Vestis Retail Group LLC’s unsecured creditors committee filed a motion Thursday to appoint Cooley L.P. as its lead counsel retroactive to April 26.
The motion came just days ahead of a hearing May 16 where the federal judge overseeing the case could rule on objections to the restructuring plan Vestis proposed in its April 18 Chapter 11 petition.
The motion proposes Cooley be paid $225 to $1,115 per hour depending on which of its partners, associates and paralegals work the case. The seven-members represent the interests of Vestis’ largest unsecured creditors, including Nike USA Inc., Under Armour Inc., Wolverine Worldwide Inc., Levi Strauss & Co. Inc and, VF Outdoor LLC. Cooley was selected for its experience representing vendors in other retail bankruptcy cases, including Eddie Bauer, Edwin Watts, Pacific Sunwear of California Inc., Princeton Ski Shops and The Walking Company.
On May 11, U.S. Bankruptcy Court Judge Laurie Selber Silverstein approved Vestis’ motion to appoint Robert J. Duffy and Mark Weinsten as co-chief restructuring officers. Both work for FTI Consulting Inc. of Washington D.C. At the request of the U.S. Trustee, the order prohibits FTI from seeking “success fees, transaction fees, or other back-end fees” regardless of how the Chapter 11 proceeding ends.
In initial motions filed in April, Vestis forecasted it would pay FTI Consulting $1.58 million of the $4.5 million in professional fees it expects to pay consultants over the 13-week course of the Chapter 11 proceedings. That same budget estimated the Unsecured Creditors Committee would ultimately incur legal and other professional fees of $525,000.
Judge Silverstein is scheduled to consider objections to Vestis’ restructuring plan at a hearing Monday, where the Judge could be asked to approve an order indemnifying two companies Vestis hired to conduct going-out-of-business sales at all 48 Sport Chalet stores, eight of 68 Eastern Mountain Sports stores and one of 35 Bob’s Stores locations.
Late last month, FTI (NYSE:FCN) reported revenues at its Corporate Finance & Restructuring segment grew 19.7 percent in the first quarter ended March 31 to $127.2 million due primarily to “higher demand and realized rates for the segment’s distressed services in North America.”
