accordance with the Court’s Order

Granting Application for Entry of an Order Authorizing the Retention and Employment of Gray Reed & McGraw LLP as Local Counsel to the Official Committee of Unsecured Creditors Nunc Pro Tunc to December 14, 2019 [Docket No. 272], and the Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses for Professionals [Docket No. 202].

Respectfully submitted this 22nd day of May, 2020.

GRAY REED & McGRAW LLP

By:/s/ Jason S. Brookner Jason S. Brookner Texas Bar No. 24033684 1300 Post Oak Blvd., Suite 2000 Houston, Texas 77056

Telephone: (713) 986-7000 Facsimile: (713) 986-7100

Email: [email protected] Local Counsel to the Official Committee of Unsecured Creditors

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In re:

Debtor.

Chapter 11

Case No. 19-36300 (DRJ)

SECOND INTERIM APPLICATION OF GRAY REED & McGRAW LLP

FOR ALLOWANCE OF COMPENSATION AND REIMBURSEMENT OF EXPENSES

THIS APPLICATION SEEKS ENTRY OF AN ORDER THAT MAY ADVERSELY AFFECT YOU. IF YOU OPPOSE THE APPLICATION, YOU SHOULD IMMEDIATELY CONTACT THE MOVING PARTY TO RESOLVE THE DISPUTE. IF YOU AND THE MOVING PARTY CANNOT AGREE, YOU MUST FILE A RESPONSE AND SEND A COPY TO THE MOVING PARTY. YOU MUST FILE AND SERVE YOUR RESPONSE WITHIN 21 DAYS OF THE DATE THIS APPLICATION WAS SERVED ON YOU. YOUR RESPONSE MUST STATE WHY THE APPLICATION SHOULD NOT BE GRANTED. IF YOU DO NOT FILE A TIMELY RESPONSE, THE RELIEF MAY BE GRANTED WITHOUT FURTHER NOTICE TO YOU. IF YOU OPPOSE THE APPLICATION AND HAVE NOT REACHED AN AGREEMENT, YOU MUST ATTEND THE HEARING. UNLESS THE PARTIES AGREE OTHERWISE, THE COURT MAY CONSIDER EVIDENCE AT THE HEARING AND MAY DECIDE THE APPLICATION AT THE HEARING.

REPRESENTED PARTIES SHOULD ACT THROUGH THEIR ATTORNEY.

Gray Reed & McGraw LLP (“Gray Reed” or “Applicant”), local counsel for the Official Committee of Unsecured Creditors (the “Committee”), pursuant to section 330 of title 11 of the United States Code (the “Bankruptcy Code”), Rule 2016(a) of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rule 2016-1 of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Southern District of Texas (the “Local Rules”), hereby files its Second Interim Application (the “Application”) for Allowance of Compensation and Reimbursement of Expenses. By this Application, Gray Reed seeks: (i) second interim approval of $18,507.50 in fees and $170.36 in expenses incurred from February 1, 2020 to April 30, 2020

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(the “Application Period”), and (ii) payment of the balance of $18,507.50 in fees and $170.36 in expenses incurred but unpaid during the Application Period.

INTRODUCTION

1. During the course of this chapter 11 case, the Committee explored and pursued opportunities for the benefit of its constituents. Gray Reed, as local counsel to the Committee, along with the Committee’s other professionals, Arent Fox LLP and FTI Consulting, Inc., has taken actions that have allowed the Committee to participate in the Debtor’s reorganization efforts in a meaningful way – namely by engaging in the sale of the Debtor’s hospital and negotiating a potential recovery for unsecured creditors. Gray Reed’s work during the Application Period allowed the Committee to effectively discharge its fiduciary duties.

2. Gray Reed respectfully submits that, based on the pleadings filed and actions taken on behalf of the Debtor to date, as well the descriptions of the services provided in the contemporaneous time records maintained by Gray Reed which are attached hereto, the services performed and amounts charged by Gray Reed are reasonable and appropriate, and provided a material and tangible benefit to this bankruptcy estate. Gray Reed respectfully requests that this Application be granted as set forth herein.

JURISDICTION

3. This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and 1334. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (O).

4. Venue in this Court is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

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Establishing Procedures for Interim Compensation and Reimbursement of Expenses for Professionals [Docket No. 202] (the “Interim Compensation Order”).

BACKGROUND

6. On November 11, 2019 (the “Petition Date”), the Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. Pursuant to sections 1107 and 1108 of the Bankruptcy Code, the Debtor remains in possession of its property and is managing its business as a debtor in possession. No trustee or examiner has been appointed.

7. On November 23, 2019, the Office of the United States Trustee (the “U.S. Trustee”) appointed the Committee, consisting of five members: Premier Anesthesia, Stroudwater Associates, Medline Industries, Inc., Boston Scientific Corporation, and Morrison Management Specialists, Inc. [Docket No. 109].

8. On or around December 14, 2019, the Committee selected Gray Reed as its local counsel, after which Gray Reed commenced its substantive work on behalf of the Committee. The Committee selected Gray Reed given the firm’s experience in complex chapter 11 cases, as well as other areas of law that might arise during the course of this case.

SUMMARY OF REQUEST

9. In accordance with the terms of the Order Granting Application for Entry of an

Order Authorizing the Retention and Employment of Gray Reed & McGraw LLP as Local Counsel to the Official Committee of Unsecured Creditors Nunc Pro Tunc to December 14, 2019 [Docket

No. 272] and the Interim Compensation Order, Gray Reed has submitted to the notice parties listed in the Interim Compensation Order (the “Notice Parties”) monthly statements of its fees and expenses (collectively, the “Monthly Fee Statements”) through April 30, 2020. Copies of the

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Monthly Fee Statements are attached hereto and incorporated herein by reference, as discussed more fully below.

10. By this Application, Gray Reed seeks second interim approval of $18,507.50 in fees for services rendered to the Committee during the Application Period and $170.36 in expenses incurred during the Application Period. The average hourly rate for professional services, including paraprofessionals, performed and billed by Gray Reed during the Application Period was $432.42. Not including paraprofessionals, Gray Reed’s average hourly rate was $619.34 during the Application Period.

11. Gray Reed has not yet been paid any of the fees and expenses incurred during the Application Period. Gray Reed hereby seeks payment of the entire amount of its unpaid fees of $18,507.50 and expenses of $170.36 incurred during the Application Period.

12. Annexed hereto as Exhibits A, B and C are Gray Reed’s Monthly Fee Statements for the months of February, March and April, 2020, respectively. The exhibits show the itemized services rendered by Gray Reed to the Committee during the Application Period, broken out by specific project category and reflecting the name of the professional rendering the service, the service provided, the professional’s billing rate and the amount of time expended on the service recorded in tenths (1/10) of an hour. These Exhibits were compiled from the contemporaneous time records maintained by Gray Reed in the ordinary course of its business. The reflected rates are those customarily charged by Gray Reed to its non-bankruptcy clients.

13. Annexed hereto as Exhibit D is a summary chart showing the aggregate amount of time and fees expended during the Application Period in connection with each billing category.

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services described herein. All such expenses are reflected in the books and records of Gray Reed, contemporaneously maintained in the ordinary course of business.

15. Applicant represents that it has no agreement or understanding which may be prohibited by 18 U.S.C. § 155.

SERVICES RENDERED DURING THE APPLICATION PERIOD

16. Gray Reed respectfully submits that its services have provided a benefit to the Committee and its constituents. Set forth below are descriptions of the services rendered by Gray Reed on the Committee’s behalf, on a category-by-category basis.

A. Asset Disposition

17. Time spent in this category relates to sales, leases (section 365 matters), abandonment and related transaction work related to asset disposition. The bulk of Gray Reed’s time in this category relates to the Debtor’s sale of its primary asset, the hospital.

18. Gray Reed spent a total of 5.80 hours on tasks in this category during the Application Period for total fees of $4,118.00.

B. Case Administration

19. Time spent in this category relates to coordination and compliance activities not specifically covered by another category, including attending to general case issues and communicating with various parties regarding the same. These services include, but are not limited to, assisting Arent Fox in the preparation of various motions and pleadings.

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C. Employment and Fee Applications

21. Time spent in this category relates to relates to Gray Reed’s preparation of employment and fee applications for itself and others, and related matters. These services include, but are not limited to, preparing and prosecuting the first interim fee applications for Committee professionals and other matters related to professionals’ employment, retention and compensation. 22. Gray Reed spent a total of 21.20 hours on tasks in this category during the Application Period for total fees of $7,167.50.

D. Litigation

23. Time spent in this category relates to general litigation issues surrounding the Debtor’s chapter 11 case – specifically, assisting Arent Fox with various issues relating to the Committee’s appeal of the order amending the sale order.

E. Meetings and Communications with Creditors

25. This category reflects time spent by Gray Reed in meetings or other discussions with the Committee.

26. Gray Reed spent a total of 0.40 hours on tasks in this category during the Application Period for total fees of $288.00.

STANDARD FOR ALLOWANCE OF FEES AND EXPENSES

27. Section 330 of the Bankruptcy Code authorizes the Court to award an applicant, as counsel for a trustee, debtor, creditors’ committee or other professional employed pursuant to 11

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(a)(1) After notice to the parties in interest and the United States Trustee and a hearing, and subject to sections 326, 328, and 329, the court may award to a . . . professional person employed under section 327 or 1103 —

(A) reasonable compensation for actual, necessary services rendered by the . . . professional person, or attorney and by any paraprofessional person employed by any such person; and

(B) reimbursement for actual, necessary expenses. 11 U.S.C. § 330(a)(1).

28. Section 330(a)(3) of the Bankruptcy Code provides that in determining the amount of reasonable compensation to be awarded, the Court should consider the nature, extent and value of the services rendered to the estate, taking into account all relevant factors, including:

(A) the time spent on such services; (B) the rates charges for such services;

(C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under [the Bankruptcy Code];

(D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the

problem, issue, or task addressed;

(E) with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and

(F) whether the compensation is reasonable, based on the customary compensation charged by comparably skilled practitioners in cases other than cases under [the Bankruptcy Code].

11 U.S.C. § 330(a)(3).

29. As analyzed below, Applicant believes that the elements governing awards of compensation justify the allowance prayed for herein.

(a) Time Spent on Services. As more specifically described in the Application, a total of 42.80 hours of professional services were rendered by Gray Reed on behalf of the Committee

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during the Application Period. Gray Reed respectfully submits that its time spent performing services for the Committee was reasonable. Gray Reed’s records of the time expended for rendition of professional services to the Committee, as well as for rendition of services to all of Gray Reed’s other clients, consist of handwritten or computer generated time entries by individual attorneys and paraprofessionals which have been placed in computer records maintained by Gray Reed. All professionals rendering services in the case have made a deliberate effort to avoid any unnecessary duplication of work and time expended. When more routine tasks were involved, Gray Reed utilized the talents of its less experienced attorneys or paraprofessionals to reduce the overall fees in this matter without sacrificing the quality of services rendered.

(b) Rates Charged for the Services. Applicant represents and would demonstrate that the hourly rates charged by Gray Reed for the services performed in these proceedings are competitive and customary for the degree of skill and expertise required in the performance of similar services rendered by other experienced bankruptcy counsel and other professionals in matters of this type. The fees requested herein have been computed in accordance with Gray Reed’s standard hourly rates for services rendered to non-insolvency clients (subject to the one-case-only discount discussed in Gray Reed’s retention application). The average hourly rate for professional services, including paraprofessionals, performed and billed by Gray Reed during the Application Period was $432.42. Not including paraprofessionals, Gray Reed’s average hourly rate was $619.34 for the Application Period.

(c) Benefit of the Services. Applicant respectfully submits that its services to date have been beneficial to the bankruptcy estate and the Debtor’s unsecured creditors. As detailed above,

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(d) Whether Services Were Performed in a Reasonable Amount of Time. Applicant represents and would demonstrate to this Court that the services were performed in a reasonable amount of time given the issues involved in this case and the timing of various matters in this case as a whole.

(e) Board Certification and/or Skill and Experience. Although some of the Gray Reed attorneys working on this case are board certified, all attorneys who worked on this engagement are skilled and experienced practitioners in bankruptcy and healthcare matters.

(f) Whether Compensation Is Reasonable. Applicant represents and would demonstrate that the compensation sought in connection with the services rendered and expenses incurred in connection with this case during the Application Period is reasonable and is commensurate with those rates charged by comparable, skilled practitioners at national and Texas-based law firms handling matters of this type. Each professional at Gray Reed who rendered services to the Committee, the hourly billing rate for each individual, and the number of hours worked by the individuals during the Application Period is set out in the Summary included in the front of this Application. Taking into consideration the time and labor spent, the nature and extent of the representation and the nature of these proceedings, Gray Reed believes the allowance prayed for herein is reasonable, in light of the rates charged, the services performed, and the results achieved.

30. Furthermore, under the lodestar approach to fee calculation, which was first articulated by the Third Circuit in Lindy Bros. Builders, Inc. v. American Radiator & Standard

Sanitary Corp., 487 F.2d 161, 167 (3d Cir. 1973), and is now the settled method for calculating

reasonable attorneys’ fees in the federal courts, see generally Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010); Louisiana Power & Light Co. v. Kellstrom, 50 F.3d 319, 323-24 (5th Cir.

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1995), cert. denied, 516 U.S. 862 (1995), the Court must make an initial objective determination of attorneys’ fees by multiplying Gray Reed’s reasonable hourly rate by the number of hours reasonably expended by Gray Reed in performing services. The lodestar amount may then be adjusted by taking the twelve (12) subjective factors set forth in Johnson v. Georgia Highway

Express, Inc., 488 F.2d 714 (5th Cir. 1974), into consideration, even though the Johnson factors

are generally subsumed within the lodestar calculation. Pennsylvania v. Delaware Valley Citizen’s

Council for Clean Air, 478 U.S. 546, 563-64 (1986); In re Miniscribe Corp., 309 F.3d 1234,

1243-44 (10th Cir. 2002) (applying Johnson factors).

31. The Johnson factors are: (1) the time and labor required; (2) the novelty and complexity of the issues presented; (3) the skill required to properly perform the legal services rendered; (4) preclusion of other employment due to acceptance of the engagement; (5) customary fee charges for like work; (6) whether the fee is fixed or contingent; (7) time limitations imposed by circumstances or the client; (8) the amount in controversy and results obtained; (9) the experience, reputation and ability of counsel; (10) the undesirability of the case; (11) the nature and length of the professional relationship between counsel and client; and (12) fee awards in similar cases. See Johnson, 488 F.2d at 717-19. Most of the Johnson factors were previously discussed in this Application (i.e., factors 1, 2, 3, 5, 6, 8 and 9). With respect to the remaining factors, Gray Reed states that: it was not precluded from accepting other employment (factor 4); the only time limitations imposed on Gray Reed were those imposed by Court order, the Local Rules, the Bankruptcy Rules, or that were otherwise existing at the time of Gray Reed’s retention (factor 7); this representation was not undesirable (factor 10); Gray Reed had no relationship with

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In addition, Gray Reed was keenly aware that estate resources were limited. As a result, Gray Reed was prudent in its expenditure of time and money, to ensure that neither resources nor value was squandered. Gray Reed respectfully submits that, based upon the objective and subjective factors, the fees sought herein are reasonable.

32. A reasonable hourly rate is the prevailing market rate in the community for similar services rendered by attorneys of comparable skill, experience and reputation. Blum v. Stenson, 465 U.S. 886, 895 (1984). Applicant respectfully submits that its rates are generally comparable to those of other firms of a similar size with comparable bankruptcy practices and similar expertise that have a national presence, as well as presence in the Southern District of Texas.

33. Gray Reed has done its best to minimize the number of professionals and paraprofessionals working on this case to ensure that this case proceeded smoothly, expeditiously and in a cost effective and efficient manner.

34. Accordingly, for all of the above reasons, Applicant respectfully submits that the fees sought in this Application are reasonable under section 330 of the Bankruptcy Code and applicable case law standards, and should be awarded in full.

SUMMARY OF EXPENSES

35. Applicant has incurred actual expenses on the Committee’s behalf in the amount of $170.36 during the Application Period, as set forth in Exhibit E. Records for overnight delivery, other air freight and messenger services, postage, computer research and other expenses are those charged to Applicant and maintained by Applicant’s accounting personnel. There is no minimum dollar charge with respect to any expense item and the charges set forth are those charged routinely to other clients. With respect to in-house photocopying charges, Gray Reed charges at a rate of 20¢ per page. These charges are intended to cover Applicant’s costs for the services; Applicant

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does not believe that the charges constitute a profit. A determination of the actual expense per page for photocopying services is dependent on both the volume of copies or facsimiles and the total expense attributable to photocopying and facsimiles on an annual basis. Outside copy service charges, delivery expenses and computer research time are billed at actual rates charged to the Applicant. Postage is charged at the actual rate charged by the U.S. Postal Service or at any lesser rate charged to Gray Reed by Gray Reed’s postal vendor(s).

NOTICE

36. Notice of this Application has been provided in accordance with the Interim Compensation Order.

CONCLUSION

WHEREFORE, Gray Reed & McGraw LLP respectfully requests this Court enter an

order (i) awarding second interim compensation to Gray Reed of $18,507.50 for services rendered for the Committee during the Application Period; (ii) allowing and approving reimbursement to Gray Reed of $170.36 in expenses incurred in connection with services rendered for the Committee during the Application Period; (iii) directing the Debtor to pay $18,507.50 in fees and $170.36 in expenses to Gray Reed promptly following entry of an order approving this Application for the unpaid portion of fees and expenses sought herein; and (iv) granting Applicant such other and further relief as may be just and proper.

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Respectfully submitted this 22nd day of May, 2020.

By: /s/ Jason S. Brookner Jason S. Brookner Texas Bar No. 24033684 1300 Post Oak Blvd., Suite 2000 Houston, Texas 77056

Email: [email protected] Local Counsel to the Official Committee of Unsecured Creditors

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on the 22nd day of May, 2020, he caused a true and correct copy of the foregoing pleading to be served via CM/ECF on all parties who have subscribed for electronic notice in this case, and via electronic mail on the Notice Parties.

/s/ Jason S. Brookner

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E

XHIBIT

“A”

GRAY REED’S FEE STATEMENT

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In re:

Debtor.

Chapter 11

Case No. 19-36300 (DRJ)

THIRD MONTHLY FEE STATEMENT OF GRAY REED & McGRAW LLP, FOR ALLOWANCE OF COMPENSATION FOR SERVICES RENDERED AND REIMBURSEMENT OF EXPENSES AS LOCAL COUNSEL TO THE

OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR THE PERIOD OF FEBRUARY 1, 2020 THROUGH FEBRUARY 29, 2020

Applicant’s Role in Case:

Local Counsel to the Official Committee of Unsecured Creditors

Date Order of Employment Signed: February 2, 2020 [Docket No. 272]

Time period covered by this statement: 2/1/2020 2/29/2020 Summary of Total Fees and Expenses Requested:

Total fees requested in this statement: $5,441.20 (80% of $6,801.50) Total expenses requested in this statement: $16.61

Total fees and expenses requested in this statement

(inclusive of holdback amount): $6,818.11

Blended hourly rate (all professionals): $393.15

Blended hourly rate (attorneys only): $666.57

1. Pursuant to sections 327, 330 and 331 of title 11 of the United States Code (the “Bankruptcy Code”), Rule 2016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and rule 2016-1 of the Bankruptcy Local Rules for the Southern District of Texas (the “Bankruptcy Local Rules”), the Order Granting Application for Entry of an Order Authorizing

the Retention and Employment of Gray Reed & McGraw LLP as Local Counsel to the Official Committee of Unsecured Creditors Nunc Pro Tunc to December 14, 2019 [Docket No. 272], the Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses for

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Professionals [Docket No. 202] (the “Interim Compensation Order”), Gray Reed & McGraw

LLP (“Gray Reed”), local counsel for the Official Committee of Unsecured Creditors (the “Committee”), hereby files this monthly fee statement (the “Monthly Fee Statement”) for (a) compensation in the amount of $5,441.20 (80% of $6,801.50) for the reasonable and necessary legal services Gray Reed rendered to the Committee from February 1, 2020 through and including February 29, 2020 (the “Compensation Period”) and (b) reimbursement in the amount of $16.61 for the actual and necessary expenses that Gray Reed incurred during the Compensation Period.

Services Rendered and Disbursements Incurred

2. Attached as Exhibit A is a billing summary of Gray Reed professionals and paraprofessionals by individual, setting forth the (a) name and title of each individual who performed services during the Compensation Period, (b) aggregate time expended by each such individual, (c) hourly billing rate for each such individual, and (d) amount of fees earned by each Gray Reed professional and paraprofessional.

3. Attached as Exhibit B is a summary of hours and fees by task code.

4. Attached as Exhibit C is a summary of reimbursement sought by expense type for all expenses for the Compensation Period incurred in connection with the performance of professional services.

5. Attached as Exhibit D is Gray Reed’s itemized time records of its professionals and paraprofessionals and itemized records of reimbursement sought for the Compensation Period.

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Reservations

6. This Monthly Fee Statement includes all the information and supporting detail regarding fees and expenses available to Gray Reed at the time of the filing of this Monthly Fee Statement. If additional information and supporting detail in connection with this Compensation Period should become available, as a result of delays in accounting processing or an inadvertence with respect to time entered in the accounting system, or any other valid reason, Gray Reed reserves the right to make an application to the Court for an allowance of such fees and expenses not included in this Monthly Statement.

Notice

7. Pursuant to the Interim Compensation Order, notice of this Monthly Fee Statement shall be served upon:

(a) the Debtor, Walker County Hospital Corporation, Attn: Steven Smith, P.O. Box 4001, Huntsville, TX 77342-4001;

(b) counsel to the Debtor, Waller Lansden Dortch & Davis, LLP, Attn: Blake D. Roth, 511 Union Street, Suite 2700, Nashville, Tennessee 37219,

[email protected];

(c) counsel to MidCap Funding IV Trust (a) Vedder Price P.C., Attn: Michael M. Eidelman and David L. Kane, 222 North LaSalle Street, Chicago, IL 60601,

[email protected] and [email protected] and (b) Porter Hedges, LLP, Attn: John F. Higgins, 1000 Main Street, 36th Floor, Houston, TX 77002, [email protected]; and

(d) the Office of the United States Trustee, Attn: Stephen Statham, 515 Rusk Street, Houston, Texas 77002, [email protected].

WHEREFORE, Gray Reed, in connection with services rendered on behalf of the Committee, respectfully requests (a) allowance of compensation and reimbursement in the amount of (i) $5,441.20 for reasonable and necessary professional services rendered (80% of $6,801.50) and (ii) $16.61 for 100% of actual and necessary costs and expenses incurred during the Compensation Period, for a total of $5,457.81 and (b) payment of the forgoing sums.

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Respectfully submitted this 21st day of March, 2020.

Email: [email protected] Local Counsel to the Official

Committee of Unsecured Creditors

The undersigned hereby certifies that on the 21st day of March, 2020, he caused a true and correct copy of the foregoing pleading to be served via CM/ECF on all parties who have subscribed for electronic notice in this case.

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EXHIBIT A

COMPENSATION BY PROFESSIONAL

Attorney Position and Year First Licensed to Practice Hourly Billing Rate Total Billed Hours Total Compensation

Micheal W. Bishop Senior Counsel 1988 $615.00 0.00 $0.00

London R. England Associate 2019 $305.00 0.00 $0.00

Paraprofessionals Position with the Applicant Hourly Rate Total Billed Hours Total Compensation

Clark D. Patterson Paralegal $300.00 2.00 $600.00

Alma B. Auth Paralegal $260.00 0.00 $0.00

Veronica T. Salazar Legal Assistant $185.00 8.30 $1,535.50

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EXHIBIT B

COMPENSATION BY PROJECT CATEGORY

Matter

No. Matter Description

Total Billed Hours Total Fees Requested Total Expenses Requested Total Compensation 2 Asset Disposition 4.50 $3,240.00 $0.00 $3,240.00 6 Business Operations 2.00 $600.00 $0.00 $600.00

12 Employment and Fee Applications 10.80 $2,961.50 $0.00 $2,961.50

24 Expenses 0.00 $0.00 $16.61 $16.61

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EXHIBIT C

EXPENSE SUMMARY

Service Description Amount

Copies $0.00 Telephone $0.00 Online Research $0.00 Delivery Services/Courier $0.00 Local Travel $0.00 Out-of-Town Travel: Transportation $0.00 Hotel $0.00 Meals $0.00 Ground Transportation $16.61 Meals (local) $0.00 Court Fees $0.00 Deposition Transcripts $0.00

Litigation Support Vendors $0.00

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EXHIBIT D

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Invoice:

Page: 533700 1 of 2

1300 Post Oak Boulevard, Suite 2000, Houston, Texas 77056 Federal Tax Identification Number: 81-4045088

Walker County Hospital - UCC [email protected] Attention: George P. Angelich

RE: Asset Disposition

Bill-at-a-Glance – for services through February 29, 2020

Professional Services $3,240.00

Total this Invoice $3,240.00

Previous Balance $7,712.04

Less Credits Applied ($58.04)

Total Now Due $10,894.00

Please remit payment to:

Gray Reed & McGraw ATTN: Accounts Receivable 1300 Post Oak Boulevard Suite 2000

Houston, TX 77056

Wire Instructions:

Domestic Routing #: 114000093 | Frost Bank 100 W. Houston St., San Antonio, TX 78205 International SWIFT #: FRSTUS44 Beneficiary Account #: 502399725

Beneficiary Name: Gray Reed & McGraw Depository

Credit Card Payment:

Pay your invoice online by using this internet address:

https://www.grayreed.com/Online-Bill-Pay

Reference: 022001.000002 Invoice # 533700

For questions about this bill please call 1.888.908.8159 or

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Walker County Hospital - UCC [email protected] Bill Date: Client.Matter: Invoice: Page: March 20, 2020 022001.000002 533700 2 of 2

Matter 000002 – Asset Disposition

Outstanding Invoices

Date Invoice Number 1-30 Days 31-60 Days 61-90 Days Over 90 Days Amount

01/30/20 529386 0.00 $6,790.00 0.00 0.00 $6,790.00

02/21/20 531338 $864.00 0.00 0.00 0.00 $864.00

Total Outstanding $864.00 $6,790.00 $0.00 $0.00 $7,654.00

Professional Services - Detail

Date Tkpr Description of Services Hours Amount

02/01/20 JSB Review email traffic re sale/closing updates. 0.50 $360.00

02/02/20 JSB Review and comment on UCC statement and request for status conference.

0.30 $216.00

02/04/20 JSB Revise and finalize request for status conference and calls and correspondence with N. Marten re same (.5); Review email traffic with Committee members re non-closing of sale, content of motion for status conference and general status (.5).

1.00 $720.00

02/06/20 JSB Review District reply to UCC/request for status conference and correspondence with counsel re same.

0.30 $216.00

02/26/20 JSB Review email traffic on closing update (.4); Review Debtor's emergency motion for status conference (.3); Committee professionals' call re status, etc. (.3); Review email traffic re District's failure to close and general status (.6); Call with B. Roth re same (.2).

1.80 $1,296.00

02/27/20 JSB Review joinder from District and review order revising sale order (.3); Review Committee professional correspondence on same (.1); Call with N. Marten re overall situation (.2).

0.60 $432.00

Total Professional Services 4.50 $3,240.00

Professional Services - Timekeeper Summary

Person Hours Rate Amount

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Invoice:

Page: 533701 1 of 2

RE: Case Administration

Professional Services $600.00

Total this Invoice $600.00

Total Now Due $5,450.50

Houston, TX 77056

(30)

Matter 000007 – Case Administration

01/30/20 529387 0.00 $4,850.50 0.00 0.00 $4,850.50

Matter 000007 – Case Administration

02/10/20 CDP Prepare motion to withdraw counsel regarding Robert Hirsh. 1.60 $480.00

02/12/20 CDP Finalize and file motion to withdraw Robert Hirsh as counsel to the Committee (.2); Serve same pursuant to certificate of service (.2).

0.40 $120.00

Total Professional Services 2.00 $600.00

(31)

Invoice:

Page: 533702 1 of 2

RE: Employment and Fee Applications

Total Now Due $11,746.50

Houston, TX 77056

(32)

Matter 000012 – Employment and Fee Applications

01/30/20 529389 0.00 $6,563.00 0.00 0.00 $6,563.00

02/21/20 531339 $2,222.00 0.00 0.00 0.00 $2,222.00

Total Outstanding $2,222.00 $6,563.00 $0.00 $0.00 $8,785.00

02/10/20 JSB Review and revise motion for withdrawal of R. Hirsh. 0.30 $216.00

02/12/20 VTS Draft Gray Reed's first monthly fee statement. 1.80 $333.00

02/13/20 VTS Work on fees and expense calculations for December 2019 and January 2020 monthly fee statements (.6); Draft January 2020 monthly fee statement (.5).

1.10 $203.50

02/18/20 LW Review fee statements (.4); Correspondence with N. Marten re same (.3). 0.70 $385.00 02/18/20 VTS Revise first and second monthly fee statements for Gray Reed (.3);

Additional revisions to Gray Reed's January 2020 monthly fee statement (.5).

0.80 $148.00

02/19/20 VTS Draft Gray Reed's first interim fee app. 1.30 $240.50

02/28/20 LW Review fee statements for filing (.5); Review and revise Gray Reed interim fee application (1.0).

1.50 $825.00

02/28/20 VTS Continued working on calculations of interim fees and expenses and draft interim fee app (2.0); Worked on finalizing Arent Fox and Gray Reed's monthly fee statements covering the period from November 27, 2019 through January 31, 2020 (1.0); Finalized, filed and served Arent Fox and Gray Reed's monthly fee statements (.3).

3.30 $610.50

(33)

Invoice:

Page: 533703 1 of 2

RE: Expenses

Expenses $16.61

Previous Balance $251.17

Total Now Due $265.65

Houston, TX 77056

(34)

Walker County Hospital - UCC [email protected] Bill Date: Client.Matter: Invoice: Page: March 20, 2020 022001.000024 533703 2 of 2 Matter 000024 – Expenses Outstanding Invoices

01/30/20 529392 0.00 $249.04 0.00 0.00 $249.04

Total Outstanding $0.00 $249.04 $0.00 $0.00 $249.04

Matter 000024 – Expenses

Expenses - Detail

Date Description of Expenses Amount

02/12/20 Travel Expenses – VENDOR: Jason S. Brookner; INVOICE#: 020720.JSB; DATE: 2/12/2020

12/20/19 Attend sale hearing and final first day hearings in Houstonl Uber $16.61

(35)

E

XHIBIT

“B”

(36)

In re:

Debtor.

Chapter 11

Case No. 19-36300 (DRJ)

FOURTH MONTHLY FEE STATEMENT OF GRAY REED & McGRAW LLP, FOR ALLOWANCE OF COMPENSATION FOR SERVICES RENDERED AND REIMBURSEMENT OF EXPENSES AS LOCAL COUNSEL TO THE

OFFICIAL COMMITTEE OF UNSECURED CREDITORS FOR THE PERIOD OF MARCH 1, 2020 THROUGH MARCH 31, 2020

Applicant’s Role in Case: Local Counsel to the Official Committee of Unsecured Creditors

Date Order of Employment Signed: February 2, 2020 [Docket No. 272]

Time period covered by this statement: 3/1/2020 3/31/2020

Summary of Total Fees and Expenses Requested:

Total fees requested in this statement: $5,103.60 (80% of $6,379.50)

Total expenses requested in this statement: $28.40

Total fees and expenses requested in this statement

(inclusive of holdback amount): $6,407.90

Blended hourly rate (all professionals): 472.56

Blended hourly rate (attorneys only): 605.18

1. Pursuant to sections 327, 330 and 331 of title 11 of the United States Code (the “Bankruptcy Code”), Rule 2016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and rule 2016-1 of the Bankruptcy Local Rules for the Southern District of Texas (the “Bankruptcy Local Rules”), the Order Granting Application for Entry of an Order Authorizing

(37)

Professionals [Docket No. 202] (the “Interim Compensation Order”), Gray Reed & McGraw

LLP (“Gray Reed”), local counsel for the Official Committee of Unsecured Creditors (the “Committee”), hereby files this monthly fee statement (the “Monthly Fee Statement”) for (a) compensation in the amount of $5,103.60 (80% of $6,379.50) for the reasonable and necessary legal services Gray Reed rendered to the Committee from March 1, 2020 through and including March 31, 2020 (the “Compensation Period”) and (b) reimbursement in the amount of $28.40 for the actual and necessary expenses that Gray Reed incurred during the Compensation Period.

Services Rendered and Disbursements Incurred

2. Attached as Exhibit A is a billing summary of Gray Reed professionals and paraprofessionals by individual, setting forth the (a) name and title of each individual who performed services during the Compensation Period, (b) aggregate time expended by each such individual, (c) hourly billing rate for each such individual, and (d) amount of fees earned by each Gray Reed professional and paraprofessional.

3. Attached as Exhibit B is a summary of hours and fees by task code.

4. Attached as Exhibit C is a summary of reimbursement sought by expense type for all expenses for the Compensation Period incurred in connection with the performance of professional services.

5. Attached as Exhibit D is Gray Reed’s itemized time records of its professionals and paraprofessionals and itemized records of reimbursement sought for the Compensation Period.

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Reservations

6. This Monthly Fee Statement includes all the information and supporting detail regarding fees and expenses available to Gray Reed at the time of the filing of this Monthly Fee Statement. If additional information and supporting detail in connection with this Compensation Period should become available, as a result of delays in accounting processing or an inadvertence with respect to time entered in the accounting system, or any other valid reason, Gray Reed reserves the right to make an application to the Court for an allowance of such fees and expenses not included in this Monthly Statement.

Notice

7. Pursuant to the Interim Compensation Order, notice of this Monthly Fee Statement shall be served upon:

(a) the Debtor, Walker County Hospital Corporation, Attn: Steven Smith, P.O. Box 4001, Huntsville, TX 77342-4001;

(b) counsel to the Debtor, Waller Lansden Dortch & Davis, LLP, Attn: Blake D. Roth, 511 Union Street, Suite 2700, Nashville, Tennessee 37219,

[email protected];

(c) counsel to MidCap Funding IV Trust (a) Vedder Price P.C., Attn: Michael M. Eidelman and David L. Kane, 222 North LaSalle Street, Chicago, IL 60601,

[email protected] and [email protected] and (b) Porter Hedges, LLP, Attn: John F. Higgins, 1000 Main Street, 36th Floor, Houston, TX 77002, [email protected]; and

(d) the Office of the United States Trustee, Attn: Stephen Statham, 515 Rusk Street, Houston, Texas 77002, [email protected].

WHEREFORE, Gray Reed, in connection with services rendered on behalf of the Committee, respectfully requests (a) allowance of compensation and reimbursement in the

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Respectfully submitted this 4th day of May, 2020.

Email: [email protected] Local Counsel to the Official

Committee of Unsecured Creditors

The undersigned hereby certifies that on the 4th day of May, 2020, he caused a true and correct copy of the foregoing pleading to be served via CM/ECF on all parties who have subscribed for electronic notice in this case.

(40)

EXHIBIT A

COMPENSATION BY PROFESSIONAL

Attorney Position and Year First Licensed _{to Practice}

Hourly Billing Rate Total Billed Hours Total Compensation

$0.00 0.00 $0.00

W.D. Armer Partner 1994 $575.00 0.40 $230.00

Micheal W. Bishop Senior Counsel 1988 $615.00 0.00 $0.00

$0.00 0.00 $0.00

London R. England Associate 2019 $305.00 0.00 $0.00

Paraprofessionals Position with the Applicant Hourly Rate Total Billed Hours Total Compensation

Clark D. Patterson Paralegal $300.00 2.70 $810.00

Veronica T. Salazar Legal Assistant $185.00 2.30 $425.50

(41)

EXHIBIT B

COMPENSATION BY PROJECT CATEGORY

Matter

No. Matter Description

Total Billed Hours Total Fees Requested Total Expenses Requested Total Compensation 2 Asset Disposition 1.30 $878.00 $0.00 $878.00

12 Employment and Fee Applications 8.80 $3,727.50 $0.00 $3,727.50

15 Litigation 3.00 $1,486.00 $0.00 $1,486.00

16 Meetings and Communications with Creditors

0.40 $288.00 $0.00 $288.00

24 Expenses 0.00 $0.00 $28.40 $28.40

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EXHIBIT C

EXPENSE SUMMARY

Service Description Amount

Copies $28.40 Telephone $0.00 Online Research $0.00 Delivery Services/Courier $0.00 Local Travel $0.00 Out-of-Town Travel: Transportation $0.00 Hotel $0.00 Meals $0.00 Ground Transportation $0.00 Meals (local) $0.00 Court Fees $0.00 Deposition Transcripts $0.00

Litigation Support Vendors $0.00

(43)

EXHIBIT D

(44)

Invoice:

Page: 535720 1 of 2

RE: Asset Disposition

Bill-at-a-Glance – for services through March 31, 2020

Less Payments ($7,654.00)

Total Now Due $4,118.00

Houston, TX 77056

(45)

Walker County Hospital - UCC [email protected] Bill Date: Client.Matter: Invoice: Page: April 20, 2020 022001.000002 535720 2 of 2

03/20/20 533700 0.00 $3,240.00 0.00 0.00 $3,240.00

03/07/20 WDA Review of Closing Checklist and First Amendment to Amended and Restated Purchase Agreement and Member Substitution Agreement (.3); Prepare communication to Mr. Marten (.1).

0.40 $230.00

03/09/20 JSB Correspondence with counsel re appeal timeline for potential appeal of amended sale order (.5); Review email traffic on various trailing sale issues (.4).

0.90 $648.00

JSB Jason S.Brookner 0.90 $720.00 $648.00

(46)

Invoice:

Page: 535721 1 of 3

RE: Employment and Fee Applications

Total Now Due $6,689.00

Houston, TX 77056

(47)

03/20/20 533702 0.00 $2,961.50 0.00 0.00 $2,961.50

03/02/20 JSB Review correspondence re monthly fee statements and fee applications

and call with N. Marten re same. 0.60 $432.00

03/02/20 LW Finalize fee applications for filing (.4); Draft notice of filing same (.5). 0.90 $495.00 03/02/20 VTS Review, revise and finalize FTI's 1st, 2nd, and Third Monthly Fee

Statements, FTI's First Interim Fee App, Arent Fox's First Interim Fee App and Gray Reed's First Interim Fee App (.4); File same (.8); Review, revise and finalize Notice of Interim Fee Applications for Committee

Professionals, file same and forward all file-marked copies to N. Marten for service (.3).

1.50 $277.50

03/05/20 LW Confer with N. Marten re setting on fee applications. 0.30 $165.00

03/09/20 LW Correspondence with chambers re setting on fee applications. 0.20 $110.00 03/11/20 LW Correspondence with chambers re setting on fee applications. 0.20 $110.00 03/16/20 LW Work on February fee statement (.2); Correspondence with N. Marten,

chambers re fee app hearing (.2); Draft notice of reset hearing (.4).

0.80 $440.00

03/16/20 CDP Finalize and file notice of reset hearing. 0.20 $60.00

03/19/20 LW Review and revise fee statement. 0.40 $220.00

03/19/20 VTS Begin calculating Gray Reed's February 2020's fees and expenses (.3); Draft third monthly fee statement (.3); Continue working on fees and expenses and make revisions to third monthly fee statement based on same (.2).

0.80 $148.00

03/20/20 LW Correspondence re Monday’s fee app hearing (.1); Correspondence re

fee statements (.1). 0.20 $110.00

03/21/20 LW Finalize, file and serve February fee statements. 0.50 $275.00

03/23/20 LW Correspondence re certificate of no objections to fee applications. 0.20 $110.00 03/23/20 CDP Prepare certificate of no objection regarding Gray Reed, Arent Fox and

FTI first interim fee applications.

1.00 $300.00

03/25/20 CDP Finalize and file certificate of no objection regarding Gray Reed, Arent Fox

and FTI first interim fee applications. 0.30 $90.00

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counsel re same (.1).

03/31/20 LW Correspondence with team re cancellation of tomorrow's hearing. 0.20 $110.00

LW Lydia Webb 4.40 $550.00 $2,420.00

CDP Clark D.Patterson 1.50 $300.00 $450.00

(49)

Invoice:

Page: 535722 1 of 2

RE: Litigation

Total Now Due $1,486.00

Houston, TX 77056

(50)

Walker County Hospital - UCC [email protected] Bill Date: Client.Matter: Invoice: Page: April 20, 2020 022001.000015 535722 2 of 2 Matter 000015 – Litigation

03/11/20 LW Draft notice of appeal. 0.50 $275.00

03/11/20 CDP Finalize and file notice of appeal (.2); Confer with L. Webb regarding

same (.2). 0.40 $120.00

03/12/20 CDP Compile deadlines regarding committee designation of items included in the record.

0.20 $60.00

03/23/20 JSB Review and revise statement of issues on appeal and designation of items for inclusion in the record on appeal (.4); Correspondence with N. Marten re same (.2).

0.60 $432.00

03/24/20 JSB Review email traffic and correspondence to Committee re appeal and

case status, etc. 0.20 $144.00

03/24/20 LW Review record designation and statement of issues on appeal (.4); Circulate same (.1).

0.50 $275.00

03/24/20 CDP Finalize and file appellant's designation of items on record on appeal (.4); Confer with L. Webb regarding same (.2).

0.60 $180.00

LW Lydia Webb 1.00 $550.00 $550.00

(51)

Invoice:

Page: 535723 1 of 2

RE: Meetings and Communications with Creditors

Total Now Due $288.00

Houston, TX 77056

(52)

Matter 000016 – Meetings and Communications with Creditors

03/27/20 JSB Committee update call. 0.40 $288.00

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Invoice:

Page: 535724 1 of 2

RE: Expenses

Expenses $28.40

Previous Balance $265.65

Less Payments ($249.04)

Total Now Due $45.01

Houston, TX 77056

(54)

Walker County Hospital - UCC [email protected] Bill Date: Client.Matter: Invoice: Page: April 20, 2020 022001.000024 535724 2 of 2 Matter 000024 – Expenses Outstanding Invoices

03/20/20 533703 0.00 $16.61 0.00 0.00 $16.61

Total Outstanding $0.00 $16.61 $0.00 $0.00 $16.61

Matter 000024 – Expenses

Expenses - Detail

Date Description of Expenses Amount

Photocopies (142 @ $0.20) $28.40

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Case Document 400 Filed in TXSB on 05/22/20 Page 1 of 74

E

XHIBIT

“A”

EXHIBIT A

EXHIBIT B

EXHIBIT C

EXHIBIT D

E

XHIBIT

“B”

EXHIBIT A

EXHIBIT B

EXHIBIT C

EXHIBIT D

E

XHIBIT

“C”