Case Document 1910 Filed in TXSB on 05/24/13 Page 1 of 6

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1 Case Document 1910 Filed in TXSB on 05/24/13 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In Re: ATP OIL & GAS CORPORATION Case No H1-11 Debtor MCGRIFF, SEIBELS & WILLIAMS OF TEXAS, INC. S EMERGENCY MOTION FOR ADEQUATE ASSURANCE OF PAYMENT OF BROKERAGE SERVICE FEES AND INSURANCE PREMIUMS THIS MOTION SEEKS AN ORDER THAT MAY ADVERSELY AFFECT YOU. IF YOU OPPOSE THE MOTION, YOU SHOULD IMMEDIATELY CONTACT THE MOVING PARTY TO RESOLVE THE DISPUTE. IF YOU AND THE MOVING PARTY CANNOT AGREE, YOU MUST FILE A RESPONSE AND SEND A COPY TO THE MOVING PARTY. YOU MUST FILE AND SERVE YOUR RESPONSE WITHIN 21 DAYS OF THE DATE THIS MOTION WAS SERVED ON YOU. YOUR RESPONSE MUST STATE WHY THE MOTION SHOULD NOT BE GRANTED. IF YOU DO NOT FILE A TIMELY RESPONSE, THE RELIEF MAY BE GRANTED WITHOUT FURTHER NOTICE TO YOU. IF YOU OPPOSE THE MOTION AND HAVE NOT REACHED AN AGREEMENT, YOU MUST ATTEND THE HEARING. UNLESS THE PARTIES AGREE OTHERWISE, THE COURT MAY CONSIDER EVIDENCE AT THE HEARING AND MAY DECIDE THE MOTION AT THE HEARING. REPRESENTED PARTIES SHOULD ACT THROUGH THEIR ATTORNEY. TO THE HONORABLE MARVIN ISGUR, UNITED STATES BANKRUPTCY JUDGE: McGriff, Seibels & Williams of Texas, Inc. ( McGriff ) files this Emergency Motion for Adequate Assurance (the Motion ) and shows: Summary of Relief Requested 1. McGriff moves the Court to order ATP Oil and Gas Corporation (the Debtor ) to provide adequate assurance that both the Insurance Premiums (defined below) and McGriff s fees related to its Brokerage Services Agreement (defined below) will be paid as agreed

2 Case Document 1910 Filed in TXSB on 05/24/13 Page 2 of 6 Emergency Consideration 2. As explained in greater detail below, emergency consideration is proper because today (May 24, 2013), McGriff was advised by the underwriters in London that that they cannot guarantee the availability of Named Windstorm (NWS) and Total Loss Only (TLO) policies for the Debtor past the end of next week, May 31, Hurricane season in the Gulf of Mexico officially begins on June 1, Jurisdiction 3. This Court has jurisdiction over this Motion pursuant to 28 U.S.C This Court may hear and determine this Motion under the standing order of reference issued by the United States District Court for the Southern District of Texas under 28 U.S.C Consideration of this Motion is a core proceeding under 28 U.S.C. 157(b)(2)(A) and (O). As such, this Court may enter a final order on this matter under 28 U.S.C. 157(b)(1). Venue of this proceeding is proper in this district under 28 U.S.C and Background 4. McGriff is the Debtor s insurance broker. 5. Prepetition, ATP Oil and Gas Corporation entered into a Brokerage Service Agreement with McGriff. The Brokerage Service Agreement commenced on March 31, 2012 and ends on March 31, A true and correct copy of the Brokerage Service Agreement is attached hereto as Exhibit 1. It must be noted that McGriff has been performing extensive services under the Brokerage Services Agreement since March 31, 2013 without any compensation. McGriff is unwilling to continue to do so. 6. Pursuant to the Brokerage Service Agreement, McGriff is responsible for, among other things, soliciting, negotiating and servicing the Debtor s insurance policies. Under the Brokerage Service Agreement, McGriff has placed hundreds of millions of dollars of insurance on Motion for Adequate Assurance: _1 2

3 Case Document 1910 Filed in TXSB on 05/24/13 Page 3 of 6 the Debtor s assets. Most of the Debtor s assets insured through McGriff are located in the Gulf of Mexico, however there are other assets located around the world. A list of insurance coverage provided under the policies placed by McGriff is listed on Exhibit A of Exhibit Rather than the usual insurance agent s commission, the Brokerage Service Agreement provides for a yearly fee of $650, (the Annual Fee ) due upon receipt of an invoice by the Debtor. The Annual Fee is payable within 30 days of the date of the invoice. Under the terms of the Brokerage Service Agreement, the 2013 Annual Fee invoice is scheduled to be issued on June 30, 2013 and will be payable on July 30, On August 17, 2012, the Debtor, ATP Oil and Gas Corporation filed its Chapter 11 voluntary petition under the Bankruptcy Code. 9. On August 22, 2012, the Bankruptcy Court issued its Order Granting Debtor s Emergency Motion for Authorization to (1) Continue Pre-Petition Insurance Program; (2) Pay Any Pre-Petition Premiums or Related Obligations; and (3) Honor Obligations Under Pre-Petition A Premium Financing Agreement (the Order ). See Docket No Pursuant to the Order, the Debtor was authorized to maintain the Insurance Program to the extent permitted pursuant to the DIP Order, including, but not limited to, employment and compensation in the ordinary course of McGriff and any other agents and brokers that Debtor relies upon to maintain the Insurance Program.... See Docket No. 203, p The Order further stated that the authorization of the payments shall not be deemed to constitute the post-petition assumption of any executory contract.... See Docket No. 203, p Post-petition McGriff has continued to act as the Debtor s insurance broker. 13. The chart below identifies several important insurance policies that require renewal in the next few days and weeks. Motion for Adequate Assurance: _1 3

4 Case Document 1910 Filed in TXSB on 05/24/13 Page 4 of 6 Policy Insurer Renewal Date Premium TLO (1) Innovator / (2) Lloyd s & Other Companies June 1, 2013 $8,659, Titan Excess Windstorm Lloyd s & Other Companies June 1, 2013 $10,818, Energy Package Lloyd s & Other Companies June 30, 2013 $16,158, Worker s Compensation / Texas Mutual Insurance June 30, 2013 $72, Employers Liability Company Commercial Property Hartford Lloyds Insurance June 30, 2013 $7, Company (collectively, the Expiring Policies ). 14. In order to provide the Debtor, the proposed buyer under the sales motion now set for June 4, 2013, and the other lenders with more time, McGriff negotiated with Lloyds and the other issuers of the TLO and Excess Windstorm policies to extend those renewal dates from June 1, 2013 to June 30, These services were over and above its duties under the Brokerage Service Agreement, required significant time and expense on McGriff s part, for which McGriff seeks an additional fee of $100, At this time, McGriff has received no guidance from the Debtor, the proposed buyer or the lenders with respect to the Expiring Policies or payment of McGriff s Annual Fee which will be due on July 30, Motion for Adequate Assurance: _1 Emergency Consideration is Proper 16. Today (May 24, 2013), McGriff was advised by the underwriters in London that that they cannot guarantee the availability of Named Windstorm (NWS) and Total Loss Only (TLO) policies for the Debtor past the end of next week, May 31, Hurricane season in the Gulf of Mexico officially begins on June 1, 2013, with the National Oceanic and Atmospheric Administration predicting an unusually robust windstorm and hurricane season. McGriff hereby advises the Court and the parties that its ability to even place NWS and TLO insurance is uncertain and no guarantees can be made that this insurance can be obtained. 4

5 Case Document 1910 Filed in TXSB on 05/24/13 Page 5 of 6 Time is of the essence to be able to negotiate optimal rates and terms are possible for the Debtor with the underwriters. Further, this insurance can only be placed with the cooperation and services of Miller Insurance Services, LP of London, which is included in the any other agents and brokers that Debtor relies upon to maintain the Insurance Program language in the Court s order of August 22, Miller is owed an additional brokerage fees for services performed but not yet paid. Thus, even if the Court approves this Motion, the TLO and NWS insurance can only be placed with Miller s assistance and payment of their fees. 17. Since filing Chapter 11, the Debtor has continued to conduct its business operations. See Debtor s Monthly Operating Reports for the Months for August 2012 through April McGriff requests adequate assurance from the Debtor (and any other party in interest which may be acquiring the Debtor s assets) with respect to (i) what course of action will be taken on the Expiring Policies; and (ii) that McGriff will receive both its Annual Fee and its additional $100, fee for negotiating the extension of the policies on behalf of the Debtor. WHEREFORE, MCGRIFF, SEIBELS & WILLIAMS OF TEXAS, INC. prays that the Court order the Debtor, and such other parties in interest as may be liable or responsible, to provide adequate assurance that i) insurance policy premiums which will become due in June and/or July, 2013 will be paid, and ii) that Movant s contractual and additional fees will be paid when invoices, and iii) for such other relief as is just. Motion for Adequate Assurance: _1 5

6 Case Document 1910 Filed in TXSB on 05/24/13 Page 6 of 6 Respectfully submitted, /s/ Wayne Kitchens Wayne Kitchens TBN wkitchens@hwa.com Simon Mayer TBN: smayer@hwa.com HUGHESWATTERSASKANASE, LLP 333 Clay Street, 29th Floor Houston, Texas Telephone: (713) Facsimile (713) ATTORNEYS FOR MCGRIFF, SEIBELS & WILLIAMS OF TEXAS, INC. CERTIFICATION FOR ACCURACY PURSUANT TO LBR (i) I hereby certify that the facts and assertions made in the Emergency Motion for Adequate Assurance are true and accurate to the best of my knowledge. /s/ Wayne Kitchens Wayne Kitchens CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the above and foregoing instrument has been served electronically on all parties receiving electronic notice in this proceeding via the Court s ECF noticing system on this 24 th day of May, /s/ Wayne Kitchens Wayne Kitchens Motion for Adequate Assurance: _1 6

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14 Case Document Filed in TXSB on 05/24/13 Page 1 of 1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In Re: ATP OIL & GAS CORPORATION Case No H1-11 Debtor ORDER GRANTING MCGRIFF, SEIBELS & WILLIAMS OF TEXAS, INC. S EMERGENCY MOTION FOR ADEQUATE ASSURANCE OF PAYMENT OF BROKERAGE SERVICE FEES AND INSURANCE PREMIUMS The Court has considered the emergency motion of McGriff, Seibels & Williams of Texas, Inc. s ( McGriff ) for adequate assurance of payment of brokerage service fees and insurance premiums (the Motion ). The Court finds the Motion to be meritorious and finds that it should be granted. It is, therefore, ORDERED that the Debtor and and shall provide adequate assurance of payment of both brokerage service fees and insurance premiums, as detailed in the Motion, to McGriff, by providing to McGriff a cash deposit in the amount of $ no later than May 31, 2103, or such other cash equivalent as may be agreed upon by the parties or as further ordered by the Court. Signed this day of, Marvin Isgur, United States Bankruptcy Judge