IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re Chapter 11 RASER TECHNOLOGIES, INC., et al., 1 Case No. 11-11315 (KJC Debtors. (Joint Administration Requested MOTION FOR AN ORDER ESTABLISHING PROCEDURES FOR INTERIM COMPENSATION AND REIMBURSEMENT OF EXPENSES OF PROFESSIONALS The above-captioned debtors and debtors-in-possession (collectively, the Debtors, by their undersigned counsel, hereby move the Court for entry of an order, the proposed form of which is attached hereto as Exhibit A, pursuant to sections 105(a and 331 of Title 11 of the United States Code, 11 U.S.C. 101-1532 (as amended, the Bankruptcy Code and Rule 2016(a of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules, establishing procedures for the allowance and payment of compensation and reimbursement for attorneys and other professionals (collectively, the Professionals whose services are authorized by the Court pursuant to sections 327 or 1103 of the Bankruptcy Code and who are required to file applications for allowance of compensation and reimbursement of expenses pursuant to sections 330 and 331 of the Bankruptcy Code and Rule 2016(a of the Bankruptcy Rules (the Motion. In support of this Motion, the Debtors rely on the Declaration of Nicholas Goodman in support 1 The Debtors are the following: Raser Technologies, Inc., Raser Technologies Operating Company, Inc, Raser Power Systems, LLC, RT Patent Company, Inc., Pacific Renewable Power, LLC, Western Renewable Power, LLC, Intermountain Renewable Power, LLC, Los Lobos Renewable Power, LLC, Columbia Renewable Power, LLC, Truckee Geothermal No. 1 SV-01, LLC, Truckee Geothermal No. 2, SV-04, LLC, Trail Canyon Geothermal No. 1 SV-02, LLC, Devil s Canyon Geothermal No. 1 SV-03, LLC, Thermo No. 1 BE-01, LLC, Thermo No. 2 BE-02, LLC, Thermo No. 3 BE-03, LLC, Cricket Geothermal No. 1 MI-01, LLC, Harmony Geothermal No. 1 IR-01, LLC, Lightning Dock Geothermal HI- 01, LLC, and Klamath Geothermal No. 1 KL-01, LLC. For the purpose of these chapter 11 cases, the service address for all Debtors is: Raser Technologies, Inc., 5152 North Edgewood Drive, Provo, UT 84604.
of Chapter 11 Petitions and Related Motions (the Goodman Declaration. In further support of this Motion, the Debtors submit as follows: I. Jurisdiction, Venue and Predicates for Relief 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 1334(b. Venue is proper pursuant to 28 U.S.C. 1408 and 1409. This matter is a core proceeding within the meaning of 28 U.S.C. 157(b(2. 2. The statutory predicates for the relief requested herein are sections 105(a and 331 of the Bankruptcy Code. II. Background 3. On the date hereof (the Petition Date, each of the Debtors filed with the Court their respective voluntary petitions for relief under chapter 11 of the Bankruptcy Code, commencing the above-captioned chapter 11 cases. The Debtors continue to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107(a and 1108 of the Bankruptcy Code. The Debtors have, pursuant to a separate motion, moved the Court for an order authorizing the joint administration of these chapter 11 cases. 4. No creditors committee has been appointed in these cases. No trustee or examiner has been appointed. 5. A full description of the Debtors business operations, corporate structures, capital structures, and reasons for commencing these cases is set forth in full in the Goodman Declaration, which was filed contemporaneously with this Motion and which is incorporated herein by reference. Additional facts in support of the specific relief sought herein are set forth below. 2
III. Relief Requested 6. The Debtors seek the entry of an administrative order pursuant to sections 105(a and 331 of the Bankruptcy Code establishing procedures for the payment of fees and reimbursement of expenses for professionals retained in these chapter 11 cases. Section 331 of the Bankruptcy Code allows courts discretion in determining the frequency of disbursements of professional fees and expenses. Accordingly, the Debtors request that the Court exercise its discretion and allow monthly compensation for Professionals in these cases. 7. By applications filed on the Petition Date or expected to be filed shortly thereafter, the Debtors are seeking approval to retain and employ, pursuant to section 327 of the Bankruptcy Code: (i Hunton & Williams LLP, as bankruptcy counsel; (ii Canaccord Genuity, as financial advisors; (iii Sichenzia Ross Friedman Ference LLP, as general corporate counsel; and (iv Bayard, P.A., as conflicts/local counsel. A statutory committee of unsecured creditors may be appointed in these cases, and likely would retain counsel, and possibly other professionals, to represent it. 8. Specifically, the Debtors propose that the monthly payment of compensation and reimbursement of expenses of Professionals be structured as follows: (a On or after the 20 th day of each calendar month, beginning with June 2011, each Professional seeking interim compensation may file with the Court a monthly application (a Monthly Fee Application, pursuant to section 331 of the Bankruptcy Code, for interim approval and allowance of compensation for services rendered and reimbursement of expenses incurred during the immediately preceding month (the Monthly Compensation Period and serve a copy of such Monthly Fee Application by hand or overnight or electronic delivery, on the following parties (collectively, the Notice Parties : (i the Debtors, c/o Raser Technologies, Inc., 5152 North Edgewood Drive, Provo, Utah 84604 (Attn: John Perry; (ii counsel to Debtors, Hunton & Williams LLP, 200 Park Avenue, 53 rd Floor, New York, New York 10166-1036 (Attn: Peter S. Partee, Esq.; (iii counsel to Debtors, Hunton & Williams LLP, Riverfront Plaza, East Tower, 951 E. Byrd St., Richmond, Virginia 23219 (Attn: Michael G. Wilson, Esq.; (iv conflicts/local counsel, Bayard, P.A., 3
222 Delaware Avenue, Suite 900, P.O. Box 25130, Wilmington, Delaware 19899 (Attn: Neil B. Glassman, Esq.; (v counsel to the DIP lender, Hogan Lovells US LLP, 875 Third Avenue, New York, NY 10022 (Attn: Christopher R. Donoho, III, Esq.; (vi the attorneys for any statutory committees appointed in these cases; and (vii the Office of the United States Trustee for the District of Delaware (the U.S. Trustee, 844 King Street, Room 2207, Lockbox #35, Wilmington, DE 19801, Attn: William K. Harrington. Any Professional that fails to file a Monthly Fee Application for a particular month or months may subsequently submit a consolidated Monthly Fee Application for a particular month or months. All Monthly Fee Applications shall comply with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules, applicable law, the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules, and the Guidelines established by the Office of the United States Trustee. (b (c Each Notice Party will have twenty (20 days after filing and service of a Monthly Fee Application to object to such application (the Objection Deadline. Upon the expiration of the Objection Deadline, each Professional may file a certificate of no objection or a certificate of partial no objection with the Court, whichever is applicable, after which the Debtors are authorized to pay each Professional an amount (the Actual Payment equal to the lesser of (i eighty percent (80% of the fees and one hundred percent (100% of the expenses requested in the Monthly Fee Application (the Maximum Payment, and (ii eighty percent (80% of the fees and one hundred percent (100% of the expenses not subject to an objection pursuant to subparagraph (c below. If any Notice Party objects to a Professional s Monthly Fee Application, it must file with the Court and serve on the affected Professional and each of the Notice Parties a written objection (the Objection, which must be filed with the Court and received by the affected Professional and the Notice Parties on or before the Objection Deadline. Thereafter, the objecting party and the affected Professional may attempt to resolve the Objection on a consensual basis. If the parties are unable to reach a resolution of the Objection within twenty (20 days after service of the Objection, the affected Professional may either: (i file a response to the Objection with the Court, together with a request for payment of the difference, if any, between the Maximum Payment and the Actual Payment made to the affected Professional (the Incremental Amount ; or (ii forego payment of the Incremental Amount until the next interim or final fee application hearing, at which time the Court will consider and dispose of the Objection if requested by the parties. 4
(d (e (f (g (h Each Professional may submit the First Monthly Fee Application on or about June 20, 2011, and such Monthly Fee Application shall be for the period from the Petition Date through May 31, 2011. Beginning with the period ending July 31, 2011, and at three-month intervals or such other intervals convenient to the Court (the Interim Fee Period, each Professional may file with the Court and serve on the Notice Parties a request, pursuant to section 331 of the Bankruptcy Code, for interim Court approval and allowance of the compensation and reimbursement of expenses sought in the Monthly Fee Applications filed during the Interim Fee Period (an Interim Fee Application. The Interim Fee Application, must include a brief description identifying (i the Monthly Fee Applications that are the subject of the request, (ii the amount of fees and expenses requested, (iii the amount of fees and expenses paid to date or subject to an Objection, (iv the deadline for other parties and the Notice Parties to file objections (the Additional Objections to the Interim Fee Applications, and (v any other information requested by the Court or required by the Local Rules. Objections, if any, to the Interim Fee Application shall be filed and served upon the affected Professional and the Notice Parties so as to be received on or before the 20 th day following service of the applicable Interim Fee Application. Each Professional should file and serve its Interim Fee Application within forty-five (45 days of the conclusion of the Interim Fee Period for which the request seeks allowance of fees and reimbursement of expenses. The first Interim Fee Application shall cover the period from the Petition Date and through and including July 31, 2011, and may be filed on or before September 14, 2011. The Debtors shall request a hearing on the pending Interim Fee Applications at least every six (6 months. The Debtors, however, may request that a hearing be held every three (3 months or at such other intervals as the Court deems appropriate. The pendency of an objection to payment of compensation or reimbursement of expenses will not disqualify a Professional from the future payment of compensation or reimbursement of expenses, unless the Court orders otherwise. In addition, any Professional that fails to file a Monthly Fee Application or an Interim Fee Application when due or permitted will be ineligible to receive further interim payments of fees or expenses under the compensation procedures until such time as a Monthly Fee Application or Interim Fee Application is submitted by the Professional. There will be no other penalties for failing to file a Monthly Fee Application or Interim Fee Application in a timely manner. 5
(i Neither (a the payment of or the failure to pay in whole or in part, a Monthly Fee Application nor (b the filing of or failure to file an objection to a Monthly Fee Application will bind any party in interest or the Court with respect to the allowance of interim or final applications for compensation and reimbursement of expenses of the Professionals. All fees and expenses paid to the Professionals are subject to disgorgement until final allowance by the Court. 9. The Debtors further request that (i only the Notice Parties be entitled to receive the Monthly Fee Applications, the Interim Fee Applications and the notice of hearing thereon (the Hearing Notice, and (ii all other parties who have filed a request for service pursuant to Rule 2002 of the Bankruptcy Rules be entitled to receive only the Hearing Notice. 2 Such notice should reach the parties most active in these cases and will save the expense of undue duplication and mailing of lengthy fee applications. 10. The Debtors will include all payments made to Professionals in accordance with the compensation procedures in their monthly operating reports, identifying the amount paid to each of the Professionals. 11. All time periods referenced in this Motion will be calculated in accordance with Bankruptcy Rule 9006(a. 12. The procedures proposed above will enable the Debtors to closely monitor the costs of administration, maintain level cash flow and implement efficient cash management procedures. Moreover, these procedures also will allow the Court and the key parties in interest to ensure the reasonableness and necessity of the compensation and reimbursement sought pursuant to such procedures. 2 If any party that has received only a Hearing Notice requests a copy of any fee applications, the Debtors will furnish that party with the requested copies at the Debtors expense. 6
IV. BASIS FOR RELIEF REQUESTED 13. Section 331 of the Bankruptcy Code provides in relevant part, as follows: A trustee, an examiner, a debtor s attorney, or any professional person employed under section 327 or 1103 of this title may apply to the court not more than once every 120 days after an order for relief in a case under this title, or more often if the court permits, for such compensation for services rendered before the date of such an application or reimbursement for expenses incurred before such date as is provided under section 330 of this title. 11 U.S.C. 331. 14. In addition, section 105(a of the Bankruptcy Code provides, in relevant part, that [t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. 11 U.S.C. 105(a. 15. Procedures similar to those proposed herein have been approved in other chapter 11 cases in this District. See, e.g., In re Appleseed s Intermediate Holdings LLC, Case No. 11-10160 (KG (Bankr. D. Del. Feb. 18, 2011; In re Local Insight Media Holdings, Inc., Case No. 10-13677 (KG (Bankr. D. Del. Dec. 17, 2010; In re OTC Holdings Corp., Case No. 10-12636 (BLS (Bankr. D. Del. Sep. 17, 2010; In re NEC Holdings Corp., Case No. 10-11890 (PJW (Bankr. D. Del. July 13, 2010; In re MiddleBrook Pharmaceuticals, Inc., Case No. 10-11485 (MFW (Bankr. D. Del. June 4, 2010. 3 Furthermore, the Debtors submit that these procedures are needed to avoid having Professionals fund the cases. V. Notice 16. Notice of this Motion has been provided to: (a the U.S. Trustee; and (b the creditors holding the 30 largest unsecured claims against the Debtors estates, as identified in the 3 Because of the voluminous nature of the orders cited herein, such orders are not attached to this Motion. Copies of these orders are available upon request to Debtors counsel. 7
Debtors chapter 11 petitions. The Debtors submit that no other or further notice need be provided. VI. No Prior Request 17. No prior motion for the relief requested herein has been made to this or any other court. 8
WHEREFORE, the Debtors respectfully request that the Court (a enter an order substantially in the form annexed hereto as Exhibit A, granting the relief requested herein, and (b grant to the Debtors such other and further relief as the Court may deem proper. Dated: April 29, 2011 Wilmington, Delaware BAYARD, P.A. By: /s/ Neil B. Glassman Neil B. Glassman (No. 2087 Jamie L. Edmonson (No. 4247 GianClaudio Finizio (No. 4253 222 Delaware Avenue, Suite 900 Wilmington, DE 19801 Phone: (302 655-5000 Fax: (302 658-6395 nglassman@bayardlaw.com jedmonson@bayardlaw.com gfinizio@bayardlaw.com Peter S. Partee, Sr. (N.Y. Bar No. 4484234 Richard P. Norton (N.Y. Bar No. 3975737 HUNTON & WILLIAMS LLP 200 Park Avenue, 53 rd Floor New York, New York 10166-0136 Telephone: (212 309-1000 Telecopier: (212 309-1100 -and- -and- Michael G. Wilson (VSB No. 48927, DE No. 4022 Henry P. (Toby Long, III (VSB No. 75134 HUNTON & WILLIAMS LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, Virginia 788-8200 Telecopier: (804 788-8218 Proposed Attorneys for Debtors and Debtors-in- Possession 9
EXHIBIT A A-1
IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re Chapter 11 RASER TECHNOLOGIES, INC., et al., 1 Case No. 11-11315 (KJC Debtors. (Joint Administration Requested ORDER ESTABLISHING PROCEDURES FOR INTERIM MONTHLY COMPENSATION AND REIMBURSEMENT OF EXPENSES OF PROFESSIONALS Upon the motion (the Motion 2 of the above-captioned debtors and debtors-inpossession (the Debtors for entry of an order (a establishing a procedure for the allowance and payment of compensation and reimbursement for attorneys and other professionals (collectively, the Professionals whose services are authorized by the Court pursuant to sections 327 or 1103 of the Bankruptcy Code and who are required to file applications for allowance of compensation and reimbursement of expenses pursuant to sections 330 and 331 of the Bankruptcy Code and Bankruptcy Rule 2016(a; and (b establishing a procedure for reimbursement of reasonable out-of-pocket expenses incurred by members of any statutory committees appointed in these cases, the Court finds that (i it has jurisdiction over the matters raised in the Motion pursuant to 28 U.S.C. 157 and 1334(b; (ii this is a core proceeding 1 2 The Debtors are the following: Raser Technologies, Inc., Raser Technologies Operating Company, Inc, Raser Power Systems, LLC, RT Patent Company, Inc., Pacific Renewable Power, LLC, Western Renewable Power, LLC, Intermountain Renewable Power, LLC, Los Lobos Renewable Power, LLC, Columbia Renewable Power, LLC, Truckee Geothermal No. 1 SV-01, LLC, Truckee Geothermal No. 2, SV-04, LLC, Trail Canyon Geothermal No. 1 SV-02, LLC, Devil s Canyon Geothermal No. 1 SV-03, LLC, Thermo No. 1 BE-01, LLC, Thermo No. 2 BE-02, LLC, Thermo No. 3 BE-03, LLC, Cricket Geothermal No. 1 MI-01, LLC, Harmony Geothermal No. 1 IR-01, LLC, Lightning Dock Geothermal HI- 01, LLC, and Klamath Geothermal No. 1 KL-01, LLC. For the purpose of these chapter 11 cases, the service address for all Debtors is: Raser Technologies, Inc., 5152 North Edgewood Drive, Provo, UT 84604. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Motion.
pursuant to 28 U.S.C. 157(b(2; (iii the relief requested in the Motion is in the best interest of the Debtors, their estates and their creditors; (iv proper and adequate notice of the Motion and the hearing thereon has been given and that no other or further notice is necessary; and (v upon the record herein after due deliberation thereon, good and sufficient cause exists for the granting of the relief as set forth herein. Therefore, IT IS HEREBY ORDERED THAT: 1. The Motion is GRANTED. 2. Except as may otherwise be provided in orders of the Court authorizing the retention of specific professionals, all Professionals in these cases may seek monthly compensation in accordance with the following procedure: (a On or after the 20 th day of each calendar month, beginning with June 2011, each Professional seeking interim compensation may file with the Court a monthly application (a Monthly Fee Application, pursuant to section 331 of the Bankruptcy Code, for interim approval and allowance of compensation for services rendered and reimbursement of expenses incurred during the immediately preceding month (the Monthly Compensation Period and serve a copy of such Monthly Fee Application by hand or overnight or electronic delivery, on the following parties (collectively, the Notice Parties : (i the Debtors, c/o Raser Technologies, Inc., 5152 North Edgewood Drive, Provo, Utah 84604 (Attn: John Perry; (ii counsel to Debtors, Hunton & Williams LLP, 200 Park Avenue, 53 rd Floor, New York, New York 10166-1036 (Attn: Peter S. Partee, Esq.; (iii counsel to Debtors, Hunton & Williams LLP, Riverfront Plaza, East Tower, 951 E. Byrd St., Richmond, Virginia 23219 (Attn: Michael G. Wilson, Esq.; (iv conflicts/local counsel, Bayard, P.A., 222 Delaware Avenue, Suite 900, P.O. Box 25130, Wilmington, Delaware 19899 (Attn: Neil B. Glassman, Esq.; (v counsel to the DIP lender, Hogan Lovells US LLP, 875 Third Avenue, New York, NY 10022 (Attn: Christopher R. Donoho, III, Esq.; (vi the attorneys for any statutory committees appointed in these cases; and (vii the Office of the United States Trustee for the District of Delaware (the U.S. Trustee, 844 King Street, Room 2207, Lockbox #35, Wilmington, DE 19801, Attn: William K. Harrington. Any Professional that fails to file a Monthly Fee Application for a particular month or months may subsequently submit a consolidated Monthly Fee Application for a particular month or months. All Monthly Fee Applications shall comply with the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules, 2
applicable law, the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Rules, and the Guidelines established by the Office of the United States Trustee. (b (c (d (e Each Notice Party will have twenty (20 days after filing and service of a Monthly Fee Application to object to such application (the Objection Deadline. Upon the expiration of the Objection Deadline, each Professional may file a certificate of no objection or a certificate of partial no objection with the Court, whichever is applicable, after which the Debtors are authorized to pay each Professional an amount (the Actual Payment equal to the lesser of (i eighty percent (80% of the fees and one hundred percent (100% of the expenses requested in the Monthly Fee Application (the Maximum Payment, and (ii eighty percent (80% of the fees and one hundred percent (100% of the expenses not subject to an objection pursuant to subparagraph (c below. If any Notice Party objects to a Professional s Monthly Fee Application, it must file with the Court and serve on the affected Professional and each of the Notice Parties a written objection (the Objection, which must be filed with the Court and received by the affected Professional and the Notice Parties on or before the Objection Deadline. Thereafter, the objecting party and the affected Professional may attempt to resolve the Objection on a consensual basis. If the parties are unable to reach a resolution of the Objection within twenty (20 days after service of the Objection, the affected Professional may either: (i file a response to the Objection with the Court, together with a request for payment of the difference, if any, between the Maximum Payment and the Actual Payment made to the affected Professional (the Incremental Amount ; or (ii forego payment of the Incremental Amount until the next interim or final fee application hearing, at which time the Court will consider and dispose of the Objection if requested by the parties. Each Professional may submit the First Monthly Fee Application on or about June 20, 2011, and such Monthly Fee Application shall be for the period from the Petition Date through May 31, 2011. Beginning with the period ending July 31, 2011, and at three-month intervals or such other intervals convenient to the Court (the Interim Fee Period, each Professional may file with the Court and serve on the Notice Parties a request, pursuant to section 331 of the Bankruptcy Code, for interim Court approval and allowance of the compensation and reimbursement of expenses sought in the Monthly Fee Applications filed during the Interim Fee Period (an Interim Fee Application. The Interim Fee Application must include a brief description identifying (i the Monthly Fee Applications that are the subject of the request, (ii the amount of fees and expenses requested, (iii the amount of fees and 3
expenses paid to date or subject to an Objection, (iv the deadline for other parties and the Notice Parties to file objections (the Additional Objections to the Interim Fee Applications, and (v any other information requested by the Court or required by the Local Rules. Objections, if any, to the Interim Fee Application shall be filed and served upon the affected Professional and the Notice Parties so as to be received on or before the 20 th day following service of the applicable Interim Fee Application. (f (g (h (i Each Professional should file and serve its Interim Fee Application within forty-five (45 days of the conclusion of the Interim Fee Period for which the request seeks allowance of fees and reimbursement of expenses. The first Interim Fee Application shall cover the period from the Petition Date and through and including July 31, 2011, and may be filed on or before July 31, 2011. The Debtors shall request a hearing on the pending Interim Fee Applications at least every six (6 months. The Debtors, however, may request that a hearing be held every three (3 months or at such other intervals as the Court deems appropriate. The pendency of an objection to payment of compensation or reimbursement of expenses will not disqualify a Professional from the future payment of compensation or reimbursement of expenses, unless the Court orders otherwise. In addition, any Professional that fails to file a Monthly Fee Application or an Interim Fee Application when due or permitted will be ineligible to receive further interim payments of fees or expenses under the compensation procedures until such time as a Monthly Fee Application or Interim Fee Application is submitted by the Professional. There will be no other penalties for failing to file a Monthly Fee Application or Interim Fee Application in a timely manner. Neither (a the payment of or the failure to pay in whole or in part, a Monthly Fee Application nor (b the filing of or failure to file an objection to a Monthly Fee Application will bind any party in interest or the Court with respect to the allowance of interim or final applications for compensation and reimbursement of expenses of the Professionals. All fees and expenses paid to the Professionals are subject to disgorgement until final allowance by the Court. 4
3. Only the Notice Parties shall be entitled to receive the Monthly Fee Applications, the Interim Fee Applications and the notice of hearing thereon (the Hearing Notice, and all other parties who file a request for service pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure shall be entitled to receive only the Hearing Notice. 4. The Debtors shall include all payments made to Professionals on the monthly operating report, identifying the amount paid to each of the Professionals. 5. All time periods set forth in this Order shall be calculated in accordance with Rule 9006(a of the Bankruptcy Rules. 6. This court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation of this Order. Dated:, 2011 Wilmington, Delaware HONORABLE KEVIN J. CAREY CHIEF UNITED STATES BANKRUPTCY JUDGE 5