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TARTER KRINSKY & DROGIN LLP Attorneys for The Christian Brothers Institute, et al. Debtors and Debtors-in-Possession 1350 Broadway, 11th Floor New York, New York 10018 (212) 216-8000 Scott S. Markowitz, Esq. Marilyn Simon, Esq. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------------- x In re: : : THE CHRISTIAN BROTHERS INSTITUTE, et al. : : Debtors. : ------------------------------------------------------------------- x

Chapter 11 Case No.: 11-22820 (RDD) (Jointly Administered)

APPLICATION IN SUPPORT OF RETENTION OF ACCOUNTANTS TO: THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE The Christian Brothers Institute, debtor and debtor-in-possession (the Debtor), respectfully sets forth and alleges: SUMMARY OF RELIEF REQUESTED 1. By this application (the Application), the Debtor seeks authority to retain

Sperduto Spector & Company P.C. (SS) to audit the Debtors statement of position as of June 30, 2011 and the related statements of activities and cash flows for the year then ended. The fee for the services to be rendered by SS is estimated not to exceed $30,000, plus expenses, as set forth in the Affidavit of Joseph R. Sperduto (the Sperduto Affidavit), annexed as Exhibit A hereto.

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JURISDICTION, VENUE AND STATUTORY BASES FOR REQUESTED RELIEF 2. This Court has jurisdiction to consider this Application under 28 U.S.C. 157

and 1334, and the order of reference, dated July 10, 1984 (Ward, C.J.). This matter is a core proceeding within the meaning of 28 U.S.C. 157(b). 3. 4. Venue is proper before this Court under 28 U.S.C. 1408 and 1409. The statutory bases for the relief requested herein are 327 and 328 of Title 11

of the United States Code (the Bankruptcy Code) and Rules 2014 and 2016 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules). RELEVANT BACKGROUND 5. On April 28, 2011 (the Petition Date), the Debtor filed a voluntary petition for

reorganization under Title 11, Chapter 11, 301 of the United States Bankruptcy Code (the Bankruptcy Code) and has been authorized to continue in the operation of its business as a debtor-in-possession pursuant to 1107 and 1108 of the Bankruptcy Code. 6. The United States Trustee has appointed a committee of unsecured creditors (the

Committee), which has retained counsel. 7. The Debtor is a domestic not-for-profit 501(c)(3) corporation organized under

102(a)(5) of the New York Not-for-Profit Corporation Law. The Debtor was formed in 1903 pursuant to Section 57 of the then existing New York Membership Law. The purpose for which the Debtor was, and continues to be, formed was to establish, conduct and support Catholic elementary and secondary schools, principally throughout New York State. As a not-for-profit corporation, the assets, and/or income are not distributable to, and do not inure to the benefit of its directors, or officers. The Debtor depends upon grants and donations to fund a portion of its operating expenses.

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RELIEF REQUESTED AND BASIS THEREFOR 8. As the affidavit of Joseph R. Sperduto, CPA, a principal of SS, indicates, SS is

not related to and has no business relationship or association with any affiliates, members, management of the Debtor, its attorneys or any other party to this case and represents no adverse interest to the creditors. Although SS provided accounting services to the Debtor prior to the Debtors Chapter 11 filing, SS is not owed any monies on account of pre-bankruptcy services. Since SS has been Debtors accountant for the ten (10) years prior to the Chapter 11 filing, and is therefore, fully familiar with the Debtors books and records, the Debtor believes it is in its best interest to retain SS as its accountant in this case to perform yearly audits. 1 It would be very expensive, disruptive and time consuming to replace accounting firms during this critical time. 9. As set forth in in the Sperduto Affidavit, SS is a disinterested person as that term

is defined in the Bankruptcy Code. 10. SS has conferred with management in order to ascertain the involvment that

would be necessary in order to meet the Debtors requirements for the services to be rendered, which include: (a) 30, 2011, and (b) ended June 30, 2011. 11. SS has advised the Debtor of its hourly rates as set forth in the Sperduto Affidavit Auditing the related statements of acticities and cash flows the the year Auditing the statement of position of the Debtor as at the year ended June

and has agreed to record its time on .1 increments. SS estimates that its charges will be not
1

Pursuant to loan documents between the Debtor and Country Bank, the Debtor is obligated to supply yearly audited financial statements.

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exceed $30,000 plus reimbursement of out-of-pocket costs, based upon its past experience with the Debtor. SS will bill the Debtor on a regularly basis and make periodic applications for allowance as required by 327 and 328 of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the Local rules of this Court. 12. As set forth in paragraph 8 hereof and in the Sperduto Affidavit the Debtor

submits that SS is a disinterested person and, therefore, may be retained as accountant to the Debtor. The Debtor is of the opinion and belief that SSs retention to render the accounting services described herein to the Debtor would be in the best interests of the estate. WHEREFORE, the Debtor respectfully requests that the Court authorize SSs retention, and grant such other and further relief as the Court deems just and proper, for which no other application has been made to this or any other Court. Dated: New York, New York July 16, 2011 THE CHRISTIAN BROTHERS INSTITUTE

By:

/s/ Brother Kevin Griffith Brother Kevin Griffith Vice-President

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Exhibit A -

EXHIBIT A

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TARTER KRINSKY & DROGIN LLP Attorneys for The Christian Brothers Institute, et al. Debtors and Debtors-in-Possession 1350 Broadway, 11th Floor New York, New York 10018 (212) 216-8000 Scott S. Markowitz, Esq. Marilyn Simon, Esq. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------------------------------------------- x In re: : : THE CHRISTIAN BROTHERS INSTITUTE, et al. : : Debtors. : ------------------------------------------------------------------- x

Chapter 11 Case No.: 11-22820 (RDD) (Jointly Administered)

AFFIDAVIT OF JOSEPH R. SPERDUTO

STATE OF NEW YORK

) ss.: COUNTY OF WESTCHESTER )

JOSEPH R. SPERDUITO, CPA, being duly sworn, deposes and says: 1. I am a certified public accountant and a partner in the accounting firm of Sperduto

Spector & Company P.C. (SS) with offices located at 15 Chester Avenue, White Plains, New York 10601. 2. SS is not related to The Christian Brothers Institute, debtor and debtor-in-

possession (the Debtor) or its affiliates, members, management, attorneys, or any other party in this case and represents no adverse interest to the creditors. 3. SS has rendered accounting services to the Debtor for the ten (10) years prior to

the Chapter 11 filing. SS is not owed any monies on account of pre-petition accounting services.

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4.

SS seeks to be retained to audit the Statement of Position of the Debtor as of June

30, 2011 and the related Statements of Activities and Cash Flows for the year ended June 30, 2011. Deponent is familiar with the books and records of the Debtor and has fairly and

consistently performed the work for which retention is sought for the past ten (10) years. 5. At this time, it is not possible to accurately determine the amount of time which

will be required to perform the services referred to herein, but the firm estimates that its fees should not exceed $30,000. 6. SS will calculate its fees for professional services by reference to its standard

hourly rates for these services, which are currently as follows: Joseph R. Sperduto Robert B. Nuccio Andrew Piccinini Paul Sarlo Michael Trapp $200/hr $200/hr $120/hr $115/hr $95/hr Partner Partner Audit Staff Audit Staff Audit Staff

7.

SS is aware of the issues presently facing the Debtor and will make every effort to

perform all required services in an efficient and cost effective manner. 8. 9. SS is a disinterested person as that term is defined in the Bankruptcy Code. SS will seek compensation by making periodic applications to the Court in

accordance with the provisions of the Bankruptcy Code and the local rules of this Court unless otherwise ordered by the Court in a monthly fee order. SS will keep its time records in tenths of an hour as is required by this Courts general orders, the United States Trustee Guidelines, the Bankruptcy Code, and the Bankruptcy Rules. 10. Deponent has been advised of the mandatory guidelines for fees and

disbursements for professionals in the Southern District of New York bankruptcy cases dated June 20, 1991, as amended.

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Exhibit A -

WHEREFORE, Deponent respectfully requests that an order be entered herein authorizing the Debtor to retain SS to perform the above-mentioned services at the hourly rates described above.

/s/ Joseph R. Sperduto Joseph R. Sperduto Sworn to before me this 24th day of June, 2011 /s/ Robert G. Sperduto Robert G. Sperduto Notary Public, State of New York No. 01SP6139299 Qualified in Westchester County My Commission Expires Jan. 3, 2014

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