mckinsey recovery& transformation services us, llc 55 east 52nd street new york

MCKINSEY RECOVERY& TRANSFORMATION SERVICES U.S., LLC 55 East 52nd Street New York, NY 10055
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------- In re: SUNEDISON, INC., et al. 1
Debtors.
SUMMARY SHEET PURSUANT TO UNITED STATES TRUSTEE GUIDELINES FOR REVIEWING
APPLICATIONS FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES FILED UNDER SECTION 330 OF THE BANKRUPTCY CODE
Name of Applicant: McKinsey Recovery & Transformation Services U.S., LLC
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s tax identification
number are as follows: SunEdison, Inc. (5767); SunEdison DG, LLC (N/A); SUNE Wind Holdings, Inc. (2144); SUNE Hawaii Solar Holdings, LLC (0994); First Wind Solar Portfolio, LLC (5014); First Wind California Holdings, LLC (7697); SunEdison Holdings Corporation (8669); SunEdison Utility Holdings, Inc. (6443); SunEdison International, Inc. (4551); SUNE ML 1, LLC (3132); MEMC Pasadena, Inc. (5238); Solaicx (1969); SunEdison Contracting, LLC (3819); NVT, LLC (5370); NVT Licenses, LLC (5445); Team-Solar, Inc. (7782); SunEdison Canada, LLC (6287); Enflex Corporation (5515); Fotowatio Renewable Ventures, Inc. (1788); Silver Ridge Power Holdings, LLC (5886); SunEdison International, LLC (1567); Sun Edison LLC (1450); SunEdison Products Singapore Pte. Ltd. (7373); SunEdison Residential Services, LLC (5787); PVT Solar, Inc. (3308); SEV Merger Sub Inc. (N/A); Sunflower Renewable Holdings 1, LLC (6273); Blue Sky West Capital, LLC (7962); First Wind Oakfield Portfolio, LLC (3711); First Wind Panhandle Holdings III, LLC (4238); DSP Renewables, LLC (5513); Hancock Renewables Holdings, LLC (N/A); EverStream HoldCo Fund I, LLC (9564); Buckthorn Renewables Holdings, LLC (7616); Greenmountain Wind Holdings, LLC (N/A); Rattlesnake Flat Holdings, LLC (N/A); Somerset Wind Holdings, LLC (N/A); SunE Waiawa Holdings, LLC (9757); SunE MN Development, LLC (8669); SunE MN Development Holdings, LLC (5388); and SunE Minnesota Holdings, LLC (8926). The address of the Debtors’ corporate headquarters is 13736 Riverport Dr., Maryland Heights, Missouri 63043.
16-10992-smb Doc 1421 Filed 10/17/16 Entered 10/17/16 22:13:50 Main Document Pg 1 of 26
2
The Debtors
Nunc pro tunc to April 21, 2016
Interim Compensation Period: April 21, 2016 through August 31, 2016 (“First Interim Compensation Period”)
Total Fees Incurred: $ 8,601,789.50
Total Amount of Fees and Expenses Requested:
$ 9,339,466.07
Total Outstanding Amount to be Paid: $ 2,614,285.17
2 This amount reflects an Expense Adjustment ($8,711.90) and Expense Credit ($8,804.14), each as described more fully in the Application.
Prior Fee Submissions:
First Monthly
Pending
Pending
Pending
3 As set forth in the Application, this amount reflects the Expense Adjustment of $8,711.90. 4 As set forth in the Application, this amount reflects the Expense Credit of $8,804.14.
4
First Interim
Pending
This is an __Monthly X Interim __Final Fee Application
5 This amount reflects the Expense Adjustment and Expense Credit, each as described in the Application.
5
SUMMARY OF HOURS BILLED BY PROFESSIONALS DURING THE FIRST INTERIM COMPENSATION PERIOD Client: SunEdison, Inc.
Court: United States Bankruptcy Court / Southern Dis trict of New York
Description: Summary of Time Entries by Person
Period: Apri l 21, 2016 through August 31, 2016
Case No: 16-10992
Name Description Hours Billed Hourly Rate (USD) Total Billed (USD) Aaron Perrine Senior Vice Pres ident 532.4 $795 $423,258.00 Alex Pustov Senior Associate 124.0 $500 $62,000.00 Al l i son Wisniewski Analyst 585.5 $350 $204,925.00 Alvina Jiao Analyst 87.7 $295 $25,871.50 Andrea Hsu Associate 126.1 $475 $59,897.50 Andreas Schlosser Senior Vice Pres ident 44.6 $795 $35,457.00 Ben Sumers Associate 727.0 $475 $345,301.25 Bradley Sostack Associate 314.3 $475 $149,292.50 Brent Packer Analyst 58.3 $350 $20,405.00 Bruno Si lva Associate 44.0 $475 $20,900.00 Carter Powis Associate 369.8 $350 $129,430.00 Cl i fford Chen Senior Vice Pres ident 1,076.4 $795 $855,738.00 Dickon Pinner Practice Leader 111.1 $1,075 $119,432.50 Dylan Rebois Vice Pres ident 869.0 $655 $569,195.00 Eelco de Jong Senior Vice Pres ident 38.3 $795 $30,448.50 El i Giovanetti Associate 716.7 $400 $286,680.00 Ian Schi l l inger Senior Vice Pres ident 176.2 $795 $140,079.00 Jason Finkels tein Associate 606.0 $475 $287,826.25 Jason Wright Vice Pres ident 35.9 $655 $23,514.50 Jess Jones Associate 218.0 $475 $103,550.00 João Lopes Sousa Vice Pres ident 92.0 $655 $60,260.00 Jordan Flowers Senior Associate 287.3 $565 $162,324.50 Kevin Ca ldwel l Senior Associate 639.5 $565 $361,317.50 Kevin Carmody Practice Leader 61.1 $995 $60,794.50 Layth Ashoo Vice Pres ident 5.8 $655 $3,799.00 Mark Hojnacki Practice Leader 736.1 $995 $732,419.50 Matt Parsons Practice Leader 25.5 $995 $25,372.50 Max Jacob Analyst 78.6 $350 $27,510.00 Naeem Husain Associate 411.0 $400 $164,400.00 Nicholas Wel lkamp Associate 164.2 $475 $77,995.00 Owen W Gal logly Associate 296.1 $475 $140,647.50 Paavan Gami Analyst 379.7 $295 $112,011.50 Patrick Madden Associate 57.6 $400 $23,040.00 Pinja Puustjarvi Associate 119.1 $475 $56,572.50 Ra jiv Gihwala Senior Associate 179.1 $500 $89,550.00 Rob Montgomery Senior Vice Pres ident 253.7 $795 $201,691.50 Robert Sternfels Practice Leader 19.8 $1,075 $21,285.00 Roland Yang Analyst 116.3 $350 $40,705.00 Samuel C Gibbs IV Vice Pres ident 729.7 $655 $477,953.50 Sarah Brody Associate 712.2 $400 $284,880.00 Scott Mel l Senior Vice Pres ident 538.8 $795 $428,346.00 Stephanie Liu Analyst 128.8 $295 $37,996.00 Steve Grossman Senior Associate 628.0 $565 $354,820.00 Tom Spahn Senior Associate 578.3 $565 $326,739.50 Travis Dziubla Associate 82.1 $400 $32,840.00 Wi l l iam B. Jones Jr Senior Vice Pres ident 62.0 $795 $49,290.00 Zachary Si lverman Vice Pres ident 540.5 $655 $354,027.50 Grand Total 14,784.1 $581.83 $8,601,789.50
Compensation by Professional Person (April 21, 2016 through August 31, 2016)
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SUMMARY OF EXPENSES INCURRED DURING THE FIRST INTERIM COMPENSATION PERIOD
Client: SunEdison, Inc. Court: Description: Period: Case No: 16-10992
Total Expenses (USD) Air Travel 279,855.63$ Case Administrator 67,650.00$ Hotel 259,602.74$ Meals 40,053.63$ Parking / Toll / Other Travel 6,543.47$ Rail / Subway 2,239.09$ Rental Car 8,721.36$ Taxi / Car Services 73,010.64$ Telecom -$ Grand Total 737,676.57$ *
* This amount reflects the Expense Adjustment ($8,711.90) and Expense Credit ($8,804.14), each as described in the Application.
United States Bankruptcy Court / Southern District of New York Summary of Expense Entries by Category April 21, 2016 through August 31, 2016
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SUMMARY OF FEES INCURRED BY TASK CODE DURING THE FIRST INTERIM COMPENSATION PERIO
Client: SunEdison, Inc. Court: Description: Period: Case No: 16-10992
Time Category Hours Billed Total Billed (USD) 001 - Bil lable Travel 1,314.3 797,342.50 002 - Non Bil lable Travel - - 003 - Business Plan 3,880.3 2,190,414.75 004 - Cash Flow Forecast 1,483.6 737,619.00 005 - Stakeholder Management 401.5 287,759.00 006 - Due Dil igence Support 2,104.5 1,195,410.50 007 - Market Outlook 104.6 41,042.00 008 - Planning & Operations 1,576.2 807,775.50 009 - Supplier Management 819.4 415,705.25 010 - Treasury 1,068.1 758,662.00 011 - Value Creation Plan 128.0 83,565.00 012 - Case Strategy 1,901.2 1,284,506.50 013 - Plan of Reorganization 2.5 1,987.50 Total 14,784.1 8,601,789.50
Notes: 1 Total bil led amount and hourly rate in "001-Bil lable (non-working) Travel" category reflect 50% discount.
Total Time Summary by Project Category (April 21, 2016 through August 31, 2016)
United States Bankruptcy Court / Southern District of New York Summary of Time Entries by Category April 21, 2016 through August 31, 2016
MCKINSEY RECOVERY& TRANSFORMATION SERVICES U.S., LLC 55 East 52nd Street New York, NY 10055 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK
--------------------------------------------------------------- In re: SUNEDISON, INC., et al.,
Debtors. 1
FIRST INTERIM APPLICATION OF MCKINSEY RECOVERY & TRANSFORMATION SERVICES U.S., LLC AS RESTRUCTURING ADVISOR FOR
THE DEBTORS FOR COMPENSATION FOR SERVICES RENDERED AND REIMBURSEMENT OF EXPENSES INCURRED FOR THE FIRST INTERIM
COMPENSATION PERIOD FROM APRIL 21, 2016 THROUGH AUGUST 31, 2016
TO THE HONORABLE STUART M. BERNSTEIN UNITED STATES BANKRUPTCY JUDGE:
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s tax identification number are as follows: SunEdison, Inc. (5767); SunEdison DG, LLC (N/A); SUNE Wind Holdings, Inc. (2144); SUNE Hawaii Solar Holdings, LLC (0994); First Wind Solar Portfolio, LLC (5014); First Wind California Holdings, LLC (7697); SunEdison Holdings Corporation (8669); SunEdison Utility Holdings, Inc. (6443); SunEdison International, Inc. (4551); SUNE ML 1, LLC (3132); MEMC Pasadena, Inc. (5238); Solaicx (1969); SunEdison Contracting, LLC (3819); NVT, LLC (5370); NVT Licenses, LLC (5445); Team-Solar, Inc. (7782); SunEdison Canada, LLC (6287); Enflex Corporation (5515); Fotowatio Renewable Ventures, Inc. (1788); Silver Ridge Power Holdings, LLC (5886); SunEdison International, LLC (1567); Sun Edison LLC (1450); SunEdison Products Singapore Pte. Ltd. (7373); SunEdison Residential Services, LLC (5787); PVT Solar, Inc. (3308); SEV Merger Sub Inc. (N/A); Sunflower Renewable Holdings 1, LLC (6273); Blue Sky West Capital, LLC (7962); First Wind Oakfield Portfolio, LLC (3711); First Wind Panhandle Holdings III, LLC (4238); DSP Renewables, LLC (5513); Hancock Renewables Holdings, LLC (N/A); EverStream HoldCo Fund I, LLC (9564); Buckthorn Renewables Holdings, LLC (7616); Greenmountain Wind Holdings, LLC (N/A); Rattlesnake Flat Holdings, LLC (N/A); Somerset Wind Holdings, LLC (N/A); SunE Waiawa Holdings, LLC (9757); SunE MN Development, LLC (8669); SunE MN Development Holdings, LLC (5388); and SunE Minnesota Holdings, LLC (8926). The address of the Debtors’ corporate headquarters is 13736 Riverport Dr., Maryland Heights, Missouri 63043.
2
McKinsey Recovery & Transformation Services U.S., LLC (“McKinsey RTS”),
Restructuring Advisor for SunEdison, Inc. and certain of its affiliates, the debtors and debtors in
possession in the above-captioned cases (collectively, the “Debtors” and together with their non-
Debtor affiliates, “SunEdison” or the “Company”), submits its first interim fee application (the
“Application”) pursuant to sections 327, 330(a) and 331 of title 11 of the United States Code (the
“Bankruptcy Code”), Rule 2016 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy
Rules”), the United States Trustee Guidelines for Reviewing Applications for Compensation and
Reimbursement of Expenses Filed Under 11 U.S.C. §330 issued by the Executive Office for
United States Trustees (the “UST Guidelines”), the United States Bankruptcy Court of the
Southern District of New York’s General Order M-447 dated January 29, 2013 by Chief Judge
Cecelia G. Morris setting forth Amended Guidelines for Fees and Disbursements for
Professionals in Southern District of New York Bankruptcy Cases, effective February 5, 2013
(the “Local Guidelines” and together with the UST Guidelines, the “Fee Guidelines”) and this
Court’s Order Granting Debtors’ Motion for Order Pursuant to Bankruptcy Code Sections 105(a)
and 331, Bankruptcy Rule 2016, and Local Bankruptcy Rule 2016-1 Establishing Procedures for
Interim Compensation and Reimbursement of Expenses of Professionals, dated May 12, 2016
(the “Interim Compensation Order”) [Docket No. 258], seeking: (i) the interim allowance of
compensation for professional services rendered from April 21, 2016 through August 31, 2016
(the “First Interim Compensation Period”) in the aggregate amount of $9,339,466.07
representing 100% of professional fees incurred in the amount of $8,601,789.50 and 100% of
actual and necessary expenses2 incurred in the amount of $737,676.573; and (ii) directing
2 McKinsey RTS’s Application may not include certain airfare expenses incurred on behalf of the Debtors
during the First Interim Compensation Period, because McKinsey RTS’s expense billing system generally requires a three-month period to reconcile all applicable airfare credits. McKinsey RTS therefore reserves
3
payment by the Debtors of any and all outstanding amounts allowed, including the Interim
Holdback (as defined herein) in the aggregate amount of $1,720,357.90 and the August Fee
Statement (as defined herein) in the amount of $893,927.27 not yet paid pursuant to the Interim
Compensation Order.
Jurisdiction and Venue
1. This court (the “Court”) has jurisdiction to consider and determine this matter
pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. §
157(b). Venue is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.
2. The bases for the relief requested herein are sections 330 and 331 of the
Bankruptcy Code, Bankruptcy Rule 2016 and Local Bankruptcy Rule 2016-1. Pursuant to the
Local Guidelines, a certification of compliance is annexed hereto as Exhibit A.
Background
3. On April 21, 2016 (the “Petition Date”), the Debtors each commenced a case by
filing voluntary petitions for relief under chapter 11 of the Bankruptcy Code (collectively, the
“Chapter 11 Cases”). The Chapter 11 Cases have been consolidated for procedural purposes
only and are being administered jointly.
the right to request, in a subsequent application for allowance, reimbursement of any unreimbursed airfare or other expenses incurred on behalf of the Debtors during the First Interim Compensation Period not previously invoiced herein.
3 This amount reflects (i) an agreed-upon expense reduction of $8,711.90 (the “Expense Adjustment”) following discussions with the United States Trustee (as defined herein) in connection with McKinsey RTS’s Fee Statement (as defined herein) for the months of April and May 2016; and (ii) a credit of $8,804.14 (the “Expense Credit”) in connection with disbursements billed erroneously by McKinsey RTS during the First Interim Compensation Period. McKinsey RTS has applied the Expense Credit to the expenses requested pursuant to its August Fee Statement (which remains unpaid), reducing its expense reimbursement request for August 2016 from $84,979.01 to $76,174.87.
4
4. The Debtors are authorized to continue to operate their business and manage their
properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code.
5. On April 29, 2016, an official committee of unsecured creditors (the “Creditors’
Committee”) was appointed for these Chapter 11 Cases by the Office of the United States
Trustee for the Southern District of New York (the “United States Trustee”).
6. Additional information regarding the Debtors, including their business operations,
their corporate and capital structure, and the events leading to these Chapter 11 Cases, is set forth
in detail in the Declaration of Patrick M. Cook Pursuant to Local Bankruptcy Rule 1007-2 in
Support of Chapter 11 Petitions and First Day Pleadings [Docket No. 4].
Retention and Disinterestedness of McKinsey RTS
7. Pursuant to a final order dated June 23, 2016 (the “Retention Order”) [Docket No.
639], the Debtors were authorized to retain and employ McKinsey RTS as Restructuring Advisor
nunc pro tunc to April 21, 2016. The Retention Order authorized the Debtors to compensate
McKinsey RTS in accordance with the procedures set forth in sections 330 and 331 of the
Bankruptcy Code, the Bankruptcy Rules, the Local Guidelines, and such other procedures as
were established by the Interim Compensation Order. A copy of the Retention Order is annexed
hereto as Exhibit B.
8. As set forth in the Declaration of Mark W. Hojnacki in Support of Debtors’
Application for Order Pursuant to Sections 327(a), 328, 330, 331, and 1107(b) of the Bankruptcy
Code, Bankruptcy Rules 2014(a) and 2016(b) and Local Bankruptcy Rules 2014-1 and 2016-1
Authorizing the Employment of McKinsey Recovery & Transformation Services U.S., LLC as
Restructuring Advisor for the Debtors, Nunc Pro Tunc to the Petition Date, dated May 5, 2014
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[Docket No. 202]; and the Amended Declaration of Mark W. Hojnacki in Support of Debtors’
Application for Order Pursuant to Sections 327(a), 328, 330, 331, and 1107(b) of the Bankruptcy
Code, Bankruptcy Rules 2014(a) and 2016(b) and Local Bankruptcy Rules 2014-1 and 2016-1
Authorizing the Employment of McKinsey Recovery & Transformation Services U.S., LLC as
Restructuring Advisor for the Debtors, Nunc Pro Tunc to the Petition Date, dated June 6, 2016
[Docket No. 484], McKinsey RTS does not hold or represent any interest adverse to the Debtors’
estates and is a disinterested person as that term is defined in Bankruptcy Code section 101(14),
as modified by Bankruptcy Code section 1107(b).
9. McKinsey RTS performed, on behalf of the Debtors and their estates, the services
for which it seeks compensation, and not on behalf of any committee, creditor or other entity.
10. For services rendered in connection with these Chapter 11 Cases, McKinsey RTS
did not receive any payments or promises of payment from any source other than the Debtors.
11. McKinsey RTS has not shared or agreed to share any of its compensation from
the Debtors with any other person, other than as permitted by section 504 of the Bankruptcy
Code.
Summary of Professional Compensation and Reimbursement of Expenses Requested
12. McKinsey RTS seeks an interim allowance of compensation for professional
services rendered during the First Interim Compensation Period in the amount of $8,601,789.50.
Additionally, McKinsey RTS seeks reimbursement of actual and necessary expenses incurred in
connection with such services during the First Interim Compensation Period in the amount of
$737,676.57.
13. During the First Interim Compensation Period, McKinsey RTS professionals
expended a total of 14,784.1 hours rendering necessary and beneficial services to the Debtors at
a blended hourly rate of $581.83.
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14. Pursuant to the UST Guidelines, the Debtors have been provided with a copy of
the Application for their review and will have completed their review of the same prior to the
hearing to consider the Application.
15. Pursuant to the Interim Compensation Order, McKinsey RTS previously filed and
served four monthly fee statements (the “Fee Statements”) requesting the payment of fees and
reimbursement of expenses. The Debtors have been billed by McKinsey RTS the following fees
and expenses:
(a) Pursuant to the Fee Statement for the period April 21, 2016 through May 31, 2016, McKinsey RTS requested payment of $3,295,534.60 in fees for services rendered (representing 80% of its total fees in the amount of $4,119,418.25 incurred for the period) and $346,283.204 for expenses incurred (representing 100% of requested expenses incurred for the period).
(b) Pursuant to the Fee Statement for the period June 1, 2016 through June 30, 2016, McKinsey RTS requested payment of $1,788,822.80 in fees for services rendered (representing 80% of its total fees in the amount of $2,236,028.50 incurred for the period) and $157,279.14 for expenses incurred (representing 100% of requested expenses incurred for the period).
(c) Pursuant to the Fee Statement for the period July 1, 2016 through July 31, 2016, McKinsey RTS requested payment of $979,321.80 in fees for services rendered (representing 80% of its total fees in the amount of $1,224,152.25 incurred for the period) and $157,939.37 for expenses incurred (representing 100% of requested expenses incurred for the period).
(d) Pursuant to the Fee Statement for the period August 1, 2016 through August 31, 2016, McKinsey RTS requested payment of $817,752.40 in fees for services rendered (representing 80% of its total fees in the amount of $1,022,190.50 incurred for the period) and $76,174.875 for expenses incurred (representing 100% of requested expenses incurred for the period).
4 This amount reflects the Expense Adjustment of $8,711.90. 5 This amount reflects the Expense Credit of $8,804.14.
7
16. As of the date of filing of this Application, no objections to the Fee Statements
have been filed. By this Application, McKinsey RTS now seeks payment by the Debtors of the
amounts that were held back for the months of April 2016 through August 2016 (the “Interim
Holdback”), aggregating $1,720,357.90. Further, McKinsey RTS has not yet received payment
for its fees and expenses invoiced pursuant to the August Fee Statement aggregating $893,927.27
and seeks payment in full thereof pursuant to this Application.
17. Pursuant to the UST Guidelines, annexed hereto as Exhibit C is a schedule of
McKinsey RTS professionals and paraprofessionals who have performed services for the
Debtors during the First Interim Compensation Period, the capacities in which each such
individual is employed by McKinsey RTS, the hourly billing rate charged by McKinsey RTS for
services performed by such individuals, and the aggregate number of hours expended in this
matter and fees billed therefor.
18. Annexed hereto as Exhibit D is a schedule specifying the categories of expenses
for which McKinsey RTS is seeking reimbursement and the total amount for each such expense
category for the First Interim Compensation Period. An itemized schedule of all such expenses
has been provided to the Debtors, the Court, the attorneys for the Creditors’ Committee and the
U.S. Trustee.
19. In accordance with section (b)(4) of the UST Guidelines, annexed hereto as
Exhibit E is a summary of McKinsey RTS’s time records for the First Interim Compensation
Period, arranged by project categories or “task codes,” as described herein.
20. Exhibit F contains copies of McKinsey RTS’s detailed fee and expense
statements during the First Interim Compensation Period using project categories hereinafter
described which have previously been distributed as part of the Fee Statements in accordance
8
with the Interim Compensation Order. McKinsey RTS maintains computerized records of the
time spent by all McKinsey RTS professionals and paraprofessionals in connection with the
Chapter 11 Cases. Copies of these computerized records have been furnished to the Debtors and,
subject to redaction or modification for the attorney-client privilege where necessary to protect
the Debtors’ estates, the Court, the attorneys for the Creditors’ Committee and the U.S. Trustee
in the format specified by the UST Guidelines.
21. During the First Interim Compensation Period, McKinsey RTS’s fees were billed
in accordance with its standard fee amounts. Such fees are reasonable and market-based and
consistent with McKinsey RTS’s normal and customary billing levels for comparably sized and
complex cases, involving the services to be provided in these Chapter 11 Cases. McKinsey RTS
believes the compensation arrangement between it and the Debtors is comparable to those
charged by other professionals rendering similar services for clients such as the Debtors.
22. McKinsey RTS’s rates are set at a level designed to compensate McKinsey RTS
fairly for the work of its professionals and to cover fixed and routine overhead expenses. Hourly
rates vary with the experience and seniority of the individuals assigned.
23. McKinsey RTS regularly reviews its invoices to ensure that the Debtors are only
billed for actual and necessary services.
24. As discussed below, in accordance with the factors enumerated in Bankruptcy
Code section 330, the fees requested by McKinsey RTS are fair and reasonable in light of: (a) the
complexity of these Chapter 11 Cases; (b) the nature and extent of the services rendered; (c) the
amount of time expended by McKinsey RTS in providing such services to the Debtors; (d) the
value of such services; and (e) the costs of comparable services in cases under the Bankruptcy
Code.
9
Summary of McKinsey RTS’s Services During the First Interim Compensation Period
25. During the First Interim Compensation Period, McKinsey RTS worked closely
with members of the Debtors’ senior management team to, among other things, assist the
Debtors with the following:
• Develop a 13 week cash flow forecast and variance reporting models.
• Develop the Debtors’ five-year comprehensive business plan, including asset by asset treatment, proposed asset sales and the plan for each business, platform and project of the Debtors and their subsidiaries.
• Develop a strategic assessment of alternatives as required in the debtor-in-possession financing agreement.
• Create near and long-term market outlooks, including a perspective on asset sale options across a number of geographies and business units.
• Provide operational support for financial planning, treasury, procurement, and business unit management teams in relation to restructuring activities and cost reductions.
• Assist in the development of supporting diligence materials and presentations for use in various stakeholder meetings, attend diligence sessions and working meetings with various stakeholders and constituents, and respond to inquiries from various constituents on business planning and operational questions.
• Provide ad hoc support to the management team, including the development and preparation of analytics to be used in restructuring discussions.
The following is a detailed summary, organized by task code, of the services rendered by
McKinsey RTS during the First Interim Compensation Period.
Task Code – Business Plan Fees: $2,190,414.75; Hours: 3,880.3
26. During the First Interim Compensation Period, McKinsey RTS assisted the
Debtors in the development of a five-year business plan. Work performed under the Business
Plan task code includes, without limitation, the following:
• Assisted management in developing the Debtors’ five-year comprehensive business plan and any alternative projections as required under the debtor-in-possession loan
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agreement, including detailed asset development completion budgets and various cost savings initiatives.
• Provided due diligence support with respect to the outlook and assumptions included in the five-year strategic business plan and alternate business plan.
• Conducted interviews with the Debtors’ management team and business unit General Managers (“GMs”) to assess current operations.
• Led workshops with the management team, GMs and functional leaders to identify productivity and cost initiatives to improve the Debtors’ current operations.
• Worked alongside investment banking partners to provide project details necessary to create sale proceeds estimates.
• Prepared supporting materials and presentations for use in meetings with potential investors and other stakeholders.
Task Code – Cash Flow Forecast Fees: $737,619.00; Hours: 1,483.6
Debtors in preparing projections and related analyses for the consolidated cash and liquidity
forecast. Work performed under the Cash Flow Forecast task code includes, without limitation,
the following:
• Built and maintained a 13-week cash flow forecast model and ran a regular update process with the Debtors’ management and Financial Planning and Analysis (“FP&A”) team.
• Prepared weekly cash analysis to assess budget-to-actual variances.
• Created detailed supporting schedules and documentation for assumptions underlying regular budget submissions.
• Generated risk scenarios and other analyses related to the Debtors’ short-term cash projections.
• Provided due diligence support related to cash management activities and initiatives.
11
Task Code – Stakeholder Management Fees: $287,759.00; Hours: 401.5
Debtors in managing stakeholder relationships and communications. Work performed under the
Stakeholder Management task code includes, without limitation, the following:
• Managed communications and relationships with stakeholders as directed by the Debtors’ management.
• Advocated for Debtors’ priorities with affiliated non-Debtor entities as directed by the Debtors’ management.
• Supported the development of a detailed communications plan utilized at the commencement of the Chapter 11 Cases.
Task Code – Due Diligence Support Fees: $1,195,410.50; Hours: 2,104.5
29. During the First Interim Compensation Period, McKinsey RTS engaged in
aggregating and tracking diligence requests related to the Debtors’ operations and forecasts.
Work performed under the Due Diligence Support task code includes, without limitation, the
following:
• Worked with management to prepare responses to appropriate due diligence requests.
• Prepared supporting diligence materials and presentations for use in various stakeholder meetings.
• Maintained diligence tracker to organize and prioritize requests.
Task Code – Market Outlook Fees: $41,042.00; Hours: 104.6
Debtors with issues associated with the general market outlook. Work performed under the
Market Outlook task code includes, without limitation, the following:
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• Analyzed market trends and drivers for the renewable energy industry.
• Assessed options for the Debtors to reorganize based on market trends and drivers.
• Assessed competitive landscape including competitive advantages on a geographic basis.
• Evaluated overall market size potential on a geographic basis.
• Reviewed the Debtors’ market positioning and overall economics on a geographic basis.
Task Code – Planning & Operations Fees: $807,775.50; Hours: 1,576.2
Debtors in matters related to financial planning and operations. Work performed under the
Planning & Operations task code includes, without limitation, the following:
• Provided general operational support for business unit management related to restructuring activities.
• Performed operational due diligence activities for certain geographic operations.
• Established and revised various processes and procedures at the direction of the Debtors’ management.
• Supported the management and operational teams in identifying and capturing fixed cost savings.
Task Code – Supplier Management Fees: $415,705.25; Hours: 819.4
Debtors in vendor management programs and issues. Work performed under the Supplier
Management task code includes, without limitation, the following:
• Crafted and implemented a comprehensive vendor management plan to manage key relationships prior to and during the Chapter 11 Cases.
• Assisted the Debtors’ management and procurement organization in coordinating and prioritizing critical supplier issues.
• Coordinated with counsel and assisted Debtors’ management to refine vendor negotiation strategies.
13
Task Code – Treasury Fees: $758,662.00; Hours: 1,068.1
Debtors in matters related to treasury activities and cash management. Work performed
under the Treasury task code includes, without limitation, the following:
• Assisted the Debtors’ treasury group to prepare a variety of reporting as required by the Court, the debtor-in-possession credit agreement, and other stakeholders.
• Provided support for the continual review of bank account status and activity.
• Created geographic cash analysis to identify need for transfers between regions and between Debtor and non-Debtor entities.
• Assisted the Debtors’ treasury group to validate intercompany transfers between Debtors and non-Debtors.
• Prepared detailed analysis for certain payables due to affiliated parties as directed by the Debtors’ management.
Task Code – Value Creation Plan Fees: $83,565.00; Hours: 128.0
34. The work performed by McKinsey RTS during the First Interim Compensation
Period involving the Value Creation Plan task code is set forth and summarized in the
Business Plan task code category above.6
Task Code – Case Strategy Fees: $1,284,506.50; Hours: 1,901.2
Debtors in general case strategy, project management, and administrative tasks directly
supporting the preparation of projections and stakeholder negotiations. Work performed
under the Case Strategy task code includes, without limitation, the following:
6 The Value Creation Plan task code category was subsequently renamed “Business Plan” and accordingly,
work completed thereunder has been described in the Business Plan task code summary herein.
14
• Coordinated meetings with internal staff, the Debtors’ staff, and/or other stakeholders.
• Created work plans and work papers to document data sources and analyses.
• Performed other administrative duties directly supporting the engagement and the Debtors’ restructuring activities.
• Advised Debtors’ management team and board of directors on restructuring options and strategic considerations.
• Provided transition support for new executive management personnel retained postpetition and their working teams.
Task Code – Plan of Reorganization Fees: $1,987.50; Hours: 2.5
Debtors in the development of a plan of reorganization. Work performed under the Plan of
Reorganization task code includes, without limitation, the following:
• Conducted analysis and provided advice and assistance to the Debtors and Debtors’ counsel in developing reorganization strategies and scenarios.
• Assisted in researching, analyzing, and presenting information requested by various stakeholders in connection with assumptions that would underlie a potential plan of reorganization.
Task Code –Non-Working Travel (Billable Travel) Fees: $797,342.50; Hours: 1,314.3
37. Non-working travel time reflects time spent by McKinsey RTS professionals
traveling on behalf of the Debtors during which no billable work is performed. Non-working
travel is billed at fifty percent (50%).
Reasonable and Necessary Services Provided by McKinsey RTS
38. The professional services performed by McKinsey RTS during the First Interim
Compensation Period were necessary and appropriate to the administration of the Chapter 11
Cases. Additionally, McKinsey RTS’s services were performed expeditiously and efficiently,
and were in the best interests of the Debtors, their estates and other parties in interest. The
15
requested compensation is commensurate with the complexity, importance and time-sensitive
nature of the problems, issues and tasks involved in these cases.
39. In order to provide the Debtors with the level of service required for a bankruptcy
case of this size and complexity, and to provide the level of skill and expertise required for the
sophisticated issues presented in these cases, McKinsey RTS draws on the experience of
consultants and experts with a wide degree of tenure and across multiple geographic locations.
McKinsey RTS brings to these cases unparalleled industry experience and deep restructuring
expertise that inures to the benefit of the Debtors and all parties in interest.
40. The professional services performed by McKinsey RTS on behalf of the Debtors
during the First Interim Compensation Period required an aggregate expenditure of 14,784.1
recorded hours by McKinsey RTS’s Practice Leaders, Senior Vice Presidents, Vice Presidents,
Senior Associates, Associates and Analysts. Of the aggregate time expended, 5,948.9 recorded
hours were expended by Practice Leaders, Senior Vice Presidents and Vice Presidents, and
8,835.2 recorded hours were expended by Senior Associates, Associates and Analysts.
41. During the First Interim Compensation Period, McKinsey RTS billed the Debtors
for time expended by professionals based (i) on hourly rates ranging from $295.00 to $1,075.00
per hour; and (ii) a blended hourly billing rate of $581.83 (based on 14,784.1 recorded hours).
As stated above, annexed hereto as Exhibit C is a list of each McKinsey RTS professional who
performed services for the Debtors during the First Interim Compensation Period, such
individual’s hourly billing rate and the aggregate number of hours billed by such individual.
Actual and Necessary Expenses of McKinsey RTS
42. As detailed in Exhibit D attached hereto, McKinsey RTS seeks reimbursement in
the amount of $737,676.57, representing actual and necessary expenses incurred during the First
16
Interim Compensation Period.7 This sum includes, among other things, travel and team meeting
meals, discount-rate lodging, rental cars and ground transportation. All expenses are charged at
the actual costs of these services without markup.
43. McKinsey RTS has made every effort to minimize its disbursements in these
cases. The actual expenses incurred in providing professional services were necessary,
reasonable and justified under the circumstances to serve the needs of the Debtors, their estates
and all parties in interest.
The Requested Compensation Should Be Allowed
44. Bankruptcy Code section 331 provides for interim and final compensation of
professionals and incorporates the substantive standards of Bankruptcy Code section 330 to
govern this Court’s award of such compensation. 11 U.S.C. § 331. Bankruptcy Code section
330 provides that a court may award a professional employed under Bankruptcy Code section
327 “reasonable compensation for actual, necessary services rendered . . . and reimbursement for
actual, necessary expenses.” 11 U.S.C. § 330(a)(l)(A)-(B). Bankruptcy Code section 330 also
sets forth the criteria for awarding compensation and reimbursement:
In determining the amount of reasonable compensation to be awarded . . . the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including –
(A) the time spent on such services; (B) the rates charged for such services; (C) whether the services were necessary to the
administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title;
7 As noted herein, McKinsey RTS reserves its right to request in a future application for allowance
reimbursement of any airfare or other expenses incurred on behalf of the Debtors during the First Interim Compensation Period not previously invoiced herein.
17
reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed;
(E) with respect to a professional person, whether
the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and
(F) whether the compensation is reasonable based
on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title.
45. McKinsey RTS respectfully submits that the professional services rendered and
expenses incurred during the First Interim Compensation Period were necessary for and
beneficial to the Debtors’ orderly administration of their estates and restructuring efforts.
McKinsey RTS worked diligently to anticipate and respond to the Debtors’ needs and assisted in
the Debtors’ navigation of the chapter 11 process. Such services and expenditures were
necessary for and in the best interests of the Debtors’ estates and all parties in interest.
McKinsey RTS further submits that allowance of the fees and expenses requested herein is
reasonable in light of the nature, extent and value of its services to the Debtors, their estates and
all parties in interest.
46. During the First Interim Compensation Period, the professional services provided
by McKinsey RTS were performed with speed and efficiency. Whenever possible, and
particularly for the more routine aspects of the cases, McKinsey RTS minimized the costs of its
services to the Debtors by utilizing lower cost professionals. Additionally, to avoid duplication
and minimize the costs of intra-McKinsey RTS communication and education about the Debtors’
circumstances, a core group of the same McKinsey RTS professionals was utilized, where
practicable, for a substantial amount of the work completed in these cases.
18
47. Consequently, the services rendered by McKinsey RTS were (i) necessary and
beneficial to the Debtors’ estates and (ii) consistently performed in a timely manner
commensurate with the complexity, importance and nature of the issues involved. Therefore,
approval of the compensation for professional services and reimbursement of expenses sought
herein is warranted.
Reservation
48. To the extent any services rendered or expenses incurred during the First Interim
Compensation Period were not processed prior to the preparation of this Application, or if for
any other reason McKinsey RTS failed herein to seek allowance of compensation of such fees or
reimbursement of such expenses, McKinsey RTS reserves the right in future applications to
request allowance of such fees and/or expenses.
Notice
49. In accordance with the Interim Compensation Order, notice of the Application has
been served upon the following parties (collectively, as further defined in the Interim
Compensation Order, the "Notice Parties"): (i) counsel to the Debtors, Skadden, Arps, Slate,
Meagher & Flom LLP, Four Times Square, New York, NY 10026, Attn: Jay M. Goffman and J.
Eric Ivester; (ii) counsel to the Tranche B Lenders (as defined in the debtor-in-possession credit
agreement) and the steering committee of the second lien creditors, Akin Gump Strauss Hauer &
Feld LLP, One Bryant Park, New York, NY 10026, Attn: Arik Preis and Kristine Manoukian;
(iii) counsel to the DIP Agent and DIP Arrangers (each as defined in the Interim DIP Order),
White & Case LLP, 1155 Avenue of the Americas, New York, NY 10026, Attn: Scott Greissman
and Elizabeth Feld; (iv) the office of the United States Trustee, U.S. Federal Office Building,
201 Varick Street, Suite 1006, New York, New York 10014, Attn: Paul Schwartzberg, Esq.
19
([email protected]); (v) counsel to the Creditors’ Committee, Weil, Gotshal &
Manges LLP, 767 Fifth Avenue, New York, NY 10153, Attn: Matthew S. Barr and Ronit
Berkovich; and (vi) the Debtors, via electronic mail to their counsel, at
[email protected] and [email protected].
50. No previous request for the relief sought herein has been made by the Debtors to
this or any other court.
Conclusion
WHEREFORE, McKinsey RTS respectfully requests that this Court enter an order: (i)
allowing interim compensation for professional services rendered by McKinsey RTS during the
First Interim Compensation Period in the amount of $8,601,789.50 and reimbursement of actual
and necessary expenses incurred by McKinsey RTS during the First Interim Compensation
Period in the amount of $737,676.57, for a total of $9,339,466.07; (ii) directing payment by the
Debtors of all outstanding amounts allowed but not yet paid by the Debtors pursuant to the
Interim Compensation Order, including the Interim Holdback in the aggregate amount of
$1,720,357.90 and the August Fee Statement in the amount of $893,927.27 and (iii) granting
McKinsey RTS such other and further relief as is just and proper.
Dated: October 17, 2016 Respectfully submitted, New York, New York
/s/ Mark W. Hojnacki Mark W. Hojnacki, Practice Leader, on behalf of MCKINSEY RECOVERY& TRANSFORMATION SERVICES U.S., LLC 55 EAST 52ND STREET NEW YORK, NY 10055
Restructuring Advisor for the Debtors and Debtors in Possession
16-10992-smb Doc 1421-1 Filed 10/17/16 Entered 10/17/16 22:13:50 Exhibit A: Certification Pg 1 of 5
MCKINSEY RECOVERY& TRANSFORMATION SERVICES U.S., LLC 55 East 52nd Street New York, NY 10055
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------------- In re: SUNEDISON, INC., et al.,1
Debtors.
CERTIFICATION UNDER GUIDELINES FOR FEES AND DISBURSEMENTS FOR PROFESSIONALS IN RESPECT OF APPLICATION OF MCKINSEY RECOVERY & TRANSFORMATION SERVICES U.S., LLC FOR FIRST INTERIM COMPENSATION
AND REIMBURSEMENT OF EXPENSES
I, Mark W. Hojnacki, hereby certify that:
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s tax identification number are as follows: SunEdison, Inc. (5767); SunEdison DG, LLC (N/A); SUNE Wind Holdings, Inc. (2144); SUNE Hawaii Solar Holdings, LLC (0994); First Wind Solar Portfolio, LLC (5014); First Wind California Holdings, LLC (7697); SunEdison Holdings Corporation (8669); SunEdison Utility Holdings, Inc. (6443); SunEdison International, Inc. (4551); SUNE ML 1, LLC (3132); MEMC Pasadena, Inc. (5238); Solaicx (1969); SunEdison Contracting, LLC (3819); NVT, LLC (5370); NVT Licenses, LLC (5445); Team-Solar, Inc. (7782); SunEdison Canada, LLC (6287); Enflex Corporation (5515); Fotowatio Renewable Ventures, Inc. (1788); Silver Ridge Power Holdings, LLC (5886); SunEdison International, LLC (1567); Sun Edison LLC (1450); SunEdison Products Singapore Pte. Ltd. (7373); SunEdison Residential Services, LLC (5787); PVT Solar, Inc. (3308); SEV Merger Sub Inc. (N/A); Sunflower Renewable Holdings 1, LLC (6273); Blue Sky West Capital, LLC (7962); First Wind Oakfield Portfolio, LLC (3711); First Wind Panhandle Holdings III, LLC (4238); DSP Renewables, LLC (5513); Hancock Renewables Holdings, LLC (N/A); EverStream HoldCo Fund I, LLC (9564); Buckthorn Renewables Holdings, LLC (7616); Greenmountain Wind Holdings, LLC (N/A); Rattlesnake Flat Holdings, LLC (N/A); Somerset Wind Holdings, LLC (N/A); SunE Waiawa Holdings, LLC (9757); SunE MN Development, LLC (8669); SunE MN Development Holdings, LLC (5388); and SunE Minnesota Holdings, LLC (8926). The address of the Debtors’ corporate headquarters is 13736 Riverport Dr., Maryland Heights, Missouri 63043.
2
1. I am a Practice Leader with the applicant firm, McKinsey Recovery &
Transformation Services U.S., LLC (“McKinsey RTS”). I am responsible for McKinsey RTS’s
compliance with the United States Trustee Guidelines for Reviewing Applications for
Compensation and Reimbursement of Expenses Filed Under 11 U.S.C. § 330 issued by the
Executive Office for the United States Trustee (the “UST Guidelines”), the United States
Bankruptcy Court of the Southern District of New York’s General Order M-447 dated January
29, 2013 by Chief Judge Cecelia G. Morris setting forth Amended Guidelines for Fees and
Disbursements for Professionals in Southern District of New York Bankruptcy Cases, effective
February 5, 2013 (the “Local Guidelines” and together with the UST Guidelines, the “Fee
Guidelines”) in connection with McKinsey RTS’s representation of SunEdison, Inc. and certain
of its affiliates, the debtors and debtors in possession in the above-captioned cases (collectively,
the “Debtors”).
2. I submit this certification with respect to the chapter 11 cases in compliance with
the Fee Guidelines and this Court’s Order Granting Debtors’ Motion for Order Pursuant to
Bankruptcy Code Sections 105(a) and 331, Bankruptcy Rule 2016, and Local Bankruptcy Rule
2016-1 Establishing Procedures for Interim Compensation and Reimbursement of Expenses of
Professionals, dated May 12, 2016 (the “Interim Compensation Order”) [Docket No. 258].
3. This certification is made in respect of McKinsey RTS’s first interim fee
application, dated October 17, 2016 (the “Application”),2 seeking an order: (i) awarding an
interim payment of compensation for professional services rendered by McKinsey RTS during
the First Interim Compensation Period in the aggregate amount of $9,339,466.07, representing
100% of professional fees incurred in the amount of $8,601,789.50 and 100% of actual and
2 Capitalized terms used but not herein defined shall have the meaning ascribed to such terms in the Application.
3
necessary expenses incurred in the amount of $737,676.57; and (ii) directing payment by the
Debtors of any and all outstanding amounts allowed, but not yet paid by the Debtors pursuant to
the Interim Compensation Order, including the Interim Holdback in the amount of $1,720,357.90
and August Fee Statement in the amount of $893,927.27; and (iii) granting McKinsey RTS such
other and further relief as is just and proper.
4. In accordance with section B(1) of the Local Guidelines, I certify that:
(a) I have read the Application;
(b) Upon information and belief formed after reasonable inquiry (including consultation with counsel and professionals working under my direction), the fees and disbursements sought in the Application fall within the Local Guidelines and the UST Guidelines;
(c) The fees and disbursements sought in the Application are consistent with McKinsey RTS's customary billing levels for comparably sized and complex cases and generally accepted by McKinsey RTS’s clients; and
(d) In providing a reimbursable service, McKinsey RTS does not make a profit on that service, whether the service is performed by McKinsey RTS in-house or through a third party.
5. With respect to section B(2) of the Local Guidelines, as set forth in the
Application, McKinsey RTS filed with this Court and served upon the Debtors, the Creditors’
Committee and the U.S. Trustee McKinsey RTS’s Fee Statements, which contain, in connection
with the Debtors’ chapter 11 cases: (i) a list of professionals and paraprofessionals providing
services to the Debtors; (ii) their respective billing rates; (iii) the aggregate hours spent by each
professional and paraprofessional; (iv) a general description of services rendered; (v) a
reasonably detailed breakdown of the disbursements incurred; (vi) an explanation of McKinsey
4
RTS’s billing practices; and (vii) copies of McKinsey RTS’s computerized time records detailing
the services rendered and expenses incurred.
6. With respect to paragraph (b)(1) of the UST Guidelines, the Debtors have
reviewed and approved the Fee Statements filed with this Court, which serve as the basis for this
Application. We can confirm that Philip Gund has reviewed, edited and commented on the Fee
Statements for the various compensation periods and approved those requested amounts. The
amounts approved by Mr. Gund in turn formed the basis for the Application.
7. Pursuant to paragraph B(3) of this Court's General Order M-447, I certify that the
Debtors, counsel for the Creditors’ Committee and the U.S. Trustee are each being provided, at
least 14 days before the date set by the Court or any applicable rules for filing fee applications, a
copy of the Application.
Dated: October 17, 2016 Respectfully submitted, New York, New York
/s/ Mark W. Hojnacki Mark W Hojnacki, Practice Leader
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK --------------------------------------------------------------- In re: SUNEDISON, INC., et al.,
Debtors.1
ORDER APPROVING THE DEBTORS’
APPLICATION FOR ORDER PURSUANT TO SECTIONS 327(a), 328, 330, 331 AND 1107(b) OF THE BANKRUPTCY CODE, BANKRUPTCY RULES 2014(a) AND
2016(b) AND LOCAL BANKRUPTCY RULES 2014-1 AND 2016-1 AUTHORIZING EMPLOYMENT AND RETENTION OF MCKINSEY RECOVERY & TRANSFORMATION SERVICES U.S., LLC AS RESTRUCTURING ADVISOR FOR
THE DEBTORS, NUNC PRO TUNC TO THE PETITION DATE
Upon the Application (the “Application”)2 of the Debtors for an Order,
pursuant to sections 327(a), 328, 330, 331 and 1107(b) of the Bankruptcy Code, Bankruptcy
Rules 2014(a) and 2016(b) and Local Bankruptcy Rules 2014-1 and 2016-1, authorizing the
retention and employment of McKinsey Recovery & Transformation Services U.S., LLC
(“McKinsey RTS US”) as restructuring advisor for the Debtors nunc pro tunc to the Petition
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s tax identification number
are as follows: SunEdison, Inc. (5767); SunEdison DG, LLC (N/A); SUNE Wind Holdings, Inc. (2144); SUNE Hawaii Solar Holdings, LLC (0994); First Wind Solar Portfolio, LLC (5014); First Wind California Holdings, LLC (7697); SunEdison Holdings Corporation (8669); SunEdison Utility Holdings, Inc. (6443); SunEdison International, Inc. (4551); SUNE ML 1, LLC (3132); MEMC Pasadena, Inc. (5238); Solaicx (1969); SunEdison Contracting, LLC (3819); NVT, LLC (5370); NVT Licenses, LLC (5445); Team-Solar, Inc. (7782); SunEdison Canada, LLC (6287); Enflex Corporation (5515); Fotowatio Renewable Ventures, Inc. (1788); Silver Ridge Power Holdings, LLC (5886); SunEdison International, LLC (1567); Sun Edison LLC (1450); SunEdison Products Singapore Pte. Ltd. (7373); SunEdison Residential Services, LLC (5787); PVT Solar, Inc. (3308); SEV Merger Sub Inc. (N/A); Sunflower Renewable Holdings 1, LLC (6273); Blue Sky West Capital, LLC (7962); First Wind Oakfield Portfolio, LLC (3711); First Wind Panhandle Holdings III, LLC (4238); DSP Renewables, LLC (5513); Hancock Renewables Holdings, LLC (N/A). The address of the Debtors’ corporate headquarters is 13736 Riverport Dr., Maryland Heights, Missouri 63043.
2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Application.
16-10992-smb Doc 1421-2 Filed 10/17/16 Entered 10/17/16 22:13:50 Exhibit B: Retention Order Pg 1 of 6
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Date; and upon the First Day Declaration and the Amended Declaration of Mark W. Hojnacki in
Support of the Debtors’ Application for Order Authorizing the Employment and Retention of
McKinsey RTS US as Restructuring Advisor Nunc Pro Tunc to the Petition Date (the “Amended
Hojnacki Declaration”) [Docket No. 484] and the Supplement to the Amended Hojnacki
Declaration (the “Supplement”) [Docket No. 586]; and the Court having reviewed the
Application, the First Day Declaration, the Amended Hojnacki Declaration, the Supplement, and
the terms set forth in the Engagement Letter attached to the Application as Exhibit C; and the
Court being satisfied with the representations made in the Application and the Amended
Hojnacki Declaration that (a) McKinsey RTS is a “disinterested person” as such term is defined
under section 101(14) of the Bankruptcy Code and (b) the retention of McKinsey RTS US by the
Debtors is in the best interests of the Debtors, their estates, their creditors, and other parties in
interest; and it appearing that the Court has jurisdiction over this matter pursuant to 28 U.S.C. §§
157 and 1334; and it further appearing that this matter is a core proceeding pursuant to 28 U.S.C.
§ 157(b); and due and sufficient notice of the Application having been given under the particular
circumstances; and it appearing that no other or further notice need be provided; and upon the
record herein; and after due deliberation thereon, and sufficient cause appearing therefor, it is
hereby
ORDERED, ADJUDGED, AND DECREED that:
1. The Application is GRANTED solely to the extent set forth herein.
2. Pursuant to sections 327(a), 328, 330, 331 and 1107(b) of the Bankruptcy
Code, Bankruptcy Rules 2014(a) and 2016(b) and Local Bankruptcy Rules 2014-1 and 2016-1,
the Debtors are authorized to employ and retain McKinsey RTS US as restructuring advisor to
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the Debtors, nunc pro tunc to the Petition Date on the terms set forth in the Engagement Letter,
subject to the terms of this Order.
3. The Debtors believe that the services to be rendered by McKinsey RTS
will not be duplicative of the services rendered by any other professionals in these Chapter 11
Cases. The Debtors and McKinsey RTS will use reasonable efforts to avoid the duplication of
services being rendered by McKinsey RTS and other professionals in these Chapter 11 Cases;
specifically, the Debtors and McKinsey RTS will use reasonable efforts to avoid unnecessary
overlap or duplication of services being rendered by McKinsey RTS and
PricewaterhouseCoopers in these Chapter 11 Cases.
4. The Engagement Letter is approved nunc pro tunc to the Petition Date.
5. The terms of the Engagement Letter, including, without limitation, the
compensation provisions and the indemnification provisions, are reasonable terms and conditions
of employment, as required under Bankruptcy Code Section 328(a), and are hereby approved.
6. McKinsey RTS shall be compensated in accordance with, and will file,
interim and final fee applications for the allowance of compensation for services rendered and
reimbursement of expenses incurred in accordance with sections 330 and 331 of the Bankruptcy
Code, the Bankruptcy Rules, the Local Bankruptcy Rules, any orders of this Court, and any
procedures as may be fixed by order of this Court.
7. The United States Trustee retains all rights to object to McKinsey RTS’s
interim and final fee applications on all grounds including, but not limited to, the reasonableness
standard provided for in section 330 of the Bankruptcy Code.
8. All of McKinsey RTS’s personnel who provide services to or on behalf of
the Debtors, with the exception of clerical staff, shall keep reasonably detailed time records of
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the services they have performed in one-tenth hour increments and will submit, with any interim
or final fee application, together with the time records, a narrative summary, by project category,
of services rendered and will identify each professional rendering services, the category of
services rendered, and the amount of compensation requested.
9. McKinsey RTS shall be reimbursed only for reasonable and necessary
expenses, including, but not limited to travel, consultants, case administrators, lodging, postage,
and communications charges in accordance with the terms of the Engagement Letter. McKinsey
RTS shall maintain detailed documentation of its professionals’ actual and necessary costs and
expenses in accordance with the RTS Reimbursement Policy as described in the Application.
10. Prior to applying any increases in its hourly rates beyond the rates set forth
in the Application and the Amended Hojnacki Declaration, McKinsey RTS shall provide ten
days’ notice of any such increases to the Debtors, the United States Trustee, any official
committee appointed in these Chapter 11 Cases, counsel to the Tranche B Lenders (as defined in
the debtor-in-possession credit agreement) and the steering committee of the second lien
creditors, and counsel to the administrative agent under the debtor-in-possession financing
facility. The United States Trustee retains all rights to object to any such rate increase, and the
Court retains the right to review any rate increase.
11. McKinsey RTS is authorized to apply the Retainer to the payment of the
Prepetition Balance. McKinsey RTS shall apply any remaining amounts of its prepetition
Retainer as a credit toward postpetition fees and expenses, after such postpetition fees and
expenses are approved in accordance with any other applicable procedures and orders of the
Court awarding fees and expenses to McKinsey RTS.
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12. The indemnification, contribution and reimbursement provisions in the
Engagement Letter are approved in their entirety; provided however:
All requests by Indemnified Parties for the payment of indemnification as set forth in the Engagement Letter shall be made by means of an application to the Court and shall be subject to review by the Court to ensure that payment of such indemnity conforms to the terms of the Engagement Letter and is reasonable under the circumstances of the litigation or settlement in respect of which indemnity is sought; provided, however, that in no event shall any Indemnified Party be indemnified in the case of its own bad faith, self-dealing, breach of fiduciary duty (if any), gross negligence or willful misconduct.
In no event shall Indemnified Parties be indemnified if the Debtors or a
representative of the estate, assert a claim for, and a court determines by final order that such claim arose out of, McKinsey RTS’s own bad faith, self-dealing, breach of fiduciary duty (if any) as a result of gross negligence or willful misconduct.
In the event an Indemnified Party seeks reimbursement from the Debtors
for attorneys’ fees and expenses in connection with the payment of an indemnity claim pursuant to the Engagement Letter, the invoices and supporting time records from such attorneys shall be included in McKinsey RTS’s own applications, both interim and final, and such invoices and time records shall be subject to the Local Bankruptcy Rules, any fee and expense guidelines of this Court, and such other procedures as may be fixed by order of the Court, and the approval of the Bankruptcy Court pursuant to sections 330 and 331 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.
13. Notwithstanding anything to the contrary in the Engagement Letter or the
Indemnification Provisions, (i) in the event that McKinsey RTS is not entitled to indemnification
pursuant to the Indemnification Provisions on account of its gross negligence, willful misconduct
or fraud (whether under the Indemnification Provisions or this Order), it shall also not be entitled
to any claim or right of contribution, limitation of liability or exoneration from the Debtors, and
(ii) the Court will have jurisdiction over fee applications and matters relating to the Engagement
Letter. Nothing herein shall be deemed to resolve or otherwise affect the payment allocation
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issues, as described in the Supplement, involving McKinsey U.S. and the Non-Debtor Project
Affiliates (both as defined in the Supplement).
14. The relief granted herein shall be binding upon any chapter 11 trustee
appointed in the Chapter 11 Cases, or upon any chapter 7 trustee appointed in the event of a
subsequent conversion of the Chapter 11 Cases to cases under chapter 7.
15. To the extent there is inconsistency between the terms of the Engagement
Letter, the Application, and this Order, the terms of this Order shall govern.
16. Notwithstanding any stay that might be imposed by Bankruptcy Rule
6004(h) or otherwise, this Order shall be effective and enforceable immediately upon entry
hereof.
17. The requirements set forth in Local Bankruptcy Rule 9013-1(b) are
satisfied by the contents of the Application.
18. The Debtors are authorized and empowered to take all actions necessary to
implement the relief granted in this Order.
19. This Court shall retain jurisdiction to hear and determine all matters
arising from or related to this Order.
Dated: June 23rd, 2016 New York, New York
/s/ STUART M. BERNSTEIN____ HONORABLE STUART M. BERNSTEIN
Confidential
Client: SunEdison, Inc. Court: United States Bankruptcy Court / SDNY Description: Compensation by Professional Person Period: April 21, 2016 to August 31, 2016 Case No: 16-10992
Name Description Hours Billed Hourly Rate (USD) Total Billed (USD) Aaron Perrine Senior Vice President 532.4 $795 $423,258.00 Alex Pustov Senior Associate 124.0 $500 $62,000.00 Allison Wisniewski Analyst 585.5 $350 $204,925.00 Alvina Jiao Analyst 87.7 $295 $25,871.50 Andrea Hsu Associate 126.1 $475 $59,897.50 Andreas Schlosser Senior Vice President 44.6 $795 $35,457.00 Ben Sumers Associate 727.0 $475 $345,301.25 Bradley Sostack Associate 314.3 $475 $149,292.50 Brent Packer Analyst 58.3 $350 $20,405.00 Bruno Silva Associate 44.0 $475 $20,900.00 Carter Powis Associate 369.8 $350 $129,430.00 Clifford Chen Senior Vice President 1,076.4 $795 $855,738.00 Dickon Pinner Practice Leader 111.1 $1,075 $119,432.50 Dylan Rebois Vice President 869.0 $655 $569,195.00 Eelco de Jong Senior Vice President 38.3 $795 $30,448.50 Eli Giovanetti Associate 716.7 $400 $286,680.00 Ian Schillinger Senior Vice President 176.2 $795 $140,079.00 Jason Finkelstein Associate 606.0 $475 $287,826.25 Jason Wright Vice President 35.9 $655 $23,514.50 Jess Jones Associate 218.0 $475 $103,550.00 João Lopes Sousa Vice President 92.0 $655 $60,260.00 Jordan Flowers Senior Associate 287.3 $565 $162,324.50 Kevin Caldwell Senior Associate 639.5 $565 $361,317.50 Kevin Carmody Practice Leader 61.1 $995 $60,794.50 Layth Ashoo Vice President 5.8 $655 $3,799.00 Mark Hojnacki Practice Leader 736.1 $995 $732,419.50 Matt Parsons Practice Leader 25.5 $995 $25,372.50 Max Jacob Analyst 78.6 $350 $27,510.00 Naeem Husain Associate 411.0 $400 $164,400.00 Nicholas Wellkamp Associate 164.2 $475 $77,995.00 Owen W Gallogly Associate 296.1 $475 $140,647.50 Paavan Gami Analyst 379.7 $295 $112,011.50 Patrick Madden Associate 57.6 $400 $23,040.00 Pinja Puustjarvi Associate 119.1 $475 $56,572.50 Rajiv Gihwala Senior Associate 179.1 $500 $89,550.00 Rob Montgomery Senior Vice President 253.7 $795 $201,691.50 Robert Sternfels Practice Leader 19.8 $1,075 $21,285.00 Roland Yang Analyst 116.3 $350 $40,705.00 Samuel C Gibbs IV Vice President 729.7 $655 $477,953.50 Sarah Brody Associate 712.2 $400 $284,880.00 Scott Mell Senior Vice President 538.8 $795 $428,346.00 Stephanie Liu Analyst 128.8 $295 $37,996.00 Steve Grossman Senior Associate 628.0 $565 $354,820.00 Tom Spahn Senior Associate 578.3 $565 $326,739.50 Travis Dziubla Associate 82.1 $400 $32,840.00 William B. Jones Jr Senior Vice President 62.0 $795 $49,290.00 Zachary Silverman Vice President 540.5 $655 $354,027.50
Grand Total 14,784.1 $581.83 $8,601,789.50
Compensation by Professional Person (April 21, 2016 through August 31, 2016)
16-10992-smb Doc 1421-3 Filed 10/17/16 Entered 10/17/16 22:13:50 Exhibit C: Time by Person Pg 1 of 1
Confidential
Client: SunEdison, Inc. Court: United States Bankruptcy Court / SDNY Description: Expense Summary Period: April 21, 2016 to August 31, 2016 Case No: 16-10992
Total Expenses (USD) Air Travel 279,855.63$ Case Administrator 67,650.00$ Hotel 259,602.74$ Meals 40,053.63$ Parking / Toll / Other Travel 6,543.47$ Rail / Subway 2,239.09$ Rental Car 8,721.36$ Taxi / Car Services 73,010.64$ Telecom -$ Grand Total 737,676.57$ *
* This amount reflects the Expense Adjustment ($8,711.90) and Expense Credit ($8,804.14), each as described in the Application.
16-10992-smb Doc 1421-4 Filed 10/17/16 Entered 10/17/16 22:13:50 Exhibit D: Expense Summary Pg 1 of 1
Confidential
Client: SunEdison, Inc. Court: United States Bankruptcy Court / SDNY Description: Compensation by Project Category Period: April 21, 2016 to August 31, 2016 Case No: 16-10992
Time Category Hours Billed Total Billed (USD) 001 - Billable Travel 1,314.3 797,342.50 002 - Non Billable Travel - - 003 - Business Plan 3,880.3 2,190,414.75 004 - Cash Flow Forecast 1,483.6 737,619.00 005 - Stakeholder Management 401.5 287,759.00 006 - Due Diligence Support 2,104.5 1,195,410.50 007 - Market Outlook 104.6 41,042.00 008 - Planning & Operations 1,576.2 807,775.50 009 - Supplier Management 819.4 415,705.25 010 - Treasury 1,068.1 758,662.00 011 - Value Creation Plan 128.0 83,565.00 012 - Case Strategy 1,901.2 1,284,506.50 013 - Plan of Reorganization 2.5 1,987.50 Total 14,784.1 8,601,789.50
Notes: 1 Total billed amount and hourly rate in "001-Billable (non-working) Travel" category reflect 50% discount.
Total Time Summary by Project Category (April 21, 2016 through August 31, 2016)
16-10992-smb Doc 1421-5 Filed 10/17/16 Entered 10/17/16 22:13:50 Exhibit E: Time by Task Code Pg 1 of 1
Client: SunEdison, Inc.
Description: Summary of Time Entries by Person
Period: April 21, 2016 to August 31, 2016
Case No: 16-10992
Date Name Hours Time Entry Category Time Entry Description Billed Amount
4/21/2016 Aaron Perrine 0.8 001 - Billable Travel Traveled from NYC to PHL (50% of billable travel) $ 636.00
4/21/2016 Aaron Perrine 3.0 003 - Business Plan Discussion with potential investor $ 2,385.00
4/21/2016 Aaron Perrine 1.0 006 - Due Diligence Support prepare materials for potential investor $ 795.00
4/21/2016 Aaron Perrine 4.0 006 - Due Diligence Support Prepare materials for creditor group $ 3,180.00
4/21/2016 Aaron Perrine 3.0 008 - Planning & Operations Attend meeting with SunEdison FP&A team on DIP budget $ 2,385.00
4/21/2016 Aaron Perrine 1.0 008 - Planning & Operations Attend team call regarding filing status $ 795.00
4/21/2016 Aaron Perrine 1.0 008 - Planning & Operations Call with Dickon Pinner, Scott Mell, Imperium (Chad) on filing & re-org status $ 795.00
4/21/2016 Aaron Perrine 0.3 008 - Planning & Operations Create work plan for week of April 25 $ 238.50
4/21/2016 Aaron Perrine 1.5 008 - Planning & Operations prepare for first day hearings $ 1,192.50
4/22/2016 Aaron Perrine 0.8 001 - Billable Travel Traveled from PHL to NYC (50% of billable travel) $ 636.00
4/22/2016 Aaron Perrine 0.8 001 - Billable Travel Traveled from PHL to NYC (50% of billable travel) $ 636.00
4/22/2016 Aaron Perrine 3.0 003 - Business Plan Begin business plan analysis $ 2,385.00
4/22/2016 Aaron Perrine 0.5 008 - Planning & Operations Check-in call with chad Gibbs, Dylan rebuys on business plan $ 397.50
4/22/2016 Aaron Perrine 1.5 008 - Planning & Operations Work planning for following week $ 1,192.50
4/22/2016 Aaron Perrine 2.5 012 - Case Strategy Attend first day hearings $ 1,987.50
4/22/2016 Aaron Perrine 1.5 012 - Case Strategy Prepare for first day testimony $ 1,192.50
4/23/2016 Aaron Perrine 3.0 003 - Business Plan Prepare business plan presentation for lenders $ 2,385.00
4/23/2016 Aaron Perrine 1.5 003 - Business Plan Work on fixed cost model and immediate reduction opportunities $ 1,192.50
4/23/2016 Aaron Perrine 0.5 008 - Planning & Operations Team Check-in Call with Dickon Pinner, Mark Hijack $ 397.50
4/23/2016 Aaron Perrine 1.5 013 - Plan of Reorganization Prepare wind down plan analyses for lenders $ 1,192.50
4/24/2016 Aaron Perrine 1.0 003 - Business Plan Discussion with Tim Derrick (SunEdison) on US utility backlog and plan forward $ 795.00
4/24/2016 Aaron Perrine 3.0 003 - Business Plan Prepare next revision of business plan presentation $ 2,385.00
4/24/2016 Aaron Perrine 1.0 005 - Stakeholder Management Call with leadership Team to Review presentation documents $ 795.00
4/24/2016 Aaron Perrine 0.5 006 - Due Diligence Support Discussion with Brian Wuebbels on investor diligence process $ 397.50
4/24/2016 Aaron Perrine 0.5 006 - Due Diligence Support Discussion with diligence Team on investor diligence process $ 397.50
4/24/2016 Aaron Perrine 0.5 008 - Planning & Operations Discussion with Chad Gibbs on fixed cost reduction $ 397.50
4/24/2016 Aaron Perrine 0.5 008 - Planning & Operations talk with matt Kearns on state of US Utility development group $ 397.50
4/25/2016 Aaron Perrine 1.0 003 - Business Plan Discuss fixed cost analysis plan with chad Gibbs & Steve Grossman $ 795.00
4/25/2016 Aaron Perrine 1.0 003 - Business Plan Participate in Rothschild liquidation plan analysis Call $ 795.00
4/25/2016 Aaron Perrine 3.0 003 - Business Plan Prepare next revision of business plan presentation $ 2,385.00
4/25/2016 Aaron Perrine 1.5 005 - Stakeholder Management Discussion with advisor group on board meeting prep $ 1,192.50
4/25/2016 Aaron Perrine 0.5 006 - Due Diligence Support Call with Mark Hojnacki, Scott Mell, Dickon Pinner on diligence Discussion $ 397.50
4/25/2016 Aaron Perrine 1.0 006 - Due Diligence Support Participate in daily diligence Discussion $ 795.00
4/25/2016 Aaron Perrine 1.0 008 - Planning & Operations Check-in Call with chad Gibbs, Dylan rebuys on business plan $ 795.00
4/25/2016 Aaron Perrine 1.0 008 - Planning & Operations Participate in daily SunEdison war room Call $ 795.00
4/26/2016 Aaron Perrine 3.5 001 - Billable Travel Traveled from JFK to SFO (50% of billable travel) $ 2,782.50
4/26/2016 Aaron Perrine 1.5 006 - Due Diligence Support Prepare materials for 4/27 board meeting $ 1,192.50
4/26/2016 Aaron Perrine 3.0 006 - Due Diligence Support Prepare materials for lender meeting $ 2,385.00
4/26/2016 Aaron Perrine 1.0 008 - Planning & Operations Leadership Check-in Call with K Carmody, Mark Hojnacki, Scott Mell, Dickon Pinner $ 795.00
4/26/2016 Aaron Perrine 2.5 012 - Case Strategy participate in lender meeting $ 1,987.50
4/27/2016 Aaron Perrine 0.5 003 - Business Plan Review business plan model $ 397.50
4/27/2016 Aaron Perrine 1.0 004 - Cash Flow Forecast Review cash flow forecast model $ 795.00
4/27/2016 Aaron Perrine 8.0 005 - Stakeholder Management attend SunEdison board meeting $ 6,360.00
4/27/2016 Aaron Perrine 1.0 008 - Planning & Operations check-in with Chad Gibbs, Dylan Rebois, Steve Grossman on Work streams $ 795.00
4/27/2016 Aaron Perrine 0.5 008 - Planning & Operations Team check-out discussion $ 397.50
4/28/2016 Aaron Perrine 1.0 003 - Business Plan US Utility call -- Tim Derrick, Matt Kearns $ 795.00
4/28/2016 Aaron Perrine 1.0 006 - Due Diligence Support Call with J Jones for potential investor diligence plan $ 795.00
4/28/2016 Aaron Perrine 1.0 006 - Due Diligence Support call with D Pinner, M Hojnacki, K Carmody on diligence support $ 795.00
4/28/2016 Aaron Perrine 0.2 006 - Due Diligence Support Discuss diligence plan with C Gibbs, D Rebois $ 159.00
4/28/2016 Aaron Perrine 1.0 006 - Due Diligence Support Review diligence materials for potential investor $ 795.00
4/28/2016 Aaron Perrine 1.5 007 - Market Outlook Design global due diligence plan $ 1,192.50
4/28/2016 Aaron Perrine 1.0 007 - Market Outlook Stand up EMEA diligence Team -- organize team, conduct in-brief $ 795.00
4/28/2016 Aaron Perrine 1.0 007 - Market Outlook Stand up LatAm diligence Team -- organize team, conduct in-brief $ 795.00
4/28/2016 Aaron Perrine 0.5 007 - Market Outlook Stand up South Africa diligence Team -- organize team, conduct in-brief $ 397.50
4/29/2016 Aaron Perrine 1.5 003 - Business Plan Business plan materials Review and edit $ 1,192.50
4/29/2016 Aaron Perrine 0.5 003 - Business Plan Call with S Grossman, C Gibbs, D Rebois on business plan timing and outputs $ 397.50
4/29/2016 Aaron Perrine 1.0 005 - Stakeholder Management daily company 'war room' call $ 795.00
4/29/2016 Aaron Perrine 0.5 006 - Due Diligence Support Call with Capstone / R Zaidman on diligence support $ 397.50
4/29/2016 Aaron Perrine 0.5 006 - Due Diligence Support Internal diligence support daily check-in call $ 397.50
4/29/2016 Aaron Perrine 0.5

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