Advertisement

Ezra Bankruptcy KEIP Approval Sought

Advertisement

Ezra Holdings filed with the U.S. Bankruptcy Court a motion for entry of an order authorizing implementation of an employee incentive plan and payment of obligations arising thereunder as administrative expenses.

The motion explains, “EMITS is the global information technology (‘IT’) organization and IT shared service provider serving Ezra Holdings Limited (‘Ezra’) and its related companies spanning the United States, Europe, Africa, the Asia Pacific and offshore vessels….Since the Petition Date, EMITS has lost several key personnel, including its Head of Applications, Senior Application Engineer (Reporting), and Senior Network Engineer.…The ECS Debtors sold substantially all of their assets to a third-party (‘Subsea 7′) and confirmed a liquidating plan, which became effective on June 29, 2017….In recognition of the significant additional efforts required by EMITS in performing under the amended service agreement, and the criticality of EMITS retaining its key personnel during the transition period, ECS agreed to the following significant terms in the agreement: (a) payment of monthly fixed fees of $300,000 – a $60,000 per-month increase from the normal fee structure charged by EMITS to ECS prior to the transition; (b) milestone bonus payments of $80,000 and $160,000 in September 2017 and at the conclusion of the transition period; and (c) payment of $3 million to EMITS as a cure related to unpaid services provided by EMITS to ECS prior to ECS’ bankruptcy filing.”

In addition, “This added expense pales in comparison to the total financial benefit EMITS will receive under the amended service agreement of approximately $3.6 million, plus the continuing revenue EMITS receives from its other counterparties through ongoing support services. All of these revenues would be at risk if EMITS’ employees do not continue with the company during this time.” The Court scheduled a December 19, 2017 hearing to consider the motion.

Read more bankruptcy news.