in the united states bankruptcy court for the …omnimgt.com/cmsvol2/pub_47322/731351_236.pdf ·...

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

) In re: ) Chapter 11 ) 1515-GEEnergy Holding Co. LLC, et al.,1 ) Case No. 19-10303 (KJC) ) Debtors. ) (Jointly Administered) )

DEBTORS’ MOTION FOR ENTRY OF AN ORDER APPROVING THE DEBTORS’

KEY EMPLOYEE RETENTION PLAN AND GRANTING RELATED RELIEF

1515-GEEnergy Holding Co. LLC (“GEE Holding”) and BBPC, LLC d/b/a Great

Eastern Energy (“GEE”), as debtors and debtors in possession in the above-captioned chapter 11

cases (collectively, the "Debtors")2 respectfully state the following in support of this motion:

Relief Requested

1. The Debtors seek entry of an order (the “Order”), substantially in the form

attached hereto as Exhibit A: (a) authorizing, but not directing, the Debtors to implement the

proposed key employee retention plan (the “KERP”) for 16 employees of the Debtors

(collectively, the “KERP Participants”); and (b) granting related relief. In support of this motion,

the Debtors respectfully submit the Declaration of Thomas Buck in Support of the Debtors’ Key

Employee Retention Plan (the “Buck Declaration”) attached hereto as Exhibit B.

Jurisdiction and Venue

2. The United States Bankruptcy Court for the District of Delaware (the “Court”)

has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended

1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification

number, include: 1515-Geenergy Holding Co. LLC (0428) and BBPC, LLC d/b/a Great Eastern Energy (0428). The location of the Debtors’ service address is: 1515 Sheepshead Bay Road, Brooklyn, NY 11235.

2 A detailed description of the Debtors and their businesses, and the facts and circumstances supporting this motion and the Debtors’ chapter 11 cases, are set forth in greater detail in the Declaration of Allan Brenner in Support of Chapter 11 Petitions and First Day Motions [Docket No. 12] (the “First Day Declaration”).

Case 19-10303-KJC Doc 236 Filed 04/25/19 of 13

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Standing Order of Reference from the United States District Court for the District of Delaware,

dated February 29, 2012. This matter is a core proceeding within the meaning of 28 U.S.C.

§ 157(b)(2). The Debtors confirm their consent, pursuant to rule 7008 of the Federal Rules of

Bankruptcy Procedure (the “Bankruptcy Rules”) and rule 9013-1(f) of the Local Rules of

Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of

Delaware (the “Local Rules”), to the entry of a final order by the Court in connection with this

motion to the extent that it is later determined that the Court, absent consent of the parties,

cannot enter final orders or judgments in connection herewith consistent with Article III of the

United States Constitution.

3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

4. The statutory bases for the relief requested herein are sections 363(b) and 503(c)

of title 11 of the United States Code (the “Bankruptcy Code”) and Bankruptcy Rule 6004.

Background

5. On February 14, 2019 (the “Petition Date”), each of the Debtors filed a petition

with the Court under chapter 11 of the Bankruptcy Code. The Debtors continue to operate their

businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and

1108 of the Bankruptcy Code. The Debtors’ chapter 11 cases have been consolidated for

procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule

1015(b). No party has requested the appointment of a trustee or examiner in these chapter 11

cases. And no official committee of unsecured creditors has been appointed by the United States

Trustee for the District of Delaware (the “U.S. Trustee”).

6. The Debtors are a provider of electricity and natural gas to commercial, industrial

and residential customers in certain markets that have been restructured to permit retail


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competition. The Debtors’ complex operations rely on the performance of their highly skilled

workforce, including their senior management team. By this motion, the Debtors seek approval

of the Debtors’ Key Employee Retention Plan, which will assure that key employees necessary

to a successful sale process remain through the conclusion of these chapter 11 cases.

7. The Debtors employ a lean and highly specialized senior management team with a

deep knowledge of the Debtors’ operations. The Debtors rely on their senior management

team’s expertise to make decisions that support the operations and drive the financial

performance of the Debtors’ businesses. The KERP will provide 16 essential employees of the

Debtors’ with the opportunity to earn a retention payment upon either sale of the Debtors assets

or a milestone date.

8. The Debtors must incentivize their employee during these chapter 11 cases to

maintain the requisite industry experience and leadership required to insure the success of the

Debtors’ sale process. The Debtors have experienced significant attrition since the beginning of

2019, including the loss of a substantial number of the senior management team. Indeed, since

January 2019, approximately 15 employees have left the Debtors’ workforce. Importantly, these

included the head of the electric operations and several key operations and finance employees.

The Debtors have also lost key sales, legal, regulatory, customer experience, and analytical staff.

No new hires have been made to replace these departures, resulting in the Debtors’ remaining

senior management team taking on additional duties and responsibilities. Further, the loss of

many of these key employees would reduce the company’s competitive capabilities by lowering

management’s internal functional market and operational knowledge. Moreover, many of these

managers have long-term relationships with their staffs and their subordinates, and the departure


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of these managers may negatively impact the Debtors’ retention across its operations, unraveling

their restructuring from the inside out.

9. The filing of these chapter 11 cases further increased the KERP Participants’

duties and responsibilities, and, unless the KERP is approved, will lead to a significant reduction

in their compensation. Prior to the Petition Date (as defined herein), all employees of the

Debtors were salaried employees. Following the Petition Date, the Debtors have only been able

to pay base salaries.

The KERP

10. By this Motion, the Debtors seek approval of a KERP for 16 of the Debtors’ non-

insider employees that the Debtors have determined are essential to the Debtors’ business

operations (the “KERP Participants”). The non-insider employees eligible for the KERP range

from “Vice President” level to the “Analyst” level -- all of which the Debtors determined are

critical to driving the strategic objections and operations of the Company through the bankruptcy

and sale(s) processes. The KERP payments range from approximately $5,000 to $31,000 per

KERP Participant during the sale period (through May 31, 2019) (the “Sale Period”) and larger

amounts for remaining individuals during the wind down period (an additional maximum period

of 150 days) (the “Wind Down Period”). The total aggregate amount potentially available for

payment under the KERP is $245,000.00.

A. The Terms of the KERP

11. The proposed KERP includes 16 of the Debtors’ non-insider employees (out of a

population of approximately 35 remaining employees). These KERP Participants were chosen

recognizing that the Debtors were embarking on the marketing process for the sale(s) of their

assets. A redacted listing of the KERP Participants (showing business division, office and


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eligible KERP payment) is attached hereto as Exhibit C (the “KERP Exhibit”).3 None of the

KERP Participants reside within the inner circle of the Company (CEO and CFO) that makes

critical financial decisions.

12. The Debtors, with the assistance of their advisors, carefully selected the KERP

Participants based on how critical the employees are to the business and the risks of attrition due

to the restructuring. The KERP Participants are active employees of the Debtors – largely

middle management and not the most senior level executives – who are working hard every day

to ensure the Debtors’ success in these cases. In addition to performing their normal

responsibilities related to the Debtors’ operations, the KERP Participants already have, and will

continue to, assume significantly greater responsibilities as a result of the sale(s) process and

these chapter 11 cases. In addition, it is imperative to retain the KERP Participants through the

Sale(s) processes so the businesses can be delivered intact to the buyer or buyers.

13. Payments under the KERP are necessary to demonstrate consistency and

commitment to the KERP Participants and to ensure the KERP Participants focus their efforts on

the successful operations of the Debtors’ businesses, minimize operational distractions and

expenses and to maximize the value of the assets. The Debtors’ ability to maintain their business

operations, preserve the value of their assets, and maximize stakeholder recovery through a

successful and expedient restructuring process hinges on the Debtors’ ability to incentivize and

retain key employees during this critical period. The KERP payment is a percentage of the

KERP Participant’s base salary and was guided by the KERP Participant’s criticality to the

business and their level in the organization.

3 Contemporaneously herewith, the Debtors are filing a Motion to File the KERP Exhibit under Seal (the “Seal

Motion”). As set forth in the Seal Motion, the Debtors are providing an unredacted version of the KERP Exhibit to the Court for in camera review and to the U.S. Trustee on a confidential basis.


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14. Any earned KERP payments for the Sale Period are payable on May 31, 2019.

Any earned KERP payments for the Wind Down Period are payable in five equal monthly

installments due on the first day of each month beginning June 1, 2019. The KERP will be fully

funded by cash collateral. With respect to KERP payments for the Sale Period, in the event that

a KERP Participant is terminated without cause, the KERP Participant will be eligible to receive

a pro rata payment (based on the amount of time the KERP Participant worked relative to May

31, 2019) at the same time other KERP Participants receive their payments.4 With respect to

KERP payments for the Wind Down Period, in the event that a KERP Participant is terminated

without cause, the applicable KERP Participant will receive the aggregate remaining unpaid

scheduled payments upon cessation of employment. If a KERP Participant is terminated for

cause, such KERP Participant will forfeit any entitlement to the KERP and any amounts

previously paid will be subject to avoidance. If a KERP Participant voluntarily ceases

employment, such KERP Participant will forfeit any entitlement to the KERP that remains

unpaid after such voluntary cessation of employment.

Basis for Relief

A. Implementing the KERP is an Exercise of the Debtors’ Sound Business Judgment.

15. Section 363(b)(1) of the Bankruptcy Code provides, in relevant part, that debtors

“after notice and a hearing, may use, sell or lease, other than in the ordinary course of business,

property of the estate.” 11 U.S.C. § 363(b)(1). Under section 363(b), courts require only that the

debtor “show that a sound business purpose justifies such actions.” In re Montgomery Ward

Holding Corp., 242 B.R. 147, 153 (D. Del. 1999) (internal citations omitted); see also In re

4 The KERP payments are subject to the terminated KERP Participant’s execution of a general release of all

claims against the Debtors.


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Elpida Memory, Inc., No. 12–10947 (CSS), 2012 WL 6090194, at *5 (Bankr. D. Del. Nov. 20,

2012) (noting that it is “well-settled” that a debtor may use its assets outside the ordinary course

where such use “represents the sound exercise of business judgment”); In re Phx. Steel Corp., 82

B.R. 334, 335–36 (Bankr. D. Del. 1987) (stating that judicial approval under section 363 of the

Bankruptcy Code requires a showing that the proposed action is fair and equitable, in good faith,

and supported by a good business reason). Moreover, “[w]here the debtor articulates a

reasonable basis for its business decisions (as distinct from a decision made arbitrarily or

capriciously), courts will generally not entertain objections to the debtor’s conduct.” In re

Johns-Manville Corp., 60 B.R. 612, 616 (Bankr. S.D.N.Y. 1986) (citation omitted); see also In

re Tower Air, Inc., 416 F.3d 229, 238 (3d Cir. 2005) (stating that “[o]vercoming the

presumptions of the business judgment rule on the merits is a near-Herculean task”).

16. Courts have found that a debtor’s use of reasonable bonuses and other incentives

to motivate employees is a valid exercise of a debtor’s business judgment. See, e.g., In re Global

Home Prods., LLC, 369 B.R. 778, 787 (Bankr. D. Del. 2007) (finding that it is the proper use of

a debtor’s business judgment to propose bonuses for employees who helped propel the debtor

successfully through the bankruptcy process); see also In re Am. W. Airlines, Inc., 171 B.R. 674,

678 (Bankr. D. Ariz. 1994).

17. The KERP Participants possess the skills, knowledge, and experience that are

critical to the Debtors’ ability to maximize the value of their enterprise through improved

operations and decreased costs. Importantly, the KERP Participants’ familiarity with, and

understanding of, the Debtors’ operations, vendors, and assets are vital not only to the day-to-day

operation of the business, but also to the Debtors’ ability to execute a value-maximizing sale

transaction for the benefit of all stakeholders in these chapter 11 cases. It is therefore essential—


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and in the best interest of the Debtors and all stakeholders—that the KERP Participants receive

competitive compensation and are properly incentivized to remain and achieve the Debtors’

financial, operational, and sale objectives.

18. The Debtors have determined in their sound business judgment that each of the

KERP Participants is necessary to ensure the smooth operation of the Debtors’ businesses

through these chapter 11 cases. The Debtors have identified those employees who are most

critical to retain throughout these chapter 11 cases, and the KERP is appropriately tailored to

ensure that each KERP Participant possesses important institutional and industry knowledge,

experience, relationships and familiarity with the Debtors’ business operations and infrastructure

that would be difficult, costly, and disruptive to replace. Further as discussed above, the KERP

is structured to ensure that payment is conditioned on staying employed by the Debtors through

May 31, 2019. Moreover, as set forth in the Buck Declaration, the cost of the KERP is

reasonable in the context of the Debtors’ assets and liabilities and chapter 11 cases of similar size

and complexity.

B. The KERP Plan Either Not Bound by Section 503 of the Bankruptcy Code or Satisfies its Requirements

19. Section 503 of the Bankruptcy Code imposes certain restrictions on the

compensation that a debtor can pay to its executives and other employees in bankruptcy – i.e.,

those insider plans that are essentially “pay to stay” plans. See, e.g., In re Borders Grp., Inc.,

453 B.R. 459, 471 (Bankr. S.D.N.Y. 2011).5 Section 101(31) of the Bankruptcy Code provides

that where a debtor is corporation, insiders include any “(i) director of the debtor; (ii) officer of

the debtor; (iii) person in control of the debtor … or [iv] relative of a … director, officer or

5 Section 503(c)(2) of the Bankruptcy Code restricts severance payments to insiders, but is inapplicable here

because no severance payments are contemplated.


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person in control of the debtor.” 11 U.S.C. § 101(31)(B). As a general matter, the Bankruptcy

Code’s distinction between “insiders” and “non-insiders” is intended to draw a line between

those individuals who exercise control over corporate activities and corporate policy, and those

that do not.

C. Section 503(c)(1) of the Bankruptcy Code Does Not Apply to the KERP, as None of the KERP Participants Are Insiders

20. By its terms, section 503(c)(1) of the Bankruptcy Code does not apply where – as

is the case with the KERP – participants in a retention-based program are not insiders. See, e.g.,

In re Global Home Prods., LLC, 369 B.R.at 784 (noting that section 503(c)(1) of the Bankruptcy

Code only applies “if a bankruptcy court is asked to authorize payments to insiders for the

purpose of inducing insiders to remain in a debtor’s employ”). As described herein and the Buck

Declaration, the KERP Participants do not include any employee that resides within the inner

circle of the Company that makes critical financial decisions. In particular, none of the KERP

Participants: (a) reports directly to the Board of Managers; (b) is appointed directly by the Board

of Managers; (c) exercises managerial control over the Debtors’ operations as a whole; (d)

controls the Debtors’ company-wide policy; or (e) directs the Debtors’ overall corporate

governance. Each KERP Participant directly or indirectly reports to another officer of the

Company. An executive committee, none of whose members participate in the KERP, oversees

the Company. See Buck Dec. at ¶ 9. Courts have held that, when looking to control, insiders

must “exercise dominion or control over debtor sufficient to create a merger of identity to the

point where the entity has become, in effect, the alter ego of the debtor.” See, e.g., In re Lehman

Bros. Holdings Inc., 541 B.R. 551, 582 (S.D.N.Y. 2015); In re Borders Group, Inc., 453 B.R. at

459 (holding that employees did not qualify as insiders: where such employees did not

implement company policy, were responsible for day-to-day operations, did not report to the


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board of directors and were required to report to an officer); In re Glob. Aviation Holdings Inc.,

478 B.R. 142, 148–49 (Bankr. E.D.N.Y. 2012) (noting that the employees subject to the bonus

program were not “officers” of the company because they were not appointed to their positions

by the board of directors). The KERP Participants here do not have sufficient authority over the

Debtors so as to unqualifiedly dictate corporate policy or disposition of corporate assets. Buck

Dec. at ¶ 9. Instead, the KERP Participants are employees, some of whom may be in charge of

specific business sub segments of the Debtors, and the Debtor’s sales, administrative, financial

and other operational aspects of the Debtors’ businesses.

21. Indeed none of the KERP Participants reside within the inner circle of the Debtors

responsible for making final critical financial decisions. Id. None of the KERP Participants are

responsible for creating corporate company-wide policy with respect to the oversight of the

Debtors’ strategic plan or determining the disposition of corporate funds with respect to strategic

investing or financing activities, nor are they granted with decision making authority akin to one

of the Company’s senior executives. Id. The KERP Participants are instead focused on the day-

to-day administrative and operational functions and oversight of the Debtors’ business lines. For

the foregoing reasons, the Debtors believe that the KERP Participants are not “insiders” as such

term is defined in the Bankruptcy Code and therefore, are not subject to section 503(c)(1) of the

Bankruptcy Code.

22. Accordingly, the Debtors respectfully submit that Bankruptcy Code section

503(c)(1) does not apply to the KERP.

D. The KERP May Additionally Be Authorized Pursuant to Section 105(a) of the Bankruptcy Code

23. Section 105(a) of the Bankruptcy Code allows the Court to “issue any order,

process, or judgment that is necessary to carry out the provisions of [the Bankruptcy Code].” 11


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U.S.C. § 105(a); see also United States v. Energy Res. Co., 495 U.S. 545, 549, 110 S. Ct. 2139,

109 L. Ed. 2d 580 (1990); In re Cont’l Airlines, 203 F.3d 203, 211 (3d Cir. 2000) (“Section

105(a) of the Bankruptcy Code supplements courts’ specifically enumerated bankruptcy powers

by authorizing orders necessary or appropriate to carry out the provisions of the Bankruptcy

Code.”); In re Adelphia Commc’ns Corp., 345 B.R. 69, 85 (Bankr. S.D.N.Y. 2006) (“Section

105(a) provides broad equitable power for a Bankruptcy Court to maintain its own jurisdiction

and to facilitate the reorganization process.”).

24. As previously stated, the Debtors strongly and reasonably believe that the KERP

is critical to the success of the Debtors’ chapter 11 cases and the overall Sale(s) processes. Such

payments are essential to appropriately incentivize and retain the KERP Participants for their

efforts throughout these chapter 11 cases, to maintain the morale of the KERP Participants and to

ensure their continued focus on both the Sale(s) processes and their day-to-day roles with the

Debtors during these chapter 11 cases. The Debtors maintain that the KERP payments are

necessary to maximize the value of their estates for the benefit of their estates and creditors.

25. The Debtors respectfully submit that the postpetition compensation described in

the KERP is an appropriate exercise of the Debtors’ business judgment, is necessary and in the

best interest of the Debtors, their estates and creditors, and should be approved under sections

105(a) and 363(b) of the Bankruptcy Code and allowed as an administrative expense under

503(b) of the Bankruptcy Code.

Reservation of Rights

26. Nothing contained herein is intended or shall be construed as: (a) an admission as

to the validity of any claim against a Debtor entity; (b) a waiver of the Debtors’ right to dispute

any claim on any grounds; (c) a promise or requirement to pay any claim; (d) an implication or


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admission that any particular claim is of a type specified or defined in this motion; (e) a request

or authorization to assume any agreement, contract, or lease pursuant to section 365 of the

Bankruptcy Code; (f) a waiver or limitation of the Debtors’ rights under the Bankruptcy Code or

any other applicable law; or (g) a concession by the Debtors that any liens (contractual, common

law, statutory, or otherwise) satisfied pursuant to the motion are valid, and the Debtors expressly

reserved their rights to contest the extent, validity, or perfection or seek avoidance of all such

liens.

Waiver of Bankruptcy Rule 6004(a) and 6004(h)

27. To implement the foregoing successfully, the Debtors request that the Court enter

an order providing that notice of the relief requested herein satisfies Bankruptcy Rule 6004(a)

and that the Debtors have established cause to exclude such relief from the 14-day stay period

under Bankruptcy Rule 6004(h).

Notice

28. The Debtors will provide notice of this motion to (a) the U.S. Trustee; (b) counsel

to Macquarie; (c) counsel to any official committee appointed in these Chapter 11 Cases, and

(d) all parties that have filed a request for notice pursuant to Bankruptcy Rule 2002. The Debtors

submit that, in light of the nature of the relief requested, no other or further notice need be given.

No Prior Request

29. No prior request for the relief sought in this motion has been made to this or any

other court.


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WHEREFORE, the Debtors respectfully request that the Court enter the Order granting

the relief requested herein and such other relief as the Court deems appropriate under the

circumstances.

Dated: April 25, 2019 /s/ Domenic E. Pacitti Wilmington, Delaware Domenic E. Pacitti (DE Bar No. 3989)

Michael W. Yurkewicz (DE Bar No. 4165) KLEHR HARRISON HARVEY BRANZBURG LLP 919 North Market Street, Suite 1000 Wilmington, Delaware 19801

Telephone: (302) 426-1189 Facsimile: (302) 426-9193 Email: [email protected] [email protected] Morton R. Branzburg (admitted pro hac vice)

KLEHR HARRISON HARVEY BRANZBURG LLP 1835 Market Street, 14th Floor Philadelphia, PA 19103 Telephone: (215) 569-2700

Facsimile: (215) 568-6603 Email: [email protected] Steven S. Newburgh (admitted pro hac vice) MCLAUGHLIN & STERN, PLLC 525 Okeechobee Boulevard

CityPlace Office Tower, Suite 1700 West Palm Beach, FL 33401

Telephone: (561) 659-4020 Email: [email protected] Counsel to the Debtors


PHIL1 7846400v.1


) In re: ) Chapter 11 ) 1515-GEEnergy Holding Co. LLC, et al.,1 ) Case No. 19-10303 (KJC) ) Debtors. ) (Jointly Administered) ) ) Objection Deadline: May 13, 2019 @ 4:00 p.m. ) Hearing Date: May 20, 2019 @ 11:00 a.m.

NOTICE OF DEBTORS’ MOTION FOR ENTRY OF AN ORDER APPROVING THE DEBTORS’ KEY EMPLOYEE RETENTION PLAN AND GRANTING RELATED RELIEF

PLEASE TAKE NOTICE THAT on April 25, 2019 the above-captioned debtors and debtors-in-possession (the “Debtors”), filed the Debtors’ Motion for Entry of an Order Approving the Debtors’ Key Employee Retention Plan and Granting Related Relief (the “Motion”) with the United States Bankruptcy Court for the District of Delaware (“Bankruptcy Court”).

PLEASE TAKE FURTHER NOTICE that any responses to the Motion must be in

writing and filed with the Clerk of the United States Bankruptcy Court for the District of Delaware, 824 Market Street, Third Floor, Wilmington, Delaware 19801, and served upon the undersigned, so as to be received on or before 4:00 p.m. on May 13, 2019.

PLEASE TAKE FURTHER NOTICE that at the same time, you must also serve a

copy of the response or objection upon: (a) the Debtors, 1515 Sheepshead Bay Road, Brooklyn, NY 11235, Attn: Allan Brenner; (b) proposed counsel to the Debtors, McLaughlin & Stern, PLLC, CityPlace Office Tower, 525 Okeechobee Blvd., Suite 1700, West Palm Beach, FL 33401, Attn: Steven Newburgh; (c) proposed co-counsel to the Debtors, Klehr Harrison Harvey Branzburg LLP, 919 N. Market Street, Suite 1000, Wilmington, Delaware, 19801, Attn: Domenic E. Pacitti and Michael W. Yurkewicz; (d) the Office of The United States Trustee, 844 King Street, Suite 2207, Lockbox 35, Wilmington, Delaware 19801, Attn: Linda Casey, Esq.; and (e) counsel to Macquarie Investments US Inc. and Macquarie Energy LLC, Haynes and Boone LLP, 1221 McKinney Street, Suite 2100, Houston, TX 77010, Attn: Kelli Norfleet, Esq. and, Morris Nichols Arsht & Tunnell, LLP, 1201 N. Market St., 16th Floor, Wilmington, Delaware 19899-1347, Attn. Derek Abbott, Esq.


number, include: 1515-GEEnergy Holding Co. LLC (0428) and BBPC, LLC d/b/a Great Eastern Energy (0428). The location of the Debtors’ service address is: 1515 Sheepshead Bay Road, Brooklyn, NY 11235.

Case 19-10303-KJC Doc 236-1 Filed 04/25/19 Page 1 of 2

PHIL1 7846400v.1

PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF DEMANDED BY THE MOTION WITHOUT FURTHER NOTICE OR HEARING.

PLEASE TAKE FURTHER NOTICE THAT IF AN OBJECTION IS PROPERLY

FILED AND SERVED IN ACCORDANCE WITH THE ABOVE PROCEDURES, A HEARING WILL BE HELD ON MAY 20, 2019 AT 11:00 A.M. PREVAILING EASTERN TIME BEFORE THE HONORABLE KEVIN J. CAREY, UNITED STATES BANKRUPTCY JUDGE FOR THE DISTRICT OF DELAWARE, 824 MARKET STREET, COURT ROOM #5, 5th FLOOR, WILMINGTON, DELAWARE 19801. ONLY OBJECTIONS MADE IN WRITING AND TIMELY FILED WILL BE CONSIDERED BY THE BANKRUPTCY COURT AT SUCH HEARING. Dated: April 25, 2019 /s/ Domenic E. Pacitti Wilmington, Delaware Domenic E. Pacitti (DE Bar No. 3989)

Michael W. Yurkewicz (DE Bar No. 4165) KLEHR HARRISON HARVEY BRANZBURG LLP 919 North Market Street, Suite 1000 Wilmington, Delaware 19801

Telephone: (302) 426-1189 Facsimile: (302) 426-9193 Email: [email protected] [email protected] Morton R. Branzburg (admitted pro hac vice)

KLEHR HARRISON HARVEY BRANZBURG LLP 1835 Market Street, 14th Floor Philadelphia, PA 19103 Telephone: (215) 569-2700

Facsimile: (215) 568-6603 Email: [email protected] Steven S. Newburgh (admitted pro hac vice) MCLAUGHLIN & STERN, PLLC CityPlace Office Tower, Suite 1700 West Palm Beach, FL 33401

Telephone: (561) 659-4020 Email: [email protected] Counsel to the Debtors


PHIL1 7809824v.4

EXHIBIT A

Proposed Order


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) In re: ) Chapter 11 ) 1515-GEEnergy Holding Co. LLC, et al.,1 ) Case No. 19-10303 (KJC) ) Debtors. ) (Jointly Administered) ) ) Related to Docket No. __

ORDER AUTHORIZING AND APPROVING THE DEBTORS’ KEY EMPLOYEE RETENTION PLAN AND GRANTING RELATED RELIEF

Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in

possession (collectively, the “Debtors”) for entry of an order (this “Order”), (a) authorizing and

approving the Debtors’ Key Employee Retention Plan and (b) granting related relief; all as more

fully set forth in the Motion; and upon the Buck Declaration; and this Court having jurisdiction

over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of

Reference from the United States District Court for the District of Delaware, dated

February 29, 2012; and the Debtors having confirmed their consent to the entry of final orders or

judgment by this Court pursuant to Bankruptcy Rule 7008 and rule 9013-1(f) of the Local Rules;

and this Court having found that venue of this proceeding and the Motion in this district is proper

pursuant to 28 U.S.C. §§ 1408 and 1409; and this Court having found that the Debtors’ notice of

the Motion and opportunity for a hearing on the Motion were appropriate under the

circumstances and no other notice need be provided; and this Court having reviewed the Motion

and having heard the statements in support of the relief requested therein at a hearing before this 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification


2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.


2 PHIL1 7809824v.4

Court (the “Hearing”); and this Court having determined that the legal and factual bases set forth

in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of

the proceedings had before this Court; and after due deliberation and sufficient cause appearing

therefor, it is HEREBY ORDERED THAT:

1. The Motion is granted as set forth herein.

2. The KERP described in the Motion is hereby approved.

3. The Debtors are authorized, but not directed, to take all actions necessary to

implement the KERP on the terms and conditions set forth in the Motion.

4. Notwithstanding the relief granted herein or any action taken hereunder, nothing

contained in this Order shall create any rights in favor of, or enhance the status of any claim held

by any employee or other person or entity.

5. Notwithstanding the relief granted in this Order and any actions taken pursuant to

such relief, nothing in this Order shall be deemed: (a) an admission as to the validity of any

claim against a Debtor entity; (b) a waiver of the Debtors’ right to dispute any claim on any

grounds; (c) a promise or requirement to pay any claim; (d) an implication or admission that any

particular claim is of a type specified or defined in this Order or the Motion; (e) a request or

authorization to assume any agreement, contract, or lease pursuant to section 365 of the

Bankruptcy Code; (f) a waiver or limitation of the Debtors’ rights under the Bankruptcy Code or

any other applicable law; or (g) a concession by the Debtors that any liens (contractual, common

law, statutory, or otherwise) satisfied pursuant to the Motion are valid, and the Debtors expressly

reserved their rights to contest the extent, validity, or perfection or seek avoidance of all such

liens.


3 PHIL1 7809824v.4

6. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized

to receive, process, honor, and pay all such checks and electronic payment requests when

presented for payment, and all such banks and financial institutions are authorized to rely on the

Debtors’ designation of any particular check or electronic payment request as approved by this

Order.

7. Notwithstanding anything to the contrary contained herein, nothing in this Order

authorizes the use of cash collateral. Notwithstanding anything to the contrary contained herein,

any payment made or to be made under this Order, any authorization contained in this Order, or

any claim for which payment is authorized hereunder, shall be subject to the requirements

imposed on the Debtors under any orders of this Court approving any use of cash collateral by

the Debtors and any budget in connection therewith; provided, however, that amounts earned and

payable to KERP Participants under this Order shall be included in the Carve Out as defined in

the final cash collateral order [Docket No. 68] entered in these cases.

8. Notice of the Motion as provided therein shall be deemed good and sufficient

notice of such Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are

satisfied by such notice.

9. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Order

are immediately effective and enforceable upon its entry.

10. The Debtors are authorized to take all actions necessary to effectuate the relief

granted in this Order in accordance with the Motion.


4 PHIL1 7809824v.4

11. This Court retains jurisdiction with respect to all matters arising from or related to

the implementation, interpretation, and enforcement of this Order.

Dated: __________, 2019 Wilmington, Delaware THE HONORABLE KEVIN J. CAREY

UNITED STATES BANKRUPTCY JUDGE


PHIL1 7809824v.4

EXHIBIT B

Buck Declaration


PHIL1 7809824v.4


) In re: ) Chapter 11 ) 1515-GEEnergy Holding Co. LLC, et al.,1 ) Case No. 19-10303 (KJC) ) Debtors. ) (Jointly Administered) )

DECLARATION OF THOMAS BUCK IN SUPPORT OF DEBTORS’ MOTION FOR

ENTRY OF AN ORDER APPROVING THE DEBTORS’ KEY EMPLOYEE RETENTION PLAN AND GRANTING RELATED RELIEF

Thomas Buck declares as follows:

1. I am a principal of GlassRatner, the court appointed financial advisors of

1515-Geenergy Holding Co. LLC (“GEE Holding”) and Chief Financial Officer of BBPC,

LLC d/b/a Great Eastern Energy (“BBPC”), the debtors and debtors in possession in the

above-captioned chapter 11 cases (each a “Debtor,” and collectively, the “Debtors”). On

the date hereof (the “Petition Date”), each of the Debtors commenced a voluntary case

under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the

“Bankruptcy Code”). I am familiar with the day-to-day operations, business, and financial

affairs and employee related issues of the Debtors.

2. Except as otherwise indicated, all facts set forth in this declaration (the

“Declaration”) are based upon my personal knowledge of the Debtors’ operations and

finances, information learned from my review of relevant documents and information

supplied to me by members of the Debtors’ management and the Debtors’ advisors. I am

authorized to submit this declaration in support of the Debtors’ Motion for Entry of an




2 PHIL1 7809824v.4

Order Approving The Debtors’ Key Employee Retention Plan and Granting Related Relief

(the “Motion”). If called upon to testify, I could and would testify competently to the facts

set forth herein.

The Non-Insider Key Employee Retention Plan

3. The Debtors must incentivize their employee during these chapter 11 cases to

maintain the requisite industry experience and leadership required to insure the success of

the Debtors’ sale process. The Debtors have experienced significant attrition since the

beginning of 2019, including the loss of a substantial number of the senior management

team. Indeed, since January 2019, approximately 15 employees have left the Debtors’

workforce. Importantly, these included the head of the electric operations and several key

operations and finance employees. The Debtors have also lost key sales, legal, regulatory,

customer experience, and analytical staff. No new hires have been made to replace these

departures, resulting in the Debtors’ remaining senior management team taking on

additional duties and responsibilities. Further, the loss of many of these key employees

would reduce the company’s competitive capabilities by lowering management’s internal

functional market and operational knowledge. Moreover, many of these managers have

long-term relationships with their staffs and their subordinates, and the departure of these

managers may negatively impact the Debtors’ retention across its operations, unraveling

their restructuring from the inside out.

4. The non-insider employees eligible for the KERP range from “Vice

President” level to the “Analyst” level -- all of which the Debtors determined are critical to

driving the strategic objections and operations of the Company through the bankruptcy and

sale(s) processes. The KERP payments range from approximately $5,000 to $31,000 per


3 PHIL1 7809824v.4

KERP Participant during the sale period (through May 31, 2019) (the “Sale Period”) and

larger amounts for remaining individuals during the wind down period (an additional

maximum period of 150 days) (the “Wind Down Period”). The total aggregate amount

potentially available for payment under the KERP is $245,000.00.

5. The proposed KERP includes 16 of the Debtors’ non-insider employees (out

of a population of approximately 35 remaining employees. These KERP Participants were

chosen recognizing that the Debtors were embarking on the marketing process for the

sale(s) of their assets. A redacted listing of the KERP Participants (showing business

division, office and eligible KERP payment) is attached as Exhibit C to the Motion (the

“KERP Exhibit”).2 None of the KERP Participants reside within the inner circle of the

Company (CEO and CFO) that makes critical financial decisions.

6. The Debtors, with the assistance of their advisors, carefully selected the

KERP Participants based on how critical the employees are to the business and the risks of

attrition due to the restructuring. The KERP Participants are active employees of the

Debtors – largely middle management and not the most senior level executives – who are

working hard every day to ensure the Debtors’ success in these cases. In addition to

performing their normal responsibilities related to the Debtors’ operations, the KERP

Participants already have, and will continue to, assume significantly greater responsibilities

as a result of the sale(s) process and these chapter 11 cases. In addition, it is imperative to

retain the KERP Participants through the Sale(s) processes so the businesses can be

delivered intact to the buyer or buyers.

2 Contemporaneously herewith, the Debtors are filing a Motion to File the KERP Exhibit under Seal (the “Seal

Motion”). As set forth in the Seal Motion, the Debtors are providing an unredacted version of the KERP Exhibit to the Court for in camera review and to the U.S. Trustee on a confidential basis.


4 PHIL1 7809824v.4

7. Payments under the KERP are necessary to demonstrate consistency and

commitment to the KERP Participants and to ensure the KERP Participants focus their

efforts on the successful operations of the Debtors’ businesses, minimize operational

distractions and expenses and to maximize the value of the assets. The Debtors’ ability to

maintain their business operations, preserve the value of their assets, and maximize

stakeholder recovery through a successful and expedient restructuring process hinges on the

Debtors’ ability to incentivize and retain key employees during this critical period. The

KERP payment is a percentage of the KERP Participant’s base salary and was guided by the

KERP Participant’s criticality to the business and their level in the organization.

8. Any earned KERP payments for the Sale Period are payable on May 31, 2019.

Any earned KERP payments for the Wind Down Period are payable in five equal monthly

installments due on the first day of each month beginning June 1, 2019. The KERP will be

fully funded by either cash collateral on hand or the proceeds of Sale(s) transactions. With

respect to KERP payments for the Sale Period, in the event that a KERP Participant is

terminated without cause, the KERP Participant will be eligible to receive a pro rata

payment (based on the amount of time the KERP Participant worked relative to May 31,

2019) at the same time other KERP Participants receive their payments.3 With respect to

KERP payments for the Wind Down Period, in the event that a KERP Participant is

terminated without cause, the applicable KERP Participant will receive the aggregate

remaining unpaid scheduled payments upon cessation of employment. If a KERP Participant

is terminated for cause, such KERP Participant will forfeit any entitlement to the KERP and

any amounts previously paid will be subject to avoidance. If a KERP Participant voluntarily

3 The KERP payments are subject to the terminated KERP Participant’s execution of a general release of all

claims against the Debtors.


5 PHIL1 7809824v.4

ceases employment, such KERP Participant will forfeit any entitlement to the KERP that

remains unpaid after such voluntary cessation of employment.

9. The KERP Participants do not include any employee that resides within the

inner circle of the Company that makes critical financial decisions. In particular, none of

the KERP Participants: (a) reports directly to the Board of Managers; (b) is appointed

directly by the Board of Managers; (c) exercises managerial control over the Debtors’

operations as a whole; (d) controls the Debtors’ company-wide policy; or (e) directs the

Debtors’ overall corporate governance. Each KERP Participant directly or indirectly reports

to another officer of the Company. An executive committee, none of whose members

participate in the KERP, oversees the Company. The KERP Participants here do not have

sufficient authority over the Debtors so as to unqualifiedly dictate corporate policy or

disposition of corporate assets. Instead, the KERP Participants are employees, some of

whom may be in charge of specific business sub segments of the Debtors, and the Debtor’s

sales, administrative, financial and other operational aspects of the Debtors’ businesses.

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true

and correct.

Dated: April 25, 2019 /s/ Thomas Buck Name: Thomas Buck

Title: Principal, GlassRatner


PHIL1 7809824v.4

EXHIBIT C

KERP Exhibit

FILED UNDER SEAL


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