3 - Restructuring Services

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Exhibit B
Malfitano Declaration
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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.
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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.
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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
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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.
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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
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Exhibit 1
Services Agreement
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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
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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
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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
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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
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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
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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
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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.
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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
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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
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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.
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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