Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 1 of 13 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ------------------------------------------------------------ In re CHAPARRAL ENERGY, INC., et al., Debtors.1 ------------------------------------------------------------ x x Chapter 11 Case No. 16-11144 (LSS) Jointly Administered Hearing Date Jan. 10, 2017 at 1000 a.m. (ET) Obj. Deadline Jan. 3, 2017 at 400 p.m (ET) Re Docket Nos. 228 & 301 SUPPLEMENTAL APPLICATION OF DEBTORS FOR ORDER UNDER 11 U.S.C. 327 AND FED. R. BANKR. P. 2014(a) AND DEL. BANKR. L.R. 2014-1 AUTHORIZING THE EXPANDED SCOPE OF EMPLOYMENT AND RETENTION OF ERNST & YOUNG LLP AS TAX AND VALUATION SERVICES PROVIDER NUNC PRO TUNC TO DECEMBER 1, 2016 The debtors and debtors in possession in the above-captioned case (the Debtors ) hereby submit this supplemental application (the Supplemental Application ) for entry of an order (the Supplemental Order ), under Section 327(a) of Title 11 of the United States Code (the Bankruptcy Code ), Rule 2014 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ) and Rule 2014-1 of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules ), further authorizing the Debtors to employ and retain Ernst & Young LLP ( EY ) as its tax and valuation services provider pursuant to the expanded terms and conditions set forth in the Supplemental Engagement Letters (as defined and described in greater detail below) nunc pro tunc to December 1, 2016. In support of the Supplemental Application, the Debtors rely upon 1 The Debtors in these cases, along with the last four (or five digits, in cases in which multiple Debtors have the same last four digits) digits of each Debtor s federal tax identification number, are CEI Acquisition, L.L.C. (1817); CEI Pipeline, L.L.C. (6877); Chaparral Biofuels, L.L.C. (1066); Chaparral CO2, L.L.C. (1656); Chaparral Energy, Inc. (90941); Chaparral Energy, L.L.C. (20941); Chaparral Exploration, L.L.C. (1968); Chaparral Real Estate, L.L.C. (1655); Chaparral Resources, L.L.C. (1710); Green Country Supply, Inc. (2723); and Roadrunner Drilling, L.L.C. (2399). The Debtors address is 701 Cedar Lake Blvd., Oklahoma City, OK 73114.
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 2 of 13 and incorporate by reference the Retention Application (as defined below) and the Affidavit of Mark A. Wood in Support of Application for Order Authorizing Employment and Retention of Ernst & Young LLP as Tax and Valuation Services Provider for the Debtors and Debtors in Possession and Statement Pursuant to Federal Rule of Bankruptcy Procedure 2014(a) and Section 327(a) of the Bankruptcy Code Nunc Pro Tunc to the Petition Date (the Wood Affidavit ), attached thereto as Exhibit A. In further support of the Supplemental Application, the Debtors respectfully represent JURISDICTION 1. The Court has jurisdiction over the Application under 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware dated as of February 29, 2012. This matter is a core proceeding under 28 U.S.C. 157(b). Venue of these cases and this Supplemental Application in this district is proper under 28 U.S.C. 1408 and 1409. The statutory predicates for the relief requested herein are Bankruptcy Code Sections 327(a) and 328(a), Bankruptcy Rule 2014(a), and Local Rule 2014-1. Such relief is warranted under Bankruptcy Rule 6003. BACKGROUND 2. On May 9, 2016 (the Petition Date ), the Debtors filed a voluntary petition in the Court commencing a case for relief under Chapter 11 of the Bankruptcy Code (the Chapter 11 Cases ). The factual background regarding the Debtors, including their business operations, their capital and debt structure, and the events leading to the filing of the Chapter 11 Cases, is set forth in detail in the Declaration of Mark A. Fischer, Chief Executive Officer of Chaparral Energy, Inc., in Support of Chapter 11 Petitions and First Day Pleadings, (the Fischer Declaration ), filed with the Court on May 10, 2016 and fully incorporated herein by reference. 2
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 3 of 13 3. The Debtors continue to manage and operate their business as debtors in possession pursuant to Bankruptcy Code Sections 1107 and 1108. No trustee or examiner has been requested in the Chapter 11 Cases and no committee has yet been appointed. 4. On June 22, 2016, the Debtors filed the Application of the Debtors for Order Under 11 U.S.C. 327 and Fed. R. Bankr. P. 2014(a) and Del. Bank L.R. 2014-1 Authorizing Employment and Retention of Ernst & Young LLP as Tax and Valuation Services Provider Nunc Pro Tunc to the Petition Date [Docket No. 228] ( the Retention Application ), requesting entry of an order (the Retention Order ) (a) authorizing the Debtors to employ EY as their tax and valuation services provider and (b) approving the terms and conditions under which EY was to be retained and compensated at the expense of the Debtors estates, as specified in the agreement between the Debtors and EY, dated May 10, 2016 (the Master Services Engagement Letter, ) and certain other agreements annexed to the Retention Application (collectively, with the Master Services Engagement Letter, the Engagement Letters ), nunc pro tunc to December 1, 2016. 5. On July 12, 2016 this Court entered the Retention Order [Docket No. 301], approving the retention of EY pursuant to the terms and conditions set forth in the Engagement Letters. RELIEF REQUESTED 6. By this Supplemental Application, the Debtors seek entry of an order substantially in the form attached hereto as Exhibit A (a) authorizing the expanded scope of employment and allowing for additional services to be conducted by EY, which were not originally included in the Engagement Letters. The additional services include (a) implementing a new program to automate the Debtors income tax provision process to support 3
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 4 of 13 its U.S. GAAP tax reporting requirements, as further described in the Tax Performance Advisory Services Statement of Work (the Tax Performance Advisory Services SOW ), attached hereto as Exhibit B, and (b) developing, tracking, and calculating tax data related to the Debtors depletable asset tracking system and database, as further described in the DD&A Assistance & Advisory Statement of Work (the DD&A Assistance & Advisory SOW and collectively with the Tax Performance Advisory Services SOW, the Supplemental Engagement Letters )2, attached hereto as Exhibit C. The Supplemental Engagement Letters incorporate the Master Services Engagement Letter by reference, and are deemed to be a part of the Master Services Engagement Letter, already approved in these Chapter 11 Cases. The supplemental services described in the Supplemental Engagement Letters are necessary for the Debtors to effectively and efficiently prepare their income tax provision and tax returns incorporating Chapter 11 filing tax implications, including attribute reduction, tax basis tracking, utilization of net operating loss carryforwards, Section 382 limitations and other computations. Implementation of the software described in the Supplemental Engagement Letters will allow the Debtors to meet the tax and financial reporting requirements in the event of future tax-sensitive transactions such as asset divestitures, initial public offerings and/or private issuances. SCOPE OF SERVICES 7. Pursuant to the terms of the Supplemental Engagement Letters, EY agreed to provide the following additional tax and valuation services 3 2 In the event of any inconsistencies between the description of EY s engagement with the Debtors in this Supplemental Application and the terms of the Supplemental Engagement Letters, the Supplemental Engagement Letters shall control. 3 Capitalized terms used in this Supplemental Application but not defined herein shall have the meanings ascribed to such terms in the Supplemental Engagement Letters. Capitalized terms used in this Supplemental Application but not defined herein or in the Supplemental Engagement Letters shall have the meanings ascribed to such terms in the Retention Application. 4
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 5 of 13 Tax Performance Advisory Services SOW As set forth in detail in the Bankruptcy Tax SOW attached hereto at as Exhibit B, EY will provide the following tax advisory Services to the Debtors, contingent upon the Bankruptcy Court s approval of EY s expanded retention in accordance with the terms and conditions that are set forth in the Tax Performance Advisory Services SOW Assist Client with automating its income tax provision process by implementing ONESOURCE Tax Provision (OTP) to support its U.S. GAAP tax reporting requirements, including the following o o o o o o o o o Conduct workshops to obtain understanding of existing and future provision process requirements, identify improvement opportunities and design implementation approach; Define approach for key areas of OTP configuration and process; Determine the technology platform to support requirements, including any required data bridges to enable automation of book income and/or book/tax difference calculations; Load foundational data (e.g., units, adjustment codes) into OTP; Assist with the design of extracts from financial systems and other workspaces to facilitate the import of data into OTP; Assist with mapping of financial system data into OTP to enable automation of adjustments; Provide support for the testing of the configuration and process, including reperformance of a representative sample of entities for a prior provision period; Develop and deliver one day of end-user training for the US Client team in OTP; and Provide support for the go-live of the software. DD&A Assistance & Advisory SOW As set forth in detail in the DD&A Assistance & Advisory SOW, attached hereto as Exhibit C, EY will provide the following tax advisory services to the Debtors, contingent upon the Bankruptcy Court s approval of EY s expanded retention in accordance with the terms and conditions that are set forth in the DD&A Assistance & Advisory SOW Assistance with development of depletion data retrieval report from financial reporting systems; 5
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 6 of 13 Assistance with conversion of existing tax schedules and reports into formats for input into depletable asset tracking system; Assistance with customization of database including coding and report creation; o o o o o o o Cost Depletion; Percentage Depletion; Tax Basis Rollforward; Net Income from Oil & Gas; Analytical, Exception and Error Capture; Alternative Minimum Tax; State Depletion; Assistance with calculation of cost depletion; Assistance with development of procedures, methodologies and data necessary for calculations of percentage depletion going forward; Assistance with maintenance and upkeep of database for year rollover and tax basis tracking; Assistance with assigning and transferring unevaluated or undeveloped tax basis; Assistance with any tax attribute reduction to depletable asset; and Assistance with documentation of tax asset assignment determination i.e. data level, other assumptions. 8. The Debtors management has determined that the Debtors require the foregoing services in order to operate its business effectively and to meet the additional requirements imposed on the Debtors business by the commencement of these Chapter 11 Cases. As noted above, EY has substantial experience working with businesses in a Chapter 11 environment. Accordingly, the Debtors believe that EY is well qualified to perform the foregoing services and assist the Debtors in these Chapter 11 Cases. 6
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 7 of 13 BASIS FOR RELIEF AND APPLICABLE AUTHORITY A. Bankruptcy Code Section 327(a) Permits the Expanded Employment and Retention of EY on Terms Substantially Similar to Those in the Supplemental Engagement Letters. 9. The Debtors desire to continue to retain and employ EY as its tax and valuation services provider during the pendency of the Chapter 11 Cases, pursuant to the expanded terms of the Supplemental Engagement Letters because such services conducted by an experienced tax and valuation services provider such as EY will enable the Debtors to continue to carry out their duties. 10. Under Bankruptcy Code Section 327(a), a debtor in possession is authorized to employ one or more professionals that do not hold or represent an interest materially adverse to the estate and that are disinterested persons to assist the debtor in possession in carrying out its duties under the Bankruptcy Code. 11 U.S.C. 327(a). professional person include 11. Bankruptcy Rule 2014 requires that an application for retention of a specific facts showing the necessity for the employment, the name of the person to be employed, the reasons for the selection, the professional services to be rendered, any proposed arrangement for compensation, and, to the best of the applicant s knowledge, all of the person s connections with the debtor, creditors, any other party in interest, their respective attorneys and accountants, the United States trustee, or any person employed in the office of the United States trustee. 12. Fed. R. Bankr. P. 2014(a). Local Rule 2014-1 further requires that [a]ny entity seeking approval of employment of a professional person pursuant to 11 U.S.C. 327... shall file with the Court a motion, a supporting affidavit or verified statement of the professional person and a proposed order for approval. Del. Bankr. L.R. 2014-1(a). 13. By this Application, the Debtors request that the Court approve the expanded employment of EY on the terms and conditions described in the Supplemental 7
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 8 of 13 Engagement Letters which are consistent with the terms in the court-approved Engagement Letters pursuant to Bankruptcy Code Section 327(a). The expanded retention of EY is beneficial to the Debtors estate and the professional compensation arrangements contained in the Supplemental Engagement Letters provide certainty and proper inducement for EY to act expeditiously and prudently with respect to the matters for which it will be employed. B. EY s Qualifications. 14. EY is a leading tax and valuation services firm. EY has considerable experience providing tax and valuation services to businesses in a Chapter 11 environment. EY has acted as tax and valuation advisor in numerous in-court and out-of-court restructurings of companies of various sizes across a wide array of industries. 15. The additional tax and valuation services described in the Supplemental Engagement Letters that EY will provide to the Debtors are necessary and appropriate to assist the Debtors with their tax and valuation needs during these Chapter 11 Cases. Further, the services to be provided by EY will not duplicate the services of any of the other professionals retained by the Debtors and the Debtors will use reasonable efforts to coordinate EY s services with those of the Debtors other professionals to avoid the unnecessary duplication of services. 16. As a result of the performance of services on behalf of the Debtors prior to and after the Petition Date, EY has acquired significant knowledge of the Debtors and familiarity with their businesses. Further, EY s professionals have worked closely with the Debtors management. Consequently, EY has developed the experience necessary for the scope of the proposed and anticipated services and to enable it to provide effective and efficient services in these Chapter 11 Cases. C. The Retention of EY is Important to the Debtors Success. 17. Denying the relief requested herein would deprive the Debtors of the 8
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 9 of 13 assistance of a highly qualified tax and valuation advisor and disadvantage the Debtors and all parties-in-interest. The Debtors would be forced to engage a new tax and valuation advisory firm lacking the same understanding of the Debtors businesses. Accordingly, the Debtors respectfully submit that the services provided by EY are important to the Debtors and request that this Court authorize the retention of EY on the terms set forth in the Supplemental Engagement Letters. TERMS OF COMPENSATION AND REIMBURSEMENT 18. Pursuant to the terms of the Supplemental Engagement Letters, EY intends to seek compensation on an hourly basis in accordance with the schedules of compensation set forth in the Supplemental Engagement Letters and to charge for its reasonable out-of-pocket expenses (the Fee Structure ). EY s willingness to continue its engagement to advise and assist the Debtors is conditioned upon its ability to be retained in accordance with the terms of the Engagement Letters, which terms represent typical conditions of employment and compensation for EY s services. 19. The hourly rates, which are subject to periodic adjustments (discussed below), that EY professionals will charge pursuant to the Supplemental Engagement Letters are as follows Title Rate Per Hour Partner/Principal/Executive Director $595 Senior Manager $560 Manager $475 Senior $295 Staff $160 20. EY s hourly rates are subject to periodic adjustment from time to time in accordance with EY s established billing practices and procedures. EY will provide notice of any changes to its hourly rates within ten (10) business days thereof to the U.S. Trustee and any 9
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 10 of 13 statutory committee appointed in these Chapter 11 Cases and file such notice with the Court. 21. Additionally, pursuant to the Supplemental Engagement Letters, EY is entitled to be compensated for any direct expenses incurred in connection with EY s retention in these cases and the performance of the services set forth in the Engagement Letters. EY s direct expenses shall include, but not be limited to, reasonable and customary out-of-pocket expenses for items such as travel, meals, accommodations, and other expenses (including any fees or reasonable expenses of EY s legal counsel) specifically related to this engagement. Additionally, the Debtors shall also pay any potential value-added taxes (VAT), sales taxes, and other indirect taxes incurred in connection with the delivery of EY s services, including any such taxes and related administrative costs that result from billing arrangements specifically requested by the Debtors. 22. The Debtors believe that the Fee Structure is market-based and reasonable considering EY s considerable knowledge and experience. Further, the Fee Structure is comprable to the fees charged by EY for similar services set forth in the Retention Application. The Debtors further believe that it is a reasonable and market-based compensation structure under the standards set forth in Bankruptcy Code Section 327(a). In this regard, it appropriately reflects the nature of the services to be provided by EY and is, upon information and belief, comparable to the fee structures utilized by leading tax and valuation services firms for comparable engagements both in and out of court. 23. Similar fee arrangements in other large Chapter 11 cases have routinely been approved and implemented by this Court. See, e.g., In re Paragon Offshore PLC, Case No 16-10386 (CSS) (Bankr. D. Del Apr. 5, 2016); In re Quiksilver, Inc. Case No 15-11880 (BLS) (Bankr. D. Del. Nov. 16, 2015); In re Overseas Shipholding Group, Inc., Case No. 12-20000 10
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 11 of 13 (PJW) (Bankr. D. Del. March 5, 2013); In re Delta Petroleum Corp., Case No. 11-14006 (KJC) (Bankr. D. Del. Jan. 11, 2012); In re NewPage Corp., Case No. 11-12804 (KG) (Bankr. D. Del. Nov. 3, 2011). 24. EY will continue to file monthly, interim, and final fee applications for the allowance of compensation for services rendered and reimbursement of expenses incurred in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the Interim Compensation Order, and such other procedures and guidelines as may be fixed by order of the Court. 25. To the best of the Debtors knowledge, information, and belief, and except as set forth herein and as otherwise disclosed in the Wood Affidavit, which is annexed as Exhibit A to the Retention Application, EY is not a prepetition creditor of the Debtors. No promises have been received by EY as to compensation or payment in connection with its retention other than in accordance with the provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules, the Interim Compensation Order, and orders of this Court. EY has no agreement with any non-affiliated person or entity to share with such entity any compensation received by EY in connection with this retention except as set forth in the Wood Affidavit. EY S DISINTERESTEDNESS 26. EY has informed the Debtors that, except as may be more fully set forth in the Wood Affidavit, EY (a) has no connection with the Debtors, its creditors, or other parties-ininterest in the Chapter 11 Cases, (b) does not hold any interest materially adverse to the Debtors estates and (c) believes it is a disinterested person as defined by Bankruptcy Code Section 101(14), as modified by Bankruptcy Code Section 1107(b) and as required by Bankruptcy Code Section 327(a). The Debtors knowledge, information, and belief regarding the matters set forth 11
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 12 of 13 in this paragraph is based, and made in reliance, upon the Wood Affidavit. 27. EY informed the Debtors that it has undertaken a detailed search of its relationships with certain potential parties-in-interest to determine and to disclose whether it is performing or has performed services for any significant party in unrelated matters. As disclosed in the Wood Affidavit, EY currently provides services to certain of the Debtors creditors and other parties-in-interest in matters unrelated to these proceedings. The Debtors believe that EY s current and future representation of these entities will not in any way adversely affect its provision of tax advice. 28. As further disclosed in the Wood Affidavit, EY formerly represented certain of the Debtors creditors and other parties-in-interest in matters unrelated to these Chapter 11 Cases. EY has informed the Debtors of its past representation of such entities. The Debtors believe that EY s past representation of these entities will not in any way adversely affect EY s provision of tax and valuation services. 29. If any new material facts or relationships are discovered or arise, the Debtors understand that EY will provide the Court with a supplemental affidavit as required by Bankruptcy Rule 2014(a). NOTICE 30. Notice of this Application will be given to (a) the Office of the United States Trustee for the District of Delaware; (b) the administrative agent for the Debtors prepetition secured financing; (c) counsel to the administrative agent for the Debtors prepetition secured financing; (d) the indenture trustee under the Debtors 9.875% senior notes due 2020; (e) the indenture trustee under the Debtors 8.25% senior notes due 2021; (f) the indenture trustee under the Debtors 7.625% senior notes due 2022; (g) Milbank, Tweed, Hadley & McCloy LLP, 12
Case 16-11144-LSS Doc 664 Filed 12/19/16 Page 13 of 13 counsel to the to the ad hoc group of the holders of the Debtors prepetition unsecured notes; (h) the Internal Revenue Services, (i) the Attorneys General for the states of Oklahoma, Texas, and Kansas; (j) the parties included on the Debtors consolidated list of thirty (30) largest unsecured creditors; and (k) those parties that have requested notice pursuant to Bankruptcy Rule 2002. The Debtors submit that, under the circumstances, no other or further notice is required. WHEREFORE, the Debtors respectfully request that the Court (a) enter the order, attached hereto as Exhibit A, authorizing the retention of EY nunc pro tunc to the December 1, 2016 on the terms set forth in the Supplemental Engagement Letters and (b) grant such other and further relief as the Court deems appropriate. December 19, 2016 By_/s/ Joseph O. Evans Joseph O. Evans Chaparral Energy Inc. Chief Financial Officer 13
Case 16-11144-LSS Doc 664-1 Filed 12/19/16 Page 1 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ------------------------------------------------------------ In re CHAPARRAL ENERGY, INC., et al., Debtors. 1 ------------------------------------------------------------ x x Chapter 11 Case No. 16-11144 (LSS) Jointly Administered Hearing Date January 10, 2017 at 1000 a.m. (ET) Obj. Deadline January 3, 2017 at 400 p.m. (ET) NOTICE OF APPLICATION AND HEARING PLEASE TAKE NOTICE that, on December 19, 2016, the debtors and debtors in possession in the above-captioned cases (collectively, the Debtors ) filed the Supplemental Application of Debtors for Order Under 11 U.S.C. 327 and Fed. R. Bankr. P. 2014(a) and Del. Bankr. L.R. 2014-1 Authorizing the Expanded Scope of Employment and Retention of Ernst & Young LLP as Tax and Valuation Services Provider Nunc Pro Tunc to December 1, 2016 (the Application ) with the United States Bankruptcy Court for the District of Delaware (the Bankruptcy Court ). PLEASE TAKE FURTHER NOTICE that any responses or objections to the Application must be in writing, filed with the Clerk of the Bankruptcy Court, 824 North Market Street, 3 rd Floor, Wilmington, Delaware 19801, and served upon and received by the undersigned counsel for the Debtors on or before January 3, 2017 at 400 p.m. (ET). 1 The Debtors in these cases, along with the last four digits (or five digits, in cases in which multiple Debtors have the same last four digits) of each Debtor s federal tax identification number, are CEI Acquisition, L.L.C. (1817); CEI Pipeline, L.L.C. (6877); Chaparral Biofuels, L.L.C. (1066); Chaparral CO2, L.L.C. (1656); Chaparral Energy, Inc. (90941); Chaparral Energy, L.L.C. (20941); Chaparral Exploration, L.L.C. (1968); Chaparral Real Estate, L.L.C. (1655); Chaparral Resources, L.L.C. (1710); Green Country Supply, Inc. (2723); and Roadrunner Drilling, L.L.C. (2399). The Debtors address is 701 Cedar Lake Blvd., Oklahoma City, OK 73114. RLF1 16274162v.1
Case 16-11144-LSS Doc 664-1 Filed 12/19/16 Page 2 of 3 PLEASE TAKE FURTHER NOTICE that if any objections to the Application are received, the Application and such objections shall be considered at a hearing before The Honorable Laurie Selber Silverstein, United States Bankruptcy Judge for the District of Delaware, at the Bankruptcy Court, 824 North Market Street, 6th Floor, Courtroom 2, Wilmington, Delaware 19801 on January 10, 2017 at 1000 a.m. (ET). PLEASE TAKE FURTHER NOTICE THAT IF NO OBJECTIONS TO THE APPLICATION ARE TIMELY FILED, SERVED AND RECEIVED IN ACCORDANCE WITH THIS NOTICE, THE BANKRUPTCY COURT MAY GRANT THE RELIEF REQUESTED IN THE APPLICATION WITHOUT FURTHER NOTICE OR HEARING. RLF1 16274162v.1 2
Case 16-11144-LSS Doc 664-1 Filed 12/19/16 Page 3 of 3 Dated December 19, 2016 Wilmington, Delaware /s/ Brendan J. Schlauch Mark D. Collins (No. 2981) John H. Knight (No. 3848) Joseph C. Barsalona II (No. 6102) Brendan J. Schlauch (No. 6115) RICHARDS, LAYTON & FINGER, P.A. One Rodney Square 920 North King St. Wilmington, Delaware 19801 Telephone 302-651-7700 Fax 302-651-7701 E-mail collins@rlf.com knight@rlf.com barsalona@rlf.com schlauch@rlf.com - and - Richard A. Levy Keith A. Simon David F. McElhoe LATHAM & WATKINS LLP 885 Third Avenue New York, New York 10022-4834 Telephone 212-906-1200 Fax 212-751-4864 Email richard.levy@lw.com keith.simon@lw.com david.mcelhoe@lw.com Counsel for Debtors and Debtors in Possession RLF1 16274162v.1 3
Case 16-11144-LSS Doc 664-2 Filed 12/19/16 Page 1 of 4 EXHIBIT A Proposed Order
Case 16-11144-LSS Doc 664-2 Filed 12/19/16 Page 2 of 4 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE ------------------------------------------------------------ x In re CHAPARRAL ENERGY, INC., et al., Debtors. 1 ------------------------------------------------------------ x Chapter 11 Case No. 16-11144 (LSS) Jointly Administered Re Docket Nos. 228, 301 & ORDER UNDER 11 U.S.C. 327 AND FED. R. BANKR. P. 2014(a) AND DEL. BANKR. L.R. 2014-1 APPROVING THE SUPPLEMENTAL APPLICATION OF DEBTORS TO EXPAND THE SCOPE OF SERVICES OF ERNST & YOUNG LLP AS TAX AND VALUATION SERVICES PROVIDER NUNC PRO TUNC TO DECEMBER 1, 2016 Upon the supplemental application (the Supplemental Application )2 of the Debtors for entry of an order, pursuant to Bankruptcy Code Section 327(a), Bankruptcy Rule 2014 and Local Rule 2014-1 (i) further authorizing the Debtors to employ, retain and compensate Ernst & Young LLP ( EY ) as its tax and valuation services provider pursuant to the expanded terms and conditions set forth in the Supplemental Engagement Letters nunc pro tunc to December 1, 2016, and (ii) granting the Debtors such other and further relief as the Court deems just and proper; and upon adequate notice of the Supplemental Application having been given as set forth in the Supplemental Application; and it appearing that no other or further notice is necessary; and the Court having jurisdiction to consider the Application and the relief requested therein pursuant to 28 U.S.C. 157 and 1334; and the Court having determined that consideration of the Application is a core proceeding pursuant to 28 U.S.C. 157(b)(2); and the Court having determined that the 1 The Debtors in these cases, along with the last four (or five digits, in cases in which multiple Debtors have the same last four digits) digits of each Debtor s federal tax identification number, are CEI Acquisition, L.L.C. (1817); CEI Pipeline, L.L.C. (6877); Chaparral Biofuels, L.L.C. (1066); Chaparral CO2, L.L.C. (1656); Chaparral Energy, Inc. (90941); Chaparral Energy, L.L.C. (20941); Chaparral Exploration, L.L.C. (1968); Chaparral Real Estate, L.L.C. (1655); Chaparral Resources, L.L.C. (1710); Green Country Supply, Inc. (2723); and Roadrunner Drilling, L.L.C. (2399). The Debtors address is 701 Cedar Lake Blvd., Oklahoma City, OK 73114. 2 Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Supplemental Application.
Case 16-11144-LSS Doc 664-2 Filed 12/19/16 Page 3 of 4 legal and factual bases set forth in the Supplemental Application establish just cause for the relief requested in the Supplemental Application, and that such relief is in the best interests of the Debtors and their estates, creditors, and other parties-in-interest; and upon the record herein; and after due deliberation thereon; and good and sufficient cause appearing therefor, it is hereby ORDERED, ADJUDGED AND DECREED THAT 1. The Supplemental Application is GRANTED as set forth herein. 2. This Supplemental Order supplements the Retention Order, which shall remain in full force and effect. 3. Pursuant to Bankruptcy Code Section 327(a), Bankruptcy Rule 2014 and Local Rule 2014-1, the Debtors are authorized to further employ, retain and compensate EY as its tax and valuation services provider nunc pro tunc to December 1, 2016 pursuant to the terms and conditions of the Supplemental Engagement Letters. 4. EY will file fee applications for monthly, interim, and final allowance of compensation, including reimbursement of expenses, pursuant to Bankruptcy Code Sections 330 and 331, the Bankruptcy Rules, the Local Rules, the Interim Compensation Order, this Supplemental Order, and such other procedures and guidelines as may be fixed by order of or in force in cases before the Court. 5. To the extent that there may be any inconsistency between the terms of the Supplemental Application, the Supplemental Engagement Letters, and this Supplemental Order, the terms of this Supplemental Order shall govern. 6. The Debtors are authorized to take all actions necessary to effectuate the relief granted in this Supplemental Order in accordance with the Application. 2
Case 16-11144-LSS Doc 664-2 Filed 12/19/16 Page 4 of 4 7. Notwithstanding the possible applicability of Bankruptcy Rules 6004(h), 7062, or 9014, the terms and conditions of this Supplemental Order shall be immediately effective and enforceable upon its entry. 8. The Court retains jurisdiction with respect to all matters arising from or related to the implementation of this Supplemental Order. Dated, 2017 Wilmington, Delaware THE HONORABLE LAURIE S. SILVERSTEIN UNITED STATES BANKRUPTCY JUDGE 3
Case 16-11144-LSS Doc 664-3 Filed 12/19/16 Page 1 of 6 EXHIBIT B Tax Performance Advisory Services SOW
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Case 16-11144-LSS Doc 664-4 Filed 12/19/16 Page 1 of 6 EXHIBIT C DD&A Assistance & Advisory SOW
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