Opinion
Case No. 01-16034 (AJG), Chapter 11, Jointly Administered
January 17, 2002
Upon consideration of the Motion of the Debtors for Administrative Order Pursuant to Sections 105(a) and 331 of the Bankruptcy Code Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals, dated December 3, 2001 ("Motion"), filed by Enron Corp. and certain of its affiliated debtors (collectively, the "Debtors"), as debtors and debtors in possession, seeking entry of an order pursuant sections 105(a) and 331 of the Bankruptcy Code establishing procedures for interim compensation and reimbursement of expenses of professionals, as more fully set forth in the Motion; and it appearing that the Court has jurisdiction to consider the Motion; and it appearing that the relief requested in the Motion is in the best interests of the Debtors, their estates and creditors; and it appearing that due and appropriate notice of the Motion has been given and no further notice need be given; and upon the proceedings before the Court; and good and sufficient cause appearing;
IT IS HEREBY ORDERED THAT:
1. The Motion is granted.
2. Except as may otherwise be provided in Court orders authorizing the retention of specific professionals, all professionals in this case may seek interim compensation in accordance with the following procedure:
Commencing on February 20, 2002, on or before the twentieth (20th) day of each month following the month for which compensation is sought (provided, however, that the first monthly statement shall pertain to the first two months of these chapter 11 cases), each professional seeking compensation under this Motion will serve a monthly statement, by hand or overnight delivery on (i) Ray Bowen, Jr., as the officer designated by the Debtors to be responsible for such matters;(ii) Weil, Gotshal Manges (attention: Brian S. Rosen), as counsel for the Debtors; (iii) the Office of the United States Trustee; (iv) the attorneys for the statutory committee of unsecured creditors once appointed; and (v) each of Shearman Sterling (attention: Frederick Sosnick) and Davis Polk Wardell (attention: Marshall S. Huebner), as counsel to Citicorp USA, Inc. and JPMorgan Chase Bank, respectively, in their capacities as co-administrative agents under the Debtors' post-petition Revolving Credit and Guaranty Agreement.
a. The monthly statement shall be filed with the Court. A courtesy copy need not be delivered to the presiding judge's chambers. This Order is not intended to alter the fee application requirements outlined in sections 330 and 331 of the Bankruptcy Code. Professionals are still required to serve and file interim and final applications for approval of fees and expenses in accordance with the relevant provisions of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure and the Local Rules for the United States Bankruptcy Court for the Southern District of New York;
b. Each monthly fee statement must contain a list of the individuals and their respective titles (e.g. attorney, accountant, or paralegal) who provided services during the statement period, their respective billing rates, the aggregate hours spent by each individual, a reasonably detailed breakdown of the disbursements incurred (No professional should seek reimbursement of an expense which would otherwise not be allowed pursuant to the Court's Administrative Orders dated June 24, 1991 and April 21, 1995 or the United States Trustee Guidelines for Reviewing Applications for Compensation and Reimbursement of Expenses Filed under 11 U.S.C. § 330 dated January 30, 1996), and contemporaneously maintained time entries for each individual in increments of tenths (1/10) of an hour;
c. Each person receiving a statement will have at least fifteen (15) days after service to review such statement and, in the event that he or she has an objection to the compensation or reimbursement sought in a particular statement, he or she shall, by no later than the thirty-fifth (35th) day following the month for which compensation is sought, serve upon the professional whose statement is objected to, and the other persons designated to receive statements in paragraph (a), a written "Notice of Objection To Fee Statement," setting forth the nature of the objection and the amount of fees or expenses at issue;
d. At the expiration of the thirty-five (35) day period, the Debtors shall promptly pay eighty percent (80%) of the fees and one hundred percent (100%) of the expenses identified in each monthly statement to which no objection has been served in accordance with paragraph (d);
e. If the Debtors receive an objection to a particular fee statement, they shall withhold payment of that portion of the fee statement to which the objection is directed and promptly pay the remainder of the fees and disbursements in the percentages set forth in paragraph (e);
f. If the parties to an objection are able to resolve their dispute following the service of a Notice of Objection To Fee Statement and if the party whose statement was objected to serves on all of the parties listed in paragraph (a) a statement indicating that the objection is withdrawn and describing in detail the terms of the resolution, then the Debtors shall promptly pay, in accordance with paragraph (e), that portion of the fee statement which is no longer subject to an objection;
g. All objections that are not resolved by the parties, shall be preserved and presented to the Court at the next interim or final fee application hearing to be heard by the Court (See paragraph (j), below);
h. The service of an objection in accordance with paragraph (d) shall not prejudice the objecting party's right to object to any fee application made to the Court in accordance with the Bankruptcy Code on any ground whether raised in the objection or not. Furthermore, the decision by any party not to object to a fee statement shall not be a waiver of any kind or prejudice that party's right to object to any fee application subsequently made to the Court in accordance with the Bankruptcy Code;
i. Approximately every 120 days, but no more than every 150 days, each of the professionals shall serve and file with the Court an application for interim or final Court approval and allowance, pursuant to sections 330 and 331 of the Bankruptcy Code (as the case may be) of the compensation and reimbursement of expenses requested;
j. Any professional who fails to file an application seeking approval of compensation and expenses previously paid under this Motion when due shall (1) be ineligible to receive further monthly payments of fees or expenses as provided herein until further order of the Court and (2) may be required to disgorge any fees paid since retention or the last fee application, whichever is later;
k. The pendency of an application or a Court order that payment of compensation or reimbursement of expenses was improper as to a particular statement shall not disqualify a professional from the future payment of compensation or reimbursement of expenses as set forth above, unless otherwise ordered by the Court;
l. Neither the payment of, nor the failure to pay, in whole or in part, monthly compensation and reimbursement as provided herein shall have any effect on this Court's interim or final allowance of compensation and reimbursement of expenses of any professionals; and
m. Counsel for any official committee may, in accordance with the foregoing procedure for monthly compensation and reimbursement of professionals, collect and submit statements of expenses, with supporting vouchers, from members of the committee he or she represents; provided, however, that such committee counsel ensures that these reimbursement requests comply with the Court's Administrative Orders dated June 24, 1991 and April 21, 1995.
3. Each member of the Committee in this case is permitted to submit statements of expenses and supporting vouchers to counsel (and co-counsel, if appointed) for the Committee who will collect and submit such requests for reimbursement in accordance with the foregoing procedure for monthly and interim compensation and reimbursement of professionals.
4. Sending notice of hearing to consider interim applications to: (i) the Office of the United States Trustee; (ii) counsel for the Committee; and (iii) all parties who have filed a notice of appearance with the Clerk of this Court and requested such notice shall be good and sufficient notice.
5. To the extent that any affiliates of the Debtors subsequently commence chapter 11 cases which are jointly administered with these chapter 11 cases, the relief requested herein shall apply to such debtors, their respective estates, and their Court-approved professionals.