Case 18-10182-KG Doc 17 Filed 01/30/18 Page 1 of 11 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 ENSEQUENCE, INC., 1 Case No. 18-10182 (KG) Debtor. MOTION OF DEBTOR PURSUANT TO 11 U.S.C. §§ 105(A) AND 363(B) TO (I) RETAIN WYSE ADVISORS LLC TO PROVIDE THE DEBTOR WITH A CHIEF RESTRUCTURING OFFICER AND (II) DESIGNATE MICHAEL WYSE AS CHIEF RESTRUCTURING OFFICER FOR THE DEBTOR, NUNC PRO TUNC TO THE PETITION DATE The above-captioned debtor and debtor-in-possession (the “Debtor”) hereby moves (the “Motion”) for entry of an order (the “Order”) authorizing the Debtor to: (i) retain Wyse Advisors LLC (“WALLC”) to provide the Debtor with a Chief Restructuring Officer (“CRO”) pursuant to sections 105(a) and 363(b) of title 11 of the United States Code (the “Bankruptcy Code”); (ii) designate Michael Wyse as CRO, and (iii) granting related relief nunc pro tunc to January 30, 2018 (the “Petition Date”). In support of the Motion, the Debtor relies upon the Declaration of Michael Wyse in Support of Chapter 11 Petition and First Day Pleadings, filed with the Court concurrently herewith (the “First Day Declaration”). In further support of the Motion, the Debtor, by and through its undersigned counsel, respectfully represents: JURISDICTION AND VENUE 1. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). The Debtor confirms its consent, pursuant to Rule 9013-1(f) of the Local 1 The Debtor’s last four digits of its U.S. federal tax identification number are 6904. The address for the Debtor’s headquarters is 420 Lexington Ave., Suite 408, New York, NY 10170. 1 61695870.10 Case 18-10182-KG Doc 17 Filed 01/30/18 Page 2 of 11 Rules for the United States Bankruptcy Court for the District of Delaware (the “Local Rules”), to the entry of a final order to the extent it is later determined that the Court, absent the consent of the parties, cannot enter final orders or judgments consistent with Article III of the United States Constitution. 2. Venue of this case is proper in this district pursuant to 28 U.S.C. § 1408. 3. The statutory predicates for the relief requested herein are Bankruptcy Code sections 105(a) and 363(b). BACKGROUND 4. On January 30, 2018 (the “Petition Date”), the Debtor filed a voluntary petition in this Court commencing a case for relief under chapter 11 of the Bankruptcy Code (the “Chapter 11 Case”). 5. The Debtor continues to manage and operate its business as a debtor-in- possession pursuant to Bankruptcy Code sections 1107 and 1108. 6. No trustee, examiner or committee has been appointed in this Chapter 11 Case. 7. The factual background regarding the Debtor, including its business operations, its capital and debt structures, and the events leading to the filing of this Chapter 11 Case, is set forth in detail in the First Day Declaration and fully incorporated herein by reference. RELIEF REQUESTED 8. By this Motion, pursuant to Bankruptcy Code sections 105(a) and 363(b), the Debtor requests entry of an order, substantially in the form attached as Exhibit A, authorizing, but not directing the Debtor to: (a) retain WALLC to provide the Debtor with a CRO; and (b) designate Michael Wyse as the Debtor’s CRO, nunc pro tunc to the Petition Date. 2 61695870.10 Case 18-10182-KG Doc 17 Filed 01/30/18 Page 3 of 11 9. Subject to Court approval, Michael Wyse will serve as the CRO to assist the Debtor with its reorganization efforts and this Chapter 11 Case, as further described below. A. Retention of WALLC Personnel 10. In consideration of the size and complexity of its business, as well as the exigencies of the circumstances, the Debtor has determined that the services of an experienced restructuring manager will substantially enhance its attempts to maximize the value of its estate. WALLC is well qualified to act on the Debtor’s behalf given its extensive knowledge and expertise with respect to chapter 11 proceedings. 11. WALLC specializes in interim management, restructuring advisory services, CRO roles, and liquidity solutions. WALLC’s advisory services include a wide range of activities targeted at stabilizing and improving a company’s financial position, including developing or validating 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. 12. Michael Wyse is the managing partner of WALLC and has worked as a restructuring consultant, financial advisor, distressed investor, and independent board member for approximately eighteen years. Mr. Wyse has substantial knowledge and experience in advising companies and assisting troubled companies with stabilizing their financial condition, analyzing their operations, developing an appropriate business plan to accomplish the necessary restructuring of their operations and finances, marketing and conducting sales of substantially all of their assets, and executing restructuring transactions. Specifically, Mr. Wyse’s prior clients have included Original Soupman, Gracious Homes, One Aviation, Enron, WorldCom, 3 61695870.10 Case 18-10182-KG Doc 17 Filed 01/30/18 Page 4 of 11 Lucent/Onetel, Flying J, Kerzner International, Fashion Bug, Fresh & Easy, Wholesale Sports, Orchard Supply, TFM/TMM railroad, and numerous private out-of-court transactions. 13. In addition, Mr. Wyse is intimately familiar with the Debtor’s businesses, financial affairs, and capital structure. Since Mr. Wyse’s initial engagement by the Debtor in November 2017, Mr. Wyse has worked closely with the Debtor’s management and other professionals in assisting with the requirements of the business, raising capital, exploring restructuring options and, ultimately, preparing and filing this Chapter 11 Case, including negotiating the Debtor’s DIP financing and cash collateral needs. Consequently, the Debtor believes that WALLC has developed significant relevant experience and expertise regarding the Debtor, its operations and the unique circumstances of this Chapter 11 Case. 14. The Debtor’s chief executive officer resigned, effective January 2, 2018, leaving a void in senior leadership to assist the Debtor through the restructuring process. Therefore, in addition to serving as CRO since he was retained in November 2017, Mr. Wyse has been serving as the interim Chief Executive Officer since January 2, 2018 and will continue to do so postpetition. 15. For these reasons, Mr. Wyse is both well qualified and uniquely suited to deal effectively and efficiently with matters that may arise in the context of this Chapter 11 Case. Accordingly, the Debtor submits that the retention of WALLC and the designation of Michael Wyse as CRO on the terms and conditions set forth herein is necessary and appropriate, is in the best interests of the Debtor’s estate, creditors, and all other parties in interest, and should be granted in all respects. 4 61695870.10 Case 18-10182-KG Doc 17 Filed 01/30/18 Page 5 of 11 B. Scope of Services 16. Subject to approval by the Court, the Debtor proposes to retain WALLC to provide Michael Wyse as CRO on the terms and conditions set forth in the engagement letter 2 dated November 12, 2017, attached hereto as Exhibit B (the “Engagement Letter”), except as otherwise explicitly set forth herein or in any order granting this Motion. 17. Among other things, WALLC will support the Debtor with respect to: a. Performing the duties normally associated with the position of CRO of entities comparable to the Company and such other powers and duties as may be prescribed by the Board of Directors of the Company (the "Board"), including, without limitation, to: i. Stabilize and enhance the financial and operational performance of the business: ii. Evaluate additional strategic alternatives with the goal of maximizing value for the Company; iii. Direct day-to-day management of restructuring, recapitalization, refinancing and any sale related efforts, including participating in negotiations and implementation of such efforts; iv. Evaluate the value of existing assets; v. Provide services required to secure the assets; vi. Lead negotiations with any potential suitors. vii. Manage cash forecasting and liquidity management procedures. In particular, assume responsibility and oversight of day-to-day cash management and initiatives to protect, preserve, and enhance liquidity; viii. Review and evaluate the go-forward business; ix. Conduct a review and analysis of the existing workforce and direct recruitment of new employees, where and if appropriate; x. Execute on identified cost saving initiatives; and xi. Perform such other services as may be reasonably requested or directed by independent member(s) of the Board of Directors from time to time; and 2 The summaries of the Engagement Letter (and indemnification agreement attached thereto) contained in this Motion are provided for purposes of convenience only. In the event of any inconsistency between the summaries contained herein and the terms and provisions of the Engagement Letter, the terms of the Engagement Letter shall control unless otherwise set forth herein. Capitalized terms use but not otherwise defined herein shall have the meanings set forth in the Engagement Letter. 5 61695870.10 Case 18-10182-KG Doc 17 Filed 01/30/18 Page 6 of 11 b. Take any and all actions necessary to fulfill the responsibilities set forth above, including executing all necessary documentation on behalf of the Company to effectuate the same. 18. These services are necessary to enable the Debtor to maximize the value of its estate and successfully complete its restructuring.