Debtors. files this motion (the Motion ), pursuant to Section 503(b)(1)(A) of title 11 of the United

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1 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 1 of 9 Hearing Date: September 25, 2018 at 11:00 a.m. (Eastern Time) Objection Deadline: September 18, 2018 at 4:00 p.m. (Eastern Time) SNELL & WILMER L.L.P. Eric S. Pezold (admitted pro hac vice) 600 Anton Blvd., Ste Costa Mesa, CA Telephone: (714) Facsimile: (714) epezold@swlaw.com Counsel to Obayashi Corporation UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re: WESTINGHOUSE ELECTRIC COMPANY LLC, et al., Case No.: (MEW) Chapter 11 (Jointly Administered) Debtors x OBAYASHI CORPORATION S MOTION FOR ENTRY OF AN ORDER DIRECTING IMMEDIATE PAYMENT OF OBAYASHI S ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(b)(1)(A) TO THE HONORABLE MICHAEL E. WILES UNITED STATES BANKRUPTCY JUDGE: Obayashi Corporation ( Obayashi ), by and through undersigned counsel, hereby files this motion (the Motion ), pursuant to Section 503(b)(1)(A) of title 11 of the United States Code (the Bankruptcy Code ), in the above-captioned jointly administered chapter 11 cases (the Chapter 11 Cases ) of Westinghouse Electric Company LLC and certain of its affiliates, as debtors and debtors in possession in the above-captioned cases (collectively, the Debtors ), 1 for entry of an order, substantially in the form attached hereto as Exhibit A, 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, if any, are: Westinghouse Electric Company LLC (0933), CE Nuclear Power International, Inc. (8833),

2 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 2 of 9 directing the immediate payment of an administrative expense claim in the amount of $800,000. In support of the Motion, Obayashi respectfully represents as follows: PRELIMINARY STATEMENT Pending the Contracting Debtors (defined below) decision to assume or reject the AP Agreement (also defined below), Obayashi performed certain engineering and design services under the AP Agreement which benefitted the Debtors estates. Obayashi is thus entitled to an administrative claim for $800,000, the amount Obayashi earned under the AP Agreement post-petition but prior to the Contracting Debtors rejection of the AP Agreement, because Obayashi s engineering and design services constitute actual, necessary costs and expenses of preserving and benefitting the Debtors estates. JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Motion under 28 U.S.C. 157 and This is a core proceeding under 28 U.S.C. 157(b). Venue of these cases and this Motion in this district is proper under 28 U.S.C and The legal basis for the relief requested herein is 503(b)(1)(A) of the Bankruptcy Code. RELEVANT BACKGROUND Fauske and Associates LLC (8538), Field Services, LLC (2550), Nuclear Technology Solutions LLC (1921), PaR Nuclear Holding Co., Inc. (7944), PaR Nuclear, Inc. (6586), PCI Energy Services LLC (9100), Shaw Global Services, LLC (0436), Shaw Nuclear Services, Inc. (6250), Stone & Webster Asia Inc. (1348), Stone & Webster Construction Inc. (1673), Stone & Webster, Inc. d/b/a WECTEC Global Project Services Inc. (8572), Stone & Webster International Inc. (1586), Stone & Webster Services LLC (5448), Toshiba Nuclear Energy Holdings (UK) Limited (N/A), TSB Nuclear Energy Services Inc. (2348), WEC Carolina Energy Solutions, Inc. (8735), WEC Carolina Energy Solutions, LLC (2002), WEC Engineering Services Inc. (6759), WEC Equipment & Machining Solutions, LLC (3135), WEC Specialty LLC (N/A), WEC Welding and Machining, LLC (8771), WECTEC Contractors Inc. (4168), WECTEC LLC (6222), WECTEC Staffing Services LLC (4135), Westinghouse Energy Systems LLC (0328), Westinghouse Industry Products International Company LLC (3909), Westinghouse International Technology LLC (N/A), and Westinghouse Technology Licensing Company LLC (5961). The Debtors principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania

3 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 3 of 9 3. On March 29, 2017 (the "Petition Date"), Debtors filed voluntary petitions for relief in the United States Bankruptcy Court for the Southern District of New York. The cases are being jointly administered at Case No (MEW). 4. In or around November 2003, Debtors Westinghouse Electric Company LLC and Westinghouse Technology Licensing Company LLC (collectively, the Contracting Debtors ) and Obayashi entered into that certain AP1000 Program Participation Agreement and Amendments ( AP Agreement ) Pursuant to Article 2.1 of the AP Agreement, Obayashi agreed to provide certain engineering and design services to the Contracting Debtors in connection with certain nuclear power plants. 6. Under Article 2.4 of the AP Agreement, and in partial consideration for Obayashi s services, the Contracting Debtors agreed to pay Obayashi (i) $200,000 upon fuel loads at the Sanmen Unit 1 nuclear power plant, located in Sanmen County, Zhejian Province, China; (ii) $400,000 upon the first generation of electricity at the Sanmen Unit 1 nuclear power plant; and (iii) $200,000 upon fuel loads at the Haiyang Unit 1 nuclear power plant in Haiyang County, Shandong Province, China. 7. Fuel load occurred at the Sanmen Unit 1 nuclear power plant on or about April 25, See Debtor s press release attached hereto as Exhibit B. 8. Sanmen Unit 1 began generating electricity on or about June 21, See Debtor s press release attached hereto as Exhibit C. 9. Fuel load occurred at the Haiyang Unit 1 nuclear power plant on or about June 21, See Debtor s press release attached hereto as Exhibit D. 2 Obayashi is not attaching the AP Agreement to this Motion because: (i) it contains propriety information and (ii) the Debtors have a copy of the AP Agreement

4 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 4 of Pursuant to the Debtors Revised Schedule of Assumed Contracts and Schedule of Assigned Contracts [Dkt. No. 3624] filed on July 24, 2018, the Contracting Debtors rejected the AP Agreement as of August 1, 2018 ( Effective Date ), the effective date of the Debtor s Modified Second Amended Joint Chapter 11 Plan of Reorganization [Dkt. No. 2954] (the Plan ). See Notice of Occurrence of Effective Date of Debtors Modified Second Amended Joint Chapter 11 Plan of Reorganization [Dkt. No. 3705]. 11. In total, Obayshi earned, and the Contracting Debtors owe, $800,000 under the AP Agreement for Obayashi s services provided between the Petition Date and the Effective Date. RELIEF REQUESTED 12. Obayashi respectfully requests that this Court enter an order, substantially in the form attached to as Exhibit A, directing the Debtors to immediately pay Obayashi s $800,000 administrative expense claim pursuant to Bankruptcy Code 503(b)(1)(A). BASIS FOR RELIEF AND APPLICABLE AUTHORITY 13. Section 503(b)(1)(A) of the Bankruptcy Code provides, in relevant part, that administrative expenses include the actual necessary costs and expenses of preserving the estate.... See 11 U.S.C. 503(b)(1)(A). Such administrative expenses are entitled to priority treatment under section 507(a)(2) of the Bankruptcy Code, which provides, [t]he following expenses and claims have priority... [s]econd, administrative expenses allowed under section 503(b).... See 11 U.S.C. 507(a)(2). 14. By assuring claimants priority of payment, section 503(b)(1)(A) serves an important purpose, in that it provides an incentive to vendors and suppliers of services to continue to deal with a debtor in bankruptcy to continue its business and thus benefit the estate and all creditors. See In re Keene Corp., 208 B.R. 112 (Bankr. S.D.N.Y.) (citing

5 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 5 of 9 Collier on Bankruptcy, [2] (15th ed. 1997)). Section 503 thus promotes the meaningful participation by creditors in a debtor s reorganization process. See In re Alert Holdings Inc., 157 B.R. 753, 757 (Bankr. S.D.N.Y. 1993) (noting that the test to determine whether a creditor is entitled to an administrative expense is intended to promote meaningful creditor participation in the reorganization process... ) (citing In re Baldwin- United Corp., 79 B.R. 321, 338 (Bankr. S.D. Ohio 1987)). 15. As this Court has held, [w]here a debtor-in-possession elects to continue to receive benefits from the other party to an executory contract pending a decision to assume or reject the contract, the debtor-in-possession is obligated to pay for the reasonable value of those services and a claim for such payment is entitled to administrative priority. See In re Old Carco LLC, 424 B.R. 633, 642 (Bankr. S.D.N.Y. 2010) (internal quotations omitted) (citations omitted). In other words, [t]he right to priority in the event the trustee or debtor in possession receives benefits under the contract during the interval between the filing of the debtor s petition and the rejection of the contract is an equitable right based upon the reasonable value of the benefits conferred.... See American Anthracite & Bituminous Coal Corp. v. Leonardo Arrivabene, S.A., 280 F.2d 119, 124 (2d Cir. 1960) (citing In re United Cigar Stores Co., 69 F,2d 513, 515 (2d Cir. 1934); Reisenwebers, Inc. v. Irving Trust Co., 293 U.S. 566 (1934); Oscar Heineman Corp. v. Nat. Levy & Co., 6 F.2d 970 (2d Cir. 1925); Gardner v. Gleason, 259 F. 755 (1st Cir. 1919)). 16. Here, Obayashi provided the Contracting Debtors with certain engineering and design services under the AP Agreement pending the Contracting Debtors decision to assume or reject the AP Agreement. Obayashi s services undoubtedly benefitted the Contracting Debtors and their estates, as the services assisted the Debtors operation of its nuclear power plants. Thus, Obayashi s services played an important role in the Debtors

6 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 6 of 9 successful completion of fuel loads at the Sanmen Unit 1 nuclear power plant and the Haiyang Unit 1 nuclear power plant and the Debtors subsequent generation of electricity at Sanmen Unit As Obayashi provided valuable post-petition services to the Debtors pending the Contracting Debtors decision to assume or reject the AP Agreement, Obayashi is entitled to an administrative expense claim for the reasonable value of the engineering and design services it provided. See In re Old Carco LLC, 424 B.R. at 642 (explaining that [w]here a debtor-in-possession elects to continue to receive benefits from the other party to an executory contract pending a decision to assume or reject the contract, the debtor-inpossession is obligated to pay for the reasonable value of those services ). The AP Agreement provides that the value of Obayashi s services i.e., the amount earned under the AP Agreement post-petition but pre-effective Date is $800,000. Specifically, the Contracting Debtors agreed to pay Obayashi $200,000 upon fuel load at the Sanmen Unit 1 nuclear power plant, $400,000 when the Sanmen Unit 1 nuclear power plant began generating electricity, and $200,000 upon fuel load at the Haiyang Unit 1 nuclear power plant. As fuel loads to the Sannen Unit 1 nuclear power plant and the Haiyang Unit 1 nuclear power plant occurred, and Sannen Unit 1 began generating electricity pending the Contracting Debtors decision to assume or reject the AP Agreement, this Court should enter an order directing the Contracting Debtors to immediately pay Obayashi s $800,000 administrative expense claim. Notice 18. Obayashi will provide notice of this Motion to all persons and/or entities listed on the Ninth Supplemental Notice Regarding (I) Executory Contracts and Unexpired Leases, (II) Proposed Cure Obligations, and (III) Related Procedures [ECF No. 3623]

7 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 7 of 9 ( Notice ). A copy of this Motion is also available on the Court s website. Obayashi submits that no other or further notice need be provided. No Prior Request 19. Obayashi has made no previous request for the relief sought herein to this Court or any other court. Reservation of Rights 20. Obayashi hereby reserves all of its rights, claims, counterclaims, defenses, and remedies under the Bankruptcy Code, its agreements with Debtors, and other applicable law. Obayashi reserves the right to assert additional claims against the Debtors, including additional claims for administrative expenses and/or rejection damages, of any nature for any other amounts, and to amend, modify and/or supplement this Motion. Conclusion WHEREFORE, for all of the foregoing reasons, Obayashi respectfully requests that this Court enter an order, substantially in the form as Exhibit A attached hereto, directing the Debtors to immediately pay Obayashi s $800,000 administrative expenses claim. Dated: August 24, 2018 SNELL & WILMER L.L.P. /s/ Eric S. Pezold Eric S. Pezold (admitted pro hac vice) 600 Anton Blvd., Ste Costa Mesa, CA Telephone: (714) Facsimile: (714) epezold@swlaw.com

8 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 8 of 9 CERTIFICATE OF SERVICE I hereby certify that on the 24th day of August, 2018, this Motion was filed electronically through the CM/ECF system, which caused all parties or counsel requesting notice to be served by electronic means on the date of filing. Additionally, on August 24, 2018, I served the following persons and/or entities listed on the Notice by: (1) placing a true and correct copy thereof in a sealed envelope in the United States mail, first class, postage prepaid, and addressed as follows: (a) Westinghouse Electric Company LLC, 1000 Westinghouse Drive, Cranberry Township, PA (Attn: Michael T. Sweeney); (b) Weil, Gotshal & Manges LLP, attorneys for the Debtors, 767 Fifth Avenue, New York, NY (Attn: Gary T. Holtzer, Robert J. Lemons, Garrett A. Fail, and David N. Griffiths); (c) Togut, Segal & Segal, One Penn Plaza, Suite 3335, New York, NY (Attn: Albert Togut, Kyle J. Ortiz, Patrick Marecki, and Charles Persons); (d) Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite Los Angeles, CA (Attn: Van C. Durrer II and Annie Z. Li); (e) Milbank, Tweed, Hadley & McCloy LLP, 2029 Century Park East, 33rd Floor, Los Angeles, CA (Attn: Paul Aronzon and Thomas R. Kreller); (f) Proskauer Rose LLP, attorneys for the Statutory Unsecured Claimholders Committee, Eleven Times Square, New York, NY (Attn: Martin J. Bienenstock, Timothy Q. Karcher, and Vincent Indelicato);

9 mew Doc 3772 Filed 08/24/18 Entered 08/24/18 16:59:05 Main Document Pg 9 of 9 (g) Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, NY (Attn: Jeffrey D. Saferstein); (h) Shearman & Sterling LLP, 599 Lexington Avenue, New York, NY (Attn: Fredric Sosnick and Ned S. Schodek); (i) Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, NY (Attn: Matthew Feldman and John Longmire); (j) Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, NY (Attn: Alan Kornberg and Kyle Kimpler); and (k) The United States Trustee for Region 2, 201 Varick Street, Suite 1006, New York, NY (Attn: Paul Schwartzberg). /s/ Tamara Apodaca

10 mew Doc Filed 08/24/18 Entered 08/24/18 16:59:05 Exhibit Pg 1 of 9 EXHIBIT A

11 mew Doc Filed 08/24/18 Entered 08/24/18 16:59:05 Exhibit Pg 2 of 9 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re: WESTINGHOUSE ELECTRIC COMPANY LLC, et al., Case No.: (MEW) Chapter 11 (Jointly Administered) Debtors x ORDER GRANTING OBAYASHI CORPORATION S MOTION FOR ENTRY OF AN ORDER DIRECTING IMMEDIATE PAYMENT OF OBAYASHI S ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(b)(1)(A) Upon consideration of Obayashi Corporation s Motion for Entry of an Order Directing Immediate Payment of Obayashi s Administrative Expense Claim Pursuant to 11 U.S.C. 503(b)(1)(A) (the Motion ) filed by Obayashi Corporation ( Obayashi ); and it appearing that sufficient notice has been given; and no other notice being necessary; and it appearing that the requested relief in the Motion is in the best interests of the Debtors 1 and their estates, creditors, and other parties-in-interest; and after due deliberation and sufficient cause appearing therefor, it is hereby 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, if any, are: Westinghouse Electric Company LLC (0933), CE Nuclear Power International, Inc. (8833), Fauske and Associates LLC (8538), Field Services, LLC (2550), Nuclear Technology Solutions LLC (1921), PaR Nuclear Holding Co., Inc. (7944), PaR Nuclear, Inc. (6586), PCI Energy Services LLC (9100), Shaw Global Services, LLC (0436), Shaw Nuclear Services, Inc. (6250), Stone & Webster Asia Inc. (1348), Stone & Webster Construction Inc. (1673), Stone & Webster, Inc. d/b/a WECTEC Global Project Services Inc. (8572), Stone & Webster International Inc. (1586), Stone & Webster Services LLC (5448), Toshiba Nuclear Energy Holdings (UK) Limited (N/A), TSB Nuclear Energy Services Inc. (2348), WEC Carolina Energy Solutions, Inc. (8735), WEC Carolina Energy Solutions, LLC (2002), WEC Engineering Services Inc. (6759), WEC Equipment & Machining Solutions, LLC (3135), WEC Specialty LLC (N/A), WEC Welding and Machining, LLC (8771), WECTEC Contractors Inc. (4168), WECTEC LLC (6222), WECTEC Staffing Services LLC (4135), Westinghouse Energy Systems LLC (0328), Westinghouse Industry Products International Company LLC (3909), Westinghouse International Technology LLC (N/A), and Westinghouse Technology Licensing Company LLC (5961). The Debtors principal offices are located at 1000 Westinghouse Drive, Cranberry Township, Pennsylvania

12 mew Doc Filed 08/24/18 Entered 08/24/18 16:59:05 Exhibit Pg 3 of 9 ORDERED THAT: 1. The Motion is granted in its entirety; 2. Obayashi is granted an administrative expense claim under 11 U.S.C. 503(b)(1)(A) against the Debtors in the amount of $800,000, and such administrative expense is hereby allowed in full; 3. Debtors are directed to pay the amount of $800,000 to Obayashi for its administrative expense claim within five (5) business days from the date this Order is entered; 4. Nothing herein shall be construed as a waiver or limitation on the rights of Obayashi to pursue any and all claims it holds against the Debtors; 5. This Court shall retain jurisdiction with respect to all matters arising from or relating to this Order. Dated, 2018 Honorable Michael E. Wiles UNITED STATES BANKRUPTCY JUDGE

13 mew Doc Filed 08/24/18 Entered 08/24/18 16:59:05 Exhibit Pg 4 of 9 EXHIBIT B

14 mew Doc Filed 08/24/18 Entered 08/24/18 16:59:05 Exhibit Pg 5 of 9 WESTINGHOUSE AP l 000 PLANT TO LOAD FUEL WESTINGHOUSE AP1000 PLANT TO LOAD FUEL Created by cassels on 4/25/ : 19:48 PM Landmark milestone for Westinghouse technology SAN MEN. CHINA, April 25, Westinghouse Electric Company, China State Nuclear Power Technology Corporation (SNPTC) and CNNC Sanmen Nuclear Power Company Limited (SMNPC) announced today that the world's first unit of AP1000 nuclear power plant located in Sanmen, Zhejiang Province, China, has received the fuel load permit from China's National Nuclear Safety Administration (NNSA) and has commenced initial fuel loading. "Today we have reached a tremendous milestone for Westinghouse and our AP1000 plant technology,'' said Jose Erneterio Gutierrez, Westinghouse president and chief executive officer. "This is the next major step in delivering the world's first AP1000 plant to our customer and demonstrating the benefits of our advanced passive safety technology to the world." Sanmen Unit 1 has successfully completed all the necessary functional tests as well as technical, safety and Chinese regulatory reviews. The fuel load process will be followed by initial criticality, initial synchronization to the electrical grid, and conservative, step by step, power ascension testing, until all testing is safely and successfully completed at 100% power. "This major project milestone marks the start of the final commissioning program for Sanmen Unit 1," said David Durham, Westinghouse New Projects Business senior vice president. "I am confident that our teams will continue to operate at the highest levels - at Sanmen, as well as the Haiyang and Vogtle projects and in our ongoing support of the worldwide operating fleet." Commenting on Westinghouse's partnership with the Chinese government and suppliers as key contributors to the successful delivery of clean energy, Gavin Liu, president -Asia Region stated, 'Westinghouse is proud to be a partner in China's forward-looking nuclear energy program, an effort that will provide clean-air electricity to power China's economy. Through technology transfer, localization and infrastructure development. Westinghouse continues to collaborate with our Chinese partners and supports the development of China's nuclear power industry." In 2007, Westinghouse successfully won the bid for China's generation Ill+ nuclear power projects to build two units of AP1000 reactors in Sanmen, Zhejiang Province and two units in Haiyang, Shandong Province. The company has two additional units currently under construction at the Vogtle Electric Generating Plant near Waynesboro, Georgia. westinghousenuclear. com/... i nsrc = [G] Skins%2f _dc fau lt%2 fno+skin&containersrc=[g]containers%2 f_ defau 11%2fNo+Container(&/6/2018 9: 04 :09 AM]

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17 mew Doc Filed 08/24/18 Entered 08/24/18 16:59:05 Exhibit Pg 8 of 9 EXHIBIT D

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