Court filing
First Monthly Fee Application (AlixPartners) — In re KServicing
Filed December 2, 2022 in Kservicing Bankruptcy; one of 140 filings from this case.
Record facts
| Court | U.S. Bankruptcy Court for the District of Delaware |
|---|---|
| Filed | 2022-12-02 |
U.S. Bankruptcy Court for the District of Delaware · No. 22-10951 · Doc. 323 · 2022-12-02 · Docket on CourtListener
Full text
1
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
KABBAGE, INC. d/b/a KSERVICING, et. l.,1
Debtors.
Chapter 11
Case No. 22-10951 (CTG)
(Jointly Administered)
Hearing Date: Only if objections are filed
Objections Due: December 22, 2022 at 4:00 p.m. (ET)
FIRST MONTHLY APPLICATION OF ALIXPARTNERS, LLP,
FINANCIAL ADVISOR TO THE CHAPTER 11 DEBTORS, FOR
ALLOWANCE OF COMPENSATION FOR PROFESSIONAL SERVICES
RENDERED AND REIMBURSEMENT OF EXPENSES INCURRED
FOR THE PERIOD FROM OCTOBER 3, 2022 THROUGH OCTOBER 31, 2022
Name of Applicant:
ALIXPARTNERS, LLP
Authorized to provide professional services to
The Chapter 11 Debtors
Date of Retention
October 21, 2022 effective as of
October 3, 2022 [Docket No. 135]
Period for which compensation
and reimbursement is sought
October 3, 2022 through October 31, 2022
Amount of compensation sought as actual,
reasonable and necessary
$731,257.25
Amount of payment sought
$585,005.80 (80% of $731,257.25)
Amount of expense reimbursement sought as
actual, reasonable and necessary
$5,925.18
This is a(n): Monthly Interim Final application
The total time expended for fee application preparation is approximately 0.1 hours and the
corresponding compensation requested is approximately $47.50.
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number,
as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A); Kabbage Asset
Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding 2019-A LLC (8973);
and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used under license; Kabbage, Inc. d/b/a
KServicing is not affiliated with American Express. The Debtors’ mailing and service address is 925B Peachtree Street
NE, Suite 383, Atlanta, GA 30309.
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 1 of 13
2
ALIXPARTNERS, LLP
SUMMARY OF MONTHLY FEE APPLICATIONS
Requested
Paid
Fees
Expenses
Fees
Expenses
11/30/2022
Docket #N/A
09/27/2022 -
10/31/2022
731,257.25
$
5,925.18
$
$ 737,182.43
731,257.25
$
5,925.18
$
-
$
-
$
$ 737,182.43
Total
Date Filed;
Docket No.
Period
Certificate of
No Objection
Amount
Outstanding
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 2 of 13
3
ALIXPARTNERS, LLP
SUMMARY OF HOURS AND FEES BY PROFESSIONAL
FROM OCTOBER 3, 2022 THROUGH OCTOBER 31, 2022
Professional
Title
Rate
Hours
Fees
Eric Koza
Managing Director
$1,335
2.3
3,070.50
Deborah Rieger-Paganis
Managing Director
$1,160
101.5
117,740.00
James Nelson
Director
$945
151.2
142,884.00
Thora B Thoroddsen
Director
$880
179.1
157,608.00
Elizabeth S Kardos
Director
$750
2.7
2,025.00
John M Katsigeorgis
Senior Vice President
$795
158.0
125,610.00
Laura Capen Verry
Senior Vice President
$530
2.8
1,484.00
Kaitlyn A Sundt
Senior Vice President
$550
0.3
165.00
Heather E Saydah
Senior Vice President
$510
2.4
1,224.00
Anthony Perrella
Vice President
$555
148.6
82,473.00
Nicholas LoBiondo
Vice President
$555
182.6
101,343.00
Brooke Filler
Vice President
$485
1.7
824.50
Lisa Marie Bonito
Vice President
$475
0.3
142.50
933.5
$ 736,593.50
(5,336.25)
$ 731,257.25
(146,251.45)
$ 585,005.80
$ 783.35
Total Hours and Fees for Professionals
Less: 50% Travel Fees
Total Fees for Professionals
Less: 20% Holdback
Total Fees for Professionals
Average Billing Rate
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 3 of 13
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ALIXPARTNERS, LLP
SUMMARY OF HOURS AND FEES BY MATTER CATEGORY
FROM OCTOBER 3, 2022 THROUGH OCTOBER 31, 2022
Code
Matter Category
Hours
Fees
1.1
Chapter 11 Process / Case Management
67.9 $ 59,502.50
1.3
Cash / Liquidity Matters
388.5 287,144.50
1.4
Communication & Meetings with Interested Parties
27.5 25,795.50
1.5
U.S. Trustee / Court Reporting Requirements
304.0 239,024.00
1.9
Plan & Disclosure Statement
64.7 52,161.00
1.10
Transaction Support
2.5 2,900.00
1.13
Vendor Management
19.5 16,497.00
1.16
Adversary Proceedings & Contested Matters
16.6 14,840.00
1.17
Preparation & Attend Court Hearing
20.0 21,189.00
1.19
Retention Applications & Relationship Disclosures
10.7 6,820.00
1.20
Fee Statements & Fee Applications
0.1 47.50
1.31
Travel Time
11.5 5,336.25
Total Hours and Fees By Matter Category
933.5 $ 731,257.25
Average Billing Rate $ 783.35
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 4 of 13
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ALIXPARTNERS, LLP
SUMMARY OF EXPENSES
FROM OCTOBER 3, 2022 THROUGH OCTOBER 31, 2022
Expense Category
Amount
Airfare
$ 844.37
Ground Transportation
962.57
Lodging
3,650.70
Meals
410.54
Parking & Tolls
57.00
Total Expenses
$ 5,925.18
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 5 of 13
1
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re:
KABBAGE, INC. d/b/a KSERVICING, et al.,1
Debtors.
Chapter 11
Case No. 22-10951 (CTG)
(Jointly Administered)
Hearing Date: Only if objections are filed
Objections Due: December 22, 2022 at 4:00 p.m. (ET)
FIRST MONTHLY APPLICATION OF ALIXPARTNERS, LLP,
FINANCIAL ADVISOR TO THE CHAPTER 11 DEBTORS, FOR
ALLOWANCE OF COMPENSATION FOR PROFESSIONAL SERVICES
RENDERED AND FOR REIMBURSEMENT OF EXPENSES INCURRED
FOR THE PERIOD FROM OCTOBER 3, 2022 THROUGH OCTOBER 31, 2022
AlixPartners, LLP (“AlixPartners”), as financial advisor to the above-captioned debtors (the
“Debtors”), hereby submits its first monthly application (the “Application”) for allowance of
compensation for professional services rendered and reimbursement of out-of-pocket expenses
incurred for the period from October 3, 2022 through October 31, 2022 (the “Compensation Period”).
AlixPartners respectfully states as follows:
Jurisdiction and Venue
1.
The United States Bankruptcy Court for the District of Delaware (the “Court”) has
jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant
1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number,
as applicable are: Kabbage, Inc. d/b/a KServicing (3937); Kabbage Canada Holdings, LLC (N/A); Kabbage Asset
Securitization LLC (N/A); Kabbage Asset Funding 2017-A LLC (4803); Kabbage Asset Funding 2019-A LLC (8973);
and Kabbage Diameter, LLC (N/A). Kabbage is a trademark of American Express used under license; Kabbage, Inc. d/b/a
KServicing is not affiliated with American Express. The Debtors’ mailing and service address is 925B Peachtree Street
NE, Suite 383, Atlanta, GA 30309.
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 6 of 13
2
to 28 U.S.C. § 157(b)(2).
2.
Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
Relief Requested
3.
The bases for the relief requested herein are Sections 330 and 331 of Title 11 of the
United States Bankruptcy Code (the “Bankruptcy Code”), Rule 2016 of the Federal Rules of
Bankruptcy Procedure (the “Bankruptcy Rules”), Rule 2016-2 of the Local Rules of Bankruptcy
Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the “Local
Rules”), the United States Trustee Guidelines for Reviewing Applications for Compensation and
Reimbursement of Expenses Filed Under 11 U.S.C. § 330, adopted June 11, 2013 (the “U.S. Trustee
Guidelines”) and the Order Establishing Procedures for Interim Compensation and Reimbursement
of Expenses of Professionals [Docket No. 136] (the “Interim Compensation Order”).
Background
4.
On October 3, 2022 (the “Petition Date”), the Debtors each filed a voluntary petition
for relief under chapter 11 of the Bankruptcy Code, thereby commencing the above-captioned Chapter
11 Cases (the “Chapter 11 Cases”) in this Court.
5.
No trustee or examiner has been appointed in these Chapter 11 Cases.
AlixPartners’ Retention
6.
On October 3, 2022, the Debtors filed their Application of Debtors for Entry of Order
Authorizing Employment and Retention of AlixPartners, LLP as Financial Advisor to the Debtors
Effective as of the Petition Date [Docket No. 16].
7.
On October 21, 2022, the Court entered the Order Authorizing Debtors to Employ and
Retain AlixPartners, LLP as Financial Advisor Effective as of the Petition Date [Docket No. 135] (the
“Retention Order”).
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 7 of 13
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8.
AlixPartners is currently holding a retainer in the amount of $476,344.64 (the
“Retainer”). Pursuant to the Retention Order, the Retainer shall be treated as an evergreen retainer
and held by AlixPartners as security throughout these Chapter 11 Cases until AlixPartners’ fees and
expenses are fully paid.
9.
The Retention Order approved the terms of AlixPartners’ hourly fee and expense
structure set forth in the engagement letter dated April 25, 2022 (the “Engagement Letter”) and
authorized AlixPartners to be compensated and reimbursed pursuant to section 327 of the Bankruptcy
Code in accordance with the terms of the Engagement Letter, subject to the procedures set forth in the
Bankruptcy Code, Bankruptcy Rules, Local Rules, U.S. Trustee Guidelines and the Interim
Compensation Order, and any other applicable orders of this Court.
10.
Pursuant to the Engagement Letter, Deborah Rieger-Paganis is the managing director
responsible for this engagement, assisted by a staff of consultants at various levels with a wide range
of relevant skills and abilities.
11.
The Interim Compensation Order provides that upon the expiration of the objection
deadline (the “Objection Deadline”), a professional may file a certificate of no objection (a “CNO”)
with the Court with respect to any professional fees and out-of-pocket expenses not subject to
objection. After a professional files a CNO, the Debtors are authorized and directed to pay the
professional 80% of the fees and 100% of the expenses not subject to an objection that are requested
in the applicable Monthly Fee Application.
Fees and Expenses During the Compensation Period
12.
During the Compensation Period, AlixPartners provided an aggregate of 933.5 hours
of professional services in the amount of $731,257.25 and incurred out-of-pocket expenses in the
amount of $5,925.18. After applying a 20% holdback of fees in the amount of $146,251.45,
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 8 of 13
4
AlixPartners seeks payment of 80% of fees for services rendered in the amount of $585,005.80, and
100% of expenses incurred in the amount of $5,925.18, for a total payment of $590,930.98 for the
Compensation Period.
13.
Detailed descriptions of the professional services performed by each professional,
organized by matter category and by date, and the aggregate hours of services provided (in tenths of
an hour) during the Compensation Period are attached hereto as Exhibit A.
14.
A detailed list of the out-of-pocket expenses incurred during the Compensation Period
are attached hereto as Exhibit B.
Services By Category Provided During the Compensation Period
15.
AlixPartners classified the services performed into separate categories. The
descriptions below summarize the services provided by AlixPartners to the Debtors during the
Compensation Period.
Matter Code 1.1: Chapter 11 Process/Case Management
67.9 hours - $59,502.50
This category includes: (i) organizing and managing the Debtors’ resources to effectively
and efficiently plan, coordinate and manage the Chapter 11 process; (ii) reviewing and
maintaining dockets and case calendars; and (iii) holding working sessions to keep the
engagement team informed of the latest case developments, remain aligned on the many
workstreams, verify that resources are properly allocated to meet deadlines, and ensure all
matters and issues are addressed in an efficient and timely manner.
Matter Code 1.3: Cash/Liquidity Matters
388.5 hours - $287,144.50
This category includes: (i) maintaining a rolling weekly cash forecasting model; (ii)
preparing daily cash balance reporting; (iii) analyzing actual weekly cash receipts and
disbursements; (iv) negotiating required reporting format and content for the cash collateral
order; (v) reconciling loan-related receipts to determine Debtors’ portion; (vi) advising
management on complying with post-petition cash management and cash reporting
requirements as defined in the cash management and cash collateral order; (vii) assisting
management with reviewing disbursements; and (viii) assisting management with
information requests related to liquidity, cash reporting, and cash forecasting.
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 9 of 13
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Matter Code 1.4: Communication & Meetings with Interested Parties
27.5 hours - $25,795.50
This category includes meeting with, preparing reports for, and communications with,
various other Debtor professionals, lenders and/or their advisors, the United States Trustee,
and other parties in interest.
Matter Code 1.5: U.S. Trustee/Court Reporting Requirements
304.0 hours - $239,024.00
This category includes: (i) preparing the Statement of Financial Affairs and the Schedules
of Assets and Liabilities; (ii) reviewing and analyzing supporting documentation for the
Statement of Financial Affairs and the Schedules of Assets and Liabilities; (iii) Preparing
the required 1502 reports; (iv) designing and maintaining schedule to track payments
authorized under the various “first day” and “second day” orders; (v) Assisting in
preparation of reporting requirements for IDI; (vi) assisting management in preparation for
341 meeting of creditors; and (vii) assisting management with adherance to the
requirements of the Court, the U.S. Trustee, and/or the Bankruptcy Code.
Matter Code 1.9: Plan & Disclosure Statement
64.7 hours - $52,161.00
This category includes: (i) developing the hypothetical liquidation analysis model for best-
interest test; (iii) preparing liquidation analysis exhibits for the disclosure statement; and
(iv) analyzing the value waterfall to various creditor classes under the proposed plan of
reorganization.
Matter Code 1.10: Transaction Support
2.5 hours - $2,900.00
This category includes assisting the Debtors with various transaction and closing-related
tasks, including researching and responding to inquiries and information requests from
parties in interest, coordinating and managing closing mechanics, and preparing and
managing the emergence day funds flow.
Matter Code 1.13: Vendor Management
19.5 hours - $16,497.00
This category includes assisting the Debtors with vendor management, including
performing claims analyses, communicating with vendors, negotiating payment terms, and
developing and customizing numerous vendor payment proposals.
Matter Code 1.16: Adversary Proceedings & Contested Matters
16.6 hours - $14,840.00
This category includes preparing reports and analyses, and attending meetings related to,
adversary proceedings and other contested matters.
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 10 of 13
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Matter Code 1.17: Preparation & Attend Court Hearing
20.0 hours - $21,189.00
This category includes preparing for and attending Court hearings in person, by video
conference, or telephonically.
Matter Code 1.19: Retention Application & Relationship Disclosures
10.7 hours - $6,820.00
This category includes: (i) drafting AlixPartners’ retention application, proposed orders
and declarations, including analyzing and drafting relationship disclosures required by the
Bankruptcy Code; (ii) communications regarding AlixPartners’ retention; and (iii)
responding to inquiries from the U.S. Trustee.
Matter Code 1.20: Fee Statements & Fee Applications
0.1 hours - $47.50
This category includes managing the fee application process, and preparing and reviewing
monthly fee applications, including all required supporting documentation, in accordance
with requirements of the U.S. Trustee and/or the Court.
Matter Code 1:31: Travel Time
11.5 hours - $5,336.25
This category includes traveling to meetings outside of consultants’ respective “home”
office region. Hours billed under this category were billed at 50% of AlixPartners’
standard rates.
16.
AlixPartners believes that the fees and out-of-pocket expenses requested are
reasonable, actual and for necessary services rendered or expenses incurred on behalf of the Debtors
during the Compensation Period.
17.
AlixPartners has not entered into any agreement, express or implied, with any other
party for the purpose of fixing or sharing fees or other compensation to be paid for professional
services rendered in these Chapter 11 Cases. No promises have been received by AlixPartners or any
member thereof as to compensation in connection with these Chapter 11 Cases other than in
accordance with the provisions of the Bankruptcy Code.
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 11 of 13
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Certification
18.
A Certification of Deborah Rieger-Paganis is attached hereto as Exhibit C and
incorporated herein.
No Prior Request
19.
No prior request for the relief sought in this Application has been made to this or any
other Court. This Application is made without prejudice to further or final applications based upon
all relevant criteria, including the results achieved in the case as a whole.
Notice
20.
Notice of this Application has been or will be provided to those parties entitled to
receive notice hereof in accordance with any applicable order of this Court.
[Remainder of page intentionally left blank.]
Case 22-10951-CTG Doc 323 Filed 12/02/22 Page 12 of 13
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Conclusion
WHEREFORE, AlixPartners, as financial advisor to the Debtors, respectfully requests: (i) an
interim allowance of compensation for professional services in the amount of $731,257.25 and
reimbursement of out-of-pocket expenses in the amount of $5,925.18 for the Compensation Period;
(ii) that, upon the expiration of the Objection Deadline and entry of a CNO, the Debtors are authorized
and directed to pay AlixPartners fees in the amount of $585,005.80 (80% of $731,257.25) and 100%
of out-of-pocket expenses in the amount of $5,925.18, for a total amount of $590,930.98; and (iii)
such other and further relief as this Court deems proper.
Dated: December 2, 2022
ALIXPARTNERS, LLP
909 Third Avenue, 28th Floor
New York, New York 10022
/s/ Deborah Rieger-Paganis
By: Deborah Rieger-Paganis
Managing Director
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