Tronox Inc. (TROX)

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Interim Application of Pillsbury Winthrop Shaw Pittman LLP as Counsel to the Official Committee of Equity Security Holders for Professional Services Rendered and for Reimbursement of Actual and Necessary Expenses Incurred from February 1, 2010 Through June 30, 2010

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Narrative of the Committee’s Involvement in Tronox’s Chapter 11 Cases During the Fourth Interim Fee Period

19. The Debtors commenced their chapter 11 cases on January 12, 2009. On March 13, 2009, the United States trustee appointed the seven (7) member Equity Committee (ECF No. 245 (amending ECF No. 244)). Since that time, the Equity Committee has advanced positions necessary to protect the interests of Tronox’s equity security holders.
The Equity Committee has consistently argued that value remains for equity stakeholders in a reorganized Tronox, and Pillsbury has been charged with researching and pursuing various strategies designed to preserve and maximize that value for all stakeholders in these cases.

20. Pillsbury’s efforts during the Fourth Interim Fee Period centered around the negotiation and development of an alternative plan of reorganization designed to maximize value to all constituencies and challenge other plan structures advanced by other constituents that the Equity Committee believes are premised upon unreasonably low enterprise valuations. At the beginning of the Fourth Interim Fee Period, various constituencies in these cases had resolved to reorganize Tronox according to a structure negotiated and presented to the Court in December of 2009. The Equity Committee was convinced that this established reorganization structure did not maximize value to secured creditors and was premised on a fundamental misunderstanding of Tronox’s value. Consequently, Pillsbury undertook negotiations with various parties—both within and outside these cases—in order to formulate a new plan of reorganization. Included in these efforts were negotiations with the United States of America (the “Government”) and other
claimants, as well as third parties who could potentially fund Tronox’s reorganization through an asset sale or infusion of capital. These efforts have been successful, and the Equity Committee will shortly be filing its own competing plan.

21. Pillsbury also monitored and participated in developments in ongoing disputes in order to ensure that the interests of equity security holders received adequate representation. These efforts involved research and comment on various developments in the Anadarko adversary proceeding, attending depositions, and reviewing discovery materials. Further, Pillsbury monitored developments in the Debtors’ negotiations with the Government, eventually forcing the other case constituents to justify their evaluation of the Government’s claims by seeking to examine the Debtors and the Government regarding the extent and propriety of the Government’s claims.

22. Pillsbury also assisted the Equity Committee with various procedural issues necessary to ensure their continued effective participation in the cases. Active, committed professionals have been necessary for the Equity Committee to participate meaningfully in these cases, as the Committee represents public shareholders and its members include some small or retail holders with limited experience on bankruptcy. The members of the Equity Committee require the dedicated assistance of professionals focused on protecting their rights and preserving value for their constituency. However, compensation of Pillsbury was contested during the Fourth Interim Fee Period, requiring the expenditure of time to defend Pillsbury’s fee applications over the objections and insinuations of other parties to these actions. Because professionals are so vital to the Equity Committee’s role in these cases, defense of Pillsbury’s fees has been necessary and, ultimately, beneficial to these cases. Given that each iteration of the Debtors’ proposed reorganizations has resulted in a more beneficial alternative for the estates in general, the Equity Committee clearly acted to provide value to these estates.

http://www.kccllc.net/documents/0910156/0910156100820000000000001.pdf