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Full title: Response to the Debtor's Objection to the Proof of Claim Filed by Deloitte Financial Advisory GmbH (related document(s)750) Filed by Deloitte Financial Advisory GmbH (Attachments: # 1 Exhibit A # 2 Exhibit B # 3 Certificate of Service) (McNeill, R. Stephen) (Entered: 06/01/2021)

Document posted on May 31, 2021 in the bankruptcy, 10 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

Prior to the commencement of KL2’s bankruptcy case, on or about October 30, 2019, Deloitte and KL2, Klausner Lumber One, LLC (“KL1”) (KL1 and KL2 shall be referred to collectively as “Klausner Lumber”), Klausner Holding USA, Inc. (“Klausner Holding”), and Klausner Nordamerika Beteiligungs GmbH (“KNB”) (KL1, KL2, Klausner Holding and KNB shall be referred to collectively as the “Klausner Group.”) entered into the Engagement Agreement (the “Engagement Letter”) in connection with the refinancing of the financial obligations of Klausner Lumber.Pursuant to the Engagement Letter, Deloitte was engaged to provide certain services including, but not limited to: (a) support management of Klausner Lumber with merger and acquisition (“M&A”) advisory services in connection with the refinancing of Klausner Lumber’s financial obligations, or the full or partial sale of KL2’s operations; (b) be the main contact for Klausner Lumber to approach potential investor, Mayr-Melnhof Holz Group (“MM”), regarding investment in Klausner Lumber.Specifically, Klausner Lumber paid Deloitte EUR 24,000 out of the EUR 60,000 owed. Deloitte satisfied its obligations under the Engagement Letter, before Klausner Lumber’s financial burden severally limited its ability to pay Deloitte the remaining retainer and other amounts due Deloitte under the Engagement Letter.Prior to the execution of Engagement Letter, Klausner Group attempted to limit Deloitte’s Success Fee to be due only for investors from the European Union (“EU”).

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 KLAUSNER LUMBER TWO LLC, Case No. 20-11518 (KBO) Debtor. Re: Docket No. 750 DELOITTE FINANCIAL ADVISORY GMBH’S RESPONSE TO THE DEBTOR’S OBJECTION TO THE PROOF OF CLAIM FILED BY DELOITTE FINANCIAL ADVISORY GMBH Deloitte Financial Advisory GMBH’s (“Deloitte” or “Claimant”), by and through its undersigned counsel, files its response (the “Response”) to Klausner Lumber Two LLC’s (“KL2”) objection (the “Objection”) to Deloitte’s Proof of Claim [Claim No. 25] (the “Claim”), and in support of the Response, Deloitte states as follows: INTRODUCTION Prior to the commencement of KL2’s bankruptcy case, on or about October 30, 2019, Deloitte and KL2, Klausner Lumber One, LLC (“KL1”) (KL1 and KL2 shall be referred to collectively as “Klausner Lumber”), Klausner Holding USA, Inc. (“Klausner Holding”), and Klausner Nordamerika Beteiligungs GmbH (“KNB”) (KL1, KL2, Klausner Holding and KNB shall be referred to collectively as the “Klausner Group.”) entered into the Engagement Agreement (the “Engagement Letter”) in connection with the refinancing of the financial obligations of Klausner Lumber. Each signatory to the Engagement Letter is jointly liable for the full payment of the success fee due Deloitte. See Exhibit A: (Unexecuted) Engagement Letter, p 1 through 21. See Exhibit B: (Executed) Engagement Letter, p. 1 through 7. Pursuant to the Engagement Letter, Deloitte was engaged to provide certain services including, but not limited to: (a) support management of Klausner Lumber with merger and

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acquisition (“M&A”) advisory services in connection with the refinancing of Klausner Lumber’s financial obligations, or the full or partial sale of KL2’s operations; (b) be the main contact for Klausner Lumber to approach potential investor, Mayr-Melnhof Holz Group (“MM”), regarding investment in Klausner Lumber. Deloitte performed the services it was employed to perform under the terms of the Engagement Letter and its claim should be allowed in full as set forth herein. A true and correct copy of the Engagement Letter is attached hereto as Exhibit A. In the Objection, KL2 disputes Deloitte’s claim and mischaracterizations of Deloitte’s engagement and relationship with potential purchasers of KL1’s assets. FACTUAL BACKGROUND 1. On or about June 10, 2020 (the “Petition Date”), KL2 filed a voluntary petition for relief under chapter 11 of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), commencing the above-captioned bankruptcy case (the “Bankruptcy Case”). 2. KL2 continued to operate its business and manage its property as a debtor-in-possession pursuant to §§ 1107(a) and 1108 of the Bankruptcy Code, until it sold its assets post-petition. 3. Deloitte has also filed a separate unsecured proof of claim in the bankruptcy case of KL1 arising from the Engagement Letter and relating to the services that Deloitte performed in furtherance of Klausner Lumber’s efforts to sell its assets or refinance its debt. 4. Upon information and belief, as of the Petition Date, KL2 was the owner of a partially completed timber sawmill located in Enfield, Halifax County, North Carolina. 2

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5. On July 24, 2020, KL2 filed its Schedules of Assets and Liabilities (Docket No. 76). Upon information and belief, KL2 failed to schedule the Engagement Letter. 6. Upon information and belief, only 2 qualifying bids were made for KL2’s assets. These bids were from MM, and Binder Beteiligungs AG, acting through Binder Enfield LLC (collectively, “Binder”). See Docket No. 507. 7. On or about December 17, 2020, the Bankruptcy Court entered its order (Docket No. 507) approving the sale of KL2’s assets to Binder. Deloitte’s Contract 8. Pursuant to Engagement Letter, Deloitte was to perform certain tasks/services. These tasks included the following: a. Deloitte was to “support the management of Klausner Lumber with M&A Advisory Services in connection with the current refinancing of the financial obligations of Klausner Lumber;” b. Deloitte will be “the main point of contact for Klausner Lumber and will coordinate the approach of the potential investor Mayr—Melnof Holz Group (“MM”); c. [Klausner Lumber] intend to approach through its CRO manager Christian Scharpenack and Marc Pulides [individuals employed by Scharpenack GmbH (“Sharpenack”)]. . . “investors for the project, and will inform [Deloitte] about any approaches in progress. To the extent, any such approached investors are EU [European Union] headquarter and one or several (up to three) shall be integrated in the process led by Deloitte, the engagement terms of this contract shall apply. See Ex. 1: Engagement Letter Section 1, page 1 of 21 (Emphasis added). 9. In addition, and as set forth in Annex 1—Scope of Work to the Engagement Letter, Deloitte agreed to provide the following additional services: a. Approach a select number of financial investors (a max number of 5), in coordination with the management of Klausner Lumber. 3

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b. Approach potential investors and distribute a short profile/investment profile and behalf of Klausner Lumber. c. Evaluation of the feedback on the short profile/investment profile presented to approach such financial investors on behalf of Klausner Lumber. d. Present and discuss the evaluations on the feedback received as a basis of decision-making for Klausner Lumber regarding the possible pursuance of a more broadly investor approach as part of a separate engagement for the structured M&A process. e. Support and coordination of Management meetings with MM including the preparation and conduct of rehearsals. f. Support with the negotiations and structure of term sheet with MM. g. Support with the ongoing communications with MM and request of (non-binding) letter of intent (“LOI”). h. Evaluation and presentation of the LOI received from MM. i. Assist in the preparation of an Electronic Data Room and support of Q&A (questions and answer) management. j. Assist with the coordination of the due diligence process and facilitate management presentation with MM. k. Negotiation support until the signing of the transaction/signing of the financing. See Ex. 1: Engagement Letter: Annex 1—Scope of Work, page 8 of 21. 10. Deloitte performed and satisfied each of these services, and Deloitte spent more than 600 hours between September 30, 2019 and March 13, 2021 performing these services. 11. In addition, Deloitte had 43 physical and virtual meetings between September 30, 2019 and March 11, 2020 relating to the services Deloitte was to provide to Klausner Lumber. 12. Further, Deloitte exchanged over 360 emails with Leopold Stephan, Friedrich Klausner, and their lawyers and their advisors regarding Deloitte’s performance of its obligations under the Engagement Letter. 4

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13. Klausner Lumber paid Deloitte the retainer stated for Phase 1, but only made a partial payment of the retainer for Phase 2. Specifically, Klausner Lumber paid Deloitte EUR 24,000 out of the EUR 60,000 owed. Deloitte satisfied its obligations under the Engagement Letter, before Klausner Lumber’s financial burden severally limited its ability to pay Deloitte the remaining retainer and other amounts due Deloitte under the Engagement Letter. 14. The efforts of Deloitte regarding MM were crucial for the success of the auction held in KL1 and KL2’s bankruptcy cases. MM would not have been in a position to participate in the auction process without the detailed knowledge of the condition, state and value of the assets of KL1 and KL2, which knowledge was gained in the process supported by Deloitte. This is especially true given the limitations in travelling during the world wide COVID pandemic in 2020, when KL1 and KL2 assets were sold. 15. Further, prior to Klausner Lumber’s bankruptcy filings, Deloitte was also in contact and had communications with Binder regarding the sale or investment in Klausner Lumber. Deloitte worked intensively on transaction structuring for the LOI which was sent to Binder, developed the transaction structure proposal, commented on the LOI and supported the information flow to Binder. Deloitte was included on the email communications when the LOI was sent to Binder on or about January 12, 2020. 16. However, even if Deloitte would not have been in contact with Binder (which was not the case), Deloitte has earned and is entitled to the Success Fee. Intentionally, Deloitte and Klausner Group agreed in the Engagement Letter that the entitlement for the Success Fee is only linked to a sale or refinancing, and not to a specific buyer. The agreed Success Fee range between 500,000 EUR—700,000 EUR is relatively low, for a transaction of this size (as compared to the success fee granted to Asgaard and Cypress which is a multiple times higher). 5

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Therefore, it was the intention of Deloitte and the Klausner Group to compensate Deloitte in any case of a sale or refinancing with the Success Fee, independent of who the investor would be and whether the investor had been in contact with Deloitte or not. 17. The basic rational behind this structure is that the Klausner Group sought to save liquidity due to its distressed situation and therefore did not want to compensate Deloitte on an hourly basis, which would have triggered multiple times higher expenses then the relatively small retainer agreed in the Engagement Letter. Therefore, it was agreed that Deloitte shall be compensated with the Success Fee once the Klausner Group receives liquidity from a sale or refinancing. 18. The Klausner Group was fully aware that Deloitte shall be compensated with the Success Fee, independent of who the investor would be or how the assets were sold. The success fee element was discussed with the Klausner Group in several meetings, whereby Deloitte had first issued a full and comprehensive offer for a global M&A advisory process with a proposed fee of 4% of the transaction volume. At the request of the Klausner Group, Deloitte agreed to change the offer to a more focused M&A advisory services as set forth in the final draft of the Engagement Letter, and with a success fee between 500,000 EUR and 700,000 EUR. 19. Prior to the execution of Engagement Letter, Klausner Group attempted to limit Deloitte’s Success Fee to be due only for investors from the European Union (“EU”). 20. Deloitte refused to agree to such limitations, and it was ultimately agreed with the Klausner Group not to include the proposed limitation on to Success Fee in the Engagement Letter. In any event, Binder is an EU-investor, and Deloitte is entitled to receive the Success Fee. 21. During KL1’s auction of its assets, MM and Binder participated in the online auction, submitted extremely competitive bids and, upon information and belief, were the only 6

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qualifying bidders for KL1 and KL2, other than the “stalking horse” bidder. In the end, Binder was the successful bidder for the assets and corresponding Asset Purchase Agreements were concluded between KL1and KL2 on the one hand and Binder on the other hand, with the following result: a. KL1: Starting with a minimum “stalking horse” bid of USD 26,000,000. Binder acquired the assets of KL1 for USD 61,000,000 and the assumption of liabilities of KL1 in the amount of USD 1,628,755. The consideration paid for KL1 increased by more than 130% compared to the minimum bid. b. KL2: Starting with a minimum “stalking horse” bid of USD 30,000,000, Binder acquired the assets of KL2 for USD 83,400,000 and the assumption of liabilities of KL2 in the amount of USD 3,287,500. The consideration provided for KL2 assets increased by more than 170% compared to the minimum bid. 22. MM’s last bids in both auctions (KL1 and KL2) had only been slightly lower than the successful bids of Binder. As all other bidders either were not qualified and/or had dropped out of the auctions at significantly lower price levels, Binder would have paid significantly lower prices without MM participating in the auctions. 23. Deloitte does not dispute or contest the engagement or payments made to Asgaard or Cypress. Deloitte merely seeks the Success Fee and remaining unpaid retainer that is contractually owed by Klausner Lumber under the Engagement Letter. 24. Although Asgaard and Cypress may have initiated a global approach for investors, other than the stalking horse bid of Mercer International, Inc. for KL1, Binder and MM were the only two investors providing qualifying bids and who participated in the auction. 7

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Not surprisingly, both were served by Deloitte, (MM much more intense than Binder), under Deloitte’s Engagement Letter. 25. Given these facts, Deloitte’s contribution to the success of the transaction (consideration over 130% for KL1 and 170% for KL2 higher than minimum bid) was key, and its claim should be allowed on the uppermost end of the Success Fee Range (i.e. EUR 700,000). 26. The Engagement Letter provides: In case of a successful or partial sale of the operations, and/or refinancing of the financial obligations of Klausner Lumber, Deloitte FA will be additionally granted a Success Fee of min. EUR 500.000,- - max EUR 700.000, irrespective of whether the transaction is an equity or debt capital transaction, or a share deal and irrespective at which level of Klausner Group the transaction occurs. 27. Based on the Engagement Letter, the work performed and the tasks and services provided pursuant to the terms of the Engagement Letter, Deloitte is entitled to the Success Fee, and that Success Fee should be EUR 700,000, in addition to the unpaid retainer of EUR 36,000, for a total allowed unsecured claim of EUR 736,0001. 28. The sale of KL1’s and KL2’s assets in the auction clearly qualifies as a “successful full or partial sale”, and KL1 and KL2 estate have benefitted from the work performed by Deloitte in fulfilment of its contractual obligations. 29. Further, the Engagement Letter provides that Austrian Law applies when determining the validity of the Engagement Letter. At no time has Deloitte received any notice the Engagement Letter was terminated. Further, under both Austrian and U.S. bankruptcy law, a contract is not terminated upon the filing of bankruptcy. 1 Deloitte seeks a single recovery in the total amount of EUR 736,000.00. Whether that recovery comes from a single bankruptcy estate of KL1 or KL2, or from each of the KL1 and KL2 estates, Deloitte seeks a single recovery of EUR 736,000.00. 8

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30. Finally, Klausner Lumber raises that Deloitte may have a conflict of interest by providing tax due diligence services to MM relating to the Klausner Group. 31. It is standard practice among the large international accounting firms that separate teams from one firm may work for different parties on the same transaction under specific conditions by implementing appropriate confidentiality safeguards to maintain each sides independence. This is a standard, especially as Deloitte has been for many years by far the market leader for financial advisory services in Austria, and therefore, such situations are common given the limited number of other comparable transactions service providers in Austria. In such situations, Deloitte has always followed its strict Compliance Rules to serve the independence of all involved Deloitte teams. These Compliance Rules were applied and strictly followed with regards to the transaction involving the Klausner Group and MM. 32. Deloitte Audit Wirtschaftsprüfungs GmbH (“Deloitte Audit”) was retained by MM to support MM with Financial and Tax Due Diligence Services, to evaluate an investment in the Klausner Group. This engagement of Deloitte was carried out by a separate Deloitte team, that was separate and apart from the team working under the Engagement Letter for the Klausner Group. As required by Deloitte’s internal compliance standards, appropriate confidential safeguards were implemented to prevent a conflict of interest situation, and to prevent the exchange of information between the two teams outside the regular communication in the course of the investment process. 33. The Klausner Group was informed from the beginning that a separate team at Deloitte had been retained by MM, and no concern or objection was raised. 9

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WHEREFORE, Deloitte requests that: (a) KL2’s Objection to Deloitte’s proof of claim be denied; (b) that Deloitte’s proof of claim be allowed in the full amount of Deloitte’s proof of claim which is EUR 736,000; and (c) that the Court grant such other and further relief as is just, equitable and proper. Dated: June 1, 2021 POTTER ANDERSON & CORROON LLP Wilmington, Delaware /s/ R. Stephen McNeill Jeremy W. Ryan (DE Bar No. 4057) R. Stephen McNeill (DE Bar No. 5210) 1313 North Market Street, 6th Floor Wilmington, DE 19801 Telephone: (302) 984-6000 Facsimile: (302) 658-1192 Email: jryan@potteranderson.com rmcneill@potteranderson.com and CARLTON FIELDS, P.A. John J. Lamoureux 4221 West Boy Scout Boulevard, Suite 1000 Tampa, Florida 33607-5736 Telephone: (813) 223-7000 Facsimile: (813) 229-4133 Email: jlamoureux@carltonfields.com Counsel for Deloitte Financial Advisory GMBH 10

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