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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 DEBTORS MOTION FOR ORDER ESTABLISHING INTERIM FEE APPLICATION AND EXPENSE REIMBURSEMENT PROCEDURES; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF [Hearing To Be Set] ( )

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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: 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 authorizing procedures

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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for professionals who are employed or may be employed in this chapter 11 case pursuant to orders of the United States Bankruptcy Court for the Central District of California (the Court) to (i) receive monthly payments on account of fees earned and costs incurred in connection with the Debtors bankruptcy case, and (ii) file periodic applications for approval of interim fees and reimbursement of expenses incurred pursuant to section 331 of title 11 of the United States Code (the Bankruptcy Code). The Debtor believes that the adoption of the interim fee and expense reimbursement procedures set forth herein is fair and reasonable and in the best interests of the Debtors estate. Pursuant to the Courts authority under section 105(1) of the Bankruptcy Code, compliance with the interim fee procedures set forth in detail in the Memorandum of Points and Authorities attached hereto and as approved by the Court will be deemed to satisfy Rule 2016 of the Federal Rules of Bankruptcy Procedure (Bankruptcy Rules) and section 330 of the Bankruptcy Code. This Motion is based on the supporting Memorandum of Points and Authorities, the statements, arguments and representations of counsel who appear at a hearing on the Motion, if one is requested, sections 102, 105, 330 and 331 of the Bankruptcy Code and Bankruptcy Rules 2002, 2016 and 9006, the record in this case, any other evidence properly before the Court and all matters of which this Court may properly take judicial notice. 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 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,
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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, for all the foregoing reasons, and such additional reasons as may be advanced at or prior to the hearing on this Motion, the Debtor respectfully requests that the Court enter an order establishing an interim fee application and expense reimbursement procedures as described 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 DEBTORS MOTION FOR ORDER ESTABLISHING INTERIM FEE APPLICATION AND EXPENSE REIMBURSEMENT PROCEDURES; DECLARATION OF DEBRA I. GRASSGREEN
[No Hearing Required Pursuant to LBR 9013-1(O)]

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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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I. INTRODUCTION ...................................................................................................................... 1 II. STATEMENT OF FACTS........................................................................................................ 1 A. B. Jurisdiction and Venue ........................................................................................... 1 General Background .............................................................................................. 1

III. RELIEF REQUESTED............................................................................................................ 4 IV. PROPOSED INTERIM FEE PROCEDURES ........................................................................ 5 V. THE INTERIM FEE PROCEDURES FOR RETAINED PROFESSIONALS IS APPROPRIATE................................................................................................................. 9 VI. NOTICE ................................................................................................................................. 11

10 VII. CONCLUSION .................................................................................................................... 12

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Table of Authorities Cases Burgess v. Klenske (In re Manoa Finance Co., Inc.) 853 F.2d 687, 690 (9th Cir. 1988) .................................................................................................... 9 First National Bank of Chicago v. Committee of Creditors Holding Unsecured Claims (In re Powerine Oil Co.) 71 B.R. 767, 770 (B.A.P. 9th Cir. 1986) .......................................................................................... 9 In re Commercial Consortium of California 135 B.R. 120, 123 (Bankr. C.D. Cal. 1991)................................................................................ 9, 10 In re Nucorp Energy, Inc. 764 F.2d 655, 658-59 (9th Cir. 1985) ............................................................................................... 9 In re Ocean Park Hotels-TOY, LLC Case. No. 1:10-15358-GM.............................................................................................................. 11 In re Pacific Forest Indus., Inc. 95 B.R. 740, 745 (Bankr. C.D. Cal. 1989)...................................................................................... 11 In re S&B Surgery Center Case No. 2:09-19825 SB................................................................................................................. 11 Thorpe Insulation Company, et al. Case No 2:07-19271 (BB) ............................................................................................................. 11 United States Trustee v. Knudsen Corp. (In re Knudsen Corp.) 84 B.R. 668 (B.A.P. 9th Cir. 1988)........................................................................................... 10, 11 Statutes 11 U.S.C. 331 ..................................................................................................................................... 9 Treatises H.R. Rep. No. 595, 95th Cong., 1st Sess. 330 (1977) .......................................................................... 9 S. Rep. No. 989, 95th Cong., 2d Sess. 41-42 (1978) ............................................................................ 9

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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 Debtors Motion for Order Establishing Interim Fee Application and Expense Reimbursement Procedures (the Motion), and respectfully represents as follows: I. INTRODUCTION The Debtor requests that the Court enter an order approving procedures for Professionals (as defined herein) who are employed or may be employed in this chapter 11 case pursuant to orders of this Court to (i) receive monthly payments on account of fees earned and costs incurred in connection with the Debtors bankruptcy case, and (ii) file periodic applications for approval of interim fees and reimbursement of expenses incurred pursuant to section 331 of the Bankruptcy Code. The Debtor believes that adoption of the interim fee and expense reimbursement procedures set forth herein is fair and reasonable and in the best interests of the Debtors estate. II. STATEMENT OF FACTS 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,

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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 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.
1

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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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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 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.

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The Debtors bankruptcy case will likely involve attorneys, accountants, and advisors (collectively, the Retained Professionals) representing the Debtor and any official committee appointed in this case. Implementation of procedures for paying and monitoring interim compensation on a monthly basis will allow parties in interest and in particular the Debtor to obtain qualified assistance and guidance, as well as to monitor and control professional fees and costs for the benefit of the estate. In addition, if the Retained Professionals in this case are required to wait several months for payment and reimbursement, the Retained Professionals will essentially be compelled to finance the case, which many courts have found discourages competent professionals from participating in bankruptcy cases. By this Motion, the Debtor seeks authorization, pursuant to sections 330 and 331, Bankruptcy Rule 2016, and Local Rule 2016-1, to establish an orderly, regular process for allowance and payment of compensation and reimbursement for a Retained Professional whose services are authorized by this Court pursuant to sections 327 or 1103 of the Bankruptcy Code and who will be required to file applications for allowance of compensation and reimbursement of expenses pursuant to sections 330 and 331 of the Bankruptcy Code and Bankruptcy Rule 2016(a). A proposed form of order is annexed hereto as Exhibit A. The procedures set forth in this Motion are designed to balance the interests of the Retained Professionals with the Courts and creditors interests in assuring that fees are only paid after appropriate notice and an opportunity for a hearing. As set forth herein, the proposed interim fee procedures are consistent with procedures implemented in other bankruptcy cases in this district. Accordingly, the Debtor respectfully requests that the Court grant the Motion in its entirety.

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In connection with the administration of this case, the Debtor and any official committee will employ Retained Professionals that will be subject to the Bankruptcy Code provisions relating to their employment and compensation. Section 331 of the Bankruptcy Code authorizes these Retained Professionals to file applications for interim compensation once each 120 days unless the Court permits them more frequently, if the case warrants. The Debtor believes that it is both necessary and appropriate to establish procedures for paying and monitoring the interim compensation due from the estate on a monthly basis. By reviewing the amounts requested on a monthly basis rather than every 120 days, the Debtor, any official committee, the prepetition and postpetition secured creditors, the Office of the United States Trustee and other parties in interest will be in a better position to monitor and control the costs and fees of Retained Professionals on a current basis. Additionally, the various Retained Professionals already have devoted and will be required to devote substantial time, effort and expense to the Debtors case. The absence of procedures for awarding interim compensation on a current basis would cause undue financial burdens on the Retained Professionals, unfairly compel the Retained Professionals to finance the case, and discourage other Retained Professionals whose services the Debtor or any official committee desires to use from accepting or continuing employment in this case. Therefore, the Debtor requests that the Court adopt the following procedures for awarding interim compensation and reimbursement of expenses to all Retained Professionals whose fees are paid on a time and expense (as opposed to a contingency) basis: a. On or before the 20th day of each month following the month for which compensation is sought, each Retained Professional seeking compensation under an order approving this Motion will serve a monthly statement (the Monthly Statement), by hand or overnight delivery, on (i) the Debtor, 3251 East Imperial Highway, Brea, CA 92821, Attn: M. Freddie Reiss; (ii) attorneys for the Debtor, Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd., 13th Floor, Los Angeles, CA 90067, Attn: Debra Grassgreen and John W. Lucas; (iii) attorneys for any statutory committee of unsecured creditors appointed in these cases; and (iv) the Office of the United States

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Trustee (the U.S. Trustee), 411 West Fourth Street, Suite 9041, Santa Ana, CA 92701 (collectively, the Notice Parties). b. Because (i) this Motion is not intended to alter the fee application requirements outlined in sections 330 and 331 of the Bankruptcy Code and (ii) Retained Professionals are still required to serve and file interim and final applications for approval of fees and expenses in accordance with the relevant provisions of the Bankruptcy Code, the Bankruptcy Rules and the Local Rules of the Bankruptcy Court for the Central District of California, the Monthly Statement will not be filed with the Court and a courtesy copy need not be delivered to Chambers. Each Monthly Statement shall contain a list of the individuals and their respective titles (e.g., attorney, accountant or paralegal) who provided services during the statement period, their respective billing rates, the aggregate hours spent by each individual and a reasonably detailed breakdown of the disbursements incurred. Moreover, each Monthly Statement should contain contemporaneously maintained time entries for each individual in increments of tenths of an hour, except where otherwise ordered by the Court. Each person receiving a Monthly Statement shall have at least 15 days after its receipt to review it. If he or she has an objection to the compensation or reimbursement sought in a particular Monthly Statement, he or she shall, by no later than the 35th day following the month for which compensation is sought, serve upon the Retained Professional whose Monthly Statement is objected to, and upon the other persons designated in paragraph (a) above to receive Monthly Statements, a written Notice of Objection to Fee Statement (hereinafter referred to as an Objection) setting forth the nature of the objection and the amount of fees or expenses at issue. After the 35th day following the month for which compensation is sought, the Debtor shall promptly pay 80% of the fees and 100% of the expenses identified in each Monthly Statement to which no Objection has timely been served in accordance with paragraph (d) above. If the Debtor receives an Objection from one or more of the Notice Parties listed herein to a particular Monthly Statement, it shall withhold payment of that portion of the Monthly Statement to which the Objection is directed and promptly pay the remainder of the fees and disbursements in the percentages set forth in paragraph (e) above. If the parties to an Objection are able to resolve their dispute following the timely service of an Objection and if the party whose Monthly Statement was objected to serves on all of the parties listed in paragraph (a) a statement indicating that the Objection is withdrawn and describing in detail the terms of the resolution, then the Debtor shall promptly pay, in accordance with paragraph (e), that portion of the Monthly Statement no longer subject to an Objection.

c.

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h.

All Objections not resolved by the parties shall be preserved and presented to the Court at the next interim or final fee application hearing to be heard by the Court in accordance with paragraphs (j) and (k) below. The service of an Objection in accordance with paragraph (d) above shall not prejudice the objecting partys right to object to any fee application made to the Court in accordance with the Bankruptcy Code on any basis, whether or not raised in the Objection. Furthermore, the decision by any party not to object to a Monthly Statement shall not constitute a waiver of any kind nor prejudice that partys right to object to any fee application subsequently made by any party to the Court in accordance with the Bankruptcy Code. Approximately every 120 days (but not less frequently than every 150 days), each Retained Professional shall serve and file with the Court an application for interim or final (as the case may be) Court approval and allowance, pursuant to sections 330 and 331 of the Bankruptcy Code, of the compensation and reimbursement of expenses requested. The Debtors attorneys shall obtain dates from the Court for the hearing of fee applications for all Retained Professionals. Approximately forty-five (45) days before the hearing, the Debtors attorneys shall file a notice with the Court, served upon the U.S. Trustee and all Retained Professionals, that sets forth the time, date and location of the fee hearing, the date by which the fee applications must be filed, the period covered by such application and the objection deadline. Any Retained Professional unable to file its own fee application with the Court shall deliver to the Debtors attorneys a fully executed copy with original signatures, along with service copies, three days before the filing deadline. The Debtors attorneys shall file and serve such application. Any Retained Professional that fails to timely file an application seeking approval of compensation and expenses previously paid under an order approving this Motion shall (i) be ineligible to receive further monthly payments of fees or reimbursement of expenses as provided herein until the filing of an application or further order of the Court and (ii) may be required to disgorge any fees paid since the later of such Retained Professionals retention or last fee application. The pendency of an application or the entry of a Court order that the prior payment of compensation or the reimbursement of expenses was improper as to a particular Monthly Statement shall not disqualify a Retained Professional from the future payment of compensation or reimbursement of expenses as set forth above, unless otherwise ordered by the Court. Neither the payment of, nor the failure to pay, in whole or in part, monthly compensation and reimbursement as provided herein shall have any effect on this Courts interim or final allowance of compensation and reimbursement of expenses of any Retained Professional.

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o.

The attorney for any official committee of unsecured creditors may, in accordance with the foregoing procedures for monthly compensation and reimbursement of Retained Professionals, collect and submit for payment a statements of expenses, with supporting vouchers, from members of the committee he or she represents.

The Debtor proposes that each Retained Professional whose retention has been approved by the Court nunc pro tunc to the Petition Date may seek, in its first Monthly Statement, compensation for work performed and reimbursement for expenses incurred during the period beginning on the Petition Date and ending on November 30, 2012. The first interim fee application for such Retained Professionals shall seek compensation and reimbursement of expenses for the period from the Petition Date through January 31, 2013, and shall be filed on or before March 29, 2013. All Retained Professionals not retained as of the Petition Date will serve their first Monthly Statement for the period from the effective date of their retention through the end of the first full month following the effective date of their retention, and otherwise in accordance with the procedures set forth in this Motion. The Debtor proposes to include all payments to Retained Professionals on its monthly operating reports, detailed so as to state the amount paid to each Retained Professional. Any party may object to requests for payment made pursuant to an order approving this Motion on the grounds that the Debtor has not timely filed monthly operating reports, has not remained current with its administrative expenses and 28 U.S.C. 1930 fees, or there exists a manifest exigency. No professional may serve a Monthly Statement until the Court enters an order approving the retention of such professional pursuant to sections 327 or 1103 of the Bankruptcy Code and entry of an order approving this Motion. The proposed procedures will enable the Debtor to closely monitor the costs of administration, forecast level cash flows and implement efficient cash management procedures. Moreover, these procedures will also allow the Court and the key parties in interest, including the U.S. Trustee, to ensure the reasonableness and necessity of the compensation and reimbursement sought pursuant to such procedures. Therefore, the Debtor requests that the Court approve the relief requested herein.

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Based on the foregoing, the Debtor submits that the relief requested is necessary and appropriate, is in the best interests of its estate and creditors, and should be granted in all respects. V. THE INTERIM FEE PROCEDURES FOR RETAINED PROFESSIONALS IS APPROPRIATE Section 331 of the Bankruptcy Code provides for the payment of interim compensation for professionals retained by debtors in possession and creditors committees: A trustee, an examiner, a debtors attorney, or any professional person employed under section 327 or 1103 of this title may apply to the court not more than once every 120 days after an order for relief in a case under this title, or more often if the court permits, for such compensation for services rendered before the date of such an application or reimbursement for expenses incurred before such date as is provided under section 330 of this title. After notice and a hearing, the court may allow and disburse to such applicant such compensation or reimbursement. 11 U.S.C. 331 (emphasis added). In enacting the professional compensation provisions of the Bankruptcy Code, Congress adopted the principle that [p]rofessionals in bankruptcy cases are entitled to be paid on a comparable basis to other privately retained counsel, both in terms of timeliness and amount of payment. See In re Commercial Consortium of California, 135 B.R. 120, 123 (Bankr. C.D. Cal. 1991) (citing Burgess v. Klenske (In re Manoa Finance Co., Inc.), 853 F.2d 687, 690 (9th Cir. 1988)); In re Nucorp Energy, Inc., 764 F.2d 655, 658-59 (9th Cir. 1985); First National Bank of Chicago v. Committee of Creditors Holding Unsecured Claims (In re Powerine Oil Co.), 71 B.R. 767, 770 (B.A.P. 9th Cir. 1986). Congress intent in enacting section 331 of the Bankruptcy Code is expressed unequivocally in the House and Senate Reports accompanying enactment of the Bankruptcy Code: The court may permit more frequent applications if the circumstances warrant, such as in very large cases where the legal work is extensive and merits more frequent payments. The court is authorized to allow and order disbursement to the applicant of compensation and reimbursement that is otherwise allowable under section 330. H.R. Rep. No. 595, 95th Cong., 1st Sess. 330 (1977); S. Rep. No. 989, 95th Cong., 2d Sess. 41-42 (1978).
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The Bankruptcy Appellate Panel for the Ninth Circuit made clear that interim payments for professionals on a monthly basis are entirely appropriate. See United States Trustee v. Knudsen Corp. (In re Knudsen Corp.), 84 B.R. 668 (B.A.P. 9th Cir. 1988) (footnote omitted). In Knudsen, the Panel observed that one cannot ignore the problem . . . is that when counsel must wait an extended period for payment, counsel is essentially compelled to finance the reorganization. This result is improper and may discourage qualified practitioners from participating in bankruptcy cases; a result that is clearly contrary to Congressional intent. Id. at 672. Knudsen holds that, monthly payments to professionals are appropriate without prior approval of the Court so long as made pursuant to a procedure that provides the opportunity for subsequent review by the Court. Knudsen, 84 B.R. at 671-72. The procedures proposed herein provide ample opportunity for such review. Other bankruptcy courts in the Central District of California have also addressed the issue of monthly compensation of professionals. In analyzing section 331 of the Bankruptcy Code, then Bankruptcy Judge Fenning held that [t]he essential purpose of this section is to relieve counsel and other professionals of the burden of financing lengthy bankruptcy proceedings. Commercial Consortium, 135 B.R. at 123. The Court noted, however, that in certain cases even payments once every 120 days were no longer sufficient to keep bankruptcy counsel on par with other lawyers: In 1978, when the Code was enacted, attorneys customarily billed their clients on a quarterly basis. Times have changed. Lawyers now run their practices in a more business-like fashion. Computerization has simplified and speeded the billing process. As widely documented in the legal press, the billing cycle has shifted to monthly statements. The 120-day provision of Section 331, intended to be a help to lawyers in 1978, has become a straight-jacket for the lawyers of the 90s. Thus, even payments every 120 days no longer compensate bankruptcy attorneys on a fully equivalent basis with their nonbankruptcy colleagues. Id. at 123-24. Because of the significant problems caused by permitting payments to professionals only once every 120 days, Judge Fenning recognized that more frequent payments are commonly authorized so as to help avoid undue delays in payment. Id. at 124, 127 (citing Knudsen, 84 B.R. at 672).

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The proposed fee procedures are consistent with both section 331 of the Bankruptcy Code, which provides that professionals may be paid after notice and a hearing, and the courts statement in In re Pacific Forest Indus., Inc., 95 B.R. 740, 745 (Bankr. C.D. Cal. 1989), that it is only after notice and hearing that the Court may allow and disburse compensation to the applicant. Indeed, such procedures were found to be appropriate in Knudsen and California Consortium and have been approved in dozens of cases in the Central District of California since, including recently in In re Ocean Park Hotels-TOY, LLC, Case. No. 1:10-15358-GM (Judge Mund); In re S&B Surgery Center, Case No. 2:09-19825 SB (Judge Bufford); and Thorpe Insulation Company, et a.l Case No 2:07-19271 (BB) (Judge Bluebond). The interim fee procedures outlined herein alleviate the financial burden on the professionals employed in the Debtors case, complies with the requirements of section 331 of the Bankruptcy Code, and accords with the procedure that the United States Trustee recommended in the Knudsen case -- a procedure that the BAP found would undoubtedly be appropriate . Knudsen, 84 B.R. at 672 n.7. For that reason, the Court should permit Professionals in this case to both serve Monthly Fee Applications and file Interim Applications as provided herein. VI. NOTICE 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
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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.

[Remainder of page intentionally blank.] VII. CONCLUSION For these reasons, and based on the authorities cited above, the Debtor respectfully requests that this Court grant the Motion in its entirety and authorize the interim fee procedures set forth therein. 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 ESTABLISHING INTERIM FEE APPLICATION AND EXPENSE REIMBURSEMENT PROCEDURES ( )

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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 pursuant to sections 330 and 331 of title 11 of the United States Code (the Bankruptcy Code), Bankruptcy Rule 2016, and Local Rule 2016-1, to establish an orderly, regular process for allowance and payment of compensation and reimbursement for a Retained Professional whose services are authorized by this Court, 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
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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being proper pursuant to 28 U.S.C. 1408 and 1409; and it appearing that the relief requested in 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 needing 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, Proposed Chief Restructuring Officer, 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. Except as may otherwise be provided in orders of the Court authorizing the retention

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of specific professionals, all Retained Professionals in these cases may seek monthly compensation in accordance with the following procedures: a. On or before the 20th day of each month following the month for which compensation is sought, each Retained Professional seeking compensation under an order approving this Motion will serve a monthly statement (the Monthly Statement), by hand or overnight delivery, on (i) the Debtor, 3251 East Imperial Highway, Brea, CA 92821, Attn: M. Freddie Reiss; (ii) attorneys for the Debtor, Pachulski Stang Ziehl & Jones LLP, 10100 Santa Monica Blvd., 13th Floor, Los Angeles, CA 90067, Attn: Debra Grassgreen and John W. Lucas; (iii) attorneys for any statutory committee of unsecured creditors appointed in these cases; and (iv) the Office of the United States Trustee (the U.S. Trustee), 411 West Fourth Street, Suite 9041, Santa Ana, CA 92701 (collectively, the Notice Parties). b. Because (i) this Motion is not intended to alter the fee application requirements outlined in sections 330 and 331 of the Bankruptcy Code and (ii) Retained Professionals are still required to serve and file interim and final applications for approval of fees and expenses in accordance with the relevant provisions of the Bankruptcy Code, the Bankruptcy Rules and the Local Rules of the Bankruptcy Court for the Central District of California, the Monthly Statement will not be filed with the Court and a courtesy copy need not be delivered to Chambers.

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c.

Each Monthly Statement shall contain a list of the individuals and their respective titles (e.g., attorney, accountant or paralegal) who provided services during the statement period, their respective billing rates, the aggregate hours spent by each individual and a reasonably detailed breakdown of the disbursements incurred. Moreover, each Monthly Statement should contain contemporaneously maintained time entries for each individual in increments of tenths of an hour, except where otherwise ordered by the Court. Each person receiving a Monthly Statement shall have at least 15 days after its receipt to review it. If he or she has an objection to the compensation or reimbursement sought in a particular Monthly Statement, he or she shall, by no later than the 35th day following the month for which compensation is sought, serve upon the Retained Professional whose Monthly Statement is objected to, and upon the other persons designated in paragraph (a) above to receive Monthly Statements, a written Notice of Objection to Fee Statement (hereinafter referred to as an Objection) setting forth the nature of the objection and the amount of fees or expenses at issue. After the 35th day following the month for which compensation is sought, the Debtor shall promptly pay 80% of the fees and 100% of the expenses identified in each Monthly Statement to which no Objection has timely been served in accordance with paragraph (d) above. If the Debtor receives an Objection from one or more of the Notice Parties listed herein to a particular Monthly Statement, it shall withhold payment of that portion of the Monthly Statement to which the Objection is directed and promptly pay the remainder of the fees and disbursements in the percentages set forth in paragraph (e) above. If the parties to an Objection are able to resolve their dispute following the timely service of an Objection and if the party whose Monthly Statement was objected to serves on all of the parties listed in paragraph (a) a statement indicating that the Objection is withdrawn and describing in detail the terms of the resolution, then the Debtor shall promptly pay, in accordance with paragraph (e), that portion of the Monthly Statement no longer subject to an Objection. All Objections not resolved by the parties shall be preserved and presented to the Court at the next interim or final fee application hearing to be heard by the Court in accordance with paragraphs (j) and (k) below. The service of an Objection in accordance with paragraph (d) above shall not prejudice the objecting partys right to object to any fee application made to the Court in accordance with the Bankruptcy Code on any basis, whether or not raised in the Objection. Furthermore, the decision by any party not to object to a Monthly Statement shall not constitute a waiver of any kind nor prejudice that partys right to object to any fee application subsequently made by any party to the Court in accordance with the Bankruptcy Code.

d.

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e.

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f.

g.

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j.

Approximately every 120 days (but not less frequently than every 150 days), each Retained Professional shall serve and file with the Court an application for interim or final (as the case may be) Court approval and allowance, pursuant to sections 330 and 331 of the Bankruptcy Code, of the compensation and reimbursement of expenses requested. The Debtors attorneys shall obtain dates from the Court for the hearing of fee applications for all Retained Professionals. Approximately forty-five (45) days before the hearing, the Debtors attorneys shall file a notice with the Court, served upon the U.S. Trustee and all Retained Professionals, that sets forth the time, date and location of the fee hearing, the date by which the fee applications must be filed, the period covered by such application and the objection deadline. Any Retained Professional unable to file its own fee application with the Court shall deliver to the Debtors attorneys a fully executed copy with original signatures, along with service copies, three days before the filing deadline. The Debtors attorneys shall file and serve such application. Any Retained Professional that fails to timely file an application seeking approval of compensation and expenses previously paid under an order approving this Motion shall (i) be ineligible to receive further monthly payments of fees or reimbursement of expenses as provided herein until the filing of an application or further order of the Court and (ii) may be required to disgorge any fees paid since the later of such Retained Professionals retention or last fee application. The pendency of an application or the entry of a Court order that the prior payment of compensation or the reimbursement of expenses was improper as to a particular Monthly Statement shall not disqualify a Retained Professional from the future payment of compensation or reimbursement of expenses as set forth above, unless otherwise ordered by the Court. Neither the payment of, nor the failure to pay, in whole or in part, monthly compensation and reimbursement as provided herein shall have any effect on this Courts interim or final allowance of compensation and reimbursement of expenses of any Retained Professional. The attorney for any official committee of unsecured creditors may, in accordance with the foregoing procedures for monthly compensation and reimbursement of Retained Professionals, collect and submit for payment a statements of expenses, with supporting vouchers, from members of the committee he or she represents.

k.

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l.

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Each Retained Professional whose retention has been approved by the Court nunc pro

tunc to the Petition Date may seek, in its first Monthly Statement, compensation for work performed and reimbursement for expenses incurred during the period beginning on the Petition Date and ending on November 30, 2012. The first interim fee application for such Retained Professionals
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shall seek compensation and reimbursement of expenses for the period from the Petition Date through January 31, 2013, and shall be filed on or before March 29, 2013. 4. All Retained Professionals not retained as of the Petition Date will serve their first

Monthly Statement for the period from the effective date of their retention through the end of the first full month following the effective date of their retention, and otherwise in accordance with the procedures set forth in this Order. 5. Any party may object to requests for payment made pursuant to this Order on the

grounds that the Debtor has not timely filed monthly operating reports, has not remained current with its administrative expenses and 28 U.S.C. 1930 fees, or there exists a manifest exigency. 6. No professional may serve a Monthly Statement or file an interim or final fee

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application until the Court enters an order approving the retention of such professional pursuant to sections 327 or 1103 of the Bankruptcy Code. 7. All time periods set forth in this Order shall be calculated in accordance with

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Bankruptcy Rule 9006. 8. The Court shall retain jurisdiction to hear and determine all matters arising from or

related to the implementation and/or interpretation of this Order. ###

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