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Hearing Date: February 15, 2012 at 10:00 a.m.

PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica, Boulevard, 11th Floor Los Angeles, California 90067 Telephone: (310) 277-6910 Facsimile: (310) 201-0760 James I. Stang, Esq. (admitted pro hac vice) -and780 Third Avenue, 36th Floor New York, New York 10017 Telephone: (212) 561-7700 Facsimile: (212) 561-7777 Ilan D. Scharf, Esq. Counsel for the Official Committee of Unsecured Creditors of The Christian Brothers Institute and The Christian Brothers of Ireland, Inc. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Chapter 11 In re: Case No. 11-22820 (RDD) THE CHRISTIAN BROTHERS INSTITUTE, et al., (jointly administered) Debtors.

COMMITTEES OBJECTION TO DEBTORS APPLICATION FOR RETENTION OF RAKOW COMMERCIAL REALTY GROUP, INC. AS DEBTORS REAL ESTATE BROKER The Official Committee of Unsecured Creditors (the Committee) of The Christian Brothers Institute (CBI) and The Christian Brothers of Ireland, Inc. (CBOI and, collectively with CBI, the Debtors), the debtors and debtors in the above-captioned cases (the Cases) under chapter 11 of Title 11 of the United States Code (the Bankruptcy Code), through its undersigned counsel, hereby objects (the Objection) to the Debtors Application for Retention of Rakow Commercial Realty, Inc. (Rakow) as Debtors Real Estate Broker (the Application). In support of its Objection, the Committee respectfully states as follows:

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OBJECTION1 1. CBI seeks to retain Rakow as a broker to market the Properties in a rigged

sale process. The Debtors have made it abundantly clear that they do not want to sell the Properties to an entity other than Iona Prep. Retention of a broker at this stage is nothing more than window dressing designed to give the impression that the process for the sale of the Properties is open and fair. 2. The Court should disapprove the proposed Sale Procedures for the

Properties and should disapprove Rakows retention as part of that flawed process. 3. Rakows retention should be denied because: a. The sale of the Properties was negotiated without any marketing to third parties. As discussed in the Sale Objection, the Sale Procedures are fatally flawed. As such, retention of a broker at this stage would simply be an exercise in futility. CBI proposes to pay Rakow a commission of 2% (or $170,000) if the sale to Iona Prep closes. That means Rakow can earn a substantial commission for doing no work. The fact that Rakow requires a commission for a sale to Iona Prep also indicates that Rakow understands that the prospect of a competing bidder is highly speculative because of the flawed Sale Procedures. CBIs efforts to retain Rakow reek of gamesmanship and should not be condoned by the Court. The Application is dated as of February 3, 2012. However, the Application was not filed until February 10, 2012. Moreover, CBI did not disclose its intention to retain Rakow to the Committee until February 10, 2012. See email from Scott Markowitz to Ilan Scharf dated February 10, 2012 and attached hereto as Exhibit A. The Debtors then seek to have a hearing on Rakows retention with five days notice. This time frame demonstrates the Debtors gamesmanship and their scramble

b.

c.

Capitalized terms used but not defined in this Objection shall have the meanings and definitions ascribed to them in the Committees Objection to the Debtors Motion for Orders Pursuant to Sections 105(a) and 363 of the Bankruptcy Code and Bankruptcy Rule 6004 Approving (I) Sale Procedures and Notice of the Auction Relating Thereto, (II) Sale of Real Estate to Iona Preparatory School or a Party Making a Higher and Better Offer Free and Clear of Liens, Claims, Interests and Encumbrances, (III) Approving the Stalking Horse Purchase Agreement, and (IV) Granting Related Relief (the Sale Objection). Rather than repeat arguments raised by the Committee in the Sale Objection, the Committee incorporates the Sale Objection herein by reference for all purposes.

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to give the appearance of a fair sale process after negotiating a fatally flawed transaction. d. CBI has not exercised its business judgment in retaining Rakow. Immediately upon CBIs notifying the Committee of its intent to retain Rakow, the Committees counsel asked CBIs counsel for information about Rakows sales plan and Rakows qualifications to act as a broker for a sale of the Properties. See email from Ilan Scharf to Scott Markowitz dated February 10, 2012 and attached hereto as Exhibit B. CBI provided copies of some newspaper articles and advertisements that demonstrate that Rakow is experienced in negotiating commercial leases for tenants. See email from Scott Markowitz to Ilan Scharf dated February 10, 2012 and attached hereto as Exhibit C. As described in the appraisals of the Properties, the Properties are zoned single family residential; they are not commercial space. Nor is CBI a tenant in the Properties; it is the owner of the Properties. Thus, CBIs reliance on Rakows experience negotiating commercial leases for tenants is misplaced. CBI provided no information to the Committee about (i) Rakows qualifications to sell property that is similar to the Properties or (ii) Rakows proposed sales plan for the Properties (including a pricing analysis and marketing plan). Thus, CBI has not exercised its business judgment in seeking to retain Rakow for a sale of the Properties.

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4.

Based on the foregoing and the Committees arguments in the Sale

Objection, the Court should deny the Application. Dated: New York, New York February 13, 2012 PACHULSKI STANG ZIEHL & JONES LLP /s/ Ilan D. Scharf Ilan D. Scharf, Esq. 780 Third Avenue, 36th Floor New York, NY 10017-2024 Telephone: (212) 561-7700 Facsimile: (212) 561-7777 -andJames I. Stang, Esq. (admitted pro hac vice) 10100 Santa Monica Blvd., Suite 1100 Los Angeles, California 90067-4100 Telephone: (310) 277-6910 Facsimile: (310) 201-0760 Counsel for the Official Committee of Unsecured Creditors of The Christian Brothers Institute and The Christian Brothers of Ireland, Inc.

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Exhibit A

11-22820-rdd Ilan D. Scharf

From: Sent: To: Cc: Subject: Attachments:

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Scott Markowitz [SMarkowitz@tarterkrinsky.com] Friday, February 10, 2012 11:31 AM Ilan D. Scharf James Stang FW: CBI 11-22820 - Rakow Retention Application Rakow Retention Application (00456956).PDF; Exhibit A - Rakow Retention Application (00456960).PDF; Exhibit B - Rakow Retention Application (00456966).PDF; Order re Rakow Retention (00456972).DOC

IlanandJim,attachedpleasefintheapplicationtoretainabrokertomarkettheStrattonroadproperty.Pleaseadviseif thecommitteewillconsenttotheretention

Circular 230 Disclosure Notice: To ensure compliance with Treasury Department rules governing tax practice, we inform you that any advice contained herein (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein. Confidentiality Disclosure: This information in this email and in attachments is confidential and intended solely for the attention and use of the named (addressee(s). This information may be subject to attorney/client privilege or may otherwise be protected by work product privilege or other legal rules. It must not be disclosed to any person without our authority. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are not authorized to disclose, and must not disclose, copy, distribute, or retain this message or any part of it. This email is an informal communication that is not meant to be legally binding upon the sender unless expressly noted to the contrary.

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Exhibit B

11-22820-rdd Ilan D. Scharf

From: Sent: To: Cc: Subject:

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Scott Markowitz [SMarkowitz@tarterkrinsky.com] Friday, February 10, 2012 12:14 PM Ilan D. Scharf James Stang RE: CBI 11-22820 - Rakow Retention Application

IwaswaitingforthesignedlistingagreementwhichIjustgottoday.Iwillemailyouthebrochurewehavefrothe broker.IaskedaroundandheseemstobewellknownInthearea.Iwillfileanoticethattheretentionapplicationwill beheardonfeb15thwiththebidprocedures.Youareliketheboythatsaysmymindismadeupdontconfusemewith thefacts

From: Ilan D. Scharf [mailto:ischarf@pszjlaw.com] Sent: Friday, February 10, 2012 11:55 AM To: Scott Markowitz Cc: James Stang Subject: RE: CBI 11-22820 - Rakow Retention Application

This was signed on February 3 and youre only sending it to us now. The Debtors are giving them a 2% commission for doing nothing. We need to see, at the very least, some evidence that they are qualified to sell a property of this nature. What is the brokers recent sale experience with development properties or sales of school buildings? What is their marketing plan for these properties? The whole sale process is deficient. This is just putting lipstick on a pig.

Ilan D. Scharf Pachulski Stang Ziehl & Jones LLP 780 Third Avenue, 36th Floor New York, NY 10017-2024 Tel: 212.561.7700 | Fax: 212.561.7777 ischarf@pszjlaw.com www.pszjlaw.com
Los Angeles | San Francisco | Wilmington, DE | New York CONFIDENTIALITY This e-mail message and any attachments thereto is intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. If you are not the intended recipient of this e-mail message, you are hereby notified that any dissemination, distribution or copying of this e-mail message, and any attachments thereto is strictly prohibited. If you have received this e-mail message in error, please immediately notify me by telephone and permanently delete the original and any copies of this email and any prints thereof. NOT INTENDED AS A SUBSTITUTE FOR A WRITING Notwithstanding the Uniform Electronic Transactions Act or the applicability of any other law of similar substance and effect, absent an express statement to the contrary hereinabove, this e-mail message, its contents, and any attachments hereto are not intended to represent an offer or acceptance to enter into a contract and are not otherwise intended to bind the sender, Pachulski Stang Ziehl & Jones LLP, any of its clients, or any other person or entity. IRS Circular 230 Disclosure: In order to comply with requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

From: Scott Markowitz [mailto:SMarkowitz@tarterkrinsky.com] Sent: Friday, February 10, 2012 11:31 AM
1

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IlanandJim,attachedpleasefintheapplicationtoretainabrokertomarkettheStrattonroadproperty.Pleaseadviseif thecommitteewillconsenttotheretention

Circular 230 Disclosure Notice: To ensure compliance with Treasury Department rules governing tax practice, we inform you that any advice contained herein (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein. Confidentiality Disclosure: This information in this email and in attachments is confidential and intended solely for the attention and use of the named (addressee(s). This information may be subject to attorney/client privilege or may otherwise be protected by work product privilege or other legal rules. It must not be disclosed to any person without our authority. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are not authorized to disclose, and must not disclose, copy, distribute, or retain this message or any part of it. This email is an informal communication that is not meant to be legally binding upon the sender unless expressly noted to the contrary.

Circular 230 Disclosure Notice: To ensure compliance with Treasury Department rules governing tax practice, we inform you that any advice contained herein (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein. Confidentiality Disclosure: This information in this email and in attachments is confidential and intended solely for the attention and use of the named (addressee(s). This information may be subject to attorney/client privilege or may otherwise be protected by work product privilege or other legal rules. It must not be disclosed to any person without our authority. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are not authorized to disclose, and must not disclose, copy, distribute, or retain this message or any part of it. This email is an informal communication that is not meant to be legally binding upon the sender unless expressly noted to the contrary.

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Exhibit C

11-22820-rdd Ilan D. Scharf

From: Sent: To: Cc: Subject: Attachments:

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Scott Markowitz [SMarkowitz@tarterkrinsky.com] Friday, February 10, 2012 1:36 PM Ilan D. Scharf James Stang FW: 20120210132716_BANK376_8028.pdf

Ilan,hereissomeinformationonrakowbrokerage.
From: Karen Menendez Sent: Friday, February 10, 2012 1:28 PM To: Scott Markowitz Subject:

Circular 230 Disclosure Notice: To ensure compliance with Treasury Department rules governing tax practice, we inform you that any advice contained herein (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein. Confidentiality Disclosure: This information in this email and in attachments is confidential and intended solely for the attention and use of the named (addressee(s). This information may be subject to attorney/client privilege or may otherwise be protected by work product privilege or other legal rules. It must not be disclosed to any person without our authority. If you are not the intended recipient, or a person responsible for delivering it to the intended recipient, you are not authorized to disclose, and must not disclose, copy, distribute, or retain this message or any part of it. This email is an informal communication that is not meant to be legally binding upon the sender unless expressly noted to the contrary.

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