Christopher Marcus, P.C. James H.M. Sprayregen, P.C. John T. Weber William A. Guerrieri (admitted pro hac vice) KIRKLAND & ELLIS LLP Alexandra Schwarzman (admitted pro hac vice) KIRKLAND & ELLIS INTERNATIONAL LLP KIRKLAND & ELLIS LLP 601 Lexington Avenue KIRKLAND & ELLIS INTERNATIONAL LLP New York, New York 10022 300 North LaSalle Street Telephone: (212) 446-4800 Chicago, Illinois 60654 Facsimile: (212) 446-4900 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Proposed Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) 21st CENTURY ONCOLOGY HOLDINGS, INC., et al., 1 ) Case No. 17-22770 (RDD) ) Debtors. ) (Jointly Administered) ) CERTIFICATE OF NO OBJECTION UNDER 28 U.S.C. 1746 REGARDING APPLICATION OF THE DEBTORS TO (I) RETAIN ALVAREZ & MARSAL HEALTHCARE INDUSTRY GROUP, LLC TO PROVIDE THE DEBTORS A CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, VICE-PRESIDENT OF TAX, AND CERTAIN ADDITIONAL PERSONNEL, AND (II) DESIGNATE PAUL B. RUNDELL AS CHIEF EXECUTIVE OFFICER, DOUGLAS STAUT AS CHIEF FINANCIAL OFFICER, AND MARK TRIVETTE AS VICE-PRESIDENT OF TAX FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE Pursuant to 28 U.S.C. 1746 and Rule 9075-2 of the Local Bankruptcy Rules for the Southern District of New York (the Local Bankruptcy Rules ), the undersigned hereby certifies as follows: 1. On June 29, 2017, 21st Century Oncology Holdings, Inc. and its affiliated debtors in the above-captioned chapter 11 cases, as debtors and debtors in possession (collectively, 1 Each of the Debtors in the above-captioned jointly administered chapter 11 cases and their respective tax identification numbers are set forth in the Order Directing Joint Administration of Chapter 11 Cases [Docket No. 30]. The location of 21st Century Oncology Holdings, Inc. s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida 33907.
the Debtors ), filed the Application of the Debtors to (I) Retain Alvarez & Marsal Healthcare Industry Group, LLC to Provide the Debtors a Chief Executive Officer, Chief Financial Officer, Vice-President of Tax, and Certain Additional Personnel, and (II) Designate Paul B. Rundell as Chief Executive Officer, Douglas Staut as Chief Financial Officer, and Mark Trivette as Vice- President of Tax for the Debtors Nunc Pro Tunc to the Petition Date (the Application ) [Docket No. 169]. 2. The Debtors established an objection deadline of July 13, 2017 at 4:00 p.m. (prevailing Eastern Time) (the Objection Deadline ), for parties to object or file a response to the Application. Local Bankruptcy Rule 9075-1 provides that the Application may be granted without a hearing if (a) no objections or other responsive pleadings have been filed on or before the applicable objection deadline and (b) the attorney for the entity that filed the Application complies with such rule. 3. As of the filing of this certificate, forty-eight (48) hours have elapsed since the Objection Deadline and, to the best of my knowledge, no responsive pleading to the Application has been (a) filed with the Court on the docket of the above-captioned chapter 11 cases or (b) served on the Debtors or their proposed counsel. 4. Accordingly, the Debtors respectfully request that the Court enter the proposed order granting the Application, annexed hereto as Exhibit A, which has been modified since the filing of the Application to (a) address certain informal concerns raised by the Office of the United States Trustee and certain parties in interest, and (b) delete the language in the proposed order stating that the hearing was held to consider the Application. A redline showing such modifications is annexed hereto as Exhibit B.
and belief. I declare that the foregoing is true and correct to the best of my knowledge, information, New York, New York Dated: July 18, 2017 /s/ Christopher Marcus, P.C. Christopher Marcus, P.C. John T. Weber KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 - and - James H.M. Sprayregen, P.C. William A. Guerrieri (admitted pro hac vice) Alexandra Schwarzman (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Proposed Counsel to the Debtors and Debtors in Possession
Exhibit A Proposed Order
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: 21st CENTURY ONCOLOGY HOLDINGS, INC., et al., 1 Debtors. ) ) Chapter 11 ) ) Case No. 17-22770 (RDD) ) ) (Jointly Administered) ) ORDER (I) AUTHORIZING THE DEBTORS TO RETAIN ALVAREZ & MARSAL HEALTHCARE INDUSTRY GROUP, LLC TO PROVIDE THE DEBTORS A CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, VICE-PRESIDENT OF TAX, AND CERTAIN ADDITIONAL PERSONNEL AND (II) DESIGNATE PAUL B. RUNDELL AS CHIEF EXECUTIVE OFFICER, DOUGLAS STAUT AS CHIEF FINANCIAL OFFICER, AND MARK TRIVETTE AS VICE-PRESIDENT OF TAX FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE Upon the Application, (the Application ) 2 of the above-captioned debtors and debtors in possession (collectively, the Debtors ) for entry of an order (this Order ): (a) authorizing the Debtors to retain Alvarez & Marsal Healthcare Industry Group, LLC ( A&M ) to provide the Debtors with a chief executive officer ( CEO ), chief financial officer ( CFO ), a vice president of tax ( Tax VP ), and certain additional personnel (the Additional Personnel, and collectively with the CEO, CFO, and Tax VP, the Engagement Personnel ); and (b) approving the designation of Paul B. Rundell as CEO, Douglas Staut as CFO, and Mark Trivette as Tax VP for the Debtors in accordance with the terms and conditions set forth in the engagement letter dated February 28, 2017 as amended and supplemented from time to time (collectively with all amendments and supplements, including the Completion Fee supplement, the Engagement 1 Each of the Debtors in the above-captioned jointly administered chapter 11 cases and their respective tax identification numbers are set forth in the Order Directing Joint Administration of Chapter 11 Cases [Docket No. 30]. The location of 21st Century Oncology Holdings, Inc. s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida 33907. 2 Capitalized terms used in this Order and not immediately defined have the meanings given to such terms in the Application. 1
Letter ), which is annexed as Exhibit 1 hereto and incorporated herein by reference, effective nunc pro tunc to the Petition Date, and the Rundell Declaration annexed to the Application as Exhibit B; all as more fully set forth in the Application; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the Southern District of New York, dated December 1, 2016; and that this Court may enter a final order consistent with Article III of the United States Constitution; and this Court having found that venue of this proceeding and the Application in this district is proper pursuant to 28 U.S.C. 1408 and 1409; and this Court having found that the relief requested in the Application is in the best interests of the Debtors estates, their creditors, and other parties in interest; and this Court having found that the Debtors notice of the Application and opportunity for a hearing on the Application was appropriate and no other notice need be provided; and this Court having reviewed the Application; and this Court having determined that the legal and factual bases set forth in the Application establish just cause for the relief granted herein; and upon all of the proceedings had before this Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. The Application is approved as set forth herein. 2. The terms of the Engagement Letter, including without limitation, the compensation provisions, indemnification provisions, and dispute resolution procedures attached to the Application as Exhibit C, all as modified by this Order, are reasonable terms and conditions of employment and are hereby approved, subject to the following terms, which apply notwithstanding anything in the Engagement Letter or the Application to the contrary: a. A&M and its affiliates shall not act in any other capacity (for example, and without limitation, as a financial advisor, claims agent/claims administrator, or investor/acquirer) in connection with the above-captioned cases; 2
b. In the event the Debtors seek to have A&M personnel assume executive officer positions that are different than the positions disclosed in the Motion, or to materially change the terms of the engagement by either (i) modifying the functions of personnel, (ii) adding new executive officers, or (iii) altering or expanding the scope of the engagement, a motion to modify the retention shall be filed; c. A&M shall file with the Court with copies to the United States Trustee ( U.S. Trustee ) and all official committees, a report of staffing on the engagement for the previous month. Such report shall include the names and functions filled of the individuals assigned. All staffing shall be subject to review by the Court in the event an objection is filed. d. No principal, employee or independent contractor of A&M and its affiliates shall serve as a director of any of the above-captioned Debtors during the pendency of the above-captioned cases; e. A&M shall file with the Court, and provide notice to the U.S. Trustee and all official committees, reports of compensation earned and expenses incurred on a quarterly basis. Such reports shall contain summary charts which describe the services provided, identify the compensation earned by each executive officer and staff employee provided, and itemize the expenses incurred. All compensation shall be subject to review by the Court in the event an objection is filed; f. Notwithstanding the requirements of paragraph (e) above, the Debtors are authorized, but not directed, to pay, in the ordinary course of business, all amounts invoiced by A&M for fees and expenses incurred in connection with A&M s retention; g. Notwithstanding anything herein to the contrary, success fees, transaction fees, or other back-end fees (including without limitation the Completion Fee) shall be approved by the Court at the conclusion of the case on a reasonableness standard and are not being pre-approved by entry of this Order. No success fee, transaction fee or back-end fee shall be sought upon conversion of the case, dismissal of the case for cause, or appointment of a trustee; h. For a period of three years after the conclusion of the engagement, neither A&M nor any of its affiliates shall make any investments in the Debtors or the Reorganized Debtors; and i. A&M shall disclose any and all facts that may have a bearing on whether A&M, its affiliates, and/or any individuals working on the engagement have any interest materially adverse to the interest of the Debtors estates or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for 3
any other reason. The obligation to disclose identified in this subparagraph is a continuing obligation. 3. Notwithstanding the indemnification provisions in the Engagement Letter, the only A&M professionals eligible for indemnification by the Debtors shall be those who are serving as officers of the Debtors. The indemnification provided to such A&M personnel serving in such roles shall be on the same terms as provided to the Debtors other officers and directors under the respective corporate bylaws and applicable state law, along with insurance coverage under the Debtors director s and officer s liability policies. The Debtors shall not have any liability or obligation for claims, liabilities, expenses, damages or costs resulting from claims that are determined by a final non-appealable court order to have resulted from A&M s bad faith, gross negligence, self-dealing, willful misconduct or violations of law. 4. The Debtors are authorized, but not directed, to pay, in the ordinary course of business, all amounts invoiced by A&M for fees and expenses incurred in connection with its retention. 5. The Debtors retention of A&M to provide the Debtors with a CEO, CFO, Tax VP, and certain Additional Personnel to assist them, on the terms and conditions set forth in the Application and the Engagement Letter is hereby approved nunc pro tunc to the Petition Date. 6. To the extent there is inconsistency between the terms of the Engagement Letter, the Application, and this Order, the terms of this Order shall govern. 7. The Debtors are authorized to take all actions necessary to effectuate the relief granted in this Order in accordance with the Application. 8. Notwithstanding anything to the contrary in the Application or Engagement Letter, including any arbitration, dispute resolution or jurisdictional provisions, this Court retains 4
exclusive jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of this Order and the Engagement Letter. White Plains, New York Dated: July, 2017 THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE 5
Exhibit 1 Engagement Letter 6
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Exhibit B Redline of Proposed Order
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: 21st CENTURY ONCOLOGY HOLDINGS, INC., et al., 1 Debtors. ) ) Chapter 11 ) ) Case No. 17-22770 (RDD) ) ) (Jointly Administered) ) ORDER (I) AUTHORIZING THE DEBTORS TO RETAIN ALVAREZ & MARSAL HEALTHCARE INDUSTRY GROUP, LLC TO PROVIDE THE DEBTORS A CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, VICE-PRESIDENT OF TAX, AND CERTAIN ADDITIONAL PERSONNEL AND (II) DESIGNATE PAUL B. RUNDELL AS CHIEF EXECUTIVE OFFICER, DOUGLAS STAUT AS CHIEF FINANCIAL OFFICER, AND MARK TRIVETTE AS VICE-PRESIDENT OF TAX FOR THE DEBTORS NUNC PRO TUNC TO THE PETITION DATE Upon the Application, (the Application ) 2 of the above-captioned debtors and debtors in possession (collectively, the Debtors ) for entry of an order (this Order ): (a) authorizing the Debtors to retain Alvarez & Marsal Healthcare Industry Group, LLC ( A&M ) to provide the Debtors with a chief executive officer ( CEO ), chief financial officer ( CFO ), a vice president of tax ( Tax VP ), and certain additional personnel (the Additional Personnel, and collectively with the CEO, CFO, and Tax VP, the Engagement Personnel ); and (b) approving the designation of Paul B. Rundell as CEO, Douglas Staut as CFO, and Mark Trivette as Tax VP for the Debtors in accordance with the terms and conditions set forth in the engagement letter dated 1 Each of the Debtors in the above-captioned jointly administered chapter 11 cases and their respective tax identification numbers are set forth in the Order Directing Joint Administration of Chapter 11 Cases [Docket No. 30]. The location of 21st Century Oncology Holdings, Inc. s corporate headquarters and the Debtors service address is: 2270 Colonial Boulevard, Fort Myers, Florida 33907. 2 Capitalized terms used in this Order and not immediately defined have the meanings given to such terms in the Application. 1
February 28, 2017 as amended and supplemented from time to time (collectively with all amendments and supplements, including the Completion Fee supplement, the Engagement Letter ), which is annexed as Exhibit 1 hereto and incorporated herein by reference, effective nunc pro tunc to the Petition Date, and the Rundell Declaration annexed to the Application as Exhibit B; all as more fully set forth in the Application; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the Southern District of New York, dated December 1, 2016; and that this Court may enter a final order consistent with Article III of the United States Constitution; and this Court having found that venue of this proceeding and the Application in this district is proper pursuant to 28 U.S.C. 1408 and 1409; and this Court having found that the relief requested in the Application is in the best interests of the Debtors estates, their creditors, and other parties in interest; and this Court having found that the Debtors notice of the Application and opportunity for a hearing on the Application was appropriate and no other notice need be provided; and this Court having reviewed the Application and having heard the statements in support of the relief requested therein at a hearing before this Court (the Hearing );; and this Court having determined that the legal and factual bases set forth in the Application and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before this Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. The Application is approved as set forth herein. 2. The terms of the Engagement Letter, including without limitation, the compensation provisions, indemnification provisions, and dispute resolution procedures attached to the Application as Exhibit C, all as modified by this Order, are reasonable terms and conditions 2
of employment and are hereby approved, subject to the following terms, which apply notwithstanding anything in the Engagement Letter or the Application to the contrary: a. A&M and its affiliates shall not act in any other capacity (for example, and without limitation, as a financial advisor, claims agent/claims administrator, or investor/acquirer) in connection with the above-captioned cases; b. In the event the Debtors seek to have A&M personnel assume executive officer positions that are different than the positions disclosed in the Motion, or to materially change the terms of the engagement by either (i) modifying the functions of personnel, (ii) adding new executive officers, or (iii) altering or expanding the scope of the engagement, a motion to modify the retention shall be filed; c. A&M shall file with the Court with copies to the United States Trustee ( U.S. Trustee ) and all official committees, a report of staffing on the engagement for the previous month. Such report shall include the names and functions filled of the individuals assigned. All staffing shall be subject to review by the Court in the event an objection is filed. d. No principal, employee or independent contractor of A&M and its affiliates shall serve as a director of any of the above-captioned Debtors during the pendency of the above-captioned cases; e. A&M shall file with the Court, and provide notice to the U.S. Trustee and all official committees, reports of compensation earned and expenses incurred on a quarterly basis. Such reports shall contain summary charts which describe the services provided, identify the compensation earned by each executive officer and staff employee provided, and itemize the expenses incurred. All compensation shall be subject to review by the Court in the event an objection is filed; f. Notwithstanding the requirements of paragraph (e) above, the Debtors are authorized, but not directed, to pay, in the ordinary course of business, all amounts invoiced by A&M for fees and expenses incurred in connection with A&M s retention; g. SuccessNotwithstanding anything herein to the contrary, success fees, transaction fees, or other back-end fees (including without limitation the Completion Fee) shall be approved by the Court at the conclusion of the case on a reasonableness standard and are not being pre-approved by entry of this Order. No success fee, transaction fee or back-end fee shall be sought upon conversion of the case, dismissal of the case for cause, or appointment of a trustee; 3
h. For a period of three years after the conclusion of the engagement, neither A&M nor any of its affiliates shall make any investments in the Debtors or the Reorganized Debtors; and i. A&M shall disclose any and all facts that may have a bearing on whether A&M, its affiliates, and/or any individuals working on the engagement have any interest materially adverse to the interest of the Debtors estates or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors, or for any other reason. The obligation to disclose identified in this subparagraph is a continuing obligation. 3. Notwithstanding the indemnification provisions in the Engagement Letter, the only A&M professionals eligible for indemnification by the Debtors shall be those who are serving as officers of the Debtors. The indemnification provided to such A&M personnel serving in such roles shall be on the same terms as provided to the Debtors other officers and directors under the respective corporate bylaws and applicable state law, along with insurance coverage under the Debtors director s and officer s liability policies. The Debtors shall not have any liability or obligation for claims, liabilities, expenses, damages or costs resulting from claims that are determined by a final non-appealable court order to have resulted from A&M s bad faith, gross negligence, self-dealing, willful misconduct or violations of law. 3.4. The Debtors are authorized, but not directed, to pay, in the ordinary course of business, all amounts invoiced by A&M for fees and expenses incurred in connection with its retention. 4.5. The Debtors retention of A&M to provide the Debtors with a CEO, CFO, Tax VP, and certain Additional Personnel to assist them, on the terms and conditions set forth in the Application and the Engagement Letter is hereby approved nunc pro tunc to the Petition Date. 5.6. To the extent there is inconsistency between the terms of the Engagement Letter, the Application, and this Order, the terms of this Order shall govern. 4
6.7. The Debtors are authorized to take all actions necessary to effectuate the relief granted in this Order in accordance with the Application. 7.8. ThisNotwithstanding anything to the contrary in the Application or Engagement Letter, including any arbitration, dispute resolution or jurisdictional provisions, this Court retains exclusive jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of this Order and the Engagement Letter. New YorkWhite Plains, New York Dated: July [ ],, 2017 THE HONORABLE ROBERT D. DRAIN UNITED STATES BANKRUPTCY JUDGE 5
Exhibit 1 Engagement Letter 1