Case 20-32299-KLP Doc 298 Filed 06/09/20 Entered 06/09/20 20:10:41 Desc Main Document Page 1 of 62 Edward O. Sassower, P.C. (admitted pro hac vice) Michael A. Condyles (VA 27807) Steven N. Serajeddini, P.C. (admitted pro hac vice) Peter J. Barrett (VA 46179) Anthony R. Grossi (admitted pro hac vice) Jeremy S. Williams (VA 77469) KIRKLAND & ELLIS LLP Brian H. Richardson (VA 92477) KIRKLAND & ELLIS INTERNATIONAL LLP KUTAK ROCK LLP 601 Lexington Avenue 901 East Byrd Street, Suite 1000 New York, New York 10022 Richmond, Virginia 23219-4071 Telephone: (212) 446-4800 Telephone: (804) 644-1700 Facsimile: (212) 446-4900 Facsimile: (804) 783-6192 Proposed Co-Counsel to the Debtors and Debtors in Possession 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) ) DEBTORS’ APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF ALVAREZ & MARSAL NORTH AMERICA, LLC AS RESTRUCTURING ADVISORS TO THE DEBTORS AND DEBTORS IN POSSESSION PURSUANT TO SECTIONS 327(A) AND 328(A) OF THE BANKRUPTCY CODE, EFFECTIVE AS OF MAY 13, 2020 The above-captioned debtors and debtors in possession (collectively, the “Debtors”) respectfully state as follows in support of this application (this “Application”):2 1 Due to the large number of Debtors in these 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 The detailed description of the Debtors and their business, and the facts and circumstances supporting the Debtors’ chapter 11 cases, are set forth in greater detail in the Declaration of David Tolley, Executive Vice President, Chief Financial Officer, and Co-Restructuring Officer of Intelsat S.A., in Support of Debtors’ Chapter 11 Petitions and First Day Motions [Docket No. 6] (the “First Day Declaration”), filed contemporaneously with the Debtors’ voluntary petitions for relief filed under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) on May 13, 2020 (the “Petition Date”). Capitalized terms used but not otherwise defined in this Application shall have the meanings ascribed to them in the First Day Declaration or as later defined herein, as applicable. KE 68019753 Case 20-32299-KLP Doc 298 Filed 06/09/20 Entered 06/09/20 20:10:41 Desc Main Document Page 2 of 62 Relief Requested 1. The Debtors seek entry of an order, substantially in the form attached hereto as Exhibit A, (the “Order”), (a) authorizing the retention and employment of Alvarez & Marsal North America, LLC together with employees of its affiliates (all of which are wholly-owned by its parent company and employees), its wholly owned subsidiaries, and independent contractors (collectively, “A&M”) as restructuring advisor for the Debtors in accordance with the terms and conditions of the engagement letter dated as of March 30, 2020 (the “Engagement Letter”), a copy of which is attached hereto as Exhibit 1 to the Order and incorporated by reference herein, effective as of May 13, 2020, and (b) approving the terms of A&M’s employment, including the proposed compensation arrangements and the indemnification provisions set forth in the Engagement Letter, as modified pursuant to the Order, under section 328(a) of the Bankruptcy Code. In support of this Application, the Debtors respectfully submit the declaration of Justin Schmaltz, managing director at Alvarez & Marsal North America, LLC (the “Schmaltz Declaration”), which is attached hereto as Exhibit B, and respectfully state as follows in further support of this Application. Jurisdiction and Venue 2. The United States Bankruptcy Court for the Eastern District of Virginia (the “Court”) has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Standing Order of Reference from the United States District Court for the Eastern District of Virginia, dated August 15, 1984. The Debtors confirm their consent, pursuant to rule 7008 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), to the entry of a final order by the Court in connection with this Application to the extent that it is later determined that the Court, 2 Case 20-32299-KLP Doc 298 Filed 06/09/20 Entered 06/09/20 20:10:41 Desc Main Document Page 3 of 62 absent consent of the parties, cannot enter final orders or judgments in connection herewith consistent with Article III of the United States Constitution. 3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 4. The bases for the relief requested herein are Bankruptcy Code sections 327(a) and 328(a), Bankruptcy Rules 2014(a) and 2016, and rules 2014-1 and 2016-1 of the Local Rules of the United States Bankruptcy Court for the Eastern District of Virginia (the “Local Bankruptcy Rules”). Background 5. The Debtors (together with their non-Debtor affiliates, the “Company”) operate one of the world’s largest satellite services businesses, providing a critical layer in the global communications infrastructure. As the foundational architects of satellite technology, the Company operates the largest satellite fleet and connectivity infrastructure in the world. 6. Through its global and extra-terrestrial network of satellites and teleports, the Company provides diversified communications services to the world’s leading media companies, fixed and wireless telecommunications operators, data networking service providers for enterprise and mobile applications in the air and on the seas, multinational corporations and internet service providers in the most challenging and remote locations across the globe. The Company is also the leading provider of commercial satellite communication services to the U.S. government and other select military organizations and their contractors. The Company’s administrative headquarters are in McLean, Virginia, and the Company has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. 7. On the Petition Date, the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. The Debtors are operating their business and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 3 Case 20-32299-KLP Doc 298 Filed 06/09/20 Entered 06/09/20 20:10:41 Desc Main Document Page 4 of 62 On May 15, 2020, the Court entered an order granting procedural consolidation and joint administration of these chapter 11 cases pursuant to Bankruptcy Rule 1015(b). A&M’s Qualifications 8. In consideration of the size and complexity of their business, as well as the demands of the circumstances, the Debtors have determined that the services of experienced restructuring advisors will substantially enhance their attempts to maximize the value of their estates. A&M is well qualified to provide these services in light of their extensive knowledge and expertise with respect to chapter 11 proceedings. 9. A&M specializes in interim management, crisis management, turnaround consulting, operational due diligence, creditor advisory services, and financial and operational restructuring. A&M’s debtor advisory services have included a wide range of activities targeted at stabilizing and improving a company’s financial position, including developing or validating forecasts, business plans and related assessments of a business’s strategic position; monitoring and managing cash, cash flow and supplier relationships; assessing and recommending cost reduction strategies; and designing and negotiating financial restructuring packages. 10. Since its inception in 1983, A&M has been a global provider of turnaround advisory services to companies in crisis or those in need of performance improvement in specific financial and operational areas, including: In re Windstream Holdings, Inc., No. 19-22312 (RDD) (Bankr. D. SDNY April 22, 2019; In re Bristow Group Inc., No. 19-32713 (DRJ) (Bankr. D. Del. May 11, 2019); In re Southcross Energy Partners, L.P., No. 19-10702 (MFW) (Bankr. D. Del. Apr. 1, 2019); In re Imerys Talc America, Inc., No. 19-10289 (LSS) (Bankr. D. Del. Feb. 13, 2019); In re Fairway Energy, LP, No. 18-12684 (LSS) (Bankr. D. Del. Nov. 26, 2018); In re Enduro Res. Partners LLC, No. 18-11174 (KG) (Bankr. D. Del. May 15, 2018); In re Toys “R” Us, Inc., No. 17-34665 (KLP) (Bankr. E.D. Va. Oct. 25, 2017); In re Gulfmark Offshore, Inc., No. 17-11125 4 Case 20-32299-KLP Doc 298 Filed 06/09/20 Entered 06/09/20 20:10:41 Desc Main Document Page 5 of 62 (KG) (Bankr. D. Del. May 26, 2017); In re Bonanza Creek Energy, Inc., No. 17-10015 (KJC) (Bankr. D. Del. Jan. 26, 2017); In re La Paloma Generating Co., No. 16-12700 (CSS) (Bankr. D. Del. Dec. 28, 2016); In re Erickson Inc., No. 16-34393 (HDH) (N.D. Tex. Dec. 15, 2016); In re Key Energy Servs. Inc., No. 16-12306 (BLS) (Bankr. D. Del. Oct. 31, 2016); In re Halcón Resources Corporation, No. 16-11724 (BLS) (Bankr. D. Del. Aug. 1, 2016); In re Seventy Seven Finance Inc., No. 16-11409 (LSS) (Bankr. D. Del. June 26, 2016); In re Southcross Holdings LP, No. 16-20111 (MI) (Bankr. S.D. Tex. May 6, 2016); In re Magnum Hunter Res. Corp., No. 15- 12533 (KG) (Bankr. D. Del. Jan. 28, 2016); In re Swift Energy Co., No. 15-12670 (MFW) (Bankr. D. Del. Feb. 1, 2016); In re Offshore Grp.