Chapter 11 ) INTELSAT SA, Et Al.,1 ) Case No. 20-32299
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Case 20-32299-KLP Doc 2121 Filed 04/27/21 Entered 04/27/21 17:11:48 Desc Main Document Page 1 of 32 IN THE UNITED STATES BANKRUPTCY COURT FOR THE EASTERN DISTRICT OF VIRGINIA RICHMOND DIVISION ) In re: ) Chapter 11 ) INTELSAT S.A., et al.,1 ) Case No. 20-32299 (KLP) ) Debtors. ) (Jointly Administered) ) DECLARATION OF DISINTERESTEDNESS BY DELOITTE LLP IN CONNECTION WITH THE RETENTION OF DELOITTE TAX LLP BY THE DEBTORS FOR TAX SERVICES I, Edward Morris, under penalty of perjury declare as follows: 1. I am a Partner at Deloitte LLP (“Deloitte UK”), which has offices located at 1 New Street Square, London, EC4A 3HQ. I am duly authorized to make and submit this declaration (“the Declaration”) on behalf of Deloitte UK as a subcontractor to Deloitte Tax LLP in relation to the tax consultancy and transfer pricing benchmarking analysis work, described below. 2. The Declaration is submitted pursuant to the Order (I) Authorizing the Debtors to Retain and Employ Deloitte Tax LLP to Provide Tax Services to the Debtors Effective as of May 13, 2020, and (II) Granting Related Relief [D.I. 827] (the “Order”), authorizing the above-captioned debtors and debtors in possession (collectively, the “Debtors”) to retain Deloitte Tax LLP (“Deloitte Tax”). 1 Due to the large number of Debtors in these chapter 11 cases (collectively, the “Chapter 11 Cases”), for which joint administration has been granted, a complete list of the Debtor entities and the last four digits of their federal tax identification numbers is not provided herein. A complete list may be obtained on the website of the Debtors’ claims and noticing agent at https://cases.stretto.com/intelsat. The location of the Debtors’ service address is: 7900 Tysons One Place, McLean, VA 22102. -2- Case 20-32299-KLP Doc 2121 Filed 04/27/21 Entered 04/27/21 17:11:48 Desc Main Document Page 2 of 32 3. As set forth more fully in the Debtors’ application to retain Deloitte Tax [D.I. 340] (the “Application”),2 the Debtors sought to retain Deloitte Tax to provide certain tax services in connection with, among other things, transfer pricing services, including the preparation of a set of transfer pricing benchmarking memos, transfer pricing documentation reports, and a transfer pricing master file for the periods of January 1, 2019 through fiscal year ended December 31, 2019, January 1, 2020 through fiscal year ending December 31, 2020, and January 1, 2021 through fiscal year ended December 31, 2021 (collectively, the “Transfer Pricing Work”). 4. The Application was supported by the declaration of Jeffrey E. Clegg, a partner of Deloitte Tax, a copy of which is annexed to the Application at Exhibit B.3 As stated in the declaration, it was contemplated that Deloitte Tax would engage, on a subcontracting basis, certain DTT Member Firms. Pursuant to an Inter-firm Work Referral Form dated March 2, 2021 (as amended or supplemented from time to time, the “Work Referral Form”), Deloitte Tax engaged Deloitte UK as a subcontractor to assist with the Transfer Pricing Work. Specifically, the Work Referral Form contemplates that Deloitte UK will perform “UK general tax consulting and transfer pricing services.” A copy of the Work Referral Form is attached hereto at Exhibit A. 5. As set forth in the Order, third party subcontractors engaged by Deloitte Tax are required to submit separate declarations of disinterestedness (see paragraph 14 of the Order). Accordingly, this Declaration is being made pursuant to the terms of the Order and 2 Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Application. 3 The declaration of Jeffrey E. Clegg and the disclosures contained therein, as well as all supplemental declarations filed by Mr. Clegg in these cases, are hereby incorporated by reference and made a part hereof. -3 - Case 20-32299-KLP Doc 2121 Filed 04/27/21 Entered 04/27/21 17:11:48 Desc Main Document Page 3 of 32 in furtherance of Deloitte UK’s engagement as a subcontractor in connection with performing services for the Debtors. 6. The statements set forth in this Declaration are based upon my personal knowledge, information and belief, and/or client matter records kept in the ordinary course of business that were reviewed by me or other personnel of Deloitte UK. 7. Deloitte UK undertook a search of the names included on the parties-in- interest list provided by the Debtors, a copy of which is attached as Exhibit B hereto, to determine and to disclose whether it is or has been employed by, or has any relationships with, certain of the Debtors’ significant creditors and other parties-in-interest (“Potential Parties-in-Interest”). Deloitte UK researched its databases of client relationships and connections and performed reasonable due diligence to determine whether it had any relationships with the Debtors and the significant Potential Parties-in-Interest where such relationships are related to an engagement by Deloitte UK involving the Debtors. This included database searches across the following: • Deloitte UK’s conflicts database which details current opportunities and engagements which are current or have been completed in the past 4 years; • Deloitte UK’s billing system; • Deloitte UK’s business relationships management system; and • Deloitte UK’s local restricted entities database. 8. Based upon the searches undertaken above, we can confirm that at all times during Deloitte UK’s engagement in connection with the tax consulting and transfer pricing benchmarking analysis supporting the Transfer Pricing Work, Deloitte UK did not and currently does not (a) hold any interest adverse to the Debtors; or (b) have a relationship to the Debtors, their significant creditors, certain other significant parties-in-interest, or to the -4- Case 20-32299-KLP Doc 2121 Filed 04/27/21 Entered 04/27/21 17:11:48 Desc Main Document Page 4 of 32 attorneys that are known to be assisting the Debtors in the Chapter 11 Cases, except as may be disclosed herein or in any attachment hereto.4 9. From time to time, Deloitte UK has provided or may currently provide services, and likely will continue to provide services, to certain creditors of the Debtors and various other parties potentially adverse to the Debtors in matters unrelated to the Chapter 11 Cases. 10. Deloitte UK has relationships with thousands of clients, some of which may be creditors of the Debtors or other Potential Parties-in-Interest, as listed on Exhibit B attached hereto. Accordingly, Deloitte UK has had, currently has and/or may have in the future relationships with such parties, or provided, may be currently providing, and/or may provide in the future professional services to certain of these parties in matters unrelated to the Chapter 11 Cases. Additionally, certain significant Potential Parties-in-Interest have or may have provided goods or services, may currently provide goods or services, and/or may in the future provide goods or services to Deloitte UK in matters unrelated to the Chapter 11 Cases. 11. In addition to the foregoing, one or more of the Debtors may be an affiliate of BC Partners Holdings Ltd., which is an audit client of Deloitte UK based in Guernsey. 12. Deloitte UK believes that the relationships described herein have no bearing on the Transfer Pricing Work and, in particular, the tax consulting and transfer pricing 4 In addition to the tax consultancy work and transfer pricing services that Deloitte UK is providing to the Debtors as a subcontractor to Deloitte Tax, Deloitte UK is, or shortly will be, separately providing assistance to dlaw (a Luxembourg company), which has been retained by the Debtors as an ordinary course professional, to provide legal services such as corporate and employment law to the Debtors in various jurisdictions, including, without limitation, Canada, the United Kingdom and countries of the European Union. -5 - Case 20-32299-KLP Doc 2121 Filed 04/27/21 Entered 04/27/21 17:11:48 Desc Main Document Page 5 of 32 benchmarking analysis for which Deloitte UK was subcontracted for by Deloitte Tax in the Debtors’ Chapter 11 Cases. Furthermore, such relationships do not impair Deloitte UK’s disinterestedness. 12. In addition to the searches described above, Deloitte UK performed queries to determine whether any of the Deloitte UK partners and other personnel performing services for the Debtors, or any member of such individual’s immediate family5: (i) owns any direct investment in the Debtors or any of their non-debtor affiliates; (ii) holds a claim against or interest adverse to the Debtors or their non-debtor affiliates; (iii) is or was an officer, director, or employee of the Debtors or their non-debtor affiliates; (iv) is related to or has any connections to the bankruptcy judges in the Eastern District of Virginia; and (v) based on the list of individuals included on the staff directories maintained on the Office of the United States Trustee in Region 4’s website, is related to or has any connections to any such individuals working in the Office of United States Trustee for Region 4. 13. Through reasonable inquiry, Deloitte UK represents that it did not receive any other affirmative responses to any of the aforementioned questions. Accordingly, I do not believe there is any connection between the personnel of Deloitte UK who are performing the tax consulting and transfer pricing benchmarking analysis for the Debtors and the United States Bankruptcy Judge presiding in the Chapter 11 Cases, the U.S. Trustee for Region 4, and the Assistant United States Trustee for the Eastern District of Virginia, or the attorneys therefor assigned to these cases.