IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE
In re:
LIGHTHOUSE RESOURCES INC., et al.,1 Debtors. ) ) ) ) ) ) ) Chapter 11 Case No. 20-13056 (JTD) (Jointly Administered)
Re: Docket No. 115
AMENDED AND RESTATED DECLARATION OF BRUCE GARBER IN SUPPORT OF THE DEBTORS’ APPLICATION FOR AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF KEEN-SUMMIT CAPITAL PARTNERS LLC AS DEBTORS’
REAL ESTATE BROKER IN A VENTURE WITH BHJ REALTY, INC. D/B/A CENTURY 21
Bruce Garber, being duly sworn, states the following under penalty of perjury:
1. I am the owner and responsible broker of BHJ Realty, Inc. d/b/a Century 21 (“BHJ”).
2. I am duly authorized to make and submit this declaration (the “Declaration”) on behalf of BHJ in accordance with section 327 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as amended (the ”Bankruptcy Code”), Rules 2014(a) and 2016(b) of the Federal Rules of Bankruptcy Procedure (the ”Bankruptcy Rules”), and Rules 2014-1 and 2016-1 of the Local Bankruptcy Rules for the District of Delaware (the “Local Rules”) in connection with the application of the above-captioned debtors (the “Debtors”) for an order authorizing the Debtors to
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax
identification number include: Lighthouse Resources Inc. (4713), LHR Coal, LLC (4799), KCP, Inc. (2558), Big Horn Coal Company (7087), Rosebud Coal Sales Company (9016), KCP Properties, Inc. (8372), Decker Holding Company, LLC (8881), Decker Coal Company, LLC (3731), Montana Royalty Holdings, LLC (1107), LHR Infrastructure, LLC (9619), Millennium Bulk Terminals-Longview, LLC (0354), Barlow Point Land Company, LLC (1398), Columbia Land Co., LLC (6826), and Gulf States Bulk Terminal, LLC (5870). The location of the Debtors’ service address in these chapter 11 cases is 10980 South Jordan Gateway, South Jordan, Utah 84095.
employ and retain BHJ and Keen-Summit Capital Partners LLC (“Keen”) as its real estate broker (Docket No. 115) (the “Application”).2
3. I previously submitted a Declaration in Support of the Debtors’ Application for an Order Authorizing the Retention and Employment of Keen-Summit Capital Partners LLC As Debtors’ Real Estate Broker in a Venture with BHJ Realty, Inc. d/b/a Century 21. My original declaration (Docket No. 115-5) is incorporated and restated herein.
4. Unless otherwise stated in this declaration, I have personal knowledge of the facts set forth herein and, if called as a witness, I would testify thereto.
5. BHJ has been in existence since 1908 and became affiliated with Century 21 in 1978. I have been employed by BHJ since 1989 and in 2005 I purchased the company.
6. BHJ has extensive expertise in representing buyers and sellers in Wyoming and Montana. It has 22 agents, 3 of which are licensed brokers in the state of Wyoming and Montana. BHJ has developed expertise in the purchase and sale of residential, agricultural, and commercial properties, particularly in Wyoming and Montana. BHJ is located in Sheridan, Wyoming where the majority of the real property is located and BHJ is only a few hours’ drive from the Rosebud Coal Company property in Hanna, Wyoming. In light of COVID-19 and travel restrictions, it is a benefit to the estate to have a broker close to the properties.
7. In addition, since my career began three decades ago, I have been the proud recipient of numerous real estate and business awards. Most notably, my team and I was awarded the 2014 Art Bartlett 2100 Cup Award, which honors one company annually that demonstrates exceptional community leadership. I also received the Business Person of the Year Award by the Sheridan County Chamber of Commerce. Over the years I have had the privilege to lead the
YMCA, Sheridan County Board of Realtors, Big Horn Education Fund and CAST or the Fly Sheridan Group.
8. In connection with these chapter 11 cases, the Debtors have requested Court authorization to retain BHJ and Keen as its real estate broker. In this capacity, the professional services that BHJ will provide to the Debtors will be focused upon marketing the Debtors’ real properties in Wyoming, as set forth in Schedule A to the retention agreement dated December 23, 2020 (“Retention Agreement”) for the Debtors’ bidding and auction process. More particularly, BHJ’s services will include the following:
i. On request, review pertinent documents and will consult with Debtors’ counsel, as appropriate;
ii. Coordinate with Debtors the development of due diligence materials, the cost of which shall be Debtors’ sole responsibility;
iii. Develop, subject to Debtors’ review and approval, a marketing plan and implement each facet of the marketing plan;
iv. Communicate regularly with prospects and maintain records of communications;
v. Solicit offers for a Transaction;
vi. Assist Debtors in evaluating, structuring, negotiating and implementing the terms and conditions of a proposed Transaction;
vii. Develop and implement, subject to Debtors’ review and approval, an auction plan, including arranging auction logistics, assisting Debtors’ counsel with auction bid procedures, assisting Debtors to qualify bidders, and running a virtual auction on Zoom or a similar platform that may be designated by Debtors;
viii. Communicate regularly with Debtors and their professional advisors in connection with the status of its efforts; and
ix. Work with Debtors’ attorneys responsible for the implementation of the proposed Transactions, reviewing documents, negotiating and assisting in resolving problems which may arise.
5. BHJ is willing to act on behalf of the Debtors and to subject itself to the jurisdiction and supervision of the Court. Additionally, BHJ will coordinate with the other retained professionals in these bankruptcy cases to eliminate unnecessary duplication or overlap of work.
Compensation
6. As set forth more fully in the Retention Documents (attached to the Application as
Exhibit B), and subject in its entirety to the terms set forth in the Retention Documents, BHJ has
agreed to accept compensation (subject to Section 328(a) review) and expense reimbursement (subject to Section 330 review) as follows:
Reimbursement of up to $35,000 for marketing related expenses; plus Eight percent (8%) of the first four million dollars of Cash Proceeds (as
defined in the Retention Agreement) from the Transaction; plus
Five percent (5%) of all Cash Proceeds in excess of four million dollars from the Transaction.
7. In the event a party holding a mortgage or lien on any of the Property acquires such Property by means of a credit bid and there are no Cash Proceeds involved in the Transaction, then the Broker shall have earned a (“Credit Bid Fee”) in lieu of the Transaction Fee, which: (a) in the event all of the Property is acquired by a credit bid, the Credit Bid Fee shall equal the greater of: (i) the Transaction Fee calculated on the highest and best bid by a third party other than the credit bidder, or (ii) two hundred thousand dollars ($200,000); or (b) in the event only a portion of the Property is acquired by credit bid and other Transactions for other portions of the Property generate Cash Proceeds, then: (i) if (a) there are no offers on the Property that is the subject of the credit bid, and (b) Broker has earned and been paid a Transaction Fee on the other portions of the Property that are sold for Cash Proceeds, and (c) the aggregate of those Transaction Fees is less than $200,000, then the Credit Bid Fee shall be calculated as the difference between what Broker
credit bid, then the Credit Bid Fee shall equal the greater of the Transaction Fee calculated on the highest and best bid by a third party other than the credit bidder for that piece of Property and $200,000 less the sum of all other Transaction Fees earned.
8. The Credit Bid Fee shall be payable in cash at the closing by the credit bidding party. The Debtors shall not be responsible for paying the Credit Bid Fee but the Debtors shall not close on the transfer of title to a credit bidder without the credit bidder paying Broker the Credit Bid Fee, in cash, in full, at the closing.
9. The parties hereto recognize that it is difficult to ascertain a fair and reasonable Credit Bid Fee in all credit bid circumstances. In the event that this Agreement does not contemplate a credit bid scenario or one party is unsatisfied with the calculation of the credit bid, then the parties agree to work cooperatively to resolve any open items and submit any agreements or remaining disputes to the Bankruptcy Court for review and approval.
10. The above-referenced compensation and reimbursement provisions have been agreed upon by the parties in anticipation that a substantial commitment of professional time and effort will be required of BHJ and in light of the fact that such commitment may foreclose other opportunities for BHJ and that the actual time and commitment required of BHJ may vary substantially from week to week or month to month, creating “peak load” issues.
11. In this engagement, Keen and BHJ have agreed amongst themselves to be compensated in a manner consistent with each’s partner’s anticipated respective role and responsibilities in the venture. Other than as set forth in this Declaration and Application regarding the venture with Keen, to the best of my knowledge, (a) no commitments have been made or received by BHJ with respect to compensation or payment in connection with these cases other than in accordance with the provisions of the Bankruptcy Code and (c) consistent with section 504
of the Bankruptcy Code, BHJ will not share any compensation received by BHJ in connection with these chapter 11 cases with any other person or entity.
12. In light of the foregoing, I believe that the proposed Transaction Fee or the alternative Credit Bid Fee is reasonable under the circumstances of this engagement.
13. As a professional seeking compensation consisting of a fixed fee and a contingent fee, BHJ seeks judicial review of its compensation pursuant to the standards of section 328(a) of the Bankruptcy Code and no other standard.
Disinterestedness and Eligibility
14. In connection with the preparation of this Declaration, BHJ conducted a review of its contacts with the Debtors that were made reasonably known to BHJ. A listing of the parties reviewed is reflected on Schedule 1 to this Declaration.
15. BHJ does not have a formal conflict check database. As a principal broker, I am aware of BHJ’s business contacts and connections. In addition, Paul Wallop of BHJ, is also very familiar with BHJ’s contacts and connections. Both Mr. Wallop and I reviewed Schedule 1 and based upon our personal knowledge, prepared lists of persons who may be considered to be contacts and connections of BHJ. Mr. Wallop and I cross-referenced our notes and combined them into one list, Schedule 2 to this Declaration, which identifies those persons or entities with whom, to the best of my knowledge, we have some connection.
16. As a matter of full disclosure and as noted in the Schedule 2, BHJ has connections with the following and in the following manner:
a. First Interstate: I am on the Board of Directors and hold shares of stock; b. Kayleen A. Gilliland, Rep. is a past and future client;
d. Sheridan County Chamber: Rosemary Garber is a member of their Executive Board of Directors and is a Chamber Ambassador; and
e. Sheridan County YMCA: I previously served on the Board of Directors for 17 years, but I am not currently a director.
17. Based upon the results of our review, to the best of my knowledge, after due inquiry and except as otherwise disclosed in this Declaration, neither I nor BHJ represent or hold any interest adverse to the Debtors’ estates. To the best of my knowledge, BHJ’s relationship with any parties on Schedule 2 in no way involves such parties’ rights in the Debtors’ cases.
18. Furthermore, neither BHJ nor I have any connection to any of the judges of the United States Bankruptcy Court for the District of Delaware, the Office of the United States Trustee, or any person employed in the Office of the United States Trustee. In the event I subsequently learn of any such connections, I will submit a supplemental affidavit detailing any such connections to the Court.
19. In the ordinary course of business, BHJ has or may reasonably expect to have in the future, professional relationships with the professional law firms, accounting firms, or other professional firms or other parties in this case. All of those relationships are or are expected to be unrelated to this case.
20. In light of the foregoing, I believe that each of BHJ and myself (a) are each a “disinterested person” as that term is defined in section 101(14) of the Bankruptcy Code, as modified by section 1107(b); and (b) do not represent or hold any interest adverse to the Debtors’ estates.
21. BHJ is a “disinterested person” as that term is defined in 101(14) of the Bankruptcy Code in that BHJ: (a) is not a creditor, equity security holder or insider of the Debtor; (b) is not and was not, within two years before the date of the order for relief entered in these cases, a director, officer or employee of the Debtor; and (c) does not represent or hold any interest adverse
to the Debtors’ estates. BHJ has not received any payments directly from the Debtors in the three (3) months prior to the start of this bankruptcy case.
Pursuant to 28 U.S.C. §1746, I certify under penalty of perjury that the foregoing is true and correct.
Dated: January 14, 2021 By: /s/ Bruce Garber Bruce Garber Responsible Broker BHJ Realty, Inc. 101 S. Main St. Sheridan, WY 82801 Telephone: (307) 752-2013
