In re:

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE
)
) Chapter 11
)
CRDENTIA CORP., et all, ) Case No. 10-10926 (BLS)
)
Debtor. ) Jointly Administered
)
) Hearing Date: April 16, 20 I 0 at I :30 p.m.
) Objection Deadline: April 9, 2010 at 4:00p.m.
---------------------------
APPLICATION FOR AN ORDER PURSUANT TO SECTIONS 327(a), 328(a) AND
1103(a) OF THE BANKRUPTCY CODE AUTHORIZING AND APPROVING THE
EMPLOYMENT AND RETENTION OF KLEHR HARRISON HARVEY BRANZBURG
LLP, AS COUNSEL TO THE OFFICIAL COMMITTEE OF
UNSECUREDCREDITORS NUNC PRO TUNC TO MARCH 25, 2009
The Official Committee of Unsecured Creditors (the "Committee") of Crdentia Corp., et
al, (the "Debtors") hereby files this application for entry of an order authorizing the Committee
to retain and employ Klehr Harrison Harvey Branzburg LLP ("Klehr Harrison") as Counsel to
the Committee nunc pro tunc, effective as of March 25,2010, pursuant to 11 U.S.C. 1103(a),
327(a) and 328(a), Federal Rule of Bankruptcy Procedure 2014(a), and Delaware Local
Bankruptcy Rule 2014-1. In support of this application (the "Application"), the Committee
submits the Declaration of Richard M. Beck, a copy of which is attached as "Exhibit A" hereto
(the "Beck Declaration") and respectfully represents as follows:
BACKGROUND
!. This Court has jurisdiction over this Application pursuant to 28 U.S.C. !57 and
1334. Venue of the Debtors' chapter II case is claimed to exist pursuant to 28 U.S.C. 1408
1
The Debtors are:Crdentia Corp., ATS Universal, LLC, Baker Anderson Christie, Inc., CRDE Corp., GHS
Acquisition Corporation, Health Industry Professionals, LLC, HIP Holding, Inc., MP Health Corp., New Age
Staffing, Inc. and Nurses Network, Inc.
DEL 1 74538-1
and 1409. The statutory predicates for the relief sought herein are sections 1103(a), 327(a) and
328(a) of the Bankruptcy Code.
2. On March 17, 2010 (the "Petition Date"), the Debtors each filed a voluntary
petition for relief under chapter 11 of title 11 of the United States Code, II U.S.C. 10 I et seq.
(the "Bankruptcy Code"). The Debtors have continued in the management and operation of their
business and property pursuant to sections II 07(a) and II 08 of the Bankruptcy Code. No trustee
or examiner has been appointed in this case.
3. In accordance with section I I 02(b) of the Bankruptcy Code, on March 25, 20 1 0
(the "Formation Date"), the United States Trustee appointed the Committee in the Debtors' case,
comprised of the following three members: Alpha Capital AG, ARM Holdings and AXSA
Document Solutions. After its formation, the Committee duly selected Klehr Harrison as its
counsel to represent it in all matters during the pendency of this case, subject to Court approval.
RELIEF REQUESTED AND THE BASIS THEREFORE
4. In order for the Committee to perform properly the functions and duties vested in
it by the Bankruptcy Code, it is essential that it have the expertise and advice of experienced
counsel. The professional services for which the Committee desires to employ Klehr Harrison
include, without limitation, the following:
DELl 74538-1
providing the Committee with legal advice with respect to its rights, duties
and powers in the Chapter 11 case and any proceedings or other litigation
related thereto or impacting the estate;
assisting the Committee in analyzing the operation of the Debtors'
business and the desirability of the continuance of such businesses and
other matters;
assisting the Committee in investigating the acts, conduct, assets,
liabilities and financial condition of the Debtors;
assisting the Committee in investigating whether any causes of action may
exist that may impact the estate;
assisting the Committee in identifying and evaluating proposals for a
transaction or transactions involving the Debtors and/or assets of its estate,
2
including a possible sale, merger, recapitalization, equity investment or
other business transaction;
preparing pleadings and applications as may be necessary in furtherance of
the Committee's interests and objectives on behalf of its constituency;
reviewing and analyzing all applications, orders, operating reports,
schedules, statements of affairs and other filings made or to be made by
the Debtors or other parties; advising the Committee with respect to the
foregoing matters and its impact upon unsecured creditors; and taking
such actions with respect to the foregoing matters as the Committee may
determine are appropriate;
consulting with the Debtors, and other creditors, interest holders, and the
United States Trustee concerning administration of the Chapter II Case
and related proceedings;
advising the Committee and otherwise participating in formulating a
chapter II plan;
assisting the Committee in the solicitation and filing with the Court of
acceptances or rejections of any proposed chapter II plan;
advising the Committee with respect to, and implementing as appropriate,
communications or related programs to notify unsecured creditors
regarding material developments in the Chapter II Case, the Committee's
position on any proposed plan, the creditors' obligations relating to any
claims deadline(s), and similar matters;
representing the Committee in hearings and other proceedings in the
Chapter II Case and related proceedings; and
performing such other legal services as may be required and as are deemed
to be in the best interests of the Committee and the constituency it
represents.
5. The Committee respectfully requests entry of an order authorizing it to employ
and retain Klehr Harrison as counsel to the Committee nunc pro tunc, effective as of March 25,
2010, pursuant to sections 1103(a), 327(a) and 328(a) of the Bankruptcy Code. The Committee
specifically requests that Klehr Harrison be employed under a general retainer to assist it in
carrying out its statutory duties under section 1103(c) of the Bankruptcy Code.
6. The Committee believes that Klehr Harrison possesses extensive knowledge and
expertise in the areas of law relevant to the Chapter II Case and related proceedings and that
Klehr Harrison is well-qualified to act as its counsel in such matters. Klehr Harrison has
considerable experience in representing official committees in chapter II reorganization cases.
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DEL! 74538-1
The finn currently represents (and has previously represented) creditors' committees in
numerous significant chapter II cases.
7. Upon information and belief, Klehr Harrison does not represent and does not hold
any interest adverse to the Debtors' estate or its creditors. The Committee has been advised that
Klehr Harrison has no connection with the Debtors, its creditors or other parties in interest in this
Case, other than as described in the Beck Declaration. However, Klehr Harrison is a large firm
and may represent or have represented certain of the Debtors' creditors in matters unrelated to
this case.
8. Because of the significant amount of legal services that will be necessary in the
case and related proceedings, and the fact that the nature and extent of such services are not
known at this time, the Committee believes that the employment of Klehr Harrison as its counsel
for all purposes under a general retainer would be appropriate and in the best interests of the
body of creditors which it represents.
9. Klehr Harrison has agreed to make appropriate applications to this Court for
compensation and reimbursement of expenses in compliance with the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules of this Court and any Order entered by this Court in this case
modifying the timing and/or procedures applicable to the payment of interim compensation and
reimbursement of expenses. Klehr Harrison will bill at its normal hourly rates (Partners: $350-
$700; Associates: $225-$365; Paralegals: $140-$245. The principal attorneys and paralegal at
Klehr Harrison designated to represent the Committee and their current hourly rates are:
DEL I 745381
Richard M. Beck (partner)
Margaret Manning (associate)
Chadd Fitzgerald (paralegal)
4
$495
$350
$150
!0. These hourly arc subject to periodic increase in the nomml wursc of Klehr
Harrison's business. The particular altomeys and pamkgals assigned to this case will from time
to time vary bawd upon the needs of the eng!lgemenr in Klehr lhH'rison's sole discretion. All
such will hill at Klehr HatTison's customary hourly rates tbr work of this nature.
These rates are set at a level designed to fairly cornpem;ate Klel1!' Harrbon for the work of its
attorneys and parakgals and to cover Jixed and routine l)Verhead expe-nses.
11. With respect to Jislmrscmcnts, it is Klehr I [arrisons policy to charge its clients in
all areas of practice for o1her expenses incurred in connection \vith the e!ient'S- matter. lhe
expenses chatged to clients include. among mhcr things, telephone and tclccopicr toll charges.
photocopying scmming and Hling costs. tnt.vel expenses. f{H working meals."
computeri:t.ed research. a...;. \'i/e!i non-ordinary such as secrdadal ovcrtirnc.
NO'I'ICE
12. trustee or examiner has been appointed in the Debtors chapter 11 case.
No1iec of the hearing on this .Application has bc'<'n provided to the Debtors. the Offi.cc of the
United Stales Tmstce, and all pmiics requesting notice pursua!ll to Bankruptcy Rule 2002. The
Cornmiuce submits that under circurnstances. no H.n"ther notke is necessary.
WHKREFOR.E. tlw Commincc respectfully requests the entry of an order authorizing it
to .Kichr 1 bnison ns its coun::::d in this Case nunc pro rune, el'fcctiv-e a!' of !v1arch 25,2010,
and gran ling such other and further rdicf as rnny he jtJst and propt:r.
Dated: March 26. 20Hl
In re:
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
) Chapter 11
)
CRDENTIA CORP., et al, ) Case No. 10-10926 (BLS)
)
Debtor. ) Jointly Administered
)
)
)
DECLARATION OF RICHARD M. BECK
Richard M. Beck deposes and says:
1. I am an attorney at law admitted to practice in the State of Delaware, among other
jurisdictions and courts. I am a member of the finn of Klehr Harrison Harvey Branzburg LLP
("Klehr Harrison"), which firm maintains offices at 919 Market Street, Suite 1000, Wilmington,
DE 19801-3062, as well as in Philadelphia, Pennsylvania and Cherry Hill, New Jersey. I am
familiar with the matters set forth herein and make this declaration in support of the application
of the Official Committee of Unsecured Creditors (the "Committee") ofCrdentia Corp., et al (the
"Debtors") seeking approval to retain Klehr Harrison nunc pro tunc, effective as of March 25,
2010, as counsel to the Committee pursuant to II U.S.C. ll03(a), 327(a) and 328(a).
2. To the best of my knowledge and information, Klehr Harrison neither holds nor
represents any interest adverse to the Committee, the Debtor, its creditors or other parties in
interest or its respective attorneys in this Case. In order to make this determination, I caused a
search of Klehr Harrison's computerized conflict system to be performed upon the following: (i)
the Debtor's name as it appears in its petition; (ii) the parties listed on the Debtor's list of largest
unsecured creditors; (iii) the members of the Committee; (iv) the Debtor's management; (v) the
proposed asset purchaser; (vi) the Debtor's secured creditors and (vi) certain other parties that
DELl 745381
appear m the Debtor's first-day affidavit. As other information becomes available, further
searches will be implemented, and supplemental disclosures will be made as necessary.
3. Based upon information currently available to me, Klehr Harrison has no
connection with the Debtor, its creditors, or any other party in interest herein, or the United
States Trustee or any person employed in the office of the United States Trustee except as
follows:
(a) In 2006, Klehr Harrison represented Crdentia Corp. and its affiliates, Arizona
Home Health Care/Private Duty, Inc., and CRDE Corp., in defending a breach of contract action
in the Superior Court of Delaware. This matter, and Klehr Harrison's representation of these
parties, ceased in 2007. To the best of my knowledge and information, the subject matter of the
prior representation is unrelated to the pending bankruptcy proceedings.
(b) Subsequent to the conclusion of the matter identified in subparagraph (a) above,
in or around April 2007, Klehr Harrison filed suit against Crdentia Corp., Arizona Home
HealthCare!Private Duty, Inc., and CRDE Corp., in the Superior Court of Delaware for unpaid
fees. This matter was resolved and concluded approximately 30 days later. As of the Petition
Date, Klehr Harrison has no claim against any of the Debtors arising from the unpaid fees.
( c ) Klehr Harrison currently represents Quest Diagnostics, an entity identified as an
unsecured creditor in this case, in matters unrelated to the Debtors or this case.
(d) Klehr Harrison previously represented Alpha Capital, AG, an unsecured creditor
and committee member in this case, in a matter unrelated to this case.
4. In addition to the foregoing, due to the size and diversity of its practice, Klehr
Harrison may have represented or otherwise dealt with, and may now be representing or
otherwise dealing with various persons (and its attorneys and accountants) who are or may
2
DEL 1 74538-1
consider themselves creditors, equity security holders or parties in interest in this case but who
are not presently so identified. However, such representations or involvement, if any, do not
relate to the Debtor or its estate.
5. No agreement exists, nor will any be made, to share any compensation received
by Klehr Harrison for its services in this Case with any other person or firm.
6. Klehr Harrison is willing to be retained by the Committee as its counsel and will
make appropriate applications to this Court for compensation and reimbursement of out-of-
pocket expenses, all in accordance with the provisions of the Bankruptcy Code, the Bankruptcy
Rules and the Local Rules of this Court, and any Orders of the Court entered in this case.
I declare under penalty of perjury that the foregoing is true and correct to the best of my
knowledge, information and belief.
Dated: March 30,2010
Wilmington, Delaware
DELl 745381
Is! Richard M Beck
Richard M. Beck
3
In re:
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
) Chapter II
)
CRDENTIA CORP., et al, ) Case No. I 0-10926 (BLS)
)
Debtor. ) Jointly Administered
)
) Related D.!. No.
_________________________ )
ORDER APPROVING THE RETENTION OF KLEHR HARRISON HARVEY
BRANZBURG LLP AS COUNSEL TO THE
OFFICIAL COMMITTEE OF UNSECURED CREDITORS IN THE DEBTOR'S CASE
Upon the application (the "Application") of the official committee of unsecured creditors
(the "Committee") of Crdentia Corp., eta!. (the "Debtors") for an order pursuant to sections
1103(a), 327(a) and 328(a) of the Bankruptcy Code authorizing the Committee to employ Klehr
Harrison Harvey Branzburg LLP ("Klehr Harrison") as its counsel in this case nunc pro tunc,
effective as ofMarch 25,2010, and all undefined terms herein having the meaning ascribed to
them in the Application, and upon the annexed declaration of Richard M. Beck, and it appearing
that proper notice of the Application has been given and that no further notice or hearing is
required, and the Court being satisfied based on the representations made in the Application and
declaration that (i) Klehr Harrison represents no interest adverse to the estates or the Debtor's
creditors, (ii) Klehr Harrison is a "disinterested person" as that term is defined in section 101(14)
ofthe Bankruptcy Code, and (iii) the employment of Klehr Harrison is necessary and would be
in the best interests of the Committee and the estate, and after due deliberation, and sufficient
cause appearing therefore, it is
ORDERED, that in accordance with sections 1103(a), 327(a) and 328(a) of the
Bankruptcy Code, the Committee be, and hereby is, authorized and empowered to retain Klehr
DELl 74538-1
Harrison as its counsel nunc pro tunc, effective as of March 25,2010, to represent the
Committee in this Case under chapter 11 of the Bankruptcy Code, and it is further
ORDERED, that Klehr Harrison shall be compensated in accordance with the procedures
set forth in sections 330 and 331 of the Bankruptcy Code and such Bankruptcy Rules as may be
then applicable, from time to time, and such procedures as may be fixed by order of this Court.
Dated: -=--=---'' 2009
Wilmington Delaware
DELl 74538-1
The Honorable Brendan L. Shannon
United States Bankruptcy Judge
2