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Full title: Emergency Motion for Entry of an Order Approving Performance Bonus Payments Filed by Debtors ASAIG, LLC, Aztec/Shaffer, LLC Hearing scheduled for 4/12/2021 at 02:30 PM at telephone and video conference. (Attachments: # 1 Proposed Order) (O'Connor, Ryan) (Entered: 04/09/2021)

Document posted on Apr 8, 2021 in the bankruptcy, 12 pages and 0 tables.

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In re: § § Case No. 20-35600 ASAIG, LLC, et al., § § Chapter 11 Debtors.1 § § (Jointly Administered) DEBTORS’ EMERGENCY MOTION FOR ENTRY OF AN ORDER APPROVING PERFORMANCE BONUS PAYMENTS EMERGENCY RELIEF HAS BEEN REQUESTED.Thus, although the Chief Executive Officer (“CEO”) and Chief Operations Offer (“COO”) were ultimately excluded from the Key Employee Incentive Plan implemented by the Debtors, the Court preserved the Debtors’ ability to seek authority to pay the CEO and COO a performance bonus upon closing of a sale for their efforts assisting the Debtors in facilitating the 2 The Debtors agreed to limit the total amount of payments to one percent (1%) of the sale price not to exceed $300,000 in the aggregate.By this Motion, the Debtors seek entry of an order substantially in the form attached hereto: (a) authorizing and approving a performance bonus payment to the CEO in the amount of $89,600; (b) authorizing and approving a performance bonus payment to the COO in the amount of $51,200; and (c) granting related relief, including allowance of the performance bonus payments as administrative expenses in the Chapter 11 Cases to be paid from debtor-in-possession financing in accordance with the Final DIP Order and approved budget.Although the CEO and COO hold officer titles and are considered “insiders” as that term is defined in section 101(31) of the Bankruptcy Code, these officers (i) did not have any control or decision-making authority for the Debtors with respect to the sale process or the Chapter 11 Cases generally; (ii) do not own any equity in either of the Debtors; and (iii) did not influence the Chief Restructuring Officer’s decision to seek payment of the performance bonuses requested herein.Their substantial efforts to assist the Debtors and their professionals in seeing the sale process through to its conclusion justifies the instant request for payment of performance bonuses under the facts and circumstances of these Chapter 11 Cases.

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION In re: § § Case No. 20-35600 ASAIG, LLC, et al., § § Chapter 11 Debtors.1 § § (Jointly Administered) DEBTORS’ EMERGENCY MOTION FOR ENTRY OF AN ORDER APPROVING PERFORMANCE BONUS PAYMENTS EMERGENCY RELIEF HAS BEEN REQUESTED. A HEARING WILL BE CONDUCTED ON THIS MATTER ON APRIL 12, 2021 AT 2:30 P.M. IN COURTROOM 404, 4th FLOOR, UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS, 515 RUSK STREET, HOUSTON, TEXAS 77002. YOU MAY PARTICIPATE IN THE HEARING BY AUDIO/VIDEO CONNECTION. AUDIO COMMUNICATION WILL BE BY USE OF THE COURT’S DIAL-IN FACILITY. YOU MAY ACCESS THE FACILITY AT (832) 917-1510. YOU WILL BE RESPONSIBLE FOR YOUR OWN LONG-DISTANCE CHARGES. ONCE CONNECTED, YOU WILL BE ASKED TO ENTER THE CONFERENCE ROOM NUMBER. JUDGE ISGUR’S CONFERENCE ROOM NUMBER IS 954554. YOU MAY VIEW VIDEO VIA GOTOMEETING. TO USE GOTOMEETING, THE COURT RECOMMENDS THAT YOU DOWNLOAD THE FREE GOTOMEETING APPLICATION. TO CONNECT, YOU SHOULD ENTER THE MEETING CODE “JUDGEISGUR” IN THE GOTOMEETING APP OR CLICK THE LINK ON JUDGE ISGUR’S HOME PAGE ON THE SOUTHERN DISTRICT OF TEXAS WEBSITE. ONCE CONNECTED, CLICK THE SETTINGS ICON IN THE UPPER RIGHT CORNER AND ENTER YOUR NAME UNDER THE PERSONAL INFORMATION SETTING. HEARING APPEARANCES MUST BE MADE ELECTRONICALLY IN ADVANCE OF THE HEARING. TO MAKE YOUR ELECTRONIC APPEARANCE, GO TO THE SOUTHERN DISTRICT OF TEXAS WEBSITE AND SELECT “BANKRUPTCY COURT” FROM THE TOP MENU. SELECT “JUDGES’ PROCEDURES” THEN “VIEW HOME PAGE” FOR JUDGE ISGUR. UNDER “ELECTRONIC APPEARANCE” SELECT “CLICK HERE TO SUBMIT ELECTRONIC APPEARANCE”. SELECT THE CASE NAME, COMPLETE THE REQUIRED FIELDS, AND CLICK “SUBMIT” TO COMPLETE YOUR APPEARANCE. 1 The debtors and debtors in possession these chapter 11 cases, along with the last four digits of their respective Employer Identification Numbers, are as follows: Aztec / Shaffer, LLC (2038); and ASAIG, LLC (2323). The Debtors’ service address is: 601 W. 6th Street, Houston, Texas 77007.

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IF YOU OBJECT TO THE RELIEF REQUESTED OR YOU BELIEVE THAT EMERGENCY CONSIDERATION IS NOT WARRANTED, YOU MUST EITHER APPEAR AT THE HEARING OR FILE A WRITTEN RESPONSE PRIOR TO THE HEARING. OTHERWISE, THE COURT MAY TREAT THE PLEADING AS UNOPPOSED AND GRANT THE RELIEF REQUESTED. RELIEF IS REQUESTED NOT LATER THAN APRIL 12, 2021. ASAIG, LLC, et al., the above-captioned debtors and debtors in possession (collectively, the “Debtors”), hereby file this Emergency Motion for Entry of an Order Approving Performance Bonus Payments (the “Motion”), and in support hereof, respectfully state as follows: I. JURISDICTION AND VENUE 1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A). Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409. 2. The statutory predicates for the relief requested in this Motion are sections 105(a), 363, and 503 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (as amended and modified, the “Bankruptcy Code”), Rule 6004 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), Rule 9013-1 of the Bankruptcy Local Rules for the Southern District of Texas (the “Bankruptcy Local Rules”), and the Procedures for Complex Chapter 11 Cases in the Southern District of Texas (the “Complex Case Procedures”). II. BACKGROUND A. In General 3. These cases (the “Chapter 11 Cases”) commenced on November 17, 2020 (the “ASAIG Petition Date”), when ASAIG, LLC (“ASAIG”) filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the “Court”). At the same time, ASAIG directed its subsidiary, Aztec / Shaffer, LLC (“Aztec”), to also seek chapter 11 relief. After a dispute as to the propriety of the

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filing of the Aztec petition, the Court dismissed the Aztec Chapter 11 Case. ASAIG properly authorized the re-filing of the Aztec Chapter 11 Case on November 24, 2020 (the “Aztec Petition Date”). 4. Pursuant to Bankruptcy Code sections 1107(a) and 1108, the Debtors are operating their businesses and managing their property as debtors in possession. No request has been made for the appointment of a trustee or examiner. An official committee of unsecured creditors was appointed on January 13, 2021. [ECF # 144]. 5. Formed on or about April 14, 2015, Debtor Aztec is one of the premier party rental and tenting specialists in Houston, and provides services for events both domestically and internationally. The Debtor’s two business segments, Aztec Events and Shaffer Sports, have both been in business for over sixty (60) years. The Debtor was formed to purchase the businesses from the former owner, Double Eagle Sports & Events. 6. The Aztec Events segment of the business maintains the largest party and event rental inventory in the Houston metropolitan area. It services individuals and corporate clientele hosting events ranging from small weddings to large corporate retreats. The Debtor also services governmental units, including providing tents to Harris County for numerous COVID-19 testing facilities around Houston. 7. The Shaffer Sports division is a leading event rental company for sporting events throughout North America and the Caribbean. The Debtor has established itself as the go-to service provider for more than 150 major invents, including many of the PGA TOUR’s most prestigious golf tournaments, where it provides unique tenting, indoor and outdoor structures, seating, and other products designed to meet the client’s individual needs.

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8. Formed on or about January 23, 2019, Debtor ASAIG was established to act as the holding company for Debtor Aztec, its wholly-owned subsidiary. 9. The Debtors focus their efforts on acquiring and developing high-potential client relationships, including lucrative contracts for major events around the country. Currently, the Debtors’ asset portfolio consists largely of rental inventory in their Tanner Road warehouse, which is deployed to project locations as needed. B. The Chapter 11 Cases 10. On January 6, 2021, the Court entered its Final Order (I) Authorizing the Debtors to Obtain Postpetition Financing, (II) Authorizing the Debtors to Use Cash Collateral, (III) Granting Liens and Providing Superpriority Administrative Expense Status, (IV) Granting Adequate Protection, (V) Modifying the Automatic Stay, and (VI) Granting Related Relief [ECF # 126] (the “Final DIP Order”). 11. On January 26, 2021, the Court entered its Order (I) Approving and Authorizing Bidding Procedures in Connection with the Sale of Substantially All Assets (II) Approving Stalking Horse Protections, (III) Approving Procedures Related to the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, (IV) Scheduling Bid Deadline Auction Date, and Sale Hearing Date, and (V) Approving the Form and Manner of Notice Thereof [ECF # 178] (the “Bidding Procedures Order”). 12. In accordance with the Bidding Procedures Order, the Debtors held an Auction on April 6, 2021 for the sale of substantially all of their assets pursuant to section 363 of the Bankruptcy Code. See ECF # 260. Upon the conclusion of the Auction, the Debtors, exercising their business judgment, and in consultation with the Consultation Parties, selected AAS BIDCO, LLC as the Successful Bidder for the Purchased Assets. Id. The Successful Bid for the Purchased Assets is a Whole Company Bid valued by the Debtors in the amount of $25,600,000. Id. The

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Sale Hearing (as defined in the Bidding Procedures Order) is set for April 12, 2021 [ECF # 247], and the Debtors intend to promptly consummate the sale transaction in April 2021. C. The Performance Bonus Payments 13. During these Chapter 11 Cases, the Chief Restructuring Officer determined that certain employees (the “Key Employees”) were vital to maximizing the value of the Debtors’ assets in the sale process. To combat the potential exodus of the Key Employees, on February 10, 2021, the Debtors filed their Motion for Entry of an Order (I) Authorizing and Approving Key Employee Incentive Plan and (II) Granting Related Relief [ECF # 189] (the “KEIP Motion”). The KEIP Motion provided for a total payment pool of $300,000 for the Key Employees.2 14. The U.S. Trustee objected to the KEIP Motion because certain of the Debtors’ officers were included in the list of Key Employees. See ECF # 200. After a contested hearing on the KEIP Motion, the Court entered its Order (I) Authorizing and Approving Key Employee Incentive Plan and (II) Granting Related Relief [ECF # 248] (the “KEIP Order”). Among other things, the KEIP Order specifically provides: “[t]his [KEIP] Order is issued without prejudice to the Debtors’ right to seek performance bonuses for the Debtors’ Chief Executive Officer and Chief Operations Officer. The lender’s previous agreement to subordinate certain amounts to those claims will remain effective.” KEIP Order, ¶ 5. 15. Thus, although the Chief Executive Officer (“CEO”) and Chief Operations Offer (“COO”) were ultimately excluded from the Key Employee Incentive Plan implemented by the Debtors, the Court preserved the Debtors’ ability to seek authority to pay the CEO and COO a performance bonus upon closing of a sale for their efforts assisting the Debtors in facilitating the 2 The Debtors agreed to limit the total amount of payments to one percent (1%) of the sale price not to exceed $300,000 in the aggregate.

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sale and maximizing value for the estates during the Chapter 11 Cases. As discussed on the record at the hearing on the KEIP Motion, and as further evidenced in the KEIP Order entered by the Court, the AIG Lenders have consented to the payment of such performance bonus payments to the CEO and COO from their collateral. III. RELIEF REQUESTED 16. By this Motion, the Debtors seek entry of an order substantially in the form attached hereto: (a) authorizing and approving a performance bonus payment to the CEO in the amount of $89,600; (b) authorizing and approving a performance bonus payment to the COO in the amount of $51,200; and (c) granting related relief, including allowance of the performance bonus payments as administrative expenses in the Chapter 11 Cases to be paid from debtor-in-possession financing in accordance with the Final DIP Order and approved budget. IV. BASIS FOR RELIEF REQUESTED 17. The Debtors seek to pay performance bonus payments to the CEO and COO because their efforts were instrumental in promoting the robust sale process conducted by the Debtors. Specifically, their (i) institutional knowledge regarding the Debtors’ business operations; (ii) relationships with existing clients; and (iii) ability to support Debtors’ professionals in the Chapter 11 Cases were vital to conducting the marketing and sale process. Although the CEO and COO hold officer titles and are considered “insiders” as that term is defined in section 101(31) of the Bankruptcy Code, these officers (i) did not have any control or decision-making authority for the Debtors with respect to the sale process or the Chapter 11 Cases generally; (ii) do not own any equity in either of the Debtors; and (iii) did not influence the Chief Restructuring Officer’s decision to seek payment of the performance bonuses requested herein.

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A. The Performance Bonuses are a Sound Exercise of the Debtors’ Business Judgment 18. Bankruptcy Code section 363(b) provides, in relevant part, that “[t]he trustee, after notice and a hearing, may use, sell or lease, other than in the ordinary course of business, property of the estate.” 11 U.S.C. § 363(b)(1). Under Bankruptcy Code section 363(b), this Court may approve a debtor’s request for relief when the debtor demonstrates a sound business justification for seeking such relief. In re ASARCO LLC, 441 B.R. 813, 823 (S.D. Tex. 2010); In re Continental Air Lines, Inc., 780 F.2d 1223, 1226 (5th Cir. 1986). 19. Once a debtor articulates a valid business justification for a particular form of relief, the Court reviews the debtor’s request under the “business judgment rule.” The business judgment rule has vitality in chapter 11 cases and shields a debtor’s management from judicial second-guessing. In re Integrated Res., Inc., 147 B.R. 650, 656 (S.D.N.Y. 1992). The business judgment rule is a presumption that “in making a business decision the directors of a corporation acted on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests of the company.” ASARCO LLC v. Ams. Mining Corp., 396 B.R. 278, 405 (S.D. Tex. 2008); Aronson v. Lewis, 473 A.2d 805, 811 (Del. 1984). Consequently, a business decision “will be upheld unless it cannot be attributed to any rational purpose.” Freuler v. Parker, 803 F. Supp. 2d 630, 637 n.6 (S.D. Tex. 2011). 20. As set forth above, the Debtors have articulated valid business reasons for paying performance bonuses to the CEO and COO for their work during the Chapter 11 Cases, and in particular, with respect to the sale process conducted by the Debtors. The Chief Restructuring Officer determined that their efforts were crucial to obtaining the highest and best price for the Debtors’ assets, and that seeking authority to make performance bonus payments as contemplated by the KEIP Order is warranted under the circumstances. In light of this, the Debtors respectfully

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submit that it is in the best interests of the Debtors and their estates to approve the performance bonus payments. B. Performance Bonuses Are Not Prohibited by Bankruptcy Code Sections 503(c)(1) and 503(c)(2) 21. Bankruptcy Code sections 503(c)(1) and (2) govern retention, severance and other payments to “insiders.” By its plain language, section 503(c)(1) of the Bankruptcy Code pertains solely to retention payments to insiders, and section 503(c)(2) of the Bankruptcy Code pertains solely to severance payments to insiders. The Bankruptcy Code elsewhere defines “insider” as a “(i) director of the debtor; (ii) officer of the debtor; (iii) person in control of the debtor; (iv) partnership in which the debtor is a general partner; (v) general partner of the debtor; or (vi) relative of a general partner, director, officer, or person in control of the debtor.” 11 U.S.C. § 101(31)(B). 22. As discussed extensively at the hearing on the KEIP Motion, payment of performance bonuses to the CEO and COO for past work performed during the Chapter 11 Cases does not constitute a retention or severance payment to insiders, and is not prohibited by the Bankruptcy Code. After being denied the ability to participate in the Key Employee Incentive Plan, the CEO and COO were not incentivized to stay employed and assist the Debtors in the sale process, and there was no promise or guarantee that they would receive any bonus compensation with respect thereto. As the Court is aware, the Chief Restructuring Officer has exclusive decision-making authority with respect to the Debtors and their Chapter 11 Cases. In his determination, the CEO’s and COO’s efforts to assist the Debtors in the sale and transition to new ownership has provided substantial benefits to the estate. Accordingly, the Debtors do not believe the performance bonus payments are impermissible payments to insiders that would be prohibited by section 503 of the Bankruptcy Code.

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C. The Performance Bonuses Are Justified by the Facts and Circumstances of These Chapter 11 Cases 23. The Debtors submit that the decision to seek approval of the performance bonuses also satisfies the standard set forth in Bankruptcy Code section 503(c)(3), which provides: “[n]otwithstanding subsection (b), there shall neither be allowed, nor paid other transfers or obligations that are outside the ordinary course of business and not justified by the facts and circumstances of the case, including transfers made to, or obligations incurred for the benefit of, officers, managers, or consultants hired after the date of the filing of the petition.” 11 U.S.C. § 503(c)(3). 24. The majority view is that the requirement that transfers or obligations be “justified by the facts and circumstances of the case” is no different from the business judgment standard applied under 363(b), as more fully described above. In re Velo Holdings, Inc., 472 B.R. 201, 212 (Bankr. S.D.N.Y. 2012); In re Borders Group, Inc., 453 B.R. 459, 473 (Bankr. S.D.N.Y. 2011); In re Dana Corp., 358 B.R. 567, 576–77 (Bankr. S.D.N.Y. 2006); In re Nobex Corp., 2006 Bankr. LEXIS 417 (Bankr. D. Del. Jan. 19, 2006). 25. Like the payments approved by the Court in the KEIP Order, the Debtors calculated the proposed performance bonus payments based on the sale price achieved. As set forth above, the Debtors value the successful bid in the amount of $25,600,000. Accordingly, the Debtors have reduced the total payment pool down from $300,000 to one percent (1%) of the total sale price – i.e., $256,000. By this Motion, the Debtors propose that the CEO and COO share in the total payment pool with the other Key Employees based on the percentages originally submitted by the Debtors in the KEIP Motion. Accordingly, the adjusted payments to Key Employees pursuant to the KEIP Order, together with the proposed performance bonus payments to the CEO and COO, are calculated based on total available funds of $256,000 as follows:

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Table 1 on page 10. Back to List of Tables
Employee Job Title Payment % $ Amount
Ryan McMinn CEO 35% $89,600
Paul Akers COO 20% $51,200
Aida Urbaneja Controller 20% $51,200
Mark McCollister Project Services Manager 10% $25,600
Tony Yzquierdo Retail Operations Manager 3% $7,680
Tony Lassiter Construction Manager 3% $7,680
Lupe Gasca HR / Payroll Manager 3% $7,680
John Chandler Procurement and Logistics Manager 3% $7,680
Sean Smith Vinyl Operations / Quality Control 3% $7,680
Totals 100% $256,000
26. Upon consummation of the sale, the Debtors request authority to provide a single lump-sum payment to the CEO in the amount of $89,600, and to the COO in the amount of $51,200, as more fully set forth in the chart above. The Debtors believe that the work done by the CEO and COO in managing the Debtors’ day to day operations and affairs during these difficult Chapter 11 Cases warrants the proposed performance bonus payments to compensate them for the increased demands placed upon them. Although they had no obligation to do so, the CEO and COO went above and beyond their general duties to ensure that the Debtors maximized value in the sale process, and that a smooth transition to new ownership will occur upon consummation of the sale. Their substantial efforts to assist the Debtors and their professionals in seeing the sale process through to its conclusion justifies the instant request for payment of performance bonuses under the facts and circumstances of these Chapter 11 Cases. 27. The Debtors believe the proposed performance bonus payments are also fair and reasonable, and comport with the percentages originally proposed by the Debtors in the KEIP Motion, which was approved by the DIP Lenders. Accordingly, the Debtors respectfully submit

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that the proposed performance bonus payments are in the best interest of the Debtors and their estates, and should therefore be approved by the Court. V. REQUEST FOR WAIVER OF STAY 28. To implement the foregoing successfully, the Debtors request that the Court enter an order providing that notice of the relief requested herein satisfies Bankruptcy Rule 6004(a) and that the Debtors have established cause to exclude such relief from the 14-day stay period under Bankruptcy Rule 6004(h). VI. BASIS FOR EMERGENCY RELIEF 29. The Debtors respectfully request emergency consideration of this Motion pursuant to Bankruptcy Local Rule 9013-1(i). As set forth above, the Sale Hearing is set for April 12, 2021, and the Debtors intend to consummate the sale promptly. Without the Court granting the relief on an emergency basis, consideration of this Motion likely would not occur until May 2021 when the Debtors are attempting to wind down their affairs. Accordingly, the Debtors respectfully request that the Court approve the relief requested in this Motion on an emergency basis and authorize the Debtors to make performance bonus payments to the CEO and COO contemporaneously with closing of the sale. VII. PRAYER WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form attached hereto: (i) granting the relief requested in this Motion; and (ii) granting the Debtors such other and further relief as the Court may deem just and proper.

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Respectfully submitted on the 9th day of April, 2021. OKIN ADAMS LLP By: /s/ Matthew S. Okin Matthew S. Okin Texas Bar No. 00784695 Email: mokin@okinadams.com David L. Curry, Jr. Texas Bar No. 24065107 Email: dcurry@okinadams.com Ryan A. O’Connor Texas Bar No. 24098190 Email: roconnor@okinadams.com 1113 Vine St., Suite 240 Houston, Texas 77002 Tel: 713.228.4100 Fax: 888.865.2118 ATTORNEYS FOR THE DEBTORS CERTIFICATE OF SERVICE I hereby certify that on April 9, 2021, a true and correct copy of the foregoing Motion was served via the Court’s CM/ECF system to all parties consenting to service through the same. By: /s/ Ryan A. O’Connor Ryan A. O’Connor

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