Case KBO Doc 149 Filed 01/28/20 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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25942088.2

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE DISTRICT OF DELAWARE

In re:

US INVESTIGATIONS SERVICES, LLC,

1

Debtor.

Chapter 11 Case No. 15-10262 (KBO)

Ref. Docket No. 138

ORDER RECLASSIFYING, DISALLOWING, OR REDUCING CLAIMS AS SET FORTH

IN THE REORGANIZED DEBTOR’S TWENTY-SECOND OMNIBUS OBJECTION

TO CERTAIN CLAIMS (SUBSTANTIVE)

Upon the objection (the “Objection”)

2

of the Reorganized Debtor seeking entry of

an order (this “Order”) reclassifying, disallowing and expunging, or reducing certain Disputed

Claims pursuant to section 502(b) of the Bankruptcy Code and Rule 3007 of the Bankruptcy Rules;

and it appearing that the Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334; and

it appearing that this proceeding is a core proceeding pursuant to 28 U.S.C. § 157; and it appearing

that venue of this proceeding is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409; and

adequate notice of the Objection and opportunity for response having been given; and it appearing

that no other notice need be given; and the Court having considered the Objection, the Robbins

Declaration, the Disputed Claims listed on Exhibits 1-4 attached hereto, and any responses

thereto; and the Court having determined that there exists just cause for the relief granted herein;

and upon the record herein; and after due deliberation and sufficient cause appearing therefor, it is

HEREBY ORDERED:

1 The Debtor in this case, along with the last four digits of the Debtor’s federal tax identification number, is US

Investigations Services, LLC (9260). The location of the Debtor’s corporate headquarters is 3349 Michelson

Drive, No. 150, Irvine, California 92612.

2

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25942088.2

1. The Objection is sustained to the extent set forth herein.

2. _{The Reclassified Claims are hereby reclassified as set forth on Exhibit 1.}

3. _{The No Liability Claims listed on Exhibit 2 are hereby disallowed and expunged in}

their entirety.

4. _{The Multiple Debtor Claims identified on the attached Exhibit 3 under the column}

titled “

_{Duplicate Claim to be Disallowed” are disallowed and expunged in their entirety.}

5. _{The Reduced Claims are hereby reduced as set forth on Exhibit 4.}

6. Claim No. 833, filed by Jeffrey Elwood Erdman, shall be deemed to be an allowed

priority claim under section 507(a)(4)(B) of the Bankruptcy Code against US Investigations

Services, LLC in the amount of $6,215.00, which claim shall be subject to the timing and payment

mechanisms set forth in the Plan.

7. Prime Clerk, the Reorganized Debtor’s claims and noticing agent, shall update the

claims register to reflect the relief granted in this Order.

8. The Reorganized Debtor’s right to file additional objections to the Disputed Claims

or any other proofs of claim that have been or may be filed against the Debtors are preserved.

Additionally, should one or more of the grounds of objection stated in the Objection be dismissed,

the Reorganized Debtor’s rights to object on other stated grounds or on any other grounds that the

Reorganized Debtor discovers during the pendency of this chapter 11 case are further preserved.

9. Each Disputed Claim and the objections by the Reorganized Debtor to such

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25942088.2

shall only apply to the contested matter that involves such claimant and Disputed Claim and shall

not act to stay the applicability and/or finality of this Order with respect to the other contested

matters or Disputed Claims listed in the Objection or this Order.

10. The terms and conditions of this Order shall be immediately effective and

enforceable, and the time to appeal this Order shall commence upon its entry. All time periods set

forth in this Order shall be calculated in accordance with Bankruptcy Rule 9006(a).

11. The Court shall retain jurisdiction with respect to all matters related to or arising

from the Objection or the implementation of this Order.

KAREN B. OWENS

UNITED STATES BANKRUPTCY JUDGE

Dated: January 28th, 2020

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25942088.2

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Exhibit 1 Reclassified Claims Name of Claimant Claim Number Debtor C laim Amount Claim Classification Status

Modified Claim Classification

Status

Reason for Reclassification

Barth, Michael 862 US Investigations Services, LLC $2,480.00 Priority (507(a)(4)) U nsecured

The proof of claim asserts priority under section 507(a)(4) of the Bankruptcy Code. The documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and all of the services provided in the claim were completed outside of the 180-day priority period under 507(a)(4). Therefore, the Reorganized Debtor believe

s

that the claim is not entitled to priority status and should be reclassified as a general unsecured claim.

Baxter, Peter Crockett

1136

US Investigations Services, LLC

$935.00

Administrative (503(b)(9))

Unsecured

The proof of claim asserts priority under section 503(b)(9) of the Bankruptcy Code. However, the proof of claim is for services provided to the Debtors, and therefore is not entitled to administrative priority pursuant to section 503(b)(9) of the Bankruptcy Code. Furthermore, the documentation attached to the claim reflects that the claimant was an independent contractor but does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and all of the services provided in the claim were completed outside of the 180-day priority period under 507(a)(4). Thus, even to the extent that the claimant intended to seek priority under section 507 of the Bankruptcy Code, there is no basis for such priority on the face of the claim. Therefore, the Reorganized Debtor believes that the claim is not entitled to 503(b)(9) status or any other priority status and should be reclassified as a general unsecured claim.

Bell, Kendra 766 US Investigations Services, LLC $812.32 Priority (507(a)(5)); Secured Unsecured

The proof of claim asserts priority under section 507(a)(5) of the Bankruptcy Code and treatment as a secured claim for "services performed/lacking." The documentation attached to the claim does not appear to relate to the basis in the proof of claim. It includes receipts for prescriptions and other estimated medical expenses and asserts that these medical expenses would have been covered by USIS insurance but that the claimant had to pay for them without insurance. The claimant did not provide any documentation reflecting that the Debtor is obligated to pay for such expenses. The claim is not one for contributions to an employee benefit plan, nor did the claimant provide evidence that the alleged services were rendered within the 180 days prior to the Petition Date. Moreover, based on the Reorganized Debtor's review of the Debtors' books and records, the claimant is not entitled to a priority claim under section 507(a)(5) of the Bankruptcy Code. Furthermore, the claim is not entitled to secured status under the Bankruptcy Code or otherwise. Accordingly, the claim must be reclassified to a general unsecured claim.

Bialecki, Francis 384 U S Investigations Services, LLC $2,085.00 Priority (507(a)(4)) Unsecured

The proof of claim asserts priority under section 507(a)(4) of the Bankruptcy Code. The documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and all of the services provided in the claim were completed outside of the 180-day priority period under 507(a)(4). Therefore, the Reorganized Debtor believe

s

Binkley, Deborah 1151 US Investigations Services, LLC $33,600.00 Priority Unsecured

This proof of claim is for "failure to pay SCA benefit overpayment" and asserts priority under section 507(a)(5) of the Bankruptcy Code. For the reasons stated in the No Liability Exhibit, the Reorganized Debtor does not believe the Debtors have any liability on account of this claim. However, out of an abundance of caution, the Reorganized Debtor also seeks to reclassify this claim to a general unsecured claim. The alleged benefits relate to the period of 6/2003 through 6/2013, which fall outside of the priority period under section 507(a)(5) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Carr, Alexandra 654 U S Investigations Services, LLC $1,405.00 Priority (507(a)(4)) Unsecured

The claim asserts priority under section 507(a)(4) of the Bankruptcy Code. The documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and does not specify when the services were provided. Therefore, the Reorganized Debtor believes that the claim is not entitled to priority status and should be reclassified as a general unsecured claim.

City of Los Angeles, O

f 182 U S Investigations Services, LLC $17,308.98 Priority Unsecured

This proof of claim is for municipal business taxes from 2006 to 2007 and asserts priority under section 507(a)(8) of the Bankruptcy Code. However, the claim falls outside the priority period set forth in section 507(a)(8)(A) of the Bankruptcy Code. Accordingly, the claim must be reclassified t

o

a general unsecured claim.

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Status

Cooper, William 260 US Investigations Services, LLC $1,290.00 Priority (507(a)(4)) Unsecured

The claim asserts priority under section 507(a)(4) of the Bankruptcy Code. The documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and all of the services provided in the claim were completed outside of the 180-day priority period under 507(a)(4). Therefore, the Reorganized Debtor believe

s

that the claim is not entitled to priority status and should be reclassified as unsecured.

Cooper, William J. 382 US Investigations Services, LLC $1,290.00 Priority (507(a)(4)) Unsecured

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Daugherty, Gail 591 US Investigations Services, LLC $450.00 Priority (507(a)(4)) Unsecured

Dennis, Jolee 221 US Investigations Services, LLC $5,005.00 Priority (507(a)(4)) Unsecured

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Dixon, Matarsa 287 US Investigations Services, LLC $4,000.00 Administrative (503(b)(9)) Unsecured

The proof of claim lists the basis as "unpaid work hours" and asserts priority under section 503(b)(9) of the Bankruptcy Code. No portion of the claim is for goods provided to the Debtors. Therefore, the claim is not entitled to administrative priority under section 503(b)(9) of the Bankruptcy Code. Even assuming the claimant intended to seek priority under section 507 of the Bankruptcy Code, on its face the claim does not satisfy the standard for priority under any section of 507 of the Bankruptcy Code. Accordingly, the Reorganized Debtor believes that the claim must be reclassified to a general unsecured claim.

Dunkerley, Dixie 394 U S Investigations Services, LLC $90,000.00 Priority (507(a)) Unsecured

The proof of claim lists the basis as "verbal contract broken or unemployment" and asserts priority under the Bankruptcy Code but does not specify the applicable subsection. The claimant seeks four years of wages and attached a letter explaining why she believes that money is owed to her, but did not include any documentation that would establish a

prima facie

valid priority claim. The

claimant did not allege that she earned any wages, salaries, or commissions that were unpaid to her within 180 days of the Petition Date or establish any other basis for priority under the Bankruptcy Code. Based on the Reorganized Debtor's review of the Debtors' books and records and the claimant's supporting documentation, the claimant is not entitled to a priority claim under section 507(a) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Dunstan Jr, William 484 US Investigations Services, LLC $415.00 Priority (507(a)(4)) Unsecured

The claim asserts priority under section 507(a)(4) of the Bankruptcy Code. The documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and does not specify when the services were provided. Therefore, the Reorganized Debtor believes that the claim is not entitled to priority status and should be reclassified to a general unsecured claim.

Fantroy, Dorletha 678 US Investigations Services, LLC $6,310.00 Priority (507(a)(4)) Unsecured

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Status

Fox, Bonnie L. 848 US Investigations Services, LLC Unknown Priority Unsecured

This proof of claim asserts an unknown amount for "back pay based on wrongful termination on 4/14/14" and asserts priority under section 507(a)(4) of the Bankruptcy Code. To the extent the claimant is owed any back pay, which the Reorganized Debtor disputes, any such claim would not be for wages, salaries, or commissions earned within 180 days before the Petition Date. Accordingly, the claim must be reclassified to a general unsecured claim.

Guerrero, Adrian R. 513 US Investigations Services, LLC $1,250.00 Priority (507(a)(4)) Unsecured

The proof of claim states the basis as "investigations completed and not paid" and asserts priority under section 507(a)(4). The only documentation included with the claim is a vague letter that alleges that a representative of the Debtor retrieved all proof of the claim. The claimant did not provide evidence that the applicable services were rendered within the 180 days prior to the Petition Date. Based on the Reorganized Debtor's review of the Debtors' books and records and the claimant's supporting documentation, the claimant is not entitled to a priority claim under section 507(a)(4) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Gwinn, Joel 357 U S Investigations Services, LLC $7,540.00 Priority (507(a)(5)) U nsecured

The proof of claim states the basis as "services performed" and asserts priority under section 507(a)(5) of the Bankruptcy Code. The documentation attached to the claim is a letter from the claimant alleging that the Debtor cancelled its paid time off policy without compensating employees and that the company subsequently settled lawsuits out of court with employees relating to the paid time off. The claim does not include any documentation supporting a right to payment for paid tim

e

off or anything else. The letter states that the claimant retired in October 2013, which preceded th

e

priority period under section 507(a)(5) of the Bankruptcy Code. Based on the Reorganized Debtor's review of the Debtors' books and records and the claimant's supporting documentation, the claimant is not entitled to a priority claim under section 507(a)(5) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Hawley, Michael 511 US Investigations Services, LLC $330.00 Priority (507(a)(4)) Unsecured

s

Herrick, James 167 US Investigations Services, LLC $5,000.00 Administrative (503(b)(9)) Unsecured

The proof of claim lists the basis as "lost wages" and asserts priority under section 503(b)(9) of the Bankruptcy Code. No portion of the claim is for goods provided to the Debtors. Therefore, the claim is not entitled to administrative priority under section 503(b)(9) of the Bankruptcy Code. Eve

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assuming the claimant intended to seek priority under section 507 of the Bankruptcy Code, on its face the claim does not satisfy the standard for priority under any section of 507 of the Bankruptcy Code. Accordingly, the Reorganized Debtor believes that the claim must be reclassified to a general unsecured claim.

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Status

Hurts, Rita 550 US Investigations Services, LLC $1,606.50 Priority (507(a)(5)); Secured; Administrative (503(b)(9)) Unsecured

The proof of claim asserts priority under section 507(a)(5) and treatment as a secured claim and a 503(b)(9) claim. The documentation attached to the claim is a letter from the claimant explaining that the claimant paid for credit monitoring as a result of a personal information breach by the Debtor, resulting in an unsecured claim of $518.00. The claim also includes a letter from the Debtor stating that if the claimant failed to follow the instructions in the letter, the claimant would not receive any credit monitoring services. The claimant's letter also asserts that the Debtor did not match IRA contributions in the amount of $1,088.50, but does not include documentation substantiating that this amount is owed, nor does it include documentation substantiating that this amount is owed on a secured basis. Accordingly, this portion of the claim must be reclassified to a general unsecured claim. As set forth in the modified amount exhibit, the Reorganized Debtor also disputes the claimant's assertion that she did not receive an employer match for IRA contributions and seeks to reduce the proof of claim by $1,088.50. The claimant asserts that the entirety of the claim is entitled to priority status under section 507(a)(5) of the Bankruptcy Code. At a minimum, the portion of the claim relating to credit monitoring is not a claim for contributions to an employee benefit plan, nor does the claimant provide evidence that the applicable services were rendered within the 180 days prior to the Petition Date. Additionally, for the portion of the claim relating to IRA contributions, the claimant does not provide evidence that the applicable services were rendered within the 180 days prior to the Petition Date. Accordingly, the entirety of the claim must be reclassified to a general unsecured claim. Finally, no portion of the claim is for goods provided to the Debtors. Therefore, the claim is not entitled to administrative priority under section 503(b)(9) of the Bankruptcy Code. Even assuming the claimant intended to seek priority under another sub-section of section 507 of the Bankruptcy Code, on its face the claim does not satisfy the standard for priority under any section of 507 of the Bankruptcy Code. Accordingly, the Reorganized Debtor believes that the claim must be reclassified to a general unsecured claim.

Kidder, Stephanie 616 US Investigations Services, LLC $1,855.00 Priority (507(a)(4)) Unsecured

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Knight, Debra 501 US Investigations Services, LLC $880.00 Priority (507(a)(4)) Unsecured

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Koontz, James 440 U S Investigations Services, LLC $10,500.00 Priority Unsecured - $7,795.89; Priority - $2,704.11

This proof of claim asserts priority under section 507(a)(4) of the Bankruptcy Code for a $10,500 claim on the basis that he should have been compensated at a higher level over an 18 month period in 2013 and 2014. Assuming the claimant is entitled to back pay, which the Reorganized Debtor disputes, only the portion attributable to the 180-day priority period would be entitled to priority. 141 days of the 180-day priority period occurred in 2014. Accordingly, the Reorganized Debtor has pro-rated the $10,500 claim over an 18 month period and believes that $7,795.89 of the claim should be reclassified to a general unsecured claim.

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Status

Maresh, Michele 4454 US Investigations Services, LLC $2,150.00 Priority (507(a)(4)) Unsecured

Martinez, Sara

379

Unliquidated

Priority (507(a)(4) and

507(a)(5)); Administrative

(503(b)(9))

Unsecured

The proof of claim lists the basis as "wages for hours worked - 40 hours week" and asserts priority under sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code. The claim is not one for contributions to an employee benefit plan, and even though it does assert unpaid wages, the claimant did not provide evidence that the applicable services were rendered within the 180 days prior to the Petition Date. Indeed, no supporting documentation has been provided. Based on the Reorganized Debtor's review of the Debtors' books and records, the claimant is not entitled to a priority claim under sections 507(a)(4) or 507(a)(5) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim. Additionally, no portion of the claim is for goods provided to the Debtors. Therefore, the claim is not entitled to administrative priority under section 503(b)(9) of the Bankruptcy Code, and the claim must be reclassified to a general unsecured claim.

McCaffery, Erin 779 US Investigations Services, LLC $3,840.00 Priority (507(a)(4)) Unsecured

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McGhee, Jamila 4287 US Investigations Services, LLC $5,000.00 Priority (507(a)(4)) Unsecured

s

Miller, Robin

343

$8,143.20

507(a)(5))

Unsecured

The proof of claim states the basis as "SCA, sick leave, wages, emp. benefits" and asserts priority under sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code. The employee attached prior earning statements but did not include documentation establishing any right to payment of the asserted amounts. Furthermore, the claimant did not provide evidence that the applicable service

s

were rendered within the 180 days prior to the Petition Date. Based on the Reorganized Debtor's review of the Debtors' books and records and the claimant's supporting documentation, the claimant is not entitled to a priority claim under sections 507(a)(4) or 507(a)(5) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Mills, Dara 866 US Investigations Services, LLC $615.83 Priority (507(a)(4)) Unsecured

s

Mullins, LABA, LLC, Lawrence T.

441

$220.00

Administrative (503(b)(9))

Unsecured

The proof of claim is for services provided to the Debtors, and therefore is not entitled to administrative priority pursuant to section 503(b)(9) of the Bankruptcy Code. Furthermore, the documentation attached to the claim reflects that the claimant was an independent contractor but does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and all of the services provided in the claim were completed outside of the 180-day priority period under 507(a)(4). Therefore, the Reorganized Debtor believes that the claim is not entitled to 503(b)(9) status and should be reclassified as a general unsecured claim.

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Status

Munoz, Catiana

244

$19,166.00

507(a)(4))

Unsecured

The proof of claim lists the basis as "lost wages, housing rent payments and domestic support obligations/household expenses" and asserts priority under sections 507(a)(1) and 507(a)(4) of the Bankruptcy Code. The Debtors had no obligation to provide domestic support obligations to their employees. Additionally, while the claim asserts unpaid wages, the claimant did not provide evidence that the applicable services were rendered within the 180 days prior to the Petition Date. Indeed, no supporting documentation has been provided. Based on the Reorganized Debtor's review of the Debtors' books and records, the claimant is not entitled to a priority claim under sections 507(a)(1) or 507(a)(4) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Nerat-Furlong, Darlene 216 US Investigations Services, LLC $1,885.00 Priority (507(a)(4)) Unsecured

The claim asserts priority under section 507(a)(4) of the Bankruptcy Code. The documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and does not specify when the services were provided. Therefore, the Reorganized Debtor believes that the claim is not entitled to priority status and should be reclassified as unsecured.

Pfaff, Jason 1163 US Investigations Services, LLC $41,316.80 Priority (unspecified) Unsecured - $28,841.80, Priority - $12,475.00 The proof of claim asserts priority under an unspecified subsection of the Bankruptcy Code for "WARN Act and Severance." The WARN portion of the claim was previously disallowed at D.I. 127. The claimant seeks recovery of severance on the basis that providing severance was a "common practice" of USIS, but did not provide any documentation establishing that any severance is owed. To the extent severance was due, the claimant would only be entitled to a priority claim for any severance earned during the 180 day priority period before his termination on September 19, 2014

,

a 38-day period, and would be entitled to a maximum priority claim of the statutory cap.

See In re

Wean Inc.

, 169 B.R. 126, 128 (Bankr. W.D. Pa. 1994) (Fitzgerald, J.) (concluding “the portion of

severance pay claims attributable to services performed during the [statutory wage] priority period is entitled to priority treatment”). Due to turnover in staff since the Debtors' bankruptcy cases commenced in 2015, the Reorganized Debtor does not have access to any information pertaining to severance. However, to the extent the claimant is entitled to any severance, it would be limited to the $12,475 cap set forth in section 507(a)(4) of the Bankruptcy Code. Accordingly, $28,841.80 of the claim must be reclassified to a general unsecured claim and the balance ($12,475) may have priority status. To the extent the Reorganized Debtor identifies additional information pertaining to severance, it reserves the right to seek to reclassify the balance of this claim.

Phillips, Jerome A 656 US Investigations Services, LLC $135.00 Priority (507(a)(4)) Unsecured

The claim asserts priority under section 507(a)(4) of the Bankruptcy Code. The documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code. Even if it did include allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code, only a portion of the services provided in the claim were completed within the 180-day priority period under 507(a)(4). Therefore, the Reorganized Debtor believes that the claim is not entitled to priority status and should be reclassified as a general unsecured claim.

Phillips, Ralph P 579 US Investigations Services, LLC $1,615.00 Priority (507(a)(4)) Unsecured

The claim asserts priority under section 507(a)(4) of the Bankruptcy Code. The documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code and does not specify when the services were provided. Therefore, the Reorganized Debtor believes that the claim is not entitled to priority status and should be reclassified as unsecured.

Rodriguez Consulting Group, LLC

901

$3,120.00

Priority (507(a)(4))

Unsecured

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Status

Rodriguez, Angela 1373 US Investigations Services, LLC $46,044.96 Priority Unsecured

This proof of claim is for "SCA benefit overpayment / benefit owed" and asserts priority under section 507(a)(4) of the Bankruptcy Code. For the reasons stated in the Modified Amount Claim Exhibit, the Reorganized Debtor does not believe the Debtors have any liability on account of the SCA portion claim. However, out of an abundance of caution, the Reorganized Debtor also seeks to reclassify this entire claim to a general unsecured claim. The claimant seeks overtime from 8/6/11 to 8/6/14 in the amount of $44,896.80 and SCA fringe benefits from 8/6/11 to 6/30/12 in the amount of $1,148.16, which time periods fall outside of the priority period under section 507(a)(4) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Satterthwaite, Michael

957

USIS International, Inc.

$50,767.20

Unsecured -

$38,292.30; Priority -

$12,475.00

The proof of claim asserts priority under section 507(a)(4) of the Bankruptcy Code for "legal obligations under the WARN Act and established severance policy." The WARN portion of the claim was previously disallowed at D.I. 127. The claimant seeks recovery of severance on the basis that "USIS has had an established history" of providing severance, but did not provide any documentation establishing that any severance is owed. To the extent severance was due, the claimant would only be entitled to a priority claim for any severance earned during the 180 days priority period before his termination on September 30, 2019, a 49-day period.

See In re Wean Inc.

, 169 B.R. 126, 128 (Bankr. W.D. Pa. 1994)

(Fitzgerald, J.) (concluding “the portion of severance pay claims attributable to services performed during the [statutory wage] priority period is entitled to priority treatment”).

Due to turnover in staff

since the Debtors' bankruptcy cases commenced in 2015, the Reorganized Debtor does not have access to any information pertaining to severance. However, to the extent the claimant is entitled to any severance, it would be limited to the $12,475 cap set forth in section 507(a)(4) of the Bankruptcy Code. Accordingly, $38,292.20 of the claim must be reclassified to a general unsecured claim and the balance ($12,475) may have priority status. To the extent the Reorganized Debtor identifies additional information pertaining to severance, it reserves the right t

o

seek to reclassify the balance of this claim.

Silvia, Natalie 1204 US Investigations Services, LLC $57,846.44 Priority Unsecured

This proof of claim is for "unpaid overtime hours and SCA fringe benefits" and asserts priority under sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code. For the reasons stated in the No Liability Exhibit, the Reorganized Debtor does not believe the Debtors have any liability on account of this claim. However, out of an abundance of caution, the Reorganized Debtor also seeks to reclassify this claim to a general unsecured claim. The alleged benefits relate to the period of Jun

e

2000 through February 2007, from May 2007 to October 2012, and from October 2012 to June 2013, which time periods fall outside of the priority period under sections 507(a)(4) and 507(a)(5) o

f

the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Slack, Paula 948 US Investigations Services, LLC $1,760.00 Priority (507(a)(4)) Unsecured

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Smallwood, Kathlyn 724 US Investigations Services, LLC $3,920.00 Priority (507(a)(4)) Unsecured

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Smith, James 177 US Investigations Services, LLC $1,425.00 Priority (507(a)(4)) Unsecured

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Status

Speller, Edward 344 US Investigations Services, LLC $1,385.00 Priority (507(a)(4)) Unsecured

s

Thoma, Brian 398 US Investigations Services, LLC $460.00 Priority (507(a)(4)) Unsecured

The claim asserts priority under section 507(a)(4) of the Bankruptcy Code. While the services provided in the claim were completed during the 180-day priority period under 507(a)(4), the documentation attached to the claim reflects that the claimant was an independent contractor and not an employee. However, the claim does not include any allegations that would satisfy section 507(a)(4)(B) of the Bankruptcy Code. Therefore, the Reorganized Debtor believes that the claim i

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not entitled to priority status and should be reclassified as a general unsecured claim.

Tresmontan, Anthony 191 US Investigations Services, LLC $31,882.11 Priority (507(a)(4)) Unsecured

The proof of claim lists the basis as "due, owing and payable overtime premium wages earned, waiting time penalties and liquidated damages" and asserts priority under section 507(a)(4) of the Bankruptcy Code. While the claim asserts unpaid wages, the claimant did not provide evidence that the applicable services were rendered within the 180 days prior to the Petition Date. Indeed, n

o

supporting documentation has been provided. To the extent liquidated damages are due and owing, they are not entitled to priority under section 507(a)(4) of the Bankruptcy Code because the

y

are not for unpaid wages, salaries, or commissions. Based on the Reorganized Debtor's review of the Debtors' books and records, the claimant is not entitled to a priority claim under section 507(a)(4) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Wagner, Linda

558

U

S Investigations Services, LLC

$3,141.03

507(a)(5))

Unsecured

The proof of claim asserts priority under sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code for "services performed/wages." The claimant attached sample pay statements to the claim and a calculation of what she believes she is owed. The amount asserted is based on being "forced" to take sick time, vacation time, holiday time, and bereavement time, but there is no explanation of why the claimant is entitled to any payment, let alone payment on a priority basis. Furthermore, th

e

claimant did not provide evidence that she earned any wages, salaries, or commissions within the 180 days prior to the Petition Date that were not paid. Based on the Reorganized Debtor's review of the Debtors' books and records and the claimant's supporting documentation, the claimant is no

t

entitled to a priority claim under sections 507(a)(4) or 507(a)(5) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

Weidenkopf, Joseph 755 U S Investigations Services, LLC $11,675.10 Priority

This proof of claim claim asserts priority under section 507(a)(4) of the Bankruptcy Code for "Unpaid Overtime/ Unpaid Service Contract Act Fringe Benefit." For the reasons stated in the Modified Amount Claim Exhibit, the Reorganized Debtor does not believe the Debtors have any SCA liability on account of this claim. However, out of an abundance of caution, the Reorganized Debtor also seeks to reclassify this entire claim to a general unsecured claim. The alleged benefit

s

relate to unpaid overtime in 2012 and unpaid fringe benefits from 4/30/2012 to 6/1/2013, all of which fall outside of the priority period under section 507(a)(4). Accordingly, the claim must be reclassified to a general unsecured claim.

Weinraub, David 369 US Investigations Services, LLC $745.00 Priority (507(a)(4)) Unsecured

The proof of claim lists the basis as "completed and transmitted case prior to 08/06/14" and asserts priority under section 507(a)(4) of the Bankruptcy Code. While the claim asserts unpaid wages, the claimant did not provide evidence that the applicable services were rendered within the 180 days prior to the Petition Date. Indeed, no supporting documentation has been provided. Moreover, 08/06/14 falls outside of the 180 day priority period under section 507(a)(4). Based on the Reorganized Debtor's review of the Debtors' books and records, the claimant is not entitled to a priority claim under section 507(a)(4) of the Bankruptcy Code. Accordingly, the claim must be reclassified to a general unsecured claim.

(13)

Status

Weinraub, David 371 U S Investigations Services, LLC $165.00 Priority (507(a)(4)) Unsecured

Weller, Glee 989 US Investigations Services, LLC $52,500.00 Priority Unsecured

This proof of claim asserts priority under section 507(a)(4) of the Bankruptcy Code for "wrongful termination due to disability" and seeks recovery of his monthly salary following his date of termination in May 2013 through August 2014. To the extent the claimant is owed anything, which the Reorganized Debtor disputes, any such claim would not be for wages, salaries, or commissions earned within 180 days before the Petition Date. Accordingly, the claim must be reclassified to a general unsecured claim.

White, Monica Lisa

1008

$1,865.00

Unsecured

Williamson, Pascal 570 U S Investigations Services, LLC $6,520.00 Priority Unsecured

The proof of claim is for "wrongful termination" and asserts priority under section 507(a)(4) of the Bankruptcy Code. The claimant did not allege or provide evidence that he is owed wages, salaries, or commissions earned within 180 days before the Petition Date. Accordingly, the claim must be reclassified to a general unsecured claim.

(14)

25942088.2

(15)

Exhibit 2 No Liability Claims Name of Claimant Claim Number Debtor Claim Amount Claim Classification Status

Reason for Disallowance

Binkley, Deborah

1151

$33,600.00

Priority

This claim asserts priority under section 507(a)(5) of the Bankruptcy Code for "failure to pay SCA benefit overpayment." The alleged SCA benefits relate to a ten- year period between 6/2003 to 6/2013. The claimant attached an email chain with a representative of the Reorganized Debtor, where on February 19, 2014, the representative explained that even if the employee did not take health benefits, the company may not owe her any money on account of SCA benefits. USIS calculated and made SCA payments on a quarterly basis. All SCA amounts owed were deposited to an employee's 401(k) account. As set forth in the Robbins Declaration, the Global Benefits Manager for the successor entity to US Investigations Services, LLC has access to many of the relevant employee records for US Investigations Services, LLC and did not identify any outstanding liability to the claimant. Accordingly, the Reorganized Debtor believes this claim should be expunged.

Kidwell, Tara E 1411 US Investigations Services, LLC $30,925.99 P riority

This claim asserts priority under section 507(a)(5) for contributions to a 401(k) plan. The claimant attached a screenshot of her 401(k) account as of 4/28/15, which supports the amount of the claim, but there are no allegations regarding when the contributions were made or if they were for services rendered within 180 days before the Petition Date. The Reorganized Debtor has reviewed the Debtors' books and records and determined that in December 2017, the claimant withdrew the total $34,722.79 balance from her 401(k) Plan. Of that total amount, $14,930.80 was rolled over to a Fidelity IRA, $19,791.99 distributed to her, and $6,729.28 withheld for taxes. Accordingly, the Reorganized Debtor believes this claim should be expunged.

Silvia, Natalie

1204

$57,846.44

Priority

This claim asserts priority under section 507(a)(4) and 507(a)(5) of the Bankruptcy Code for "SCA benefit overpayment/benefit owed." The SCA benefits allegedly are owed from June 2000 through February 2007, from May 2007 to October 2012, and from October 2012 to June 2013. USIS calculated and made SCA payments on a quarterly basis. All SCA amounts owed were deposited to an employee's 401(k) account. As set forth in the Robbins Declaration, the Global Benefits Manager for the successor entity to US Investigations Services, LLC has access to many of the relevant employee records for US Investigations Services, LLC and did not identify any outstanding liability to the claimant. Accordingly, the Reorganized Debtor believes this claim should be expunged.

Smalls, Shem

1207

$601.12

Priority

This claim asserts priority under section 507(a)(5) for contributions to a 401(k) plan, PTO, and SCA fringe, and various other benefits. The claimant attached a statement indicating that he was paid in full and owes the Debtors $601.12. The documentation attached to the claim demonstrates that the Debtors do not have any outstanding liability to the claimant. Moreover, the Reorganized Debtor has reviewed the Debtors' books and records and has no record of any liability to the claimant. Accordingly, the Reorganized Debtor believes this claim should be expunged.

(16)

25942088.2

(17)

Exhibit 3

Multiple Debtor Claims

Name of Claimant

D

uplicate Claim to Be Disallowed

Surviving Claim

Reason for Disallowance

Bialecki, Francis

137, USIS International, Inc., $2,085.00

384, US Investigations Services, LLC, $2,085.00

The proof of claim to be disallowed asserts liabilities that are also asserted against a different Debtor in the column entitled "Surviving Claim." Upon a review of the Debtors' books and records, the Reorganized Debtor confirmed that the claimant was employed by US Investigations Services, LLC and not by USIS International, Inc. Accordingly, based on the Debtors' books and records, the claim to be disallowed is properly asserted in the column entitled "Surviving Claim."

Satterthwaite, Michael

894, US Investigations Services, LLC, $50,767.20

957, USIS International, Inc., $50,767.20

The proof of claim to be disallowed asserts liabilities that are also asserted against a different Debtor in the column entitled "Surviving Claim." Upon a review of the Debtors' books and records, the Reorganized Debtor confirmed that the claimant was employed by USIS International, Inc. and not by US Investigations Services, LLC. Accordingly, based on the Debtors' books and records, the claim to be disallowed is properly asserted in the column entitled "Surviving Claim."

(18)

25942088.2

(19)

Exhibit 4 Reduced Claims Name of Claiman t Claim Number Debto r Claim Amount

Modified Claim Amount

Reason for Modification

Hurts, Rita

550

$1,606.50

$518.00

Among other things, the claim asserts that the Debtors did not match IRA contributions in the amount of $1,088.50. The claim does not include documentation substantiating that this amount is owed, nor does it include documentation substantiating that this amount is owed on a secured basis. The Reorganized Debtor reviewed the Debtors' book and records and confirmed that Ms. Hurts received an employee match and, following her termination, the funds were rolled over into a Fidelity Rollover IRA. Fidelity's website reflects that a portion of Ms. Hurts' withdrawal/rollover was from an employer match. Accordingly, this claim should be reduced by $1,088.50, resulting in a total claim of $518.00.

Rodriguez, Angela

1373

$46,044.96

$44,896.80

This claim asserts priority under section 507(a)(4) of the Bankruptcy Code for "unpaid overtime hours and SCA Fringe Benefits." The claimant seeks overtime from 8/6/11 to 8/6/14 in the amount of $44,896.80 and SCA fringe benefits from 8/6/11 to 6/30/12 in the amount of $1,148.16. As set forth in the Robbins Declaration, the Reorganized Debtor calculated and made SCA payments on a quarterly basis. All SCA amounts owed were deposited to an employee's 401(k) account. The Global Benefits Manager for the successor entity to US Investigations Services, LLC has access to many of the relevant employee records for US Investigations Services, LLC and did not identify any outstanding liability to the claimant. Accordingly, the claim should be reduced by $1,148.16, resulting in a claim of $44,896.80. The Reorganized Debtor is separately seeking to reclassify this claim, as set forth in the Reclassified Claims Exhibit.

(20)

Exhibit 4 Reduced Claims Name of Claiman t Claim Number Debto r Claim Amount

Modified Claim Amount

Reason for Modification

Weidenkopf, Joseph

755

$11,675.10

$5,998.20

This claim asserts priority under section 507(a)(4) of the Bankruptcy Code for "unpaid overtime/unpaid service contract act fringe benefit." The overtime pay is for 4/30/12 to 11/1/12 for $5,998.20 and the SCA fringe benefit is for 4/30/12 to 6/1/13 for $5,676.90. As set forth in the Robbins Declaration, the Reorganized Debtor calculated and made SCA payments on a quarterly basis. All SCA amounts owed were deposited to an employee's 401(k) account. The Global Benefits Manager for the successor entity to US Investigations Services, LLC has access to many of the relevant employee records for US Investigations Services, LLC and did not identify any outstanding liability to the claimant. Accordingly, the claim should be reduced by $5,676.90, resulting in a claim of $5,998.20. The Reorganized Debtor is separately seeking to reclassify this claim, as set forth in the Reclassified Claims Exhibit.