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UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA
In re: Genmar Holdings, Inc., et al.1 Debtors.
Chapter 11
Case No. 09-43537
Jointly Administered
DEBTORS’ REPLY TO TEXTRON LIMITED OBJECTION TO THE EMPLOYMENT OF
HOULIHAN, LOKEY, HOWARD & ZUKIN CAPITAL, INC.
Genmar Holdings, Inc. and the affiliated debtors set out in the footnote below
(collectively the “Debtors”) made an Application on August 10, 2009 to employ Houlihan
Lokey, Howard & Zukin Capital, Inc. (“Houlihan”) as their financial advisor and investment
banker (the “Application”). Textron Financial Corporation and Textron Financial Canada, Ltd.
(together, “Textron”) filed a limited objection to that Application (the “Textron Objection”).
The Debtors hereby respond to the Textron Objection.
1. The Textron Objection raises two issues: that the employment of Houlihan is not
necessary, and that the terms of the employment are not reasonable. Both of these objections are
without merit and should be overruled.
2. It is necessary for the Debtors to employ an investment banker. The Textron
Objection does not explain or assert any facts to support its first contention, that the Debtors
have failed to demonstrate the necessity for retention of an investment banker. The Application
1 Jointly administered debtors: Genmar Holdings, Inc., Case No. 09-43537; Carver Industries, L.L.C., Case No. 09-43538; Carver Italia, L.L.C., Case No. 09-33773; Carver Yachts International, L.L.C., Case No. 09-33774; Genmar Florida, Inc., Case No. 09-43539; Genmar Industries, Inc., Case No. 09-43540; Genmar IP, L.L.C., Case No. 09-43541; Genmar Manufacturing of Kansas, Inc., Case No. 09-43542; Genmar Michigan, L.L.C., Case No. 09-43543; Genmar Minnesota, Inc., Case No. 09-33775; Genmar Tennessee, Inc., Case No. 09-43544; Genmar Transportation, Inc., Case No. 09-43545; Genmar Yacht Group, LLC, Case No. 09-43546; Marine Media, L.L.C., Case No. 09-43547; Minstar, L.L.C., Case No. 09-43548; Triumph Boats, Inc., Case No. 09-43550; Triumph Boat Rentals, L.L.C., Case No. 09-43551; VEC Leasing Services, L.L.C., Case No. 09-43552; VEC Management Co. L.L.C., Case No. 09-43553; VEC Technology, Inc., Case No. 09-43554; Windsor Craft Yachts, L.L.C., Case No. 09-43555; Wood Manufacturing Company, Inc., Case No. 09-43556.
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sets out the fact that such engagement is necessary (see Application Paragraph 1). The Unsworn
Declaration of Jeffery P. Baker (the “Baker Declaration”), filed herewith, details the reasons for
the Debtors’ statement in the Application that they require the assistance of an investment banker
in the course of the cases. Employment of an investment banker to assist the Debtors in
exploring emergence from Chapter 11 through a series of asset sales is a requirement of their
continued DIP loan financing. Even if the Debtors propose a reorganization plan with ongoing
operations, it is likely that they will sell some operating assets. Effective sale in their specialized
market and the probable complexity of a sale require the services of an experienced investment
banker.
3. The terms of the Houlihan engagement are reasonable. The Textron
Objection asserts that the terms of engagement are unreasonable for four reasons: the
engagement has no set term; the fees are too high; there is a “tail” period; and the effective date
of employment is July 7. It asks the Court to adopt a nine-factor standard for determining
whether engagement terms are reasonable, as outlined by one bankruptcy court in Massachusetts.
See, In re High Voltage Engineering Corp., 311 B.R. 320 (Bankr. D. Mass. 2004). As a
preliminary matter, neither the Eighth Circuit nor any bankruptcy court in Minnesota requires the
showing suggested by the Massachusetts court. That is not the standard here—nor should it be--
and it would be unfair for the Court to deny employment on such a basis. Rather, reasonableness
should be determined on the particular circumstances of a case. Here, the terms of employment
are entirely reasonable.
4. As set out in the Baker Declaration, a Special Committee of the Genmar Board,
made up of independent, outside directors undertook a procedure to identify, evaluate, and
engage an investment banker. It considered six firms, and two finalists. It compared their
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qualification and their pricing structures. It even negotiated a more favorable pricing structure
with Houlihan. As the Baker Declaration and the Declaration of Stephen Spencer, filed herewith
Ithe “Spencer Declaration”) set out, the terms of the engagement are entirely consistent with
industry practice, and make sense in these particular cases.
5. The Baker Declaration and the Spencer Declaration address Textron’s particular
objections, and the facts set out there will not be repeated here. As to the first objection, the
absence of a set term for the engagement is not a problem where, as here, there is a right to
terminate on relatively short notice. All of the parties in interest have incentive to see the
Debtors emerge from Chapter 11 quickly, whether through sale or otherwise; and if Houlihan is
not being effective, the engagement can be terminated by the Debtors or by the Court, on motion
by another party. The second objection also lacks merit. The fee structure is not only consistent
with fees in the industry, but was also extensively and successfully negotiated to the Debtors’
benefit. Textron’s assertion that fees are too high, without comparative data or alternatives, is
simply incorrect. Third, the 18 month tail is within industry standards and was negotiated and
agreed among the parties. It is likely that the outcome of these cases, whatever it is, will be
known well before the end of the tail period, making the difference between an 18 month tail and
a shorter tail irrelevant. Finally, the effective date of the engagement is appropriate under the
circumstances here. Any delay in making the Application is the result of a complex negotiation
among the Debtors, Houlihan, and the secured lenders; yet, Houlihan acted in reliance on its
being engaged, and no party in interest is prejudiced by the relation back of the effective date.
6. Section 328(a) of the Bankruptcy Code authorizes the employment of a
professional person “on any reasonable terms and conditions of employment.” Section 327(a)
allows the debtor to employ a professional with the court’s approval. Courts have long
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recognized that a debtor’s right to engage quaified counsel of its choice should not be disturbed
except in the rarest of circumstances. See, eg., Vergos v. Timber Creek, Inc., 200 B.R. 624, 628
(W.D. Tenn. 1996). Such precedent suggests that, where the professional is otherwise qualified,
and similar to many other provisions of the Code that authorize debtor action “with the court’s
approval,” the Court should give deference to the Debtors’ decision to engage Houlihan. The
Debtors have determined that the terms of the Houlihan employment are reasonable, and they
may employ Houlihan with the Court’s approval. The Court should approve the Debtors’ choice
of professional.
7. In conclusion, it is clear that the Debtors require the assistance of an experienced
investment banker and that the terms the Debtors negotiated with Houlihan are reasonable under
the circumstances and consistent with investment banking industry standards. The Textron
Objection is without merit and should be overruled.
Date: August 20, 2009 s/ Faye Knowles
Faye Knowles (#56959) James L. Baillie (#3980) Ryan T. Murphy (#311972) FREDRIKSON & BYRON, P.A. 200 South Sixth Street, Suite 4000 Minneapolis, MN 55402 Phone (612) 492-7054 / fax (612) 492-7077 [email protected]
4607312_1.DOC
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UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA
In re: Genmar Holdings, Inc., et al.1 Debtors.
Chapter 11
Case No. 09-43537
Jointly Administered
UNSWORN DECLARATION OF JEFFERY P. BAKER
I, Jeffery P. Baker, make this Unsworn Declaration under penalty of perjury, in support
of the Debtors’ reply to the Textron Financial Corporation and Textron Financial Canada, Ltd.’s
Limited Objection to Debtors’ Application to Employ Houlihan, Lokey, Howard & Zukin
Capital, Inc. as Their Financial Advisor and Investment Banker (the “Textron Objection”). I
have personal knowledge of the facts set out below and, if called, would testify consistent
therewith.
1. I am Managing Partner of Manchester Companies, Inc., which is retained as
Debtors’ chief restructuring officer (“Manchester”). I was involved in designing and
coordinating the Debtors’ search for an investment banker. Manchester is engaged in other cases
as an investment banker from time-to-time, and I am familiar with the role, qualifications, and
general price structure practices of investment bankers and with the investment banking industry
in general.
1 Jointly administered debtors: Genmar Holdings, Inc., Case No. 09-43537; Carver Industries, L.L.C., Case No. 09-43538; Carver Italia, L.L.C., Case No. 09-33773; Carver Yachts International, L.L.C., Case No. 09-33774; Genmar Florida, Inc., Case No. 09-43539; Genmar Industries, Inc., Case No. 09-43540; Genmar IP, L.L.C., Case No. 09-43541; Genmar Manufacturing of Kansas, Inc., Case No. 09-43542; Genmar Michigan, L.L.C., Case No. 09-43543; Genmar Minnesota, Inc., Case No. 09-33775; Genmar Tennessee, Inc., Case No. 09-43544; Genmar Transportation, Inc., Case No. 09-43545; Genmar Yacht Group, LLC, Case No. 09-43546; Marine Media, L.L.C., Case No. 09-43547; Minstar, L.L.C., Case No. 09-43548; Triumph Boats, Inc., Case No. 09-43550; Triumph Boat Rentals, L.L.C., Case No. 09-43551; VEC Leasing Services, L.L.C., Case No. 09-43552; VEC Management Co. L.L.C., Case No. 09-43553; VEC Technology, Inc., Case No. 09-43554; Windsor Craft Yachts, L.L.C., Case No. 09-43555; Wood Manufacturing Company, Inc., Case No. 09-43556.
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2. Retention of an investment banker in these cases is necessary, as set out in the
Application by Debtors to Employ Financial Advisor and Investment Banker (the
“Application”). Debtors’ DIP financing agreement requires the Debtors to propose a plan
acceptable to the secured lenders for emerging from Chapter 11. The secured lenders have
required the Debtors to retain an investment banker to pursue sale(s) of assets as one alternative
to completing the Chapter 11 process as a condition of extending the Debtors’ DIP financing. I
expect the amended DIP financing agreement to be filed with the Court within the next few days.
The Debtors believe the secured lenders would not continue to perform under the DIP financing
agreement unless an investment banker is retained.
3. Moreover, even if the Debtors propose a plan of reorganization based on ongoing
operations, it is likely that some operating assets will need to be sold. The special skills of an
experienced investment banker will assure that any assets will be thoroughly marketed and will
be sold for the best available price, to the benefit of all creditors in the cases.
4. In addition, this is a particularly complex case, involving twenty-two separate
Debtors with multiple operating facilities. The cases require the retention of an investment
banker to explore sale possibilities and/or combinations and to effectively coordinate sale
processes in a situation as complex as this. More specifically, it will require an investment
banker with the requisite skills and expertise of selling assets in a distressed situation, and
process experience for effecting sales in a bankruptcy environment. The Textron Objection does
not state why Textron believes the engagement of an investment banker is not necessary, and I
know of no facts that would support such a conclusion in these cases.
5. The Engagement Agreement attached to the Application sets out the role of the
investment banker clearly, and in detail. While it is always difficult at the beginning of an
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investment banking engagement to know the precise services that will be performed, it is
imperative to provide for enough flexibility to allow the parties to achieve and consummate a
sale transaction. The range of services identified in Houlihan’s engagement letter are both
required (for the aforementioned reasons) and flexible enough to allow the parties to accomplish
their joint goals. In addition, I believe that the terms of the Engagement Agreement here are
standard in the investment banking industry. The Textron Objection does not set out what other
terms or details might be included in an engagement agreement with the Debtors, and I am not
aware of any such additional terms.
6. Houlihan, Lokey, Howard & Zukin Capital, Inc. (“Houlihan”) was chosen as the
Debtors’ investment banker by a Special Committee of the Genmar Holdings, Inc. board. The
Special Committee is made up of three independent, outside directors, James Pohlad, Raymond
Zehr, and James Nicholson. The Special Committee considered four factors it deemed most
important in choosing an investment banker for this situation. They are—
the investment banker’s distressed company experience,
its experience with sale of major brands,
its marine experience (or similar industry experience with an extensive dealer
network and floor plan financing issues), and
its pricing structure.
7. The Special Committee considered six nationally recognized investment banking
firms. Of those firms, one declined to make a formal proposal, two were deemed inadequately
experienced in distressed situation, and one was conflicted. The remaining two firms made
detailed retention proposals. After review of the qualifications and pricing proposals of both
investment banking firm candidates, Houlihan was chosen for a number of reasons—
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Houlihan was the most qualified and experienced in working with distressed
companies, and particularly those in a bankruptcy environment.
it was the most qualified in relevant marine experience, including a very recent
transaction involving a comparable boat manufacturer, as well as transactions
with manufacturers of leisure products in other industries.
Houlihan has a proven record in distressed business sales nationwide, giving the
Debtors a high degree of certainty that a transaction will be completed in a
timely manner.
It has a local office, which will minimize out-of-pocket expenses.
Houlihan was willing to negotiate a pricing structure that included, among other
things, no minimum fee and no “per transaction” fee.
8. Pricing was an important, but not the only factor in the Special Committee’s
decision, and was heavily negotiated between the Debtors and Houlihan. Houlihan was willing
to negotiate elements of its fee structure, which resulted in a flat 2% fee in the final agreement,
and that 50% of the monthly retainer after three months would be credited against the transaction
fee. Finally, it agreed that there would be no minimum fee or per-transaction fee, as was the case
with the other candidate.
9. Both of the detailed proposals considered by the Special Committee included
“tail” periods, which are designed to protect the investment banker from having its development
of potential buyers usurped for the benefit of a successor in the event its services are terminated.
This is a standard provision in investment banking—and in real estate sales, for that matter—and
a standard tail period is between 12 and 18 months. The 18 month period was considered by the
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Special Committee to be reasonable in this case, particularly in light of the probable complexity
of a multi-debtor sale process.
10. The Houlihan engagement does not have a set duration. This is a common
practice in the industry where there is a right to terminate the engagement, as there is here. All
of the parties contemplate that this will be a relatively quick process because of the Debtors’
desire to exit Chapter 11 and the secured lenders’ encouragement to do so.
11. Regarding the request that Houlihan's employment be effective as of July 7, 2009,
the Special Committee approved Houlihan's employment as of that date, and an initial
engagement agreement was executed on July 7, 2009. Houlihan began its analysis and
preparation immediately thereafter, anticipating approval of its employment. Since then, Debtors
and their secured lenders have been in discussion regarding how the Chapter 11 process should
go forward, and they only recently reached agreement, which is reflected in the agreement to
renew the DIP financing. Houlihan's employment is part of this agreement, and all parties
expected that the employment will be effective as of the date the Special Committee made the
choice of Houlihan as Debtors' investment banker. Moreover, during the pendency of the DIP
financing discussions, Houlihan was able to substantially complete the marketing materials for
the Debtor and is now in a position to begin marketing subject to resolution of the employment
matter.
12. Based on my involvement in the process of choosing Houlihan as the Debtors’
investment banker, and my experience in dealing with other investment bankers and the
investment banking industry, I believe that employment of an investment banker is necessary in
these cases and that the terms negotiated with Houlihan are reasonable and should be approved
by the Court.
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UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA
In re: Genmar Holdings, Inc. et al.1
Chapter 11 Case No. 09-43537 Jointly Administered
DECLARATION OF STEPHEN SPENCER IN SUPPORT OF THE
APPLICATION OF THE DEBTORS FOR AUTHORITY TO EMPLOY HOULIHAN LOKEY HOWARD & ZUKIN CAPITAL, INC.
AS FINANCIAL ADVISOR AND INVESTMENT BANKER
I, Stephen Spencer, declare under penalty of perjury as follows:
1. I am a Director of Houlihan Lokey Howard & Zukin Capital, Inc. (“Houlihan
Lokey”), a provider of financial advisory and investment banking services that maintains
offices in Minneapolis. I am authorized to make this Declaration on behalf of Houlihan Lokey.
I submit this Declaration in support of the application (the “Application”) of the debtors and
debtors in possession (collectively, the “Debtors”) in the above-captioned chapter 11 cases (the
“Chapter 11 Cases”) for an order authorizing the employment and retention of Houlihan Lokey
as financial advisors and investment bankers to the Debtors. Except as otherwise noted, I have
personal knowledge of the matters set forth herein. To the extent any information disclosed
herein requires amendment or modification upon Houlihan Lokey’s completion of further
1 Jointly administered debtors: Genmar Holdings, Inc., Case No. 09-43537; Carver Industries,
L.L.C., Case No. 09-43538; Carver Italia, L.L.C., Case No. 09-33773; Carver Yachts International, L.L.C., Case No. 09-33774; Genmar Florida, Inc., Case No. 09-43539; Genmar Industries, Inc., Case No. 09-43540; Genmar IP, L.L.C., Case No. 09-43541; Genmar Manufacturing of Kansas, Inc., Case No. 09-43542; Genmar Michigan, L.L.C., Case No. 09-43543; Genmar Minnesota, Inc., Case No. 09-33775; Genmar Tennessee, Inc., Case No. 09-43544; Genmar Transportation, Inc., Case No. 09-43545; Genmar Yacht Group, LLC, Case No. 09-43546; Marine Media, L.L.C., Case No. 09-43547; Minstar, L.L.C., Case No. 09-43548; Triumph Boats, Inc., Case No. 09-43550; Triumph Boat Rentals, L.L.C., Case No. 09-43551; VEC Leasing Services, L.L.C., Case No. 09-43552; VEC Management Co. L.L.C., Case No. 09-43553; VEC Technology, Inc., Case No. 09-43554; Windsor Craft Yachts, L.L.C., Case No. 09-43555; Wood Manufacturing Company, Inc., Case No. 09-43556.
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2
review or as additional party-in-interest information becomes available to it, a supplemental
declaration will be submitted to the Court reflecting such amended or modified information.
HOULIHAN LOKEY’S QUALIFICATIONS
2. Houlihan Lokey is an international investment banking/financial advisory firm,
with 14 offices worldwide and more than 800 employees. Houlihan Lokey provides corporate
finance and financial advisory services, as well as execution capabilities, in a variety of areas,
including financial restructuring and distressed mergers and acquisitions. Houlihan Lokey is
one of the leading advisors and investment bankers to troubled companies, both inside and
outside of bankruptcy, as well as to their bondholders, banks, other secured and unsecured
creditors, official creditor committees, acquirers, equity sponsors and other parties-in-interest
involved with financially challenged companies. Houlihan Lokey’s Financial Restructuring
Group has over 180 professionals worldwide dedicated to providing restructuring and other
financial advisory services. Houlihan Lokey’s Financial Restructuring Group has advised on
over 500 transactions, valued in excess of $1.25 trillion.
3. Additionally, Houlihan Lokey has served as an investment banker and/or
financial advisor in some of the largest and most complex restructuring matters in the United
States, including the following: General Motors Corp., No. 09-50026 (REG) (Bankr. S.D.N.Y.
2009); Lehman Brothers Holdings Inc., No. 08-13555 (JMP) (Bankr. S.D.N.Y. 2008); In re
USG Corporation, No. 01-2094 (JKF) (Bankr. D. Del. 2001); WorldCom, Inc., No. 02-13533
(AJG) (Bankr. S.D.N.Y. 2002); Enron Corporation, No. 01-16034 (AJG) (Bankr. S.D.N.Y.
2001).
4. I received my bachelor’s degree from the University of Wisconsin – Madison
and I hold an MBA in finance from Fordham University in New York.
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5. Prior to joining Houlihan Lokey in 2001, I was an investment banker in the
middle-market M&A group at U.S. Bancorp Piper Jaffray. Before joining Piper Jaffray, I
worked at G.E. Capital, where I executed transactions for the national restructuring, capital
markets and structured finance groups. I was one of the founding members of G.E. Capital’s
national debtor in possession (“DIP”) lending practice, and I frequently speak and publish on
distressed mergers and acquisitions.
6. Since the Genmar Holdings, Inc. Special Committee of the board of directors
agreed to engage Houlihan Lokey on July 7, 2009, Houlihan Lokey has rendered financial
advisory and investment banking services to the Debtors in connection with their restructuring
efforts. Houlihan Lokey has become familiar with the Debtors’ operations and is well qualified
to represent the Debtors as their financial advisor and investment banker in connection with
such matters in a cost-effective and efficient manner.
NECESSITY OR REASONABLENESS OF PROPOSED ENGAGEMENT
7. Pursuant to Section 328 of the Bankruptcy Code, a debtor in possession, with the
court’s approval, may employ a professional under Section 327 of the Bankruptcy Code on any
reasonable terms and conditions of employment. See 11 U.S.C 328. Houlihan Lokey believes
the Application complies with Section 328 of the Bankruptcy Code and is consistent with many
other applications over the last decade that have been granted in numerous jurisdictions,
including the United States Bankruptcy Court District of Minnesota. Most recently, on
February 9, 2009, Houlihan Lokey’s retention application to provide similar services for
Polaroid Corporation, et al. was approved by the Court (the “Polaroid Application”). Houlihan
Lokey’s retention application and engagement agreement outlined substantially similar detail
on the nature and scope of services, term and tail periods, nunc pro tunc approval and other
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threshold matters required to determine whether the retention application satisfied the necessity
or reasonableness of a proposed engagement. Polaroid Corporation, No. 08-46617 (GFK)
(BKY D. MN).
8. Like the Polaroid Application, the current Application allowed that Houlihan
Lokey be compensated for such services, and reimbursement for any related expenses, in
accordance with Section 328(a) of the Bankruptcy Code, the Bankruptcy Code Rules and any
local rules and any other applicable orders of this Court. Houlihan believes that such provisions
are common and expected not only in cases in other parts of the country, but in this jurisdiction,
as well.
9. In recognition of the local practice in this district, Houlihan Lokey has agreed to
maintain time records in hour increments for all of its employees providing services to the
Debtors pursuant to the Engagement Agreement.
10. Since the Special Committee approved its engagement on July 7, 2009, Houlihan
Lokey commenced providing services to the Debtor in reliance on the belief that we would be
promptly retained pursuant to order of the Bankruptcy Court, all as requested by the Debtor and
other parties-in-interest due to the tenuous financial situation of the Debtor. The delay in filing
a requested motion and obtaining a hearing from the Court is fully addressed in the Debtor’s
pleadings and outlined in the Unsworn Declaration of Jeffrey P. Baker (the “Baker
Declaration”), both in support of the Application, and is certainly not due to any action or
inaction by us.
REASONABLENESS OF PROFESSIONAL SERVICES COMPENSATION
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11. The parties have entered into a detailed agreement that will govern the
relationship between Houlihan Lokey and the Debtors, a copy of which is attached as Exhibit A
to the Application (the “Engagement Letter”). As provided for in the Engagement Letter, the
services to be provided by Houlihan Lokey in these cases (the “Strategic Advisory Services”)
are set out in detail below. Given the complexity of these cases, which is consistent with many
of Houlihan Lokey’s prior engagements, the range of services described are necessary and need
to be flexible enough to allow Houlihan Lokey to pursue a value maximizing transaction(s):
(a) Assisting the Debtors in the development, preparation and distribution of selected information, documents and other materials in an effort to create interest in and to consummate a Transaction;
(b) Soliciting and evaluating indications of interest and proposals regarding any Transaction from current and/or potential equity investors, acquirers, and/or strategic partners;
(c) Assisting the Debtors with the development, structuring, negotiating and implementation of any Transaction, including participating as a representative of the Debtors in negotiations with creditors and other parties involved in any Transaction;
(d) Advising and attending meetings of the Debtors’ boards of directors, creditor groups, official constituencies, and other interested parties, as the Debtors and Houlihan Lokey may determine to be necessary or desirable; and
(e) Providing such other financial advisory and investment banking services as may be agreed by Houlihan Lokey and the Debtors.
12. As more fully described in the Engagement Letter, in consideration of the services
provided by Houlihan Lokey, the Debtors have agreed to pay Houlihan Lokey during these
chapter 11 cases:
(a) Monthly Fees: In addition to the other fees provided for in the Engagement Agreement, upon the execution of the Engagement Agreement and every monthly anniversary of that date, the Debtor shall pay Houlihan Lokey in advance, without notice or invoice, a non-refundable cash fee of $100,000 (“Monthly Fee”). Each such monthly fee
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6
shall be earned upon Houlihan Lokey’s receipt thereof in consideration of its accepting the engagement and performing the described services. Fifty percent (50%) of all monthly fees received after the third monthly fee shall be credited against the Transaction Fee described below;
(b) Transaction Fee: In addition to the other fees provided for in the
Engagement Agreement, the Debtor shall pay Houlihan Lokey upon the closing of a Transaction, immediately and directly from the gross proceeds of such Transaction and as a cost of the Transaction, a cash fee equal to two percent (2%) of the Aggregate Gross Consideration (as defined in the Engagement Agreement).
(c) Expenses: In addition to all of the other fees and expenses described in
the Engagement Agreement, and regardless of whether any Transaction is consummated, the Debtor will reimburse Houlihan Lokey for its reasonable out-of-pocket expenses incurred from time to time in connection with its services. The details of the type of expenses contemplated are set out in the Engagement Agreement.
(d) Post-Termination Services: If Houlihan Lokey is required to render
services not described in the Engagement Agreement, but which relate directly or indirectly to the subject matter of the Engagement Agreement (including without limitation producing documents, answering interrogatories, attending depositions, giving expert or other testimony, or like) the Debtors shall pay Houlihan Lokey the additional fees to be mutually agreed upon for such services, plus reasonable related out-of-pocket costs and expenses, including, among other things, the reasonable legal fees and expenses of Houlihan Lokey’s counsel in connection therewith.
Houlihan Lokey believes that its fee structure appropriately reflects the nature and
scope of the services to be provided by Houlihan Lokey, Houlihan Lokey’s substantial
experience with respect to financial advisory and investment banking services, and the
fee structures typically utilized by Houlihan Lokey and other leading investment bankers
in similar situations.
13. Houlihan Lokey was selected by the Debtor after participating in a competitive
selection process conducted by the Debtor. Details of this process are outlined in Baker
Declaration in support of the Application. The fee structure described herein was heavily
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negotiated by the Debtor, Manchester in its capacity as Chief Restructuring Officer, and several
other parties-in-interest. As a result, Houlihan Lokey agreed to a number of changes to its
engagement (including elimination of a minimum transaction fee) to satisfy the various parties
involved hereto, and is unwilling to perform the services requested on terms inferior to what we
have finally agreed to.
Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury under the laws of the
United States of America that the foregoing is true and correct.
Dated: August 20, 2009
/s/ Stephen Spencer Director Houlihan Lokey
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4598295
UNITED STATES BANKRUPTCY COURT DISTRICT OF MINNESOTA
In re: Genmar Holdings, Inc., et al.1 Debtors.
Chapter 11
Case No. 09-43537
Jointly Administered
CERTIFICATE OF SERVICE
Faye Knowles, under penalty of perjury, states that on August 20, 2009, she caused to be served the following: 1. Debtor’s Reply to Textron Limited Objection to the Employment of Houlihan, Lokey, Howard & Zukin Capital, Inc.; 2. Unsworn Declaration of Jeffery P. Baker; and 3. Unsworn Declaratonof Stephen Spencer; and 4. Certificate of Service Served electronically by the court on the court’s ecf list attached, which includes counsel for the objecting party. Dated: August 20, 2009 /s/ Faye Knowles Faye Knowles
1 Jointly administered debtors: Genmar Holdings, Inc., Case No. 09-43537; Carver Industries, L.L.C., Case
No. 09-43538; Carver Italia, L.L.C., Case No. 09-33773; Carver Yachts International, L.L.C., Case No. 09-33774; Genmar Florida, Inc., Case No. 09-43539; Genmar Industries, Inc., Case No. 09-43540; Genmar IP, LLC, Case No. 09-43541; Genmar Manufacturing of Kansas, Inc., Case No. 09-43542; Genmar Michigan, L.L.C., Case No. 09-43543; Genmar Minnesota, Inc., Case No. 09-33775; Genmar Tennessee, Inc., Case No. 09-43544; Genmar Transportation, Inc., Case No. 09-43545; Genmar Yacht Group, LLC, Case No. 09-43546; Marine Media, LLC, Case No. 09-43547; Minstar, LLC, Case No. 09-43548; Triumph Boats, Inc., Case No. 09-43550; Triumph Boat Rentals, L.L.C., Case No. 09-43551; VEC Leasing Services, L.L.C., Case No. 09-43552; VEC Management Co., L.L.C., Case No. 09-43553; VEC Technology, Inc., Case No. 09-43554; Windsor Craft Yachts, L.L.C., Case No. 09-43555; Wood Manufacturing Company, Inc., Case No. 09-43556.
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US Trustee and Other Required Parties
U.S. Trustee's Office 1015 US Courthouse 300 S Fourth St Minneapolis MN 55415 [email protected]
U.S. Trustee's Office 1015 US Courthouse 300 South Fourth Street Minneapolis MN 55415 [email protected]
Debtors
Genmar Holdings, Inc. and other Debtors Genmar Holdings, Inc. Attention: David Huls 2900 IDS Center 80 South Eighth Street Minneapolis MN 55402-2100 612-337-1930 (fax) [email protected]
Major Secured Creditors
Wells Fargo Bank, NA Michael R. Stewart Lyle Ward Sara Bruggeman Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh St Minneapolis MN 55402-3901 [email protected] [email protected] [email protected]
Fifth Third Bank James Markus 1700 Lincoln Suite 4000 Denver CO 80203 [email protected]
GE Commercial Distribution Finance Corporation Thomas J. Lallier Jeffrey D. Klobucar Nathan J. Kavlie Foley & Mansfield, PLLP 250 Marquette Ave, Ste 1200 Minneapolis MN 55401 [email protected] [email protected] [email protected]
GE Commercial Distribution Finance Michael C. Rupe Heath D. Rosenblat King & Spalding LLP 1185 Avenue of the Americas New York NY 10036 [email protected] [email protected]
Textron Financial Corporation Paul L. Ratelle Fabyanske Westra Hart & Thomson PA 800 LaSalle Ave S, Ste 1900 Minneapolis MN 55402 612-359-7600 (telephone) 612-359-7602 (fax) [email protected] Textron Financial Corporation Textron Financial Canada, Ltd. Steven E. Fox Paul Traub Brett J. Nizzo Maura I. Russell Epstein Becker & Green PC 250 Park Ave New York NY 10177-1211 [email protected] [email protected] [email protected] [email protected] Yamaha Motor Corporation USA Timothy D. Moratzka, Esq. 1400 AT&T Tower 901 Marquette Ave Minneapolis MN 55402 612-305-1414 (fax) [email protected]
Committee of Unsecured Creditors
Phillip Bohl William J. Fisher Henry Wang
Jessica A. Mitchell Gray Plant Mooty Mooty & Bennett PA 500 IDS Ctr, 80 S 8th St Minneapolis MN 55402 612-632-3000 (telephone) 612-632-4444 (fax) [email protected] [email protected] [email protected] [email protected]
Special Counsel Committee of Unsecured Creditors
Matthew A. Swanson Leonard Street and Deinard 150 S 5th St, Ste 2300 Minneapolis MN 55402 612-335-1500 (telephone) 612-335-1657 (fax) [email protected]
Requests for Notice
Hagemeyer NA Cynthia J. Lowery Moore & Van Allen PLLC 40 Calhoun St, Ste 300 PO Box 22828 Charleston SC 29413-2828 [email protected]
Hagemeyer NA/Navico, Inc. Larry B. Ricke Spence Ricke & Sweeney PA 325 Cedar St, Ste 600 St Paul MN 55101 651-223-8000 (telephone) 651-223-8003 (fax) [email protected]
Bombardier Recreational Products Kevin D. Hofman Halleland Lewis Nilan & Johnson PA 600 US Bank Plaza South 220 S Sixth St Minneapolis MN 55402 612-338-7858 (fax) [email protected]
Bombardier Recreational Products Aaron Davis Bryan Cave LLP 161 N Clark St, Ste 4300 Chicago IL 60601 312-602-5135 (telephone) 312-698-7535 (fax) [email protected]
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Inland American Office Management and MB Minneapolis 8th St LLC Kevin M. Newman Menter Rudin & Trivelpiece PC 308 Maltbie St, Ste 200 Syracuse NY 13204-1498 315-474-4040 (fax) [email protected]
Volvo Penta of the Americas Inc./ Volvo Financial Service North America/ VFS Leasing Co. Cass S. Weil John K. Rossman Sarah E. Doerr Moss & Barnett PA 4800 Wells Fargo Center, 90 S 7th St Minneapolis MN 55402-4129 [email protected] [email protected] [email protected]
Lindy Lazar Gregory M. Luyt Bowerman Bowden Ford Clulo & Luyt 620-A Woodmere Traverse City MI 49686 231-941-8192 (fax) [email protected] [email protected]
Llebroc Industries Aaron Z. Tobin Anderson & Jones PLLC One Galleria Tower 13355 Noel Rd, Ste 1900 Dallas TX 75240 972-789-1160 (telephone) [email protected]
Llebroc Industries Davis A. Kessler Gregerson Rosow Johnson & Nilan Ltd 650 Third Ave S, Ste 1600 Minneapolis MN 55402 [email protected]
Kubota Credit Corp. Joe M. Lozano, Jr. National Bankruptcy Services.com LLC F#2390-N-2696 9441 LBJ Freeway, Ste 350 Dallas TX 75243 972-643-6600 (telephone) 972-643-6698 (fax) [email protected]
MB Minneapolis 8th St LLC
Jane S. Welch Michael T. Berger Morrison Fenske & Sund PA 5125 Cty Rd 101, Ste 202 Minnetonka MN 55345 952-975-0050 (telephone) 952-975-0058 (fax) [email protected] [email protected]
Nancy Adelmann Vice President, Finance Normark Corporation d/b/a Rapala 10395 Yellow Circle Drive Hopkins MN 55343-9101 952-939-4361 (telephone) 952-933-7329 (fax) [email protected]
Vicem Yachts, Inc./Vicem Yat Saniyi ve Ticaret AS Ralph V. Mitchell Lapp Libra Thomson Stoebner & Pusch One Financial Plaza, Ste 2500 120 S 6th St Minneapolis MN 55402 612-338-5815 (telephone) 612-338-6651 (fax) [email protected]
Vicem Yachts, Inc./Vicem Yat Saniyi ve Ticaret AS Steven J. Cohen Wachtel & Masyr LLP 110 E 59th St New York NY 10022 212-909-9500 (telephone) [email protected]
North American Composites Co./ Interplastic Corp. Ivan M. Levy Interplastic Corporation & Subsidiaries 1225 Willow Lake Blvd St Paul MN 55110-5145 651-481-6871 (telephone) 651-481-9836 (fax) [email protected]
Constellation NewEnergy, Inc. Bruce J. Ruzinsky D. Elaine Conway Jackson Walker LLP 1400 McKinney St, Ste 1900 Houston TX 77010 713-752-4200 (telephone) 713-752-4221 (fax) [email protected]
Constellation NewEnergy, Inc. Heather M. Forrest Jackson Walker LLP 901 Main St, Ste 6000 Dallas TX 75202 214-953-6000 (telephone) 214-953-5822 (fax) [email protected]
Rodney & Barbara Voisine Leonard J. Koenick Kivitz & Liptz LLC 5454 Wisconsin Ave, Ste 650 Chevy Chase MD 20815 301-951-3400 (telephone) 301-951-3646 (fax) [email protected]
Michael L. Murawski 5 Hickory Ln Plumsted NJ 08533 [email protected]
Financial Protection Corp./ Lyndon Property Co. David E. Runck Fafinski Mark & Johnson PA 400 Flagship Corporate Center 775 Prairie Center Dr Eden Prairie MN 55344 952-995-9500 (telephone) 952-955-9577 (fax) [email protected]
Taylor Made Group, Inc. Jeffrey A. Cooper Carella Byrne Bain Gilfillan, et al. 5 Becker Farm Rd Roseland NJ 07068 973-422-5573 (telephone) [email protected]
Veada Industries, Inc. Michael F. DeBoni 130 N Main St PO Box 575 Goshen IN 46527-0575 574-533-1171 (telephone) 574-534-4174 (fax) [email protected]
Mahar Tool Supply Co. Susan M. Cook Keith A. Schofner Lambert Leser Isackson Cook & Giunta 916 Washington Ave, Ste 309
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Bay City MI 48708 989-893-3518 (telephone) [email protected] [email protected]
WPS Health Plan, Inc. d/b/a Arise Health Plan Catherine J. Furay Murphy Desmond S.C. 33 E. Main St, Ste 500 PO Box 2038 Madison WI 53701-2038 608-268-5614 (telephone) 608-257-4333 (fax) [email protected]
DC Capital Advisors Ltd. Lawrence P. Vonckx Baker & McKenzie LLP One Prudential Plaza 130 E. Randolph Dr, Ste 3600 Chicago IL 60601 312-861-8803 (telephone) [email protected]
Missouri Department of Revenue Bankruptcy Unit PO Box 475 Jefferson City MO 65105-0475 Attn: Steven A. Ginther 753-751-5531 (telephone) 753-751-7232 (fax) [email protected]
Squiggle Tool Company LLC Mark F. Uphus Uphus Law Office 310 E Main St PO Box 158 Melrose MN 56352 320-256-7491 (telephone) [email protected]
Scott and Lambia Heilman David H. Stein Jay B. Feldman Wilentz, Goldman & Spitzer PA 90 Woodbridge Ctr Dr, Ste 900, Box 10 Woodbridge NJ 07095 [email protected] [email protected]
March First d/b/a Gainesville Marina Daniel W. Fram Peterson Fram & Bergmann PA 55 E 5th St, Ste 800 St Paul MN 55101 651-291-8955 (telephone)
651-228-1753 (fax) [email protected]
Manatee County Tax Collector Susan D. Profant 819 US 301 Blvd W Bradenton FL 34205 941-741-4832 (telephone) 941-741-4865 (fax) [email protected]
Eldon E. Fox Lisa P. Sumner Poyner Spruill LLP PO Box 1801 Raleigh NC 27602 919-783-6400 (telephone) 919-783-1075 (fax) [email protected]
IKON Office Solutions, Inc. Katrina A. Rumph Bankruptcy Specialist IKON Office Solutions, Inc. 3920 Arkwright Rd., Ste. 400 Recovery & Bankruptcy Group Macon GA 31210 [email protected]
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