mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 1 of 18

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1 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 1 of 18 Proposed Hearing Date: September 25, 2018 at 11:00 a.m. (Eastern Time) Proposed Objection Deadline: September 18, 2018 at 4:00 p.m. (Eastern Time) CHIESA SHAHINIAN & GIANTOMASI PC One Boland Drive West Orange, New Jersey Telephone: (973) Facsimile: (973) Scott A. Zuber, Esq. (szuber@csglaw.com) Attorneys for American Home Assurance Company; The Insurance Company of the State of Pennsylvania; and National Union Fire Insurance Company of Pittsburgh, P.A. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: WESTINGHOUSE ELECTRIC COMPANY LLC, et al., Debtors. 1 Chapter 11 Case No (MEW) (Jointly Administered) NOTICE OF HEARING AND MOTION OF AMERICAN HOME ASSURANCE COMPANY, THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, AND NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, P.A. FOR ENTRY OF AN ORDER (I) ALLOWING AND DIRECTING IMMEDIATE PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(a) AND 503(b)(1)(A) AND (II) GRANTING SUCH OTHER OR FURTHER RELATED RELIEF PLEASE TAKE NOTICE that on September 25, 2018 at 11:00 a.m., or as soon thereafter as counsel may be heard (the Hearing Date ), American Home Assurance Company, 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 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 Global Project Services Inc. (8572), 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

2 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 2 of 18 The Insurance Company of the State of Pennsylvania, and National Union Fire Insurance Company of Pittsburgh, P.A. (collectively, AIG ), by and through their undersigned attorneys, shall move before the Honorable Michael E. Wiles, United States Bankruptcy Judge, at Courtroom 617 of the United States Bankruptcy Court for the Southern District of New York, located at One Bowling Green New York, N.Y (the Bankruptcy Court ) for an order, pursuant to sections 503(a) and 503(b)(1)(A) of title 11 of the United States Code (the Bankruptcy Code ), (i) allowing and directing the immediate payment of an administrative expense claim and (ii) grating such other or further related relief as may be appropriate. (the Motion ). PLEASE TAKE FURTHER NOTICE that responses or objections to the Motion, if any, must be in writing, shall conform to the Federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules, and shall be filed with the Bankruptcy Court electronically in accordance with General Order M-399 (General order M-399 and the User s Manual for the Electronic Case Filing System can be found at by registered users of the Bankruptcy Court s case filing system and, by all other parties in interest, on a CD-ROM, in text searchable Portable Document Format (PDF) (with a hard-copy delivered directly to Chambers), in accordance with the customary practices of the Bankruptcy Court and General Order M-399, to the extent applicable, and served in accordance with General Order M-399 and the Order Pursuant to 11 U.S.C. 105(a) and Fed. R. Bankr. P. 1015(c), 2002(m), and 9007 Implementing Certain Notice and Case Management Procedures [ECF No. 101], including served upon AIG s undersigned counsel, Chiesa Shahinian & Giantomasi PC, One Boland Drive, West Orange, New Jersey attention: Scott A. Zuber, Esq. so as to be actually received by September 18, 2018 at 4:00 p.m. (Eastern Time) (the Objection Deadline )

3 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 3 of 18 PLEASE TAKE FURTHER NOTICE that if no responses or objections are timely filed and served, the Court may grant the relief requested in the Motion without a hearing. Dated: August 30, 2018 Respectfully submitted, CHIESA SHAHINIAN & GIANTOMASI PC By: /s/ Scott A. Zuber SCOTT A. ZUBER One Boland Drive West Orange, New Jersey Tel: (973) Fax: (973) szuber@csglaw.com Attorneys for American Home Assurance Company; The Insurance Company of the State of Pennsylvania; and National Union Fire Insurance Company of Pittsburgh, P.A

4 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 4 of 18 Proposed Hearing Date: September 25, 2018 at 11:00 a.m. (Eastern Time) Proposed Objection Deadline: September 18, 2018 at 4:00 p.m. (Eastern Time) CHIESA SHAHINIAN & GIANTOMASI PC One Boland Drive West Orange, New Jersey Telephone: (973) Facsimile: (973) Scott A. Zuber, Esq. (szuber@csglaw.com) Attorneys for American Home Assurance Company; The Insurance Company of the State of Pennsylvania; and National Union Fire Insurance Company of Pittsburgh, P.A. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: WESTINGHOUSE ELECTRIC COMPANY LLC, et al., Debtors. 1 Chapter 11 Case No (MEW) (Jointly Administered) MOTION OF AMERICAN HOME ASSURANCE COMPANY, THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, AND NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, P.A. FOR ENTRY OF AN ORDER (I) ALLOWING AND DIRECTING IMMEDIATE PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(a) AND 503(b)(1)(A) AND (II) GRANTING SUCH OTHER OR FURTHER RELATED RELIEF TO THE HONORABLE MICHAEL E. WILES, UNITED STATES BANKRUPTCY JUDGE: 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 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 Global Project Services Inc. (8572), 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

5 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 5 of 18 American Home Assurance Company, The Insurance Company of the State of Pennsylvania, and National Union Fire Insurance Company of Pittsburgh, P.A. (collectively, AIG or the Surety ), by and through their undersigned attorneys, files this motion (the Motion ), pursuant to sections 503(a) and 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 ) for entry of an order, substantially in the form attached hereto as Exhibit A, (i) allowing and directing the immediate payment of an administrative expense claim and (ii) grating such other or further related relief as may be appropriate. In support of the Motion, AIG relies on the accompanying Declaration of Waiman Yeung ( Yeung Dec. ) and respectfully represents as follows: PRELIMINARY STATEMENT 1. After March 29, 2017 (the Petition Date ) through the date of this Motion, AIG has incurred $213, in legal fees ( Legal Fees ) in protecting its interests in the Chapter 11 Cases and in preserving value for Debtors estates. The Legal Fees accrued post-petition in connection with Debtors use of and reliance on AIG s surety bonds, which bonds were maintained and continued by AIG after the Petition Date at the specific request of Debtors and for the benefit of Debtors estates. Debtors are obligated to pay AIG s Legal Fees under an indemnity agreement executed before the Petition Date. 2. Debtors received and continued to receive the benefit of AIG s surety credit on and after the Petition Date, but have failed to pay their related indemnity obligations, in the form of reimbursing AIG for its Legal Fees as and when accrued post-petition

6 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 6 of As detailed below, AIG is entitled to an administrative expense claim for the Legal Fees that accrued post-petition with respect to the surety bonds because such costs constitute actual, necessary costs and expenses of preserving the estate. JURISDICTION, VENUE & STATUTORY BASIS 4. The Court has jurisdiction over this Motion under 28 U.S.C. 157 and This Motion is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). Venue in this District is proper pursuant to 28 U.S.C and The statutory basis for the relief requested in this Motion is 11 U.S.C. 503(a) and 503(b)(1)(A). RELEVANT BACKGROUND Procedural Background 5. On the Petition Date, each Debtor commenced with this Court a voluntary case under chapter 11 of the Bankruptcy Code. The Debtors are authorized to continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in these Chapter 11 Cases. 6. The Debtors Chapter 11 Cases are being jointly administered for procedural purposes only pursuant to Bankruptcy Rule 1015(b). 7. On April 7, 2017, the United States Trustee for Region 2 appointed the Official Committee of Unsecured Creditors pursuant to section 1102 of the Bankruptcy Code. 8. On March 28, 2018, the Debtors confirmed a Modified Second Amended Joint Chapter 11 Plan of Reorganization [ECF no. 2988] (the Plan ). The Effective Date of the Plan occurred on August 1, Pursuant to the Plan, all requests for payment of administrative expense claims must be filed and served on the Debtors no later than August 31,

7 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 7 of The Plan further provides that Debtor or Wind Down Co (or the Reorganized Debtors, as applicable) shall pay to each holder of an Allowed Administrative Expense Claim Cash in an amount equal to the Allowed amount of such Allowed Claim, which payment shall be made on, or as soon as reasonably practicable after, the first Business Day after the later of the (a) Effective Date, and (b) the date such Administrative Expense Claim becomes an Allowed Administrative Expense Claim. Plan, Section 2.1. The Relationship Between Debtors and AIG 11. Before the Petition Date, AIG issued a number of surety bonds at the request and on behalf of certain pre-petition entities that are now Debtors in this matter, as principals, including Westinghouse Electric Company, LLC ( WEC ), PCI Energy Services, Inc., and WEC Carolina Energy Solutions, LLC. (Yeung Dec. 3). 12. AIG s surety bonds guaranty and financially assure the Debtor-principals payment and performance obligations with respect to their business operations in the United States and Mexico for the benefit of certain third-parties named as obligees on the surety bonds. (Id. 4). Attached as Exhibit A to the Yeung Dec. is a chart summarizing the twenty-six (26) surety bonds issued by AIG that were outstanding as of the Petition Date, in the aggregate penal sum of $16,980, (collectively, the Bonds ). 2 (Id. 5). 13. The Bonds are financial accommodations securing and guaranteeing Debtors primary obligations to the various states, labor unions, governmental entities, and contract 2 Copies of the Bonds are too voluminous to attach but will be provided upon request. The amount and extent of AIG s bonding of the Debtors has, at times, fluctuated based on the (non)renewal, release, cancellation and/or expiration of certain Bonds and based on the completed versus on-going nature of Debtors underlying projects and contracts that AIG bonded. Since the Effective Date, most of the Bonds have been cancelled, terminated, released and/or replaced, however, there remains potential tail liability to AIG associated with certain of the U.S. commercial Bonds for a period of between thirty (30) to ninety (90) days running from the date of cancellation. (Yeung Dec. 5, fn.3)

8 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 8 of 18 counterparties associated with Debtors business operations. The Bonds are prerequisites for the continuance of Debtors contracts, projects and operations. Without the Bonds (or adequate replacement bonding from another surety company), Debtors could not have sold their assets and/or confirmed a Plan. (Id. 6). 14. In connection with AIG s issuance of the Bonds, prior to the Petition Date, WEC executed in favor of AIG an Agreement of Indemnity dated May 16, 2008 (the Indemnity Agreement ), pursuant to which WEC, on behalf of itself and its subsidiaries, agreed to exonerate, indemnify, reimburse, and keep indemnified AIG from all loss and expense, including, but not limited to, premiums, costs, expenses, and attorneys fees in the event AIG sustains any loss as a result of having to pay or perform under any of the Bonds or on account of any breach or enforcement of the Indemnity Agreement. (Id. 7; Ex. B). Attached as Exhibit B to the Yeung Dec. is a copy of the Indemnity Agreement. Debtors Use and Reliance on AIG Post-Petition Surety Credit 15. On August 22, 2017, AIG moved for stay relief to cancel the Bonds [Dkt. 1211](the Lift Stay Motion ). (Id. 8). 16. Debtors never opposed the Lift Stay Motion. Instead, Debtors repeatedly sought and obtained four (4) separate stipulations and agreed orders adjourning the hearing date and extending the objection deadline to the Lift Stay Motion. [Dkt Nos. 1277, 1296, 1335, 1385] (Id. 9). 17. At the specific request of Debtors, and with AIG s consent, the Bonds remained extant after the Petition Date through to and including the Effective Date of the Plan. (Id. 10). 18. On October 18, 2017, AIG filed a Notice of Withdrawal, without prejudice, of the Lift Stay Motion. [Dkt. No. 1576]. (Id. 11)

9 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 9 of On October 24, 2017, the Bankruptcy Court entered an Order Pursuant to 11 U.S.C. 363 and 364 and Fed. R. Bankr. P and 6003 Authorizing the Debtors to Continue and Renew their Surety Bond Program [Dkt. 1606] (the Surety Program Order ). The Surety Program Order authorized Debtors to continue and renew certain of AIG s Bonds. (Id. 12). 20. On March 27, 2018, the Bankruptcy Court entered a Stipulation And Agreed Order By And Among Debtors, American Home Assurance Company, The Insurance Company Of The State Of Pennsylvania, And National Union Fire Insurance Company Of Pittsburgh, P.A. Regarding Certain Pre-Petition Surety Bonds [Dkt. 2973] (the Stipulation ) (Id. ). The Stipulation provided a mechanism by which the Bonds would be cancelled and/or released after the Effective Date of the Plan and, in the interim, assure[d] [Debtors] ability to maintain adequate bonding without interruption and [allowed Debtors to] avoid costly and unnecessary litigation (See Stipulation at recital J). (Yeung Dec. 13). 21. Debtors elected to continue to receive post-petition benefits from AIG s surety credit, in the form of the Bonds remaining in place, which surety credit Debtors utilized and relied upon in continuing to operate their business in Chapter 11 and which, at least in part, helped facilitate confirmation of the Debtors Plan less than a year after the Petition Date. (Id. 14). 22. Debtors did not terminate, cancel or reject any of the Bonds, or replace the Bonds with those from another surety before the Effective Date. (Id. 15). AIG s Proofs of Claim and Post-Petition Legal Fees 23. On August 31, 2017, AIG filed three separate proofs of claim in the claims registered maintained by Debtors claims agent KCC (specifically, Claim No as against

10 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 10 of 18 Westinghouse Electric Company, LLC; Claim No as against PCI Energy Services LLC; and, Claim No as against WEC Carolina Energy Solutions, LLC.). (Id. ). 24. AIG has incurred and will continue to incur post-petition Legal Fees in connection with maintaining and continuing the Bonds post-petition, as well as in resolving obligee claims thereunder. After the Petition Date through the date of this Motion, AIG has incurred $213, in Legal Fees. Debtors have not paid any of AIG s post-petition Legal Fees. (Id., Ex. C). Attached as Exhibit C to the Yeung Dec. is a chart summarizing the invoices for Legal Fees incurred by AIG during the post-petition period. 3 RELIEF REQUESTED 25. By this Motion, AIG seeks, pursuant to Bankruptcy Code 503(a) and 503(b)(1)(A), entry of the proposed order attached hereto as Exhibit A, allowing AIG an administrative expense in the amount of the Legal Fees and directing the Debtors to immediately pay AIG the administrative expense. BASIS FOR RELIEF REQUESTED A. AIG s Legal Fees Arising Post-Petition In Connection With the Bonds, Constitute An Administrative Expense. 26. Section 503 of the Bankruptcy Code provides that after notice and a hearing, there shall be allowed administrative expenses, including the actual, necessary costs and expenses of preserving the estate. 11 U.S.C. 503(b)(1)(A). 3 Copies of the actual invoices are too voluminous to attach but will be provided upon request, in redacted form to protect attorney-client communications, attorney work product, and other applicable privileges

11 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 11 of The Second Circuit has held that under Bankruptcy Code section 503(b)(1)(A), [a]n expense is administrative only if it arises out of a transaction between the creditor and the bankrupt s trustee or debtor in possession, and only to the extent that the consideration supporting the claimant s right to payment was both supplied to and beneficial to the debtor-inpossession in the operation of the business. See, e.g., In re Bethlehem Steel Corp., 479 F.3d 167, 172 (2d Cir. 2007) (citing Trustees of Amalgamated Ins. Fund v. McFarlin s, 789 F.2d 98, 101 (2d Cir. 1986)); see also In In re Old Carco LLC, 424 B.R. 633 (Bankr.S.D.N.Y.2010)( [t]he services performed by the claimant must have been induced by the debtor-in-possession to warrant entitlement to administrative claim priority). 28. To be eligible for administrative expense priority, a post-petition transaction need not involve the exchange of money or formation of a contract.... Indeed, a claimant s performance of a pre-petition contract, and a debtor s acceptance of that performance, can establish a post-petition transaction. In re Goody s Family Clothing, Inc., 401 B.R. 656, 671 (D. Del. 2009) aff d sub nom. In re Goody s Family Clothing Inc., 610 F.3d 812 (3d Cir. 2010). 29. Administrative expenses include the actual, necessary costs and expenses of preserving the estate. See 11 U.S.C. 503(b)(1)(A). An actual or necessary cost is one that has conferred a benefit upon the bankruptcy estate. Matter of H.L.S. Energy Co., 151 F.3d 434, 437 (5th Cir. 1998)( The benefit requirement has no independent basis in the Code, however, but is merely a way of testing whether a particular expense was truly necessary to the estate ); see also 4 Collier on Bankruptcy (16th 2018). The term benefit is not restricted to goods or services that lead to a direct economic enhancement of the estate but can also cover less concrete benefits such the ability to continue to conduct business as usual. See In re Texas Pellets, Inc., 2017 WL , at *2 (citing Matter of H.L.S. Energy, 151 F.3d at 438); see also

12 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 12 of 18 Matter of TransAmerican Nat. Gas Corp., 978 F.2d 1409, 1420 (5th Cir. 1992) (allowing administrative expense claim where debtor received other less readily calculable benefits, such as the ability to continue to conduct business as usual ) (internal citation omitted). 30. The underlying purpose behind Section 503 is that for a reorganization to succeed, creditors that are asked to extend credit after the petition is filed must be given priority so they will be moved to furnish the necessary credit to enable the debtor to function. In the Matter of Jartran, Inc., 732 F.2d 584 (7th Cir. 1984). Section 503(b)(1) is intended to provide an incentive for creditors to continue doing business with a debtor and an incentive for others to engage in business transactions with the debtor. 4 Collier on Bankruptcy, [3][a] (16th ed. 2014). 31. In this case, AIG meets the standard for an administrative expense claim. Debtors requested that AIG s Bonds remain in place after the Petition Date; AIG consented to maintaining and continuing the Bonds post-petition; and Debtors accepted the benefits of AIG s post-petition surety credit. Yet, Debtors have refused to pay in the ordinary course AIG s Legal Fees that have accrued post-petition in connection with the Bonds despite Debtors obligations under the Indemnity Agreement. 32. Since the Petition Date, Debtors had to maintain adequate bonding to support and continue their business operations on an uninterrupted basis. AIG s withdrawal of the Stay Relief Motion and AIG s consent to Debtors request to leave the Bonds in place through the occurrence of the Effective Date of the Plan were of critical importance to Debtors estates and the relative success of these Chapter 11 Cases. Absent AIG s Bonds, Debtors would have had to procure replacement bonding from another surety company, and likely post collateral for the new surety credit, thus diverting Debtors time and attention away from confirming their Plan. AIG s

13 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 13 of 18 maintenance and continuation of the Bonds post-petition preserved the value of Debtors estates by minimizing distraction, delay and expense. Without AIG s Bonds (or adequate replacement bonding, which Debtors never procured), Debtors would not have been able to confirm their Plan in less than a year after the Petition Date and likely would have faced more challenges, costs and delay to the detriment of their estates. 33. AIG is entitled to administrative expense status for its post-petition Legal Fees incurred in connection with the Bonds, as these are costs and expenses that are actual and necessary to preserving the estate and arise out of post-petition transactions. The Bonds and associated Legal Fees conferred a substantial benefit to Debtors estates. B. AIG is Entitled to Immediate Payment of the Allowed Administrative Expense. 34. Courts have discretion to determine when an administrative expense will be paid. HQ Global Holdings, Inc., 282 B.R. 169, 173 (Bankr. D. Del. 2002)). In determining the time of payment, courts consider prejudice to the debtor, hardship to the claimant, and potential detriment to other creditors. Id. 35. There is no valid reason to defer payment of AIG s administrative expense claim, provided that the Court allows such claim. To AIG s knowledge, immediate payment of its allowed administrative expense claim would not prejudice Debtors or other creditors. Upon information and belief, Debtors are administratively solvent. Upon further information and belief, general unsecured creditors are anticipated to receive payment in full on account of their allowed claims. See Modified First Amended Disclosure Statement For Joint Chapter 11 Plan of Reorganization [ECF No. 2623]; see also Disclosure Statement, Section I.D-E. Furthermore, the Plan requires payment on the first Business Day after the date such Administrative Expense Claim becomes an Allowed Administrative Expense Claim. Plan, Section

14 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 14 of 18 Accordingly, the Court should compel immediate payment of AIG s allowed administrative expense claim. 4 NOTICE 36. Notice of the Motion has been provided to: (i) the Office of the United States Trustee; (ii) Debtors counsel; (iii) counsel to The Statutory Committee of Unsecured Claimholders, Proskauer Rose LLP; (iv) counsel to Wind Down Co, Paul, Weiss, Rifkind, Wharton & Garrison LLP; (v) all parties and/or counsel noted in the Court s Order pursuant to 11 U.S.C. 105(a) and Fed. R. Bankr. P. 1015(c), 2002(m), and 9007 implementing certain notice and case management procedures [Dkt. 101]; and (vi) all parties that have filed a Notice of Appearance in this case pursuant to Bankruptcy Rule AIG submits that, under the circumstances, no further notice is required. NO PRIOR REQUEST 37. No prior request for the relief sought by the Motion has been made to this Court or any other court. 4 In the event that the Court disallows AIG s administrative expense claim, AIG reserves its right to seek the allowance of an amendment to its original proofs of claim to assert that the Legal Fees constitute a general unsecured claim against the applicable Debtors estates. The Second Circuit has held that it is permissible and not inequitable to allow post-petition legal fees as a component of a creditor s pre-petition claim. United Merchs. & Mfrs., Inc. v. Equitable Life Assurance Soc y of the U.S. (In re United Merchs. & Mfrs., Inc.), 674 F.2d 134, 137 (2d Cir. 1982); See also Qmect, Inc. v. Burlingame Capital Partners II, L.P. (In re Qmect, Inc.), 368 B.R. 882, 885 (Bankr. N.D. Cal. 2007) ( It would seem highly inequitable to permit the estate to recover fees incurred in postpetition [litigation] with a creditor while at the same time denying the creditor the right even to include its postpetition fees in its [pre-petition, general] unsecured claim. ); Insurance Co. of North America v. Sullivan, 333 B.R. 55, 62 (D.Md.2005) (embracing the proposition that a prepetition indemnity agreement covering attorney's fees creates a contingent right to those attorney's fees for litigation occurring postpetition [in fulfilling surety obligations] ); In re Agway, Inc., 2008 WL (Bankr. N.D.N.Y. July 18, 2008)(a surety creditor with a contractual right to recover attorneys fees could include attorneys fees incurred post-petition in its allowed prepetition proof of claim.). Accordingly, in the event of disallowance of AIG s administrative expense claim, AIG should be permitted to amend its original proof of claim to specify the Legal Fees that have accrued post-petition, and have such general unsecured claim allowed for payment and distribution purposes

15 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 15 of 18 RESERVATION OF RIGHTS 38. AIG expressly reserves all of its rights, claims, defenses and remedies under the Bonds, Indemnity Agreement, Bankruptcy Code, and other applicable law, including, without limitation, its common law rights of indemnity and exoneration. AIG reserves the right to assert additional claims against the Debtors including additional claims for administrative expenses of any nature for any other amounts, and to amend, modify, and/or supplement this Motion. The filing of this Motion should not be construed as an election of remedies against any party or a waiver of any such rights. CONCLUSION WHEREFORE, for each of the reasons set forth above, AIG respectfully requests that the Court enter an order substantially in the form annexed hereto as Exhibit A, (i) allowing AIG an administrative expense in the amount of $213,853.09, (ii) directing the Debtors to immediately pay AIG the full amount of its administrative expense, and (iii) granting such other and further relief as may be just and proper. Dated: August 30, 2018 Respectfully submitted, CHIESA SHAHINIAN & GIANTOMASI PC By: /s/ Scott A. Zuber SCOTT A. ZUBER One Boland Drive West Orange, New Jersey Tel: (973) Fax: (973) szuber@csglaw.com Attorneys for American Home Assurance Company; The Insurance Company of the State of Pennsylvania; and National Union Fire Insurance Company of Pittsburgh, P.A

16 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 16 of 18 EXHIBIT A Proposed Order Directing Immediate Payment of AIG s Administrative Expense Claim

17 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 17 of 18 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: WESTINGHOUSE ELECTRIC COMPANY LLC, et al., Debtors. 5 Chapter 11 Case No (MEW) (Jointly Administered) ORDER GRANTING MOTION OF AMERICAN HOME ASSURANCE COMPANY, THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, AND NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, P.A. FOR ENTRY OF AN ORDER (I) ALLOWING AND DIRECTING IMMEDIATE PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(a) AND 503(b)(1)(A) AND (II) GRANTING SUCH OTHER OR FURTHER RELATED RELIEF Upon consideration of the motion (the Motion ) of American Home Assurance Company, The Insurance Company of the State of Pennsylvania, and National Union Fire Insurance Company of Pittsburgh, P.A. (collectively AIG ), for entry of an order, pursuant to sections 503(a) and 503(b)(1)(A) of title 11 of the United States Code (the Bankruptcy Code ), (i) allowing and directing the immediate payment of an administrative expense claim and (ii) grating such other or further related relief as may be appropriate; and it appearing that sufficient notice has been given; and no other notice being necessary; and it appearing that the 5 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 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 Global Project Services Inc. (8572), 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

18 mew Doc 3816 Filed 08/30/18 Entered 08/30/18 23:50:43 Main Document Pg 18 of 18 requested relief in the Motion is in the best interests of the Debtors and their estates, creditors and other parties in interest; and after due deliberation and sufficient cause appearing therefor, it is hereby ORDERED THAT: 1. The Motion is granted to the extent set forth herein. 2. AIG is hereby granted an administrative expense claim against Debtors in the amount of $213,853.09, in addition to AIG s attorneys fees that accrue in the interim period after the filing date of the Motion and until the date of entry of this Order (the Additional Fees ), and such administrative expense claim is hereby allowed in full, under Bankruptcy Code sections 503(a) and 503(b)(1)(A). 3. Debtors are directed to pay AIG the amount of $213, plus the Additional Fees 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 AIG 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: New York, New York, 2018 Honorable Michael E. Wiles United States Bankruptcy Judge

19 of Waiman Yeung Pg 1 of 22 Proposed Hearing Date: September 25, 2018 at 11:00 a.m. (Eastern Time) Proposed Objection Deadline: September 18, 2018 at 4:00 p.m. (Eastern Time) CHIESA SHAHINIAN & GIANTOMASI PC One Boland Drive West Orange, New Jersey Telephone: (973) Facsimile: (973) Scott A. Zuber, Esq. (szuber@csglaw.com) Attorneys for American Home Assurance Company; The Insurance Company of the State of Pennsylvania; and National Union Fire Insurance Company of Pittsburgh, P.A. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: WESTINGHOUSE ELECTRIC COMPANY LLC, et al., Debtors. 1 Chapter 11 Case No (MEW) (Jointly Administered) DECLARATION OF WAIMAN YEUNG IN SUPPORT OF MOTION OF AMERICAN HOME ASSURANCE COMPANY, THE INSURANCE COMPANY OF THE STATE OF PENNSYLVANIA, AND NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, P.A. FOR ENTRY OF AN ORDER (I) ALLOWING AND DIRECTING IMMEDIATE PAYMENT OF ADMINISTRATIVE EXPENSE CLAIM PURSUANT TO 11 U.S.C. 503(a) AND 503(b)(1)(A) AND (II) GRANTING SUCH OTHER OR FURTHER RELATED RELIEF I, Waiman Yeung, declare, pursuant to 28 U.S.C. 1746, under penalty of perjury that: 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 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 Global Project Services Inc. (8572), 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

20 of Waiman Yeung Pg 2 of I am a Vice President of AIG Surety Division, having an office in New York, New York. AIG Surety Division is the authorized representative of American Home Assurance Company, The Insurance Company of the State of Pennsylvania, and National Union Fire Insurance Company of Pittsburgh, P.A. (collectively, AIG ). I am authorized to make this Declaration in support of AIG s motion (the Motion ) 2 pursuant to sections 503(a) and 503(b)(1)(A) of title 11 of the United States Code (the Bankruptcy Code ), in the abovecaptioned jointly administered chapter 11 cases (the Chapter 11 Cases ) for entry of an order allowing and directing the immediate payment of an administrative expense claim and grating such other or further related relief as may be appropriate. 2. In my capacity as Vice President of AIG Surety Division, I have oversight of and personal knowledge regarding the Bonds, Indemnity Agreement and related documents that are the subject of the Motion as further described below. Except as to any matters stated upon information and belief, I have personal knowledge of the facts attested to herein based upon: (i) my personal involvement in the Chapter 11 Cases on behalf of AIG and with the AIG s administration of Bonds, Indemnity Agreement and related documents; (ii) information provided to me in the ordinary course of business by other employees and officers of AIG Surety Division who are directly involved in the Chapter 11 Cases on behalf of AIG and with the AIG s administration of the Bonds, Indemnity Agreement and related documents; (iii) information contained in AIG Surety Division s business records that are maintained in the ordinary course of business and as to which I have custody and control; and (iv) my personal review of the Chapter 11 Cases, Bonds, Indemnity Agreement and related documents. As to any matters of opinion or matters stated upon information and belief, I believe them to be true and correct. 2 Capitalized terms not otherwise defined herein shall have the same meaning as in the Motion

21 of Waiman Yeung Pg 3 of 22 The Relationship Between Debtors and AIG 3. Before the Petition Date, AIG issued a number of surety bonds at the request and on behalf of certain pre-petition entities that are now Debtors in this matter, as principals, including Westinghouse Electric Company, LLC ( WEC ), PCI Energy Services, Inc., and WEC Carolina Energy Solutions, LLC. 4. AIG s surety bonds guaranty and financially assure the Debtor-principals payment and performance obligations with respect to their business operations in the United States and Mexico for the benefit of certain third-parties named as obligees on the surety bonds. 5. Attached hereto as Exhibit A is a chart summarizing the twenty-six (26) surety bonds issued by AIG that were outstanding as of the Petition Date, in the aggregate penal sum of $16,980, (collectively, the Bonds ) The Bonds are financial accommodations securing and guaranteeing Debtors primary obligations to the various states, labor unions, governmental entities, and contract counterparties associated with Debtors business operations. The Bonds are prerequisites for the continuance of Debtors contracts, projects and operations. Without the Bonds (or adequate replacement bonding from another surety company), Debtors could not have sold their assets and/or confirmed a Plan. 7. In connection with AIG s issuance of the Bonds, prior to the Petition Date, WEC executed in favor of AIG an Agreement of Indemnity dated May 16, 2008 (the Indemnity Agreement ), pursuant to which WEC, on behalf of itself and its subsidiaries, agreed to 3 Copies of the Bonds are too voluminous to attach but will be provided upon request. The amount and extent of AIG s bonding of the Debtors has, at times, fluctuated based on the (non)renewal, release, cancellation and/or expiration of certain Bonds and based on the completed versus on-going nature of Debtors underlying projects and contracts that AIG bonded. Since the Effective Date, most of the Bonds have been cancelled, terminated, released and/or replaced, however, there remains potential tail liability to AIG associated with certain of the U.S. commercial Bonds for a period of between thirty (30) to ninety (90) days running from the date of cancellation

22 of Waiman Yeung Pg 4 of 22 exonerate, indemnify, reimburse, and keep indemnified AIG from all loss and expense, including, but not limited to, premiums, costs, expenses, and attorneys fees in the event AIG sustains any loss as a result of having to pay or perform under any of the Bonds or on account of any breach or enforcement of the Indemnity Agreement. Attached hereto as Exhibit B is a copy of the Indemnity Agreement. Debtors Use and Reliance on AIG Post-Petition Surety Credit 8. On August 22, 2017, AIG moved for stay relief to cancel the Bonds [Dkt. 1211](the Lift Stay Motion ). 9. Debtors never opposed the Lift Stay Motion. Instead, Debtors repeatedly sought and obtained four (4) separate stipulations and agreed orders adjourning the hearing date and extending the objection deadline to the Lift Stay Motion. [Dkt Nos. 1277, 1296, 1335, 1385]. 10. At the specific request of Debtors, and with AIG s consent, the Bonds remained extant after the Petition Date through to and including the Effective Date of the Plan. 11. On October 18, 2017, AIG filed a Notice of Withdrawal, without prejudice, of the Lift Stay Motion. [Dkt. No. 1576]. 12. On October 24, 2017, the Bankruptcy Court entered an Order Pursuant to 11 U.S.C. 363 and 364 and Fed. R. Bankr. P and 6003 Authorizing the Debtors to Continue and Renew their Surety Bond Program [Dkt. 1606] (the Surety Program Order ). The Surety Program Order authorized Debtors to continue and renew certain of AIG s Bonds. 13. On March 27, 2018, the Bankruptcy Court entered a Stipulation And Agreed Order By And Among Debtors, American Home Assurance Company, The Insurance Company Of The State Of Pennsylvania, And National Union Fire Insurance Company Of Pittsburgh, P.A. Regarding Certain Pre-Petition Surety Bonds [Dkt. 2973] (the Stipulation ). The Stipulation

23 of Waiman Yeung Pg 5 of 22 provided a mechanism by which the Bonds would be cancelled and/or released after the Effective Date of the Plan and, in the interim, assure[d] [Debtors] ability to maintain adequate bonding without interruption and [allowed Debtors to] avoid costly and unnecessary litigation (See Stipulation at recital J). 14. Debtors elected to continue to receive post-petition benefits from AIG s surety credit, in the form of the Bonds remaining in place, which surety credit Debtors utilized and relied upon in continuing to operate their business in Chapter 11 and which, at least in part, helped facilitate confirmation of the Debtors Plan less than a year after the Petition Date. 15. Debtors did not terminate, cancel or reject any of the Bonds, or replace the Bonds with those from another surety before the Effective Date. AIG s Proofs of Claim and Post-Petition Legal Fees 16. On August 31, 2017, AIG filed three separate proofs of claim in the claims registered maintained by Debtors claims agent KCC (specifically, Claim No as against Westinghouse Electric Company, LLC; Claim No as against PCI Energy Services LLC; and, Claim No as against WEC Carolina Energy Solutions, LLC.). 17. AIG has incurred and will continue to incur post-petition Legal Fees in connection with maintaining and continuing the Bonds post-petition, as well as in resolving obligee claims thereunder. After the Petition Date through the date of this Motion, AIG has incurred $213, in Legal Fees. Debtors have not paid any of AIG s post-petition Legal

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