Application of AP Services, LLC for Approval of Completion Fee — Vyaire Medical, Inc., et al. (Case No. 24-11217)

Summary

An application of AP Services, LLC (APS) in the Vyaire Medical Chapter 11 case, Case 24-11217-BLS, in the United States Bankruptcy Court for the District of Delaware, for allowance and payment of a completion fee of $1,000,000 under an Engagement Letter dated as of June 6, 2024. The page header shows a hearing date of January 29, 2025 and an objection deadline of December 13, 2024. The application states that Charles Braley was engaged as the Debtors' Chief Restructuring Officer, asks the Court to award the $1,000,000 fee, and carries the signature block /s/ Charles Braley. It states that APS earned the fee upon closing the sales of the Ventilation and Respiratory Diagnostics businesses, to Zoll for $43.1 million in cash and to Trudell for $53.5 million in cash.

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)

In re:
)
Chapter 11
)

VYAIRE MEDICAL, INC., et al.,
1
)
Case No. 24-11217 (BLS)
)

Debtors.
)
(Jointly Administered)
)

)
Hearing Date: January 29, 2025, at 10:30 a.m. (ET)
)
Objection Deadline: December 13, 2024, at 4:00 p.m. (ET)
)
Re: Docket No. 338
APPLICATION OF AP SERVICES, LLC FOR APPROVAL OF COMPLETION FEE
AP Services, LLC (“APS”) hereby moves the Court by this application (the “Application”),
for allowance and payment of a completion fee in the amount of $1,000,000 (the “Completion
Fee”) in accordance with the Engagement Letter (the “Engagement Letter”) dated as of June 6,
2024, by and between the Debtors and APS. A copy of the Engagement Letter is attached hereto
as Exhibit A.  Charles Braley was engaged as the Debtors’ Chief Restructuring Officer and together
with the APS team were engaged provided experienced guidance, leadership and assistance with
the company’s sale processes in order to maximize value to the estate and avoid a complete
liquidation.  In furtherance of this Application, APS respectfully submits the Declaration of
Charles Braley in Support of the Application of AP Services, LLC for Approval of a Completion
Fee, attached hereto as Exhibit B, and further represents:
1   The last four digits of Debtor Vyaire Medical, Inc.’s federal tax identification number are 6495. A complete list
of each of the Debtors in these chapter 11 cases and each such Debtor’s federal tax identification number may be
obtained on the website of the Debtors’ claims and noticing agent at https://omniagentsolutions.com/Vyaire. The
location of Debtor Vyaire Medical, Inc.’s principal place of business and the Debtors’ service address in these
chapter 11 cases is 26125 North Riverwoods Boulevard, Mettawa, Illinois, USA 60045.
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Jurisdiction and Venue
1.
The United States District Court for the District of Delaware has jurisdiction over
this matter pursuant to 28 U.S.C. § 1334, which was referred to the United States Bankruptcy
Court for the District of Delaware (the “Court”) under 28 U.S.C. § 157 and the Amended Standing
Order of Reference from the United States District Court for the District of Delaware, dated
February 29, 2012.  The Debtors confirm their consent, pursuant to rule 9013-1(f) of the Local
Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District
of Delaware (the “Local Rules”), to the entry of a final order by the Court in connection with this
motion to the extent that it is later determined that the Court, absent consent of the parties, cannot
enter final orders or judgments in connection herewith consistent with Article III of the United
States Constitution.
2.
Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.
3.
The statutory basis for the relief requested herein are sections 105, 330, and 363 of
title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the “Bankruptcy Code”), rule 2016 of
the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Local Rule 2016-2.
Background and Retention of APS
4.
The Debtors and their non-debtor affiliates (collectively, the “Company”) were
(prior to the asset sales discussed herein) a global company which focused on supporting breathing
through everyday stages of life.  The Company manufactured, designed, and sold a broad range of
products and services which are focused on respiratory health.  The Company operated two
business segments: ventilation and respiratory diagnostics.  The ventilation business
(“Ventilation”) focuses on helping patients breathe by offering products and related services that
mechanically pump air in and out of ailing lungs. The respiratory diagnostics business
(“Respiratory Diagnostics”) develops, manufactures and commercializes devices to diagnose
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pulmonary and cardiopulmonary diseases. The Company previously operated a third consumables
business (“Consumables”) which provided leading airway management and operative care
technology.
5.
Prior to the Petition Date, the Company faced various obstacles which stressed its
financial condition and ultimately necessitated a bankruptcy filing.  Although the COVID-19
pandemic significantly increased demand for the Company’s products and services given the need
for life-saving technology, after the pandemic such demand substantially decreased, and additional
post-pandemic macroeconomic challenges such as higher interest rates, inflationary pressures, and
supply chain disruption forced the Company to reposition itself long-term.  The Company
subsequently initiated a financial and operational turnaround, and starting in summer 2023 through
the early months of 2024, the Company negotiated with its stakeholders.
6.
In April 2024, the board of directors formed a special committee comprised of
disinterested directors to pursue a potential recapitalization, reorganization, sale or restructuring
transaction.  Under advisement of the special committee, the Company worked with its advisors
to launch a sale process, filed these Chapter 11 Cases with support from its lenders and sponsor
and negotiated what was originally a $45 million new money debtor-in-possession financing
facility (the “DIP Facility”) in order to provide additional liquidity and to support the Company’s
marketing and sales efforts.  The total amount of new money provided for the DIP Facility was
reduced to $40 million as $5 million of the new money was never drawn as a result of negotiations
with the DIP Facility lenders.
7.
As further discussed below, the aforementioned events and circumstances which
harmed the Company’s financial state necessitated specific needs for the protections and tools only
available under the Bankruptcy Code.  Accordingly, beginning in April 2024 and leading up to the
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Petition Date (as defined below), the Company worked with its advisors to prepare for a chapter
11 filing and to begin marketing a sale process for each of the Ventilation and Respiratory
Diagnostics businesses.  The Debtors entered into that certain Restructuring Support Agreement
(the “RSA”) with certain of its first lien term lenders holding over 90% of the first lien term loan,
second lien lenders holding 100% of the second lien term loan, and Apax, the controlling equity
holder in Vyaire Intermediate HoldCo LP (together, the “RSA Parties”), to support such sale
processes and ultimate resolution of the Debtors’ Chapter 11 Cases.
8.
As contemplated by the RSA, on June 9, 2024 (the “Petition Date”), the Debtors
filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code (the “Chapter 11
Cases”) to pursue value maximizing sales for all or substantially all of the Debtors’ assets. As of
the Petition Date, the Debtors had approximately $533.6 million in total outstanding funded debt
obligations.
9.
On July 9, 2024, the Debtors filed the Debtors’ Application for Entry of an Order
(I) Authorizing the (A) Retention of AP Services, LLC and (B) Designation of Charles Braley as
Chief Restructuring Officer Effective as of the Petition Date and (II) Granting Related Relief
[Docket No. 241] (the “Retention Application”).
10.
This Court entered the Order (I) Authorizing Debtors to (A) Retain AP Services,
LLC, and (B) Designate Charles Braley as Chief Restructuring Officer Effective as of the Petition
Date and (II) Granting Related Relief [Docket No. 338] on July 30, 2024.
Completion Fee Terms
11.
The Engagement Letter and Retention Application provide that in addition to
regular hourly fees for which APS is paid, APS shall be compensated for its efforts by payment of
a completion fee (the “Completion Fee”) in the amount of $1,000,000 upon the earliest to occur
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of any of the following: (i) completion of a restructuring through confirmation of a chapter 11 plan
(which, for the avoidance of doubt, shall not include a plan of liquidation), (ii) the consummation
of any material recapitalization or debt restructuring of the debtors, or (iii) consummation of one
or more transactions, in any form, that effectively transfers a significant and material portion of
the business as a going concern to another entity or entities, or that results in a change in structure
of the board of directors. The Engagement Letter and Retention Application further provided that,
for the avoidance of doubt, the Completion Fee shall be earned upon a sale or sales of all or
substantially all the assets of the Debtors pursuant to section 363 of the Bankruptcy Code (“Sale
Transaction”); provided, however, that (i) if the sale or sales of some, all, or substantially all assets
of the Debtors does not result in an aggregate purchase price of in excess of the amount of “new
money” debtor-in-possession financing actually funded, (ii) the Debtors’ lenders elect to credit bid
for such assets, or (iii) the Debtors confirm a chapter 11 plan of liquidation but do not complete
any Sale Transaction, APS shall earn a Completion Fee of $750,000; provided further that if the
Debtors convert these Chapter 11 Cases to chapter 7 cases prior to APS’s earning of the
Completion Fee, APS shall not be entitled to a Completion Fee.  The Completion Fee shall be due
and payable immediately when the objective or objectives determined as described above have
been achieved.
12.
The Completion Fee is intended to compensate and reward APS not only for taking
a leadership role in these Chapter 11 Cases, but also in challenging circumstances extending prior
to the prepetition period, driving the engagement successfully and preserving and maximizing the
value of the Debtors’ estates.  The Completion Fee was negotiated as a part of the overall fee and
expense structure agreed to in the Engagement Letter and as approved by this Court.
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13.
APS earned the Completion Fee according to condition (iii) described above upon
closing the sales of its Ventilation and Respiratory Diagnostics businesses.  APS was specifically
entitled to $1 million Completion Fee because such sales transferred substantially all of the
business as a going concern.  APS earned a completion fee of $1 million and not $750,000 because
the sales resulted in amounts which exceeded the amount of “new money” debtor-in-possession
financing actually funded.  As further discussed below, the Debtors sold the assets from their
Ventilation business to Zoll (as defined below) for $43.1 million in cash consideration after
required payments under the applicable sale order on account of the pay down of the DIP Facility,
and the Debtors sold the assets from their Respiratory Diagnostics business to Trudell (as defined
below) who paid $53.5 million in cash plus additional non-cash consideration, including certain
cure costs and assumption of certain liability.  APS also met the requirements to receive a
completion fee of $1 million and not $750,000 because the company’s lenders did not credit bid
for any of the assets.  Moreover, as set forth in further detail below, the APS team led the efforts
in this matter in helping the Debtors to reach a favorable outcome in the face of challenging
circumstances that resulted in maximizing value of the Debtors’ estates and accordingly, granting
the Completion Fee to APS is warranted.
Basis for Relief
14.
APS performed substantial and necessary services both prior to and during these
Chapter 11 Cases which were paramount to preventing further economic loss to the Debtors’
bankruptcy estates, and providing meaningful recoveries to the Debtors’ creditors through sale
processes.  As such, APS’s efforts warrant an award of compensation beyond the amount that
results from payment of hourly fees and simply application of the lodestar approach.
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15.
AlixPartners, LLP2 (“AlixPartners”) began advising the Company as the
Company’s financial advisor in late March 2024.  At the time, the Company had already
determined with its lenders that a sale was the likely option due to the Company’s recent financial
performance, additional funding requirements and a widely accepted view that a debt restructuring
would not be successful.  And due to the distinct nature of the businesses (including their
geographical footprints), two separate sale processes were the likely path to a successful sale.  The
Company engaged APS because it needed leadership to help it seamlessly transition into a chapter
11 proceeding and implement the most value-maximizing sale process so that the Company could
not only repay its creditors but also sustain its life-saving technology and preserve jobs.  Mr. Braley
and the AlixPartners team were initially focused on a variety of workstreams including liquidity
management, creating cashflow forecasts, developing first day motions, implementing procedures
for a filing, overseeing weekly disbursement runs, and assisting the Company with the
development of a business plan to support the sale processes.  In addition, they assisted the secured
creditors with diligence to help them explore options in the corresponding sale process.
16.
Mr. Braley and AlixPartners were acutely aware based on their forecasts that in
order to enter into chapter 11 to implement the sale processes, the Company would need additional
financing.  The AlixPartners team assisted with the sizing and procurement of the DIP Facility.
The DIP Facility initially included $45 million of new money provided by existing secured lenders
along with a $135 million roll-up of the DIP Facility lender’s prepetition first lien term loans,
although as discussed above, only $40 million was ultimately drawn down.  The team was involved
in successfully negotiating the DIP Facility.  Mr. Braley and AlixPartners prepared the cash flow
forecast related to the DIP Facility.  In doing so they worked directly with the Company’s chief
2
APS is an affiliate of AlixPartners.
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financial officer and treasury teams—as the forecast was complex given two distinct operating
businesses with certain shared costs as well as the number of international entities involved.  The
team also assisted with the business planning process utilized to size the DIP Facility and drove
the due diligence process utilized by outside parties including the eventual DIP Facility provider.
17.
Mr. Braley and AlixPartners also began working on the RSA which was a critical
document in these Chapter 11 Cases because it outlined the terms for the Debtors’ exit from chapter
11.  The RSA provided for a continuation of the Company’s prepetition process for the sale of the
Respiratory Diagnostics and Ventilation businesses, and that if the sale process was terminated
due to lack of sufficient indications of interest or qualified bids, then the Debtors would implement
a wind-down pursuant to a plan of liquidation.  Mr. Braley and AlixPartners were critical
participants in bringing the RSA to fruition: they (i) coordinated with the Debtors’ other advisors
to determine the proper terms, (ii) negotiated its terms with the DIP Facility lender’s advisors, (iii)
coordinated all due diligence related to the RSA and (iv) drove the cash forecasting and business
planning process related to the RSA.
18.
Once the Debtors filed for chapter 11, Mr. Braley was appointed the Chief
Restructuring Officer.  Mr. Braley and APS assisted the Debtors in the negotiation of the sales of
their Ventilation and Respiratory Diagnostics Businesses, pursuant to which the Debtors were able
to generate substantial liquidity for the estate, and additionally, allowed the Debtors’ businesses to
continue as a going concern.  But for APS’s efforts, the Debtors would have had to liquidate those
businesses, which would have resulted in significant job loss.
19.
APS’s services and involvement in the Debtors’ vigorous pursuit of a value-
maximizing transaction were essential to completing the sales.  APS spent considerable time
working alongside the Debtors’ investment banker with the diligence of interested parties to ensure
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the Debtors found the highest and best offer for each of the businesses.  APS’s assistance included
regular communication with interested parties including attending calls with them, responding to
due diligence requests, developing and then presenting the Debtors’ business plan, and working
with management to draft numerous analyses and provide financial information.  APS also played
a critical role in assisting the Debtors with their negotiations with parties interested in their assets,
including advocating for buyers to assume certain liabilities and purchase certain non-debtor
entities (serving to reduce wind down costs), and development of asset purchase agreements and
sale disclosure schedules.
20.
On August 12-14, 2024, the Debtors held an auction (the “Auction”) for certain of
the Debtors’ Ventilation assets.  The APS team, along with other Debtors’ advisors, ran the
Auction and the APS team was involved in evaluating the bids and engaging in discussions with
the qualified bidders for such assets.  The Auction included ten rounds of bidding over three days.
The Auction concluded on August 14, 2024 after three days of competitive, lively, and arm’s-
length bidding, which resulted in the Debtors’ selection of Zoll Medical Corporation (“Zoll”) as
the successful bidder for the Ventilation assets. Zoll’s successful bid included cash consideration
that was approximately $30 million greater than the starting leading bid and provided
approximately $1.1 million greater value than the next-highest bid.  The APS team played a critical
role in the Auction through engaging with bidders, and the Debtors’ management team and other
advisors to drive consensus and increase the ultimate value paid.  APS also engaged with a number
of parties with respect to the Respiratory Diagnostics assets (the “RDx Assets”).  While several
parties expressed interest in the RDx Assets, the Debtors received a single actionable proposal
from Trudell Medical Limited (“Trudell”).  APS assisted in engaging with Trudell in extensive,
arm’s-length negotiations to improve the terms of Trudell’s bid, including exchanging of several
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rounds of draft asset purchase agreements and mark-ups.  As a result of these discussions, on
August 20, 2024, the Debtors selected Trudell as the successful bidder for the RDx Assets
21.
The Court approved both sale processes on August 30, 2024.
22.
The Sale Transaction with Zoll closed on October 11, 2024.  The Debtors received
approximately $43.1 million in cash consideration after required payments under the applicable
sale order on account of the pay down of the DIP Facility.  In exchange for the assets of the
Respiratory Diagnostics business, Trudell paid $53.5 million in cash, plus additional non-cash
consideration, including the payment of certain cure costs and the assumption of liabilities arising
out of ownership of the RDx Assets.
23.
In further effort to achieve consensus among their stakeholders, APS played a key
role in negotiations with the official committee of unsecured creditors (the “Committee”) to
resolve the Committee’s concerns regarding the Debtors’ chapter 11 plan and the wind-down.
Following these fruitful negotiations, the Debtors and the Committee reached a comprehensive
settlement with the Official Committee of Unsecured Creditors, embodied in the chapter 11 plan
(such committee, the “Committee” and such settlement the “Committee Settlement”).  The
Committee Settlement provides, among other things: (i) a reserve of approximately $3 million for
payment of Allowed Administrative Claims (as defined in the plan); (ii) a “Residual GUC
Recovery Pool”; (iii) the Debtors’ release of preference claims pursuant to section 547 of the
Bankruptcy Code; and (iv) treatment of the Debtors’ vendors and service providers servicing Zoll
and Trudell pursuant to the transition services agreement.  APS engaged in numerous meetings
with the Committee advisors to manage diligence sessions with a focus on the Debtors’ near-term
cash forecast and wind down budget.
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24.
Ultimately, all voting classes voted in favor of the chapter 11 plan, and the chapter
11 plan enjoys support across the Debtors’ capital structure.  This is the best outcome for the
Debtors, their estates, and all constituencies affected by these Chapter 11 Cases: it allows the
Debtors to continue supporting the distribution of life-saving medical devices and equipment
through provision of transition services to Zoll and Trudell and provides a mechanism to wind-
down the Debtors in an orderly, cost-efficient manner.  Additionally, a substantial number of jobs
were saved through the sales transactions, which jobs would not have existed but for the sales and
as a result, the Debtors would have been forced to solely wind down their businesses.  As noted
above, Mr. Braley and the APS Team played an integral role in achieving two successful sales
which transferred a material portion of the business as a going concern.  But for both sales, the
Debtors would have been forced to wind down.  Instead—with the assistance of Mr. Braley and
the team, both the Ventilation and Respiratory Diagnostics businesses will continue operating on
a go-forward basis.
25.
The quantitative results and value-accretive actions described above provide ample
justification for allowance of the Completion Fee under the most rigorous of judicial standards.
As a result of Mr. Braley and APS’s efforts, the Debtors were able to complete two successful sale
processes quickly.  APS was instrumental in assisting the Debtors in achieving their success.  There
is no question that APS played a vital role in supporting and implementing the transaction that
effectuated the market test of value and the eventual asset sales.  As a result, the Completion Fee
should be granted.
Legal Standard
26.
Section 363(b)(1) provides, in relevant part, that the trustee or debtor in possession,
“after notice and a hearing may use, sell, or lease, other than in the ordinary course of business
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property of the estate….”  11 U.S.C. §363(b)(1).  Furthermore, pursuant to section 105(a) of the
Bankruptcy Code, the “court may issue any order, process, or judgement that is necessary or
appropriate to carry out the provisions of this title.”  11 U.S.C. §105(a).  Under applicable case
law, in this and other circuits, if a debtor’s proposed use of its assets pursuant to section 363(b) of
the Bankruptcy Code represents a reasonable business judgment on the part of the debtor, such use
should be approved.  See, e.g., Comm. of Equity Sec. Holders v. Lionel Corp. (In re Lionel Corp.),
722 F.2d 1063, 1070 (2d Cir. 1983) (“The rule we adopt requires that a judge determining a
§363(b) application expressly find from the evidence presented before him at the hearing a good
business reason to grant such an application.”); Comm. of Asbestos-Related Litigants v. Johns
Manville Corp. (In re Johns-Manville Corp.), 60 B.R. 612, 616 (Bankr. S.D.N.Y. 1986) (“Where
the debtor articulates a reasonable basis for its business decisions (as distinct from a decision made
arbitrarily or capriciously), courts will generally not entertain objections to the debtor’s conduct”).
27.
The standard for reasonableness under section 330 of the Bankruptcy Code is
measured by a marketplace comparison.  See In re Enron Corp., No. 01-16034 (AJG), 2006 WL
1030421, at *6 (Bankr. S.D.N.Y. Apr. 12, 2006) (stating that the standard for a success fee awarded
to a chief restructuring officer or top management is “a reasonable amount as established by the
relevant marketplace.”); see also 11 U.S.C. §330(a)(3)(F) (“In determining the amount of
reasonable compensation to be awarded to…[a] professional person, the court shall consider the
nature, the extent, and the value of such services, taking into account all relevant factors,
including…whether he compensation is reasonable based on the customary compensation charged
by comparably skilled practitioners in cases other than cases under this title.”).
28.
Completion fees are normal parts of compensation for turnaround firms and
management restructuring consulting firms and are standard for APS’s engagements of this type,
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both inside and outside of bankruptcy courts.3  Indeed, APS and other similar firms price their
engagements to include completion fees as part of the total compensation packages for such
engagements.  Thus, APS and other turnaround and management restructuring firms rely upon and
consider the negotiated completion fee when accepting engagements.
29.
Completion fees are typical in restructuring cases because clients appreciate an
approach which aligns the interests of the client with the interests of its advisor.  In colloquial
terms, completion fees demonstrate that a turnaround firm, such as APS, has “skin in the game”
along with the company undergoing the turnaround.  This alignment of interests inures to the
overall benefit of a debtor, as well as its estate and creditors.  Without that demonstrated alignment
of interests, such a client might be reluctant to reach out for critical leadership and specialized
guidance from seasoned turnaround and management restructuring firms like APS.  As a result,
the absence of specialized top-management leadership would decrease the likelihood of a
successful outcome of that client’s bankruptcy.  Similarly, completion fees are a vital and
inseparable component of the overall compensation model for turnaround and crisis management
firms like APS, and denial of such fees in cases such as these, where the concrete achievement of
the stated goal outlined at the outset of APS’s engagement has occurred (the chapter 11 plan),
would ill-serve restructurings generally and potentially produce undesirable results.  Some firms
would simply decline challenging engagements and others would adjust their compensation model
by increasing their monthly and/or hourly fees.4   In recognition of these realities, courts routinely
3
While completion fees for lawyers and accountants are rarely sought or granted, completion fees are a standard
component of compensation for turnaround management, restructuring and consulting firms and investment
banking firms.  APS is neither a law firm nor an accounting firm.  APS is, among other things, a firm that
specializes in supplying senior executives on an interim basis to financially troubled companies.  As such,
payment of the Completion Fee to APS is consistent with industry practice in and out of bankruptcy cases.
4
The former is not an acceptable result, as it would deny distressed companies the necessary services of firms like
APS that specialize in supplying senior executives to financially troubled companies and that have earned a
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authorize and approve the payment of completion fees upon a clear and demonstrable showing of
management expertise that is transformative, in terms of business viability, capital structure fit and
value generation.  This reasoning is precisely applicable to the engagement of APS by the Debtors
in these Chapter 11 Cases.
30.
The marketplace ordinarily compensates restructuring advisors with both a salary
component, based on hours worked, and a performance-based fee.  As the Bankruptcy Court in the
Southern District of Ohio held in In re Cardinal Indus., Inc., 151 B.R. 843 (Bankr. S.D. Ohio
1993) (Chapter 11 operating trustee awarded APS a fee of $2.1 million plus an additional fee of
50,000 shares of stock):
Performance-based or success-factor bonuses are a normal part of
compensation arrangements for management restructure consultants
and … such bonuses generally far exceed the time value of the
consultant’s services on a lodestar basis. Indeed, the time value
component is referred to as the base salary, apparently payable to the
consultant even if success is not achieved.
151 B.R. at 847.  See also, In re Busy Beaver Building Center, Inc., 19 F.3d 833 (3rd Cir. 1993)
(explaining that the basis for requested compensation should be based on the market rate that
professional would charge and collect from a client in a non-bankruptcy setting); In re UDC
Homes, Inc., 203 B.R. 218 (Bankr. D. Del. 1996) (same).
31.
Courts review transaction fees or completion fees under the “reasonableness
standard” of section 330 of the Bankruptcy Code.  In re Northwest Airlines Corporation, 400 B.R.
393, 395 (Bankr. S.D.N.Y. 2009); In re XO Communications, Inc., 398 B.R. 106, 110 (Bankr.
S.D.N.Y. 2008).  In considering a completion fee, courts consider (a) whether the financial
national and international reputation for their expertise in financial reorganizations and restructurings of troubled
companies. The latter also is not a desirable result, as it would needlessly result in increased fees during the
pendency of the case, without such fees being tied to performance-based criteria and the outcome of the case itself
(measuring success against alternative outcomes and relative distributable value yields).
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advisor’s services were necessary and beneficial to the debtors’ estates at the time the services
were rendered; and (b) whether the compensation is reasonable based on the customary
compensation charged by comparably skilled practitioners in cases outside of bankruptcy.  XO
Communications, 398 B.R. at 113.  In determining the reasonableness of a completion fee and
whether the services were necessary and beneficial to the debtor’s estate, courts will look “at the
nexus between what was achieved, i.e., the restructuring of the debt, and the impact of the advisor’s
effort in that regard.”  Id. at 116; see also In re Residential Capital, LLC, 504 B.R. 358, 367.
32.
When Congress passed the Bankruptcy Reform Act of 1978, it decided to remove
the “spirit of frugality” as a factor in bankruptcy fees.  The standard is now the cost of comparable
services in a non-bankruptcy setting.  Inasmuch as completion fees or performance fees are a
normal part of the fee structures of APS and other turnaround and management restructuring firms,
both within and outside of bankruptcy, approval of the Completion Fee is appropriate to assure
comparable compensation for comparable services.
33.
Recent bankruptcy cases involving performance-based fees awarded to APS and
AlixPartners serving as interim management include the following:

Cyxtera Techs., Inc., a chapter 11 case in the District of New Jersey before
Judge John K. Sherwood. In 2024, AlixPartners was awarded a completion
fee of $2,000,000 [Case No. 23-14853, Docket 944].

Cineworld Group plc, a chapter 11 case in the Southern District of Texas
before Judge Marvin Isgur. In 2023, AlixPartners was awarded a completion
fee of $2,506,934 [Case No. 23-90267 (previously Case No. 23-90168),
Docket 47].

Bed Bath & Beyond Inc., a chapter 11 case in the District of New Jersey
before Judge Vincent F. Papalia. In 2023, AlixPartners was awarded a
completion fee of $750,000 [Case No. 23-13359, Docket 2411].

Avaya, Inc., a chapter 11 case in the Southern District of Texas before David
R. Jones.  In 2023, AlixPartners was awarded a completion fee of
$2,875,000 [Case No. 23-90088, Docket No. 440].
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
Carlson Travel, Inc., a chapter 11 case in the Southern District of Texas
before Marvin Isgur.  In 2022, AlixPartners was awarded a success fee of
$500,000 [Case No. 21-90017, Docket No. 274].

Southland Royalty Company LLC, a chapter 11 case in the District of
Delaware before Karen B. Owens.  In 2021, AlixPartners was awarded a
success fee of $1,000,000 [Case No. 20-10158, Docket No. 1879].

NPC International, Inc., a chapter 11 case in the Southern District of Texas
before David R. Jones.  In 2021, AlixPartners was awarded a restructuring
fee of $1,500,000 [Case No. 20-33353, Docket No. 1655].

Noble Corporation PLC, a chapter 11 case in the Southern District of Texas
before David R. Jones.  In 2021, AlixPartners was awarded a success fee of
$1,750,000 [Case No. 20-33826, Docket No. 999].

Tailored Brands, Inc., a chapter 11 case in the Southern District of Texas
before Marvin Isgur.  In 2021, AlixPartners was awarded a success fee of
$500,000 [Case No. 20-33900, Docket No. 1648].

PG&E Corporation, a chapter 11 case in the Northern District of California
before Dennis Montali.  In 2020, APS was awarded a success fee of
$8,000,000 [Case No. 19-30088, Docket No. 9373].

McDermott International, Inc., a chapter 11 case in the Southern District of
Texas before David R. Jones.  In 2020, APS was awarded a success fee of
$5,000,000 [Case No. 20-30336, Docket No. 1022].

Alta Mesa Resources, Inc., a chapter 11 case in the Southern District of
Texas before Marvin Isgur.  In 2020, APS was awarded a completion fee of
$200,000 [Case No. 19-35133, Docket No. 2007].

Aegerion Pharmaceuticals, Inc., a chapter 11 case in the Southern District
of New York before Martin Glenn.  In 2019, APS was awarded a success
fee of $500,000 [Case No. 19-11632, Docket No. 406].

Sungard Availability Capital Services, a chapter 11 case in the Southern
District of New York before Robert D. Drain.  In 2019, APS was awarded a
success fee of $1,250,000 [Case No. 19-22915, Docket No. 115]

Aceto Corporation, a chapter 11 case in the District of New Jersey before
Judge Vincent F. Papalia. In 2019, APS was awarded a success fee of
$1,000,000 [Case No. 19-13448, Docket No. 683]
34.
In short, completion fees are a normal part of compensation for firms such as APS,
which provided interim management services to the Debtors, and may be approved on that basis.
The services provided by APS resulted in tangible, measurable and significant incremental value
to the Debtors, their lenders and their estates.
Case 24-11217-BLS    Doc 795    Filed 11/22/24    Page 16 of 18

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35.
The leadership and contributions of Mr. Braley and APS were key enablers of the
outcome and recovery within these Chapter 11 Cases.  As such, the amount of the Completion Fee
in these cases is reasonable and should be approved.
Notice
36.
The Debtors will provide notice of this Application to: (a) the Office of the United
States Trustee for the District of Delaware; (b) counsel to the Committee; (c) counsel to the 1L Ad
Hoc Group; (d) the agent of the DIP Facility and counsel thereto; (e) the agent of the First Lien
Credit Agreement and counsel thereto; (f) the Second Lien Credit Agreement Agent and counsel
thereto; (g) the agent of the First Lien Notes and counsel thereto; and (h) any party that has
requested notice pursuant to Bankruptcy Rule 2002.  The Debtors submit that, in light of the nature
of the relief requested, no other or further notice need be given.
Conclusion
37.
To summarize, the Engagement Letter provides for the payment of the Completion
Fee based upon defined criteria.  The defined criteria, namely a transaction that effectively
transfers a significant and material portion of the business as a going concern to another entity or
entities, was attained.  Fees such as the Completion Fee are a normal part of the compensation
structure of APS and other similar firms both inside and outside of bankruptcy.  Mr. Braley and
APS played a pivotal role in the positive outcome of these Chapter 11 Cases.  Accordingly,
approval of the Completion Fee is warranted and appropriate.
[Remainder of Page Intentionally Left Blank]
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WHEREFORE, APS respectfully requests that this Court enter an order, substantially in the
form of the proposed order attached hereto as Exhibit C, awarding APS its Completion Fee in the
amount of $1,000,000, and for such other or further relief as is just or appropriate.
Dated this 22nd day of November, 2024.

AP Services, LLC
/s/ Charles Braley

Name: Charles Braley

Authorized Representative
Case 24-11217-BLS    Doc 795    Filed 11/22/24    Page 18 of 18

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