Case 18-04177-TOM11 Doc 609 Filed 01/30/19 Entered 01/30...
Transcript of Case 18-04177-TOM11 Doc 609 Filed 01/30/19 Entered 01/30...
UNITED STATES BANKRUPTCY COURTFOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
In re:
MISSION COAL COMPANY, 11,C. ei o/.,1
Debtors.
Chapter 11Case No. 18-04177 (TOM)
(Jointly Administered)
Proposed Hearing Date: February 6, 2019 at 10:00 a.m.
(CT)
Proposed Objection Deadline: February 3, 2019 at 4:00
p.m. (CT)
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS' MOTION FOR AN
ORDER PURSUANT TO BANKRUPTCY RULE 2004 AUTHORIZING THE
EXAMINATION AND PRODUCTION OF DOCUMENTS BYCHERRY BEKAERT LLP
The Official Committee of Unsecured Creditors (the "Committee'') of Mission Coal
Company, LLC ("Mission Coal") and certain of its affiliates, as debtors and debtors-in-
possession (collectively, the "Debtors"), by and through its undersigned counsel, hereby
respectfully moves (the -Motion"), pursuant to Bankruptcy Rule 2004 of the Federal Rules or
Bankruptcy Procedure (the "Bankruptcy Rules"), for the entry of an order, substantially in the
form attached hereto as Exhibit A (the "Proposed Order"), directing the corporate
representatives of Cherry Bekaert TIP ( "Cherry Bekaert") to produce all documents within its
custody, possession or control regarding the issues and matters designated on the attached
Exhibit B (the "Document Requests") on or before eight (8) calendar days following entry of an
order granting this Motion, and requiring the corporate representative(s) of Cherry Bekaert to
appear for examination to be held at a time and place mutually agreeable to the Committee and
The Debtors in these chapter 1 1 cases, along with the last four digits of each Debtor's federal tax identification
number, include: Mission Coal Company, LLC (8465); Beard Pinnacle, LLC (0637); Oak Grove Land Company,
LLC (6068); Oak Grove Resources, LLC (0300); Pinnacle Land Company, LLC (6070); Pinnacle Mining Company,
LLC (7780); Seminole Alabama Mining Complex, LLC (6631); Seminole Coal Resources, 1.1,C (1795); Seminole
West Virginia Mining Complex, LLC (7858); Seneca Coal Resources, I,LC (1816); and Seneca North American
Coal, LLC (5102). The location of the Debtors' service address is: 7 Sheridan Square, Suite 300, [Kingsport,
Tennessee 37660.
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Cherry .Bekaert no later than seven (7) calendar days before the Challenge Deadline (defined
below). In support of this Motion, the Committee respectfully states as follows:
PRELIMINARY STATEMENT
1. Since its retention of counsel in these Chapter 1 1 Cases (defined below), the
Committee has been diligently and vigorously investigating the Debtors' history, the
circumstances surrounding the creation of Mission Coal in January 2018, and the pre- and post-
formation transactions by and between the Debtors, their insiders and affiliates, and other related
third parties. The Committee's investigation to date has uncovered numerous transactions
involving third parties who have overlapping or common ownership with certain of the Debtors
both before and after Mission Coal's formation, including potentially fraudulent transfers and
other actions that were value-destructive to the Debtors.
2. The Committee's investigation is proceeding •at a rapid pace given the
confirmation timeline proposed by the Debtors. The Committee's deadline to initiate, or move
for standing to initiate any avoidance actions or any other claims, counterclaims, or causes of
action, objections, contests, or defenses relating to the Debtors' estates (the "Challenge
Deadline") is currently February 28, 2019 (and for one party, February 26, 2019).2 While the
Committee is working diligently to investigate the pre- and post-formation transactions of the
Debtors, the Committee's investigation remains ongoing and is not complete.
3. The Committee, as an independent party and the fiduciary charged with
representing the interest of all creditors in these Chapter 11 Cases, is well-equipped and is the
appropriate party to investigate the types of issues addressed in this Motion as part of its ongoint,,
investigation.
Simultaneously with the filing of this Motion, the Committee has tiled a Motion to Extend the Challenge Deadline
to April 5, 2019, without prejudice to the Committee's right to seek future extensions.
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JURISDICTION AND VENUE
4. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and
1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is proper in this
District pursuant to 28 U.S.C. §§ 1408 and 1409.
5. The Committee consents to the entry of a final order in connection with this
Motion if it is determined that the Court, absent the consent of the parties, cannot enter final
orders or judgments consistent with Article 111 of the United States Constitution.
BACKGROUND
A. The Bankruptcy Cases
6. On October 14, 2018 (the "Petition Date"), the Debtors filed voluntary petitions
for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of Alabama (the "Court"), commencing their chapter 11 cases (the "Chapter 11
Cases"). Pursuant to sections 1107 and 1 108 of the Bankruptcy Code, the Debtors continue to
operate their businesses and properties as debtors-in-possession. No trustee or examiner has
been appointed in these cases.
7. On October 25, 2018, the Bankruptcy Administrator for the Northern District of
Alabama appointed the nine-member Committee. [Docket No. 147]. The Committee convened
and selected counsel on October 30, 2018.
B. The Committee's Investigation
8. On November 12, 2018, the Committee sought. 2004 examinations and document
productions from the Debtors, Thomas Clarke and Ana Clarke, Charles Ebetino, Kenneth.
McCoy and Jason McCoy, and pre-petition lender Mission Coal Funding, (collectively, the
"Rule 2004 Parties"). [See Docket Nos. 244-49].
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9 The Committee and the Rule 2004 Parties, plus Bay Point Advisors, LLC,
thereafter entered into agreed orders stipulating to dates and deadlines in connection with the
Debtors' independent directors' and the Committee's separate investigations (collectively, the
"November Orders"). [See Dockets Nos. 275, 306-07, 332-34.341 and 385].
10. The Rule 2004 Parties and Bay Point Advisors, LLC have produced in excess of
214,000 documents to the Committee as of January 28, 2019, and continue to produce
documents relevant to the Committee's investigation. The Committee has sent additional
document requests to certain of the Rule 2004 Parties in accordance with the November Orders.
The Committee's review and analysis of these document productions is ongoing.
1 1. The Committee's investigation to date has uncovered numerous transactions,
which occurred both before and after Mission Coal's formation on January 31, 2018, that merit
further scrutiny. These transactions include potentially fraudulent transfers and other value-
destructive behavior from which potential claims against the Debtors, their insiders, and/or other
related third parties may arise.
12. Cherry Bekaert has served as the auditor for Debtors Seneca Coal Resources,
TIC ("Seneca") and Seminole Coal Resources, LLC ("Seminole") and their subsidiaries. In
2018, Cherry Bekaert performed an audit for Seneca and Seminole and their subsidiaries for the
years ending December 31, 2016 and 2017 (the "Audit"). At the time Cherry Bekaert issued
the Audit, it also issued other reports that are highly relevant to the Committee's investigation.-
13. Many of the questionable transactions the Committee is investigating occurred in
2016 and 2017, the time period covered by the Audit. Accordingly, as part of its ongoing
investigation of the Debtors' financial affairs and various prepetition transfers, the Committee
filed the instant Motion.
These reports are marked Highly Confidential. In order to comply with the Conficlentialitt, Agreement 017(1
Stipulated Protective Order [Docket No. 5491, the Committee is referring to them generically.
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RELIEF REQUESTED
14. Pursuant to Bankruptcy Rule 2004, the Committee requests this Court to enter an
order substantially in the same form as the Proposed Order attached hereto as Exhibit A ordering
Cherry Bekaert to produce certain documents regarding the issues and matters designated on the
attached Exhibit B. Further, the Committee requests this Court to order Cherry Bekaert, through
the partner in charge of the Audit and/or the senior manager for the Audit, to appear for an
examination to be held at a time and place mutually agreeable to the Committee and Cherry
Bekaert no later than seven (7) calendar clays before the Challenge Deadline regarding the topics
described on the attached Exhibit B.
15. As a fiduciary for all unsecured creditors, the Committee is granted broad
statutory powers to, among other things, "investigate the acts, conduct, assets and liabilities and
financial condition of the debtor. . . and any other matter relevant to the case or to the
formulation of a plan." 11 U.S.C. § 1103(c)(2). The Committee believes that this Motion is
necessary and appropriate pursuant to its duties and efforts to investigate any possible avoidance
actions and fraudulent transfers that could benefit the Debtors' estates and the unsecured
creditors.
16. The Committee seeks information regarding various transactions which occurred
during the time period at issue in the Audit, including various debt issuances and related third
party transactions, the Debtors' financial and accounting practices, and the Debtors' internal
control procedures.
17. The examination of Cherry Bekaert and the Document Requests will inform
whether, and to what extent, the transactions the Committee has identified implicate, inter alio,
(i) breaches of fiduciary or other duties to the Debtors; (ii) transfers that may constitute
fraudulent transfers or preferences; (iii) coordinated actions; and/or (iv) breach of the covenant
of good faith and fair dealing, among other potential causes of action.
18. Each request in the Document Requests seeks information concerning the acts,
conduct, property, liabilities, and/or financial condition of the Debtors, or matters affecting the
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administration of the Debtors' estates. As a result, the Document Requests fall squarely within
the scope of discovery permissible under Bankruptcy Rule 2004. The relief requested herein should
be granted to permit the Committee to adequately investigate claims against the Debtors' estates
and potentially aid in the recovery of assets for the benefit of the Debtors' estates and their
creditors. Accordingly, the Committee respectfully submits that the Motion should be granted,
and the Committee be authorized to conduct the Bankruptcy Rule 2004 discovery requested
herein on an expedited basis.
1 9. Until Cherry Bekaert produces the documents requested by the Document
Requests and appears for examination by the Committee, the Committee will not be able to fully
discharge its fiduciary duties to all creditors by investigating potential claims and causes of
action.
BASIS FOR RELIEF
20. The facts and circumstances set forth herein and as described in the previously
filed motions concerning the Rule 2004 Parties demonstrate that good cause exists to allow the
Committee to pursue the requested Bankruptcy Rule 2004 discovery to further the Committee's
investigation into potential causes of action. The examination of Cherry Bekaert and the
Document Requests are intended to provide a more complete picture of the questionable
transactions that occurred during the time period at issue in the Audit that is not otherwise
available to the Committee.
21. As previously stated. Committee is a fiduciary for all unsecured creditors. Thus,
the Committee is granted broad statutory powers to, among other things, "investigate the acts,
conduct, assets, liabilities. and financial condition of the debtor . . . and any other matter relevant
to the case or to the formulation of a plan." 11 U.S.C. § 1 103(c)(2). To permit the Committee to
exercise its investigative powers, Bankruptcy Rule 2004 provides that "[o In motion of any party
in interest, the court may order" the production of documents. Fed. R. Bankr. P. 2004(c).
22. Discovery under Bankruptcy Rule 2004 includes within its scope, inter cilia, any
matter that may relate to the property and assets of the estate; the financial condition of the
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debtor; and any matter that may affect the administration of a debtor's estate. See Fed. R. Bankr.
P. 2004(b); see also "babas v. Global Auto. Grp., LLC (In re MMII Auto. Grp., LUC), 346 B.R.
229, 233 (Bankr. S.D. Fla. 2006) ("Rule 2004 does allow the Trustee to go on a general fishing
expedition so long as the information sought relates to the acts, conduct, or property or to the
liabilities and financial condition of the debtor, or to any matter which may affect the
administration of the debtor's estate. . . . ") (internal quotation omitted); In re Teleglobe
Commc'ns Corp., 493 F.3d 345, 354 n.6 (3d Cir. 2007) (Rule 2004 allows parties with an
interest in the bankruptcy estate to conduct discovery into matters affecting the estate); Official
Comm. of Unsecured Creditors of Cybergenics Corp. v. Chinery, 330 F.3d 548, 564-65 (3d Cir.
2003) ("creditors' committee may certainly assist a debtor in locating property under Bankruptcy
Rule 2004"); In re Wash. Mut., Inc., 408 B.R. 45, 50 (Bankr. D. Del. 2010) ("The purpose of the
examination is to enable the trustee to discover the nature and extent of the bankruptcy estate.");
In re Johns-Manville Corp., 42 B.R. 362, 364 (S.D.N.Y. 1984) (lithe examination of witnesses
having knowledge or the debtor's acts, conduct, liabilities, assets, etc. is [I proper"). Bankruptcy
Rule 2004 affords both debtors and creditors the broad rights of examination of a debtor's or
third party's records. See Snyder v. Soc'y Bank, 181 B.R. 40, 41 (S.D. Tex. 1994), aff'd by In re
Snyder. 52 F.3d 1067 (5th Cir. 1995) (citing Cameron v. U.S., 231 U.S. 710, 716 (1914)).
23. Indeed, the scope of inquiry under Bankruptcy Rule 2004 is broad because "Me
primary purpose of a Rule 2004 examination is for revealing the nature and extent of the
bankruptcy estate, and for discovering assets, examining transactions and determining whether
wrongdoing has occurred." In re Kelton, 389 B.R. 812, 820 (Bankr. S.D. Ga. 2008) (internal
quotations permitted. "The general rule is that the scope a Rule 2004 examination is very broad
and great latitude of inquiry is ordinarily permitted." Id. at 819-20 (quotations omitted); see also
In re Recoton Corp., 307 B.R. 751, 755 (Bankr. S.D.N.Y. 2004). This broad inquiry extends to
third parties -[b]ccause the purpose of the Rule 2004 investigation is to aid in the discovery of
assets, any third party who can be shown to have a relationship with the debtor can be made
subject to a Rule 2004 investigation." In re Ionosphere Clubs, Inc., 156 B.R. 414, 432
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(S.D.N.Y. 1993), affid, 17 F.3d 600 (2d Cir. 1994); see also In re Mittco, Inc., 44 B.R. 35, 36
(Bankr. D. Wis. 1984) ("Where there is a showing that the purpose of the examination is to
enable a party to probe into matters which may lead to the discovery of assets by examining not
only the debtor, but also other witnesses, such inquiry is allowed."); In re Wilcher, 56 B.R. 428,
433 (Bankr. N.D. Ill. 1985) (Rule 2004 examination "may extend to creditors and third parties
who have had dealings with the debtor"). This is because "Hite clear intent of Rule 2004 . . . is
to give parties in interest an opportunity to examine individuals having knowledge of the financial
affairs of the debtor in order to preserve the rights of creditors." In re GI IR Cos., Inc., 41 B.R.
655, 660 (Bankr. D. Mass. 1984).
24. Furthermore, even in instances where estate representatives try to ascertain
whether or not to pursue estate claims, Bankruptcy Rule 2004 is recognized as a proper pre-
litigation device that can uncover facts and circumstances that may demonstrate whether a
debtor's estate holds a claim against a third party and the strength of any such claim. In fact,
"[o]ne of the primary purposes of a Rule 2004 examination is as a pre-litigation device." Wash.
Mut., 408 B.R. at 53. Similarly, as noted in Bennett Fundin Group. Bankruptcy Rule 2004 "is
properly used as a pre-litigation device to determine whether there are grounds to bring an
action[.]" Bennett Funding Grp., 203 B.R. 24, 28 (Bankr. N.D.N.Y. 1996); see In re Rosenberg,
303 B.R. 172, 175 (B.A.P. 8th Cir. 2004) (use of Rule 2004 to investigate potential claims
against the debtor's employer permitted where the claim is an asset of the estate); In re Hughes,
281 B.R. 224, 226 (Bankr. S.D.N.Y. 2002) (rejecting argument that a subpoena issued against an
accounting firm seeking the production of documents was improper because it was primarily
sought for the purpose of investigating potential claims that the debtor may have against the
accounting firm).
25. Understanding the various debt issuances and related third party transactions, the
Debtors' financial and accounting practices, and the Debtors' internal control procedures in
conjunction with the transactions at issue during the time periods covered by the Audit could
have a significant impact on the Debtors' bankruptcy estates. Accordingly, the Committee's
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Motion seeking authorization to serve document requests on, and it necessary, issue subpoenas
for the production of documents by, Cherry Bekaert and the examination of Cherry Bekaert
should be granted.
RESERVATION OF RIGHTS
26. The Committee reserves all rights to serve additional requests for documents or
examinations in the course of its investigation, pursuant to Bankruptcy Rule 2004 or otherwise,
and to propound discovery in connection with this matter and/or any other matter that may arise
in these cases.
27. The Committee further reserves all rights to seek to formally depose Cherry
-Bekaert, through the partner in charge of the Audit and/or the senior manager on the Audit, or a
witness under Federal Rule of Civil Procedure 30(h)(6) iii requested by the Committee, upon
service of appropriate deposition notices and subpoenas, if it determines that such depositions are
warranted.
CONCLUSION
WHEREFORE, the Committee respectfully requests the Court grant the Motion
and enter the Proposed Order attached hereto as Exhibit A, and grant the Committee such further
relief as is just and appropriate.
[Remainder of Ilk> page intentionally left blank]
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Dated: January 30, 2019 BAKER DONELSON BEARMAN CALDWELL
& BERKOWITZ, P.C.
/s/ Rita HuHell Rita Ilullett, Esq.1400 Wells Fargo Tower420 20th Street NBirmingham. AL 35203Telephone: (205) 276-9807
Email: rhullett('(7)bakerdonelson.com
LOWENSTEIN SANDLER LLPJeffrey Cohen. Esq. (admitted Pro Hoc rice)
Jennifer Kimble, Esq. (ASB-9593-E62K)
1 251 Avenue or the Americas
New York, New York
Telephone: (212) 262-6700
Facsimile: (212) 262-7402
E mail: jcoheniidowenstein.com
ikimbleOdowenstein.com
and —
Michael Kaplan (admitted Pro Hoc Vice)
Nicole Et]lfree, Esq. (tilllitted Pro Hoc Vice)
One I,owenstein DriveRoseland, New Jersey 07068
(973) 597-2500 (Telephone)
(973) 597-2400 (Facsimile)
E-mail: mkaplan(iidoNkenstein.com nrulrree(adowenstein.com
Counsel for the ()Metal Committee of
Unsecured Creditors
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EXHIBIT A
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UNITED STATES BANKRUPTCY COURTFOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
In re:
MISSION COAI, COMPANY, 11_,C, et at.,1
Debtors.
Chapter 11Case No. 18-04177 (TOM)
(Jointly Administered)
ORDER GRANTING THE OFFICIAL COMMITTEE OF UNSECURED
CREDITORS' MOTION FOR AN ORDER PURSUANT TO BANKRUPTCY
RULE 2004 AUTHORIZING THE EXAMINATION AND PRODUCTION
OF DOCUMENTS BY CHERRY BEKAERT LLP
Upon consideration of The Official Committee of (insectrreof Creditors' for cm
Order Pursuant 10 Bankruptcy Rule 2004 .4Mhorizing the Production of Documents by Cherry
Belated.' LLP (the -IVIotion"),2 and any responses thereto; and the Court having conducted a
hearing on the Motion, and upon the record thereof; and after due deliberation thereon; and good
and sufficient cause existing therefor, it is hereby
ORDERED, ADJUDGED, AND DECREED that:
1. "file Motion is granted as set forth herein.
2. The Committee is authorized to (a) conduct a Rule 2004 examination of Cherry
Bekaert LLP, and (b) serve on Cherry Bekaert LLP document requests substantially in the form
attached as Exhibit B to the Motion.
The Debtors in these chapter I I cases, along with the last Pour digits of each Debtor's federal tax identification
number, include: Mission Coal Company, LLC (8465); Beard Pinnacle, LLC (0637); Oak Grove Land Company,
LLC (6068); Oak Grove Resources, LLC (0300); Pinnacle Land Company, LLC (6070); Pinnacle Mining Company,
LLC (7780); Seminole Alabama Mining Complex, LLC (6631); Seminole Coal Resources, I,I,C (1795); Seminole
West Virginia Mining Complex, LLC (7858); Seneca Coal Resources, LI,C (1816); and Seneca North American
Coal, LLC (5102). The location of the Debtors' service address is: 7 Sheridan Square, Suite 300, Kingsport,
Tennessee 37660.
- Capitalized terms used but otherwise not defined herein shall have the meanings ascribed to such terms in the
Motion.
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Cherry Bekaert I,I,P must respond to the document requests attached as Exhibit 13
to the Motion on a rolling basis following the entry of this Order so as to be completed no later
than eight (8) calendar days after entry of this Order.
4. The Committee is authorized to examine Cherry Bekaert LLP, through the partner
in charge of the Audit and/or the senior manager on the Audit, or a witness under Federal Rule of
Civil Procedure 30(b)(6) if requested by the Committee. Such examinations shall be completed
no later than seven (7) calendar days before the Challenge Deadline.
5 . Nothing in this Order shall be deemed to limit or restrict the Committee's right to
seek further discovery, including but not limited to additional documents. communications, and
formal depositions, from Cherry Bekaert
6. Notwithstanding Bankruptcy Rule 6004(h), this Order shall be effective and
enforceable immediately upon entry.
7. This Court shall retain jurisdiction to resolve any disputes arising from or related
to this Order, and to interpret, implement, and enforce the provisions of this Order.
Dated: Birmingham, AlabamaFebruary , 2019
HONORABLE TAMARA 0. MITCI TELL
UNITED STATES BANKRUPTCY JUDGE
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EXHIBIT B
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UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF ALABAMASOUTHERN DIVISION
In re:
MISSION COAL COMPANY, LLC, et a/.,1
Debtors.
Chapter 11Case No. 18-04177 (TOM)
(Jointly Administered)
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS' REQUESTS
FOR DOCUMENTS AND INFORMATION FROM CHERRY BEKAERT LLP AND
TOPICS FOR EXAMINATION
DEFINITIONS
1. "Bankruptcy Court" means the United States Bankruptcy Court for the
Northern District of Alabama, Southern Division.
"Chapter 11 Cases" means the chapter 11 cases filed by the Debtors in the
Bankruptcy Court on the Petition Date, jointly administered under Case No. 18-04177.
3. "Cherry Bekaert means Cherry Bekaert LLP, including its present and
former parents, members, partners, direct and indirect subsidiaries, affiliates, predecessors,
successors, employees, managers, officers, directors, agents, advisors, contractors,
representatives, attorneys, and all other persons and entities acting or purporting to act on its
behalf.
4. "Communication" means any writiml., or any oral conversation of any kind
or character, including, by way of example and without limitation, e-mails, instant messages, text
The Debtors in these chapter 1 1 cases, along with the last four digits of each Debtor's federal tax identification
number, include: Mission Coal Company, LLC (8465); Beard Pinnacle, LLC (0637); Oak Grove Land Company,
LLC (6068); 0 ik Grove Resources, LI.0 (0300); Pinnacle band Company, LLC (6070); Pinnacle Mining Company,
LLC (7780); Seminole Alabama Mining Complex, LLC (6631); Seminole Coal Resources, LLC (1795); Seminole
West Virginia Mining Complex, LLC (7858); Seneca Coal Resources, LLC (1816); and Seneca North American
Coal, LLC (5102). The location of the Debtors' service address is: 7 Sheridan Square, Suite 300, Kingsport,
Tennessee 37660.
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messages, voicemail or messages, personal conversations, telephone conversations, letters,
meetings, memoranda, telegraphic and telex communications or transmittals of Documents, and
all Documents concerning such writing or such oral conversation.
5. "Concerning" means consisting of, reflecting, referring to, relating to,
regarding, involving, evidencing, constituting, or having any legal, logical, evidential, or factual
connection with (whether to support or to rebut) the subject matter designated in any paragraph
of these requests. A request for documents "concerning" a specified subject matter always shall
include communications, notes, and memoranda (whenever prepared) relating to the subject
matter of the request.
6. "Debtors" means the above-captioned debtors and debtors-in-possession,
including their predecessors or successors, assignees, prior or current parents, members, partners,
subsidiaries, affiliates or controlled companies, and each of their prior or current Officers,
Directors, managers, employees, agents, advisors, and attorneys.
7. "Directors" means each present and former director of the Debtors and
Non-Debtors.
8. "Document(s)" means, without limitation, the original and all copies, prior
drafts, and translations of information in any written, typed, printed, recorded or graphic form,
however produced or reproduced, or any type Or description, regardless of origin or location,
including without limitation all Electronically Stored Information, correspondence, records,
tables, charts, analyses, graphs, schedules, reports, memoranda, notes, lists, calendar and diary
entries, letters (sent or received), telegrams, telexes, messages (including, but not limited to,
reports of telephone conversations and conferences), studies, books, periodicals, magazines,
booklets, circulars, bulletins, instructions, papers, files, minutes, other communications
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(including, but not limited to, inter- and intra-office communications), questionnaires, contracts,
memoranda or agreements, assignments, licenses, ledgers, books of account, orders, invoices,
statements, bills, checks, vouchers, notebooks, receipts, acknowledgments, microfilm,
photographs, motion pictures, video tapes, photographic negatives, phonograph records, tape
recordings, wire recordings, voice mail recordings or messages, other mechanical records,
transcripts or logs of any such recordings, and all other data compilations from which
information can be obtained. The term "Document(s)" is intended to be at least as broad in
meaning and scope as the usage of this term in or pursuant to the Federal Rules of Civil
Procedure.
followinLY:
"Electronically Stored Information" shall include, without limitation, the
a. Information that is generated, received, processed, recorded, or
accessed by computers and other electronic devices, including but not
limited to e-mail;
b. Internal or external web sites:
c. Output resulting from the use of any software program; and
d. All items stored on cache memories, magnetic disks (such as computer
hard drives or floppy drives), optical disks (such as DVDs or CDs),
magnetic tapes, microfiche, or on any other media for digital data
storage or transmittal (e.g., a smartphone such as an iPhone , a tablet
such as an iPad®, or a personal digital assistant such as a
Blackberryt).
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10. "Mission Coal" means Mission Coal Company, LLC, including its present
and former parents, members, partners, direct and indirect subsidiaries, affiliates, predecessors,
successors, managers, employees, Officers, Directors, agents, advisors, contractors,
representatives, attorneys, and all other persons and entities acting or purporting to act on its
behalf.
11. "Non-Debtors" means any affiliate and/or direct or indirect subsidiary of
the Debtors who are not Debtors in the Chapter 11 Cases, including their professionals,
employees, agents and other representatives.
1 2. "Officers" means each present and former officer of the Debtors and Non-
Debtors.
13. "Person" means any natural person or any business, legal, or governmental
entity or association.
14. "Petition Date" means October 14, 2018.
15. "Relating to" means consisting of, reflecting, referring to, regarding.
Concerning, involving, evidencing, constituting, or having any legal, logical, evidential, or
factual contention with (whether to support or to rebut) the subject matter designated in any
paragraph of this request. A request for documents "relating to" a specified subject matter
always shall include notes and memoranda (whenever prepared) relating to the subject matter of
the request.
16. The -Audit- means the Combined Financial Statements of Consolidated
Seneca Coal Resources, 11.0 and Consolidated Seminole Coal Resources, LLC as of and for the
Years Ended December 31, 2017 and 2016 issued by Cherry Bekaert on or about April 30, 2018.
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17. "Mission Coal AU-C 265 Management Letter.pdf' means the April 30,
2018 memorandum to the members and management of Seneca Coal Resources, LLC and
Seminole Coal Resources, TIC bearing the file name "Mission Coal AU-C 265 Management
Letter.pdf."
RULES OF CONSTRUCTION
1. The following rules of construction apply to these Requests: (1 ) the terms
"all" and "each" shall be construed as all and each (2) the connectives, and" and "or" shall be
construed either disjunctively or conjunctively as necessary to bring within the scope of these
Requests all responses that might otherwise be construed to be outside of their scope; and (3) the
use of the singular form of any word shall include the plural and vice versa.
2. Capitalized terms not defined herein shall have the meaning ascribed to
them in the Official Committee of Unsecured Creditors' Requests for Documents and
Inlarmation From the Debtors (Docket No. 244-2), as applicable. All other words, terms, and
phrases not defined herein are to be given their normal and customary meaning in the context in
which they are used.
INSTRUCTIONS
1. Unless otherwise indicated, all documents shall be produced for the
relevant time period, including any documents having an earlier origin and in use during the
relevant time period.
2. The obligation to produce documents responsive to these Requests shall be
continuing in nature, and a producing party is required promptly to produce any document
requested herein that it locates or obtains after responding to these Requests, up to the conclusion
of the Chapter 11 Cases.
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3. Where an objection is made to any document request, the objection shall
state with specificity all grounds for objection.
4. Where a claim of privilege is asserted in objecting to the production of any
document and a document called for by this Request is withheld on the basis of such assertion,
the objecting party shall identify the nature of the privilege (including work product) that is
being claimed and, if the privilege is governed by state law, indicate the state's privilege rule
being invoked. In addition, the objecting party shall provide the following information with
respect to any document so withheld: (i) the type of document, e.g., letter or memorandum; (ii)
the general subject matter of the document; (iii) the date of the document; and (iv) such other
information as is sufficient to identify the document for a subpoena duces tecin» including,
where appropriate, the author of the document, the addressees of the document, and any other
recipients shown in the document, and, where not apparent, the relationship of the author,
addressees, and recipients to each other.
In the event that a requested document has been lost, destroyed, discarded,
and/or otherwise disposed of; the parties will identify the document by identifying: (i) its author
or preparers (ii) all persons to whom distributed or shown; (iii) date; (iv) subject matter; (v)
attachments or appendices; (vi) date, manner, and reason for destruction or other disposition;
(vii) person authorizing destruction or other disposition; (viii) the document request or requests
to which the document is responsive.
6. Produce all responsive documents as they are kept in the usual course of
business, or organize and label them to correspond with the Request to which they are
responsive.
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DOCUMENT REQUESTS TO CHERRY BEKAERT
1. Any and all audit work papers Concerning or Relating to the Audit.
2. Any and all Documents and Communications Concerning or Relating to any audit
tiles and/or "permanent work papers" used as background for the Audit, including, but not
limited to, loan documents, bank statements, credit card statements or other accounting
reconciliation documents used to verily any of the Debtors' transactions.
Any engagement letter or retention agreement between Cherry Bekaert and the
Debtors (or any of them) from January 1, 2015 through the current date.
4. Any Communications with the Debtors (or any of them) Concerning or Relating
to the engagement or retention of Cherry Bekaert from January 1, 2015 through the current date.
5. Any and all Documents and Communications (including but not limited to
Communications with the Debtors, third parties and internal Cherry Bekaert Communications)
used to confirm the debt transactions and amounts set forth in the Combined Balance Sheets and
Notes to the Combined Financial Statements in the Audit.
6. Any and all Documents Concerning or Relating to sources/uses for each of the
debt transactions discussed in the Audit.
7. Any and all Documents Concerning or Relating to the related party transactions in
Note 14 of the Audit.
8. Any and all Communications Concerning or Relating to the full impairment of
loans with affiliated entities in Note 14 of the Audit.
9. Any and all Communications between Cherry Bekaert and the Debtors (or any of
them) and/or the any of the Debtors' Officers, Directors, managers and employees Concerning or
Relating, to the conclusions and results of the Audit.
1 0. Any and all Documents, including drafts of memoranda, Concerning or Relating
to "Mission Coal AU-C 265 Management Letter.pdr from January 1. 2015 through the current
date.
11. Any and all Documents Concerning or Relating to any disagreements between
Cherry Bekaert and the Debtors' management, including the Debtors' Officers, Directors,
managers and employees, regarding accounting issues from January 1, 2015 through the current
date.
12. Any and all work papers and Documents Relating to Note 12 of the Audit.
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13. Any and all Documents dated between April 1, 2018 and May 31, 2018 fromCherry Bekaert to the Debtors Concerning or Relating to the Audit. including but not limited to-Mission Coal AU-C 265 Management Letter.pdf- and any other letters or memoranda issued inconjunction with the Audit.
EXAMINATION TOPICS
Mission Coal.
2. Any and all a' greements, Communications, negotiations or discussions by or onbehalf of Cherry Bekaert and any third party Concerning or Relating to Cherry Bekaert'sretention by, and work or services performed for, Mission Coal.
3. Any and all agreements, Communications, negotiations or discussions by or onbehalf of Cherry Bekaert and any third party Concerning or Relating to Mission Coal and theAudit.
4. Preparation of the Audit.
5. "l'he Audit.
6. Any and all interactions and Communications with the Debtors and the Debtors'Officers, Directors, managers and employees Concerning or Relating to the Audit.
7. Any and all interactions and Communications with the Debtors and the Debtors'
Officers, Directors, managers and employees Concerning or Relating to the conclusions and/or
results of the Audit.
8. Any and all Documents, findings, reports or other memoranda prepared as part of
the Audit or prior accounting services performed by Cherry Bekaert for Mission Coal.
9. The authentication, source and creation of any Documents produced in responseto the Document Requests set forth herein.
10. Any Documents produced in response to the Document Requests set forth herein.
1 1. The Debtors' and Non-Debtors' financial conditions and transactions by and
among them and various third parties.
[Remainder of the page intenlionaTh: left blank]
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Dated: January 30, 2019 BAKER DONELSON BEARMAN CALDWELL
& BERKOWITZ, P.C.
/s/ Rita Mullett Rita Hullen, Esq.1400 Wells Fargo Tower420 20th Street NBirmingham, AL 35203Telephone: (205) 276-9807
rhullett bakerdonelson.com
LOWENSTEIN SANDLER LLPJeffrey Cohen, Esq. (admitted Pro HOC riCC)Jennifer Kimble. Esq. (ASB-9593-E62K)1251 Avenue of the AmericasNew York, New YorkTelephone: (212) 262-6700Facsimile: (212) 262-7402E mail: jcohen4idowenstein.com
ikimble idowensteincom
— and
Michael Kaplan (admitted Pro Hue Vice)Nicole Fulfree, Esq. (admitted Pro Hue rice)One Lowenstein DriveRoseland, New Jersey 07068(973) 597-2500 (Telephone)(973) 597-2400 (Facsimile)E-mail:
mkaplani)lowenstein.com nfulfreerii':lowenstein.com
Counsel for the Official Committee of.
Unsecured Creditors
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