mew Doc 2066 Filed 01/03/18 Entered 01/03/18 21:21:33 Main Document Pg 1 of 24

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1 Pg 1 of 24 TROUTMAN SANDERS LLP 875 Third Avenue New York, NY Tel (212) Hugh M. McDonald David A. Pisciotta -And th Street NW, Suite 1000 Washington, DC Tel (202) David C. Mancini Attorneys for EvapTech, Inc. Hearing Date and Time January 24, 2018 at 1100 a.m. (Eastern Time) Objection Deadline and Time January 17, 2018 at 400 p.m. (Eastern Time) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re WESTINGHOUSE ELECTRIC COMPANY LLC, et al., 1 Debtors x x Chapter 11 Case No (MEW) Jointly Administered NOTICE OF HEARING AND MOTION OF EVAPTECH, INC. FOR ALLOWANCE AND IMMEDIATE PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(a) AND (b)(1) 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, if any, are 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). The Debtors principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania

2 Pg 2 of 24 PLEASE TAKE NOTICE that a hearing on the annexed Motion of EvapTech, Inc. for Allowance and Immediate Payment of Administrative Expense Claim Pursuant to 11 U.S.C. 503(a) and (b)(1) (the Motion ) will be held before the Honorable Michael E. Wiles, United States Bankruptcy Judge, in Room 617 of the United States Bankruptcy Court for the Southern District of New York, One Bowling Green, New York, New York (the Bankruptcy Court ), on January 24, 2018 at 1100 a.m. (Eastern Time), or as soon thereafter as counsel may be heard. PLEASE TAKE FURTHER NOTICE that any responses or objections (the Objections ) to the Motion must be in writing, shall conform to the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules, and shall be filed with the Bankruptcy Court (a) by attorneys practicing in the Bankruptcy Court, including attorneys admitted pro hac vice, electronically in accordance with General Order M-399 (which can be found at and (b) by all other parties in interest, on a CD-ROM, in textsearchable portable document format (PDF) (with a hard copy delivered directly to Chambers), in accordance with the customary practices of the Bankruptcy Court and General Order M-399, to the extent applicable, and served in accordance with General Order M-399 and the Order Pursuant to 11 U.S.C. 105(a) and Fed. R. Bankr. P. 1015(c), 2002(m), and 9007 Implementing Certain Notice and Case Management Procedures [ECF No. 101] so as to be received no later than January 17, 2018 at 400 p.m. (Eastern Time) (the Objection Deadline ). PLEASE TAKE FURTHER NOTICE that, if no Objections are timely filed and served with respect to the Motion, the relief requested in the Motion may be granted without a hearing. 2

3 Pg 3 of 24 Dated New York, New York January 3, 2018 TROUTMAN SANDERS LLP By s/ Hugh M. McDonald Hugh M. McDonald David A. Pisciotta 875 Third Avenue New York, NY Tel (212) And- David C. Mancini th Street NW, Suite 1000 Washington, DC Tel (202) Counsel for EvapTech, Inc. 3

4 Pg 4 of 24 Hearing Date and Time January 24, 2018 at 1100 a.m. (Eastern Time) Objection Deadline and Time January 17, 2018 at 400 p.m. (Eastern Time) TROUTMAN SANDERS LLP 875 Third Avenue New York, NY Tel (212) Hugh M. McDonald David A. Pisciotta -And th Street NW, Suite 1000 Washington, DC Tel (202) David C. Mancini Attorneys for EvapTech, Inc. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re WESTINGHOUSE ELECTRIC COMPANY LLC, et al., 1 Debtors x x Chapter 11 Case No (MEW) Jointly Administered MOTION OF EVAPTECH, INC. FOR ALLOWANCE AND IMMEDIATE PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(a) AND (b)(1) 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, if any, are 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). The Debtors principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania

5 Pg 5 of 24 EvapTech, Inc. ( EVP ), through its undersigned counsel, hereby submits this motion (the Motion ) for entry of an order, substantially in the form annexed hereto, allowing and directing immediate payment of its administrative expense claim in the amount of $1,052, pursuant to sections 503(a) and (b)(1) of title 11 of the United States Code (the Bankruptcy Code ). In support of the Motion, EVP submits the Declaration of Michael Bickerstaff (the Bickerstaff Declaration ), 2 filed simultaneously herewith, and respectfully represents as follows JURISDICTION 1. On March 29, 2017 (the Petition Date ), each of the above-captioned debtors (collectively, the Debtors ) filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court ). 2. The Bankruptcy Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334(b). This matter is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A) and (B). Venue is proper in this District pursuant to 28 U.S.C and BACKGROUND The EVP-WEC Subcontract 3. EVP is party to a contract dated June 3, 2010 with one of the Debtors in this bankruptcy matter, WECTEC Contractors, Inc. ( WEC or the Debtor ), f/k/a CB&I Contractors, Inc., f/k/a Shaw Constructors, Inc. (the EVP-WEC Subcontract ). (Bickerstaff Declr. 4, Ex. A.) 2 References to the Bickerstaff Declaration and the exhibits thereto shall be cited as follows (Bickerstaff Declr., Ex.). 2

6 Pg 6 of Pursuant to the EVP-WEC Subcontract, EVP was to construct four cooling towers at the V.C. Summer Nuclear Power Generating Station (the Project ) to provide a circulating water cooling system for two new reactors also under construction known as Units 2 and 3. The scope of work for each cooling tower required, among other things, approximately 1,430 pieces of precast concrete, 16 large roof mounted fans, electrical work within the cooling tower that connected electrical power between and among the equipment and other components, connecting electrical power needed for each cooling tower to a nearby dedicated power distribution center ( PDC ) for each tower, and installation of internal engineered materials in the upper part of each tower to facilitate the water cooling process. The four towers were designated as 2A, 2B, 3A, and 3B. 5. Beginning in 2010, EVP performed engineering, supply, and installation work for the mechanical components and systems of each cooling tower that facilitated the water cooling process. The Interim Assessment Agreement 6. On March 30, 2017, the day after the Debtors commenced their bankruptcy cases, the Bankruptcy Court entered an order [ECF No. 68] (the IAA Order ) approving an Interim Assessment Agreement (the Assessment Agreement ) between the Debtors and South Carolina Electric & Gas Company and South Carolina Public Service Authority (the Project Owners ). Among other things, the IAA Order authorized the Debtors to execute, deliver, implement and perform all obligations under the Assessment Agreement. (See IAA Order at 2.) Pursuant to the Assessment Agreement, the Project Owners were required to pay all costs incurred by the Debtors for Subcontractors and/or Vendors for work performed or services rendered for the Project during the Interim Assessment Period. (Assessment Agreement 6.) 3

7 Pg 7 of From the very outset of the post-petition period and pursuant to the Assessment Agreement, WEC and the Project Owners directed EVP to continue performing its scope of work under the EVP-WEC Subcontract. 8. On April 28, 2017, the Debtors and the Project Owners executed an amendment (the First Amendment ) to the Assessment Agreement. (See Notice of Filing of Amendment No. 1 to V.C. Summer Interim Assessment Agreement [ECF. No. 385].) 9. The First Amendment gave additional protection and assurances to vendors and suppliers. It specifically provided as follows The V.C. Summer Owners agree to pay all costs and administrative expenses accrued by the Debtors during the Interim Assessment Period pursuant to the EPC, the Interim Assessment Agreement, or any other agreement related to the V.C. Summer Project, regardless of whether the costs become payable during or after the Interim Assessment Period, and including all costs accrued by the Debtors to Fluor, Subcontractors and/or Vendors pursuant to (i) existing purchase orders, vendor contracts and Subcontracts (as defined in the EPC) and (ii) new purchase orders, new vendor contracts Subcontracts, or change orders to existing purchase orders, vendor contracts or Subcontracts. (First Amendment 2.) 10. The First Amendment further provided that the Project Owners will indemnify and hold harmless the Debtors against any administrative expenses which the Debtors may incur under the EPC, the Interim Assessment Agreement, the IAP Contracts, or any other agreement related to the V.C. Summer Project, regardless of whether the administrative expenses arise during or after the Interim Assessment Period. (Id. 4.) 11. A second amendment (the Second Amendment ) to the Assessment Agreement was executed on June 26, (See Notice of Filing of Amendment No. 2 to V.C. Summer Interim Assessment Agreement [ECF. No. 778].) The Second Amendment required the Debtors and Project Owners to continue to perform to and through the earlier of (a) August 10, 2017, or 4

8 Pg 8 of 24 (b) termination of the Interim Assessment Agreement by SCE&G or the Authority [Project Owners] upon five (5) business days notice (the Interim Assessment Period ). (Second Amendment 1.) Notifications to Suspend, Shutdown and Demobilize EVP s Work 12. By letter dated July 31, 2017 ( Owner s Stop Work Notice ), the Project Owners gave EVP notice that they had decided to cease construction of both nuclear units [at VC Summer] and, as a result, will shift toward appropriate steps to coordinate all of the work to stabilize and demobilize the site. (Bickerstaff Declr. 7, Ex. B.) The Owner s Stop Work Notice also informed EVP that all contracts will be evaluated for termination and final payment in accordance with each contracts terms and conditions. Importantly, the Project Owners promised that they were committed to working with [EVP] on an orderly demobilization process. (Id.) 13. WEC issued a separate but similar letter to EVP dated July 31, 2017, ( WEC s Shutdown Notice) informing EVP that construction on the Project must cease immediately. (Bickerstaff Declr. 8, Ex. C.) WEC further provided that a transition plan will be developed and a plan for demobilization of all subcontractor property will be announced. Do not return to the site until you have been officially directed to do so. (Id.) 14. WEC sent EVP another letter on this same subject ( WEC s Suspension Notice ) dated August 1, 2017 with the subject line V.C. Summer AP 1000 Suspension Notification. (Bickerstaff Declr. 9, Ex. D.) In WEC s Suspension Notice, WEC reiterated its prior message that all work remaining should be stopped effective immediately. (Id.) WEC acknowledged therein that the suspension of work would cause EVP to incur costs and charges and requested that EVP take all commercially reasonable efforts to minimize the 5

9 Pg 9 of 24 charges. (Id.) WEC also requested that EVP take steps to de-mobilize all work in progress. (Id.) 15. The three Notice letters referenced above (i.e., the Owner s Stop Work Notice, WEC s Shutdown Notice and WEC s Suspension Notice; collectively, the Notices ) substantially prejudiced EVP and greatly hindered its ability to proactively plan for an orderly demobilization by abruptly halting EVP s work and failing to specify when EVP would be permitted to return to the Project site or what type of demobilization work would be requested. Prior to receiving the Owner s Stop Work Notice and WEC s Shutdown Notice, EVP had been working diligently, as directed by WEC, toward completion of the cooling towers. Moreover, the unexpected and sudden cessation of work while construction was still occurring significantly increased the scope and cost of demobilization over that typically contemplated in a similar project where demobilization happens gradually as phases of the project are completed, materials are fully installed, equipment is removed and labor is reduced. (Bickerstaff Declr. 10.) 16. On August 4, 2017, EVP requested additional information from WEC and the Project Owners regarding the demobilization that EVP was directed to complete. EVP also asked when it would be permitted to return to the Project site. 17. In response, WEC directed EVP to demobilize in a way that preserved the work as much as reasonably possible to enable the work to be used in the future. (Bickerstaff Declr. 12.) 18. Notwithstanding WEC s direction to continue to perform post-petition demobilization work on the Project, on August 7, 2017, the Debtors filed an Omnibus Motion of Debtors Pursuant to 11 U.S.C. 365(a) and 105(a) for Entry of Order Authorizing Debtors to 6

10 Pg 10 of 24 Reject Certain Executory Contracts Related to the VC Summer Project [ECF No. 1099] (the V.C. Summer Rejection Motion ), seeking to reject substantially all of the Debtors contracts and purchase orders related to the V.C. Summer Facility, including the EVP-WEC Subcontract. 19. On August 8, 2017, EVP again requested additional information from WEC, including instructions regarding the fan motors that were offsite at that time and the removal of scaffolding. EVP also provided WEC rough estimates of demobilization costs for this demobilization. 20. On August 16, 2017, EVP agreed to meet with WEC, but again requested instruction, in writing, from WEC as to certain issues that remained unresolved, including but not limited to scaffolding and logistics such as when EVP would be permitted to gain access to the Project site and begin demobilization work. EVP also requested details as to how it should submit its invoices for the suspension costs it was currently incurring and the demobilization work. 21. EVP did not receive a written response to its request. Moreover, EVP s project team began to receive ambiguous instructions regarding the scope of demobilization. (Bickerstaff Declr. 15.) 22. On August 23, 2017, EVP met with WEC at a site meeting, during which the timing and instructions for demobilization were to be clarified. WEC instructed EVP to return to the Project site on August 28, 2017 to begin preparing, planning and executing its demobilization efforts. (Id. 16.) EVP was further directed to wait until September 5, 2017 to begin the actual demobilization work. (Id. 19.) 7

11 Pg 11 of 24 EVP s Suspension of Work Costs 23. In response to the Notices referenced above, EVP suspended its work efforts from August 1 through August 27, 2017, as directed and while EVP awaited further direction regarding the scope and timing of its forthcoming demobilization efforts (the Suspension Time Period ). 24. During this Suspension Time Period, EVP was still incurring costs associated with its Project overhead and other time-related and necessary costs for the forthcoming demobilization. 25. The Suspension Time Period concluded when WEC directed EVP to return to the site on August 28, On September 6, 2017, EVP submitted an initial invoice for its costs incurred during the Suspension Time Period totaling $597, On September 20, 2017, EVP submitted payment application number 78 ( Pay App. No. 78 ), containing an updated calculation of the suspension costs, which included the cost of storing fill material. The updated calculation for the Suspension Time Period totaled $624, (the Suspension Costs ). (Bickerstaff Declr. 23, Ex. F.) 28. On October 16, 2017, WEC submitted payment to EVP in the amount of $190,461.54, which was to be credited towards costs for the first week of EVP s Suspension Time Period (August 1-7, 2017). By applying WEC s partial payment to EVP s outstanding Suspension Costs, it reduced EVP s total outstanding Suspension Costs from $624, to $434, On September 20, 2017, EVP submitted payment application number 77 ( Pay App. No. 77 ) containing an invoice for the PVC Drift Eliminators (i.e., a patented internal 8

12 Pg 12 of 24 cooling tower equipment component) in the amount of $125,943.00, which was incurred during the Interim Assessment Period and prior to WEC and the Project Owner s stop work Notices. (Bickerstaff Declr. 25, Ex. G.) EVP s Demobilization Efforts and Costs 30. On August 28, 2017, EVP returned to the Project as directed by WEC and began to plan and coordinate its demobilization efforts. During this process, EVP discussed and collaborated with WEC to determine the appropriate scope of equipment and materials to remain on site versus the equipment and materials to be removed, as well as the schedule for the demobilization work. On September 5, 2017, EVP began executing the physical demobilization process pursuant to the agreed upon scope with WEC. 31. On September 6, 2017, the Court entered an Order Pursuant to 11 U.S.C. 365(a) and 105(a) Authorizing Debtors to Reject Certain Executory Contracts Related to the V.C. Summer Project [ECF No. 1321] (the V.C. Summer Rejection Order ), which authorized the Debtors to reject numerous contracts but, inexplicably, omitted the EVP-WEC Subcontract. 32. On September 8, 2017, EVP provided WEC and the Project Owners with a written estimate for the requested demobilization services. (Bickerstaff Declr. 22, Ex. E.) 33. During the suspension and demobilization time period, when WEC was giving directives to EVP, and EVP and WEC were collaborating and discussing the scope and performance of demobilization, neither WEC nor the Project Owners ever objected to EVP s demobilization scope, cost estimates or efforts, nor did either object to EVP s submission of costs incurred for the Suspension Time Period. (Bickerstaff Declr. 26.) 34. On September 22, 2017, the Debtors filed their Notice of Resolution of Pending 9

13 Pg 13 of 24 Objection to Omnibus Motion of Debtors for Authority to Reject Certain Executory Contracts Related to the VC Summer Project [ECF No. 1391] (the V.C. Summer Rejection Notice ). As set forth in the V.C. Summer Rejection Notice and pursuant to the V.C. Summer Rejection Order, the EVP-WEC Subcontract was deemed rejected. 35. EVP has submitted weekly invoices for its demobilization costs to WEC. (Bickerstaff Declr. 27, Ex. H.) These invoices capture EVP s demobilization costs through October 22, 2017, which total $579, (the Demobilization Costs ). 36. EVP s Demobilization Costs, plus its outstanding Suspension of Work Costs, plus Equipment Costs for Drift Eliminators, comprise its Administrative Expense Claim in the amount of $1,139, As part of discussions between WEC and EVP regarding demobilization, EVP offered a credit to purchase fill material that was in storage while awaiting delivery to and installation at the Project. WEC s and Notices halted EVP s work progress before the fill could be installed. WEC and EVP agreed to give WEC a credit for the stored fill material in the amount of $87, to mitigate WEC s demobilization costs. (Bickerstaff Declr. 28.) 38. After applying the $87,071 credit for the fill material referenced in the paragraph above, EVP s net present Administrative Expense Claim totals $1,052, , and is broken down as follows Suspension Costs $434, Demobilization Costs $579, Drift Eliminators, Pay App No. 77 $125, Less Credit, EVP repurchase of fill material ($87,071.00) 10

14 Pg 14 of 24 Benefits to the Estate Total $1,052, EVP s suspension and demobilization significantly benefitted the Debtor s estate, including, but not limited to, the following ways o By removing equipment that was no longer being used much of which is rented from and owned by third parties and protecting the remaining equipment from the elements, EVP s demobilization efforts reduced the Debtor s liability to the Project Owners for removal of the equipment of the job site, as well as liability to third parties for the loss of and/or potential damages to the equipment; o By moving and storing on-site materials inside the cooling towers, EVP s demobilization efforts protected them from the elements, thereby prolonging and/or preserving the value of those materials for the estate; o By removing ladders and scaffolding as well as material and debris, safely and professionally, EVP s demobilization efforts reduced the Debtor s risk of on-site injuries and tort and other injury-related claims; and o By working with WEC on developing and executing a demobilization plan, EVP reduced and mitigated the Debtor s project costs and damages associated with any potential claims by the Owner to perform the same work with another contractor. 40. Despite WEC s direction to EVP to perform the previously described demobilization services which resulted in significant benefits to the Debtor s estate and the Project Owners indemnity of the Debtors for such costs EVP has been unsuccessful at obtaining payment of its Administrative Expense Claim over the course of the last three months. RELIEF REQUESTED 41. By this Motion, EVP respectfully requests entry of an order, substantially in the form annexed hereto, (i) allowing the Administrative Expense Claim in the amount of $1,052, pursuant to section 503(b)(1) of the Bankruptcy Code as an actual and necessary cost of preserving the bankruptcy estate; (ii) directing immediate payment of the Administrative Expense Claim in full pursuant to section 503(a) of the Bankruptcy Code; and (iii) such other 11

15 Pg 15 of 24 and further relief as this Court deems just and proper. EVP reserves the right to supplement, amend or revise this Motion, and to submit additional Motions for Allowance and Payment of Administrative Expenses. 3 BASIS FOR RELIEF REQUESTED I. The Administrative Expense Claim arose from post-petition transactions with WEC that benefited WEC in the operation of its business 42. Section 503(b)(1)(A) of the Bankruptcy Code provides, in relevant part, After notice and a hearing, there shall be allowed administrative expenses... including... the actual, necessary costs and expenses of preserving the estate. 11 U.S.C. 503(b)(1)(A). Section 507(a)(2) of the Bankruptcy Codes affords high priority to allowed administrative expense claims. Id. 507(a)(2). The rationale for such favorable treatment is that it induces third parties to continue doing business with a debtor-in-possession. See In re Babbs, 265 B.R. 35, 37 (Bankr. S.D.N.Y. 2001). 43. Under the standard enumerated by the Second Circuit, [a]n expense is administrative only if it arises out of a transaction between the creditor and the bankrupt s trustee or debtor in possession, and only to the extent that the consideration supporting the claimant's right to payment was both supplied to and beneficial to the debtor-in-possession in the operation of the business. In re Bethlehem Steel Corp., 479 F.3d 167, 172 (2d Cir. 2007) (quoting Trustees of Amalgamated Ins. Fund v. McFarlin's, Inc., 789 F.2d 98, 101 (2d Cir. 1986)) (internal quotation marks omitted). 44. The requirement that the debtor-in-possession receive a benefit is broadly construed. See In re ATP Oil & Gas Corp., No , 2014 WL , at *9 (Bankr. 3 EVP anticipates filing an additional Motion for Payment of Administrative Expenses due to the cost of scaffolding that EVP owned but had to leave erected in two of the cooling towers due to demobilization time and resource constraints. 12

16 Pg 16 of 24 S.D. Tex. Mar. 18, 2014) ( [A]ctual and necessary costs should include costs ordinarily incident to operation of a business, and not be limited to costs without which rehabilitation would be impossible. (quoting Reading Co. v. Brown, 391 U.S. 471, 483 (1968) (internal quotation marks omitted)). 45. EVP s Administrative Expense Claim meets both criteria and is therefore entitled to administrative expense priority. 46. The Suspension Costs arose from WEC s post-petition directive that EVP immediately cease work on the Project and await further instruction. For the benefit of WEC and at its behest, EVP s personnel remained on standby to (i) resume work on the cooling towers if WEC required; or (ii) commence demobilization. Accordingly, EVP s Suspension Costs benefitted WEC s estate in at least two significant ways. First, incurring the Suspension Costs preserved WEC s option to resume construction of the Project without incurring significant delays and expenses upon resumption. Second, by incurring the Suspension Costs, upon reaching the decision to demobilize, EVP was able to perform the demobilization work more quickly (on only five days notice) and more cost effectively because it still had crew and equipment on standby. Being able to commence demobilization immediately benefitted WEC s estate because, as set forth more fully below, there was an appreciable risk of damage to the Project site and equipment, as well as for liability to third parties, that would only increase over time. WEC and the Project Owners acceptance of Pay App No. 78 and Pay App. No. 77, without objection, demonstrates that both WEC and the Project Owners recognized and knowingly accepted these benefits. 47. The estate also benefited by EVP s willingness to engage WEC in numerous and ongoing discussions during the Suspension Time Period and demobilization work regarding 13

17 Pg 17 of 24 various options for demobilization; storage, use and protection of equipment and materials; status and protection of work in place; and safety options. This information allowed the estate to make educated and informed decisions as to what options would be most beneficial to the estate. 48. Because the services underlying the Suspension Costs were directed by and beneficial to WEC, EVP should be compensated accordingly as an administrative expense claimant. 49. The Demobilization Costs, likewise, arose from a transaction with the Debtor that conferred significant benefits upon the Debtor s estate. As directed by WEC, EVP protected and, where possible removed, on-site equipment, scaffolding, and ladders, returned rental equipment, stored and protected materials, and removed debris from the Project site. Because of EVP s efforts, the estate was spared the time and expense of engaging another subcontractor to perform these critical tasks (and the likelihood that engaging another subcontractor that did not already have personnel on site who were familiar with the site would have charged significantly more for these services than EVP did). 50. EVP s demobilization efforts also protected the estate from liability on various fronts, thereby benefiting the estate. For example, the protection, storage and, where possible, removal and recovery of equipment saved the estate the costs of repair or replacement; likewise, the removal ladders and protection of scaffolding prevented personal injuries, for which the estate could have been liable. If WEC fails to compensate EVP as a priority creditor for the demobilization services, WEC will be unjustly enriched. See In re Enron Corp., 300 B.R. 201, 207 (Bankr. S.D.N.Y. 2003) ( The focus on allowance of a priority is to prevent unjust enrichment of the estate, not to compensate the creditor for its loss. ). Indeed, both WEC and the Project Owners acknowledged the value being conferred upon the estate by requesting that 14

18 Pg 18 of 24 the demobilization work be performed and accepting EVP s invoices for that work without raising a single objection. Therefore, the Demobilization Costs satisfy the criteria for allowance of an administrative expense claim. 51. As part of EVP s post-petition continuation of its scope of work as directed by WEC, the estate also benefited by EVP s supply of Drift Eliminators. This equipment, valued by the WEC-EVP Subcontract at $125,943.00, was invoiced to WEC in EVP Payment Application No. 77, submitted post-petition, but that remains unpaid, due and owing. 52. For fairness, EVP s Administrative Costs computation gives the estate a credit back for the fill material that EVP previously delivered. The fill material would have deteriorated and been costly to remove later. WEC and EVP negotiated a credit value of $87,071.00, if EVP would timely remove the fill material. EVP has done that. Thus, EVP s Administrative Cost Claim is reduced by the $87, Had EVP not removed the fill material, the estate would have not received any credit at all. II. Immediate payment of the Administration Expense Claim will not prejudice the Debtors or other Creditors and is necessary to protect EVP from financial hardship 53. A bankruptcy court has discretion to determine when an administrative claim must be paid. See In re HQ Glob. Holdings, Inc., 282 B.R. 169, 173 (Bankr. D. Del. 2002). In the exercise of such discretion, the following factors are often considered (1) the prejudice to the debtors, (2) hardship to claimant, and (3) potential detriment to other creditors. In re Global Home Prods., LLC, No (KG), 2006 Bankr. LEXIS 3608, at *12 (Bankr. D. Del. Dec. 21, 2006). Courts are more inclined to authorize payment on an administrative claim before confirmation of a chapter 11 plan if it is anticipated that administrative expenses will be paid in full, and the risk of a race to a debtor s assets is minimal. See In re HQ Glob. Holdings, Inc., 282 B.R. at

19 Pg 19 of On balance, the relative hardships support an order compelling immediate payment of EVP s Administrative Expense Claim. Immediate payment of the Administrative Expense Claim will not prejudice WEC. Pursuant to the First Amendment to the Assessment Agreement between the Debtors and the Project Owners, the Project Owners are required to pay or indemnify the Debtors for administrative expense claims. See First Amendment 2, 4. Therefore, the estate will not suffer unfair surprise or hardship if directed to pay the Administrative Expense Claim immediately. 55. In contrast, EVP will be significantly prejudiced if payment is delayed. EVP relied on WEC s reassurances that EVP would be paid timely for the Suspension Costs and Demobilization Costs, and such reliance was reasonable the Project Owners expressly obligated themselves under the First Amendment to the Assessment Agreement to pay administrative expense claims. See id. WEC even paid EVP for its first week of suspension costs incurred, amounting to $190, However, $1,052, remains outstanding. This sum is a significant receivable on EVP s books relative to the size of EVP s business. (Bickerstaff Declr. 32.) Therefore, immediate payment of the Administrative Expense Claim is required to prevent significant prejudice and financial hardship to EVP. 56. EVP submits that immediate payment of the Administrative Expense Claim will not result in prejudice to other creditors because the Project Owners are required to pay or indemnify WEC for administrative expenses related to the Project. 57. Because the relevant factors militate in favor of immediate payment, the Court should order the Debtors to pay EVP s Administrative Expense Claim within five (5) business days of entry of the order. 16

20 Pg 20 of 24 NO PRIOR REQUEST 58. No previous application for the relief sought herein has been made to this or any other court. RESERVATION OF RIGHTS 59. EVP expressly reserves all rights, claims, counterclaims, defenses, and remedies under the Bankruptcy Code, the EVP-WEC Subcontract and any other agreements with any of the Debtors, and other applicable law. EVP reserves the right to assert additional claims against the Debtors of any nature for any other amounts, and to amend, modify, and/or supplement this Motion. NOTICE 60. Pursuant to the Case Management Order [ECF. No. 101], Notice of this Motion will be provided to (i) attorneys for the Debtors, Weil, Gotshal & Manges LLP; (ii) the Office of the United States Trustee; (iii) attorneys for the Debtor Toshiba Nuclear Energy Holdings (UK) Limited, Togut, Segal & Segal LLP; (iv) counsel to Toshiba Corporation, Skadden, Arps, Slate, Meagher & Flom LLP; (v) counsel to the Debtors prepetition agent under that certain Second Amended and Restated Credit Agreement, dated as of October 7, 2009 (as amended), Latham & Watkins LLP; (vi) counsel to the lenders under the Debtors DIP Facility, Paul, Weiss, Rifkind, Wharton & Garrison LLP; (vii) counsel to the agents and letter of credit issuer under the Debtors DIP Facility, Shearman & Sterling LLP; (viii) counsel to the Statutory Unsecured Claimholders Committee of Westinghouse Electronic Company LLC, et al.; and (ix) any other party in interest who filed a Notice of Appearance and a Request for Service of Documents as of December 19, EVP respectfully submits that, in view of the facts and circumstances, such notice is sufficient and no other or further notice is necessary. 17

21 Pg 21 of 24 CONCLUSION WHEREFORE, EVP respectfully requests that the Court enter an order, substantially in the form annexed hereto, (i) allowing the Administrative Expense Claim in the amount of $1,052, pursuant to section 503(b)(1) of the Bankruptcy Code as an actual and necessary cost of preserving the bankruptcy estate; (ii) directing immediate payment of the Administrative Expense Claim in full pursuant to section 503(a) of the Bankruptcy Code; and (iii) such other and further relief as this Court deems just and proper. Dated New York, New York January 3, 2018 TROUTMAN SANDERS LLP By s/ Hugh M. McDonald Hugh M. McDonald David A. Pisciotta 875 Third Avenue New York, NY Tel (212) And- David C. Mancini th Street NW, Suite 1000 Washington, DC Tel (202) Counsel for EvapTech, Inc. 18

22 Pg 22 of 24 PROPOSED ORDER

23 Pg 23 of 24 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re WESTINGHOUSE ELECTRIC COMPANY LLC, et al., Debtors x x Chapter 11 Case No (MEW) Jointly Administered ORDER GRANTING MOTION OF EVAPTECH, INC. FOR ALLOWANCE AND IMMEDIATE PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(a) AND (b)(1) Upon the motion (the Motion ) 4 of EvapTech, Inc. ( EVP ), for entry of an order allowing the Administrative Expense Claim pursuant to section 503(b)(1) of the Bankruptcy Code and directing immediate payment of the Administrative Expense Claim in full pursuant to section 503(a) of the Bankruptcy Code; and the Court having jurisdiction to consider the Motion and the relief requested therein; and venue being proper before the Court; and due and proper notice of the Motion having been provided, and it appearing that no other or further notice need be provided; and the Court having reviewed the Motion; and the Court having determined that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and upon all of the proceedings had before the Court and after due deliberation and sufficient cause appearing therefor, it is ORDERED that the Motion is granted as set forth herein; and it is further ORDERED that EVP shall have an allowed Administrative Expense Claim in the amount of $1,052,379.81; and it is further 4 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.

24 Pg 24 of 24 ORDERED that the Debtors shall pay $1,052, to EVP within five (5) business days of entry of this order; and it is further ORDERED that the Debtors, to the extent applicable, shall continue to timely perform all post-petition obligations pursuant to any contract or agreement with EVP; and it is further ORDERED that the Court shall retain jurisdiction with respect to all matters arising from or related to the implementation of this Order.