Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 EOD 03/24/17 16:41:50 Exhibit B Malfitano Declaration Pg 1 of 23 Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 EOD 03/24/17 16:41:50 Pg 2 of 23 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION Chapter 11 In re: hhgregg, Inc., et al.,1 Debtors. Case No. 17-01302-RLM-11 (Jointly Administered) I, Joseph A. Malfitano, hereby declare under penalty of perjury and pursuant to 28 U.S.C. § 1746 that the following is true and correct to the best of my knowledge, information, and belief: 1. I am the Founder and Managing Member of Malfitano Advisors, LLC (“Malfitano”). 2. I am duly authorized to make and submit this declaration (this “Declaration”) on behalf of Malfitano in support of the Debtors’ Application for Entry of Order, Pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code, (I) Authorizing Employment and Retention of Malfitano Advisors, LLC as the Debtors’ Asset Disposition Advisor and Consultant, Nunc Pro Tunc to the Petition Date, and (II) Granting Related Relief (the “Application”).2 Except as otherwise noted, I have personal knowledge of the matters set forth herein. Malfitano’s Qualifications 3. Malfitano is well-qualified to provide asset disposition and consulting services to the Debtors. Malfitano is a boutique firm that provides clients around the globe with asset 1 The Debtors in these cases, along with the last four digits of each Debtor’s federal tax identification number, are: hhgregg, Inc. (0538); Gregg Appliances, Inc. (9508); and HHG Distributing LLC (5875). The location of the Debtors’ corporate headquarters is 4151 East 96th Street, Indianapolis, IN 46240. 2 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Application. Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 EOD 03/24/17 16:41:50 Pg 3 of 23 acquisition and disposition advice, particularly in the context of restructurings and reorganizations. Malfitano helps formulate asset disposition plans for a range of assets, such as retail inventory, real estate, accounts receivable, furniture, fixtures and equipment, and industrial machinery and equipment. Leveraging almost two decades of experience structuring complex asset acquisition and disposition transactions, both from the sell and buy side, Malfitano assists clients by (i) identifying non-core assets, (ii) formulating a program to dispose of those assets in order to maximize the assets’ value, including the preparation of due diligence and related offering materials, (iii) implementing the agreed upon program and assisting in the solicitation and evaluation of disposition proposals, and (iv) monitoring the disposition process to its conclusion. 4. I personally have been involved, either as a lawyer or as a business executive, in some of the largest retail bankruptcies in this country’s history including, but not limited to, Linens ‘n Things, Borders Group, The Sharper Image, Boater’s World, Goody’s Family Clothing, Eastern Mountain Sports, and Golfsmith International. I am intimately familiar with the structure and metrics that drive a successful retail liquidation and have been involved in the creation and evolution of retail liquidation agreements since 2007. 5. In addition, in providing prepetition services to the Debtors, Malfitano has developed relevant experience and expertise regarding the Debtors’ inventory and issues surrounding potential store closings. 6. Accordingly, I believe Malfitano is well qualified to perform all services contemplated by the Services Agreement, and to represent the Debtors’ interests in these Cases in a cost-effective, efficient, and timely manner. Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 EOD 03/24/17 16:41:50 Pg 4 of 23 Disclosures Concerning Connections with the Debtors and Parties in Interest 7. In the ordinary course of its business, Malfitano and its affiliates maintains a database for purposes of performing “conflicts checks.” The database contains information regarding its present and past representations and transactions. 8. I obtained a list of the Debtors, certain of the Debtors’ creditors, and other parties in interest in the above-captioned cases from Debtors’ counsel for purposes of searching the aforementioned database and determining the connection(s) which Malfitano or its affiliates has with such entities. 9. Malfitano searched the aforementioned database for the parties in interest identified on the attached Schedule 1. 10. Malfitano’s search of the aforementioned database identified the connections listed on the attached Schedule 2. 11. Neither I, Malfitano, nor any principal, partner, director, officer, or employee thereof, nor any professional retained by Malfitano has agreed to share or will share any portion of the compensation to be received from the Debtors by Malfitano with any other person other than the principals and regular employees of Malfitano. 12. To the best of my knowledge, neither I, Malfitano, nor any principal, partner, director, officer, or employee thereof, nor any professional retained by Malfitano, insofar as I have been able to ascertain, holds or represents any interest adverse to the Debtors or their estates with respect to the matter(s) upon which Malfitano is engaged. 13. Neither I, Malfitano, nor any principal, partner, director, officer, or employee thereof, nor professional retained by Malfitano, insofar as I have been able to ascertain, is (or Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 EOD 03/24/17 16:41:50 Pg 5 of 23 within two (2) years before the date the Debtors filed these chapter 11 cases) a director or officer of the Debtors. 14. To the best of my knowledge, Malfitano is a “disinterested person” within the meaning of section 101(14) of the Bankruptcy Code. 15. Malfitano is conducting further inquiries regarding its retention by any creditors of the Debtors, and upon conclusion of that inquiry, or at any time during the period of Malfitano’s engagement, if Malfitano should discover any facts bearing on the matters described herein, Malfitano will supplement the information contained in this Declaration. Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 EOD 03/24/17 16:41:50 Pg 6 of 23 Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge and belief. Dated: March 24, 2017 MALFITANO ADVISORS, LLC ________________________________ Joseph A. Malfitano Founder & Managing Member Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 Exhibit 1 Services Agreement EOD 03/24/17 16:41:50 Pg 7 of 23 Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 EOD 03/24/17 16:41:50 Pg 8 of 23 Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 EOD 03/24/17 16:41:50 Pg 9 of 23 Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 Pg 10 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 Pg 11 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 Pg 12 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 SCHEDULE 1 TO DECLARATION Potential Parties in Interest I. Debtors hhgregg, Inc. Gregg Appliances, Inc. HHG Distributing LLC II. Secured Creditors Wells Fargo Barclays Regions Suntrust RBS Citizens JPMorgan Chase III. Current Directors Michael Andretti Greg Bettinelli William P. Carmichael Lawrence P. Castellani Benjamin D. Geiger Kenneth Kocher Catherine A. Langham John Roth Peter Starrett Kathleen Cecelia Tierney IV. Largest Unsecured Creditors FRIGIDAIRE CONSIGNMENT ROSETTA MARKETING GROUP, LLC WARRANTECH CPS, INC ZIMMERMAN ADVERTISING QUAD/GRAPHICS, INC. CURTIS INTERNATIONAL LTD. HAIER AMERICA TRADING, LLC INSURANCE RESERVES (IBNR) - WORKERS COMP EXCL. OHIO SEIKI LLC CHECK REFUNDS OWED (VARIOUS INDIVIDUALS) SERTA WHIRLPOOL CORPORATION GENERAL ELECTRIC CO. - MABG Pg 13 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 Pg 14 of PERSONAL PROPERTY TAXES (DUE TO VARIOUS AGENCIES) STEVE SILVER COMPANY PAYROLL WITHHOLDINGS (TAXES, GARNISHMENTS, PET W/H, CRITICAL ILLNESS W/H, ETC.) REAL ESTATE TAXES (DUE TO VARIOUS LANDLORDS/AGENCIES) INSURANCE RESERVES (IBNR) - GENERAL LIABILITY CLAIMS INSTALLS INC, LLC SPIRIT MIDEA AMERICAN CORP. KLIPSCH TREASURER OF STATE - OHIO ANTHEM BLUE CROSS & BLUE SHIELD MONSTER LLC FLORIDA DEPT OF REVENUE BSH HOME APPLIANCES CORP. U.S. TRANSPORT CORPORATION GE CAPITAL (SYNCHRONY) RYDER INTEGRATED LOGISTICS, INC. ICON TOPHAT LOGISTICAL SOLUTIONS, LLC SEVERANCE - DENNIS MAY CORINTHIAN INC. HOME MERIDIAN. SALES TAX AUDIT - ESTIMATE - INDIANA DEPT OF REVENUE LG ELECTRONICS USA, INC. SALES TAX AUDIT - ESTIMATE - FLORIDA DEPT OF REVENUE INDIANA DEPT OF REVENUE BOSE CORPORATION UNCLAIMED PROPERTY (VARIOUS STATES) XPO LAST MILE, INC. TRANSPORTATION INSIGHT, LLC SOFAMASTER LLC KPMG PETRA INDUSTRIES, INC. BIG E TRANSPORTATION TENNESSEE DEPT OF REVENUE WELLS FARGO BANK, N.A. GEORGIA DEPT OF REVENUE RYDER TRANSPORTATION SERVICES STAPLES CONTRACT & COMMERCIAL, INC. NORTH CAROLINA DEPT OF REVENUE ILLINOIS DEPT OF REVENUE HOME ACCENTS HOMESTRETCH INC. SEVERANCE - KEITH ZIMMERMAN MCKINSEY RECOVERY & TRANSFORMATION 2 Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 JUST MARKETING INC. COMMONWEALTH OF PA DANBY PRODUCTS INC. CISCO SYSTEMS CAPITAL CORPORATION PRINCIPAL FINANCIAL GROUP, INC. 89 DEGREES INC. VIRGINIA DEPARTMENT OF TAXATION TOTAL DEFENSE WASTE MANAGEMENT INC OGLETREE, DEAKINS, NASH, SMOAK & ST TEMPUR-PEDIC COMPTROLLER OF MARYLAND - SUT CYBERTRON INTERNATIONAL, INC. INSURANCE RESERVES (IBNR) - WORKERS COMP OHIO ONLY SOUTH CAROLINA DEPT OF REVENUE SALES TAX AUDIT - ESTIMATE - GEORGIA DEPT OF REVENUE SALES TAX AUDIT - ESTIMATE - ILLINOIS DEPT OF REVENUE LOLOI INC. HOOVER, INC. BUILTECH CONSTRUCTION, INC. ERGOTRON, INC. CHUB JOFRAN INC SOUTHERN MOTION Florida Power & Light Company (FPL) CAPITOL CONSTRUCTION SERVICES, INC. BLUESKY TECHNOLOGY PARTNERS, INC. SUNNY DESIGNS, INC CENTURYLINK KENTUCKY DEPT OF REVENUE CORPORATION SERVICE COMPANY CAP & ASSOCIATES, INC. KEURIG GREEN MOUNTAIN, INC. FABRICTECH 2000 LLC ALABAMA DEPT OF REVENUE DIGITAL PRODUCTS INTERNATIONAL INC Constellation NewEnergy/4640 CANON USA, INC. TISDEL DISTRIBUTING BUSH INDUSTRIES, INC. RIEDY CONSTRUCTION INC LOUISIANA DEPT OF REVENUE ORACLE AMERICA, INC. COAST TO COAST IMPORTS, LLC LENNOX INDUSTRIES INC SEVERANCE - TREVOR MAY 3 Pg 15 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 DELTA FURNITURE MFG., LLC DEMAR LOGISTICS, INC. CROWN MARK, INC. J.B. HUNT TRANSPORT, INC. JARDEN CONSUMER SOLUTIONS PROLOGISTIX JOHN HICKEY V. Landlords W. Gerald Throgmartin W. Gerald Throgmartin La Place Properties Receivership Washington Place Indiana, LLC Don Throgmartin Scatterfield Station, LLC Simon Property Group, L.P. Don R. Throgmartin Muncie Investment, LLC WHITEHALL CROSSING A-II WGT V, LLC CPP River Fall Mall LLC et al George Gelsebach Aviana Company Ltd. dba Aviana Company Ltd., LLC ARC JCLOUKY001, LLC HAP Property Owner, LP Critzer Properties, LLC RPAI US Management LLC SC Windsor Square LLC DDR Carolina Pavilion LP DDRTC Columbiana Station II LLC Schottenstein Residential Realty LLC Lightning PropCo III, LLC Monarch Rivergate, LLC LPF One Hundred Oaks, Inc Greenwood Marketplace II,LLC Cool Springs Torrence, LLC The Oaks Shopping Center I Hart TC I-III, LLC DFG-Knoxville, LLC T NG Retail Dill OH, LLC Inland Commercial Real Estate Services Hobby Lobby Stores, Inc. BRE DDR Crocodile Indian Springs LLC Kings Mall Partners, LLC New Plan Property Holding Company 4 Pg 16 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 Noblesville Partners, LLC Tri-County Commons Associates, LLC Big Box Property Owner E, LLC Shoppes of Beavercreek Ltd. Dayton Mall II LLC Harveyco, LLC RPAI Newnan Crossing II, LLC J&P Family L.L.L.P. KIR Augusta I 044, LLC DDRTC WESTSIDE CENTRE LLC Provest Eisenhower Associates LLC Monarch at Montgomery LLC ProLogis Taylor Park Ltd. Tanglewood Park LLC. et al Chillicothe Mall, Inc. Farnsworth Holdings, Ltd. The Thomas Company Drexel Delaware Sawmill Holdings, LLC ETCBW, LLC Cleveland American, LLC DFG-Great Lakes Plaza, LLC DeVille Developments M&G Equities DFG-CHapel HIll LLC WGT V, LLC B & G Properties Limited Partnership Riverchase Center LLC Highway 11/31, LLC Duke Realty Limited Partnership Douglasville Retail Facility LLC Monarch at Stonecrest Pavilion, LLC DDRTC Barrett Pavilion LLC Glenwood Lotz Mall Corners Holding Company, LLC DDRTC Fayette Pavilion III and IV LLC USPG Portfolio Five, LLC WGT V, LLC Gateway Windward II, LLC Cumberland Crossing, LLC Mullin Properties, LLC ARC ASANDSC001, LLC Valley Hills Mall L.L.C. Medalist Fund 1-A, LLC Birmingham Realty Company Waterside Property Investment, LLC Spirit HH Mt. Juliet, TN, LLC 5 Pg 17 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 USPG Franklin LLC Spirit SPE Loan Portfolio 2013-3, LLC DDR Ohio Opportunity II, LLC Loral Ontario Property, LLC Berg-Mooresville Crossing II, LLC The Rouse Companies, LLC GW Mishawaka IN, LLC Mayfaire Town Center, LP HH Golden Gate LLC KIR Snellville L.P. Chatham Plaza, LLC Kimco Realty G.B Evansville Developers LLC RAF Johnson City LLC BRE Retail NP Memphis Commons Owner LLC Southaven Towne Center II, LLC Duke Realty Limited Partnership Fayetteville Mall Holdings, LLC Highway One South, LLC DDRTC Alexander Place LLC Spirit SPE Loan Portfolio 2013-2, LLC Pacific Apex, LLC Midland Southpoint Development Company, LLC Hanes Mall Boulevard Retail Partners, LLC Meeting Street HHG, LLC Buckhead Triangle, L.P. Cole HH North Charleston SC, LLC Myrtle Beach Farms Company, Inc Overlook Village 1685, LP Prologis Southside Retail, LLC Cole MT Daytona Beach FL, LLC Oakleaf Station Land Trust u/t/a dated September Kimco Avenues Walk, LLC WGT V, LLC DDR Homestead LLC Ireland Tallahassee, Ltd. Duke Realty Limited Partnership ARC CLORLFL001, LLC SGO Osceola Village, LLC 37 Gregg LLC 1810 Rinehart, LLC BM Colonial Town Center LLC Lakeland Retail, LLC Treasure Coast-JCP Associates, Ltd Ocala Retail 2015 LLC 6 Pg 18 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 West Melbourne Town Center, LLC The Pensacola Airport, LLC Mobile Festival Acquisition LLC Welling Realty, LLC Pine Trail Square, LLC Pan York Glades, LLC KTR Seneca II LLC Brixmor/IA Clearwater Mall, LLC Tampa Palms Shopping Plaza LLC Sarasota Crossings, Ltd. DDR Southeast Cortez, L.L.C. Port Richey Partners LLC Susanne Bard, Trustee Brixmor GA Coastal Way, LLC BRE DDR Carillon Place LLC Page Plaza Acquisition, LP Deer Capital, LLC PR Pembroke Crossing, LLC SC (Westland Promenade) Limited Partnership Flamingo Sunrise Investments,LLC Bal Harbour Square LLC Sunniland Center, Ltd. Kosoy Kendall Associates LLC Short PumpTown Center LLC Midlothian Huguenot AT LLC LEA Company Princess Anne Properties, Inc. Belle Isle IHOP, LLC and DHJ Chesapeake LLC MACH II MCB SILVER PORTFOLIO OWNER ONE, LLC Colonial Heights Holdings, LLC Southeast Holdings LLC TKG Paxton Towne Center Development, LP North Mall Associates Voorhees Environmental Corp Red Rose Commons Associates LP WashREIT Centre at Hagerstown LLC PR Wyoming Valley Limited Partnership Brixmor Residual Dickson City Crossing, LLC BRE DDR BR Winchester VA LLC DGI LS, LLC Berkshire West LLC Brandywine Square LLC ECHO Swedesford Associates LP KIR Montgomery 049 LLC Boulevard North Associates, L.P. Lincoln Plaza Center, L.P. 7 Pg 19 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 Mall at Lehigh Valley, L.P. US MJW East Gate IV, LLC BRE RC Deptford NJ LLC BFW/Pike Associates, LLC TKG Christiana Center, LLC Dover DE LLC Acadia Town Center Holdco, LLC ICON EX US PROPERTIES OWNER POOL 2 WEST/NORTHEAST/ DDR Southeast Loisdale, L.L.C. Potomac Run, LLC Fair Lakes Promenade Retail, LLC RREEF America REIT II Corp. MM Potomac Festival II, LLC AMCB Manassas Promenade LLC RPAI US Management LLC Madison Waldorf LLC Congressional North Associates Limited Partnership Frederick Crossing Associates, LLC VEI Catonsville LLC Arundel Mills Marketplace Limited Partnership RPAI US Management LLC TOWSON UE LLC Annapolis Plaza LLC 6711 Glen Burnie Retail, LLC Gravois Bluffs II, LLC Exchangepoint Property Management, LLC Spirit Realty capital, Inc Cole HH Chesterfield MO, LLC Samdoz, Inc Cranberry Commons Center I LP Cole HH North Fayette PA, LLC RPAI US Management LLC PCE Partner, LLC COFAL Partners, L.P. GS Erie DST RAF Investments Ltd Ohio Valley Mall Company Grand Central Parkersburg, LLC MLRP Lockport 1 LLC Inland US Management LLC OLP Crystal Lake LLC SFERS Real Estate Corp. KK BRE DDR Woodfield Village LLC FRLP, Inc FIDC III LLC New Plan of Arlington Heights, LLC 8 Pg 20 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 Cole HH Merrillville IN, LLC Cole HH Joliet IL LLC Brixmor Heritage Square, LLC Highbook LLC IRC Retail Centers OLP Niles LLC Wilson AmCap II, LLC North Riverside Cermak LLC SFI Ford City - Chicago LLC Fordbook, LLC Mall at White Oaks, LLC CTC Retail LLC Fox River Shopping Center LLC Palmetto Investors LLC Westgate Investors LLC HP WB Village, LLC Mall of Louisiana, LLC W. Gerald Throgmartin La Place Indiana Receivership 9 EOD 03/24/17 16:41:50 Pg 21 of Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 Pg 22 of SCHEDULE 2 TO DECLARATION a. Malfitano’s founder and managing member, Joseph Malfitano, was previously employed by Hilco Trading, LLC (d/b/a Hilco Global), the parent company for approximately 22 entities operating around the globe (“Hilco Global”), from August 2007 to December 2015. While employed at Hilco Global, Joseph Malfitano served as the Deputy General Counsel and later as an Executive Vice President. One or more entities under Hilco Global may be a bidder for some or all of the Debtors’ assets. b. In matters unrelated to the Debtors, an affiliate of Malfitano has provided legal services to various entities owned or controlled by Hilco Global. c. In matters unrelated to the Debtors, an affiliate of Malfitano has provided legal services to Gordon Brothers Retail Partners, LLC (“GBRP”). bidder for some or all of the Debtors’ assets. GBRP may be a d. In matters unrelated to the Debtors, an affiliate of Malfitano has provided legal services to various entities owned or controlled by Tiger Capital Group, LLC (“Tiger”). One or more entities owned or controlled by Tiger may be a bidder for some or all of the Debtors’ assets. e. In matters unrelated to the Debtors, an affiliate of Malfitano has provided legal services to various entities owned or controlled by Great American Group, LLC (“GA”). One or more entities owned or controlled by GA may be a bidder for some or all of the Debtors’ assets. In addition, unrelated to Malfitano, upon information and belief, GA previously performed certain appraisal services for the Debtors or their lenders and is currently a lender to the Debtors. f. Malfitano’s founder and managing member, Joseph Malfitano, through his legal practice with Joseph A. Malfitano, PLLC, his previous association with Young Conaway Stargatt & Taylor LLP and/or through his previous employment with Hilco Global, currently does, has in the past, and will continue from time to time to represent certain of the national inventory liquidation firms in matters unrelated to the Debtors. g. Prior to the Petition Date, Malfitano was engaged by the Debtors in connection with the eighty-eight store closing project. Malfitano was paid in full in connection with such assignment prior to the Petition Date. Case 17-01302-RLM-11 Doc 356-2 Filed 03/24/17 23 EOD 03/24/17 16:41:50 Pg 23 of h. Because of the magnitude of the entire creditor list in these cases, it is possible that Malfitano may represent or may have represented other creditors of the Debtors but does not represent any such creditors in connection with these cases. Malfitano presently or in the past has served as a professional person in other matters, wholly unrelated to the Debtors or these cases, in which other attorneys, accountants and other professionals of the Debtors, creditors, or other parties in interest may have also served or serve as professional persons. 2
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