joint application by debtors to employ tax · pdf filepayments to johnson, and do not owe any...

UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA

In re: Lyman Holding Company, et al., Debtors.1

Chapter 11 Case No. 11-45190

(Jointly Administered)

JOINT APPLICATION BY DEBTORS TO EMPLOY TAX RETURN PREPARER

(JOHNSON, TIBODEAU, BOTTIN & CO., P.S.C.)

TO: United States Bankruptcy Judge, the United States Trustee, and other parties in interest

identified in Local Rule 2014-1.

1. The above-named debtors and debtors in possession (“Debtors”) have filed

petitions for reorganization under Chapter 11 of the Bankruptcy Code, Title 11, United States

Code, and require assistance in preparation of tax returns.

2. The Debtors wish to employ the firm of Johnson, Tibodeau, Bottin & Co., P.S.C.

(“Johnson”), to prepare federal and state tax returns for the year ending December 31, 2011.

3. This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and

1334, Bankruptcy Rule 5005, and Local Rule 1070-1. This is a core proceeding. The petitions

in these cases were filed on August 4, 2011 (the “Filing Date”). The cases are now pending in

this Court.

1 Jointly administered estates of the following Debtors: Lyman Holding Company Case No. BKY 11-45190, Lyman Lumber Company Case No. BKY 11-45191, Automated Building Components, Inc. Case No. BKY 11-45192, Building Materials Wholesalers, Inc. Case No. BKY 11-45193, Carpentry Contractors Corp. Case No. BKY 11-45194, Construction Mortgage Investors Co. Case No. BKY 11-45196, Lyman Development Co. Case No. BKY 11-45199, Lyman Lumber Wisconsin, Inc. Case No. BKY 11-45201, Lyman Properties, L.L.C. Case No. BKY 11-45202, Mid-America Cedar, Inc. Case No. BKY 11-45203, Woodinville Lumber, Inc. Case No. BKY 11-45204, Woodinville Construction Services, L.L.C. Case No. BKY 11-45206.

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Case 11-45190 Doc 444 Filed 03/16/12 Entered 03/16/12 17:07:14 Desc Main Document of 19

4. This Application arises under 11 U.S.C. §§ 327(a) and 328, and Bankruptcy Rule

2014. This Application is filed under Local Rules 2014-1 and 9013-4. The Debtors seek an

order authorizing the employment of Johnson as tax return preparer.

5. The Debtors have not previously worked with Johnson, have not made any

payments to Johnson, and do not owe any money to Johnson. Based on Johnson’s reputation in

the business community and Johnson’s experience with similar clients, the Debtors believe that

Johnson is well-qualified to provide the necessary tax services to the Debtors, and that the

retention of Johnson is in the best interests of the estates.

6. The terms of Johnson’s retention are set forth in the “Engagement Letter”

attached as Exhibit A. As described in the Engagement Letter, Johnson would be engaged to

prepare the Debtors’ federal and state tax returns, with a target completion date of August 15,

2012. The specific tax returns to be prepared are listed on Exhibit A to the Engagement Letter.

For this service, the Debtors would pay Johnson a total of $28,000, which includes time spent for

tax preparation services, plus costs. The Debtors believe this amount represents a fair price for

preparation of multiple returns for numerous entities. The Engagement Letter also provides that,

as the work progresses, Johnson may submit monthly invoices to the Debtors.

7. The Engagement Letter also provides that disputes over Johnson’s services be

mediated by the American Arbitration Association. Nevertheless, Johnson has agreed, as

reflected by the Unsworn Declaration of Brett R. Tibodeau, that any dispute regarding services

will be decided by the Bankruptcy Court so long as it retains jurisdiction. The proposed order to

employ Johnson submitted with this Application amends the Engagement Agreement

accordingly.

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8. Thus, in accordance with paragraph 9 of this Court’s Instructions for Filing a

Chapter 11 Case, the Debtors propose that: (a) Johnson be authorized to schedule a hearing on its

applications for allowance of fees and reimbursement of expenses not more than once every

ninety (90) days; (b) Johnson be allowed to submit regular monthly bills to the Debtors, with

copies to the Committee of Unsecured Creditors and the Office of the United States Trustee; and

(c) the Debtors be authorized to pay up to 80% of such fees and 100% of such costs on a monthly

basis, subject to later court approval under Section 330 of the Bankruptcy Code.

9. The Debtors have reviewed the Unsworn Declaration of Brett R. Tibodeau, and

believe that the employment of Johnson is in the best interests of their estates and that Johnson

does not hold or represent any interest adverse to the estates, and is “disinterested” within the

meaning of Section 327(a) of the Bankruptcy Code. In the event the United States Trustee, the

Court, or other party asserts or is concerned that Johnson is not qualified to provide services to

the Debtors, the Debtors request that a hearing be scheduled.

10. The Debtors believe that the granting of this application is in the best interests of

the Debtors and is in the best interests of creditors and parties in interest in these Chapter 11

proceedings. The Debtors’ decision to enter into the Engagement Letter is an appropriate

exercise of the Debtors’ business judgment and will benefit the Debtors’ estates and creditors.

The Debtors’ tax returns must be prepared, and the Debtors believe that Johnson will accurately

and efficiently complete this task.

11. No previous application has been made for employment of a tax return preparer.

12. This application has been served on the parties set out in Local Rule 2014-1(a).

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EXHIBIT A

ENGAGEMENT LETTER






UNSWORN DECLARATION OF BRETT R. TIBODEAU, CPA

Brett R. Tibodeau makes the following declaration in support of the application by

the above-named debtors (“Debtors”) to employ Johnson, Tibodeau, Bottin & Co., P.S.C.

(“Johnson”) as tax return preparer.

1. I am a principal in the accounting firm of Johnson. I make this declaration in

support of the Debtors’ joint application to employ Johnson as tax return preparer in these cases (the

“Application”).

2. The representation contemplated under the Application consists of tax return

preparation and related bookkeeping adjustments for only the year ending December 31, 2011.

3. Johnson has never been an elected officer or director of the Debtors, and no

employee of Johnson is an insider of the Debtors.

4. Neither Johnson nor any member of the firm is a relative, as defined in 11 U.S.C.

§ 101(45), of any judge of the United States Bankruptcy Court for the District of Minnesota, and has



not had, and does not now have, any past or present connection with any such judge as might render

approval of employment improper.

5. As described in the Application, Johnson was not employed by the Debtors prior to

the chapter 11 filings, has received no payments from the Debtors, and is not owed any money by

the Debtors.

6. In connection with the proposed retention by the Debtors in these cases, Johnson

researched its client and conflict database to determine whether it had any relationships with the

following entities:

a. The Debtors;

b. the secured creditors; and c. the 20 largest unsecured creditors of each of the Debtors. Based on the above-referenced conflicts check, and to the best of my knowledge, Johnson does not

hold or represent any interest adverse to the Debtors’ estates, and does not have any connection with

the Debtors, the aforementioned creditors of the estates, their attorneys or accountants, the United

States Trustee, or any other person employed in the office of the United States Trustee within the

meaning of Bankruptcy Rule 2014.

7. There may be other persons within the scope of Bankruptcy Rule 2014 that,

unknown to me, Johnson has represented in particular matters in the past. We agree not to represent

such persons who are creditors or other parties in interest in these cases while representing the

Debtors, without further disclosure. Johnson agrees to update the disclosure information from time

to time if and when additional parties with an interest in or a relationship with the Debtors are

identified by the Debtors, in writing, to Johnson.

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8. Except as the Court may determine from the circumstances disclosed above,

Johnson does not hold or represent any interest adverse to the estates, and Johnson is a

“disinterested person” within the meaning of 11 U.S.C. § 327(a).

9. The compensation agreed to be paid by the Debtors to Johnson for its tax return

preparation services is set out in the Engagement Letter attached as Exhibit A to the Application, all

as may be allowed by the Court following periodic fee application.

10. The Employment Agreement states that all disputes regarding Johnson’s services be

mediated by the American Arbitration Association, however Johnson consents to entry of an order

by the Bankruptcy Court requiring that disputes over services will be resolved by the Bankruptcy

Court for as long as it retains jurisdiction.

11. The source of all payments to Johnson was or will be from earnings or other current

income of the Debtors. In the bankruptcy case, Johnson has not received and will not receive

transfer of property other than such payments from the Debtors.

12. No understanding or agreement exists for a division of fees or compensation

between affiant, the Johnson firm, or any other person or entity expect for such division of

compensation as exists among the owners of Johnson.

13. Johnson requests that it be authorized to schedule fee applications at 90-day intervals

and to receive monthly payment from the Debtors in accordance with the procedures set out in

paragraph 9 of the Court’s Instructions for Filing a Chapter 11 Case, as requested by the Debtors in

the Application.

14. Johnson is aware of the conflict and disgorgement rules regarding representation of

debtors in Chapter 11 cases, and has the financial ability to return fees if the Court so orders at any

point.

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In re: Lyman Holding Company, et al.,

Debtors.1



CERTIFICATE OF SERVICE

Douglas W. Kassebaum, under penalty of perjury, states that on March 16, 2012, he

caused to be served the following:

1. Joint Application by Debtors to Employ Tax Return Preparer (Johnson, Tibodeau, Bottin & Co., P.S.C.);

2. Unsworn Declaration of Brett A. Tibodeau, CPA;

3. Proposed Order; and

4. Certificate of Service

by sending true and correct copies via ECF to the parties on the attached service list. Dated: March 16, 2012 /e/ Douglas W. Kassebaum Douglas W. Kassebaum

1 Jointly administered estates of the following Debtors: Lyman Holding Company Case No. BKY 11-45190, Lyman Lumber Company Case No. BKY 11-45191, Automated Building Components, Inc. Case No. BKY 11-45192, Building Materials Wholesalers, Inc. Case No. BKY 11-45193, Carpentry Contractors Corp. Case No. BKY 11-45194, Construction Mortgage Investors Co. Case No. BKY 11-45196, Lyman Development Co. Case No. BKY 11-45199, Lyman Lumber Wisconsin, Inc. Case No. BKY 11-45201, Lyman Properties, L.L.C. Case No. BKY 11-45202, Mid-America Cedar, Inc. Case No. BKY 11- 45203, Woodinville Lumber, Inc. Case No. BKY 11-45204, Woodinville Construction Services, L.L.C. Case No. BKY 11-45206.

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Lyman Holding Company and Related Debtors Main Case: Bky No. 11-45190 SERVICE LIST Served via ECF

US Trustee and Other Required Parties

U.S. Trustee Sarah J. Wencil U.S. Trustee's Office 1015 US Courthouse 300 South Fourth Street Minneapolis, MN 55415 [email protected] [email protected]

Debtors

Special Counsel for Debtors c/o Robert T. Kugler Leonard, Street and Deinard 150 South Fifth Street, #2300 Minneapolis, MN 55402 [email protected]

Official Committee of Unsecured Creditors

Connie A. Lahn, Esq. Lorie A. Klein, Esq. David E. Runck, Esq. Fafinski Mark & Johnson, P.A. 400 Flagship Corporate Center 775 Prairie Center Drive Eden Prairie, MN 55344 [email protected] [email protected] [email protected]

Major Secured Creditors

Lumbermens Merchandising Corp. c/o Mark J. Kalla Barnes & Thornburg LLP 225 South Sixth Street, #2800 Minneapolis MN 55402 [email protected]

TCF National Bank c/o Steven W. Meyer, Esq. Rebecca G. Sluss, Esq. David B. Galle, Esq. Oppenheimer, Wolff & Donnelly Plaza VII, Suite 3300 45 South Seventh Street Minneapolis, MN 55402 [email protected] [email protected] [email protected]

US Bank, N.A. c/o John R. McDonald, Esq. Marcus A. Ploeger, Esq. Briggs and Morgan, P.A. 2200 IDS Center 80 South 8th St. Minneapolis, MN 55402 [email protected] [email protected] Wells Fargo Bank, N.A. c/o Michael R. Stewart, Esq. Colin F. Dougherty, Esq. Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402-3901 [email protected] [email protected]

Interested Parties

SP Asset Management c/o Donald E. Rothman, Esq. Steven E. Fox, Esq. Brett J. Nizzo, Esq. Riemer & Braunstein LLP Seven Times Square, Suite 2506 New York, NY 10036 [email protected] [email protected] [email protected] SP Asset Management c/o Jeffrey W. Jones, Esq. Paul L. Ratelle, Esq. Fabyanske, Westra, Hart & Thomson, P.A. 800 LaSalle Plaza, Ste 1900 Minneapolis, MN 55402 [email protected] [email protected]

Debt Acquisition Group, LLC Craig A. Loren 10 Rockefeller Plaza, Suite 601 N.Y., NY 10020 [email protected]

Guardian Building Products Distribution, Inc. c/o Timothy J. Prindiville Nilsson Law Offices, P.A. 900 Flour Exchange Building 310 Fourth Avenue South Minneapolis, Minnesota 55415 [email protected] Patrick M. Sneed Davis, Pickren, Seydel & Sneed, LLP 285 Peachtree Center Avenue N.E. 2300 Marquis II Tower Atlanta, GA 30303 [email protected]

Pension Benefit Guaranty Corporation c/o Jon Chatalian, Esq. Office of the Chief Counsel 1200 K Street, N.W., Suite 340 Washington, DC 20005-4026 [email protected] [email protected]

Sierra Pacific Industries c/o Gordon B. Conn, Jr. Kalina, Wills, Gisvold & Clark 6160 Summit Drive, Suite 560 Minneapolis, MN 55430 [email protected]

Minnetonka Public Schools District 276 c/o Monica Clark Dorsey & Whitney 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402-1498 [email protected]

Central States, Southeast and Southwest Areas Pension Fund c/o David L. Mitchell Robins, Kaplan, Miller & Ciresi 2800 LaSalle Plaza 800 LaSalle Avenue Minneapolis, MN 55402 [email protected]

Central States Law Dept. c/o Timothy C. Reuter, Esq. 9377 West Higgins Rd Rosemont, IL 60018 [email protected]

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mailto:[email protected]





















Lyman Holding Company and Related Debtors Main Case: Bky No. 11-45190 SERVICE LIST Served via ECF

Stoel Rives LLP Attn: Brandy A. Sargent 900 SW Fifth Ave., Suite 2600 Portland, OR 97204 [email protected]@stoel.com [email protected]@stoel.com

BEP/Lyman, LLC c/o Kenneth Corey-Edstrom Larkin Hoffman & Daly & Lindgren Ltd. 1500 Wells Fargo Plaza 7900 Xerxes Avenue South Minneapolis, MN 55431-1194 [email protected]

Lyman, LLC c/o George H. Singer Lindquist & Vennum PLLP 80 South Eighth Street, #4200 Minneapolis, MN 55402 [email protected]

Norcraft Companies LP d/b/a Midcontinent Cabinetry c/o Thomas J. Flynn Larkin, Hoffman, Daly & Lindgren Ltd. 1500 Wells Fargo Plaza 7900 Xerxes Avenue South Bloomington MN 55431-1194 [email protected]

Midland Loan Services c/o Larry B. Ricke Ricke & Sweeney, PA Degree of Honor Building, #600 325 Cedar Street St. Paul, MN 55101 [email protected]

Midland Loan Services c/o Demetra L. Liggins Thompson & Knight, LLP Three Allen Center 333 Clay Street, #3300 Houston, TX 77002 [email protected]

Lake States Lumber, Inc. c/o Joel A. Hilgendorf David G. Hellmuth Hellmuth & Johnson, PLLC 8050 West 78th Street Edina, MN 55439 [email protected]

Kenneth Brown c/o Robert D. Metcalf Stuart J. Miller [email protected] [email protected]

Simonton Windows, Inc. c/o Sarah E. Doerr Moss & Barnett 4800 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402 [email protected]

Ryland Group, Inc. c/o Morgan W. Kavanaugh Wilkerson & Hegna, PLLP 7300 Metro Boulevard, #300 Edina, MN 55439

John F. Waldron c/o Joseph W. Dicker 1406 West Lake Street, #209 Minneapolis, MN 55408 [email protected]

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ORDER GRANTING APPLICATION BY DEBTORS

TO EMPLOY TAX RETURN PREPARER (Johnson, Tibodeau, Bottin & Co., P.S.C)

This matter came before the Court on the joint application by the debtors to employ

Johnson, Tibodeau, Bottin & Co., P.S.C. as tax return preparer in these chapter 11 cases. Based

on the documents of record herein, it appears that it is necessary for the debtors to employ a tax

return preparer, that the proposed terms of the employment are reasonable under the

circumstances, and that the professional selected by the debtors does not hold or represent an

interest adverse to the estates and is disinterested within the meaning of 11 U.S.C. § 327(a).

IT IS HEREBY ORDERED:

1. The debtors’ employment of Johnson, Tibodeau, Bottin & Co., P.S.C. as its tax

return preparer, pursuant to 11 U.S.C. §§ 327 and 328, is hereby approved.

2. Notwithstanding anything to the contrary in the engagement agreement between

the debtors and Johnson, Tibodeau, Brottin & Co., P.S.C., disputes regarding services shall be

resolved by this court until it no longer has jurisdiction to do so.



3. Fee applications by Johnson, Tibodeau, Bottin & Co., P.S.C. may be heard on 90-

day intervals.

4. The debtors are authorized to pay monthly invoices of Johnson, Tibodeau,

Bottin & Co., P.S.C. under the procedures in Instruction No. 9(c) of the Instructions for Filing a

Chapter 11 Case, as amended, adopted by this court effective January 27, 2003.

Dated: _____________________________

Dennis D. O’Brien United States Bankruptcy Judge

5077011.2

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