Case CSS Doc 55 Filed 04/06/18 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE : : : : : : : Chapter 11

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1 Case CSS Doc 55 Filed 04/06/18 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re CANDI CONTROLS, INC., 1 Debtor. Chapter 11 Case No (CSS) Hearing Date May 7, 2018 at 200 p.m. EST Objection Deadline April 20, 2018 at 400 p.m. EST APPLICATION OF THE DEBTOR FOR ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF THE ROSNER LAW GROUP LLC AS COUNSEL TO THE DEBTOR, NUNC PRO TUNC TO THE ORDER FOR RELIEF Candi Controls, Inc., the above-captioned debtor and debtor in possession (the Debtor ), hereby files this application for order (the Application ) authorizing the retention and employment of The Rosner Law Group LLC ( RLG or the Firm ) as counsel to the Debtor, nunc pro tunc to the Order for Relief [D.I. 13]. In support of this Application, the Debtor relies upon the Declaration of Frederick B. Rosner (the Rosner Decl. ) attached hereto as Exhibit A. In further support of this Application, the Debtor respectfully represents as follows Jurisdiction and Venue 1. This Court has jurisdiction to consider this Application pursuant to 28 U.S.C. 157 and 1334, and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated as of February 29, Consideration of this Application is a core proceeding pursuant to 28 U.S.C. 157(b). Venue of this proceeding is proper before this Court pursuant to 28 U.S.C and The statutory predicates for the relief requested herein are section 327 of title 11 of the United States Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code ), Rules 2014, 2016, and 1 The last four digits of the Debtor's federal tax identification number are The Debtor's principal place of business is located at th Street, 3 rd Flr., Oakland, CA 94612

2 Case CSS Doc 55 Filed 04/06/18 Page 2 of of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rules and of the Local Rules for the United States Bankruptcy Court for the District of Delaware (the Local Rules ). BACKGROUND 3. On March 23, 2018, an involuntary petition under chapter 11 of the Bankruptcy Code (the Chapter 11 Case ) was filed against the Debtor in this Court and an Order for Relief was entered on March 27, The factual background relating to the Debtor s commencement of this Chapter 11 Case is set forth in detail in the Declaration of Douglas Klein in Support of Debtor s First Day Pleadings [D.I. 15] incorporated herein by reference. 5. As of the date of this filing, no official committee of unsecured creditors has been appointed in this Chapter 11 Case, and no request has been made for the appointment of a trustee or examiner. Relief Requested 6. By this Application, the Debtor, pursuant to 327(a) of the Bankruptcy Code, Bankruptcy Rule 2014(a) and Local Rule , seeks authority to retain and employ RLG as counsel to the Debtor in connection with the filing and prosecution of its Chapter 11 Case, nunc pro tunc to the Order for Relief. Basis for Relief 7. The Debtor requests that the Court approve the retention and employment of RLG to perform the legal services that will be necessary during this Chapter 11 Case in accordance with RLG s discounted hourly rates and disbursement policies. 2

3 Case CSS Doc 55 Filed 04/06/18 Page 3 of 6 8. The Debtor seeks to retain RLG because of the Firm s experience and knowledge in the field of debtors and creditors rights and business reorganizations under chapter 11 of the Bankruptcy Code and its extensive knowledge on matters of local practice and procedure. RLG is particularly well suited for the type of representation required by the Debtor. RLG s attorneys have played significant roles representing various constituencies in many large and complex cases in this Court. The Debtor believes that RLG is both well qualified and able to represent its interests in this Chapter 11 Case. Services to Be Provided 9. The services of RLG are necessary to enable the Debtor to execute faithfully its duties as a debtor in possession. In particular, the Debtor anticipates that RLG will provide the following legal services a. providing legal advice regarding local rules, practices, and procedures and providing substantive and strategic advice on how to accomplish the Debtor s goals in connection with the prosecution of this Chapter 11 Case; b. prepare on behalf of the Debtor, as debtor in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtor s estate; c. take all necessary actions in connection with any chapter 11 plan and related disclosure statement and all related documents, and such further actions as may be required in connection with the administration of the Debtor s estate; d. appearing in Court and at any meeting with the U.S. Trustee and any meeting of creditors at any given time on behalf of the Debtor; e. take all necessary action to protect and preserve the value of the Debtor s estate, including all related matters; and f. performing all other services assigned by the Debtor or co-counsel. 3

4 Case CSS Doc 55 Filed 04/06/18 Page 4 of RLG has stated its desire and willingness to act in this case and render the necessary professional services as counsel to the Debtor. RLG will be serving as local counsel to Perkins Coie, LLP, and will work to ensure the services of the two firms are not duplicative of each other. Bankruptcy Rule 2014 Disclosure 11. To the best of the Debtor s knowledge, except as set forth in the Rosner Decl., the attorneys of RLG (i) do not have any connection with the Debtor, its creditors, or any other party in interest, and its respective attorneys and accountants, (ii) are disinterested persons as that term is defined in 101(14) of the Bankruptcy Code, (iii) do not represent any interest adverse to this estate, (iv) are not insiders as the term is defined in 101(31) of the Bankruptcy Code, and (v) are not related to any judge of this Court, the United States Trustee for the District of Delaware or any one employed in the Office of the United States Trustee in this district. 12. The Debtor submits that RLG s representation of the Debtor is permissible under 327(a) of the Bankruptcy Code and is in the best interests of the Debtor s estate. Payment of Fees and Expenses 13. Subject to this Court s approval, RLG intends to (a) charge for its legal services on a discounted hourly basis and (b) seek reimbursement of actual and necessary out-of-pocket expenses. RLG will maintain detailed, contemporaneous records of time and any actual and necessary expenses incurred in connection with the rendering of the legal services described above by category and nature of the services rendered. RLG intends to apply to this Court for payment of compensation and reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and pursuant to any additional procedures that may be established by this Court. The expenses charged to clients include, among other things, mail and express mail charges, special or hand delivery charges, document 4

5 Case CSS Doc 55 Filed 04/06/18 Page 5 of 6 processing, duplication charges, charges for mailing supplies (e.g. envelopes and labels) provided by the Firm to outside copying services for use in mass mailings, travel expenses, expenses for working meals, computerized research, transcription charges, as well as non-ordinary overhead expenses approved by the client such as secretarial and other overtime. The principal attorneys and paralegals presently designated to represent the Debtor in this Chapter 11 Case and their current standard hourly rates are Frederick B. Rosner, Esquire $375 Scott J. Leonhardt, Esquire $350 Jason A. Gibson, Esquire $325 Zhao (Ruby) Liu, Esquire $275 Charles Park, Paralegal $200 The rates set forth above are subject to periodic adjustments to reflect economic and other conditions. Other attorneys and paralegals may from time to time serve the Debtor in connection with the matters described herein. 14. RLG received no retainer in connection with providing services in this case. 15. As set forth in the Rosner Declaration, RLG has not shared or agreed to share any of its compensation from the Debtor with any other person or entity, other than as permitted by section 504 of the Bankruptcy Code. Notice and Prior Applications 16. Notice of this Application has been provided to (a) the Office of the United States Trustee for the District of Delaware; (b) counsel to the proposed DIP Lender; (c) the Debtor s twenty (20) largest unsecured creditors and any party that has filed a Notice of Appearance in this Chapter 11 Case. The Debtor submits that, under the circumstances, no other or further notice is required. 5

6 Case CSS Doc 55 Filed 04/06/18 Page 6 of 6

7 Case CSS Doc 55-1 Filed 04/06/18 Page 1 of 7 EXHIBIT A Rosner Declaration

8 Case CSS Doc 55-1 Filed 04/06/18 Page 2 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re CANDI CONTROLS, INC., Debtor. 1 Chapter 11 Case No (CSS) DECLARATION OF FREDERICK B. ROSNER IN SUPPORT OF APPLICATION OF THE DEBTOR FOR ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF THE ROSNER LAW GROUP LLC AS COUNSEL TO THE DEBTOR, NUNC PRO TUNC TO THE ORDER FOR RELIEF I, Frederick B. Rosner, hereby declare as follows 1. I am the owner of The Rosner Law Group LLC ( RLG or the Firm ), which maintains an office for the practice of law at 824 North Market Street, Suite 810, Wilmington, Delaware I am admitted to practice in the State of Delaware, the State of New York, the United States District Court for the District of Delaware, the United States District Courts for the Southern and Eastern District of New York and the United States Court of Appeal for the Third Circuit. Except as otherwise indicated, I have personal knowledge of the matters set forth herein and if called as a witness, would testify competently thereto. Certain of the disclosures herein relate to matters within the knowledge of other attorneys at RLG or are based on information provided by or to them. I make this Declaration in support of the Debtor s Application for Order Authorizing the Debtor to Retain and Employ RLG as Counsel to the Debtor, nunc pro tunc to the Order for Relief 2. 1 The last four digits of the Debtor's federal tax identification number are The Debtor's principal place of business is located at th Street, Third Floor, Oakland, CA Capitalized terms used herein but not otherwise defined shall have the meaning ascribed to them in the Application.

9 Case CSS Doc 55-1 Filed 04/06/18 Page 3 of 7 Scope of Services 2. RLG proposes to provide the following services for its engagement in this Chapter 11 Case as bankruptcy counsel a. providing legal advice regarding local rules, practices, and procedures and providing substantive and strategic advice on how to accomplish the Debtor s goals in connection with the prosecution of this Chapter 11 Case; b. prepare on behalf of the Debtor, as debtor in possession, all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtor s estate; c. take all necessary actions in connection with any chapter 11 plan and related disclosure statement and all related documents, and such further actions as may be required in connection with the administration of the Debtor s estate; d. appearing in Court and at any meeting with the U.S. Trustee and any meeting of creditors at any given time on behalf of the Debtor ; e. take all necessary action to protect and preserve the value of the Debtor s estate, including all related matters; and f. performing all other services assigned by the Debtor. RLG Disclosures 3. Except as otherwise disclosed herein, RLG represents no entity other than the Debtor in, or in connection with, the Chapter 11 Case. Except as otherwise disclosed herein, RLG is a disinterested person, as that term is defined in section 101(14) of the Bankruptcy Code, in that the attorneys at RLG (a) (b) (c) are not creditors, equity holders, or insiders of the Debtor; are not and were not, within two (2) years before the Petition Date, a director, officer, or employee of the Debtor; and do not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtor, or for any other reason. 2

10 Case CSS Doc 55-1 Filed 04/06/18 Page 4 of 7 4. RLG has not received a retainer in connection with its proposed services in this case. 5. RLG seeks to be retained nunc pro tunc to the Order for Relief. 6. RLG has conducted a conflict search to identify relationships with creditors, and other parties in interest (or potential parties in interest) in this Chapter 11 Case. Based on the conflicts, connections, and relationships searched and reviews conducted, to the best of my knowledge, neither I, the Firm, nor any partner, counsel or associate thereof, insofar as I have been able to ascertain, has any connections with the above-captioned debtor and debtor in possession, its creditors, or any other parties in interest, or their respective attorneys and professionals, and the United States Trustee or any person employed in the Office of the United States Trustee. 7. RLG in the past has represented, currently represents, and in the future may represent certain creditors of the Debtor and other parties-in-interest or affiliates thereof in matters wholly unrelated to the Debtor, the Debtor s bankruptcy case or such entities claims against or interests in the Debtor. A list setting forth all potential parties-in-interest (and their corporate relatives) as determined by a conflict check is attached hereto as Schedule 1. In addition, various professional firms may serve as professionals to one or more parties in interest in connection with this Chapter 11 Case. RLG currently works or has in the past worked with and/or against many of these potential professionals in connection with matters wholly unrelated to this Chapter 11 Case. 8. RLG is continuing to review the Debtor s complete list of creditors and other parties in interest. Based on its review as of this date, RLG has determined that it does not represent any party in this case with a material adverse interest with respect to the Debtor. RLG will supplement this affidavit with disclosures of additional information as such information becomes known to RLG. 3

11 Case CSS Doc 55-1 Filed 04/06/18 Page 5 of 7 9. In addition, to the best of my knowledge, information and belief and in accordance with Bankruptcy Rule 5002, neither I nor any attorney at RLG is a relative of the United States Bankruptcy Judge assigned to this Chapter 11 Case, and RLG does not have a connection with the United States Bankruptcy Judge that would render its retention in this Chapter 11 Case improper. Further, in accordance with Bankruptcy Rule 2014, RLG does not have any connection with the Office of the United States Trustee (the U.S. Trustee ) or any persons employed by the U.S. Trustee. 10. The Firm intends to apply for compensation for professional services rendered in connection with this Chapter 11 Case subject to approval of this Court and in compliance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules and the Local Rules on an hourly basis, plus reimbursement of actual, necessary expenses and other charges incurred by the Firm. The principal attorneys and paralegal designated to represent the Debtor and their current discounted hourly rates are Frederick B. Rosner, Esquire $375 Scott Leonhardt, Esquire $350 Jason Gibson, Esquire $325 Zhao (Ruby) Liu, Esquire $275 Charles Park, Paralegal $200 The rates set forth above are subject to periodic adjustments to reflect economic and other conditions. Other attorneys and paralegals may from time to time serve the Debtor in connection with the matters described herein. 11. The hourly rates set forth above are the Firm s discounted hourly rates for work of this nature. These rates are set at a level designed to fairly compensate the Firm for the work of its attorneys and paralegals and to cover fixed and routine overhead expenses. It is the Firm s policy to charge its clients in all areas of practice for all other expenses incurred in connection with 4

12 Case CSS Doc 55-1 Filed 04/06/18 Page 6 of 7 the client s case. The expenses charged to clients include, among other things, mail and express mail charges, special or hand delivery charges, document processing, duplication charges, charges for mailing supplies (e.g. envelopes and labels) provided by the Firm to outside copying services for use in mass mailings, travel expenses, expenses for working meals, computerized research, transcription costs, as well as non-ordinary overhead expenses, approved by the client, such as secretarial and other overtime. The Firm will charge the Debtor for these expenses in a manner and at a rate consistent with charges made generally to the Firm s other clients. 12. Except for arrangements among the members of RLG and as permitted under 504(b)(1) of the Bankruptcy Code, RLG has no agreement with any other entity to share any compensation received, nor will any such sharing be made. I declare under penalty of perjury pursuant to 28 U.S.C that the foregoing is true and correct. Dated April 6, 2018 Wilmington, Delaware /s/ Frederick Rosner Frederick B. Rosner, Esq. (DE #3995) 5

13 Case CSS Doc 55-1 Filed 04/06/18 Page 7 of 7 SCHEDULE 1 Checked Parties Unsecured Creditors A.C.M. Gierman-Van Gils Albrecht, Helmut Brazil, Jack Brown, Nicholas CGM Partners LLC de Virion, Robert Elias, Howard Essen-Moller, Jon Exarchos, Konstantinos ("Gus") Feldman, Paul J. French, Robert S. Ganji, Kishore Huibers, Paul Kelly Yang Living Trust Leebelt, Chris Lone Star Ventures, LLC Mansell, Robert MP Tavill Revocable Trust Nock, David O'Leary, Patrick Perez Garza, Jorge Gerarado Perez Garza, Rodrigo Eduardo Pollock, Bruce Pulling out of Here to Win, LLC Rameriz, Alvaro Raschke, Steve Reece, Gerald Schur, William Seegma, LLC Shefflin, Joanna Shefflin, Joel Simon, George Stamatis, Paul Woods, Denise Woods, John F. Yardi Systems, Inc. Yardi Systems, Inc. Zimmerman, Michael Parties to Executory Contracts and Leases Mash Petroleum Intel Ceres Imaging Secured Creditors (Bridge Loan Lenders) Brown, Nicholas Exarchos, Konstantinos ( Gus ) Harp, Doug Raschke, Steve Waldfogel, Asher Proposed DIP Lender and Buyer Altair Engineering, Inc. Current Client Former Client Notes

14 Case CSS Doc 55-2 Filed 04/06/18 Page 1 of 3 EXHIBIT B Proposed Form of Order

15 Case CSS Doc 55-2 Filed 04/06/18 Page 2 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re CANDI CONTROLS, INC., 1 Debtor. Chapter 11 Case No (CSS) Re D.I. ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF THE ROSNER LAW GROUP LLC Upon consideration of the Application of the Debtor for Order Authorizing the Retention and Employment of The Rosner Law Group LLC as Counsel to the Debtor, nunc pro tunc to the Order for Relief (the Application ), pursuant to 327(a) of the Bankruptcy Code 2 and Bankruptcy Rule 2014(a) and Local Rule ; and upon consideration of the Declaration of Frederick B. Rosner in support of the Application, wherein the relationships between RLG and various creditors of the Debtor and parties in interest in this Chapter 11 Case, if any, are disclosed; and wherein it is represented that RLG neither holds nor represents any interest materially adverse to the Debtor; and upon the record of this Chapter 11 Case; and the Court having found that RLG is a disinterested person, as referenced in Bankruptcy Code 327(a) and as defined in Bankruptcy Code 101(14), as modified by 1107(b); and the Court having jurisdiction to consider the Application and the relief requested therein in accordance with 28 U.S.C. 157 and 1334; and it appearing that the retention of RLG is in the best interest of the Debtor s estate and its creditors; and it appearing that notice of the Application was adequate and proper under the 1 The last four digits of the Debtor's federal tax identification number are The Debtor's principal place of business is located at th Street, Third Floor, Oakland, CA Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Application.

16 Case CSS Doc 55-2 Filed 04/06/18 Page 3 of 3 circumstances of this case, and it appearing that no further notice of the Application is required; and the Court having found that good and sufficient cause exists for granting the Application; it is hereby ORDERED, that the Application is granted; and it is further ORDERED, that the Debtor is authorized, pursuant to 327(a) of the Bankruptcy Code and Bankruptcy Rule 2014(a) and Local Rule , to employ and retain RLG as counsel to the Debtor in this Chapter 11 Case upon the terms and conditions set forth in the Application; and it is further ORDERED, that RLG s retention shall be effective nunc pro tunc to the Order for Relief; and it is further ORDERED, that all compensation to RLG for services rendered to the Debtor, and reimbursement of expenses incurred in connection therewith, shall be pursuant to periodic applications to be submitted to and approved by this Court during the pendency of this case, in accordance with Bankruptcy Code 327, 330 and 331, such Bankruptcy Rules and Local Rules of this Court as may then be applicable, and any orders of this Court governing such matters; and it is further ORDERED, that this Court shall retain jurisdiction over all matters arising from or related to the interpretation and implementation of this Order. Dated April, 2018 Wilmington, Delaware United States Bankruptcy Judge 2

17 Case CSS Doc 55-3 Filed 04/06/18 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re CANDI CONTROLS, INC., 1 Debtor. Chapter 11 Case No (CSS) Hearing Date May 7, 2018 at 200 p.m. (ET) Obj. Deadline April 20, 2018 at 400 p.m. (ET) NOTICE OF MOTION AND HEARING PLEASE TAKE NOTICE THAT on April 6, 2018, the above-captioned debtor and debtor in possession (the Debtor ) filed the Application of the Debtor for Order Authorizing the Retention and Employment of The Rosner Law Group LLC as Counsel to the Debtor, Nunc Pro Tunc to the Order for Relief (the Application ). PLEASE TAKE FURTHER NOTICE that responses, if any, to the Application must be made in writing, filed with the Clerk of the United States Bankruptcy Court for the District of Delaware (the Court ), 824 North Market Street, 3rd Floor, Wilmington, DE 19801, so as to be received by that Court on or before April 20, 2018 at 400 p.m. (ET) (the Objection Deadline ), and served upon and received by the undersigned proposed counsel for the Debtor on or before the Objection Deadline. PLEASE TAKE FURTHER NOTICE that, if an objection is timely filed, served, and received, and such objection is not otherwise timely resolved, a hearing with respect to the Application and such objection(s) will be held before the Honorable Christopher S. Sontchi at the Bankruptcy Court, 824 North Market Street, 5th Floor, Courtroom No. 6, Wilmington, Delaware, on May 7, 2018 at 200 p.m. (ET). 1 The last four digits of the Debtor s federal tax identification number are The Debtor s principal place of business is th Street, Third Floor, Oakland, CA { }

18 Case CSS Doc 55-3 Filed 04/06/18 Page 2 of 2 IF NO OBJECTIONS TO THE APPLICATION ARE TIMELY FILED, SERVED AND RECEIVED IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED IN THE APPLICATION WITHOUT FURTHER NOTICE OR HEARING. Respectfully submitted, Dated April 6, 2018 Wilmington, Delaware THE ROSNER LAW GROUP LLC By /s/ Scott Leonhardt Frederick B. Rosner (DE 3995) Scott Leonhardt (DE 4885) Jason A. Gibson (DE 6091) 824 N. Market Street, Suite 810 Wilmington, DE Telephone (302) rosner@teamrosner.com leonhardt@teamrosner.com gibson@teamrosner.com -and- PERKINS COIE LLP Jordan A. Kroop (admitted pro hac vice) 2901 N Central Ave Suite 2000 Phoenix AZ Telephone (602) jkroop@perkinscoie.com Proposed Co-Counsel to Debtor in Possession { }