IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
In re:
PACIFIC DRILLING S.A., et al.,1
Debtors. x : : : : : : x Chapter 11 Case No. 20-35212 (DRJ) (Jointly Administered)
DEBTORS’ APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF DELOITTE TAX LLP
AS TAX SERVICES PROVIDER EFFECTIVE AS OF THE PETITION DATE THIS APPLICATION SEEKS AN ORDER THAT MAY ADVERSELY AFFECT YOU. IF YOU OPPOSE THE APPLICATION, YOU SHOULD IMMEDIATELY CONTACT THE APPLICANT TO RESOLVE THE DISPUTE. IF YOU AND THE APPLICANT CANNOT AGREE, YOU MUST FILE A RESPONSE AND SEND A COPY TO THE APPLICANT. YOU MUST FILE AND SERVE YOUR RESPONSE WITHIN 21 DAYS OF THE DATE THIS WAS SERVED ON YOU. YOUR RESPONSE MUST STATE WHY THE APPLICATION 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 APPLICATION 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 APPLICATION AT THE HEARING.
REPRESENTED PARTIES SHOULD ACT THROUGH THEIR ATTORNEY.
TO THE HONORABLE UNITED STATES BANKRUPTCY JUDGE:
The above-captioned debtors and debtors-in-possession (collectively, the “Debtors”)
respectfully state as follows in support of this application (this “Application”):
RELIEF REQUESTED
1. The Debtors seek entry of an order, substantially in the form attached hereto
(the “Order”), authorizing the employment and retention of Deloitte Tax LLP (“Deloitte Tax”),
effective as of the Petition Date (as defined below), to provide certain tax services in accordance
with the terms and conditions set forth in: (i) that certain engagement letter, dated January 23,
2020, between the Debtors and Deloitte Tax, to provide services on federal, foreign, state and local
tax matters (the “Engagement Letter”); and (ii) that certain work order, dated June 24, 2020, and
entered into pursuant to the Engagement Letter, to provide services related to discharge of
indebtedness and other tax issues arising in connection with the Debtors’ restructuring (the “Work
Order” and together with the Engagement Letter, the “Engagement Agreement”).2 A copy of the Engagement Agreement is annexed hereto as Exhibit A.
2. In support of this Application, the Debtors rely on and incorporate by reference:
(a) the Declaration of James Harris, Chief Financial Officer of the Debtors, in Support of the
Debtors’ Chapter 11 Petitions and First Day Relief [Docket No. 4] (the “First Day
Declaration”),3 filed on October 30, 2020 (the “Petition Date”), and (b) the declaration of Gregory P. Kernek, a partner of Deloitte Tax (the “Kernek Declaration”), annexed hereto as
Exhibit B.
2 On October 5, 2020, Debtor Pacific Drilling S.A. assigned the Engagement Agreement to Debtor Pacific Drilling Company Limited.
JURISDICTION AND VENUE
3. The United States Bankruptcy Court for the Southern District of Texas
(the “Court”) has jurisdiction to consider this Application under 28 U.S.C. § 1334. This is a core
proceeding under 28 U.S.C. § 157, and this Court may enter a final order consistent with Article
III of the United States Constitution.
4. 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 in
connection with this Application to the extent that it is later determined that the Court, absent
consent of the parties, cannot enter final orders or judgments in connection herewith consistent
with Article III of the United States Constitution. Venue is proper under 28 U.S.C. §§ 1408 and
1409.
5. The bases for the relief requested herein are Sections 327(a) and 328(a) of Title 11
of the United States Code (the “Bankruptcy Code”), Bankruptcy Rules 2014(a) and 2016, Rules
2014-1 and 2016-1 of the Local Bankruptcy Rules for the Southern District of Texas (the “Local
Rules”), and the Procedures for Complex Cases in the Southern District of Texas. BACKGROUND
6. The Debtors are an international offshore drilling contractor whose primary
business is to contract their fleet of seven high-specification drillships to drill wells for clients in
the global offshore oil exploration and production industry. The Debtors believe they own and
operate the only deepwater fleet comprised solely of sixth and seventh generation
high-specification drillships and that their fleet offers premium technical capabilities to their clients.
The Debtors’ industry-leading operational performance is grounded in their core values, emphasis
clients’ expectations by delivering the safest, most efficient and reliable deepwater drilling services
in the industry.
7. On the Petition Date, each of the Debtors filed voluntary petitions in this Court
commencing cases for relief under Chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”).
The factual background regarding the Debtors, including their business operations and the events
leading to the filing of the Chapter 11 Cases, is set forth in detail in the First Day Declaration.
8. The Debtors continue to manage and operate their businesses as debtors in
possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code. No trustee or examiner
has been requested in the Chapter 11 Cases, and no committees have been appointed.
9. Additional information regarding the Debtors’ business, capital structure, and the
events leading up to the Petition Date is set forth in the First Day Declaration.
DELOITTE TAX’S QUALIFICATIONS
10. The Debtors seek to retain and employ Deloitte Tax to provide certain tax advisory
services. Deloitte Tax has significant experience performing tax advisory services and has
performed such services in large and complex chapter 11 cases for debtors throughout the United
States. See, e.g., In re Gavilan Resources, LLC, No. 20-32656 (MI) (Bankr. S.D. Tex); In re
Halcón Res. Corp., No. 34446, (DRJ) (Bankr. S.D. Tex.); In re Bristow Grp. Inc., No. 19-32713 (DRJ) (Bankr. S.D. Tex.); In re Vanguard Nat. Res., Inc., No. 19-31786 (DRJ) (Bankr. S.D.
Tex.); In re Parker Drilling Co., No. 18-36958 (MI) (Bankr. S.D. Tex.); In re Gastar Expl., Inc.,
No. 18-36057 (MI) (Bankr. S.D. Tex.); HGIM Holdings, LLC, No. 18-31080 (DRJ) (Bankr. S.D.
Tex.); In re Vanguard Nat. Res., LLC, No. 17-30560 (MI) (Bankr. S.D. Tex.). Such experience
renders Deloitte Tax well-qualified and able to provide services to the Debtors in a cost-effective,
efficient, and timely manner. Deloitte Tax’s services fulfill an important need and are not provided
11. Since approximately September 2011, Deloitte Tax provided certain professional
services to the Debtors. In providing these professional services to the Debtors, Deloitte Tax has
become familiar with the Debtors and their financial affairs, debt structure, business operations,
and related matters. Having worked with the Debtors’ management, Deloitte Tax has developed
relevant experience and knowledge regarding the Debtors that will assist it in providing effective
and efficient services during the Chapter 11 Cases. Accordingly, Deloitte Tax is both
well-qualified and able to provide the services for the Debtors during the Chapter 11 Cases in an
efficient and timely manner.
SERVICES PROVIDED BY DELOITTE TAX
12. Subject to this Court’s approval of the Application, and as set forth more fully in
the Kernek Declaration and the Engagement Agreement, Deloitte Tax has agreed to provide
professional services to the Debtors pursuant to the terms and conditions of the Engagement
Agreement, as requested by the Debtors and agreed to by Deloitte Tax, as follows:
(a) Pursuant to the terms of the Engagement Agreement, Deloitte Tax will provide services related to discharge of indebtedness and other tax issues arising in connection with the Chapter 11 Cases, which may include the following:
(i) Advise the Debtors as they consult with their legal and financial advisors on the cash tax effects of restructuring, bankruptcy and the post-restructuring tax profile, including plan of reorganization tax costs, and the cash tax effects of the Chapter 11 filing and emergence transaction. This will include gaining an understanding of the Debtors’ financial advisors’ valuation model and disclosure model to consider the tax assumptions contained therein;
(ii) Advise the Debtors regarding the restructuring and bankruptcy emergence process from a tax perspective, including the tax work plan and analyzing various structuring alternatives and modification of debt, including considerations for the unwind of intercompany debts among the Debtors and their subsidiaries/affiliates;
including cancellation of debt income generated from a restructuring, bankruptcy emergence transaction, and/or modification of the debt;
(iv) Advise the Debtors on restructuring tax attributes and post-bankruptcy tax attributes (tax basis in assets, tax basis in subsidiary stock and net operating loss carryovers) available under the applicable tax regulations and the reduction of such attributes based on the Debtors’ operating projections, including a technical analysis of the effects of Treasury Regulation section 1.1502-28 and the interplay with IRC sections 108 and 1017;
(v) Advise the Debtors on the effects of tax rules under IRC sections 382(l)(5) and (l)(6) pertaining to the post-bankruptcy net operating loss carryovers and limitations on their utilization and the Debtors’ ability to qualify for IRC section 382(l)(5);
(vi) Advise the Debtors on net built-in gain or net built-in loss position at the time of “ownership change” (as defined under IRC section 382), including limitations on use of tax losses generated from post-restructuring or post-bankruptcy asset or stock sales;
(vii) Advise the Debtors as to the treatment of post-petition interest for federal and state income tax purposes, including the applicability of the interest limitations under IRC section 163(j);
(viii) Advise the Debtors as to the state and federal income tax treatment of pre-petition and post-petition reorganization costs including restructuring-related professional fees and other costs, the categorization and analysis of such costs, and the technical positions related thereto;
(ix) Advise the Debtors with their evaluation and modeling of the tax effects of liquidating, disposing of assets, merging or converting entities as part of the restructuring, including the effects on federal and state tax attributes, state incentives, apportionment and other tax planning;
(x) Advise the Debtors on state income tax treatment and planning for restructuring or bankruptcy provisions in various jurisdictions including cancellation of indebtedness calculation, adjustments to tax attributes and limitations on tax attribute utilization;
(xi) Advise the Debtors on responding to tax notices and audits from taxing authorities;
(xiii) Advise the Debtors on income tax return reporting of restructuring and/or bankruptcy issues and related matters;
(xiv) Assist the Debtors with documenting as appropriate, the tax analysis, development of the Debtors’ opinions, recommendation, observations, and correspondence for any proposed restructuring alternative tax issue or other tax matter described above (but does not include the preparation, review or rendering advice with respect to the Debtors’ tax provision or financial reporting purposes);
(xv) Advise the Debtors with non-U.S. tax implications and structuring alternatives;
(xvi) Advise the Debtors with their efforts to calculate tax basis in the stock in each of the Debtors’ subsidiaries or other entity interests and tax basis in assets by legal entity; and
(xvii) As requested by the Debtors and as may be agreed to by Deloitte Tax, advise the Debtors regarding other state or federal income tax, and non-U.S. income tax related questions that may arise in the course of this engagement.
13. The services performed by Deloitte Tax will not unnecessarily duplicate or overlap
with the other services performed by the Debtors’ other retained consultants and advisors. As set
forth in the Kernek Declaration, Deloitte Tax understands that the Debtors have retained other
professionals and may retain additional professionals during the Chapter 11 Cases, and Deloitte
Tax agrees to work cooperatively with the Debtors to avoid unnecessary duplication of services.
PROFESSIONAL COMPENSATION
14. Deloitte Tax’s retention by the Debtors is conditioned upon its ability to be retained
in accordance with its terms and conditions of employment, including the proposed compensation
arrangements set forth in the Engagement Agreement.
15. Subject to Court approval, and in compliance with the applicable provisions of the
Bankruptcy Code, the Bankruptcy Rules, and the Local Rules, and such other procedures as may
be established by order of the Court, the Debtors will compensate Deloitte Tax in accordance with
16. Pursuant to the terms of the Engagement Agreement, Deloitte Tax and the Debtors
agreed to an hourly billing arrangement for the services contemplated to be performed thereunder
based on the amount of professional time required and the experience level of the professionals
involved, as set forth in the table below:
Professional Level Hourly Rate
Washington National Tax or Managing Director $930 Partner, Principal, or Managing Director $830
Senior Manager $750
Manager $550
Senior $380
Staff $300
17. Hourly rates are revised periodically in the ordinary course of Deloitte Tax’s
business. As set forth in the Kernek Declaration, Deloitte Tax shall advise the Debtors of any new
rates should it institute a rate-change during the Chapter 11 Cases. Such changes will be noted on
the invoices for the first time period in which a revised rate becomes effective.
18. In addition, reasonable expenses, including travel, report production, delivery
services, and other expenses incurred in providing Deloitte Tax’s services, will be included in the
total amount billed.
19. The Debtors are advised that the compensation terms contemplated by the
Engagement Agreement are reasonable and comparable to those generally charged by tax advisory
service providers of similar stature to Deloitte Tax for similar engagements. The fee structure
summarized above is consistent with Deloitte Tax’s customary billing practices for comparable
engagements. Moreover, the fee structure is consistent with and typical of arrangements entered
into by Deloitte Tax and other firms with the rendering of comparable services to clients such as
20. Some services incidental to the tasks to be performed by Deloitte Tax in the Chapter
11 Cases may be performed by personnel now employed by or associated with affiliates of Deloitte
Tax, such as Deloitte & Touche LLP (“Deloitte & Touche”), Deloitte Financial Advisory Services
LLP (“Deloitte FAS”), Deloitte Transactions and Business Analytics LLP, and Deloitte
Consulting LLP (“Deloitte Consulting”), or their respective subsidiaries, including subsidiaries
located outside of the United States.
21. Prior to the Petition Date, Deloitte Tax provided professional services to the
Debtors. In the ninety (90) days prior to the Petition Date, the Debtors paid Deloitte Tax
approximately $100,000 on account of invoices issued prior to the Petition Date. As of the Petition
Date, no amounts were outstanding with respect to the invoices issued by Deloitte Tax prior to
such date.
22. Deloitte FAS provided prepetition services to the Debtors. The Debtors paid
Deloitte FAS approximately $200,000, as a retainer, in the ninety (90) days prior to the Petition
Date. As of the Petition Date, no amounts were outstanding with respect to invoice(s) issued by
Deloitte FAS to the Debtors prior to the Petition Date, and approximately $200,000 of the retainer
amounts remained as of such date. Subject to Court approval, Deloitte FAS will apply such
retainer amounts to fees for post-petition services performed for the Debtors.
23. Prior to the Petition Date, Deloitte Consulting provided professional services to the
Debtors. The Debtors did not pay Deloitte Consulting any amounts in the ninety (90) days prior
to the Petition Date. As of the Petition Date, no amounts were outstanding with respect to
invoice(s) issued by Deloitte Consulting to the Debtors prior to the Petition Date.
24. The Debtors submit that the compensation terms are fair and reasonable and
propose that all compensation and expenses will be sought in accordance with Section 328(a) of
the Bankruptcy Code and will not be subject to any other standard of review, including Section
330 of the Bankruptcy Code.
25. The Debtors are advised that Deloitte Tax intends to file interim and final fee
applications for the allowance of compensation for the services rendered and reimbursement of
expenses incurred in accordance with applicable provisions of the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules, and any applicable orders of the Court and/or the applicable
guidelines issued by the Office of the U.S. Trustee (the “U.S. Trustee Guidelines”). Deloitte Tax
has agreed to accept as compensation such sums as may be allowed by the Court and understands
that fee awards are subject to approval by the Court.
26. Deloitte Tax will submit monthly invoices for services rendered and expenses
incurred under the Engagement Agreement. Such invoices will contain reasonable detail in
support of any fees (in 1/10th of an hour increments) consistent with any rules, guidelines, or
administrative orders promulgated by the Court that apply to the Chapter 11 Cases. The Debtors
request authority to pay such invoices, after appropriate review, in a manner consistent with the
payment of other retained professionals in the Chapter 11 Cases and consistent with any
administrative orders, if any, that would apply to interim payments. All payments rendered
pursuant to Deloitte Tax’s retention by the Debtors must be approved by an order of this Court and
based upon the filing by Deloitte Tax of appropriate interim and final applications for allowance
of compensation and reimbursement of expenses.
27. The Debtors are advised that Deloitte Tax has received no promises regarding
set forth in the Kernek Declaration. Deloitte Tax has no agreement with any nonaffiliated or
unrelated entity to share any compensation earned in the Chapter 11 Cases.
INDEMNIFICATION PROVISIONS
28. As part of the overall compensation payable to Deloitte Tax under the terms of the
Engagement Agreement, the Debtors have agreed to certain indemnification provisions set forth
in the General Business Terms attached to the Engagement Letter (the “Indemnification
Provisions”), subject to modification by the Order:
The Client shall indemnify and hold harmless Deloitte Tax, and any other Deloitte Entity from all third party Claims except to the extent finally determined to have resulted primarily from the intentional fraud, intentional misconduct or bad faith of Deloitte Tax, or any other Deloitte Entity. In circumstances where all or any portion of the provisions of this paragraph are finally determined to be unavailable, the aggregate liability of Deloitte Tax and all other Deloitte Entities (including their respective personnel) for any Claim shall not exceed an amount which is proportional to the relative fault that their conduct bears to all other conduct giving rise to such Claim.
29. The terms of the Engagement Agreement, including the Indemnification
Provisions, were fully negotiated by the Debtors and Deloitte Tax at arm’s length and in good
faith. The Debtors respectfully submit that the Indemnification Provisions, as modified by the
proposed Order, are reasonable and in the best interests of the Debtors, their estates, and creditors.
DELOITTE TAX’S DISINTERESTEDNESS
30. To the best of the Debtors’ knowledge, information, and belief, and except as may
be provided in the Kernek Declaration, Deloitte Tax and the partners, principals, and managing
directors who are anticipated to provide services to the Debtors pursuant to the Engagement
Agreement do not have any connection with or any interest adverse to the Debtors, their
significant creditors, or any other significant party-in-interest. Accordingly, based on the Kernek
Declaration, (i) Deloitte Tax is a “disinterested person” within the meaning of Section 101(14) of
or represent an interest adverse to the Debtors, and (ii) Deloitte Tax has no relationship to the
Debtors, their significant creditors, certain other significant parties-in-interest, or to the attorneys
that are known to be assisting the Debtors in the Chapter 11 Cases, except as stated in the Kernek
Declaration or in any attachment thereto. To the extent that any new relevant facts or
relationships bearing on the matters described herein during the period of its retention are
discovered or arise, Deloitte Tax will use reasonable efforts to file promptly a supplemental
declaration as required by Bankruptcy Rule 2014(a).
RELEVANT AUTHORITY
31. The Debtors seek authority to retain and employ Deloitte Tax for certain tax
advisory services under Section 327 of the Bankruptcy Code, which provides that a debtor is
authorized to employ professional persons “that do not hold or represent an interest adverse to the
estate, and that are disinterested persons, to represent or assist the Debtors in carrying out the
Debtors’ duties under this title.” 11 U.S.C. § 327(a).
32. The Debtors seek approval of the Engagement Agreement pursuant to Section
328(a) of the Bankruptcy Code, which provides, in relevant part, that the Debtors “with the
court’s approval, may employ or authorize the employment of a professional person under
section 327 . . . on any reasonable terms and conditions of employment, including on a retainer,
on an hourly basis, on a fixed or percentage fee basis, or on a contingent fee basis.” 11 U.S.C.
§ 328(a). Accordingly, Section 328 of the Bankruptcy Code permits the compensation of
professionals, on flexible terms that reflect the nature of their services and market conditions.
Moreover, Bankruptcy Rule 2014 requires that an application for retention include:
Fed. R. Bankr. P. 2014.
33. As further detailed in the Kernek Declaration, to the best of the Debtors’
knowledge, Deloitte Tax is a “disinterested person” with the meaning of Section 101(14) of the
Bankruptcy Code and does not hold an interest adverse to the Debtors’ estates or the Debtors. All
of Deloitte Tax’s fees and expenses are subject to approval of the Court in accordance with the
Bankruptcy Code, the Bankruptcy Rules, the Local Rules, and any applicable guidelines issued by
the Office of the U.S. Trustee and further orders of the Court. Additionally, the compensation
terms set forth in the Engagement Agreement are reasonable terms and conditions of employment
and should be approved under Section 328(a) of the Bankruptcy Code. The fee structures
adequately reflect (i) the nature of the services to be provided by Deloitte Tax and (ii) fee and
expense structures and indemnification provisions typically utilized by Deloitte Tax and other
leading tax advisory services providers.
34. Moreover, Deloitte Tax has significant experience and extensive knowledge in
performing tax advisory services. Deloitte Tax is familiar with the relevant financial information
and other data maintained by the Debtors and is qualified and best positioned to provide tax
advisory services to the Debtors in an efficient and cost effective manner.
35. Pursuant to Local Rule 2014-1(b), the Debtors seek entry of the Order approving
the retention of Deloitte Tax effective as of the Petition Date. The Application was not filed earlier
due to the length of time necessary to perform the conflicts review in order to be able to submit
the Kernek Declaration. Nunc pro tunc authorization is required because Deloitte Tax has
provided, and will continue to provide, valuable services to the Debtors since the Petition Date.
To the best of the Debtors’ knowledge, approval of this Application will not prejudice any parties
in interest because, among other things, the services provided by Deloitte Tax will assist the
36. Accordingly, the Debtors believe that Deloitte Tax’s retention and employment is
in the best interests of the Debtors’ estates, the Debtors, and their creditors and should be approved
pursuant to the terms set forth in the Engagement Agreement.
NOTICE
37. Notice of this Application will be given to: (a) the U.S. Trustee; (b) the parties
included on the Debtors’ consolidated list of the holders of the 30 largest unsecured claims against
the Debtors; (c) counsel to members of an ad hoc crossover group comprising certain first and
second lien creditors (the “Ad Hoc Crossover Group”); (d) counsel to the indenture trustee for
the Debtors’ Prepetition First Lien Notes; (e) counsel to the indenture trustee for the Debtors’
Prepetition Second Lien PIK Notes; (f) the United States Attorney’s Office for the Southern
District of Texas; (g) the Internal Revenue Service; (h) the Securities and Exchange Commission;
(i) the state attorneys general for states in which the Debtors conduct business; and (j) all parties
that have requested or that are required to receive notice pursuant to Bankruptcy Rule 2002. In
light of the nature of the relief requested, the Debtors submit that no other or further notice is
required or needed under the circumstances.
38. A copy of this Application is available on (a) the Court’s website:
www.txs.uscourts.gov, and (b) the website maintained by the Debtors’ Claims and Noticing Agent,
WHEREFORE, the Debtors respectfully request that the Court enter the Order, granting
the relief requested herein and such other relief as the Court deems appropriate under the
circumstances.
Dated: December 22, 2020 Pacific Drilling S.A.
(for itself and on behalf of its affiliates as debtors and debtors in possession)
/s/ James Harris Name: James Harris
CERTIFICATE OF SERVICE
I certify that on December 22, 2020, a true and correct copy of the foregoing document was served by the Electronic Case Filing System for the United States Bankruptcy Court for the Southern District of Texas on those parties registered to receive electronic notices.
Schedule 1
Potential Parties-in-Interest Checked
3C METAL MIDDLE EAST FZE ABB AS
ABS AMERICAS
ACE AMERICAN INSURANCE CO. ADAMS AND REESE LLP
ADDAX ENERGY SA
ADEPETUN CAXTON-MARTINS AGBOR & SEGUN ADMINISTRATION DES CONTRIBUTIONS DI ADMINISTRATION DES CONTRIBUTIONS DIRECTES
AIG EUROPE LIMITED AIG EUROPE SA
AKIN GUMP STRAUSS HAUER & FELD ALFA LAVAL
ALFORD SAFETY SERVICES
ALFRED BERG KAPITALFORVALTNING AS ALIXPARTNERS LLP
ALLIED WORLD ASSURANCE COMPANY (EUROPE) LIMITED
ALVAREZ & MARSAL
ALVAREZ TAX SERVICE LLC AMAZON WEB SERVICES AMEGY BANK OF TEXAS AMERICAN BLOCK
AMERIFORGE CORPORATION AMY L. RODDY
ANGELO, GORDON ENERGY SERVICER, LLC ANTHONY C. SEELIGER
ANTOINE BONNIER APPLEBY
APPLUS K2 AMERICA LLC ARISTEIA CAPITAL, LLC ART CATERING, INC.
ASSURANCEFORENINGEN SKULD (GJENSIDIG) ATLAS ENERGY TOWER, LLC
AVENUE CAPITAL MANAGEMENT II, L.P. BANK OF AMERICA MERRILL LYNCH
BATLLE & PARTNERS, AGENCIA DE VALORES S.A.
BEAZLEY GROUP BERNIE G. WOLFORD JR
BISHOP LIFTING PRODUCTS INC BLACKROCK ADVISORS, LLC BMO ASSET MANAGEMENT, INC. BNY MELLON (CAYMAN) LIMITED BOUK VAN GELOVEN
BP LUBRICANTS USA, INC. BREEN DE BREE
BRIDON AMERICAN CORPORATION CAMPOS MELLO ADVOGADOS CANYON CAPITAL ADVISORS, LLC CCB ZAMAKONA OFFSHORE S.L. CEES VAN DIEMEN
CENTRALIS USA INC
CHARTER SUPPLY COMPANY CHRISTINA COLEMAN
CHUBB EUROPEAN GROUP LTD CHUBB SEGUROS BRASIL S. A. CITIBANK N.A.
CLEARSTREAM BANK
CLYDE & CO LLP (MEXICO BRANCH) CMS OMAN
COGENT COMMUNICATIONS
COMPAGNIE NOUVELLE DES ASSURANCES CORPORATE HEALTH RESOURCES, INC
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH CREDIT SUISSE SERVICES (USA) LLC
CRESEADA INTERNATIONAL LIMITED CYRIL DUCAU
DAN-BUNKERING (AMERICA) INC. DANIEL HAN
DAVID N. WEINSTEIN
DEROTECH OFFSHORE SERVICES LIMITED DIAMOND OFFSHORE DRILLING CO
DICKERMAN OVERSEAS CONTRACTING CO L DIMAGO NIGERIA LIMITED
DINTEC CO., LTD DIRECT TV
DONALD PLATNER
DZ PRIVATBANK S.A. ED BROKING LLP EDWARD H. BURDICK EFAX.COM
EM&I (TRADING) LTD
EMPLOYEES RETIREMENT SYSTEM OF TEXAS EQUINOR GULF OF MEXICO LLC
ERNST & YOUNG TAX ADVISORY SERVICES ERNST AND YOUNG U.S. LLP
EUROCLEAR BANK
EVERCORE PARTNERS INTERNATIONAL LLP EXPERT RISER SOLUTIONS, LLC
EXPRO GULF LTD - MAURITANIA FEDERAL INLAND REVENUE SERVICE
FELICITY TOUBE QC, INDEPENDENT COUNSEL, SOUTH SQUARE CHAMBERS
FIDELITY MANAGEMENT & RESEARCH COMPANY
FIRE PROTECTION SERVICE, INC. FMR LLC
FORGO, DAMJANOVIC & PARTNERS LAW FIRM FORUM US, INC.
FOSS & ESG CATERING LTD FOSTER QUAN, LLP.
FRANK’S INTERNATIONAL WEST AFRICA FREDERIC W. COOK & CO.
FREEDOM SPECIALTY INSURANCE COMPANY (NATIONWIDE)
FSP ENERGY TOWER I CORP FTI CONSULTING
GAC BROKERAGE GATES E & S, NA
GLOBAL FOOD SERVICES PTE LTD GLOBAL RISER S.L
GOLDENTREE ASSET MANAGEMENT, L.P. (U.S.) GOSS (GLOBAL OILFIELD SUPPORT SERVICES) GRAMERCY FUNDS MANAGEMENT, LLC GREENHILL & CO.
GRIFFIN STAFFING AGENCY SERVICE GROUP 4 SECURICOR NIGERIA LIMITED GULF COPPER & MANUFACTURING CORP HAL INVESTMENTS B.V.
HANIL-FUJI (KOREA) CO., LTD
HARRIS COUNTY TAX ASSESSOR - COLLECTOR HASSANS INTERNATIONAL LAW FIRM
HAYFIN CAPITAL MANAGEMENT, LLP HEIDRICK & STRUGGLES
HIDRAMAR, S.L.
HM GOVERNMENT OF GIBRALTAR HOF HOORNEMAN BANKIERS N.V. HOULIHAN LOKEY, INC.
HYDRIL PCB LTD.
HYUNDAI GLOBAL SERVICE AMERICAS CO. ICM COTE D'IVOIRE S.A.
ID-SPARINVEST, FILIAL AF SPARINVEST S.A., LUXEMBOURG
INCE GORDON DADDS LLP
INDEPENDENT OIL TOOLS-DOSCO B.V. INDUSTRIAL AIR TOOL LP LLP
INMARSAT SOLUTIONS
INTERMARKET CORPORATION INTERNATIONAL SOS (AMERICAS) BV INVESCO ADVISERS, INC.
J.P. MORGAN SECURITIES, LLC JAMES W. HARRIS
JEF TECH LTD JEFF D. HUNTER JEREMY ASHER JH BLADES & CO. JLT GROUP
JOHANNES P. BOOTS JOHN V. SIMON JONES WALKER LLP KIRAN RAMINENI
KONGSBERG MARITIME, INC KPMG LLP
KURT ARNOLD, ARNOLD & ITKIN LLP LAGOS STATE
LASACO ASSURANCE, PLC LATHAM WATKINS LLP LAURENCE N. CHARNEY LEADWAY ASSURANCE CO. LHR SERVICES & EQUIPMENT LIBERTY - LLOYDS OF LONDON
LISA MANGET BUCHANAN LLOYD & PARTNERS LLOYD'S OF LONDON
LOGAN INDUSTRIES INTERNATIONAL CORP LOGIX COMMUNICATIONS
LOYENS LOEFF
MACDERMID OFFSHORE SOLUTIONS LLC MACKAY COMMUNICATIONS INC. MACKAY SHIELDS, LLC
MAERSK DRILLING
MARKEL INTERNATIONAL MATTHEW SAMUELS
MAYER BROWN TAUIL & CHEQUER MCGRIFF, SEIBELS & WILLIAMS
MEA CATERING & INVESTMENT LIMITED MELLON INVESTMENTS CORPORATION METLIFE INVESTMENT MANAGEMENT, LLC MICHAEL D. ACUFF
MILBANK
MINITERE DES FINANCES DIRECTION GENERALE DES IMPOTS (MAURITANIA)
MODURESOURCES USA INC. MOODY'S INVESTORS SERVICE MURPHY OIL
MURPHY SHIPPING AND COMMERCIAL US N. SCOTT FINE
NATIONAL OILWELL VARCO NATIONALE D'ASSURANCE ET DE REASSURANCE (NASR) S. A. NATIONWIDE
NEMZETI ADóéS VáMHIVATAL NET2PHONE
NOBLE CORPORATION
NORDEA INVESTMENT MANAGEMENT AB (NORWAY)
NORD-SUD SHIPPING, INC. NORTHLIGHT GROUP, LLP NSSL GLOBAL LTD
OCEANEERING INTERNATIONAL INC. OCEANEERING MUSCAT LLC
OMA LOGISTICS SENEGAL SARL PACIFIC BORA LTD (LIBERIA)
PACIFIC DRILLING (GIBRALTAR) LTD
PACIFIC DRILLING ADMINISTRATOR LIMITED (BVI)
PACIFIC DRILLING COMPANY LIMITED
PACIFIC DRILLING DO BRASIL INVETIMENTOS LTDA (BRAZIL)
PACIFIC DRILLING DO BRASIL SERVICOS DE PERFUACAO LTDA (BRAZIL)
PACIFIC DRILLING FINANCE SARL (LUXEMBOURG)
PACIFIC DRILLING GHANA LIMITED (GHANA) PACIFIC DRILLING HOLDING (GIBRALTAR) LTD PACIFIC DRILLING INC. (US)
PACIFIC DRILLING INTERNATIONAL LLC (US) PACIFIC DRILLING INTERNATIONAL LTD (BVI) PACIFIC DRILLING LLC (US)
PACIFIC DRILLING LTD (LIBERIA)
PACIFIC DRILLING MANPOWER LTD (BVI) PACIFIC DRILLING MANPOWER SARL (LUXEMBOURG)
PACIFIC DRILLING MANPOWER, INC. (US) PACIFIC DRILLING N.V. (NETH ANTILLES) PACIFIC DRILLING NETH COOPERATIF (NETHERLANDS)
PACIFIC DRILLING OPERATIONS INC. (US) PACIFIC DRILLING OPERATIONS LTD (BVI) PACIFIC DRILLING S.A.
PACIFIC DRILLING S.A. (LUXEMBOURG) PACIFIC DRILLING SERVICES INC. (US) PACIFIC DRILLING SERVICES PTE LTD
PACIFIC DRILLING SOUTH AMERICA 1 LTD (BVI) PACIFIC DRILLING SOUTH AMERICA 2 LTD (BVI) PACIFIC DRILLING V LTD (BVI)
PACIFIC DRILLING VII LTD (BVI) PACIFIC DRILLING VIII LIMITED (BVI) PACIFIC DRILLSHIP (GIBRALTAR) LTD
PACIFIC DRILLSHIP MEXICO, S. DE R.L. DE C.V (MEXICO)
PACIFIC DRILLSHIP NIGERIA LIMITED (BVI) PACIFIC DRILLSHIP SARL (LUXEMBOURG) PACIFIC INTERNATIONAL DRILLING WEST AFRICA LTD (NIGERIA)
PACIFIC MENERGY GHANA LIMITED (GHANA) PACIFIC MISTRAL LTD (LIBERIA)
PACIFIC SANTA ANA LIMITED (BVI) PACIFIC SCIROCCO LTD (LIBERIA) PACIFIC SHARAV KFT (HUNGARY) PACIFIC SHARAV SARL (LUXEMBOURG) PAUL T. REESE
PAUL WEISS
PEREZ ALBORS & CO. PETRONAS
PIMCO - PACIFIC INVESTMENT MANAGEMENT COMPANY
PPG ARCHITECTURAL FINISHES (PROTECTI) PRIMECLERK
PRINCIPAL GLOBAL INVESTORS, LLC PROTERA TECHNOLOGIES, INC. QBE AND ASPEN LONDON
QUANTUM PACIFIC (GIBRALTAR) LIMITED) RBC CAPITAL MARKETS, LLC
RED WING BRANDS OF AMERICA, INC. REPSOL
RICE ELECTRONICS, L.P. RICHARD E. TATUM
RK HARRISON INSURANCE BROKERS RKH SPECIALTY
ROBERT A. SCHWED ROGER B. HUNT
ROLLOOS OIL AND GAS RPS GROUP PLC
SAFEKICK AMERICAS, LLC SAMI ISKANDER
SEADRILL
SEPCO INDUSTRIES
SEVEN SEAS MARITIME SERVICES SPAIN SEWARD & KISSEL
SHEARMAN & STERLING LLP SHI INTERNATIONAL CORP SHIPMAN & GOODWIN
SHUMAN - PACIFIC ESCROW ACCOUNT SOMPO
SOUTHERN TRUST INC PLC
SOUTHPAW ASSET MANAGEMENT, L.P. SPECIALIZED SEAL DESIGN AND DISTRIB SPEEDCAST COMMUNICATIONS
STACEY SUPPLY DBA HUFCO
STANDARD & POOR'S FINANCIAL SERVICE STARR INDEMNITY & LIABILITY COMPANY STATE OF DELAWARE
STATE STREET GLOBAL ADVISORS (SSGA) STENA DRILLING
STRAUSS & KING SUBC USA LLC
SUBSEAQUENCE LIMITED
SULTANATE OF OMAN TAX AUTHORITY SUPPLY OILFIELD & MARINE PERSONNEL SERVICES INC
SWIRE OILFIELD SERVICE DO BRASIL TANKS-A-LOT, INC.
TARD ENGINEERING TERRY SPARKMAN
TEXAS COMPTROLLER OF PUBLIC ACCOUNTS TEXAS MUTUAL
THE BANK OF NEW YORK MELLON (ITC DEALERS CLEARANCE SPECIAL ) THE ESTATE OF DARIUS OWENS THE SUBSEA COMPANY
THE YOUNG LAW FIRM THE BAUPOST GROUP, LLC
THRIVENT ASSET MANAGEMENT, LLC TOGUT, SEGAL & SEGAL LLP
TOKIO MARINE HCC
TOR ASIA CREDIT MASTER FUND LP TOTAL S.A.
TRANSOCEAN LTD
TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA
U.S. BOLT MANUFACTURING, INC. U.S. SPECIALTY INSURANCE CO. U.S. TREASURY DEPARTMENT
UBS SECURITIES, LLC (LONDON BRANCH) VALARIS PLC
VANTAGE DRILLING VERIZON WIRELESS
WALKERS
WEB NETWORK SOLUTIONS
WELLBORE INTEGRITY SOLUTIONS, LLC WELLINGTON MANAGEMENT COMPANY, LLP WELLS FARGO SECURITIES, LLC
WEST AFRICA CATERING NIGERIA LTD WHITEBOX ADVISORS, LLC
WILDGEN S.A. WILGEN SA
WILHELMSEN SHIPS SERVICE
WILMINGTON TRUST, NATIONAL ASSOCIATION WORKSTRINGS INTERNATIONAL
WORLD FUEL SERVICES PTE LTD XL CATLIN
XL SPECIALTY INSURANCE XL SYNDICATE
ZURICH AMERICAN INSURANCE COMPANY (ZURICH)
Schedule 2
Potential Parties-in-Interest or their affiliates for whom Deloitte Tax LLP or its affiliates has provided or is currently providing services in matters unrelated to these Chapter 11 Cases, except as set forth above, or with whom such parties have other relationships, including banking relationships.
PACIFIC BORA LTD (LIBERIA)
PACIFIC DRILLING COMPANY LIMITED PACIFIC DRILLING FINANCE SARL (LUXEMBOURG)
PACIFIC DRILLING HOLDING (GIBRALTAR) LTD
PACIFIC DRILLING INC. (US) PACIFIC DRILLING LLC (US) PACIFIC DRILLING LTD (LIBERIA)
PACIFIC DRILLING OPERATIONS INC. (US) PACIFIC DRILLING OPERATIONS LTD (BVI) PACIFIC DRILLING S.A.
PACIFIC DRILLING S.A. (LUXEMBOURG) PACIFIC DRILLING V LTD (BVI)
PACIFIC DRILLING VII LTD (BVI)
PACIFIC DRILLSHIP NIGERIA LIMITED (BVI) PACIFIC DRILLSHIP SARL (LUXEMBOURG) PACIFIC MISTRAL LTD (LIBERIA)
PACIFIC SANTA ANA LIMITED (BVI) PACIFIC SCIROCCO LTD (LIBERIA) PACIFIC SHARAV KFT (HUNGARY) PACIFIC SHARAV SARL (LUXEMBOURG) PACIFIC DEEPWATER CONSTRUCTION LTD (BVI)
PACIFIC DRILLING (GIBRALTAR) LTD PACIFIC DRILLING ADMINISTRATOR LIMITED (BVI)
PACIFIC DRILLING DO BRASIL INVETIMENTOS LTDA (BRAZIL)
PACIFIC DRILLING DO BRASIL SERVICOS DE PERFUACAO LTDA (BRAZIL)
PACIFIC DRILLING GHANA LIMITED (GHANA)
PACIFIC DRILLING INTERNATIONAL LLC (US)
PACIFIC DRILLING INTERNATIONAL LTD (BVI)
PACIFIC DRILLING MANPOWER, INC. (US) PACIFIC DRILLING N.V. (NETH ANTILLES) PACIFIC DRILLING NETH COOPERATIF (NETHERLANDS)
PACIFIC DRILLING SERVICES INC. (US) PACIFIC DRILLING SERVICES PTE LTD PACIFIC DRILLING SOUTH AMERICA 1 LTD (BVI)
PACIFIC DRILLING SOUTH AMERICA 2 LTD (BVI)
PACIFIC DRILLING VIII LIMITED (BVI) PACIFIC DRILLSHIP (GIBRALTAR) LTD PACIFIC DRILLSHIP MEXICO, S. DE R.L. DE C.V (MEXICO)
PACIFIC INTERNATIONAL DRILLING WEST AFRICA LTD (NIGERIA)
PACIFIC MENERGY GHANA LIMITED (GHANA)
PACIFIC SANTA ANA (GIBRALTAR) LTD ABB AS
ACE AMERICAN INSURANCE CO. ADAMS AND REESE LLP
ADDAX ENERGY SA AIG EUROPE LIMITED AIG EUROPE SA
AKIN GUMP STRAUSS HAUER & FELD ALFA LAVAL
ALFRED BERG KAPITALFORVALTNING AS ALIXPARTNERS LLP
ALLIED WORLD ASSURANCE COMPANY (EUROPE) LIMITED
ALVAREZ & MARSAL AMAZON WEB SERVICES AMEGY BANK OF TEXAS AMERIFORGE CORPORATION
ANGELO, GORDON ENERGY SERVICER, LLC APPLUS K2 AMERICA LLC
ARISTEIA CAPITAL, LLC
ASSURANCEFORENINGEN SKULD (GJENSIDIG)
AVENUE CAPITAL MANAGEMENT II, L.P. BANK OF AMERICA MERRILL LYNCH BEAZLEY - LLOYDS
BEAZLEY GROUP
BLACKROCK ADVISORS, LLC BMO ASSET MANAGEMENT, INC. BNY MELLON (CAYMAN) LIMITED BP LUBRICANTS USA, INC.
BRIDON AMERICAN CORPORATION CANYON CAPITAL ADVISORS, LLC CCB ZAMAKONA OFFSHORE S.L. CENTRALIS USA INC
CHUBB EUROPEAN GROUP LTD CHUBB SEGUROS BRASIL S. A. CITIBANK N.A.
CLEARSTREAM BANK
CLYDE & CO LLP (MEXICO BRANCH) CMS OMAN
COGENT COMMUNICATIONS
COMPAGNIE NOUVELLE DES ASSURANCES CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
CREDIT SUISSE SERVICES (USA) LLC DIAMOND OFFSHORE DRILLING CO DIRECT TV
DUPONT CAPITAL MANAGEMENT CORPORATION
DZ PRIVATBANK S.A. ED BROKING LLP
EMPLOYEES RETIREMENT SYSTEM OF TEXAS
EQUINOR GULF OF MEXICO LLC
ERNST & YOUNG TAX ADVISORY SERVICES ERNST AND YOUNG U.S. LLP
EUROCLEAR BANK
EVERCORE PARTNERS INTERNATIONAL LLP
EXPRO GULF LTD - MAURITANIA FEDERAL INLAND REVENUE SERVICE FIDELITY MANAGEMENT & RESEARCH COMPANY
FIRE PROTECTION SERVICE, INC. FMR LLC
FORUM US, INC.
FRANK’S INTERNATIONAL WEST AFRICA FREEDOM SPECIALTY INSURANCE COMPANY (NATIONWIDE)
GOLDENTREE ASSET MANAGEMENT, L.P. (U.S.)
GOSS (GLOBAL OILFIELD SUPPORT SERVICES)
GRAMERCY FUNDS MANAGEMENT, LLC GREENHILL & CO.
GROUP 4 SECURICOR NIGERIA LIMITED HAL INVESTMENTS B.V.
HARRIS COUNTY TAX ASSESSOR - COLLECTOR
HAYFIN CAPITAL MANAGEMENT, LLP HEIDRICK & STRUGGLES
HOULIHAN LOKEY, INC. HYDRIL PCB LTD.
HYUNDAI GLOBAL SERVICE AMERICAS CO. ICM COTE D'IVOIRE S.A.
ID-SPARINVEST, FILIAL AF SPARINVEST S.A., LUXEMBOURG
INMARSAT SOLUTIONS
INTERNATIONAL SOS (AMERICAS) BV INVESCO ADVISERS, INC.
J.P. MORGAN SECURITIES, LLC JAMES W. HARRIS
JH BLADES & CO. JLT GROUP
JONES WALKER LLP
KONGSBERG MARITIME, INC KPMG LLP
LATHAM WATKINS LLP
LIBERTY - LLOYDS OF LONDON
LIBERTY MUTUAL INSURANCE EUROPE SE LLOYD & PARTNERS
LOGAN INDUSTRIES INTERNATIONAL CORP LOYENS LOEFF
MACKAY SHIELDS, LLC MAERSK DRILLING
MARKEL INTERNATIONAL
MAYER BROWN TAUIL & CHEQUER MCGRIFF, SEIBELS & WILLIAMS
MELLON INVESTMENTS CORPORATION METLIFE INVESTMENT MANAGEMENT, LLC MILBANK
NATIONAL OILWELL VARCO NATIONWIDE
NOBLE CORPORATION
NORDEA INVESTMENT MANAGEMENT AB (NORWAY)
NORTHLIGHT GROUP, LLP
OCEANEERING INTERNATIONAL INC. OMA LOGISTICS SENEGAL SARL PAUL WEISS
PETRONAS
PIMCO - PACIFIC INVESTMENT MANAGEMENT COMPANY
PPG ARCHITECTURAL FINISHES (PROTECTI) PRIMECLERK
PRINCIPAL GLOBAL INVESTORS, LLC QUANTUM PACIFIC (GIBRALTAR) LIMITED) RBC CAPITAL MARKETS, LLC
REPSOL
RK HARRISON INSURANCE BROKERS RKH SPECIALTY
RPS GROUP PLC SEADRILL
SEWARD & KISSEL
SHEARMAN & STERLING LLP SHI INTERNATIONAL CORP SHIPMAN & GOODWIN SOMPO
SOUTHERN TRUST INC PLC SPEEDCAST COMMUNICATIONS
STANDARD & POOR'S FINANCIAL SERVICE STATE OF DELAWARE
STATE STREET GLOBAL ADVISORS (SSGA) SUBC USA LLC
SWIRE OILFIELD SERVICE DO BRASIL TEXAS COMPTROLLER OF PUBLIC ACCOUNTS
TEXAS MUTUAL
THE BANK OF NEW YORK MELLON (ITC DEALERS CLEARANCE SPECIAL ) THE BAUPOST GROUP, LLC TOGUT, SEGAL & SEGAL LLP TOKIO MARINE HCC
TOTAL S.A.
TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA
U.S. SPECIALTY INSURANCE CO. U.S. TREASURY DEPARTMENT
UBS SECURITIES, LLC (LONDON BRANCH) VALARIS PLC
VANTAGE DRILLING VERIZON WIRELESS
VIKING LIFE-SAVING EQUIPMENT WALKERS
WELLBORE INTEGRITY SOLUTIONS, LLC WELLINGTON MANAGEMENT COMPANY, LLP
WELLS FARGO SECURITIES, LLC WHITEBOX ADVISORS, LLC WILHELMSEN SHIPS SERVICE WILMINGTON TRUST, NATIONAL ASSOCIATION
WORLD FUEL SERVICES PTE LTD XL CATLIN
XL SPECIALTY INSURANCE XL SYNDICATE
ZURICH AMERICAN INSURANCE COMPANY (ZURICH)
IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
In re:
PACIFIC DRILLING S.A., et al.,1
Debtors. x : : : : : : x Chapter 11 Case No. 20-35212 (DRJ) (Jointly Administered)
ORDER AUTHORIZING RETENTION AND EMPLOYMENT OF DELOITTE TAX LLP AS TAX SERVICES PROVIDER EFFECTIVE AS OF THE PETITION DATE
[Relates to Docket No. ____ ]
Upon the application (the “Application”),2 of the Debtors for entry of an order authorizing
the employment and retention of Deloitte Tax LLP to provide tax advisory services to the Debtors,
all as more fully set forth in the Application; and upon consideration of the Kernek Declaration;
and this Court being satisfied, based on the representations made in the Application and in the
Kernek Declaration, that Deloitte Tax is a “disinterested person” as such term is defined in Section
101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code, and, as
required by Section 327(a) of the Bankruptcy Code and referenced by Section 328 of the
Bankruptcy Code, neither represents nor holds an interest adverse to the Debtors’ estates or the
Debtors; and this Court having jurisdiction to consider the Application and the relief requested
1 The Debtors in the Chapter 11 Cases, along with the last four digits of each Debtor’s U.S. federal tax identification number, to the extent applicable, are: Pacific Drilling S.A. (5724), Pacific Bora Ltd. (9815), Pacific Drilling Operations Limited (9103), Pacific Drilling Operations, Inc. (4446), Pacific Drilling, Inc. (1524), Pacific Drilling, LLC (7655), Pacific Scirocco Ltd. (0073), Pacific Sharav S.À R.L. (2431), Pacific Drilling Holding (Gibraltar) Limited (3754), Pacific Drilling Company Limited (4275), Pacific Sharav Korlátolt Felelősségű Társaság (4898), Pacific Drillship Nigeria Limited (0281); Pacific Drilling Finance S.À R.L., Pacific Drilling Limited, Pacific Drilling V Limited, Pacific Drilling VII Limited, Pacific Drillship S.À R.L., Pacific Mistral Ltd., and Pacific Santa Ana Limited.
therein pursuant to 28 U.S.C. § 1334; and consideration of the Application and the requested relief
being a core proceeding pursuant to 28 U.S.C. § 157(b); and it appearing that venue is proper
before this Court pursuant to 28 U.S.C. §§ 1408 and 1409; and due and proper notice of the
Application having been provided; and such notice having been adequate and appropriate under
the circumstances, and it appearing that no other or 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 it appearing that
the relief requested in the Application is in the best interests of the Debtors and their respective
estates and creditors; 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. The Debtors are authorized to retain and employ Deloitte Tax as tax advisors,
effective as of the Petition Date, in accordance with the terms and conditions of the Engagement
Agreement, as modified by this Order.
2. Deloitte Tax shall file interim and final fee applications for allowance of
compensation for services rendered and reimbursement of expenses with respect to services
rendered in the Chapter 11 Cases with the Court, in accordance with Sections 330 and 331 of the
Bankruptcy Code, the applicable Bankruptcy Rules and Local Rules, the applicable U.S. Trustee
Guidelines, and any applicable orders of this Court.
3. Deloitte Tax shall include in its fee applications, among other things,
contemporaneous time records setting forth a description of the services rendered by each
professional and the amount of time spent on each date by each such individual in rendering
4. In the event that the rates of compensation for the services increase from the rates
disclosed for services in the Application, Deloitte Tax will file a supplemental declaration with the
Court describing such increased rates and serve upon the Debtors and the U.S. Trustee at least ten
(10) business days prior to the effective date of such increases, which supplemental declaration
shall explain the basis for the requested rate increases in accordance with Section 330(a)(3)(F) of
the Bankruptcy Code and indicate whether the Debtors have received notice of an approved the
proposed rate increase. The U.S. Trustee retains all rights to object to any rate increase on all
applicable grounds including, but not limited to, the reasonableness standard provided for in
Section 330 of the Bankruptcy Code and all rates and rate increases are subject to review by the
Court.
5. Notwithstanding anything to the contrary in this Order, the United States Trustee
and this Court shall retain the right and be entitled to object to Deloitte Tax’s fees and expenses in
these cases based on the reasonableness standard provided for in Section 330 of the Bankruptcy
Code, and this Order shall not prejudice or otherwise affect the rights of the U.S. Trustee or this
Court to challenge the reasonableness of Deloitte Tax’s compensation and reimbursement requests
in these cases under Sections 330 and 331 of the Bankruptcy Code. Accordingly, nothing in this
Order shall constitute a finding of fact or conclusion of law binding the U.S. Trustee or this Court
on appeal or otherwise, with respect to the reasonableness of Deloitte Tax’s compensation and
reimbursement requests in the Chapter 11 Cases.
6. To the extent the Debtors and Deloitte Tax enter into any supplemental agreements,
engagement letters or statements of work for additional services, the Debtors will file any such
supplemental agreements, engagement letters or statements of work with the Court and serve the
the filing and service of any such supplemental engagement letter or statement of work, Deloitte
Tax shall be deemed authorized and approved to provide and be compensated for such additional
services pursuant to this Order and the terms of such supplemental engagement letter or statement
of work. To the extent any such parties object to such proposed supplemental engagement letter
or statement of work, the Debtors will promptly schedule a hearing before the Court within ten
days of receipt of any such objection or as soon thereafter as is practicable. All additional services
shall be subject to the provisions of this Order.
7. Notwithstanding anything to the contrary in the Application and the Engagement
Agreement, with respect to the services performed under the Engagement Agreement from the
Petition Date through the effective date of a Chapter 11 plan, this Court retains exclusive
jurisdiction over all matters arising out of or pertaining to Deloitte Tax’s engagement until such
jurisdiction is relinquished.
8. The Indemnification Provisions set forth in the general business terms attached to
the Engagement Letter are hereby approved, subject to the following modifications with respect
to the services performed thereunder through the effective date of a plan of reorganization:
(a) All requests for payment of indemnity, contribution, or otherwise pursuant to the Indemnification Provisions shall be made by means of a fee application (interim or final) and shall be subject to the approval and review by this Court to ensure that such payment conforms to the terms of the Indemnification Provisions and is reasonable based on the circumstances of the litigation or settlement in respect of which indemnity is sought; provided, however, that in no event shall an indemnified party be indemnified or receive contribution to the extent that any claim arose or expense has resulted from any such losses finally judicially determined by a court of competent jurisdiction to have primarily resulted from the gross negligence, willful misconduct, breach of fiduciary duty (if any), intentional fraud, or bad faith of any indemnified parties;
gross negligence, willful misconduct, breach of fiduciary duty (if any), bad faith, or intentional fraud of such indemnified party; and
(c) In the event an indemnified party seeks reimbursement of attorneys’ fees from the Debtors pursuant to the Indemnification Provisions, the invoices and supporting time records from such attorneys shall be attached to Deloitte Tax’s own interim and/or final fee applications, and such invoices and time records shall be subject to the applicable U.S. Trustee Guidelines and the approval of the Bankruptcy Court under the standards of Section 330 of the Bankruptcy Code without regard to whether such attorneys have been retained under Section 327 of the Bankruptcy Code and without regard to whether such attorneys’ services satisfy Section 330(a)(3)(C) of the Bankruptcy Code.
9. In the event that, during the pendency of these cases, Deloitte Tax seeks
reimbursement for any attorneys’ fees and/or expenses, the invoices and supporting time records
from such attorneys shall be included in Deloitte Tax fee applications and such invoices and time
records shall be in compliance with the Bankruptcy Local Rules, and shall be subject to the
applicable U.S. Trustee Guidelines and approval of the Court under the standards of Sections 330
and 331 of the Bankruptcy Code, without regard to whether such attorney has been retained under
Section 327 of the Bankruptcy Code; provided, however, that Deloitte Tax shall not seek
reimbursement from the Debtors’ estates for any fees incurred in defending any objections filed
with respect to Deloitte Tax’s fee applications in these bankruptcy cases.
10. Notwithstanding anything in the Application or the Engagement Agreement to the
contrary, to the extent that Deloitte Tax uses third-party subcontractors who are not a subsidiary
of, or otherwise affiliated with, Deloitte Tax (collectively, the “Contractors”) in the Chapter 11
Cases, Deloitte Tax shall ensure that the Contractors are subject to the same conflicts checks as
required for Deloitte Tax and file with the Court such disclosures required by Bankruptcy Rule
11. The Debtors shall coordinate with Deloitte Tax and the Debtors’ other retained
professionals in the Chapter 11 Cases to minimize unnecessary duplication of efforts among the
Debtors’ professionals.
12. To the extent there may be any inconsistency between the terms of the Application,
the Engagement Agreement, the Kernek Declaration, and this Order, this Order shall govern.
13. Notwithstanding any Bankruptcy Rule to the contrary, this Order shall be effective
and enforceable immediately upon entry.
14. The Debtors and Deloitte Tax are authorized to take all actions necessary or
appropriate to carry out the relief granted in this Order.
15. This Court shall retain jurisdiction to hear and determine all matters arising from
or related to the implementation, interpretation, or enforcement of this Order.
Dated: , 2020
Houston, Texas
Exhibit A
Work Order Number: 2020-INT-1 Authorized Start Date: Upon Execution
This Work Order incorporates the terms and conditions of the Engagement Letter between Deloitte Tax LLP (“Deloitte Tax”) and Pacific Drilling S.A. plc, on behalf of itself and its subsidiaries and/or affiliates (“Client”) dated January 23, 2020.
Description of Services:
Deloitte Tax has agreed to perform the Services related to discharge of indebtedness and other tax issues arising in connection with Client’s restructuring and/or Chapter 11 filing of which Client may become the subject. The Deloitte Tax Services may include the following:
(i) Advise Client as it consults with its legal and financial advisors on the cash tax effects of restructuring, bankruptcy and the post-restructuring tax profile, including plan of reorganization tax costs, and the cash tax effects of the Chapter 11 filing and emergence transaction. This will include gaining an understanding of Client’s financial advisors’ valuation model and disclosure model to consider the tax assumptions contained therein;
(ii) Advise Client regarding the restructuring and bankruptcy emergence process from a tax perspective, including the tax work plan and analyzing various structuring alternatives and modification of debt, including considerations for the unwind of intercompany debts among Client and its subsidiaries/affiliates;
(iii) Advise Client on the cancellation of debt income for tax purposes under Internal Revenue Code (“IRC”) section 108, including cancellation of debt income generated from a restructuring, bankruptcy emergence transaction, and/or modification of the debt;
(iv) Advise Client on post-restructuring tax attributes and post-bankruptcy tax attributes (tax basis in assets, tax basis in subsidiary stock and net operating loss carryovers) available under the applicable tax regulations and the reduction of such attributes based on Client’s operating projections; including a technical analysis of the effects of Treasury Regulation section 1.1502-28 and the interplay with IRC sections 108 and 1017;
(v) Advise Client on the effects of tax rules under IRC sections 382(l)(5) and (l)(6) pertaining to the post-bankruptcy net operating loss carryovers and limitations on their utilization and Client’s ability to qualify for IRC section 382(l)(5);
(vi) Advise Client on net built-in gain or net built-in loss position at the time of “ownership change” (as defined under IRC section 382), including limitations on use of tax losses generated from post-restructuring or post-bankruptcy asset or stock sales;
(vii) Advise Client as to the treatment of post-petition interest for federal and state income tax purposes, including the applicability of the interest limitations under IRC section 163(j);
(viii) Advise Client as to the state and federal income tax treatment of pre-petition and post-petition reorganization costs including restructuring-related professional fees and other costs, the categorization and analysis of such costs, and the technical positions related thereto;
(ix) Advise Client with its evaluation and modeling of the tax effects of liquidating, disposing of assets, merging or converting entities as part of the restructuring, including the effects on federal and state tax attributes, state incentives, apportionment and other tax planning;
(x) Advise Client on state income tax treatment and planning for restructuring or bankruptcy provisions in various jurisdictions including cancellation of indebtedness calculation, adjustments to tax attributes and limitations on tax attribute utilization;
(xi) Advise Client on responding to tax notices and audits from taxing authorities;
(xii) Assist Client with identifying potential tax refunds and advise Client on procedures for tax refunds from tax authorities;
(xiii) Advise Client on income tax return reporting of restructuring and/or bankruptcy issues and related matters;
(xiv) Assist Client with documenting as appropriate, the tax analysis, development of Client’s opinions, recommendation, observations, and correspondence for any proposed restructuring alternative tax issue or other tax matter described above (but does not include the preparation, review or rendering advice with respect to Client’s tax provision or financial reporting purposes);
(xvi) Advise Client with its efforts to calculate tax basis in the stock in each of Client’s subsidiaries or other entity interests and tax basis in assets by legal entity; and
(xvii) As requested by Client and as may be agreed to by us, advise Client regarding other state or federal income tax, and non-U.S. income tax related questions that may arise in the course of this engagement.
Potential Impact of Tax Reform
Recently enacted tax reform measures have altered overall tax rates and numerous other areas of the IRC, including areas such as exclusions and deductions, cost recovery, credits, compensation, and taxation of foreign income and foreign persons. These tax reform measures could have a significant impact on Client’s current and future tax obligations. As the full impact of tax reform on Client’s overall tax situation and this engagement is analyzed, the scope of our Services may need to change, and it may result in additional fees being incurred. Our fees for such services will generally be based on the amount of professional time incurred and our agreed-upon hourly rates set forth below. We will discuss such additional services with Client prior to proceeding.
Tax Positions, Potential Penalties, Taxing Authority Audits
In accordance with our professional standards, while in the course of performing the Services should Deloitte Tax become aware of tax return positions for which either Client or Deloitte Tax may be subject to potential penalties by taxing authorities, Deloitte Tax will discuss with Client these positions including how any such penalties may be avoided through adequate disclosures to taxing authorities. Client should be aware that as a tax return preparer, Deloitte Tax may be required to satisfy disclosure requirements that may exceed those applicable to Client.
The Services do not include representation of Client in administrative taxing authority proceedings. However, Deloitte Tax would generally be willing to represent Client in such proceedings under the terms of a separate engagement letter or other written agreement.
Estimated Timing for Services:
Deloitte Tax is prepared to begin the delivery of Services to Client upon execution of this Work Order. If the Client commences a bankruptcy proceeding, the Services may continue both during and after the Client emerges from bankruptcy.
Client Responsibilities and Additional Acknowledgements:
The Client shall cooperate with Deloitte Tax in the performance by Deloitte Tax of the Services, including, without limitation, providing Deloitte Tax with reasonable facilities and timely access to data, information and personnel of the Client. The Client acknowledges and agrees that Deloitte Tax’s performance is dependent upon the timely and effective satisfaction of the Client’s responsibilities hereunder and timely decisions and approvals of the Client in connection with the Services. Deloitte Tax shall be entitled to rely on all decisions and approvals of the Client.
Fees and Expenses:
The Deloitte Tax fees for Services are based on the amount of professional time required and the below agreed-upon hourly rates, which vary depending upon the experience level of the professionals involved, plus reasonable out-of-pocket expenses.
Experience Level Agreed-Upon
Hourly Rate Washington National Tax or Other Specialist
In the normal course of business, Deloitte Tax revises its hourly rates to reflect changes in responsibilities, increased experience, geographical differentials and increased costs of doing business. Changes in the foregoing agreed-upon hourly rates will be subject to Client’s approval in advance and then noted on the invoices for the first-time period in which the revised rates become effective.
In addition, in connection with the engagement Deloitte Tax will be entitled to compensation for any time and actual reasonable out-of-pocket expenses including, without limitation, reasonable legal fees and expenses that may be incurred in considering or responding to discovery requests or other requests for documents or information, or in participating as a witness or otherwise in any legal, regulatory, or other proceedings relating to the Client, including, without limitation, those relating to Client but arising other than as a result of or in connection with this agreement.
Upon execution of this Work Order, Deloitte Tax will request the payment of a retainer in the amount of $50,000, prior to the commencement of the Services, upon which Deloitte Tax will draw to satisfy amounts due under this Work Order prior to the commencement of a Chapter 11 proceeding by Client, if any. Deloitte Tax will provide Client with a periodic statement, either weekly, biweekly or monthly depending on the amount of fees and expenses incurred, relative to the retainer. Upon the presentation of a statement, Client agrees to pay Deloitte Tax sufficient funds to restore the retainer to an agreed-upon amount within 3 business days. If Client files for Chapter 11 protection, the remaining portion of the retainer will be applied toward Deloitte Tax’s professional fees for services rendered and expenses incurred, subject to applicable Bankruptcy Court order, rules and procedures regarding compensation and reimbursement of expenses.
Upon the commencement of a Chapter 11 proceeding, Deloitte Tax expects to apply for compensation for professional services rendered and for reimbursement of expenses incurred, in accordance with applicable provisions of Title 11 of the United States Code (the “Bankruptcy Code”), the Federal Rules of Bankruptcy Procedure, the applicable local rules of bankruptcy procedure (the “Local Rules”) and the United States Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under Bankruptcy Code Section 330. In such event, payment of fees and reimbursement of expenses will be subject to ultimate allowance and approval by the Bankruptcy Court (as defined below). However, in the interim, Client will ask the Bankruptcy Court for approval to allow Deloitte Tax to submit invoices to Client for prompt payment in accordance with the Local Rules or practices of the Bankruptcy Court regarding monthly payment of professional fees and expenses. Accordingly, Deloitte Tax will provide Client with an invoice on a periodic basis, with the invoice due and payable pursuant to the payment procedures adopted by the Bankruptcy Court in Client’s Chapter 11 proceeding. If applicable, payment of these invoices will be made by Client on an interim basis subject to approval and allowance upon application to and order by the Bankruptcy Court.
Client agrees that Client will promptly seek the Bankruptcy Court’s approval of this engagement. The application, proposed order and other supporting documents (collectively, the “Application”) submitted to the Bankruptcy Court seeking its approval of this engagement must be satisfactory to Deloitte Tax in all respects. In addition to Deloitte Tax’s other rights or remedies hereunder, Deloitte Tax may, in its sole discretion and without any liability arising there from, terminate this engagement in the event that (a) a third party objects or threatens to object, or Deloitte tax reasonably believes that a third party may object, in the form of an objection or otherwise, to Deloitte Tax’s retention by Client on the terms and conditions set forth in this Work Order, (b) a final order authorizing the employment of Deloitte Tax is not issued by the Bankruptcy Court on or before sixty (60) days from the filing date of Client’s Chapter 11 petition on the terms and conditions set forth herein, or on such other terms and conditions as are satisfactory to Deloitte Tax, or (c) the Application is denied by the Bankruptcy Court. In such event, Client hereby agrees to withdraw or amend, promptly upon Deloitte Tax’s request, any Application filed or to be filed with the Bankruptcy Court to retain Deloitte Tax’s services in the Chapter 11 proceeding.
For purposes of this Work Order, “Bankruptcy Court” shall mean the United States Bankruptcy Court with which Client files a Chapter 11 petition.
Other Terms:
CONSENT FOR DISCLOSURE AND USE OF TAX RETURN INFORMATION
