Case Document 204 Filed in TXSB on 09/30/17 Page 1 of 14

Transcription

1 Case Document 204 Filed in TXSB on 09/30/17 Page 1 of 14 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS VICTORIA DIVISION ) In re: ) Chapter 11 ) SEADRILL LIMITED, et al., 1 ) Case No (DRJ) ) Debtors. ) (Jointly Administered) ) DEBTORS APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF ALVAREZ & MARSAL NORTH AMERICA, LLP AND ALVAREZ & MARSAL EUROPE LLP AS FINANCIAL ADVISORS NUNC PRO TUNC TO THE PETITION DATE THIS APPLICATION SEEKS AN ORDER THAT MAY ADVERSELY AFFECT YOU. IF YOU OPPOSE THE APPLICATION, 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 WAS SERVED ON YOU. YOUR RESPONSE MUST STATE WHY THE APPLICATION 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 APPLICATION 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 APPLICATION AT THE HEARING. REPRESENTED PARTIES SHOULD ACT THROUGH THEIR ATTORNEY. A HEARING WILL BE HELD ON THIS MATTER FOR NOVEMBER 1, 2017, AT 2:30 P.M. (CT) IN COURTROOM 400, 4 th FLOOR, UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS, 515 RUSK STREET, HOUSTON, TEXAS The above-captioned debtors and debtors in possession (collectively, the Debtors ) respectfully state as follows in support of this application (this Application ): 1 Due to the large number of Debtors in these chapter 11 cases, for which joint administration has been granted, a complete list of the Debtors and the last four digits of their tax identification, registration, or like numbers is not provided herein. A complete list of such information may be obtained on the website of the Debtors proposed claims and noticing agent at The location of Debtor Seadrill Americas, Inc. s principal place of business and the Debtors service address in these chapter 11 cases is Equity Drive, Suite 150, Houston, Texas KE

2 Case Document 204 Filed in TXSB on 09/30/17 Page 2 of 14 Relief Requested 1. The Debtors seek entry of an order (the Order ), substantially in the form attached hereto as Exhibit A: (a) authorizing the Debtors to retain and employ Alvarez & Marsal North America, LLC and Alvarez & Marsal Europe LLP, together with employees of their affiliates (all of which are wholly owned by its parent company and employees), their wholly owned subsidiaries, and independent contractors (collectively, A&M ), nunc pro tunc to September 12, 2017 (the Petition Date ), to serve as financial advisors in accordance with the terms and conditions set forth in that certain engagement letter between the Debtors and A&M effective as of February 22, 2017 (the Engagement Letter ) a copy of which is attached hereto as Exhibit B and incorporated herein by reference, to the Debtors; and (b) granting related relief. In support of this Application, the Debtors submit the Declaration of Edgar W. Mosley II (the Mosley Declaration ), attached hereto as Exhibit C. Jurisdiction and Venue 2. The United States Bankruptcy Court for the Southern District of Texas (the Court ) has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the Southern District of Texas, dated May 24, 2012 (the Amended Standing Order ). The Debtors confirm their consent, pursuant to rule 7008 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), to the entry of a final order by the Court in connection with this Application to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments in connection herewith consistent with Article III of the United States Constitution. 3. Venue is proper pursuant to 28 U.S.C and

3 Case Document 204 Filed in TXSB on 09/30/17 Page 3 of The bases for the relief requested herein are sections 327(a), 328, 330, 331, and 1107(b) of the United States Code, 11 U.S.C (the Bankruptcy Code ), Rules 2014 and 2016 of the Bankruptcy Rules, and rule and of the Local Bankruptcy Rules for the Southern District of Texas (the Local Rules ). Retention of A&M 5. In consideration of the size and complexity of their businesses, the Debtors have determined that the services of experienced restructuring advisors will substantially enhance their attempts to maximize the value of their estates. A&M is well qualified to provide these services in light of their extensive knowledge and expertise with respect to chapter 11 proceedings. 6. A&M specializes in interim management, crisis management, turnaround consulting, operational due diligence, creditor advisory services, and financial and operational restructuring. A&M s debtor advisory services have included a wide range of activities targeted at stabilizing and improving a company s financial position, including developing or validating forecasts, business plans and related assessments of a business s strategic position; monitoring and managing cash, cash flow and supplier relationships; assessing and recommending cost reduction strategies; and designing and negotiating financial restructuring packages. 7. Since its inception in 1983, A&M has been a global provider of turnaround advisory services to companies in crisis or those in need of performance improvement in specific financial and operational areas, including In re Ameriforge Group Inc., et al., No (DRJ) (Bankr. S.D. Tex. June 9, 2017); In re Azure Midstream Partners, LP, Case No (DRJ) (Bankr. S.D. Tex. Jan. 30, 2017); In re Erickson Incorporated, Case No (HDH) (Bankr. N.D. Tex. Nov. 8, 2016); In re SandRidge Energy, Inc., No (DRJ) (Bankr. S.D. Tex. June 23, 2016); In re Southcross Holdings LP, No (MI) (Bankr. S.D. Tex. May 6, 2016); In re Swift Energy Co., No (MFW) (Bankr. D. Del. Feb. 1, 2016); In re Magnum Hunter Res. 3

4 Case Document 204 Filed in TXSB on 09/30/17 Page 4 of 14 Corp., No (KG) (Bankr. D. Del. Jan. 28, 2016); In re Offshore Grp. Inv. Ltd., No (BLS) (Bankr. D. Del. Jan. 5, 2016) In addition, A&M is familiar with the Debtors businesses, financial affairs, and capital structure. Since A&M s engagement on February 22, 2017, A&M s personnel providing services to the Debtors (the A&M Professionals ) have worked closely with the Debtors management and other professionals in assisting with the myriad of requirements of these chapter 11 cases. Consequently, the Debtors believe that A&M has developed significant experience and expertise regarding the Debtors and the circumstances of this case. For these reasons, A&M is both well qualified and uniquely suited to deal effectively and efficiently with matters that may arise in the context of these cases. Accordingly, the Debtors submit that the retention of A&M on the terms and conditions set forth herein is necessary and appropriate, is in the best interests of the Debtors estates, creditors, and all other parties in interest, and should be granted in all respects. Scope of Services 9. The terms of the Engagement Letter shall govern the Debtors retention of A&M except as explicitly set forth herein or in the Order. 10. The Debtors have chosen Houlihan Lokey ( Houlihan ) to act as its proposed investment banker. A&M will work closely with Houlihan and the Debtors other advisors to prevent any duplication of efforts in the course of advising the Debtors. 11. Among other things, A&M will provide assistance to the Debtors with respect to management of the overall restructuring process, the development of ongoing business and 2 Because of the voluminous nature of the orders cited in this Application, they are not attached to this Application. Copies of these orders are available upon request to Debtors proposed counsel. 4

5 Case Document 204 Filed in TXSB on 09/30/17 Page 5 of 14 financial plans and supporting restructuring negotiations among the debtors, their advisors and their creditors with respect to an overall exit strategy for their chapter 11 cases. A&M will provide such restructuring support services as A&M and the Debtors shall deem appropriate and feasible to manage and advise the Debtors during these chapter 11 cases, including: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) assistance to the Debtors in the preparation of financial-related disclosures required by the Court, including the Debtors Schedules of Assets and Liabilities, Statements of Financial Affairs and Monthly Operating Reports; assistance with the identification and implementation of short-term cash management procedures; assistance with identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; assistance to Debtors management team and counsel focused on the coordination of resources related to the ongoing reorganization effort; assistance in the preparation of financial information for distribution to creditors and others, including, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; attendance at meetings and assistance in discussions with potential investors, banks, and other secured lenders, any official committee(s) appointed in these chapter 11 cases, the United States Trustee, other parties in interest and professionals hired by same, as requested; analysis of creditor claims by type, entity, and individual claim, including assistance with development of databases, as necessary, to track such claims; assistance in the preparation of information and analysis necessary for the confirmation of a plan of reorganization in these chapter 11 cases, including information contained in the disclosure statement; assistance in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; expert witness testimony on case related issues as required by the debtors; and rendering such other general business consulting or such other assistance as 5

6 Case Document 204 Filed in TXSB on 09/30/17 Page 6 of 14 Debtors management or counsel may deem necessary consistent with the role of a financial advisor to the extent that it would not be duplicative of services provided by other professionals in this proceeding. A&M s Disinterestedness 12. To the best of the Debtors knowledge, information, and belief, other than as set forth in the Mosley Declaration, A&M: (a) has no connection with the Debtors, their creditors, other parties in interest, or the attorneys or accountants of any of the foregoing, or the United States Trustee or any person employed in the Office of the United States Trustee; (b) does not hold any interest adverse to the Debtors estates; and (c) believes it is a disinterested person as defined by section 101(14) of the Bankruptcy Code. 13. Accordingly, the Debtors believe that A&M is disinterested as such term is defined in section 101(14) of the Bankruptcy Code. In addition, as set forth in the Mosley Declaration, if any new material facts or relationships are discovered or arise, A&M will provide the Court with a supplemental declaration. Compensation 14. Subject to approval by the Court, the Debtors propose to employ and retain A&M to serve as the Debtors financial advisor on the terms and conditions set forth in the Engagement Letter. 15. In accordance with the terms of the Engagement Letter, A&M will be paid by the Company for the services of the A&M Professionals at their customary hourly billing rates which shall be subject to the following ranges: Restructuring Advisory Managing Directors $ Directors $ Analysts/Associates $ Claims Management Services Managing Directors $

7 Case Document 204 Filed in TXSB on 09/30/17 Page 7 of 14 Directors $ Analysts/Consultants $ Such rates and ranges shall be subject to adjustment annually at such time as A&M adjusts its rates generally. 16. In addition, A&M will be reimbursed for the reasonable out-of-pocket expenses of the A&M Professionals incurred in connection with this assignment, such as travel, lodging, third party duplications, messenger and telephone charges. In addition, A&M shall be reimbursed for the reasonable fees and expenses of its counsel incurred in connection with the preparation and approval of this Application. All fees and expenses due to A&M will be billed in accordance with any interim compensation orders entered by this Court, and the relevant sections of the Bankruptcy Code, Bankruptcy Rules and Local Rules. Indemnification 17. As a material part of the consideration for which the A&M Professionals have agreed to provide the services described herein, the Debtors have agreed to the indemnification provisions in paragraph 10 of the Engagement Letter. Notwithstanding the foregoing, the Debtors and A&M have agreed to modify such provisions as follows, during the pendency of these chapter 11 cases: (a) (b) As set forth in paragraph (c), A&M shall not be entitled to indemnification, contribution or reimbursement pursuant to the Engagement Letter for services, unless such services and the indemnification, contribution or reimbursement therefore are approved by the Court; The Debtors shall have no obligation to indemnify A&M, or provide contribution or reimbursement to A&M, for any claim or expense that is either: (i) judicially determined (the determination having become final) to have arisen from A&M s gross negligence, willful misconduct, breach of fiduciary duty, if any, bad faith or self-dealing, or (ii) settled prior to a judicial determination as to A&M s gross negligence, willful misconduct, breach of fiduciary duty, or bad faith or self-dealing but determined by this Court, after notice and a hearing to be a claim or expense for which A&M 7

8 Case Document 204 Filed in TXSB on 09/30/17 Page 8 of 14 should not receive indemnity, contribution or reimbursement under the terms of the Agreement as modified by this Order; and (c) If, before the earlier of (i) the entry of an order confirming a chapter 11 plan in these cases (that order having become a final order no longer subject to appeal), and (ii) the entry of an order closing these chapter 11 cases, A&M believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors indemnification, contribution and/or reimbursement obligations under the Engagement Letter (as modified by this Application), including without limitation the advancement of defense costs, A&M must file an application therefore in this Court, and the Debtors may not pay any such amounts to A&M before the entry of an order by this Court approving the payment. This subparagraph (c) is intended only to specify the period of time under which the Court shall have jurisdiction over any request for fees and expenses by A&M for indemnification, contribution or reimbursement, and not a provision limiting the duration of the Debtors obligation to indemnify A&M. All parties in interest shall retain the right to object to any demand by A&M for indemnification, contribution or reimbursement. 18. The Debtors and A&M believe that these provisions of the Engagement Letter, as modified by the Order, are customary and reasonable for restructuring advisory and support engagements, both in- and out-of-court, and reflect the qualifications and limitations on indemnification provisions that are customary in this District and other jurisdictions. Similar indemnification arrangements have been approved and implemented in other large chapter 11 cases by courts in this district and others. See, e.g., In re Southcross Holdings, LP, No (Bankr. S.D. Tex. May 6, 2016); In re Edge Petroleum Corp., No (Bankr. S.D. Tex. Oct. 26, 2009); In re Scotia Dev. LLC, No C-11 (Bankr. S.D. Tex. Mar. 15, 2007); see also In re Paragon Offshore plc, No (Bankr. D. Del. Apr. 5, 2016). Application for Compensation 19. The Debtors understand that A&M intends to apply to the Court for allowance of compensation and reimbursement of expenses for its financial advisory services in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, corresponding Local Rules, orders of this Court and guidelines established by the United States Trustee. A&M 8

9 Case Document 204 Filed in TXSB on 09/30/17 Page 9 of 14 received $500,000 as a retainer in connection with preparing for and conducting the filing of these Chapter 11 cases, as described in the engagement Letter. In the 90 days prior to the Petition Date, A&M received retainers and payments totaling $11,010,920 in the aggregate for services performed for the Debtors. A&M has applied these funds to amounts due for services rendered and expenses incurred prior to the Petition Date. A precise disclosure of the amounts or credits held, if any, as of the Petition Date will be provided in A&M s first interim fee application for postpetition services and expenses to be rendered or incurred for or on behalf of the Debtors. The unapplied residual retainer, which is estimated to total approximately $750,000, will not be segregated by A&M in a separate account, and will be held until the end of these Chapter 11 cases and applied to A&M s finally approved fees in these proceedings. 20. Given the numerous issues that the A&M may be required to address in the performance of their services, A&M s commitment to the variable level of time and effort necessary to address all such issues as they arise, and the market prices for such services for engagements of this nature in an out-of-court context, as well as in chapter 11, the Debtors submit that the fee arrangements set forth herein are reasonable under the standards set forth in section 328(a) of the Bankruptcy Code. No Duplication of Services 21. The Debtors believe that the services provided by A&M will not duplicate the services that other professionals will be providing to the Debtors in these chapter 11 cases. The Debtors will coordinate with A&M and the Debtors other professionals to minimize unnecessary duplication of efforts among the Debtors professionals. Basis for Relief 22. The Debtors submit that the retention of A&M under the terms described herein is appropriate under sections 327(a), 328, 330, and 1107(b) of the Bankruptcy Code. Section 327(a) 9

10 Case Document 204 Filed in TXSB on 09/30/17 Page 10 of 14 of the Bankruptcy Code empowers the trustee, with the Court s approval, to employ professionals that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trustee s duties under this title. 11 U.S.C. 327(a). Section 101(14) of the Bankruptcy Code defines a disinterested person as a person that: (a) (b) (c) is not a creditor, an equity security holder, or an insider; is not and was not, within 2 years before the date of the filing of the petition, a director, officer, or employee of the debtor; and does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the debtor, or for any other reason. 11 U.S.C. 101(14). Further, section 1107(b) of the Bankruptcy Code provides that a person is not disqualified for employment under section 327 of this title by a debtor in possession solely because of such person s employment by or representation of the debtor before the commencement of the case. 11 U.S.C. 1107(b). A&M s prepetition relationship with Debtors is therefore not an impediment to A&M s retention as Debtors postpetition financial advisor. 23. Section 328(a) of the Bankruptcy Code authorizes the employment of a professional person on any reasonable terms and conditions of employment, including on a retainer U.S.C. 328(a). The Debtors submit that the terms and conditions of A&M s retention as described herein, including the proposed compensation and indemnification terms, are reasonable and in keeping with the terms and conditions typical for engagements of this size and character. Since Debtors will require substantial assistance with the reorganization process, it is reasonable for Debtors to seek to employ and retain A&M to serve as its financial advisor on the terms and conditions set forth herein. 10

11 Case Document 204 Filed in TXSB on 09/30/17 Page 11 of 14 Waiver of Bankruptcy Rule 6004(a) and 6004(h) 24. To implement the foregoing successfully, the Debtors request that the Court find that notice of the relief requested herein satisfies Bankruptcy Rule 6004(a) and that the Debtors have established cause to exclude such relief from the 14-day stay period under Bankruptcy Rule 6004(h). Notice 25. Notice of the hearing on the relief requested in the Application has been provided by the Debtors in accordance and compliance with Bankruptcy Rules 4001 and 9014, as well as the Local Rules, and is sufficient under the circumstances. Without limiting the foregoing, due notice was afforded, whether by facsimile, electronic mail, overnight courier or hand delivery, to parties-in-interest, including (a) the Office of the United States Trustee for the Southern District of Texas; (b) proposed counsel to the official committee of unsecured creditors; (c) the agents for each of the Debtors secured credit facilities; (d) the Committee of Coordinators appointed under and as defined in that certain appointment letter dated April 20, 2016, among Seadrill Limited and each member thereof, as amended, restated, supplemented, or otherwise modified from time to time (the Bank CoCom ); (e) the indenture trustee for each of the Debtors unsecured notes; (f) the commitment parties under that certain Investment Agreement dated September 12, 2017, among Seadrill Limited and the commitment parties thereto (the Commitment Parties ); (g) counsel to the parties referenced in clauses (c) to (f); (h) the Office of the United States Attorney for the Southern District of Texas; (i) the state attorneys general for states in which the Debtors conduct business; (j) the Internal Revenue Service; (k) the Securities and Exchange Commission; (l) the Environmental Protection Agency and similar state environmental agencies for states in which the Debtors conduct business; and (m) any party that has requested notice pursuant to 11

12 Case Document 204 Filed in TXSB on 09/30/17 Page 12 of 14 Bankruptcy Rule The Debtors submit that, in light of the nature of the relief requested, no other or further notice need be given. [Remainder of page intentionally left blank.] 12

13 Case Document 204 Filed in TXSB on 09/30/17 Page 13 of 14 WHEREFORE, the Debtors respectfully request that the Court enter the Order substantially in the form attached hereto as Exhibit A, granting the relief requested in this Application and granting such other and further relief as is appropriate under the circumstances. London, England Dated: September 30, 2017 /s/ Mark Morris Mark Morris Chief Financial Officer Seadrill Management Limited

14 Case Document 204 Filed in TXSB on 09/30/17 Page 14 of 14 Certificate of Service I certify that on September 30, 2017, I caused a copy of the foregoing document to be served by the Electronic Case Filing System for the United States Bankruptcy Court for the Southern District of Texas. /s/ Matthew D. Cavenaugh Matthew D. Cavenaugh

15 Case Document Filed in TXSB on 09/30/17 Page 1 of 5 EXHIBIT A Proposed Order

16 Case Document Filed in TXSB on 09/30/17 Page 2 of 5 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS VICTORIA DIVISION ) In re: ) Chapter 11 ) SEADRILL LIMITED, et al., 1 ) Case No (DRJ) ) Debtors. ) (Jointly Administered) ) ) Re: Docket No. ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF ALVAREZ & MARSAL NORTH AMERICA, LLP AND ALVAREZ & MARSAL EUROPE LLP AS FINANCIAL ADVISORS NUNC PRO TUNC TO THE PETITION DATE Upon the application (the Application ) 2 of the above-captioned debtors and debtors in possession (collectively, the Debtors ) for entry of an order (this Order ), authorizing the Debtors to retain and employ Alvarez & Marsal North America, LLC and Alvarez & Marsal Europe LLP, together with employees of their affiliates (all of which are wholly owned by its parent company and employees), their wholly owned subsidiaries, and independent contractors (collectively, A&M ) as financial advisors, nunc pro tunc to the Petition Date in accordance with the Engagement Letter, as more fully set forth in the Application; and upon the Mosley Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order; this Court having found that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and this Court having found that it may enter a final order 1 2 Due to the large number of Debtors in these chapter 11 cases, for which joint administration has been granted, a complete list of the Debtors and the last four digits of their tax identification, registration, or like numbers is not provided herein. A complete list of such information may be obtained on the website of the Debtors proposed claims and noticing agent at The location of Debtor Seadrill Americas, Inc. s principal place of business and the Debtors service address in these chapter 11 cases is Equity Drive, Suite 150, Houston, Texas Capitalized terms used but not defined herein have the meanings given to them in the Application.

17 Case Document Filed in TXSB on 09/30/17 Page 3 of 5 consistent with Article III of the United States Constitution; and this Court having found that venue of this proceeding and the Application in this district is proper pursuant to 28 U.S.C and 1409; and this Court having found that the relief requested in the Application is in the best interests of the Debtors estates, their creditors, and other parties in interest; and this Court having found that the Debtors notice of the Application and opportunity for a hearing on the Application were appropriate and no other notice need be provided; and this Court having reviewed the Application and having heard the statements in support of the relief requested therein at a hearing before this Court (the Hearing ); and this Court having determined that the legal and factual bases set forth in the Application and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before this Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. The Application is granted as set forth herein. 2. Pursuant to sections 327(a), 328, and 330 of the Bankruptcy Code, the Debtors are hereby authorized to retain A&M as restructuring advisors to the Debtors, nunc pro tunc to the Petition Date on the terms set forth in the Engagement Letter, as modified by this Order. 3. The terms of the Engagement Letter, including the compensation provisions and the indemnification provisions, as modified by the Application and this Order, are reasonable terms and conditions of employment and are hereby approved. 4. The indemnification provisions included in the Engagement Letter and its attachments are approved, subject to the following: (a) (b) As set forth in paragraph (c), A&M shall not be entitled to indemnification, contribution or reimbursement pursuant to the Engagement Letter for services, unless such services and the indemnification, contribution or reimbursement therefore are approved by the Court; The Debtors shall have no obligation to indemnify A&M, or provide contribution or reimbursement to A&M, for any claim or expense that is 2

18 Case Document Filed in TXSB on 09/30/17 Page 4 of 5 either: (i) judicially determined (the determination having become final) to have arisen from A&M s gross negligence, willful misconduct, breach of fiduciary duty, if any, bad faith or self-dealing, or (ii) settled prior to a judicial determination as to A&M s gross negligence, willful misconduct, breach of fiduciary duty, or bad faith or self-dealing but determined by this Court, after notice and a hearing to be a claim or expense for which A&M should not receive indemnity, contribution or reimbursement under the terms of the Agreement as modified by this Order; and (c) If, before the earlier of (i) the entry of an order confirming a chapter 11 plan in these cases (that order having become a final order no longer subject to appeal), and (ii) the entry of an order closing these chapter 11 cases, A&M believes that it is entitled to the payment of any amounts by the Debtors on account of the Debtors indemnification, contribution and/or reimbursement obligations under the Engagement Letter (as modified by this Application), including without limitation the advancement of defense costs, A&M must file an application therefore in this Court, and the Debtors may not pay any such amounts to A&M before the entry of an order by this Court approving the payment. This subparagraph (c) is intended only to specify the period of time under which the Court shall have jurisdiction over any request for fees and expenses by A&M for indemnification, contribution or reimbursement, and not a provision limiting the duration of the Debtors obligation to indemnify A&M. All parties in interest shall retain the right to object to any demand by A&M for indemnification, contribution or reimbursement. 5. To the extent there is inconsistency between the terms of the Engagement Letter, the Application, and this Order, the terms of this Order shall govern. 6. Notwithstanding anything to the contrary in the Application, the Engagement Letter or the Mosley Declaration, including any arbitration, dispute resolution or jurisdictional provisions, this Court shall retain jurisdiction with respect to all matters arising from or related to the implementation or interpretation of this Order or the Engagement Letter. 7. Notice of the Application as provided therein shall be deemed good and sufficient notice of such Application and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are satisfied by such notice. 8. Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Order are immediately effective and enforceable upon its entry. 3

19 Case Document Filed in TXSB on 09/30/17 Page 5 of 5 9. The Debtors are authorized to take all actions necessary to effectuate the relief granted in this Order in accordance with the Application. 10. This Court retains exclusive jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of this Order. Victoria, Texas Dated:, 2017 THE HONORABLE DAVID R. JONES UNITED STATES BANKRUPTCY JUDGE 4

20 Case Document Filed in TXSB on 09/30/17 Page 1 of 22 EXHIBIT B Engagement Letter

21 Case Document Filed in TXSB on 09/30/17 Page 2 of 22

22 Case Document Filed in TXSB on 09/30/17 Page 3 of 22

23 Case Document Filed in TXSB on 09/30/17 Page 4 of 22

24 Case Document Filed in TXSB on 09/30/17 Page 5 of 22

25 Case Document Filed in TXSB on 09/30/17 Page 6 of 22

26 Case Document Filed in TXSB on 09/30/17 Page 7 of 22

27 Case Document Filed in TXSB on 09/30/17 Page 8 of 22

28 Case Document Filed in TXSB on 09/30/17 Page 9 of 22

29 Case Document Filed in TXSB on 09/30/17 Page 10 of 22

30 Case Document Filed in TXSB on 09/30/17 Page 11 of 22

31 Case Document Filed in TXSB on 09/30/17 Page 12 of 22

32 Case Document Filed in TXSB on 09/30/17 Page 13 of 22

33 Case Document Filed in TXSB on 09/30/17 Page 14 of 22

34 Case Document Filed in TXSB on 09/30/17 Page 15 of 22

35 Case Document Filed in TXSB on 09/30/17 Page 16 of 22

36 Case Document Filed in TXSB on 09/30/17 Page 17 of 22

37 Case Document Filed in TXSB on 09/30/17 Page 18 of 22

38 Case Document Filed in TXSB on 09/30/17 Page 19 of 22

39 Case Document Filed in TXSB on 09/30/17 Page 20 of 22

40 Case Document Filed in TXSB on 09/30/17 Page 21 of 22

41 Case Document Filed in TXSB on 09/30/17 Page 22 of 22

42 Case Document Filed in TXSB on 09/30/17 Page 1 of 53 EXHIBIT C Declaration of Edgar W. Mosley II

43 Case Document Filed in TXSB on 09/30/17 Page 2 of 53 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS VICTORIA DIVISION ) In re: ) Chapter 11 ) SEADRILL LIMITED, et al., 1 ) Case No (DRJ) ) Debtors. ) (Jointly Administered) ) DECLARATION OF EDGAR W. MOSLEY II IN SUPPORT OF THE DEBTORS APPLICATION FOR ENTRY OF AN ORDER AUTHORIZING THE RETENTION AND EMPLOYMENT OF ALVAREZ & MARSAL NORTH AMERICA, LLP AND ALVAREZ & MARSAL EUROPE LLP AS FINANCIAL ADVISORS NUNC PRO TUNC TO THE PETITION DATE Under 28 U.S.C. 1746, I, Edgar W. Mosley II, declare as follows under penalty of perjury: 1. I am a Managing Director with Alvarez & Marsal North America, LLC, together with Alvarez & Marsal Europe LLP, and with employees of their affiliates (all of which are wholly-owned by its parent company and employees), their wholly owned subsidiaries, and independent contractors, ( A&M ), a restructuring advisory services firm with numerous offices throughout the country. I submit this declaration on behalf of A&M (the Mosley Declaration ) in support of the Debtors Application For Entry of an Order Authorizing the Retention and Employment of Alvarez & Marsal North America, LLC and Alvarez & Marsal Europe LLP as Restructuring Advisor for the Debtors Nunc Pro Tunc to the Petition Date (the Application ) on the terms and conditions set forth in the Application and the engagement letter between Debtors 1 Due to the large number of Debtors in these chapter 11 cases, for which joint administration has been granted, a complete list of the Debtors and the last four digits of their tax identification, registration, or like numbers is not provided herein. A complete list of such information may be obtained on the website of the Debtors proposed claims and noticing agent at The location of Debtor Seadrill Americas, Inc. s principal place of business and the Debtors service address in these chapter 11 cases is Equity Drive, Suite 150, Houston, Texas

44 Case Document Filed in TXSB on 09/30/17 Page 3 of 53 and A&M attached to the Application as Exhibit B (the Engagement Letter ). Except as otherwise noted, 2 I have personal knowledge of the matters set forth herein. Disinterestedness and Eligibility 2. A&M together with its affiliates (the Firm ) utilize certain procedures ( Firm Procedures ) to determine the Firm s relationships, if any, to parties that may have a connection to a client debtor. In implementing the Firm Procedures, the following actions were taken to identify parties that may have connections to the Debtors, and the Firm s relationship with such parties: (a) (b) (c) A&M requested and obtained from the Debtors extensive lists of interested parties and significant creditors (the Potential Parties in Interest ). 3 The list of Potential Parties in Interest which A&M reviewed is annexed hereto as Schedule 1. The Potential Parties in Interest reviewed include, among others, the Debtors and affiliates, prepetition lenders, officers, directors, contract counterparties, the top 100 non-insider unsecured creditors of the Debtors (on a consolidated basis), significant vendors, significant litigation parties, and parties holding ownership interests in the Debtors. A&M then compared the names of each of the Potential Parties in Interest to the names in its master electronic database of the Firm s current and recent clients (the Client Database ). The Client Database generally includes the name of each client of the Firm, the name of each party who is or was known to be adverse to the client of the Firm in connection with the matter in which the Firm is representing such client, the name of each party that has, or had, a substantial role with regard to the subject matter of the Firm s retention, and the names of the Firm professionals who are, or were, primarily responsible for matters for such clients. An was issued to all Firm professionals requesting disclosure of information regarding: (i) any known personal connections between the 2 Certain of the disclosures herein relate to matters within the personal knowledge of other professionals at A&M and are based on information provided by them. 3 The list of Potential Parties in Interest is expected to be updated during these cases. A&M continues to review the relationships its attorneys may have with potentially interested parties and to determine whether any relationships other than those set forth herein exist. As may be necessary, A&M will supplement this Declaration if it becomes aware of a relationship that may adversely affect A&M s retention in these cases or discovers additional parties in interest through the filing of statements of financial affairs or statements under Rule A&M will update this disclosure if it is advised of any trading of claims against or interests in the Debtors that may relate to A&M s retention or otherwise requires such disclosure. 2

45 Case Document Filed in TXSB on 09/30/17 Page 4 of 53 respondent and/or the Firm on the one hand, and the Debtors or certain critical Potential Parties in Interest (including Debtor affiliates and board members, certain lenders and certain significant creditors), on the other hand, 4 (ii) any known connections or representation by the respondent and/or the Firm of any of the such critical Potential Parties in Interest in matters relating to the Debtors; and (iii) any other conflict or reason why A&M may be unable to represent the Debtors. (d) Known connections between former or recent clients of the Firm and the Potential Parties in Interest were compiled for purposes of preparing this Declaration. These connections are listed in Schedule 2 annexed hereto 3. As a result of the Firm Procedures, I have thus far ascertained that, except as may be set forth herein, upon information and belief, if retained, A&M: (a) (b) (c) is not a creditor of the Debtors (including by reason of unpaid fees for prepetition services), 5 an equity security holder of the Debtors (except certain Firm employees may own de minimis amounts representing not more than 0.01% of the equity interests in the related entity), or an insider of the Debtors, as that term is defined in section 101(31) of the Bankruptcy Code; is not, and has not been, within two (2) years before the date of the filing of the petition, a director, officer, or employee of the Debtors; and does not have an interest materially adverse to the interests of the Debtors estates, or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason. 4 In reviewing its records and the relationships of its professionals, A&M did not seek information as to whether any A&M professional or member of his/her immediate family: (a) indirectly owns, through a public mutual fund or through partnerships in which certain A&M professionals have invested but as to which such professionals have no control over or knowledge of investment decisions, securities of the Debtors or any other party in interest; or (b) has engaged in any ordinary course consumer transaction with any party in interest. If any such relationship does exist, I do not believe it would impact A&M s disinterestedness or otherwise give rise to a finding that A&M holds or represents an interest adverse to the Debtors estates. It is also noted that in the course of our review it came to A&M s attention that A&M personnel hold de minimis investments, representing not more than 0.01% of the equity interests in the related entity, in various parties in interest, including, but not limited to, AT&T, Bank of America, Citibank International PLC, Comcast Cable Communications Management LLC, Deutsche Bank AG, ExxonMobil Deepwater Rig BV, GE Capital Equipment Finance Ltd., Siemens AS, UBS AG and Wells Fargo Bank. 5 See paragraph 11 below. 3

46 Case Document Filed in TXSB on 09/30/17 Page 5 of As can be expected with respect to any international professional services firm such as A&M, the Firm provides services to many clients with interests in the Debtors chapter 11 cases. To the best of my knowledge, except as indicated below, A&M s services for such clients do not relate to the Debtors chapter 11 cases. 5. In addition to the relationships described in Schedule 2, we note the following: (a) (b) (c) (d) Alvarez & Marsal Inc. ( A&M Inc. ), the majority owner of Alvarez & Marsal North America, LLC s parent company, Alvarez & Marsal Holdings, LLC ( A&M Holdings ), holds a significant ownership interest in Alvarez & Marsal Capital, LLC ( A&M Capital ). A&M Capital is an investment vehicle that indirectly serves as the general partner of A&M Capital Partners, LP (the A&M Fund ) that makes private equity investments in companies (all of whom are wholly unrelated to these proceedings). Certain A&M employees have invested in limited partnership interests in A&M Capital and the A&M Fund. In addition; As set forth on Schedule 2, Kirkland & Ellis LLP ( K&E ) currently represents A&M and/or its affiliates in matters unrelated to the Debtors and these chapter 11 cases. In addition to Kirkland & Ellis s representations of certain A&M affiliates (including A&M Inc., A&M Capital and the A&M Fund) certain partners or other persons or entities associated with K&E ( K&E Persons ) have invested in the A&M Fund. Each K&E Person that has invested in the A&M Fund holds less than one percent of the A&M Fund. JPMorgan Chase Bank, N.A. ( JPMC ) together with certain of its affiliates (collectively, JPM ) and Wells Fargo Bank, National Association ( WFBNA ) together with certain of its affiliates (collectively, Wells Fargo ) are Potential Parties in Interest. Under a credit facility (the Credit Facility ) to A&M s parent company A&M Holdings: WFBNA is administrative agent, swingline lender and issuing lender, JPMC is a syndication agent and participating lender and Wells Fargo Securities, LLC and J.P. Morgan Securities LLC are joint lead arrangers and joint book runners and HSBC is a participating lender. In addition to the receipt of interest in their capacity as a lender under the Credit Facility, Wells Fargo and JPM have received certain customary and negotiated fees and reimbursement of expenses in connection with their roles under the Credit Facility. An A&M affiliate signed an engagement letter in July 2016 with North Atlantic Drilling Ltd. ( NADL ) to provide consulting services to the Conflicts Committee of NADL s Board of Directors in its consideration of restructuring alternatives submitted by Seadrill Limited (the NADL 4

47 Case Document Filed in TXSB on 09/30/17 Page 6 of 53 Engagement ). Such NADL Engagement was terminated prior to the commencement of the assignment, and no applicable consulting services have in fact been provided under the NADL Engagement. 6. Further, as part of its diverse practice, the Firm appears in numerous cases and proceedings, and participates in transactions that involve many different professionals, including attorneys, accountants, and financial consultants, who represent claimants and parties-in-interest in the Debtors chapter 11 cases. Further, the Firm has performed in the past, and may perform in the future, advisory consulting services for various attorneys and law firms, and has been represented by several attorneys and law firms, some of whom may be involved in these proceedings. Based on our current knowledge of the professionals involved, and to the best of my knowledge, none of these relationships create interests materially adverse to the Debtors in matters upon which A&M is to be employed, and none are in connection with these cases. 7. To the best of my knowledge, no employee of the Firm is a relative of, or has been connected with the United States Trustee in this district or its employees. 8. Accordingly, to the best of my knowledge, A&M is a disinterested person as that term is defined in section 101(14) of the Bankruptcy Code, in that A&M: (a) is not a creditor, equity security holder, or insider of the Debtors; (b) was not, within two (2) years before the date of filing of the Debtors chapter 11 petitions, a director, officer, or employee of the Debtors; and (c) does not have an interest materially adverse to the interest of the Debtors estates or of any class of creditors or equity security holders. 9. If any new material relevant facts or relationships are discovered or arise, A&M will promptly file a supplemental declaration. Compensation 10. Subject to Court approval and in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, applicable United States Trustee guidelines, and the 5

48 Case Document Filed in TXSB on 09/30/17 Page 7 of 53 Bankruptcy Local Rules, A&M will seek from the Debtors payment for compensation on an hourly basis and reimbursement of actual and necessary expenses incurred by A&M. A&M s customary hourly rates as charged in bankruptcy and non-bankruptcy matters of this type by the professionals assigned to this engagement are outlined in the Application. These hourly rates are adjusted annually. To the best of my knowledge, (a) no commitments have been made or received by A&M with respect to compensation or payment in connection with these cases other than in accordance with applicable provisions of the Bankruptcy Code and the Bankruptcy Rules, and (b) A&M has no agreement with any other entity to share with such entity any compensation received by A&M in connection with these chapter 11 cases. Indemnification 11. Additionally, the Engagement Letter includes a provision for the indemnification of A&M by the Debtors. I believe the indemnification provision in the Engagement Letter is generally consistent in all material respects with the indemnification provision contained in A&M s standard engagement letter for both in- and out-of-court restructuring advisory and support services. Further, similar indemnification arrangements have been approved by courts as part of A&M s retention in other bankruptcy matters. 12. The indemnification provisions contained in the Engagement Letter are important and necessary to limit the exposure of advisors to potential future liability for decisions made based on all material information reasonably available. To the best of my knowledge, such indemnification provisions are consistent with the marketplace. I believe that the indemnification provisions contained in the Engagement Letter are appropriate and reasonable for the engagement of A&M as restructuring advisor in these chapter 11 cases. 6

49 Case Document Filed in TXSB on 09/30/17 Page 8 of By reason of the foregoing, I believe A&M is eligible for employment and retention by the Debtors pursuant to sections 327(a) (as modified by sections 1107(b)) and 328 of the Bankruptcy Code and the applicable Bankruptcy Rules and the Bankruptcy Local Rules. [Remainder of page intentionally left blank.] 7

50 Case Document Filed in TXSB on 09/30/17 Page 9 of 53 Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury that the foregoing is true and correct. Dated: September 29, 2017 Victoria, Texas By: Edgar W. Mosley II Managing Director Alvarez & Marsal North America, LLC

51 Case Document Filed in TXSB on 09/30/17 Page 10 of 53 Schedule 1 Potential Parties in Interest

52 Case Document Filed in TXSB on 09/30/17 Page 11 of 53 Administrative Agent Banco de Brasil S.A. Citibank International PLC Danske Bank AS Deutsche Bank AG DNB Bank ASA ING Bank N.V. Nordea Bank AB Nordea Bank Finland PLC Nordea Bank Norge ASA Bankruptcy Professionals Adepetun Caxton Martins Agbor & Segun Advokatfirmaet Thommessen AS Akin Gump Strauss Hauer & Feld LLP Alvarez & Marsal Europe LLP Alvarez & Marsal North America Arifa Corporate Services, Inc Baker Tilly Mkm And Ayad Al Seraihi CPA Baker Tilly Nigeria (Chartered Accountants) Baker Tilly Virchow Krause, LLP Cms Cameron Mckenna LLP Conyers Dill & Pearman Pte LTD D'Empaire Reyna Abogados Ernst & Young - Brunei Ernst & Young (Cis) B.V, Moscow Branch Ernst & Young (Nigeria) Ernst & Young Advisory LTD Ernst & Young Angola, LDA Ernst & Young AS Ernst & Young Belastingadviseurs, LLP Ernst & Young Global LTD Ernst & Young LLP Ernst & Young LLP - Canada Ernst & Young Middle East (Dubai) Ernst & Young Namibia Ernst & Young Services Limited Ernst & Young Solutions LLP. Ernst & Young Tax Advokatfirma AS Ernst & Young Terco Assessoria Empresarial LTDA Ernst & Young Vietnam LTD Ernst & Young, Ernst & Young, UK Ernst And Young Han Young Ey Services France Fearnley Offshore Fearnley Offshore Pte LTD Fearnley Procter Drill String Engineering Limited Ffa Ernst & Young Fried, Frank, Harris, Shriver & Jacobson LLP Houlihan Lokey Capital Inc. Kirkland & Ellis LLP KPMG (Australia) KPMG (Ghana) KPMG Advisory (China) Limited Shenzhen Branch KPMG AS KPMG International, KPMG Law Advokatfirma AS KPMG LLP KPMG Phoomchai Tax LTD. KPMG Professional Services / KPMG Advisory Services KPMG Tax AS KPMG Tax Limited KPMG Tax Services SDN BHD Lazard & Co, LTD Mancera, S.C. Moelis & Company Morgan Stanley & Co. International PLC Pareto Offshore AS Paul, Weiss, Rifkind, Wharton & Garrison LLP Price Waterhouse Coopers L.L.P. Oman Branch Pricewatercoopers (Angola), Limitada Pricewaterhouse Coopers, Hong Kong Pricewaterhousecoopers Pricewaterhousecoopers (Ghana) Pricewaterhousecoopers Abas Limited Pricewaterhousecoopers AS Pricewaterhousecoopers Auditores Independentes Pricewaterhousecoopers Chartered Accountants (Nigeria) Pricewaterhousecoopers LLP Pricewaterhousecoopers Risk Services Pte LTD Pricewaterhousecoopers LLP Pricewaterhousecoopers, S.C.