NORTH AMERICA 2016 PROFESSIONAL FEES REPORT

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1 NORTH AMERICA 2016 PROFESSIONAL FEES REPORT Joshua Friedman Legal Analyst Rong Ren Analyst Jack M. Tracy II Head of Legal Analysis, Americas Tim Hynes Head of Research

2 ABOUT THIS REPORT Debtwire s annual Professional Fees Report tracks and ranks advisors by the total amount of fees those firms earned in connection with their in-court representations in 2016.* This report complements Debtwire s Restructuring Advisory Mandate Report, which tracks and ranks advisors by the total number of in-court and out-of-court hires, by providing a snapshot of the 2016 restructuring advisory market through the analysis of public fee data for professionals involved in US bankruptcy cases. We reviewed and analyzed the professional fee applications and court orders approving those fees filed in bankruptcy cases that commenced in As a result, this report captures fee data for the following types of representations: Companies and boards of directors; Official committees (unsecured creditors and equity); and Trustees (Chapter 7 and Chapter 11). As for types of advisors, this report tracks the fees paid to: Counsel (lead counsel and local/special counsel); Financial Advisors/Investment Bankers; Restructuring Advisors; and Claims Agents. Notably, while the companion Restructuring Advisory Mandate Report includes significant data regarding representations of lenders and bondholders, this report does not include fee data for the professionals of parties that are not estate fiduciaries, as there is no requirement for those advisors to disclose or seek approval of their fee arrangements (and even when filed are still not subject to the same level of disclosure or review). * NOTE: We have attempted to capture fees approved by the bankruptcy court on a final basis. However, due to the fluid nature of the fee application process, we have used interim fee orders and fee applications where final orders were not yet available. 2

3 INTRODUCTION 2016 was a very busy year in the restructuring space. There was a seemingly never-ending stream of oil & gas bankruptcies; alternative energy saw its biggest collapse in years (SunEdison); and the US coal sector was battered, seeing two stalwarts Arch Coal and Peabody Energy seek Chapter 11 protection. The year also birthed the current retail restructuring boom occupying most of With 2016 now in the rearview mirror, we took the opportunity to provide some global takeaways from a year s worth of fee data. In that vein, we analyzed data from 2016, based on: the total amount of fees each disclosing professional earned; the type of party represented (ie, the company, UCC, equity committee, etc.); and the sector in which the representation occurred. This report ranks the most lucrative restructuring practices for 2016 based on: (1) Lead Counsel; (2) Local/Special Counsel; (3) Financial Advisors; (4) Investment Bankers; (5) Restructuring Advisors; and (6) Claims Agents. We provide further analysis of average hourly rates and the relationship of company to UCC fees, in addition to performing a deep dive on fee data for each bankruptcy case, showing how expensive each case one was to run both on a monthly basis and broken down by type of advisor. We also shine a spotlight on the energy, retail, and metals & mining sectors, ranking firms based on sectorspecific fees and providing an overview of company-specific costs within each sector. 3

4 2016 Professional Fees

5 COMMENTARY There were more than 200 bankruptcies in 2016 that Debtwire tracked for this fees report, which includes more than 1,100 in-court representations by law firms, financial and operational advisers, investment bankers and claims agents. During the course of 2016, bankrupt estates cut checks for more than USD 1.25bn of fees and expenses to restructuring professionals, including more than USD 700m for legal counsel (ie, over 55%), close to USD 400m for investment bankers/financial advisors (ie, over 30%), approximately USD 150m for restructuring advisors (ie, 12%) and USD 2.6m for claims agents. The most significant difference between the data we analyzed for advisor fees versus mandates is that counsel have a decreased role in the cost structure, with FAs, I-Bankers, and RAs seeing the benefit of higher fees (compared to the amount of representations). 20.1% 33.9% FAs and I-bankers comprised 25% of total 2016 mandates (both inand out-of-court), but earned 30% of total fees for 2016 (in-court). 9.5% Restructuring advisors saw an even bigger jump. They earned close to 12% of total fees for 2016, while comprising approximately 5% of total mandates. 10.4% 11.8% 14.3% Energy Metals & Mining Alternative Energy Transportation & Automotive Retail Others 5

6 LEAD COUNSEL LEAD COUNSEL. In 2016, lead counsel were responsible for USD 594m of fees and expenses, including approximately USD 450m for company-side representations and USD 135m for official committees. Kirkland & Ellis and Weil Gotshal were the clear leaders, totaling over USD 66m of fees and expenses each. Weil is the top-earning law firm in the retail space for 2016, while Kirkland dominated the energy space to the tune of USD 47m, which was double Weil s USD 23m second-place finish. Skadden is the only other firm near the top of the leaderboard, totaling USD 56m of fees (on the back of its SunEdison representation), clearing the remaining firms by over USD 30m. Top 20 Lead Counsel Lead Counsel Prime / Middle Total Fees Total Hours Average Rate Total Kirkland & Ellis 12 10/2 $63,840,484 84,038 $760 $3,273,584 $67,114,068 Weil, Gotshal & Manges 11 9/2 $64,472,183 80,399 $802 $1,663,144 $66,135,326 Skadden, Arps, Slate, Meagher & Flom 6 6/0 $55,428,936 70,103 $791 $1,378,756 $56,807,692 Jones Day 5 4/1 $23,516,466 37,414 $629 $320,919 $23,837,385 Akin Gump Strauss Hauer & Feld 7 5/2 $20,334,205 27,724 $733 $462,694 $20,796,899 Gibson, Dunn & Crutcher 4 3/1 $19,254,168 24,301 $792 $359,756 $19,613,924 Latham & Watkins 5 4/1 $18,776,528 23,850 $787 $658,895 $19,435,423 DLA Piper 9 4/5 $17,527,075 26,923 $651 $727,415 $18,254,490 Vinson & Elkins 2 2/0 $16,901,727 26,809 $630 $1,151,191 $18,052,918 Morrison & Foerster 4 3/1 $17,732,068 23,422 $757 $274,761 $18,006,829 Greenberg Traurig 6 4/2 $16,933,710 28,830 $587 $689,066 $17,622,776 Paul, Weiss, Rifkind, Wharton & Garrison 2 2/0 $15,761,202 18,608 $847 $247,436 $16,008,638 Ropes & Gray 2 1/1 $13,845,095 16,576 $835 $376,484 $14,221,579 Kramer Levin Naftalis & Frankel 3 2/1 $11,561,258 14,901 $776 $1,059,823 $12,621,080 O'Melveny & Myers 3 2/1 $12,275,855 16,714 $734 $153,018 $12,428,873 Davis Polk & Wardwell 1 1/0 $11,020,831 13,144 $839 $291,931 $11,312,762 Lowenstein Sandler 7 3/4 $10,487,576 17,155 $611 $143,559 $10,631,135 Hughes Hubbard & Reed 1 1/0 $9,343,752 15,212 $614 $204,528 $9,548,280 Sidley Austin 3 2/1 $8,502,004 11,735 $724 $277,114 $8,779,118 Pachulski Stang Ziehl & Jones 10 2/8 $8,417,037 11,651 $722 $327,862 $8,744,899 6

7 LEAD COUNSEL (CONT D) Energy Lead Counsel Prime / Middle Total Fees Total Hours Average Rate Total Kirkland & Ellis 8 7/1 $44,376,303 58,392 $760 $2,531,238 $46,907,541 Weil, Gotshal & Manges 5 5/0 $22,549,030 27,592 $817 $470,577 $23,019,608 Vinson & Elkins 2 2/0 $16,901,727 26,809 $630 $1,151,191 $18,052,918 Latham & Watkins 3 3/0 $16,168,184 20,747 $779 $591,509 $16,759,693 Akin Gump Strauss Hauer & Feld 6 5/1 $14,246,536 19,503 $730 $298,013 $14,544,549 Lead Counsel Prime / Middle Metals & Mining Total Fees Total Hours Average Rate Total Jones Day 1 1/0 $17,976,194 28,471 $631 $237,974 $18,214,168 Kirkland & Ellis 2 1/1 $15,706,942 20,653 $761 $653,416 $16,360,358 Paul, Weiss, Rifkind, Wharton & Garrison 1 1/0 $12,958,110 15,767 $822 $215,598 $13,173,709 Davis Polk & Wardwell 1 1/0 $11,020,831 13,144 $839 $291,931 $11,312,762 Lowenstein Sandler 2 2/0 $6,087,086 9,557 $637 $115,018 $6,202,104 Lead Counsel Prime / Middle Retail Total Fees Total Hours Average Rate Total Weil, Gotshal & Manges 3 1/2 $16,265,985 21,311 $763 $610,484 $16,876,469 Gibson, Dunn & Crutcher 1 1/0 $10,307,701 13,583 $759 $215,049 $10,522,750 Cooley 7 1/6 $4,742,525 6,503 $729 $70,519 $4,813,044 O'Melveny & Myers 1 0/1 $4,609,515 6,278 $734 $35,156 $4,644,671 Klee, Tuchin, Bogdanoff & Stern 2 0/2 $3,717,758 5,226 $711 $148,718 $3,866,476 7

8 LOCAL / SPECIAL COUNSEL LOCAL/SPECIAL COUNSEL. In 2016, local/special counsel earned USD 107m in fees and expenses. While Delaware and Texas firms dominated the rankings, Debevoise & Plimpton rode its representation of CHC Group to the top of the local/special counsel table (with USD 9.7m of fees and expenses). Richards Layton & Finger and Young Conaway Stargatt & Taylor followed closely behind, each with double-digit representations in Richards Layton was engaged in 13 cases, bringing in USD 9.2m of fees and expenses (including top-five finishes for each of the retail, energy, and metals & mining sectors), while Young Conaway earned USD 8.5m over 15 cases (and led the retail space). Top 20 Local / Special Counsel Local / Special Counsel Prime / Middle Total Fees Total Hours Average Rate Total Debevoise & Plimpton 1 1/0 $9,613,249 10,918 $881 $66,836 $9,680,085 Richards, Layton & Finger 13 9/4 $8,577,367 17,604 $487 $597,419 $9,174,786 Young Conaway Stargatt & Taylor 15 8/7 $8,064,463 17,052 $473 $391,760 $8,456,223 Cohen & Gresser 1 1/0 $5,912,037 9,908 $597 $829,639 $6,741,676 Quinn Emanuel Urquhart & Sullivan 4 4/0 $3,779,329 5,017 $753 $436,267 $4,215,596 Pachulski Stang Ziehl & Jones 8 3/5 $3,638,071 6,396 $569 $267,662 $3,905,733 Togut, Segal & Segal 2 1/1 $3,266,799 5,808 $562 $25,886 $3,292,685 Curtis, Mallet-Prevost, Colt & Mosle 4 4/0 $3,146,308 4,689 $671 $121,977 $3,268,285 Kasowitz Benson Torres & Friedman 1 1/0 $3,042,921 4,945 $615 $99,517 $3,142,438 Armstrong Teasdale 3 3/0 $2,866,778 7,211 $398 $120,668 $2,987,446 Jackson Walker 6 6/0 $2,502,644 4,732 $529 $246,937 $2,749,581 Morrison & Foerster 1 1/0 $2,723,114 3,826 $712 $5,649 $2,728,762 Bracewell 1 1/0 $1,939,831 3,204 $605 $349,110 $2,288,941 Wilmer Cutler Pickering Hale and Dorr 3 1/2 $1,898,198 3,371 $563 $35,670 $1,933,868 Clyde & Co 1 1/0 $1,585,251 2,245 $706 $347,402 $1,932,653 Whiteford, Taylor & Preston 4 1/3 $1,690,833 3,887 $435 $39,036 $1,729,868 Heller, Draper, Patrick, Horn & Dabney 1 1/0 $1,589,149 4,172 $381 $131,017 $1,720,166 Gardere Wynne Sewell 2 2/0 $1,550,496 3,105 $499 $33,476 $1,583,971 Morris, Nichols, Arsht & Tunnell 4 4/0 $1,438,918 2,947 $488 $101,318 $1,540,237 Andrews Kurth Kenyon 3 3/0 $1,485,512 2,056 $722 $27,456 $1,512,967 8

9 LOCAL / SPECIAL COUNSEL (CONT D) Energy Local / Special Counsel Prime / Middle Total Fees Total Hours Average Rate Total Kasowitz Benson Torres & Friedman 1 1/0 $3,042,921 4,945 $615 $99,517 $3,142,438 Jackson Walker 4 4/0 $2,186,465 4,005 $546 $218,021 $2,404,486 Clyde & Co 1 1/0 $1,585,251 2,245 $706 $347,402 $1,932,653 Richards, Layton & Finger 4 4/0 $1,641,520 3,738 $439 $179,159 $1,820,679 Heller, Draper, Patrick, Horn & Dabney 1 1/0 $1,589,149 4,172 $381 $131,017 $1,720,166 Local / Special Counsel Prime / Middle Metals & Mining Total Fees Total Hours Average Rate Total Quinn Emanuel Urquhart & Sullivan 1 1/0 $2,910,602 3,855 $755 $422,831 $3,333,433 Curtis, Mallet-Prevost, Colt & Mosle 1 1/0 $2,743,344 4,090 $671 $108,297 $2,851,641 Richards, Layton & Finger 2 2/0 $1,760,639 3,342 $527 $136,067 $1,896,705 Armstrong Teasdale 1 1/0 $1,666,202 4,034 $413 $42,569 $1,708,771 Pachulski Stang Ziehl & Jones 1 1/0 $1,208,649 1,942 $623 $87,497 $1,296,146 Local / Special Counsel Prime / Middle Retail Total Fees Total Hours Average Rate Total Young Conaway Stargatt & Taylor 4 2/2 $3,874,828 8,230 $471 $225,315 $4,100,143 Richards, Layton & Finger 2 0/2 $1,968,728 4,203 $468 $92,415 $2,061,143 Whiteford, Taylor & Preston 1 0/1 $1,038,760 2,456 $423 $14,989 $1,053,748 Wilmer Cutler Pickering Hale and Dorr 1 0/1 $533, $736 $9,087 $542,620 Pachulski Stang Ziehl & Jones 1 1/0 $427, $615 $36,058 $463,814 9

10 FINANCIAL ADVISOR FINANCIAL ADVISORS/INVESTMENT BANKERS. In 2016, FAs and investment bankers earned approximately USD 400m in total from in-court bankruptcy cases, comprised of USD 289m for I-bankers and USD 109m for FAs. On the FA-side, FTI Consulting dominated, earning over USD 33m in fees and expenses across 18 engagements, more than three times as much as PwC s USD 10m of earnings. FTI topped the retail as well as the metals & mining sectors, while finishing in second place for the energy space, behind Conway MacKenzie s USD 8m of revenues. Huron Consulting Group and Berkeley Research Group joined the leaderboard for the energy and metals & mining sectors, while Zolfo Cooper made the top five of the retail and metals & mining categories. Top 20 Financial Advisors Lead Counsel Prime / Middle Total Fees Total Hours Average Rate Total FTI Consulting 18 12/6 $31,870,598 57,156 $558 $1,434,489 $33,305,087 PwC 2 1/1 $9,325,815 26,199 $356 $761,549 $10,087,364 Conway MacKenzie 8 5/3 $9,346,504 15,465 $604 $259,260 $9,605,764 Berkeley Research Group (BRG) 5 4/1 $8,590,434 14,974 $574 $93,123 $8,683,558 Zolfo Cooper 9 7/2 $6,072,725 12,212 $497 $167,222 $6,239,947 Huron Consulting Group 4 2/2 $5,796,426 10,518 $551 $234,823 $6,031,249 Seabury Group 2 2/0 $5,445,519 15,172 $359 $364,415 $5,809,934 Alvarez & Marsal 9 5/4 $5,586,500 9,500 $588 $117,594 $5,704,094 Province 7 1/6 $3,437,469 6,886 $499 $40,222 $3,477,692 Opportune 2 2/0 $2,915,323 3,862 $755 $31,890 $2,947,212 Imperial Capital 1 1/0 $2,637,424 4,146 $636 $87,426 $2,724,850 SkyWorks Capital 1 1/0 $1,964,223 2,495 $787 $20,624 $1,984,847 Deloitte 4 1/3 $1,771,289 3,510 $505 $9,031 $1,780,320 BDO Consulting 5 1/4 $1,761,575 4,569 $386 $6,395 $1,767,970 VLC Associates 1 1/0 $1,721,960 2,967 $580 $12,167 $1,734,127 Goldin Associates 1 1/0 $1,104,563 1,757 $629 $21,266 $1,125,828 SSG Capital Advisors 1 1/0 $1,070,710 1,564 $685 $7,881 $1,078,591 Clear Thinking Group 1 0/1 $804,569 2,627 $306 $96,371 $900,940 SierraConstellation Partners 2 0/2 $751,101 2,085 $360 $12,206 $763,306 CohnReznick 3 0/3 $722,510 1,437 $503 $28,402 $750,912 10

11 FINANCIAL ADVISOR (CONT D) Energy Financial Advisor Prime / Middle Total Fees Total Hours Average Rate Total Conway MacKenzie 5 4/1 $7,689,107 11,998 $641 $210,014 $7,899,121 FTI Consulting 4 4/0 $4,552,302 9,305 $489 $69,763 $4,622,065 Huron Consulting Group 2 2/0 $3,814,454 6,984 $546 $153,526 $3,967,980 Berkeley Research Group (BRG) 3 2/1 $3,572,815 6,441 $555 $20,734 $3,593,550 Opportune 2 2/0 $2,915,323 3,862 $755 $31,890 $2,947,212 Financial Advisor Prime / Middle Metals & Mining Total Fees Total Hours Average Rate Total FTI Consulting 2 2/0 $11,121,694 17,096 $651 $437,929 $11,559,622 Berkeley Research Group (BRG) 2 2/0 $5,017,619 8,533 $588 $72,389 $5,090,008 Huron Consulting Group 1 0/1 $1,860,533 3,368 $552 $71,736 $1,932,269 SSG Capital Advisors 1 1/0 $1,070,710 1,564 $685 $7,881 $1,078,591 Zolfo Cooper 1 1/0 $691,888 1,586 $436 $22,751 $714,638 Financial Advisor Prime / Middle Retail Total Fees Total Hours Average Rate Total FTI Consulting 4 1/3 $9,558,017 20,061 $476 $754,230 $10,312,247 Province 4 1/3 $2,908,544 5,712 $509 $38,086 $2,946,630 BDO Consulting 2 1/1 $1,491,821 3,920 $381 $6,395 $1,498,216 Clear Thinking Group 1 0/1 $804,569 2,627 $306 $96,371 $900,940 Zolfo Cooper 1 0/1 $333, $434 $2,818 $335,951 11

12 INVESTMENT BANKER FINANCIAL ADVISORS/INVESTMENT BANKERS. In 2016, FAs and investment bankers earned approximately USD 400m in total from in-court bankruptcy cases, comprised of USD 289m for I-bankers and USD 109m for FAs. PJT Partners was far and away the leading investment banking firm, earning over USD 86m in 2016, over USD 50m more than any other firm. Approximately USD 50m of PJT s fees were on account of restructuring fees in a wide array of large cases, including Arch Coal, Energy XXI and Halcon Resources. Jefferies and Lazard were the only other I-bankers to cross the USD 30m mark, while Houlihan Lokey and Rothschild were the only other firms to cross the USD 20m threshold. Jefferies is the sole I-banker to make the top-five list for the energy, retail and metals & mining sectors (PJT had no retail mandates with fees). Investment Banker Prime / Middle Top 20 Investment Bankers Monthly Fee Financing Fee Asset Sale Fee Restructuring Fee Total Fees Total PJT Partners 11 11/0 $11,062,425 $8,617,500 $4,587,500 $ 48,835,054 $85,560,463 $306,035 $85,866,498 Jefferies 10 9/1 $6,654,892 $3,275,000 $4,350,000 $ 18,421,893 $32,701,785 $457,400 $33,159,185 Lazard 11 11/0 $10,021,290 $9,550,000 - $ 12,050,000 $31,621,290 $545,728 $32,167,019 Houlihan Lokey 14 8/6 $5,559,772 $635,000 $6,743,590 $ 15,350,205 $28,222,649 $215,551 $28,438,200 Rothschild 4 3/1 $3,630,161 $5,500,000 $13,511,184 $ 4,302,989 $26,944,334 $320,835 $27,265,170 Evercore 5 5/0 $3,914,194 $4,300,000 $675,000 $ 10,359,677 $19,248,871 $554,018 $19,802,889 Moelis & Co 5 5/0 $3,391,855 $1,200,000 - $ 14,769,505 $19,361,360 $258,243 $19,619,603 Carl Marks Advisory Group 3 2/1 $1,778,092 $84,000 $5,046,038 $ 750,000 $7,658,129 $63,791 $7,721,920 Stifel / Miller Buckfire 2 1/1 $600,000 $1,600,000 $3,000,000 - $5,200,000 $97,586 $5,297,586 Guggenheim Securities 3 1/2 $2,100,000 - $2,675,000 - $4,775,000 $155,523 $4,930,523 Perella Weinberg Partners 1 1/0 $150, $ 4,250,000 $4,400,000 $491 $4,400,491 Intrepid Financial Partners 1 0/1 $562,500 - $2,411,500 - $2,974,000 $104,257 $3,078,257 Lincoln International 2 0/2 $900,000 $375,000 $1,675,000 - $2,950,000 $44,735 $2,994,735 Blackhill Partners 1 0/1 $500,000 $362,000 - $ 2,050,000 $2,912,000 $68,218 $2,980,218 Ducera Partners 2 2/0 $685, $ 2,000,000 $2,685,161 $8,681 $2,693,842 Imperial Capital 5 2/3 $1,033,000 - $1,015,000 - $2,048,000 $54,759 $2,102,759 Cowen & Company 2 0/2 $440,000 - $1,500,000 - $1,940,000 $32,818 $1,972,818 Chardan Capital s 1 0/1 - $171,000 $1,705,333 - $1,876,333 $5,976 $1,882,308 Peter J. Solomon Company 1 0/1 - - $1,500,000 - $1,500,000 $11,850 $1,511,850 Sagent Advisors 1 0/1 $100,000 - $1,300,000 - $1,400,000 $12,410 $1,412,410 12

13 INVESTMENT BANKER (CONT D) Investment Banker Prime / Middle Energy Monthly Fee Financing Fee Asset Sale Fee Restructuring Fee Total Fees Total PJT Partners 7 7/0 $5,471, $ 30,781,384 $36,252,503 $125,780 $36,378,282 Evercore 4 4/0 $3,633,548 $4,150,000 $675,000 $ 9,325,000 $17,783,548 $531,764 $18,315,313 Houlihan Lokey 5 3/2 $2,398,425 $135,000 $250,000 $ 15,350,205 $18,067,712 $128,039 $18,195,751 Lazard 6 6/0 $4,712,419 $5,450,000 - $ 4,500,000 $14,662,419 $289,448 $14,951,867 Jefferies 2 2/0 $1,100,000 $3,000,000 - $ 7,571,093 $11,671,093 $125,062 $11,796,155 Investment Banker Prime / Middle Metals & Mining Monthly Fee Financing Fee Asset Sale Fee Restructuring Fee Total Fees Total PJT Partners 2 2/0 $3,552,113 $2,887,500 $4,587,500 $ 12,234,556 $23,261,670 $122,448 $23,384,118 Lazard 2 2/0 $2,875,000 $2,650,000 - $ 3,500,000 $9,025,000 $176,862 $9,201,862 Jefferies 2 2/0 $3,229, $ 2,737,500 $5,967,392 $151,329 $6,118,721 Evercore 1 1/0 $280,645 $150,000 - $ 1,034,677 $1,465,323 $22,254 $1,487,577 Guggenheim Securities 1 1/0 $1,050, $1,050,000 $51,433 $1,101,433 Investment Banker Prime / Middle Retail Monthly Fee Financing Fee Asset Sale Fee Restructuring Fee Total Fees Total Rothschild 1 1/0 $670,161 $2,500,000 - $ 4,302,989 $7,473,151 $43,023 $7,516,173 Stifel / Miller Buckfire 1 0/1 $600,000 $1,600,000 $3,000,000 - $5,200,000 $93,506 $5,293,506 Lincoln International 2 0/2 $900,000 $375,000 $1,675,000 - $2,950,000 $44,735 $2,994,735 Guggenheim Securities 1 0/1 $750,000 - $1,825,000 - $2,575,000 $73,190 $2,648,190 Jefferies 1 0/1 $250,000 - $2,000,000 - $2,250,000 $53,225 $2,303,225 13

14 RESTRUCTURING ADVISOR RESTRUCTURING ADVISORS. Restructuring advisors earned close to USD 150m in 2016, led by Alvarez & Marsal (USD 45m) and AlixPartners (USD 36m). AlixPartners fees were predominantly earned in the energy sector (more than USD 29m, or 81%), while A&M was the leader in retail and metals & mining fees. FTI coupled its FA dominance with a top-three finish in the RA field (at USD 22m), exceeding McKinsey s fourth-place finish by approximately USD 10m. Opportune was the only other RA to surpass USD 10m in fees and expenses. Restructuring Advisor Prime / Middle Top 20 Restructuring Advisors Total Hourly Fees Total Hours Average Rate Total Success Fees Total Alvarez & Marsal 17 15/2 $39,603,946 60,675 $653 $ 5,200,000 $1,463,048 $46,266,994 AlixPartners 10 9/1 $33,372,943 55,735 $599 $ 500,000 $2,086,739 $35,959,682 FTI Consulting 11 6/5 $20,242,962 35,534 $608 $ 1,350,000 $982,804 $22,575,766 McKinsey Recovery & Transformation 1 1/0 $11,332,693 19,348 $586 - $985,321 $12,318,013 Services Opportune 6 3/3 $10,165,138 28,679 $354 - $346,984 $10,512,122 Zolfo Cooper 1 1/0 $1,806,823 7,321 $247 $ 1,250,000 $63,144 $3,119,966 CDG Group 2 1/1 $2,875,000 6,306 $393 - $206,529 $3,081,529 Mackinac Partners 2 1/1 $2,400,793 3,594 $381 - $208,710 $2,609,503 Berkeley Research Group (BRG) 2 2/0 $2,109,570 1,923 $587 - $164,029 $2,273,598 RAS Management Advisors 1 1/0 $1,750,300 5,146 $340 - $108,765 $1,859,065 Deloitte 3 3/0 $1,439,717 3,287 $438 - $113,482 $1,553,198 CR3 Partners 3 0/3 $1,247,291 2,993 $417 - $73,684 $1,320,975 TDF Partners 1 0/1 $1,153,811 2,291 $504 - $8,785 $1,162,596 Winter Harbor 2 0/2 $1,061,027 2,276 $360 - $79,741 $1,140,768 Conway Mackenzie 1 0/1 $1,057,401 2,352 $465 - $60,592 $1,117,993 Development Specialists 1 0/1 $935,108 2,898 $398 - $82,055 $1,017,163 Clear Thinking Group 2 0/2 $822,482 1,597 $284 - $95,304 $917,786 Ernst & Young 2 1/1 $636,385 1,275 $398 - $50,793 $687,177 Goldin Associates 1 1/0 $425,000 1,130 $376 - $0 $425,000 Ankura Consulting Group 2 0/2 $396, $599 - $20,500 $417,321 14

15 RESTRUCTURING ADVISOR (CONT D) Restructuring Advisor Prime / Middle Energy Total Hourly Fees Total Hours Average Rate Total Success Fee Total AlixPartners 6 6/0 $28,001,516 46,703 $600 - $1,737,106 $29,738,622 Alvarez & Marsal 8 8/0 $14,487,032 22,328 $649 $ 2,200,000 $592,125 $16,687,032 Opportune 4 3/1 $6,051,298 20,450 $296 - $203,104 $6,254,403 FTI Consulting 2 1/1 $3,109,030 4,008 $776 - $117,168 $3,226,198 Deloitte 3 3/0 $1,439,717 3,287 $438 - $113,482 $1,553,198 Restructuring Advisor Prime / Middle Metals & Mining Total Hourly Fees Total Hours Average Rate Total Success Fee Total Alvarez & Marsal 1 1/0 $9,519,940 14,067 $677 - $366,323 $9,886,263 FTI Consulting 3 2/1 $5,093,812 10,964 $465 - $366,668 $5,460,480 RAS Management Advisors 1 1/0 $1,750,300 5,146 $340 - $108,765 $1,859,065 Goldin Associates 1 1/0 $425,000 1,130 $ $425,000 Ernst & Young 1 1/0 $55, $222 - $1,829 $57,811 Restructuring Advisor Prime / Middle Retail Total Hourly Fees Total Hours Average Rate Total Success Fee Total Alvarez & Marsal 3 2/1 $3,873,427 6,956 $557 $1,000,000 $161,317 $5,034,743 FTI Consulting 4 1/3 $4,720,632 7,041 $670 - $207,695 $4,928,327 Berkeley Research Group (BRG) 2 2/0 $2,109,570 3,594 $587 - $164,029 $2,273,598 Development Specialists 1 0/1 $935,108 2,352 $398 - $82,055 $1,017,163 Clear Thinking Group 2 0/2 $822,482 2,898 $284 - $95,304 $917,786 15

16 CLAIMS AGENT CLAIMS AGENTS. In 2016, the claims agents field was a two-horse race. Prime Clerk led the way with approximately USD 740,000 of earnings across 19 engagements, followed closely behind by Kurtzman Carson Consultants, which earned USD 631,000 from 10 bankrupt companies. BMC Group, however, led the energy sector, nearly doubling Epiq Bankruptcy Solutions. All USD 292,000 of BMC s 2016 earnings occurred in the energy space. Claims Agent* Claim Agent Prime / Middle Total Fees Total Hours Average Rate Total Prime Clerk 19 12/7 $737,166 4,414 $167 $4,983 $742,149 Kurtzman Carson Consultants 10 7/3 $628,230 4,170 $151 $2,650 $630,880 Epiq Bankruptcy Solutions 12 7/5 $383,572 2,285 $168 $3,177 $386,749 Resources Global Professionals 1 1/0 $300,662 1,344 $224 $3,025 $303,687 BMC Group 2 2/0 $180,398 1,685 $107 $112,501 $292,898 Garden City Group 2 2/0 $144, $170 - $144,660 Donlin, Recano & Co 4 1/3 $109, $155 - $109,829 Rust Consulting/Omni Bankruptcy 4 0/4 $17, $87 $3,297 $20,579 UpShot Services 1 0/1 $6, $153 - $6,441 NOTE: While there were many more claims agent representations during 2016 (for point of reference, we tracked well over 100 claims agent mandates for 2016), many claims agent fees were not disclosed as part of the fee application process and as a result, the fee data for claims agents is fairly limited. 16

17 Fees by Representation and Sector

18 TYPE OF REPRESENTATION / SECTOR In order to provide a more robust picture of professional fees, this report provides additional analysis of the fee data based on the party represented, including company-side mandates and official committee representations (both UCC and equity). This analysis breaks down the data to highlight cumulative fees and average hourly rates across representation types. We also perform a wealth of fee data analysis based on sectors, including with respect to the type of role played by the advisor (ie, lead counsel, financial advisor) and the party represented (ie, company or official committee). Moreover, we compare hourly rates at the sector level and also look at the vast majority of bankruptcies for three of the most vital sectors for 2016 (and looking ahead to 2017): Energy; Retail; and Metals & Mining. 18

19 TYPE OF REPRESENTATION Total Fees and Breakdown Representation Lead Counsel Local / Special Counsel Financial Advisor Investment Banker Restructuring Advisor Claim Agent Total Company / Board of Directors $45,8184,491 $85,644,996 $54,356,868 $284,776,347 $152,267,123 $2,635,111 $1,037,864,937 Unsecured Creditors Committee $134,001,719 $15,793,986 $58,985,967 $15,461,943 - $2,761 $224,246,375 Equity Committee $3,791,628 $5,459,507 $1,604,381 $3,150, $14,006,111 Chapter 11 / Chapter 7 Trustee $4,700,610 $1,021,535 $316, $6,038,674 Total $600,678,449 $107,920,024 $115,263,745 $303,388,884 $152,267,123 $2,637,872 $1,282,156, % 4.73% 1.45% 0.47% 18.58% 10.75% 0.21% 35.74% 11.88% 80.95% 22.21% 6.68% 4.24% Lead Counsel Financial Advisor Local / Special Counsel Investment Banker Company / Board of Directors UCC / Equity Committee Chapter 11 / Chapter 7 Trustee Lead Counsel Financial Advisor Restructuring Advisor Local / Special Counsel Investment Banker Claim Agent 19

20 AVERAGE HOURLY RATE Lead Counsel & Local / Special Counsel Average Rate >100 & <=200 >200 & <=300 >300 & <=400 >400 & <=500 >500 & <=600 >600 & <=700 >700 & <=800 >800 & <=900 >900 & <=1000 >1000 Lead Counsel Average Rate Local / Special Counsel Average Rate Financial Advisor / Restructuring Advisor Average Rate >100 & <=200 >200 & <=300 >300 & <=400 >400 & <=500 >500 & <=600 >600 & <=700 >700 & <=800 >800 & <=900 >900 & <=1000 >1000 Financial Advisor Average Rate Restructuring Advisor Average Rate NOTE: We have not calculated the average hourly fee for investment bankers due to the significant role that restructuring, sale and/or financing fees play in I-bankers total fees. 20

21 AVERAGE HOURLY RATE: TYPE OF REPRESENTATION Breakdown - Hourly Rate Representation Lead Counsel Local / Special Counsel Financial Advisor Restructuring Advisor Claim Agent Company / Board of Directors $689 $546 $449 $536 $160 Unsecured Creditors Committee $671 $498 $ Equity Committee $510 $580 $ Chapter 11 / Chapter 7 Trustee $582 $335 $ Total $683 $537 $503 $536 $160 $800 $700 $689 $671 $600 $500 $510 $582 $546 $498 $580 $449 $561 $564 $437 $400 $335 $300 $200 $100 $0 Lead Counsel Local / Special Counsel Financial Advisor Company / Board of Directors Unsecured Creditors Committee Equity Committee Chapter 11 / Chapter 7 Trustee 21

22 AVERAGE HOURLY RATE: SECTOR Hourly Rate by Sector and Advisor Type Sector Lead Counsel Local / Special Counsel Financial Advisor Restructuring Advisor Claim Agent Agriculture $512 $531 $618 $354 N/A Alternative Energy $750 $563 $425 $575 $151 Chemicals $571 $444 $421 $628 N/A Consumer $487 $386 $361 $366 $156 Education $749 $320 N/A $380 N/A Energy $682 $532 $578 $534 $163 Financial Services $719 $487 $676 $540 $175 Healthcare $525 $385 $468 $755 $124 Industrial Products & Services $651 $480 $373 $499 $263 Leisure $491 $462 $387 $359 $158 Media & Telecom $652 $386 $464 $527 $118 Metals & Mining $728 $521 $594 $534 $161 Paper & Forest Products $694 $737 $444 $597 $168 Real Estate & Construction $489 $428 $483 N/A N/A Retail $718 $487 $454 $545 $193 Services $581 $361 $543 N/A $149 Technology $571 $420 $515 $556 $181 Transportation & Automotive $705 $707 $475 $524 $169 Utilities $615 $642 $596 $795 $158 Total $683 $537 $503 $536 $160 22

23 SECTOR ANALYSIS Energy m 77.6 m 6.8 m Metals & Mining m 38.2 m 3.7 m Alternative Energy m 28.4 m Transportation & Automotive m 24.9 m Retail m 18.2 m 0.9 m Media & Telecom 53.2 m 9.8 m Paper & Forest Products 39.9 m 2.7 m Healthcare 19.9 m 3.9 m 0.2 m Leisure 18.0 m 5.9 m 0.4 m 0 m 50 m 100 m 150 m 200 m 250 m 300 m 350 m 400 m 450 m 500 m Company / Board of Directors Unsecured Creditors Committee Equity Committee Trustees 23

24 SECTOR ANALYSIS by Sector and Advisor Type Sector Lead Counsel Local / Special Counsel Financial Advisor Investment Banker Restructuring Advisor Claim Agent Total Energy $198,052,152 $25,286,262 $26,904,920 $122,879,197 $59,760,312 $699,861 $433,582,704 Metals & Mining $85,986,500 $15,368,095 $21,841,082 $42,308,949 $17,688,619 $78,840 $183,272,085 Alternative Energy $73,012,333 $18,116,438 $16,151,121 $28,803,363 $14,104,622 $92,572 $150,280,448 Transportation & Automotive $73,789,646 $17,095,962 $16,684,411 $10,819,519 $14,305,087 $196,750 $132,891,375 Retail $55,464,239 $10,233,181 $16,529,496 $24,804,529 $14,196,820 $543,124 $121,771,389 Media & Telecom $30,654,498 $1,886,666 $2,892,212 $14,694,754 $13,181,890 $438,379 $63,748,398 Paper & Forest Products $8,980,434 $3,495,077 $820,316 $25,015,046 $4,053,951 $145,638 $42,510,464 Healthcare $13,090,104 $2,765,901 $1,227,577 $5,638,995 $2,124,235 $35,621 $24,882,433 Leisure $13,345,903 $2,247,205 $2,527,977 $3,949,726 $2,179,264 $85,911 $24,335,986 Technology $7,591,231 $2,855,019 $1,306,495 $8,843,502 $2,606,582 $75,666 $23,278,496 Financial Services $9,729,629 $1,579,348 $1,333,947 $6,002,461 $3,119,966 $114,662 $21,880,013 Industrial Products & Services $7,882,643 $3,158,217 $972,842 $3,183,209 $1,469,273 $76,713 $16,742,896 Chemicals $5,377,157 $550,276 $1,578,314 $3,929,350 $1,894,323 - $13,329,419 Agriculture $3,448,393 $224,773 $1,239,339 $559,275 $758,876 - $6,230,656 Utilities $2,217,405 $1,351,137 $283,310 $1,661,262 $21,863 $43,314 $5,578,290 Real Estate & Construction $3,722,092 $503,172 $1,184,763 $1, $5,411,591 Services $3,707,439 $88,496 $1,450,437 $123,993 - $9,294 $5,379,658 Consumer $2,167,884 $245,135 $335,186 $170,192 $668,186 $1,525 $3,588,109 Education $2,458,769 $869, $133,255 - $3,461,688 Total $600,678,449 $107,920,024 $115,263,745 $303,388,884 $152,267,123 $2,637,872 $1,282,156,097 24

25 SECTOR ANALYSIS: ENERGY (2016) 60 m 50 m 49.0 m 45.9 m 40 m 34.9 m 30 m 25.8 m 24.5 m 20 m 19.7 m 19.2 m 19.0 m 16.8 m 15.6 m 14.3 m 13.9 m 13.1 m 11.4 m 10 m 9.4 m 9.1 m 8.9 m 8.2 m 7.9 m 6.7 m 6.7 m 6.6 m 6.3 m 6.1 m 5.3 m 4.1 m 2.7 m 2.6 m 1.6 m 1.6 m 0 m 25

26 SECTOR ANALYSIS: METALS & MINING (2016) 60 m 50 m 50.8 m 42.9 m 40 m 36.2 m 30 m 28.2 m 20 m 10 m 10.2 m 8.8 m 0 m Peabody Energy Arch Coal Noranda Aluminum Horsehead Holding Sherwin Alumina Essar Steel Minnesota 3.5 m American Gilsonite Company 2.1 m CS Mining 0.4 m 0.1 m Optima Specialty Steel Paladin Energy 26

27 SECTOR ANALYSIS: RETAIL (2016) 35 m 30 m 30.8 m 25 m 24.9 m 20 m 15 m 10 m 5 m 0 m 9.7 m 9.6 m 9.1 m 7.8 m 7.5 m 6.1 m 5.1 m 2.7 m 2.6 m 2.2 m 1.5 m 1.3 m 0.5 m 0.2 m 0.1 m 27

28 Case Analysis

29 CASE ANALYSIS: BY ADVISOR TYPE We are including additional fee analysis on an individual company basis to capture the overall cost of specific bankruptcies. We broke down professional fees for each company that filed for bankruptcy in 2016, based on both the type of advisor and the party represented. We also looked to the average monthly cost of running a bankruptcy case, highlighting which cases were most expensive on a per-month basis. Top 20 Company by Advisor Type Company Lead Counsel Local / Special Investment Restructuring Financial Advisor Counsel Banker Advisor Claim Agent Total SunEdison $51,760,006 $14,867,767 $11,344,300 $20,228,388 $11,332,693 $85,141 $ 109,618,294 Peabody Energy $23,315,856 $8,455,559 $13,741,145 $3,626, $ 49,139,227 Energy XXI $27,814,476 $3,668,683 $2,623,548 $11,588,844 $1,204,367 - $ 46,899,919 LINN Energy $23,488,467 $2,303,831 $6,646,600 $1,225,000 $10,260,963 - $ 43,924,861 Verso Paper $8,857,975 $3,416,283 $809,386 $25,000,645 $3,896,881 $144,056 $ 42,125,225 Arch Coal $15,202,307 $614,596 $690,317 $20,657,137 $4,007,845 $2,761 $ 41,174,962 CHC Group $19,856,714 $11,523,944 $2,818,158 $1,985,161 $2,400,000 - $ 38,583,976 Noranda Aluminum $16,779,233 $1,118,789 - $7,928,272 $9,519,940 - $ 35,346,235 C&J Energy Services $12,364,178 $1,349,189 $1,595,506 $12,320,323 $6,206,504 - $ 33,835,699 Sports Authority $12,523,625 $2,542,759 $5,496,480 $8,223,151 $899,888 $35,289 $ 29,721,190 Horsehead Holding $11,472,851 $3,407,521 $3,775,944 $7,025,000 $1,750,300 $70,608 $ 27,502,224 Republic Airways Holdings $17,149,918 $670,817 $8,950, $30,351 $ 26,802,055 SandRidge Energy $9,079,487 $128,400 $1,750,806 $11,304,041 $2,833,005 - $ 25,095,739 Aéropostale $13,059,234 $89,825 $1,179,317 $5,200,000 $4,404,720 $36,547 $ 23,969,642 Paragon Offshore $12,863,494 $2,744,387 - $1,750,000 $5,755,301 - $ 23,113,182 UCI International $8,970,250 $1,098,888 $1,541,649 $4,616,129 $5,650,696 $101,346 $ 21,978,958 SFX Entertainment $9,036,629 $349,641 $1,263,691 $3,626,799 $6,888,282 $283,745 $ 21,448,787 RCS Capital $8,191,745 $1,312,617 $1,109,566 $5,950,000 $3,056,823 $113,668 $ 19,734,418 Hercules Offshore (2016) $6,701,993 $3,940,214 - $6,041,532 $2,503,442 $56,559 $ 19,243,740 Penn Virginia $4,793,454 $411,739 $853,226 $7,300,000 $5,317,051 $89,749 $ 18,765,218 29

30 CASE ANALYSIS: BY REPRESENTATION TYPE SunEdison 92.3 m 17.4 m Peabody Energy 34.0 m 15.1 m Energy XXI 29.6 m 17.0 m 0.4 m LINN Energy 32.2 m 11.7 m Verso Paper 39.5 m 2.6 m Arch Coal 32.0 m 9.2 m CHC Group 30.7 m 7.9 m Noranda Aluminum 30.4 m 4.9 m C&J Energy Services 26.0 m 7.8 m Sports Authority 25.6 m 4.1 m Horsehead Holding 18.7 m 5.2 m 3.6 m Republic Airways Holdings 19.2 m 7.6 m SandRidge Energy 19.6 m 5.5 m Aéropostale Paragon Offshore 21.7 m 23.1 m 2.3 m UCI International 16.8 m 5.2 m SFX Entertainment RCS Capital Hercules Offshore (2016) Penn Virginia 17.6 m 15.8 m 13.5 m 16.5 m 3.9 m 3.9 m 5.7 m 2.3 m 0.0 m 20.0 m 40.0 m 60.0 m 80.0 m m m Company/Board of Directors Unsecured Creditors Committee Equity Committee 30

31 CASE ANALYSIS: MONTHLY RATE SunEdison Southcross Holdings Halcon Resources Verso Paper C&J Energy Services LINN Energy Peabody Energy Energy XXI Atlas Resource Partners SandRidge Energy RCS Capital Arch Coal CHC Group Basic Energy Swift Energy Company Penn Virginia Noranda Aluminum Key Energy Services Aspect Software Performance Sports Group Hercules Offshore (2016) American Apparel (2016) Dex Media UCI International Aéropostale Sports Authority Midstates Petroleum Company Golfsmith International Republic Airways Holdings Gawker Media Stone Energy Horsehead Holding Paragon Offshore SFX Entertainment Maxus Energy Breitburn Energy Partners International Shipholding Corporation Implant Sciences Venoco (2016) Warren Resources 6.1 m 5.9 m 5.8 m 5.6 m 5.6 m 5.5 m 5.3 m 5.2 m 5.0 m 4.8 m 4.5 m 4.2 m 3.9 m 3.8 m 3.8 m 3.7 m 3.3 m 3.3 m 3.3 m 3.2 m 3.1 m 3.0 m 2.8 m 2.7 m 2.6 m 2.6 m 2.6 m 2.5 m 2.3 m 2.2 m 2.1 m 2.0 m 2.0 m 1.9 m 1.9 m 1.9 m 7.8 m 7.4 m 0.0 m 2.0 m 4.0 m 6.0 m 8.0 m 10.0 m 12.0 m 14.0 m 16.0 m 12.2 m 13.4 m 31

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