KE 72033438
IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
)
In re: ) Chapter 11
)
BOUCHARD TRANSPORTATION CO., INC., et al.,1 )
)
Case No. 20-34682 (DRJ) )
Debtors. ) (Jointly Administered)
)
DEBTORS’ APPLICATION FOR
ENTRY OF AN ORDER (A) AUTHORIZING THE RETENTION AND EMPLOYMENT OF PORTAGE POINT PARTNERS, LLC AS RESTRUCTURING ADVISOR TO THE DEBTORS AND DEBTORS IN POSSESSION, EFFECTIVE AS OF THE PETITION DATE, (B) DESIGNATING MATTHEW RAY AS CHIEF RESTRUCTURING OFFICER, AND (C) GRANTING RELATED RELIEF
This motion seeks an order that may adversely affect you. If you oppose the motion, you should immediately contact the moving party to resolve the dispute. If you and the moving party cannot agree, you must file a response and send a copy to the moving party. You must file and serve your response within 21 days of the date this was served on you. Your response must state why the motion should not be granted. If you do not file a timely response, the relief may be granted without further notice to you. If you oppose the motion and have not reached an agreement, you must attend the hearing. Unless the parties agree otherwise, the court may consider evidence at the hearing and may decide the motion at the hearing.
Represented parties should act through their attorney.
The above-captioned debtors and debtors in possession (collectively, the “Debtors”) respectfully state as follows in support of this application (this “Application”):2
1 Due to the large number of Debtors in these chapter 11 cases, a complete list of the Debtor entities and the last four digits of their federal tax identification numbers is not provided herein. A complete list may be obtained on the website of the Debtors’ proposed claims and noticing agent at https://cases.stretto.com/bouchard. The location of the Debtors’ service address is: 58 South Service Road, Suite 150, Melville, NY 11747.
2 Capitalized terms used but not immediately defined have the meanings given to them elsewhere in this
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Relief Requested
1. The Debtors seek entry of an order, substantially in the attached form (the “Order”): (a) authorizing the Debtors to retain and employ Portage Point Partners, LLC (“Portage Point”) as restructuring advisor for the Debtors, effective as of the Petition Date (as defined herein); (b) designating Matthew Ray of Portage Point as chief restructuring officer (“CRO”), in each case in accordance with the terms and conditions of the engagement letter dated as of September 24, 2020, (the “Engagement Letter”), which is attached hereto as Exhibit A; and (c) granting related relief.
2. In support of this Application, the Debtors submit the Declaration of Matthew Ray
in Support of the Debtors’ Application for Entry of an Order (A) Authorizing the Retention and Employment of Portage Point Partners, LLC as Restructuring Advisor to the Debtors and Debtors in Possession, Effective as of the Petition Date, (B) Designating Matthew Ray as Chief Restructuring Officer, and (C) Granting Related Relief (the “Ray Declaration”), which is attached
hereto as Exhibit B.
Jurisdiction and Venue
3. The United States Bankruptcy Court for the Southern District of Texas (the “Court”) has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b). The Debtors confirm their consent, pursuant to rule 7008 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), to the entry of a final order by the Court.
4. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
5. The bases for the relief requested herein are sections 327(a), 328(a), and 1107(b) of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the “Bankruptcy Code”),
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Bankruptcy Rules 2014(a) and 2016, and rules 2014-1, 2016-1, and 9013-1 of the Bankruptcy Local Rules for the Southern District of Texas (the “Local Rules”)
Background
6. The Debtors comprise one of the nation’s largest independently-owned ocean-going petroleum barge companies. Since their establishment over 100 years ago, the Debtors have expanded their fleet to encompass 25 barges and 25 tugs, all with state-of-the-art equipment and fuel-efficient technologies. Headquartered in Melville, New York, the Debtors provide extensive oil and petroleum product transportation along the Eastern Seaboard and Gulf Coast of the United States.
7. On September 28, 2020 and September 29, 2020 (as applicable to each Debtor, the “Petition Date”), each Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. A detailed description surrounding the facts and circumstances of these chapter 11 cases is set forth in the Declaration of Matthew Ray of Portage Point Partners, LLC in
Support of the Chapter 11 Petitions and the First Day Motions [Docket No. 79] (the “First Day
Declaration”), filed on October 12, 2020. The Debtors are operating their business and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. On September 30, 2020, the Court entered orders [Docket Nos. 30, 31] authorizing procedural consolidation and joint administration of these chapter 11 cases pursuant to Bankruptcy Rule 1015(b). No request for the appointment of a trustee or examiner has been made in these chapter 11 cases, and no committees have been appointed or designated.
Portage Point’s Qualifications
8. In consideration of the size and complexity of their business, as well as the exigencies of the circumstances, the Debtors have determined that the services of an experienced
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restructuring advisor will substantially enhance their attempts to maximize the value of their estates. Portage Point is well qualified to provide these services in light of their extensive knowledge and expertise with respect to chapter 11 proceedings.
9. Portage Point is a restructuring and turnaround management firm whose professionals have a wealth of experience in providing restructuring advisory services and enjoy an excellent reputation for services they have rendered on behalf of debtors and creditors throughout the United States.
10. Professionals currently employed by Portage Point have assisted, advised, and provided strategic advice to debtors, creditors, bondholders, investors, and other entities in numerous cases, including the following: In re Hornbeck Offshore Services, LLC, No. 20-32685 (DRJ) (June 18, 2020); In re Dura Automotive Systems, No. 19-12378 (KBO) (Bankr. D. Del. Oct. 17, 2019); In re Melinta Therapeutics, No. 19-12748 (LSS) (Bankr. D. Del. Dec. 27, 2019); In re
Loot Crate, Inc., No. 19-11791 (BLS) (Bankr. D. Del. Sept. 18, 2019); In re Total Finance Investment Inc., No. 19-03734 (CAD) (Bankr. N.D. Ill. Mar. 14, 2019); In re Rupari Holding Corp., No. 17-10793 (KJC) (Bankr. D. Del. April 10, 2017); In re Triangle USA Petroleum Corporation, No. 16-11566 (MFW) (Bankr. D. Del. June 29 2016).3
11. Since September 24, 2020, Portage Point has provided restructuring advisory services to the Debtors. In providing such prepetition professional services, Portage Point has acquired knowledge of the Debtors and their businesses, and developed familiarity with the Debtors’ financial affairs, debt structure, operations, and related matters. Likewise, in providing prepetition services to the Debtors, Portage Point and its personnel (including the proposed CRO)
3 Because of the voluminous nature of the orders cited herein, such orders have not been attached to this
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(the “Portage Point Professionals”) have worked closely with the Debtors’ chief executive officer and other advisors to understand the Debtors’ businesses. For these reasons, Portage Point is both well qualified and uniquely suited to deal effectively and efficiently with matters that may arise in the context of these chapter 11 cases. The retention of Portage Point and the designation of Mr. Ray as CRO on the terms and conditions set forth herein is necessary and appropriate, is in the best interests of the Debtors’ estates, creditors, and all other parties in interest, and should be granted in all respects.
Scope of Services
12. The terms of the Engagement Letter shall govern the Debtors’ retention of Portage Point except as explicitly set forth herein or in any order granting this Application.
13. Among other things, the Portage Point Professionals will provide assistance to the Debtors with respect to management of the overall restructuring process, the development of ongoing business and financial plans and supporting restructuring negotiations among the Debtors, their advisors and their creditors with respect to an overall exit strategy for their chapter 11 cases.
14. Portage Point will provide such restructuring support services as Portage Point and the Debtors shall deem appropriate and feasible in order to manage and advise the Debtors in the course of these chapter 11 cases, including, but not limited to:4
a. providing Mr. Ray to serve as the Debtors’ CRO (subject to the terms and conditions set forth in the Order);
b. assisting in evaluating and developing a short-term cash flow model and related liquidity management tools to for general corporate purposes or as may be required by the Debtors or their various constituents including,
4 The summaries of the Engagement Letter contained in this Application are provided for purposes of convenience
only. In the event of any inconsistency between the summaries contained herein and the terms and provisions of the Engagement Letter, the terms of the Engagement Letter will control. The Debtors reserve the right to amend, restate, supplement, or modify the Engagement Letter, as the case may be, and any such amended, restated, supplemented, or modified Engagement Letter will be filed with the Court.
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without limitation, employees, investors, customers, vendors, and lenders (“Constituents”) in connection with negotiations with such Constituents; c. assisting with the evaluation and development of a business plan and such
other related forecasts as may be required by the Debtors’ for general corporate purposes or in connection with Constituent negotiations;
d. assisting in evaluating and developing various strategic alternatives and financial analyses as requested by the Debtors for general corporate purposes of in connection with Constituent negotiations;
e. assisting in evaluating and implementing contingency planning related to a chapter 11 proceeding;
f. assisting in working and negotiating with Constituents including, but not limited to, meeting with Constituents, developing presentations and providing management with financial analytical assistance necessary to facilitate such negotiations;
g. assisting with the development and distribution of information required by the Debtors’ Constituents;
h. assisting in obtaining and presenting information required by parties in interest in the Debtors’ bankruptcy process, including official committees appointed by the Court and the Court itself;
i. assisting in other business, financial and reporting aspects of a chapter 11 proceeding including, without limitation, development and execution of asset sales, disclosure statement, and plan of reorganization; and
j. assisting with such other matters as may be requested that fall within Portage Point’s expertise and that are mutually agreeable.
Portage Point’s Disinterestedness
15. To the best of the Debtors’ knowledge, information, and belief, other than as set forth in the Ray Declaration, Portage Point: (a) has no connection with the Debtors, their creditors, other parties in interest, or the attorneys or accountants of any of the foregoing, or the Office of the United States Trustee for the Southern District of Texas (the “U.S. Trustee”) or any person employed in the Office of the U.S. Trustee; (b) does not hold any interest adverse to the Debtors’ estates; and (c) believes it is a “disinterested person” as defined by section 101(14) of the Bankruptcy Code.
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16. Portage Point is “disinterested” as such term is defined in section 101(14) of the Bankruptcy Code. In addition, as set forth in the Ray Declaration, if any new material facts or relationships are discovered or arise, Portage Point will provide the Court with a supplemental declaration related thereto.
Professional Compensation and Expense Reimbursement
17. Portage Point’s decision to accept this engagement to provide services to the Debtors is conditioned upon its ability to be retained in accordance with its customary terms and conditions of employment, compensated for its services, and reimbursed for the out-of-pocket expenses it incurs in accordance with its customary billing practices, as set forth on Schedule 1 of the Engagement Letter (the “Fee and Expense Structure”).
18. In accordance with the terms of the Engagement Letter, Portage Point will be paid by the Debtors for the services of the Portage Point Professionals (including the CRO) at their customary hourly billing rates for 2020, subject to periodic adjustments, which are as follows:
Portage Point Professionals’ Hourly Rates:
Managing Partner $885
Managing Directors $715 - 765
Director $615 - 665
Vice President $495 - 565
Associate $360 - 405
In the ordinary course of its business, Portage Point may periodically adjust its billing rates. Changes in applicable hourly rates will be noted on the invoices for the first time period in which the revised rates have become effective. Portage Point’s hourly rates are typically adjusted quarterly to reflect the advancing expertise, capabilities, and seniority of Portage Point’s professionals as well as general economic factors.
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19. In addition, Portage Point will be reimbursed for the reasonable out-of-pocket expenses of the Portage Point Professionals incurred in connection with this assignment, including transportation costs, lodging, and meals.
20. During the pendency of these chapter 11 cases, Portage Point will file fee statements as well as interim and final fee applications for the allowance of compensation for services rendered and reimbursement of expenses in accordance with any interim compensation orders entered by this Court, and the relevant sections of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules.
21. The Debtors submit that the Fee and Expense Structure is reasonable, market-based, and designed to compensate Portage Point fairly for its work and to cover fixed and routine overhead expenses. The Fee and Expense Structure appropriately reflects the nature of the services to be provided by Portage Point and the fee structures typically utilized by leading advisory firms of similar stature to Portage Point for comparable engagements. The Fee and Expense Structure is consistent with Portage Point’s normal and customary billing practices for cases of this size and complexity and that require the level and scope of services outlined herein.
22. The Debtors understand that Portage Point intends to apply to the Court for allowance of compensation and reimbursement of expenses for its restructuring advisory services in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, corresponding Local Rules, orders of this Court, and guidelines established by the U.S. Trustee. Portage Point did not receive any retainer from the Debtors in connection with preparing for and conducting the filing of these chapter 11 cases.
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Indemnification Provisions
23. As a material part of the consideration for which the Portage Point Professionals have agreed to provide the services described herein, the Debtors have agreed to the indemnification provisions in the Engagement Letter. Notwithstanding the foregoing, the Debtors and Portage Point have agreed to modify such provisions as follows, during the pendency of these chapter 11 cases:
a. subject to the provisions of subparagraphs (b) and (c) below, the Debtors are (i) permitted to indemnify those persons serving as executive officers on the same terms as provided to the Debtors’ other officers and directors under the corporate bylaws and applicable state law, along with insurance coverage under any policy covering the Debtors’ directors and officers and any equivalently-placed employees, and (ii) authorized to indemnify, and to provide contribution and reimbursement to, and will indemnify, and provide contribution and reimbursement to, Portage Point and its affiliates in accordance with the Engagement Letter for any claim arising from, related to, or in connection with the services provided for in the Engagement Letter; b. notwithstanding subparagraph (a) above or any provisions of the
Engagement Letter to the contrary, the Debtors will have no obligation to indemnify Portage Point or provide contribution or reimbursement to Portage Point (i) for any claim or expense that is judicially determined (the determination having become final) to have arisen from Portage Point’s bad faith, self-dealing, breach of fiduciary duty (if any), gross negligence, or willful misconduct, (ii) for a contractual dispute in which the Debtors allege the breach of Portage Point’s contractual obligations if the Court determines that indemnification, contribution, or reimbursement would not be permissible pursuant to In re United Artists Theatre Co., 315 F.3d 217 (3d Cir. 2003), or (iii) for any claim or expense that is settled prior to a judicial determination as to the exclusions set forth in clauses (i) and (ii) above, but determined by this Court, after notice and a hearing, to be a claim or expense for which Portage Point should not receive indemnity, contribution or reimbursement under the terms of the Engagement Letter, as modified by the Order; and
c. if, before the earlier of (i) the entry of an order confirming a chapter 11 plan in these cases (that order having become a final order no longer subject to appeal), and (ii) the entry of an order closing these chapter 11 cases, Portage Point believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors’ indemnification, contribution and/or reimbursement obligations under the Engagement Letter, as modified by this Order, including without limitation the advancement of defense costs,
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Portage Point must file an application therefor in this Court, and the Debtors may not pay any such amounts to Portage Point before the entry of an order by this Court approving such payment. This subparagraph (c) is intended only to specify the period during which the Court will have jurisdiction over any request by Portage Point for indemnification, contribution or reimbursement and is not a provision limiting the duration of the Debtors’ obligation to indemnify.
No Duplication of Services
24. The Debtors believe that the services provided by Portage Point will not duplicate the services that other professionals will be providing to the Debtors in these chapter 11 cases. Specifically, the Debtors have chosen Jefferies, LLC (“Jefferies”) to act as their investment banker. Portage Point will work closely with Jefferies to prevent any duplication of efforts in the course of advising the Debtors. Portage Point will carry out unique functions and will use reasonable efforts to coordinate with the Debtors and their professionals retained in these chapter 11 cases to avoid the unnecessary duplication of services.
Basis for Relief
25. The Debtors submit that the retention of Portage Point and designation of Mr. Ray as CRO under the terms described herein is appropriate under sections 327(a), 328(a), and 1107(b) of the Bankruptcy Code. Section 327(a) of the Bankruptcy Code empowers the trustee, with the Court’s approval, to employ professionals “that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee’s duties under this title.” 11 U.S.C. § 327(a). Section 101(14) of the Bankruptcy Code defines a “disinterested person” as a person that:
a. is not a creditor, an equity security holder, or an insider;
b. is not and was not, within 2 years before the date of the filing of the petition, a director, officer, or employee of the debtor; and
c. does 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
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or indirect relationship to, connection with, or interest in, the debtor, or for any other reason.
11 U.S.C. § 101(14).
26. Further, section 1107(b) of the Bankruptcy Code provides that “a person is not disqualified for employment under section 327 of this title by a debtor in possession solely because of such person’s employment by or representation of the debtor before the commencement of the case.” 11 U.S.C. § 1107(b). Portage Point’s prepetition relationship with the Debtors is therefore not an impediment to Portage Point’s retention as Debtors’ postpetition restructuring advisor.
27. Section 328(a) of the Bankruptcy Code authorizes the employment of a professional person “on any reasonable terms and conditions of employment, including on a retainer . . . .” 11 U.S.C. § 328(a). The Debtors submit that the terms and conditions of Portage Point’s retention as described herein, including the proposed compensation and indemnification terms, are reasonable and in keeping with the terms and conditions typical for engagements of this size and character. Furthermore, the requirements set forth by Bankruptcy Rule 2014 are satisfied by this Application. Because the Debtors will require substantial assistance with their chapter 11 process, it is reasonable for Debtors to seek to employ and retain the CRO and Portage Point to serve as their restructuring advisor on the terms and conditions set forth herein.
Notice
28. Notice of the hearing on the relief requested in this Motion will be provided by the Debtors in accordance and compliance with Bankruptcy Rules 4001 and 9014, as well as the Bankruptcy Local Rules, and is sufficient under the circumstances. Without limiting the foregoing, due notice will be afforded, whether by facsimile, electronic mail, overnight courier or hand delivery, to parties-in-interest, including: (a) the Office of the U.S. Trustee for the Southern District of Texas; (b) entities listed as holding the 30 largest unsecured claims against the Debtors
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(on a consolidated basis); (c) Wells Fargo Bank, National Association, and counsel thereto; (d) Fortress Credit Co LLC, and counsel thereto; (e) the DIP Lenders, and counsel thereto; (f) the United States Attorney’s Office for the Southern District of Texas; (g) the Internal Revenue Service; (h) the United States Securities and Exchange Commission; (i) the Environmental Protection Agency and similar state environmental agencies for states in which the Debtors conduct business; (j) the state attorneys general for states in which the Debtors conduct business; and (k) any party that has requested notice pursuant to Bankruptcy Rule 2002. In light of the nature of the relief requested, no other or further notice need be given.
The Debtors respectfully request that the Court enter the Order, granting the relief requested in this Application and granting such other and further relief as is appropriate under the circumstances.
Houston, Texas
Dated: October 27, 2020
/s/ Morton S. Bouchard III
Morton S. Bouchard III Chief Executive Officer
Certificate of Service
I certify that on October 27, 2020, I caused a copy of the foregoing document to be served by the Electronic Case Filing System for the United States Bankruptcy Court for the Southern District of Texas.
/s/ Matthew D. Cavenaugh
Exhibit A Engagement Letter
Exhibit B
IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
)
In re: ) Chapter 11
)
BOUCHARD TRANSPORTATION CO., INC., et al.,1 )
)
Case No. 20-34682 (DRJ) )
Debtors. ) (Joint Administration Requested)
) )
DECLARATION OF MATTHEW RAY IN SUPPORT OF THE DEBTORS’ APPLICATION FOR ENTRY OF AN ORDER (A) AUTHORIZING THE RETENTION AND EMPLOYMENT OF PORTAGE POINT PARTNERS, LLC AS RESTRUCTURING ADVISOR TO THE DEBTORS AND DEBTORS IN POSSESSION, EFFECTIVE AS OF
THE PETITION DATE, (B) DESIGNATING MATTHEW RAY AS CHIEF RESTRUCTURING OFFICER, AND (C) GRANTING RELATED RELIEF
I, Matthew Ray, being duly sworn, hereby state as follows:
1. I am a Founder and Managing Partner of Portage Point Partners, LLC (“Portage Point”), a consulting firm that has significant experience in providing financial advisory services both in- and out-of-court, and enjoys an excellent reputation for services it has rendered on behalf of debtors and creditors throughout the United States.
2. I submit this declaration on behalf of Portage Point (this “Declaration”) in support of the Debtors’ Application for Entry of an Order (A) Authorizing the Retention and Employment
of Portage Point Partners, LLC as Restructuring Advisor to the Debtors and Debtors in Possession, Effective as of the Petition Date, (B) Designating Matthew Ray as Chief Restructuring
1 Due to the large number of Debtors in these chapter 11 cases, a complete list of the Debtor entities and the last four digits of their federal tax identification numbers is not provided herein. A complete list may be obtained on the website of the Debtors’ proposed claims and noticing agent at https://cases.stretto.com/bouchard. The location of the Debtors’ service address is: 58 South Service Road, Suite 150, Melville, NY 11747.
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Officer, and (C) Granting Related Relief (the “Application”),2 by which the Debtors seek to retain
Portage Point on the terms and conditions set forth in the Application and the engagement letter dated as of September 24, 2020, (the “Engagement Letter”), a copy of which is attached to the Application as Exhibit A. Except as otherwise noted,3 I have personal knowledge of the matters
set forth herein.
Portage Point’s Qualifications
3. Portage Point is a restructuring and turnaround management firm whose professionals have a wealth of experience in providing restructuring advisory services and enjoy an excellent reputation for services they have rendered on behalf of debtors and creditors throughout the United States.
4. Professionals currently employed by Portage Point have assisted, advised, and provided strategic advice to debtors, creditors, bondholders, investors, and other entities in numerous cases, including the following: In re Hornbeck Offshore Services, LLC, No. 20-32685 (DRJ) (June 18, 2020); In re Dura Automotive Systems, No. 19-12378 (KBO) (Bankr. D. Del. Oct. 17, 2019); In re Melinta Therapeutics, No. 19-12748 (LSS) (Bankr. D. Del. Dec. 27, 2019); In re
Loot Crate, Inc., No. 19-11791 (BLS) (Bankr. D. Del. Sept. 18, 2019); In re Total Finance Investment Inc., No. 19-03734 (CAD) (Bankr. N.D. Ill. Mar. 14, 2019); In re Rupari Holding Corp., No. 17-10793 (KJC) (Bankr. D. Del. April 10, 2017); In re Triangle USA Petroleum Corporation, No. 16-11566 (MFW) (Bankr. D. Del. June 29 2016).4
2 Capitalized terms used but not defined herein will have the meanings ascribed to such terms in the Application. 3 Certain of the disclosures herein relate to matters within the personal knowledge of other professionals at Portage
Point and are based on information provided by them.
4 Because of the voluminous nature of the orders cited herein, such orders have not been attached to this
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5. I and the Portage Point personnel who will work with me on this matter (collectively, the “Portage Point Professionals”) have substantial expertise in, among other things, restructuring negotiations, treasury operations, liquidity management, financial accounting and reporting, operational and debt reorganization, key stakeholder management and business plan development, and cost-reduction initiatives, and, if approved, will provide services to the Debtors under an order approving the Application. The Portage Point Professionals will work closely with the Debtors’ chief executive officer and professionals throughout the reorganization process.
6. By virtue of the expertise of its restructuring personnel, Portage Point is well qualified to provide services to and represent the Debtors’ interests in these chapter 11 cases. Since September 24, 2020, Portage Point has provided restructuring advisory services to the Debtors. Portage Point has acquired knowledge of the Debtors and their businesses, and developed familiarity with the Debtors’ financial affairs, debt structure, operations, and related matters. For these reasons, Portage Point is both well qualified and uniquely suited to deal effectively and efficiently with matters that may arise in the context of these chapter 11 cases.
Scope of Services
7. The terms of the Engagement Letter shall govern the Debtors’ retention of Portage Point except as explicitly set forth herein or in any order granting this Application.
8. Among other things, the Portage Point Professionals will provide assistance to the Debtors with respect to management of the overall restructuring process, the development of ongoing business and financial plans and supporting restructuring negotiations among the Debtors, their advisors and their creditors with respect to an overall exit strategy for their chapter 11 cases.
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9. Portage Point will provide such restructuring support services as Portage Point and the Debtors shall deem appropriate and feasible in order to manage and advise the Debtors in the course of these chapter 11 cases, including, but not limited to:5
a. providing me to serve as the Debtors’ CRO (subject to the terms and conditions set forth in any order approving the Application);
b. assisting in evaluating and developing a short-term cash flow model and related liquidity management tools to for general corporate purposes or as may be required by the Debtors or their various constituents including, without limitation, employees, investors, customers, vendors, and lenders (“Constituents”) in connection with negotiations with such Constituents; c. assisting with the evaluation and development of a business plan and such
other related forecasts as may be required by the Debtors’ for general corporate purposes or in connection with Constituent negotiations;
d. assisting in evaluating and developing various strategic alternatives and financial analyses as requested by the Debtors for general corporate purposes of in connection with Constituent negotiations;
e. assisting in evaluating and implementing contingency planning related to a chapter 11 proceeding;
f. assisting in working and negotiating with Constituents including but not limited to meeting with Constituents, developing presentations and providing management with financial analytical assistance necessary to facilitate such negotiations;
g. assisting with the development and distribution of information required by the Debtors’ Constituents;
h. assisting in obtaining and presenting information required by parties in interest in the Debtors’ bankruptcy process, including official committees appointed by the Court and the Court itself;
i. assisting in other business, financial and reporting aspects of a chapter 11 proceeding including, without limitation, development and execution of asset sales, disclosure statement, and plan of reorganization; and
5 The summaries of the Engagement Letter contained in this Application are provided for purposes of convenience
only. In the event of any inconsistency between the summaries contained herein and the terms and provisions of the Engagement Letter, the terms of the Engagement Letter will control.
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j. assisting with such other matters as may be requested that fall within Portage Point’s expertise and that are mutually agreeable.
Professional Compensation and Expense Reimbursement
10. Portage Point’s decision to accept this engagement to provide services to the Debtors is conditioned upon its ability to be retained in accordance with its customary terms and conditions of employment, compensated for its services, and reimbursed for the out-of-pocket expenses it incurs in accordance with its customary billing practices, as set forth on Schedule 1 of the Engagement Letter (the “Fee and Expense Structure”).
11. In accordance with the terms of the Engagement Letter, Portage Point will be paid by the Debtors for the services of the Portage Point Professionals (including the CRO) at their customary hourly billing rates for 2020, subject to periodic adjustments, which are as follows:
Portage Point Professionals’ Hourly Rates:
Managing Partner $885
Managing Directors $715 - 765
Director $615 - 665
Vice President $495 - 565
Associate $360 - 405
In the ordinary course of its business, Portage Point may periodically adjust its billing rates. Changes in applicable hourly rates will be noted on the invoices for the first time period in which the revised rates have become effective. Portage Point’s hourly rates are typically adjusted quarterly to reflect advancing expertise, capabilities and seniority of Portage Point’s professionals as well as general economic factors.
12. In addition, Portage Point will be reimbursed for the reasonable out-of-pocket expenses of the Portage Point Professionals incurred in connection with this assignment, including transportation costs, lodging, and meals.
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13. During the pendency of these chapter 11 cases, Portage Point will file interim and final fee applications for the allowance of compensation for services rendered and reimbursement of expenses in accordance with any interim compensation orders entered by this Court, and the relevant sections of the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules.
14. Portage Point intends to apply to the Court for allowance of compensation and reimbursement of expenses for its financial advisory services in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, corresponding Local Rules, orders of this Court, and guidelines established by the U.S. Trustee. Portage Point did not receive any retainer from the Debtors in connection with preparing for and conducting the filing of these chapter 11 cases.
Portage Point’s Disinterestedness
15. In connection with its proposed retention by the Debtors in these chapter 11 cases, Portage Point undertook a robust review to determine whether it had any conflicts or other relationships that might cause it not to be disinterested or to hold or represent an interest adverse to the Debtors. Specifically, Portage Point obtained from the Debtors and/or their representatives the names of individuals and entities that may be parties in interest in these chapter 11 cases (the “Potential Parties in Interest”). Such parties are listed on Schedule 1 attached hereto. A search was performed for connections to the Potential Parties in Interest within the past five years.
16. Based on that review, Portage Point represents that, to the best of its knowledge, Portage Point knows of no fact or situation that would represent a conflict of interest for Portage Point with regard to the Debtors.
17. As a result of the review, I have thus far ascertained that, except as may be set forth herein, upon information and belief, if retained, Portage Point:
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a. is not a creditor of the Debtors (including by reason of unpaid fees for prepetition services) or an equity security holder of the Debtors;
b. is not, and has not been, within 2 years before the date of the filing of the petition, a director, officer, or employee of the Debtors; and
c. does not have an interest materially adverse to the interests of the Debtors’ estates, 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 Debtors, or for any other reason.
18. Portage Point provides services to many clients with interests in the Debtors’ chapter 11 cases. To the best of my knowledge, except as indicated below, the Firm’s services for such clients do not relate to the Debtors’ chapter 11 cases.
19. Portage Point is an advisor providing services and advice in many areas, including restructuring and distressed debt. As part of its diverse practice, Portage Point appears in numerous cases, proceedings, and transactions involving many different attorneys, accountants, investment bankers, and financial consultants, some of whom may represent claimants and parties in interest in these chapter 11 cases. Further, Portage Point has in the past, and may in the future, be represented by various attorneys and law firms, some of whom may be involved in these chapter 11 cases. In addition, Portage Point has been in the past, and likely will be in the future, engaged in matters unrelated to the Debtors or these chapter 11 cases in which it works with or in opposition to other professionals involved in these chapter 11 cases. Moreover, Portage Point might have referred work to other professionals who are retained in these chapter 11 cases. Likewise, certain such professionals who are retained in these chapter 11 cases might have referred work to Portage Point. To the best of my knowledge, information and belief, insofar as I have been able to ascertain after reasonable inquiry, none of these business relationships constitute interests adverse to the Debtors.
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20. From time to time, Portage Point has provided services, and likely will continue to provide services, to certain creditors of the Debtors and various other parties adverse to the Debtors in matters wholly unrelated to these chapter 11 cases. As described herein, however, Portage Point has undertaken a detailed search to determine, and to disclose, whether it is providing or has provided services to any significant creditor, equity security holder, insider or other party in interest in such unrelated matters.
21. To the best of my knowledge, information and belief, insofar as I have been able to ascertain after reasonable inquiry, none of the Portage Point Professionals (a) have any connection with Office of the United States Trustee for the Southern District of Texas (the “U.S. Trustee”), or any employee in the Office of the U.S. Trustee; or (b) are related or connected to any United States Bankruptcy Judge for the Southern District of Texas, except as otherwise set forth herein.
22. To the best of my knowledge, none of the members of the engagement team or Portage Point is a direct holder of any of the Debtors’ securities. It is possible that members of the engagement team or certain of Portage Point employees, managing directors, board members, equity holders, or an affiliate of any of the foregoing, may own interests in mutual funds or other investment vehicles (including various types of private funds) that own the Debtors’ or other parties in interest’s debt or equity securities or other financial instruments, including bank loans and other obligations. Typically, the holders of such interests have no control over investment decisions related to such investment funds or financial instruments. Portage Point’s policy prohibits its employees from personally trading in the Debtors’ securities.
23. To the best of my knowledge, information and belief, insofar as I have been able to ascertain after reasonable inquiry, Portage Point has not been retained to assist any entity or person other than the Debtors on matters relating to, or in direct connection with, these chapter 11 cases.
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Portage Point will continue to provide professional services to entities that may be creditors or equity security holders of the Debtors or other parties in interest in these chapter 11 cases, provided that such services do not relate to, or have any direct connection with, these chapter 11 cases or the Debtors.
24. Certain of Portage Point’s employees, managing directors, board members, equity holders, or an affiliate of any of the foregoing may have financial accounts or insurance relationships with a Potential Party in Interest.
25. Despite the efforts described above to identify and disclose the connections that Portage Point has with parties in interest in these chapter 11 cases, because the Debtors form a large enterprise with numerous creditors and other relationships, Portage Point is unable to state with certainty that every client relationship or other connection has been identified and disclosed.
26. In accordance with section 504 of the Bankruptcy Code and Bankruptcy Rule 2016, neither I nor Portage Point has entered into any agreements, express or implied, with any other party in interest, including the Debtors, any creditor, or any attorney for such party in interest in these chapter 11 cases, (a) for the purpose of sharing or fixing fees or other compensation to be paid to any such party in interest or its attorneys for services rendered in connection therewith, (b) for payment of such compensation from the assets of the estates in excess of the compensation allowed by this Court pursuant to the applicable provisions of the Bankruptcy Code, or (c) for payment of compensation in connection with these chapter 11 cases other than in accordance with the applicable provisions of the Bankruptcy Code.
27. Except as otherwise set forth herein, insofar as I have been able to determine, neither I, Portage Point nor any Portage Point Professionals hold or represent any interest adverse to the Debtors or their estates, and Portage Point is a “disinterested person” as that term is defined
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in section 101(14) of the Bankruptcy Code, as modified by section 1107(b) of the Bankruptcy Code, in that Portage Point and its professionals and employees who will work on the engagement:
a. are not creditors, equity security holders, or insiders of the Debtors;
b. were not, within two years before the Petition Date, a director, officer, or employee of the Debtors; and
c. do not have an interest materially adverse to the interest of the Debtors’ estate or any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason.
28. If Portage Point discovers additional information that requires disclosure, Portage Point will promptly file a supplemental disclosure with this Court as required by Bankruptcy Rule 2014. Portage Point reserves the right to supplement this Declaration in the event that Portage Point discovers any facts bearing on matters described in this Declaration regarding Portage Point’s employment by the Debtors.
Dated: October 27, 2020 Houston, Texas
/s/ Matthew Ray
Matthew Ray
Founder and Managing Partner Portage Point Partners, LLC
Schedule 1 List of Schedules Schedule Category
1(a) Subsidiaries / Affiliates 1(b) Directors & Officers
1(c) Shareholders
1(d) Bankruptcy Judges
1(e) Government/Regulatory Agencies and Taxing Authorities
1(f) Insurers
1(g) Investment Bankers
1(h) Landlords
1(i) Lenders, Lienholders, Banking Relationships
1(j) Litigation
1(k) Professionals
1(l) Significant Customers
1(m) Significant Vendors
1(n) US Trustee Office Personnel
SCHEDULE 1(a) Subsidiaries / Affiliates B. No. 205 Corp. B. No. 210 Corp. B. No. 215 Corp. B. No. 220 Corp. B. No. 225 Corp. B. No. 230 Corp. B. No. 231 Corp. B. No. 233 Corp. B. No. 235 Corp. B. No. 240 Corp. B. No. 242 Corp. B. No. 245 Corp. B. No. 250 Corp. B. No. 252 Corp. B. No. 260 Corp. B. No. 262 Corp. B. No. 264 Corp. B. No. 265 Corp. B. No. 270 Corp. B. No. 272 Corp. B. No. 280 Corp. B. No. 282 Corp. B. No. 284 Corp. B. No. 285 Corp. B. No. 295 Corp. B. No. 57
Tug Barbara E. Bouchard Corp. Tug Bouchard Boys Corp. Tug Bouchard Girls Corp. Tug Brendan J. Bouchard Corp. Tug Buster Bouchard Corp. Tug Captain Fred Bouchard Corp. Tug Danielle M. Bouchard Corp. Tug Denise A. Bouchard Corp. Tug Donna J. Bouchard Corp. Tug Ellen S. Bouchard Corp. Tug Evening Breeze Corp. Tug Evening Light Corp Tug Evening Mist Corp. Tug Evening Star Corp. Tug Evening Tide Corp
Tug Frederick E. Bouchard Corp.
Tug J. George Betz Corp. Tug Jane A. Bouchard Corp. Tug Kim M. Bouchard Corp. Tug Linda Lee. Bouchard Corp. Tug Marion C. Bouchard Corp. Tug Morton S. Bouchard IV Corp. Tug Morton S. Bouchard Jr. Corp. Tug Ralph E. Bouchard Corp. Tug Rhea I. Bouchard Corp. Tug Robert J. Bouchard Corp.
SCHEDULE 1(b)
Directors & Officers
SCHEDULE 1(c)
Shareholders
SCHEDULE 1(d) Bankruptcy Judges Isgur, Marvin Jones, David R. Lopez, Chris Norman, Jeffrey P. Rodriguez, Eduardo V.
SCHEDULE 1(e)
Government/Regulatory Agencies and Taxing Authorities
Broward, County of (FL), Board of Commissioners Lafayette, City of (LA)
New York State Insurance Fund
New York, City of (NY), Department of Finance
New York, State of, Department of Taxation and Finance Port Authority of New York and New Jersey
Port of Houston Authority
South Louisiana Port Commission
United States, Government of the, Coast Guard
United States, Government of the, Department of the Treasury Broward, County of (FL), Board of Commissioners
Lafayette, City of (LA)
Louisiana, State of, Department of Revenue Louisiana, State of, Tax Commission
New Jersey, State of, Department of the Treasury, Division of Taxation New York State Insurance Fund
New York, City of (NY), Department of Finance
New York, State of, Department of Taxation and Finance Port Authority of New York and New Jersey
Port of Houston Authority
South Louisiana Port Commission
United States, Government of the, Coast Guard
United States, Government of the, Department of the Treasury Virginia, Commonwealth of, Department of Taxation
SCHEDULE 1(f)
Insurers
American Alternative Insurance Corp. Ascot Insurance Co.
Brit Syndicates Ltd. Canopius Insurance Co. Canopius Insurance Services Chaucer Holdings Ltd.
Chubb Global Markets – Marine A Continental Insurance Co., The Eagle Ocean Agencies Inc.
Endurance Worldwide Insurance Ltd. Helvetia Group, The
Helvetia Marine Services Ltd. Liberty Mutual Insurance Co. Markel Syndicate Management Ltd. Mitsui Sumitomo Insurance USA Inc. MS Amlin Underwriting Ltd.
Navigators Insurance Co. Norwegian Hull Club
Royal & Sun Alliance Insurance plc Safe Harbor Pollution Insurance
Signal Mutual Indemnity Association Ltd. Tokio Marine HCC
UK P&I Club
United Kingdom Mutual Steam Ship Assurance Association (Europe) Ltd., The United States Fire Insurance Co.
Unitedhealthcare Insurance Co. Willis of New York Inc.
SCHEDULE 1(g)
Investment Bankers
SCHEDULE 1(h)
Landlords
SCHEDULE 1(i)
Lenders, Lienholders, Banking Relationships
A.R.M. Marine Supply LLC Armorica Sales Inc.
Atlantic Cordage Corp.
Baker Tilly Virchow Krause LLP Bank of America Corp.
Billybey Marina Services LLC Boland Marine & Industrial LLC Bollinger Shipyards Lockport LLC Caddell Dry Dock & Repair Co. Inc. CFGI LLC
Clean Water of New York Inc. Colby Service & Supply LLC E.N. Bisso & Son Inc.
ECM Maritime Services LLC Engine Systems Inc.
Flag Service & Maintenance Inc. Flagship Management LLC Flight Safety International Inc. Fortress Credit Corp.
Freehill Hogan & Mahar LLP GMD Shipyard Corp.
GMT Electronics Inc.
Greater Baton Rouge Port Commission Hartree Partners LP
HP Consolidated Hyde Marine Inc.
Intercontinental Terminals Co. LLC
International Ship Repair & Marine Services Inc.
Kinder Morgan Inc. Marine Systems Inc. MCA Associates Inc.
McAllister Towing & Transportation Co. Inc.
Metropolitan Marine Transportation Inc. Mormax Co. Inc.
Murphy Rogers Sloss Gambel & Tompkins plc
National Insurance Brokerage of New York Inc.
Northeastern Air Management Corp. Owen Petersen & Co.
Plaza Marine Inc.
Port Authority of New York and New Jersey Portland Tugboat LLC
Providence Steamboat Co. Rio Marine Inc.
Rolls-Royce plc S&P Global Platts Inc. S.C. Engineering Co. Inc. Signature Bank
SKOUT Secure Intelligence LLC
ST Engineering Halter Marine Offshore Inc. St. Petersburg, City of (FL)
Stewart & Stevenson LLC Unitedhealthcare Insurance Co. VT Halter Marine Inc.
Wells Fargo
Wells Fargo Bank NA
Wells Fargo Commercial Services Winston & Strawn LLP
SCHEDULE 1(j)
Litigation
A.R.M. Marine Supply LLC Billybey Marina Services LLC Bollinger Amelia Repair LLC Bollinger Marine Fabricators LLC Bollinger Shipyards Lockport LLC Caddell Dry Dock & Repair Co. Inc. CFGI LLC
E.N. Bisso & Son Inc. Grilli, Peter John
International Ship Repair & Marine Services Inc. Novum Energy Services LLC
Parrish, Paul E. Plaza Marine Inc.
Port Authority of New York and New Jersey Ryan Marine Services Inc.
Severino, Anthony Joseph Unger, Michael E.
Valdes, Michelle Otero Wells Fargo Bank NA
SCHEDULE 1(k)
Professionals
Baker Tilly Virchow Krause LLP CFGI LLC
Flagship Management LLC Freehill Hogan & Mahar LLP Jefferies Financial Group Inc. Kauff McGuire & Margolis LLP Kirkland & Ellis LLP
Kozusko Harris Duncan
Murphy Rogers Sloss Gambel & Tompkins plc Owen Petersen & Co.
Phelps Dunbar LLP Sidley Austin LLP Stretto
Welder Leshin LLP Winston & Strawn LLP
SCHEDULE 1(l)
Significant Customers
Gulf Oil LP PBF Energy Inc.
Plains All American Pipeline LP Plains Marketing LP
SCHEDULE 1(m)
Significant Vendors
58/68 S. Service Road SPE LLC A.R.M. Marine Supply LLC ABS Americas
Apollo International Corp. Armorica Sales Inc.
Associated Federal Pilots & Docking Masters of Louisiana LLC
Associated Marine Services Inc. Atlantic Cordage Corp.
Baker Tilly Virchow Krause LLP Barges LLC
Bayonne Lineboat Services Inc. Billybey Marina Services LLC Boland Marine & Industrial LLC Bollinger Shipyards Lockport LLC Braemar Technical Services Inc. Broward, County of (FL), Board of
Commissoners
Caddell Dry Dock & Repair Co. Inc. CFGI LLC
Clean Water of New York Inc. Coastal Bend Mooring & Marine Inc. Colby Service & Supply LLC
Custom Fuel Services Inc. DCL Mooring & Rigging
Delaware City Refining Co. LLC Donjon Marine Co. Inc.
Donovan Marine Inc. Ebi Cranes LLC
ECM Maritime Services LLC Engine Systems Inc.
FAM Marine Services Inc. Flag Service & Maintenance Inc. Flagship Management LLC Flight Safety International Inc. Force Power Systems LLC Freehill Hogan & Mahar LLP Galveston WHARVES General Marine Electric LLC GMD Shipyard Corp.
GMT Electronics Inc.
Greater Baton Rouge Port Commission
Greenwich Terminals LLC Gulfstream Aerospace Corp. HP Consolidated
Hutchison Sport Medicine Hyde Marine Inc.
Independence Valve & Supply Inter Gulf Marine LLC
Intercontinental Terminals Co. LLC
International Ship Repair & Marine Services Inc.
JOWA USA Inc.
Kauff Mcguire & Margolis LLP Kinder Morgan Inc.
Kozusko Harris Duncan L&R Midland Inc.
Lighthouse Shipping Agency Inc. Manning Electric Inc.
Marine Preservation Association Marine Systems Inc.
MCA Associates Inc.
McAllister Towing & Transportation Co. Inc.
Metropolitan Marine Transportation Inc. Mormax Co. Inc.
Motor-Services Hugo Stamp Inc.
Murphy Rogers Sloss Gambel & Tompkins plc
National Insurance Brokerage of New York Inc.
Northeastern Air Management Corp. NRE Power Systems Inc.
Owen Petersen & Co.
Padgett-Swann Machinery Co. Inc. Phelps Dunbar LLP
Plaza Marine Inc.
Port Authority of New York and New Jersey Port of Galveston
Port of Pascagoula Portland Tugboat LLC Providence Steamboat Co. Refco Marine Services LLC Rhoads Industries Inc.
Rio Marine Inc. Rolls-Royce plc
Ryan Marine Services Inc. S&P Global Platts Inc. S.C. Engineering Co. Inc. Satcom Direct Inc.
Sea Safety International Inc. SKOUT Secure Intelligence LLC
ST Engineering Halter Marine Offshore Inc. St. Petersburg, City of (FL)
Stewart & Stevenson LLC T&T Offshore Inc.
Tormar Shipping Agency Inc. Tugz Co. LLC
Unitedhealthcare Insurance Co.
Universal Environmental Solutions LLC Van Hydraulics Inc.
VT Halter Marine Inc. W.W. Grainger Inc. Welder Leshin LLP Willis of New York Inc. Winston & Strawn LLP
SCHEDULE 1(n)
US Trustee Office Personnel
Boykin, Jacqueline Duran, Hector Griffin, Barbara Hobbs, Henry G., Jr. Johnson-Davis, Luci McCullar, Alicia Motton, Linda Otto, Glenn Ruff, Jayson B. Schmidt, Patricia Simmons, Christy Smith, Gwen Statham, Stephen Waxton, Clarissa Whitworth, Jana
SCHEDULE 1(o)
Utilities
Consolidated Edison Inc. National Grid plc
IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
)
In re: ) Chapter 11
)
BOUCHARD TRANSPORTATION CO., INC., et al.,1 )
)
Case No. 20-34682 (DRJ) )
Debtors. ) (Joint Administration Requested)
)
) Re: Docket No. __
ORDER (A) AUTHORIZING
THE RETENTION AND EMPLOYMENT OF
PORTAGE POINT PARTNERS, LLC AS RESTRUCTURING ADVISOR TO THE DEBTORS AND DEBTORS IN POSSESSION,
EFFECTIVE AS OF THE PETITION DATE, (B) DESIGNATING MATTHEW RAY AS CHIEF RESTRUCTURING OFFICER, AND (C) GRANTING RELATED RELIEF
Upon the application (the “Application”)2 of the above-captioned debtors and debtors in
possession (collectively, the “Debtors”) for entry of an order (this “Order”) pursuant to sections 327(a) and 328(a) of title 11 of the United States Code (the “Bankruptcy Code”), (a) authorizing the Debtors to retain and employ Portage Point Partners, LLC (“Portage Point”) as restructuring advisor for the Debtors, effective as of the Petition Date, (b) designating Matthew Ray of Portage Point as chief restructuring officer (“CRO”), in each case in accordance with the terms and conditions of the Engagement Letter attached to the Application as Exhibit A, and (c) granting related relief, all as more fully set forth in the Application; and upon the First Day Declaration; and upon the Declaration of Matthew Ray in support of the Application (the “Ray Declaration”),
1 Due to the large number of Debtors in these chapter 11 cases, a complete list of the Debtor entities and the last
four digits of their federal tax identification numbers is not provided herein. A complete list may be obtained on the website of the Debtors’ proposed claims and noticing agent at https://cases.stretto.com/bouchard. The location of the Debtors’ service address is: 58 South Service Road, Suite 150, Melville, NY 11747.
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which is attached thereto as Exhibit B; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. § 1334; and this Court having found that this is a core proceeding pursuant to 28 U.S.C. § 157(b)(2); and this Court having found that it may enter a final order consistent with Article III of the United States Constitution; and this Court having found that venue of this proceeding and the Application in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having found that the relief requested in the Application is in the best interests of the Debtors’ estates, their creditors, and other parties in interest; and this Court having found that the Debtors’ notice of the Application is appropriate under the circumstances and no further notice need be provided; and this Court having reviewed the Application; and this Court having determined that the legal and factual bases set forth in the Application establish just cause for the relief granted herein; and upon all of the proceedings had before this Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT:
1. Pursuant to section 327(a) of the Bankruptcy Code, the Debtors are authorized to (a) retain Portage Point as restructuring advisor to the Debtors, effective as of the Petition Date, and (b) designate Matthew Ray as CRO, in each case on the terms set forth in the Engagement Letter, as modified by this Order.
2. The terms of the Engagement Letter, including without limitation, the compensation provisions and the indemnification provisions (as modified herein), are reasonable terms and conditions of employment and are hereby approved.
3. The designation of Matthew Ray as CRO is subject to, and will be effective only upon, the Debtors’ compliance with section 7 of the General Terms and Conditions of the Engagement Letter, including as it relates to acceptable insurance coverage for Portage Point Personnel serving as directors or officers of the Debtors.
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4. Portage Point shall file applications for monthly, interim, and final allowance of compensation and reimbursement of expenses pursuant to the procedures set forth in Bankruptcy Code sections 330 and 331, such Bankruptcy Rules and Local Bankruptcy Rules as may then be applicable, the U.S. Trustee Guidelines and any applicable orders and procedures of this Court. For billing purposes, Portage Point shall keep its time in one tenth (1/10) hour increments in accordance with the US Trustee Guidelines. Portage Point also intends to make a reasonable effort to comply with the U.S. Trustee’s requests for information and additional both in connection with the Application and the interim and final fee applications to be filed by Portage Point in these chapter 11 cases.
5. The indemnification provisions set forth in the Engagement Letter are hereby approved, subject to the following:
a. subject to the provisions of subparagraphs (b) and (c) below, the Debtors are (i) permitted to indemnify those persons serving as executive officers on the same terms as provided to the Debtors’ other officers and directors under the corporate bylaws and applicable state law, along with insurance coverage under any policy covering the Debtors’ directors and officers and any equivalently-placed employees, and (ii) authorized to indemnify, and to provide contribution and reimbursement to, and will indemnify, and provide contribution and reimbursement to, Portage Point and its affiliates in accordance with the Engagement Letter for any claim arising from, related to, or in connection with the services provided for in the Engagement Letter; b. notwithstanding subparagraph (a) above or any provisions of the
Engagement Letter to the contrary, the Debtors will have no obligation to indemnify Portage Point or provide contribution or reimbursement to Portage Point (i) for any claim or expense that is judicially determined (the determination having become final) to have arisen from Portage Point’s bad faith, self-dealing, breach of fiduciary duty (if any), gross negligence, or willful misconduct; (ii) for a contractual dispute in which the Debtors allege the breach of Portage Point’s contractual obligations if the Court determines that indemnification, contribution, or reimbursement would not be permissible pursuant to In re United Artists Theatre Co., 315 F.3d 217 (3d Cir. 2003); or (iii) for any claim or expense that is settled prior to a judicial determination as to the exclusions set forth in clauses (i) and (ii) above, but determined by this Court, after notice and a hearing, to be a claim or expense for which Portage Point should not receive indemnity,
4
contribution or reimbursement under the terms of the Engagement Letter, as modified by the Order; and
c. if, before the earlier of (i) the entry of an order confirming a chapter 11 plan in these cases (that order having become a final order no longer subject to appeal), and (ii) the entry of an order closing these chapter 11 cases, Portage Point believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors’ indemnification, contribution and/or reimbursement obligations under the Engagement Letter, as modified by this Order, including without limitation the advancement of defense costs, Portage Point must file an application therefor in this Court, and the Debtors may not pay any such amounts to Portage Point before the entry of an order by this Court approving such payment. This subparagraph (c) is intended only to specify the period during which the Court will have jurisdiction over any request by Portage Point for indemnification, contribution or reimbursement and is not a provision limiting the duration of the Debtors’ obligation to indemnify.
6. Portage Point shall provide ten-business-days’ notice to the Debtors, the U.S. Trustee, and any official committee before any increases in the hourly rates set forth in the Application or the Engagement Letter are implemented. The U.S. Trustee retains all rights to object to any rate increase on all grounds, including the reasonableness standard set forth in section 330 of the Bankruptcy Code, and the Court retains the right to review any rate increase pursuant to section 330 of the Bankruptcy Code.
7. To the extent the Debtors wish to expand the scope of Portage Point’s services beyond those services set forth in the Engagement Letter or this Order, the Debtors shall seek further approval from this Court.
8. In the event of any inconsistency between the terms of the Engagement Letter, the Application, the Ray Declaration, and this Order, the terms of this Order shall govern.
9. Notice of the Application as provided therein shall be deemed good and sufficient notice of such Application, and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are satisfied by such notice.
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10. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Order are immediately effective and enforceable upon its entry.
11. The Debtors and Portage Point are authorized to take all actions necessary to effectuate the relief granted in this Order in accordance with the Application.
12. This Court retains exclusive jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of this Order.
Houston, Texas
Dated: ___________, 2020
