mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 1 of 10

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1 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 1 of 10 Peter S. Partee, Sr. Michael S. Legge HUNTON ANDREWS KURTH LLP 200 Park Avenue New York, New York (212) ppartee@huntonak.com mlegge@huntonak.com Counsel for Alvarez & Marsal North America, LLC UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re Westinghouse Electric Company LLC, et al., 1 Debtors. Chapter 11 Case No (MEW) Jointly Administered MEMORANDUM IN SUPPORT OF ALVAREZ & MARSAL NORTH AMERICA, LLC S APPLICATION FOR APPROVAL OF COMPLETION FEE 1 The original Debtors in these Chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, if any, were: Westinghouse Electric Company LLC (0933), CE Nuclear Power International, Inc. (8833), Fauske and Associates LLC (8538), Field Services, LLC (2550), Nuclear Technology Solutions LLC (1921), PaR Nuclear Holding Co., Inc. (7944), PaR Nuclear, Inc. (6586), PCI Energy Services LLC (9100), Shaw Global Services, LLC (0436), Shaw Nuclear Services, Inc. (6250), Stone & Webster Asia Inc. (1348), Stone & Webster Construction Inc. (1673), Stone & Webster International Inc. (1586), Stone & Webster Services LLC (5448), Toshiba Nuclear Energy Holdings (UK) Limited (N/A), TSB Nuclear Energy Services Inc. (2348), WEC Carolina Energy Solutions, Inc. (8735), WEC Carolina Energy Solutions, LLC (2002), WEC Engineering Services Inc. (6759), WEC Equipment & Machining Solutions, LLC (3135), WEC Specialty LLC (N/A), WEC Welding and Machining, LLC (8771), WECTEC Contractors Inc. (4168), WECTEC Global Project Services Inc. (8572), WECTEC LLC (6222), WECTEC Staffing Services LLC (4135), Westinghouse Energy Systems LLC (0328), Westinghouse Industry Products International Company LLC (3909), Westinghouse International Technology LLC (N/A), and Westinghouse Technology Licensing Company LLC (5961) (collectively, the Debtors ). The Debtors principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania By order dated September 25, 2018, [Dkt. No. 3956] administration of, among other things, the Final Applications was consolidated at the case of Westinghouse Electric Company LLC, and the affiliated cases of certain Debtors were closed.

2 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 2 of 10 TO THE HONORABLE MICHAEL E. WILES UNITED STATES BANKRUPTCY JUDGE: Alvarez & Marsal North America, LLC ( A&M ), by counsel, hereby submits this Memorandum in support of the payment to A&M of a completion fee in the amount of $1 million (the Completion ) as requested in Alvarez & Marsal North America, LLC s Application for Approval of Completion (the Application ) 2 [Dkt. No. 3975]: BACKGROUND 1. A&M was engaged in these Chapter 11 cases to serve as financial advisor to the Statutory Committee of Unsecured Claimholders of Westinghouse Electric Company LLC, et al. (the UCC ). 2. The terms of A&M s retention were included in the Application of Statutory Committee of Unsecured Claimholders to Employ and Retain Alvarez & Marsal North America, LLC as Its Financial Advisor Pursuant to Sections 328(a) And 1103(a) of the Bankruptcy Code, Rules 2014 And 2016 of the Bankruptcy Rules and Local Rules and Nunc Pro Tunc to April 18, 2017 (the Retention Application ) [Dkt. No. 794]. A&M s compensation included both an hourly component, with compensation varying by the timekeeper s title, as well as the Completion that is the subject of the Application. By its terms, the Completion is in an indeterminate amount and earned and payable upon the earlier to occur of confirmation of a Chapter 11 plan or a sale of substantially all the Debtors assets. See Retention Application 13; Roberts Decl The hourly component of the retention was approved under 11 U.S.C. 328(a), but the Court expressly carved out the Completion from the section 328(a) preapproval. See Retention Order 3. 2 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Application. 2

3 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 3 of Both of the alternative prerequisites for the Completion have occurred, and, given the importance of A&M s work in achieving the extraordinarily successful result in these Chapter 11 cases, A&M has more than satisfied the criteria specified in the engagement letter for payment of the Completion. The Debtors Second Amended Plan of Reorganization dated March 23, 2018 [Dkt. No. 2954], provides for the sale of substantially all the Debtors assets was confirmed by the Court on March 28, [Dkt. No ]. And, as detailed further in A&M s Application and in the supporting declaration of Mark A. Roberts (the Roberts Declaration ), annexed hereto as Exhibit 1, A&M s services were critical to both the UCC s general ability to perform its statutory duties, as well as the extraordinary results achieved in these Chapter 11 cases with respect to A&M facilitating the DIP negotiations, enabling UCC oversight of the Debtors complicated and trans-national capital structure, ensuring UCC cohesion despite the divergent interests of the unsecured creditor body, and expediting the resolution of these Chapter 11 cases to achieve cost savings for the benefit of all parties in interest. 4. A&M obtained the approval of the UCC and all the relevant constituencies in the case regarding a completion fee in the amount of $1 million. Roberts Decl. 9. As a result of discussions with these parties, no objections were filed to A&M s Application for the Completion. Id. 5. The Court scheduled the Application for a hearing on November 16, Although the Court continued the hearing on the Application at A&M s request to January 22, 2019, the Court also indicated that it required additional analytical support for the approval of the Completion. Hr g. Tr. pp , Nov. 16, This Memorandum and the Roberts 3

4 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 4 of 10 Declaration are intended to satisfy the Court s request for additional evidence to support the award of the Completion. ARGUMENT 6. An award of the Completion to A&M is reasonable and appropriate given A&M s central role in achieving the extraordinarily successful and efficient resolution of these complicated Chapter 11 cases, the inclusion of a potential completion fee in A&M s bargainedfor terms of its initial retention, and the general support of the award implied by the lack of any objection to the Application. A. A General Reasonableness Standard Applies to the Completion Award 7. Unless pre-approved under 11 U.S.C. 328(a), the fees of estate professionals are subject to a review of reasonableness under 11 U.S.C See In re Relativity Fashion, LLC, No (MEW), 2016 WL , at *6 (Bankr. S.D.N.Y. Dec. 16, 2016) (citing Riker, Danzig, Scherer, Hyland & Perretti v. Official Committee of Unsecured Creditors (In re Smart World Technologies, LLC), 552 F.3d 228 (2d Cir. 2009)). Pre-approval of the non-hourly component of estate professional fees is often favored by professionals because restructuring work inherently involves a great deal of uncertainty and fees that are awarded on a flat, percent or other non-hourly basis may appear to be improvident when judged with the benefit of hindsight. See Id. (distinguishing between the standards of sections 328(a) and 330 of the Bankruptcy Code in the review of a transaction fee award). However, merely because a contingent fee award is initially indefinite in amount and is subject to negotiation does not imply a review standard higher than the general standard for reasonableness under section 330 of the Bankruptcy Code. Success or completion fees for estate professionals may be agreed to in principle, with the final amounts and milestones to be achieved determined subsequently to the 4

5 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 5 of 10 approval of retention. 3 See, e.g., In re Residential Capital, LLC, 504 B.R. 358, 365 & 366 n.5 (Bankr. S.D.N.Y. 2014) (approving fee application in accordance with an engagement letter that granted a chief restructuring officer the right to seek an indeterminate success fee upon completion of engagement and distinguishing the award from a bonus or fee enhancement award). 8. Section 330(a) provides a list of relevant factors for a court to consider in making its reasonableness determination: (A) the time spent on such services; (B) the rates charged for such services; (C) whether the services were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of, a case under this title; (D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed; (E) with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field; and (F) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title. 11 U.S.C. 330(a)(3). Generally, the measurement for section 330 s reasonableness standard as to the time, rates, reasonable time and customary compensation factors is marketplace compensation, as informed by the judge s general body of experience and familiarity with the case at hand. See In re Enron Corp., 2006 WL , at *6 (Bankr. S.D.N.Y. Apr. 12, 2006). When fees are contingent upon a specific result, such as confirming a plan of reorganization, the reviewing court must also find a nexus between the work done and the results achieved to determine the 3 Pleadings and case law are notably lacking in uniform terminology, variously describing an economically similar fee award as a success fee, contingent success fee, restructuring fee or incentive fee depending on the context in which the award is sought. See In re Relativity Fashion, LLC, 2016 WL , at *4. 5

6 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 6 of 10 reasonableness of the fee award. In re XO Commc ns, Inc. (XO Commc ns II), 398 B.R. 106, (Bankr. S.D.N.Y. 2008); see also In re Residential Capital, LLC, 504 B.R. at 366 ( In the present case, the relevant factors to consider when determining the reasonableness of [the CRO s] Success are: (1) whether [the CRO s] services were necessary and beneficial to the estates at the time they were rendered and (2) whether the Success is reasonable based on a market comparison. ). While A&M is among a group of estate professionals whose efforts contributed to the successful result in this case, the award of contingent completion or success fees does not require that the professional requesting the award be solely responsible for the results achieved, and the case law recognizes that restructuring efforts typically involve a number of parties working in tandem. In re Residential Capital, LLC, 504 B.R. at 368. B. The Completion is Reasonable 9. Because the amount of the Completion was indefinite and subject to further negotiation at the outset of A&M s retention, the Court did not pre-approve the Completion under 11 U.S.C. 328(a). Now all indefiniteness relating to the Completion has been removed. The Completion s alternative prerequisites of plan confirmation and a sale of substantially all assets both have occurred, the amount of the Completion is now liquidated, and A&M s contribution to the extraordinary results achieved in these Chapter 11 cases is now evident. Consequently, the Court and other parties in interest have the necessary information to adjudge the reasonableness of the compensation requested by A&M. In re Relativity Fashion, LLC, 2016 WL , at *2 (noting that to some extent a section 330 reasonableness review is made after-the-fact ). 10. Indefinite components of a completion or success fee award the amount or the milestones that trigger it precludes pre-approval of the award under section 328 and requires 6

7 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 7 of 10 that the components of the award be reviewed with benefit of hindsight once they have been defined under section 330. This was the approach of the court in In re Residential Capital. 504 B.R. at There, as here, the court withheld section 328(a) pre-approval when the chief restructuring officer s engagement letter did not define the amount of the contemplated success fee or the milestones necessary for the award. Id. After the milestones for the fee award were defined, the amount of the award was liquidated, and the submission of supporting evidence, the court granted the request for the success fee under section 330 over the objection of the United States Trustee. Id. at The analysis here should follow the same approach. 11. The amount of the Completion was determined on a consensual basis after negotiation with the UCC and other economically affected parties, which is itself material evidence of reasonableness. Moreover, as detailed in the Roberts Declaration, A&M has submitted uncontroverted evidence that the services that it provided were actual, necessary and beneficial to the administration of these Chapter 11 cases in allowing the UCC to perform its statutory duties, and those services resulted in substantial benefits to the estate. See Roberts Decl A&M s services were necessary and beneficial in enabling the effective oversight of estate funds; ensuring the cohesiveness of the UCC; materially expediting the resolution of the case; substantially contributing to the claims resolution process; and, in material part due to A&M s efforts, securing a potentially full recovery for General Unsecured Claims in Class 3A and a substantial partial recovery for General Unsecured Claims in Class 3B. Id. 12. The amount of the Completion is also reasonable by market standards for the compensation of estate professionals. As described in the Roberts Declaration, success or completion fees in different cases may be meaningfully compared by comparing awards, on a percentage basis, to financial metrics, such as a debtor s Revenue, Total Assets and Total 7

8 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 8 of 10 Liabilities or a debtor s pre-petition revenue. See Roberts Decl. Ex. A (the Completion analysis). Here, the comparison to the success or completion fees in the twenty-two cases in the analysis implies a reasonable completion fee in the range of $10 to $23 million. See Roberts Decl In terms of measuring the value creation flowing to the estates in order to determine the reasonableness of a completion or success fee, the approximately $12 million in average professional fees accruing during the pendency of the case implies substantial savings to the estate through the efforts of A&M by accelerating the case by weeks or months. See Roberts Decl. 12(i). Further, A&M s contributions to the successful negotiation to resolve significant claims that were contested by the Debtors resulted in the estates saving substantial costs that may have been incurred through protracted and complex litigation between the stakeholders. See Roberts Decl. 12(j). 14. Given A&M s significant contributions to these Chapter 11 cases, the resulting benefit to the estates, the considerable margin by which the Completion exceeds section 330 s necessary and beneficial benchmark and the fact that the amount of the Completion falls significantly under the implied reasonable range ($1 million as compared to $10-23 million), A&M submits that the Completion would also be well justified under any standard. A&M has provided uncontroverted demonstrable evidence that its efforts resulted in an extraordinary benefit to the estate, especially in comparison to the nominal value of the Completion. See In re Northwestern Corp., 365 B.R. 453, 457 (D. Del. 2007). 15. Accordingly, because the Roberts Declaration offers uncontroverted evidence that A&M s efforts were actual, necessary and beneficial to the administration of these Chapter 11 cases, that A&M s efforts resulted in extraordinary benefits to the estates and all parties in 8

9 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 9 of 10 interest, and that the amount of the Completion is well below market standards, A&M respectfully submits that the amount of the Completion is well within the range of reasonableness under section 330 of the Bankruptcy Code. WHEREFORE, A&M respectfully requests the entry of an order, substantially in the form submitted with the Application, (i) granting the relief requested herein and approving payment of the Completion fee; and (ii) granting such other relief as the Court deems appropriate. Dated: January 7, 2019 New York, New York /s/peter S. Partee, Sr. Peter S. Partee, Sr. Michael S. Legge HUNTON ANDREWS KURTH LLP 200 Park Avenue New York, New York (212) ppartee@huntonak.com mlegge@huntonak.com Counsel for Alvarez & Marsal North America, LLC 9

10 mew Doc 4142 Filed 01/07/19 Entered 01/07/19 14:47:32 Main Document Pg 10 of 10 Exhibit 1 Roberts Declaration

11 Pg 1 of 13 Peter S. Partee, Sr. Michael S. Legge HUNTON ANDREWS KURTH LLP 200 Park Avenue New York, New York (212) ppartee@huntonak.com mlegge@huntonak.com Counsel for Alvarez & Marsal North America, LLC UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re Westinghouse Electric Company LLC, et al., 1 Debtors. Chapter 11 Case No (MEW) Jointly Administered DECLARATION OF MARK A. ROBERTS IN SUPPORT OF ALVAREZ & MARSAL NORTH AMERICA, LLC S APPLICATION FOR APPROVAL OF COMPLETION FEE 1 The original Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, if any, were: Westinghouse Electric Company LLC (0933), CE Nuclear Power International, Inc. (8833), Fauske and Associates LLC (8538), Field Services, LLC (2550), Nuclear Technology Solutions LLC (1921), PaR Nuclear Holding Co., Inc. (7944), PaR Nuclear, Inc. (6586), PCI Energy Services LLC (9100), Shaw Global Services, LLC (0436), Shaw Nuclear Services, Inc. (6250), Stone & Webster Asia Inc. (1348), Stone & Webster Construction Inc. (1673), Stone & Webster International Inc. (1586), Stone & Webster Services LLC (5448), Toshiba Nuclear Energy Holdings (UK) Limited (N/A), TSB Nuclear Energy Services Inc. (2348), WEC Carolina Energy Solutions, Inc. (8735), WEC Carolina Energy Solutions, LLC (2002), WEC Engineering Services Inc. (6759), WEC Equipment & Machining Solutions, LLC (3135), WEC Specialty LLC (N/A), WEC Welding and Machining, LLC (8771), WECTEC Contractors Inc. (4168), WECTEC Global Project Services Inc. (8572), WECTEC LLC (6222), WECTEC Staffing Services LLC (4135), Westinghouse Energy Systems LLC (0328), Westinghouse Industry Products International Company LLC (3909), Westinghouse International Technology LLC (N/A), and Westinghouse Technology Licensing Company LLC (5961) (collectively, the Debtors ). The Debtors principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania By order dated September 25, 2018, [Dkt. No. 3956] administration of, among other things, the Final Applications was consolidated at the case of Westinghouse Electric Company LLC, and the affiliated cases of certain Debtors were closed.

12 Pg 2 of 13 I, Mark A. Roberts, pursuant to section 1746 of Title 28 of the United States Code being duly sworn, state the following under penalty of perjury: A. Background Information 1. I am a Managing Director at Alvarez & Marsal North America, LLC ( A&M ). This declaration is made in support of Alvarez & Marsal North America, LLC s Application For Approval Of Completion (the Application ). 2 [Dkt. No ] 2. My business address is Washington Center, th Street NW, Suite 600, Washington, District of Columbia A&M is a global professional firm offering a variety of services, including corporate restructuring, that was engaged in the above captioned proceedings to serve as financial advisor to the Statutory Committee of Unsecured Claimholders of Westinghouse Electric Company LLC, et al. (the UCC ). 3. I have extensive experience advising organizations undergoing major financial transactions (bankruptcies, out-of-court restructurings, LBOs and other types of acquisitions) during my twenty-eight-year career, including approximately eighteen years with A&M. I received a bachelor s degree in accounting from the University of Virginia s McIntire School of Commerce, and I am a licensed Certified Public Accountant. I maintain a variety of longstanding memberships in restructuring reorganizations, including: The Association of Insolvency and Restructuring Advisors, The American Bankruptcy Institute and The Turnaround Management Association. 4. Here, I have performed an analysis to evaluate the reasonableness of the Completion 3 sought in the Application. As a result of my analysis, detailed more fully 2 Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Application. 3 The Completion is further described in Application of Statutory Committee of Unsecured Claimholders to Employ and Retain Alvarez & Marsal North America, LLC as its Financial Advisor Pursuant to Sections 328(a) and 1103(a) of the Bankruptcy Code, Rules 2014 and 2016 of the Bankruptcy Rules and Local Rules and

13 Pg 3 of 13 below and in Exhibit A, I believe the Completion is appropriate given the necessity of A&M s services to the UCC, the benefits accruing to the estates and the administration in the Debtors chapter 11 cases, the extraordinary results achieved in this case as a result of A&M s services, and the Completion s congruence with general market standards for comparative fee awards in bankruptcy proceedings of similar size and complexity. 5. At the time of A&M s retention, A&M consulted with the UCC to reach the terms incorporated in the Retention Application, which provided that A&M could seek Bankruptcy Court approval of the Completion upon confirmation of a chapter 11 plan and the sale of substantially all of the Debtors assets in these proceedings The Retention Application, including the provision for a future application for the Completion, was approved by the Retention Order in accordance with the terms set forth in the [Retention] Application, without the need for any further action on the part of A&M or the Claimholder s Committee to document such retention. Retention Order On March 28, 2018, the Court approved the Debtors chapter 11 plan, which provided for the sale of substantially all of the Debtors assets (the Plan ). [Dkt. No ] 8. As the conditions precedent to the Completion are now satisfied, A&M is authorized to request allowance and payment of the Completion, and the UCC supports A&M s request. In the Retention Application, the UCC noted that it retained A&M (a) because Nunc Pro Tunc to April 18, 2017 (the Retention Application ), [Dkt. No. 794], and Order Authorizing Statutory Committee of Unsecured Claimholders to Employ and Retain Alvarez & Marsal North America, LLC as its Financial Advisor Pursuant to Sections 328(a) And 1103(a) of the Bankruptcy Code, Rules 2014 and 2016 of the Bankruptcy Rules and Local Rules and Nunc Pro Tunc to April 18, 2017 dated July 20, 2017 (the Retention Order ). [Dkt. No. 952.] 4 A&M reserves the right to request, at a later date, a completion fee, to be considered earned and payable, subject to Bankruptcy Court approval, upon the earliest to occur of the following: (a) confirmation of a chapter 11 plan of reorganization or liquidation, and (b) the sale of substantially all of the Debtors assets. Retention Application at 13(b). 3

14 Pg 4 of 13 it had determined that A&M was the best candidate to provide the services needed by the UCC in these chapter 11 cases, and (b) on the basis of A&M s proposed fee structure (including the contemplated Completion ), which the UCC believed to be competitive and appropriate given its understanding of the facts and circumstances of the Debtors chapter 11 cases. 9. In formulating the amount of the Completion, A&M engaged with the UCC and the economically effected constituencies the Debtors, the Debtors advisors, and the Consenting Claimholders, as defined by the Plan and reached an agreement as to the $1 million amount now requested, as reflected in the lack of any objection to the Application. 10. If approved, the Completion will not be paid from the Segregated Funds set aside for the benefit of Class 3A General Unsecured Claims, but will be paid from Available Cash of Wind Down Co. See Plan 2.2 (Professional Claims). B. Work Performed and Results Achieved by A&M in the Chapter 11 Cases 11. On January 20, 2017, the Court entered the Retention Order, approving A&M s retention by the UCC, nunc pro tunc to April 18, The UCC retained A&M to (i) monitor and evaluate the Debtors operations, cash flows and business plans; (ii) evaluate and monitor the Debtors efforts to reorganize and maximize the value of their estates for creditors; and (iii) assist in the review and monitoring of international operating, intercompany and cash management activities. In seeking to retain A&M, the UCC emphasized that the services of A&M were necessary and appropriate to enable it to evaluate the complex financial and economic issues raised by the Debtors chapter 11 cases and to fulfill its statutory duties effectively. 12. In the course of advising the UCC, A&M accomplished a variety of value creating actions in the following critical roles: 4

15 Pg 5 of 13 (a) Facilitating DIP Negotiations. A&M was instrumental in negotiations that led to successful resolution of objections to the DIP and cash management motions. A&M s services ultimately allowed the Debtors to access their DIP loans and led to the establishment of the DIP intercompany lending protocol necessary to ensure oversight of Debtors lending activity to non-debtor affiliates. Establishing this mechanism for oversight was critical to the UCC s fulfillment of its statutory duties. The proposed DIP financing provided for in the initial DIP motion contemplated a $375 million Intercompany Facility that allowed for international transfers out of the Debtors estates to Westinghouse s foreign affiliates located in Europe, the Middle East and Asia, 5 with the purported purpose to stabilize the Debtors business. See Motion Of Debtors Pursuant To 11 U.S.C. 362, 363, 364, 507, And 105 And Fed. R. Bankr. P. 2002, 4001, 6003, 6004 And 9014 for Interim and Final Orders (I) Authorizing the Debtors to Obtain Senior Secured, Superpriority, Postpetition Financing, (II) Granting Liens And Superpriority Claims, and (III) Scheduling A Final Hearing [Dkt. No. 19]. Due to A&M s facilitation of negotiations that resulted in the supervision protocol and A&M s monitoring and objections under the protocol, less than $50 million of the funds designated for international transfer were ultimately transferred during the first six months of the case, and, ultimately, less than half of the contemplated $375 million of international, unsecured transfers were required to 5 These transfers were to be accomplished pursuant to the Liquidity Facility Agreements (the LFA ), loans with recourse for the Debtors estates. See Final Order (I) Authorizing Debtors to Obtain Senior Secured, Superpriority, Postpetition Financing, (II) Granting Liens and Superpriority Claims Pursuant to Bankruptcy Code Sections 105, 362, 363, 364 and 507, Bankruptcy Rules 2002, 4001, 6004, and 9014 and Local Rule and (III) Granting Related Relief dated May 26, 2017 [Dkt. No. 565] (the Final DIP Order ). However, due to a variety of circumstances, certain foreign counterparties were unable to enter into the agreements. A&M s involvement was critical to restructuring some of these transactions such that subject transfers would be routed through signatories to the LFA, ensuring that the recourse rights of the Debtors estates and the creditors would be preserved. 5

16 Pg 6 of 13 stabilize the Debtors business, and, therefore, less DIP funding resulted in transfers outside of the purview of the Bankruptcy Court. (b) Enabling UCC Oversight. In addition to A&M s critical role in supporting UCC oversight over the routing of estate DIP funds to foreign non-debtor affiliates, A&M enabled the UCC s ability to fulfill its statutory oversight duties in a number of other ways. A&M established Critical Vendor limits and ensured oversight of critical vendor bucket spend. Again, due to A&M s efforts, the Debtors ultimately used far less of the Critical Vendor funds than initially requested. A&M engaged in general cash management oversight, which included repeated calls with the Debtors advisors on actual spending and reasons for variances to forecast, justification for forecasted disbursements, and prepared reports for the UCC to enable a full understanding of the cash situation and the Debtors cash management and business practices. Services to the UCC also included an in-depth review of the Debtors business plan, holding multiple meetings with Debtors advisors and management to review assumptions and overall tenets of the business plan, and preparing summary and conclusions of the business plan for the UCC to assist the UCC in gaining familiarity and comfort with the stability and value of the ongoing enterprise. A&M s additional responsibilities included performing repeated claims analyses and producing multiple different reports that allowed the UCC to gain a deeper understanding of the overall claims pool, which was critical to the plan negotiation process. Also, in coordination with the UCC s other advisors, A&M produced waterfall analyses to help the UCC to compare plan options. A&M regularly engaged in discussions with the Debtors advisors to monitor the performance of the Debtors businesses, raised questions 6

17 Pg 7 of 13 about operations, and reported to the UCC on a regular basis, such that the UCC was fully informed about the reorganization and prospects of recovery. Overall, these various and iterative analyses were fundamental to the UCC s ability to participate in the case to drive key decisions and the overall outcome achieved. (c) Ensuring UCC Cohesion. Even more so than in a typical bankruptcy, the unsecured creditor body and its statutory representatives were beset by divergent interests to point, the interests of the owners of the Debtors facilities, the prime contractors, and the Pension Benefit Guarantee Corporation. Given this divergence of interests, the assistance of A&M, and its seasoned bankruptcy professionals, in discussions between UCC members was critical to ensuring a more balanced view that resulted in more productive conversations for the UCC and the UCC s ability to provide oversight and to effectively represent the unsecured creditor body. (i) Expediting the Resolution of the Case. A&M s contributions to the overall case and to the plan negotiations expedited the resolution of the Debtors chapter 11 cases. A&M s efficiency and ability to work rapidly contributed to the cases lasting only sixteen months, despite the great uncertainty at the outset on what direction the cases would ultimately take, the risks facing creditor recovery, and the divergent interests of the various stakeholders. Based on the average monthly professional fees accrued during the first twelve months of the cases, every month that the pendency of the cases was reduced by A&M s efforts in enhancing the cohesion of the UCC, facilitating the DIP negotiations, contributing to the claims resolution and plan negotiation processes resulted in savings to the estates of approximately $12 million. 7

18 Pg 8 of 13 (j) Securing a Potential Full Recovery for Certain Unsecured Claims. As typical at the outset of bankruptcy, it is my understanding that unsecured creditors had little expectation of a full recovery. Depending on the ultimate resolution of equity claims and Toshiba s parental company guarantee, all unsecured creditors potentially could have recovered as little as 25% on their claims. From this base scenario, A&M worked hand in hand with UCC s other advisors to review a claims pool that ultimately exceeded $114 billion and to negotiate a plan that has the potential of resulting in a full recovery for certain claims, with an estimated recovery provided by the Debtors of % for General Unsecured Claims in Class 3A (estimated at $774.5 million to $1.162 billion of potentially allowed claims) and % for General Unsecured Claims in Class 3B (estimated at $7.6 billion of potentially allowed claims). 6 This potential recovery was supported by A&M s successful efforts to consensually resolve a number of significant contested claims. See, e.g., Modified First Amended Joint Chapter 11 Plan of Reorganization [Dkt. No. 2622] (detailing the NI Settlement, which involved the withdrawal of the Chinese AP1000 claims, which were unliquidated but in an asserted amount of over $4 billion). A&M was also active in the negotiations with the Pension Funding Agreement purchaser of the Toshiba Claims and Vogtle Claims to accept less favorable treatments in order to segregate and utilize $1.15 billion in cash funds to 6 See Ex. 6 to Order Approving (A) Proposed Disclosure Statement, (B) Solicitation and Voting Procedures, (C) Notice and Objection Procedures for Confirmation of Debtors' Plan and Other Relief, (D) Procedures for Assumption and Assignment of Contracts, and (E) the Form of 363 Sale Notice as Alternative Relief [Dkt. No. 2632]. This is the Court-approved disclosure statement associated with the Debtor s confirmed plan, the Modified Second Amended Joint Chapter 11 Plan of Reorganization [Dkt. No. 2986]; confirmed by the Court s Confirmation Order, Findings of Fact, Conclusions of Law, and Order Confirming Modified Second Amended Joint Plan of Reorganization, [Dkt. No. 2988]; and as later amended by Order Authorizing Debtors to Amend the Chapter 11 Plan and Plan Funding Agreement and Providing Related Relief [Dkt. No. 3644]. 8

19 Pg 9 of 13 satisfy Class 3A General Unsecured Claims. 7 Notably, A&M s Completion will not be taken out of the $1.15 billion segregated for the benefit of the Class 3A Claimants. 13. In sum, A&M s services were necessary for the UCC to fulfill its statutory role and were fundamental to the expeditious negotiation and confirmation of the Debtors Plan, which presents the extraordinary prospect that unsecured creditors may be paid in full. C. Market Analysis of Completion s in the Market 14. In assessing the reasonableness of completion fees (also described as a success fee, contingent success fee, restructuring fee or incentive fee ), A&M conducted a market study that reviewed the retention of professionals in large bankruptcies for the period of CY A&M specifically looked at debtor-side bankruptcies where a financial advisor and other restructuring professionals were retained, and the details of the compensation arrangement included a success or completion fee. 15. In order to identify an estimated range of comparative values for completion fees, I and other A&M professionals, at my direction, examined 22 cases that included a combination of a time-based compensation rate (hourly or monthly), as well as a success or completion fee. Furthermore, A&M has participated in various cases where retained restructuring professionals compensation packages include completion fees. The average value of the success or completion fees in the analysis was approximately $1.93 million, comprising 0.58% of Revenue, Total Assets and Total Liabilities ( LTM ) and 0.23% of Total Assets as of the Bankruptcy Petition Date. As shown in the attached analysis, the $1.0 million Completion 7 Defined terms in this sentence are those used in the Court-approved disclosure statement. Ex. 6 to Order Approving (A) Proposed Disclosure Statement, (B) Solicitation and Voting Procedures, (C) Notice and Objection Procedures for Confirmation of Debtors' Plan and Other Relief, (D) Procedures for Assumption and Assignment of Contracts, and (E) the Form of 363 Sale Notice as Alternative Relief. [Dkt. No. 2632]. 9

20 Pg 10 of 13 requested by A&M is well below the average and median value of success fees in the sample, and only comprises 0.03% of LTM and 0.02% of Total Assets. Applying the average LTM and Total Asset ratios to the Debtors $3.99 billion of LTM and $4.4 billion in pre-petition revenue would imply a reasonable completion fee of between $10.1 to $23 million. 16. I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge and belief. Executed on January 7, /s/mark A. Roberts Mark A. Roberts ALVAREZ & MARSAL NORTH AMERICA, LLC th Street NW, Suite 600 Washington, District of Columbia Telephone: (202) Facsimile: (202) Financial Advisor for the Statutory Committee of Unsecured Claimholders of Westinghouse Electric Company LLC, et al. 10

21 Pg 11 of 13 Exhibit A Completion s Analysis

22 Comparative Analysis for Success/Incentive s Success / Incentive s by Deal Success Summary Restructuring Company Amount Firm Structure*** Role Petition Date Jurisdiction LTM Revenue* Total Assets* Total Liabilities* A&M Nine West 3,750,000 Completion Southern Dist of CEO Apr-18 NY 1,575,000, % 988,200, % 1,937,300, % A&M FirstEnergy Completion Northern Dist of 3,000,000 CRO Mar-18 Solutions OH 3,078,000, % 5,514,000, % 7,584,000, % A&M Walter Investment Completion Southern Dist of 1,250,000 CRO Dec-17 Group** NY 830,063, % 14,979,635, % 15,215,869, % Maeva Group True Religion 3,000,000 Completion FA Jul-17 Delaware 369,500, % 243,300, % 534,700, % AlixPartners Gymboree 1,250,000 Contingent Eastern Dist of CRO Jun-17 Success VA 1,006,115, % 755,498, % 1,364,646, % FTI Consulting Adeptus Health 700,000 Completion + Northern Dist of CRO Apr-17 Success TX 403,739, % 798,679, % 453,482, % A&M Ciber, Inc. 500,000 Incentive CRO Apr-17 Delaware 679,714, % 334,327, % 171,927, % AlixPartners Westinghouse Contingent Southern Dist of 7,500,000 CRO Mar-17 Electric Co. Success NY 3,998,200, % 4,392,000, % 9,391,000, % AlixPartners BCBG Max Azria Southern Dist of Global Holdings, 909,000 Success CRO Feb-17 NY LLC 897,700, % 223,000, % 651,000, % Zolfo Cooper Avaya Inc 3,150,000 Restructuring Southern Dist of CRO Jan-17 NY 3,619,000, % 5,576,000, % 10,059,000, % A&M Fairway Holdings 1,000,000 Completion Southern Dist of CRO May-16 NY 764,375, % 345,957, % 397,078, % A&M Penn Virginia 1,000,000 Incentive CRO May-16 Eastern Dist of VA 211,249, % 466,503, % 1,415,725, % A&M Dex Media 2,000,000 Incentive CRO May-16 Delaware 1,498,074, % 1,419,000, % 2,703,000, % A&M Noranda Aluminum 900,000 FTI Consulting SFX Entertainment 1,350,000 Zolfo Cooper RCS Capital 1,250,000 Completion Completion Confirmation CRO Feb-16 Eastern Dist of MO 1,228,100, % 1,087,600, % 1,259,500, % CRO/Interim CEO Feb-16 Delaware 402,422, % 661,614, % 517,440, % CRO/CFO Jan-16 Delaware 2,735,016, % 1,975,286, % 1,387,672, % Huron Consulting The NORDAM Group 1,500,000 Success CRO Jul-18 Delaware 676,000, % n/a n/a 305,200, % A&M Gibson Brands 500,000 Incentive CRO May-18 Delaware 1,325,500, % n/a n/a 521,300, % Stephens Harvey Gulf International Marine 3,500,000 Restructuring FA/Inv. Banker Mar-18 Southern Dist of TX 53,000, % n/a n/a 1,265,000, % AlixPartners Velocity Holding Co. 2,000,000 Success CRO Nov-17 Delaware 584,200, % n/a n/a 485,000, % A&M Payless Shoesource 1,900,000 A&M Answers.com 500,000 Pg 12 of 13 Completion Completion CRO CRO Apr-17 Mar-17 Eastern Dist of MO Southern Dist of NY 3,375,700, % n/a n/a 838,000, % 21,500, % n/a n/a 571,000, % Average $ 1,927,682 Median $ 1,300, % 0.23% 0.18% A&M - Westinghouse UCC Westinghouse Electric Co. 16 1,000,000 Completion Mar-17 Southern Dist of NY 3,998,200, % 4,392,000, % 9,391,000, %

23 Methodology: Pg 13 of 13 Representative Deals: Deals included are based on a Debtwire and Capital IQ screening of select debtor side Chapter 11 representations during FY17 and January - August 2018, with incentive fees above $500,000. Retention applications were approved for all of the cases included, though in certain of the most recent cases, final approval has not yet been granted for the incentive fees. Notes: *Revenue, Total Assets and Total Liabilities Data is as of the Bankruptcy Petition Date. Where Total Liabilities data was not available, Total Debt was used. **Walter changed name to Ditech Holding Corporation in Feb 2018 *** Structure - Fixed monthly fees are based on retention applications and other court documents. NORDAM Group - Success fee contingent upon (i) the confirmation of a chapter 11 plan (ii) a consensual resolution involving asset sale(s) and an extension of the Debtors credit facility maturity date of greater than 12 months (iii) dismissal of the chapter 11 cases, (iv) other events that the Restructuring Committee deems worthy of a success fee. Gibson Brands - Success fee payable upon the earlier of (i) the consummation of a Chapter 11 plan of reorganization and (ii) the sale, transfer, or other disposition of all or a substantial portion of the assets or equity of the Debtors Harvey Gulf International Marine - Stephens is entitled to a $3.5 million success fee as well as financing fees based on the following criteria: (i) 1.0% of the aggregate principal of new debt that is secured by first-priority liens over any of the Company's assets (ii) 2.0% of of the aggregate principal of new debt that is raised by the Company and not covered by the previous clause (iii) 3.0% of the aggregate principal amount of the aggregate committed or face amount of financing involving the issuance of equity. These financing related tiered fees have been excluded from this analysis as the financing have not yet been completed at the time this document was finalized. Walter Investment Group - A&M is entitled to a success fee of up to $1.25m. Gymboree - Success of $1.25m based on successful resolution or reorganization within 6 months from the petition date (if longer than 6 months the Success was to be $1.0m). Adeptus Health - FTI will be entitled to a fee of $200K upon either i) confirmation of a plan of reorg or liquidation; or ii) the sale of substantially all of the assets. Additionally, FTI will be entitled to a fee of $500k based on unsecured recoveries. Westinghouse Electric Co. - Alix Success is based on achieving certain savings milestones to be set forth in an addendum to the Engagement Letter, subject to $7.5 million cap. Avaya - Restructuring calculated as one twentieth of one percent (0.05%) of the debt restructured per the Engagement Letter. 2