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P ACHULSKI S TANG Z IEHL & J ONES LLP
Richard M. Pachulski (CA Bar No. 90073) James I. Stang (CA Bar No. 94435) Dean A. Ziehl (CA Bar No. 84529) Linda F. Cantor (CA Bar No. 153762) Debra I. Grassgreen (CA Bar No. 169978) PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., Suite 1300 Los Angeles, CA 90067-4114 Telephone: 310/277-6910 Facsimile: 310/201-0760 E-mail: rpachulski@pszjlaw.com jstang@pszjlaw.com dziehl@pszjlaw.com lcantor@pszjlaw.com dgrassgreen@pszjlaw.com Proposed Attorneys for Debtor and Debtor in Possession UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION In re: American Suzuki Motor Corporation,1 Debtor. Case No.: 12Chapter 11 NOTICE OF MOTION AND MOTION OF DEBTOR FOR AN ORDER AUTHORIZING THE DEBTOR TO RETAIN, EMPLOY, AND COMPENSATE CERTAIN PROFESSIONALS UTILIZED IN THE ORDINARY COURSE OF BUSINESS; MEMORANDUM OF POINTS AND AUTHORITIES [Declaration of M. Freddie Reiss, Proposed Chief Restructuring Officer, in Support of Emergency First Day Motions Filed Concurrently Herewith] [Hearing To Be Set.] TO THE HONORABLE UNITED STATES BANKRUPTCY JUDGE, THE DEBTORS PREPETITION AND POSTPETITION LENDER, THE CREDITORS APPEARING ON THE LIST FILED IN ACCORDANCE WITH RULE 1007(D) OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE, PARTIES REQUESTING SPECIAL NOTICE, AND THE OFFICE OF THE UNITED STATES TRUSTEE: ( )
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ATTORNEYS AT LAW LOS ANGELES, CALIFORNIA
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The last four digits of the Debtors federal tax identification number are (8739). The Debtors address is: 3251 East Imperial Highway, Brea, CA 92821.
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American Suzuki Motor Corporation, the debtor and debtor in possession in the abovecaptioned case (the Debtor), hereby moves the Court for entry of an order, pursuant to sections 105(a), 327(a), 328, and 330 of title 11 of the United States Code (the Bankruptcy Code), authorizing the Debtor to employ and compensate certain professionals utilized in the ordinary course of the Debtors business (the Motion). The Debtor customarily retains the services of various attorneys, accountants, and other professionals in matters arising in the ordinary course of its business (individually, an OCP and collectively, the OCPs) that are unrelated to its pending chapter 11 case. It is unnecessary and unreasonably expensive to go through the process of employing each OCP under a separate application for each. By this Motion, therefore, the Debtor proposes an efficient and appropriate procedure by which the Debtor may employ OCPs. This procedure calls for each OCP to file a declaration disclosing any potential conflicts, and if there are no objections, to be compensated in the ordinary course of business. Although not waived, no prepetition claims held by an OCP will be paid except at the same time and in the same manner as all other unsecured claims are paid. The Motion is based on the circumstances described in this Motion, the annexed Memorandum of Points and Authorities, the Declaration of M. Freddie Reiss, Proposed Chief Restructuring Officer, in Support of Emergency First Day Motions (the Reiss Declaration), the arguments of counsel, and other admissible evidence properly brought before the Court at or before the hearing on this Motion. The Debtor will serve this Motion, the annexed Memorandum of Points and Authorities, and the Reiss Declaration on (a) the Office of the United States Trustee, (b) the creditors appearing on the list filed in accordance with Rule 1007(d) of the Federal Rules of Bankruptcy Procedure, unless and until an official committee of unsecured creditors (the Committee) is appointed, then in that event, to counsel to the Committee, (c) counsel to Suzuki Motor Corporation, the Debtors prepetition and postpetition lender, and (d) parties that file with the Court and serve upon the Debtor requests for notice of all matters in accordance with Bankruptcy Rule 2002. To the extent necessary, the Debtor requests that the Court waive compliance with Local Bankruptcy Rule 9075-1(a)(5) and approve service (in addition to the means of service set forth in such Local Bankruptcy Rule) by
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overnight or electronic delivery. In addition, upon scheduling of a hearing on this and other noticed motions filed contemporaneously herewith, the Debtor will serve a notice of hearing on this Motion, which will set forth the deadline for objections hereto. In the event that the Court grants the relief requested by the Motion, the Debtor shall provide notice of the entry of the order granting such relief to each of the foregoing parties and any other parties in interest as the Court directs. The Debtor submits that such notice is sufficient and that no other or further notice be given. WHEREFORE the Debtor respectfully requests that the Court enter an Order authorizing the Debtor to employ and compensate certain professionals utilized in the ordinary course of the Debtors business in accordance with the procedures set forth in the attached Memorandum of Points and Authorities, and granting such other and further relief as this Court deems just and proper. Dated: November 5, 2012 PACHULSKI STANG ZIEHL & JONES LLP By /s/ Debra I. Grassgreen Richard M. Pachulski James I. Stang Dean A. Ziehl Linda F. Cantor Debra I. Grassgreen Proposed Attorneys for Debtor and Debtor in Possession
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Richard M. Pachulski (CA Bar No. 90073) James I. Stang (CA Bar No. 94435) Dean A. Ziehl (CA Bar No. 84529) Linda F. Cantor (CA Bar No. 153762) Debra I. Grassgreen (CA Bar No. 169978) PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., Suite 1300 Los Angeles, CA 90067-4114 Telephone: 310/277-6910 Facsimile: 310/201-0760 E-mail: rpachulski@pszjlaw.com jstang@pszjlaw.com dziehl@pszjlaw.com lcantor@pszjlaw.com dgrassgreen@pszjlaw.com Proposed Attorneys for Debtor and Debtor in Possession UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION In re: American Suzuki Motor Corporation,1 Debtor. Case No.: 12Chapter 11 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION OF DEBTOR FOR AN ORDER AUTHORIZING THE DEBTOR TO RETAIN, EMPLOY, AND COMPENSATE CERTAIN PROFESSIONALS UTILIZED IN THE ORDINARY COURSE OF BUSINESS [Declaration of M. Freddie Reiss in Support of First Day Motions Filed Concurrently Herewith] ( )
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I. BACKGROUND ........................................................................................................................ 1 A. B. Jurisdiction and Venue ........................................................................................... 1 General Background .............................................................................................. 1
II. RELIEF REQUESTED ............................................................................................................. 3 III. THE DEBTORS ORDINARY COURSE PROFESSIONALS .............................................. 4 IV. PROPOSED RETENTION AND COMPENSATION PROCEDURES ................................ 5 A. B. Retention Procedures ............................................................................................. 5 Compensation Procedures ...................................................................................... 7
V. AUTHORITY FOR THE REQUESTED RELIEF ................................................................... 8 VI. Notice ....................................................................................................................................... 9 VII. Conclusion ............................................................................................................................ 10
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Table of Authorities Cases In re Allegiance Telecom, Inc. Case No. 03-13057 (Bankr. S.D.N.Y. May 15, 2003) ...................................................................... 8 In re Consolidated Freightways Corp., et al. Case No. 02-24284 (Bankr. C.D. Cal. September 9, 2002) ............................................................. 8 In re Federal Mogul Global, Inc., et al. Case No. 01-10578 (Bankr. D. Del. Nov. 9, 2001).......................................................................... 8 In re FLYi, Inc. Case No. 05-20011 (Bankr. D. Del. Dec. 1, 2005) ........................................................................... 8 In re Global Home Products LLC, et al. Case No. 06-10340 (Bankr. D. Del. May 5, 2006) ........................................................................... 8 In re Nobex Corp. Case No. 05-20050 (Bankr. D. Del. Dec. 22, 2005) ......................................................................... 8 In re NRG Energy, Inc. Case No. 03-13024 (Bankr. S.D.N.Y. May 20, 2003) ...................................................................... 8 In re Peoples Choice Home Loan, Inc., et al. Case No. 07-10765 (Bankr. C.D. Cal. July 3, 2007) ........................................................................ 8 In re Pliant Corp. Case No. 06-10001 (Bankr. D. Del. Feb. 2, 2006) ........................................................................... 8 In re Trans World Airlines, Inc. Case No. 01-00056 (Bankr. D. Del. Jan. 26, 2001) ......................................................................... 8 In re United Artists Theatre Co. Case No. 00-3514 (Bankr. D. Del. Nov. 14, 2000)........................................................................... 8 In re Worldcom, Inc. Case No. 02-13533 (Bankr. S.D.N.Y. Sep. 4, 2002) ........................................................................ 8 Victor Valley Community Hospital Case No. 6:10-39537 (Bankr C.D. September 13, 2010) ................................................................. 8 Statutes 11 U.S.C. 105(a) ................................................................................................................................ 3 11 U.S.C. 327(a) ................................................................................................................................ 4 11 U.S.C. 327(b) ................................................................................................................................ 3 11 U.S.C. 327(e) ............................................................................................................................ 4, 5 11 U.S.C. 328 ................................................................................................................................. 3, 7 11 U.S.C. 330 ................................................................................................................................. 3, 7 11 U.S.C. 331 ................................................................................................................................. 3, 7
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American Suzuki Motor Corporation, the above-captioned debtor and debtor in possession (the Debtor), hereby files this Memorandum of Points and Authorities in support of the Motion of Debtor for an Order Authorizing the Debtor to Retain, Employ, and Compensate Certain Professionals Utilized in the Ordinary Course of Business, and respectively represents as follows: I. BACKGROUND A. Jurisdiction and Venue The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). The venue of the chapter 11 case of the Debtor is proper pursuant to 28 U.S.C. 1408 and 1409. B. General Background On the date hereof (the Petition Date), the Debtor filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the Bankruptcy Code). The Debtor continues to operate and manage its affairs as a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner, or committee has been appointed in this chapter 11 case. The Debtor was established in 1986 as the sole distributor in the continental United States of Suzuki automobiles, motorcycles, all-terrain vehicles, and marine outboard engines (the Suzuki Products). Suzuki Motor Corporation (SMC), the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki Products1 and is not a debtor in this or any other insolvency proceeding. As of the Petition Date, the Debtor has approximately 295 employees across three divisions: automotive (the Automotive Division), motorcycles and all-terrain vehicles (the Motorcycles/ATV Division), and outboard marine motors and related products (the Marine Division). In the operation of its business, the Debtor purchases Suzuki Products from SMC and certain other non-debtor affiliates. In turn, the Debtor wholesales virtually its entire inventory through a network of independently owned and unaffiliated dealerships located throughout the continental
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The ATVs are manufactured by an 80% owned affiliate of the Debtor. An overview of the Suzuki Products manufactured by SMC, its affiliates, and certain unaffiliated entities is included in the Declaration of M. Freddie Reiss, Proposed Chief Restructuring Officer, in Support of Emergency First Day Motions.
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United States. The dealers then market and sell the Suzuki Products to retail customers. As of the Petition Date, there are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. Through dealers, the Debtor also sells a portion of its automotive inventory (less than 10%) to car rental companies and others (less than 2%) that lease the vehicles to retail customers. The Debtor also purchases the majority of its automotive parts from SMC and certain unaffiliated companies and resells them to the automotive dealers and authorized warranty service providers. The Debtor determined that its Automotive Division is facing and will continue to face a number of serious challenges in the highly regulated and competitive automotive industry in the continental U.S. market. The challenges include unfavorable foreign exchange rates, disproportionally high and increasing costs associated with meeting more stringent state and federal automotive regulatory requirements unique to the continental U.S. market, low sales volumes, a limited number of models in its line-up, and existing and potential litigation costs. The Debtor has exhausted all available means to reduce the cost of operating the Automotive Division for it to operate profitably. Accordingly, the Debtor determined that the best way to preserve and enhance the value of its overall business is to wind down new sales of the Automotive Division in the continental U.S. and realign its business focus on the long-term growth of its Motorcycles/ATV and Marine Divisions. Contemporaneous with the filing of this case, the Debtor filed a plan of reorganization (the Plan). Under the proposed Plan, the Motorcycles/ATV and Marine Divisions will remain largely unaffected including the warranties associated with such products. As part of its restructuring, NounCo, Inc., a wholly owned subsidiary of SMC, will purchase the Motorcycles/ATV and Marine Divisions and the parts and service components of the Automotive Division. The restructured Automotive Division intends to honor automotive warranties and authorize the sale of genuine Suzuki automotive parts and services to retail customers through a network of parts and service only dealerships that will provide warranty services. The Debtors Motorcycles/ATV Division is strong and competitively positioned in its market, allowing for long-term growth as economic conditions improve. Similarly, the Marine
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Division has remained competitive during the recent challenging economic times and the Debtor is working to further build its market share in the marine industry through continued investment in new product development and resuming large-scale marketing events focused on attracting new marine customers. The strategy embodied in the proposed Plan returns the business to its roots in the U.S. market, which began with motorcycles, and is intended to position the overall business for success in the continental U.S. for the benefit of all parties in interest. The Suzuki name is recognized around the world as a brand of quality products that offer reliability and originality. SMC has informed the Debtor that it continues to invest in its operations, improve its overall performance worldwide, and remains committed to manufacturing Suzuki Products for customers around the world. SMCs manufacturing and world-wide distribution of Suzuki automobiles will continue despite the Debtors wind down of the continental U.S. Automotive Division. Additional factual background regarding the Debtor, including its current and historical business operations and the events precipitating its chapter 11 filing, is set forth in detail in the Declaration of M. Freddie Reiss, Proposed Chief Restructuring Officer, in Support of Emergency First Day Motions (the Reiss Declaration) filed contemporaneously with this Motion and incorporated herein by reference. II. RELIEF REQUESTED By this Motion, pursuant to sections 105(a), 327(b), 328, and 330 of the Bankruptcy Code, the Debtor, out of an abundance of caution, seeks entry of an order of this Court (a) authorizing it to retain and employ ordinary course professionals on an as needed basis without the submission of separate, formal retention applications for each ordinary course professional, and (b) establishing procedures to compensate the OCPs (as defined below) under sections 330 and 331 of the Bankruptcy Code for postpetition services rendered and expenses incurred. A proposed form of order is annexed hereto as Exhibit A.
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THE DEBTORS ORDINARY COURSE PROFESSIONALS The Debtor customarily retains the services of various attorneys, accountants, and other professionals in matters arising in the ordinary course of business that are unrelated to the underlying chapter 11 case (each an OCP and collectively, the OCPs). The Debtor requires the services of the OCPs listed on Exhibit B hereto2 and any additional OCPs whose services may be required during this chapter 11 in order to continue to operate its business as a debtor in possession. The work of the OCPs, albeit ordinary course, is directly related to the preservation of the value of the Debtors estate, even though the amount of fees and expenses incurred by the OCPs is relatively small. The operation of the Debtors business would be severely hindered if the OCPs were delayed in performing their work on behalf of the Debtor while the Debtor (i) submitted to this Court an application, affidavit, and proposed retention order for each OCP; (ii) waited until such order was approved before such OCP continued to render services; and (iii) withheld payment of the normal fees and expenses of the OCPs until they complied with the compensation procedures applicable to professionals hired pursuant to section 327(a) or (e) (the Chapter 11 Professionals). In addition, the OCPs do not generally work for debtors in bankruptcy cases and are generally unfamiliar with the required employment and compensation procedures. Therefore, the Debtor would expend significant amounts of money and time educating the OCPs as to these procedures and assisting them with their compliance with the procedures. Further, some OCPs might be unwilling or unable to assume the administrative and cost burden of such employment and fee procedures and may therefore be unwilling to work with the Debtor if these requirements are imposed, forcing the Debtor to incur additional and unnecessary expenses to retain other professionals who would not have the background and expertise of the OCPs and could potentially charge higher rates. The uninterrupted services of the OCPs are
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As discussed more fully below, the Debtor reserves the right to amend such list in the future, pursuant to the procedures set forth herein. As such, the procedures for retention and payment for the Ordinary Course Professional set forth herein will apply to additional ordinary course professionals whose services may be required during this case.
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important to the Debtors continuing operations and its ability to move toward a successful reorganization. Moreover, a requirement that the OCPs each file retention pleadings and follow the usual fee application process required of the Chapter 11 Professionals would burden the Clerks office, this Court, and the U.S. Trustees office with unnecessary fee applications while significantly adding to the administrative costs of the Case without any corresponding benefit to the Debtors estate. This Motion proposes a procedure to alleviate such a burden. Although the OCPs set forth on Exhibit B and additional OCPs whose services may be required during this chapter 11 case may hold unsecured claims against the Debtor in respect of prepetition services rendered, the Debtor does not believe that the OCPs have an interest materially adverse to the Debtor, its estate, its creditors, or other parties in interest, and thus none would be retained that did not meet, if applicable, the special counsel retention requirement of section 327(e) of the Bankruptcy Code. By this Motion, the Debtor is not requesting authority to pay prepetition amounts owed to OCPs. IV. PROPOSED RETENTION AND COMPENSATION PROCEDURES A. Retention Procedures The Debtor proposes that it be permitted to continue to employ and retain the OCPs without the necessity of each OCP filing an application for the approval of its employment and obtaining an order approving such application. To provide the interested parties and this Court with appropriate comfort and assurances, each OCP will be required to file with this Court, and to serve upon (i) counsel for the Debtor, Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd., 13th Floor, Los Angeles, CA 90067, Attention: Debra I. Grassgreen and John W. Lucas; (ii) Office of the U.S. Trustee, 411 West Fourth Street, Suite 9041, Santa Ana, CA 92701; (iii) counsel for the Committee, if one is appointed; and (iv) any party requesting special notice pursuant to Bankruptcy Rule 2002 (collectively, the Notice Parties), a disclosure declaration (the Declaration), a proposed form of which is attached as Exhibit C hereto, no later than thirty days after the later of (i) entry of an order of this Court granting the Motion or (ii) the retention of such OCP. Such
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Declaration shall set forth the following information: (a) to the best of the OCPs knowledge, a description of the effort(s) that were taken to search for connections with parties in interest; (b) a description of the proposed scope of services to be provided by the OCP; (c) the rate(s) proposed to be charged for the services; (d) all information otherwise required to be disclosed pursuant to Rule 2014 of the Federal Rules of Bankruptcy Procedure; (e) any prepetition amounts owed to the OCP by the Debtor; and (f) to the extent that the OCP was not providing services as of the Petition Date, the date on which such services began postpetition. The Debtor will not make any payments to any OCP who has failed to file such a Declaration. The Debtor further requests that the Notice Parties have fourteen (14) days from the date of the filing and service of the Declaration by each OCP (the Objection Period) to object to the retention of the OCP in question. Any such objection must be timely filed with this Court and served upon the OCP, the Debtor, and the Notice Parties. If an objection is filed and is not resolved and/or withdrawn within twenty-one days after service of such objection, this Court shall adjudicate the matter at a hearing scheduled by the Debtor at a mutually convenient time. If no timely objection is filed and served, or if an objection is withdrawn, the Debtor will be authorized to retain the OCP on a final basis without further order of this Court. The Debtor requests that it be authorized to employ and retain additional OCPs, not currently listed on Exhibit B hereto, from time to time as necessary, without the need to file individual retention applications or have a further hearing, by filing with this Court one or more supplements to Exhibit B (a Supplemental Notice) and serving a copy of the Supplemental Notice upon the Notice Parties. The Debtor proposes that, as with the OCPs set forth on Exhibit B, each additional OCP be required to file and serve upon the Court and the Notice Parties a Declaration substantially in the form of Exhibit C hereto within thirty days after service of the Supplemental Notice. The Notice Parties then would be given fourteen days after service of each required Declaration to object to the retention of such OCP. Any objection will be handled pursuant to the procedures discussed above. If no objection is submitted, or the objection is withdrawn, the Debtor will be authorized to retain the professional as an OCP on a final basis without further order of this Court.
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B.
Compensation Procedures The Debtor seeks authority to pay, without formal application to and order from this Court,
100% of the fees and expenses of each OCP upon submission to, and approval by, the Debtor of an appropriate billing statement setting forth in reasonable detail the nature of the postpetition services rendered and expenses actually incurred up to $50,000 per month per OCP on a rolling basis, such that an OCP whose fees and disbursements are less than $50,000 in any month may be paid in subsequent months a total of $50,000, plus the difference between $50,000 and the amount billed in prior months (the Cap Amount). Further, the Debtor will not pay any fees and expenses to an OCP unless (i) the OCP has filed its Declaration, (ii) the Objection Period has expired, and (iii) no timely objection is pending. If a timely objection to the Declaration is received, no payment will be made until such objection is resolved and/or withdrawn, or the employment of the OCP is otherwise approved by the Court. If in any given month the fees and expenses for any OCP exceed the Cap Amount, such OCP shall be required to apply for approval by the Court of all such OCPs fees and expenses for such month under sections 328, 330, and 331 of the Bankruptcy Code; provided, however, that such OCP shall be entitled to an interim payment of up to the Cap Amount as a credit against the invoices for such month ultimately allowed by the Court. It should be noted that certain of the Debtors OCPs are compensated on a fixed fee basis. Thus, to the extent that an OCPs fixed fee exceeds the Cap Amount, the fee application would be submitted for approval pursuant to sections 328, 330, and 331 of the Bankruptcy Code. As a routine matter, the Debtor regularly reviews all billing statements received from the OCPs to ensure that the fees and expenses charged are reasonable. This type of review will continue postpetition and, coupled with the proposed Cap Amount, will protect the Debtors estate against excessive and improper billings. The Debtor further proposes to file a payment summary statement with this Court not more than thirty days after every 3-month period this Case is pending, or such other period as this Court directs, and to serve such statement upon the Notice Parties. The summary statement will include the following information for each OCP: (a) the name of the OCP; (b) the aggregate amounts paid as
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compensation for services rendered and reimbursement of expenses incurred by such OCP during the statement period; and (c) a brief statement of the type of services rendered. V. AUTHORITY FOR THE REQUESTED RELIEF The Debtor and its estate will be well served if granted the authority to employ and retain the OCPs given their past involvement with the Debtor. Prior to the filing of this chapter 11 case, the Debtor retained the OCPs listed on Exhibit B to render services in connection with the day-to-day operation of its businesses. As in this case, debtors in other chapter 11 cases have routinely requested authority to retain professionals used in the ordinary course of their business operations. In an effort to ensure uninterrupted and orderly administration of business services, courts have regularly granted the same or similar relief as requested by this Debtor. See, e.g., Victor Valley Community Hospital, Case No. 6:10-39537 (Bankr C.D. September 13, 2010); In re Peoples Choice Home Loan, Inc., et al., Case No. 07-10765 (Bankr. C.D. Cal. July 3, 2007); In re Consolidated Freightways Corp., et al., Case No. 02-24284 (Bankr. C.D. Cal. September 9, 2002); In re Global Home Products LLC, et al., Case No. 06-10340 (Bankr. D. Del. May 5, 2006); In re Pliant Corp., Case No. 06-10001 (Bankr. D. Del. Feb. 2, 2006); In re Nobex Corp., Case No. 05-20050 (Bankr. D. Del. Dec. 22, 2005); In re FLYi, Inc., Case No. 05-20011 (Bankr. D. Del. Dec. 1, 2005); In re NRG Energy, Inc., Case No. 0313024 (Bankr. S.D.N.Y. May 20, 2003); In re Allegiance Telecom, Inc., Case No. 03-13057 (Bankr. S.D.N.Y. May 15, 2003); In re Federal Mogul Global, Inc., et al., Case No. 01-10578 (Bankr. D. Del. Nov. 9, 2001); In re Trans World Airlines, Inc., Case No. 01-00056 (Bankr. D. Del. Jan. 26, 2001); In re United Artists Theatre Co., Case No. 00-3514 (Bankr. D. Del. Nov. 14, 2000); In re Worldcom, Inc., Case No. 02-13533 (Bankr. S.D.N.Y. Sep. 4, 2002). Granting the Motion is in the best interest of the Debtor, its estate, and creditors because the OCPs past relationship with, and understanding of, the Debtor and its operations and the essential services the OCPs perform for benefit of the Debtors business. It is in the best interest of Debtors business, it estate and the creditors to avoid any disruption in the professional services rendered by the OCPs.
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As set forth in the Motion, the Debtor will serve the Motion, this Memorandum of Points and Authorities, and the Reiss Declaration on (a) the Office of the United States Trustee, (b) the creditors appearing on the list filed in accordance with Fed. R. Bankr. P. 1007(d) by the Debtor unless and until an official committee of unsecured creditors (the Committee) is appointed, then in that event, to counsel to the Committee, (c) counsel to Suzuki Motor Corporation, the Debtors prepetition and postpetition lender, and (d) parties that file with the Court and serve upon the Debtor requests for notice of all matters in accordance with Bankruptcy Rule 2002. To the extent necessary, the Debtor requests that the Court waive compliance with Local Bankruptcy Rule 9075-1(a)(5) and approve service (in addition to the means of service set forth in such Local Bankruptcy Rule) by overnight or electronic delivery. In addition, upon scheduling of a hearing on this and other noticed motions filed contemporaneously herewith, the Debtor will serve a notice of hearing on this Motion, which will set forth the deadline for objections thereto. In the event that the Court grants the relief requested by the Motion, the Debtor shall provide notice of the entry of the order granting such relief to each of the foregoing parties and any other parties in interest as the Court directs. The Debtor submits that such notice is sufficient and that no other or further notice be given.
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VII. CONCLUSION Based upon the foregoing, the Debtor respectfully requests that this Court enter an order authorizing the Debtor to employ and compensate the OCPs set forth on Exhibit B and any additional OCPs whose services may be required during the pendency of this Case as described herein and granting such other and further relief as this Court deems appropriate. Dated: November 5, 2012 PACHULSKI STANG ZIEHL & JONES LLP By: /s/ Debra I. Grassgreen Richard M. Pachulski James I. Stang Dean A. Ziehl Linda F. Cantor Debra I. Grassgreen Proposed Attorneys for Debtor and Debtor in Possession
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EXHIBIT A
(Proposed Order)
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Richard M. Pachulski (CA Bar No. 90073) James I. Stang (CA Bar No. 94435) Dean A. Ziehl (CA Bar No. 84529) Linda F. Cantor (CA Bar No. 153762) Debra I. Grassgreen (CA Bar No. 169978) PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., Suite 1300 Los Angeles, CA 90067-4114 Telephone: 310/277-6910 Facsimile: 310/201-0760 E-mail: rpachulski@pszjlaw.com jstang@pszjlaw.com dziehl@pszjlaw.com lcantor@pszjlaw.com dgrassgreen@pszjlaw.com Proposed Attorneys for Debtor and Debtor in Possession UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION In re: American Suzuki Motor Corporation,1 Debtor. Case No.: 12Chapter 11 ORDER AUTHORIZING THE DEBTOR TO RETAIN, EMPLOY, AND COMPENSATE CERTAIN PROFESSIONALS UTILIZED IN THE ORDINARY COURSE OF BUSINESS ( )
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Upon the motion (the Motion)2 of the above-captioned debtor and debtor in possession (the Debtor) for entry of an order (this Order), pursuant to sections 105(a), 327(b), 328, and 330 of title 11 of the United States Code (the Bankruptcy Code), authorizing the Debtor to employ and compensate certain professionals utilized in the ordinary course of the Debtors business, as set forth in greater detail in the Motion; and the Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. 157 and 1334; and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. 157(b)(2); and venue being proper pursuant to 28 U.S.C. 1408 and 1409; and it appearing that the relief requested in
The last four digits of the Debtors federal tax identification number are (8739). The Debtors address is: 3251 East Imperial Highway, Brea, CA 92821. 2 Capitalized terms not defined herein shall have the meanings used in the Motion.
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the Motion is in the best interests of the Debtors estate, its creditors, and all other parties in interest; and the Debtor having provided appropriate notice of the Motion and the opportunity for a hearing on the Motion under the circumstances and no other or further notice need be provided; and the Court having reviewed the Motion and having heard the statements in support of the relief requested therein at a hearing (the Hearing); and the Court having considered the Motion, all pleadings and papers filed in connection with the Motion, including the Declaration of M. Freddie Reiss in Support of Emergency First Day Motions and the Memorandum of Points and Authorities filed in support thereof, and the arguments of counsel and evidence proffered at the hearing on the Motion; after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. 2. The Motion is GRANTED. The Debtor is authorized to employ and retain the OCPs without the necessity of each
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OCP filing an application for retention pursuant to sections 327 and 328 of the Bankruptcy Code provided that each OCP complies with the following procedures: a. file and serve upon (i) counsel for the Debtor, Pachulski Stang Ziehl & Jones
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LLP, 10100 Santa Monica Blvd., 13th Floor, Los Angeles, CA 90067, Attention: Debra I. Grassgreen and John W. Lucas; (ii) Office of the U.S. Trustee, 411 West Fourth Street, Suite 9041, Santa Ana, CA 92701; (iii) counsel for the committee, if one is appointed; and (iv) any party requesting special notice pursuant to Bankruptcy Rule 2002 (collectively, the Notice Parties), a disclosure declaration (the Declaration) no later than thirty days after entry of an order of this Court granting the Motion or the retention of such OCP. b. Each OCPs Declaration shall set forth the following information: (a) to the
best of the OCPs knowledge, a description of the effort(s) that were taken to search for connections with parties in interest; (b) a description of the proposed scope of services to be provided by the OCP; (c) the rate(s) proposed to be charged for the services; (d) all information otherwise required to be disclosed pursuant to Rule 2014 of the Federal Rules of Bankruptcy Procedure; (e) any prepetition amounts owed to the OCP by the Debtor; and (f) to the extent that the OCP was not providing services as of the Petition Date, the date on which such services began postpetition.
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c.
The Debtor shall not make any payments to any OCP who has failed to file
such a Declaration. d. Notice Parties have fourteen (14) days from the date of the filing and service
of the Declaration by each OCP (the Objection Period) to object to the retention of the OCP in question. Any such objection must be timely filed with this Court and served upon the OCP, the Debtor, and the Notice Parties. If an objection is filed and is not resolved and/or withdrawn within twenty-one days after service of such objection, this Court shall adjudicate the matter at a hearing scheduled by the Debtor at a mutually convenient time. If no timely objection is filed and served, or if an objection is withdrawn, the Debtor will be authorized to retain the OCP on a final basis without further order of this Court. e. The Debtor is authorized to employ and retain additional OCPs, not currently
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listed on Exhibit B to the Motion, from time to time as necessary, without the need to file individual retention applications or have a further hearing by filing with this Court one or more supplements to Exhibit B to the Motion (a Supplemental Notice) and serving a copy of the Supplemental Notice upon the Notice Parties. The Debtor proposes that, as with the OCPs set forth on Exhibit B to the Motion, each additional OCP be required to file and serve upon the Court and the Notice Parties a Declaration substantially in the form of Exhibit C to the Motion within thirty days after service of the Supplemental Notice. The Notice Parties shall have fourteen days after service of each required Declaration to object to the retention of such OCP. Any objection will be handled pursuant to the procedures discussed above. If no objection is submitted, or the objection is withdrawn, the Debtor is authorized to retain the professional as an OCP on a final basis without further order of this Court. 3. The Debtor is authorized to compensate each OCP that is retained pursuant to the
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procedures set forth herein, without formal application to and order from this Court: a. 100% of the fees and expenses of each OCP upon submission to, and approval
by, the Debtor of an appropriate billing statement setting forth in reasonable detail the nature of the postpetition services rendered and expenses actually incurred up to $50,000 per month per OCP on a rolling basis, such that an OCP whose fees and disbursements are less than
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$50,000 in any month may be paid in subsequent months a total of $50,000, plus the difference between $50,000 and the amount billed in prior months (the Cap Amount). b. the Debtor shall not pay any fees and expenses to an OCP unless (i) the OCP
has filed its Declaration, (ii) the Objection Period has expired, and (iii) no timely objection is pending. If a timely objection to the Declaration is received, no payment will be made until such objection is resolved and/or withdrawn, or the employment of the OCP is otherwise approved by the Court. c. If in any given month the fees and expenses for any OCP exceed the Cap
Amount, such OCP shall be required to apply for approval by the Court of all such OCPs fees and expenses for such month under sections 330 and 331 of the Bankruptcy Code; provided, however, that such OCP shall be entitled to an interim payment of up to the Cap Amount as a credit against the invoices for such month ultimately allowed by the Court. d. The Debtor shall file a payment summary statement with this Court not more
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than thirty days after every 3-months this case is pending, or such other period as this Court directs, and to serve such statement upon the Notice Parties. The summary statement will include the following information for each OCP: (a) the name of the OCP; (b) the aggregate amounts paid as compensation for services rendered and reimbursement of expenses incurred by such OCP during the statement period; and (c) a brief statement of the type of services rendered. 4. The Court retains jurisdiction to interpret and enforce the terms of this Order. ###
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EXHIBIT B (List of Ordinary Course Professionals) NatureofLegal Services

ProductLiability Consulting Legal Legal
OrdinaryCourseProfessional
B33CONSULTING 8711E.PINNACLEPEAKRD SCOTTSDALE,AZ85255 BAKER&HOSTETLERLLP POBOX70189 CLEVELAND,OH441900189 BECHERER,KANNETT&SCHWEITZER 1255POWELLSTREET EMERYVILLE,CA94608 BEIRNE,MAYNARD&PARSONS 1300POSTOAKBOULEVARD SUITE2500 HOUSTON,TX77056 BERKOWITZOLIVERWILLIAMS 2600GRANDBLVD.,SUITE#1200 KANSASCITY,MO64108 BOWMANANDBROOKE 2901NORTHCENTRALAVENUE SUITE1600,PHOENIXPLAZA PHOENIX,AZ85012 BOWMANANDBROOKE 1441MAINSTREET SUITE1200 COLUMBIA,SC29201 BRACEWELL&GIULIANILLP P.O.BOX848566 DALLAS,TX752848566 BROMAGEN&RATHET,P.A. 515E.LASOLASBLVD FORTLAUDERDALE,FL33301 BUCHANAN,INGERSOLL&ROONEY, 301GRANTSTREET20T PITTSBURGH,PA152191410 C2LEGAL DEPT.210,BOX4346 HOUSTON,TX77210434 CLAPPPETERSONTIEMESSENTHORS 711HSTREET,SUITE620 ANCHORAGE,AK995013454 CORNELL&GOLLUB 75FEDERALSTREET BOSTON,MA02110 DANNER&MARTYN,LLP 100E.THOUSANDOAKS THOUSANDOAKS,CA91360
Estimated MonthlyFees
$13,500.00 $50,000.00 $520.00(LTM)
Legal
$12,300.00
Legal
$50,000.00
Legal
$50,000.00
Legal Legal Legal Legal Legal Legal Legal
$7,100.00(LTM) $4,100.00(LTM) $1,700.00 $5,000.00 $3,400.00(LTM) $11,000.00 $4,700.00(LTM)
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NatureofLegal Services
Legal Legal Legal Legal Legal TaxConsultingAPA Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal
DINSMORE&SHOHLLLP POBOX640635 CINCINNATI,OH452640635 HISCOCK&BARCLAYLLP ONEPARKPLACE SYRACUSE,NY132022078 HORNAYLWARD&BANDY,LLC 2600GRANDBLVD,SUI KANSASCITY,MO64108 JACOBSONHOLMANPLLC 400SEVENTHST.,N.W WASHINGTON,DC20004 JULIATACHIKAWA 27223RDSTREET,#204 SANTAMONICA,CALIFORNIA90405 KPMG,LLP DEPT.0511 DALLAS,TX753120511 KRAVIT,HOVEL,KRAWCZYKS.C. 825NORTHJEFFERSON MILWAUKEE,WI532023737 LAWOFFICESOFMARKWRAY 608LANDERST RENO,NV89509 LIGHTFOOT,FRANKLIN&WHITE 40020THSTREET BIRMINGHAM,AL352033200 LOZA&LOZALLP 305NORTHSECONDAVE UPLAND,CA917866064 MARSHALL,DENNEHEYWARNER,COL 2000MARKETSTREETSUITE2300 PHILADELPHIA,PA19103 MCGUIREWOODS 901EASTCARYSTREET RICHMOND,VA232860645 NANCYTAYUI 1978WestridgeRoad LosAngeles,CA90049 O'HAGANSPENCERLLP 6806PARAGONPLACE, RICHMOND,VA23230 O'HAGANSPENCER,LLC ONEEASTWACKER,STE CHICAGO,IL60601 PINKERTONCONSULTING&INVESTI P.O.BOX406394 ATLANTA,GA303846394 POLSINELLISHUGHARTPC 700W47THSTREET KANSASCITY,MO64112
$9,200.00 $950.00 $6,900.00(LTM) $800.00(LTM) $35,000.00 $2,700.00 $600.00(LTM) $2,500.00(LTM) $1,500.00(LTM) $1,900.00(LTM) $9,600.00 $150.00(LTM) $15,500 $5,700.00(LTM) $1,000.00 $2,300.00(LTM) $8,400.00
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NatureofLegal Services
Legal Legal
RUGGERELLOLAWGROUPL.L.P. P.O.BOX30012,#115 LAGUNANIGUEL,CA92677 RUMBERGER,KIRKANDCALDWELL,P.A. 300SOUTHORANGEAVENUE ORLANDO,FL32801 SEGALMCCAMBRIDGESINGER& MAHONEY,LTD. 1818MARKETST. SUITE2600 PHILADELPHIA,PA19103 STRADLINGYOCCACARLSON&RAUT 660NEWPORTCENTERD NEWPORTBEACH,CA92660 STRASBURGER&PRICE,LLP 720BRAZOS,SUITE70 AUSTIN,TX78701 SUTHERLAND,ASBILL&BRENNAN, 999PEACHTREESTNE ATLANTA,GA303093996 WILKESLAWFIRM,P.A. 127DUNBARSTREET,S SPARTANBURG,SC29306 WINSTON&STRAWNLLP 36235TREASURYCENTE CHICAGO,IL606946200 WOOD&JENKINS,PLLC 205S.ACADEMYSTREE CARY,NC27519
$2,900.00 $11,800.00
Legal
$25,600.00
Legal Legal Legal Legal Legal Legal
$2,800.00(LTM) $4,300.00 $7,200.00 $11,400.00 $35,200.00 $700.00(LTM)
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EXHIBIT C (Disclosure Declaration Form)
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Richard M. Pachulski (CA Bar No. 90073) James I. Stang (CA Bar No. 94435) Dean A. Ziehl (CA Bar No. 84529) Debra I. Grassgreen (CA Bar No. 169978) Linda F. Cantor (CA Bar No. 153762) PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., Suite 1300 Los Angeles, CA 90067-4114 Telephone: 310/277-6910 Facsimile: 310/201-0760 E-mail: rpachulski@pszjlaw.com jstang@pszjlaw.com dziehl@pszjlaw.com dgrassgreen@pszjlaw.com lcantor@pszjlaw.com Proposed Attorneys for Debtor and Debtor in Possession UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA SANTA ANA DIVISION In re: American Suzuki Motor Corporation,1 Debtor. Case No.: 12Chapter 11 DISCLOSURE DECLARATION OF _____________________________ AS ORDINARY COURSE PROFESSIONAL [No hearing required pursuant to L.B.R. 90131] I, ___________, hereby declare that the following is true to the best of my knowledge, information and belief: 1. [address]. 2. This Declaration is submitted in connection with an order of the United States I am a ____________ of _________ (the Firm) which maintains offices at ( )
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Bankruptcy Court for the Central District of California, Santa Ana Division dated ________, 2012, authorizing the above-captioned debtor and debtor in possession (the Debtor) to retain certain professionals in the ordinary course of business during the pendency of the Debtors chapter 11 case.
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3.
The Firm, through me, and members of the firm, have represented and advised the
Debtor as ____________ with the following aspects of the Debtors business or legal affairs, including _______________________________________, since [insert date]. 4. The Debtor has requested, and the Firm has agreed, to continue to provide services to
the Debtor pursuant to section 327(b) of chapter 11 of title 11 of the United States Code (the Bankruptcy Code) with respect to such matters. Additionally, the Debtor has requested, and the Firm proposes to render, the following services to the Debtor: [Insert description]. 5. The Firms current customary [hourly] rates, subject to change from time to time, are
$____________. In the normal course of business, the Firm revises its regular [hourly] rates on ___________ of each year and requests that, effective ____________ of each year, the aforementioned rates be revised to the regular [hourly] rates which will be in effect at that time. 6. To the best of my knowledge, formed after due inquiry, neither I, the Firm, nor any
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employee thereof has any connection with the Debtor, nor currently represents any creditors, other parties-in-interest, the United States Trustee or any person employed by the Office of the United States Trustee with respect to the matters upon which it is to be engaged, and the Firm does not, by reason of any direct or indirect relationship to, connection with, or interest in the Debtor, hold or represent any interest adverse to the Debtor, the estate or any class of creditors or equity interest holders, except [________________]. 7. [Thus, I believe that the Firms representation of such entities in matters entirely
unrelated to the Debtor is not adverse to the Debtors interests, or the interests of creditors or the estate in respect of the matters for which the Firm will be engaged, nor will such services impair the Firms ability to represent the Debtor in the ordinary course in this chapter 11 case.] 8. In addition, although unascertainable at this time after due inquiry, the Firm may have
in the past represented, currently represent, and may in the future represent entities that are claimants of the Debtor in matters entirely unrelated to the Debtor and the estate. The Firm does not and will not represent any such entity in connection with this pending chapter 11 case and does not have any relationship with any such entity, attorneys or accountants that would be adverse to the Debtor or the estate.
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9.
The Firms process of ascertaining what, if any, connection it may have with any
interest adverse to the Debtor, the estate or any class of creditors or equity interest holders, consists of the following: ___________. 10. In the past year, the Firm has rendered services that have not yet been billed or that
have been billed but with respect to which payment has not yet been received. The Firm is currently owed $__________ on account of such prepetition services. 11. In light of the foregoing, I believe that the Firm does not hold or represent any
interest materially adverse to the Debtor, the estate, creditors, or equity interest holders, as identified to the Firm, with respect to the matters in which the firm will be engaged. 12. Except as set forth herein, no promises have been received by the Firm or any partner,
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associate or other professional thereof as to compensation in connection with this chapter 11 case other than in accordance with the provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the Central District of California, and orders of this Court. 13. The Firm further states that it has not shared, nor agreed to share any compensation
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received in connection with this chapter 11 case with another party or person, other than as permitted by section 504(b) of the Bankruptcy Code and Bankruptcy Rule 2016. 14. The foregoing constitutes the statement of the Firm pursuant to sections 329 and 504
of the Bankruptcy Code and Federal Rules of Bankruptcy Procedure 2014 and 2016(b). I declare under penalty of perjury under the laws of the United States of America, that the foregoing is true and correct. Executed this ___ day of ____________, 2012, at ___________________________.
[NAME] [ADDRESS]
DOCS_LA:256883.7 12832/001

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EXHIBIT B (List of Ordinary Course Professionals) NatureofLegal Services

Legal Legal Legal Legal Legal Legal Legal

$7,100.00(LTM) $4,100.00(LTM) $1,700.00 $5,000.00 $3,400.00(LTM) $11,000.00 $4,700.00(LTM)

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Legal Legal Legal Legal Legal Legal

$2,800.00(LTM) $4,300.00 $7,200.00 $11,400.00 $35,200.00 $700.00(LTM)

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EXHIBIT C (Disclosure Declaration Form)

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