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Full title: Objection to Claim Number 38,63 by Claimant Roger Milton Filed by Debtor Wave Computing, Inc.. (Attachments: # 1 Declaration of Desi Banatao In Support Thereof # 2 Declaration of Julie Rome-Banks In Support Thereof) (Rome-Banks, Julie) (Entered: 08/25/2021)
Document posted on Aug 24, 2021 in the bankruptcy, 6 pages and 0 tables.
Bankrupt11 Summary (Automatically Generated)
Wave objects3 to the Milton Claim for the following reasons: 17 A. Mr. Milton was employed by Wave as the Regional Sales Director –18 North America pursuant to a written offer of employment dated 19 October 18, 2018.In addition to the Sales Policy, Wave provided Mr. Milton with 4 specific sales quotas which he was expected to achieve during each5 quarter of 2019 as targets to be entitled to incentive compensation.Mr. Milton generated sales on three specific dates: (i) on 24 March 4, 2019, Mr. Milton generated four sales which collectively 25 totaled the sum of $90,000, which were Mr. Milton’s only sales in the26 first quarter of 2019; (ii) on July 5, 2019, Mr. Milton generated a 27 single sale in the amount of $100,000, which sale was in the third 28 quarter of 2019; and, (iii) on September 25, 2019, Mr. Milton 1 generated additional revenue through the sale of maintenance and 2 service contracts in the amount of $370,000, which sale was also in 3 the third quarter.As reflected in Exhibit “D” to the Banatao 5 Declaration, when comparing the above sales by quarter to the 6 quotas required for Mr. Milton to receive incentive compensation set7 forth in the 2019 comp sheet attached as Exhibit “C” to the Banatao 8 Declaration, Mr. Milton failed to achieve the required quotas for the 9 first and third quarters of 2019 so as to be entitled to any incentive 10 compensation. Given that Mr. Milton’s bi-monthly salary 26 compensation was previously paid by Wave for the period through 27 December 1, 2019 when he was laid off by Wave, there is no 28 additional compensation owed to Mr. Milton by Wave during the 1 priority wage period.
List of Tables
Document Contents1 BINDER & MALTER, LLP Michael W. Malter (SBN 96533) 2 Robert G. Harris (SBN 124678) Julie H. Rome-Banks (SBN 142364) 3 2775 Park Avenue, Santa Clara CA 95050 4 Telephone: 408.295.1700 Facsimile: 408.295.1531 5 Email: email@example.com Email: firstname.lastname@example.org 6 Email: email@example.com 7 Attorneys for the Reorganized Debtors 8 UNITED STATES BANKRUPTCY COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 SAN JOSE DIVISION 11 In re: Case No. 20-50682 (MEH) 12 WAVE COMPUTING, INC., et al., Chapter 11 (Jointly Administered) 13 Debtors.1 14 NO HEARING UNLESS REQUESTED 15 16 OBJECTIONS TO CLAIM OF ROGER MILTON 17 TO AFFECTED CLAIMANT: ROGER MILTON (Claim #38) 18 WAVE COMPUTING, INC., the Reorganized Debtor and Debtor-in-Possession 19 (“Wave” or “Debtor”) hereby objects to the Proof of Claim that has been filed by claimant 20 ROGER MILTON described below and request that said claim be disallowed in its 21 entirety: 22 /// 23 /// 24 1 The Debtors in these chapter 11 cases, along with the last four digits of eac25 Debtor’s federal tax identification number, as applicable, are: Wave Computing, Inc. (4264MIPS Tech, Inc. (8247), Hellosoft, Inc. (8640), Wave Computing (UK) Limited (None26 Imagination Technologies, Inc. (6967), Caustic Graphics, Inc. (7272), and MIPS Tech, LL(2161) (collectively the “Debtors”). The Debtors’ mailing address is 3201 Scott Blvd, Sant27 Clara, CA 95054. 28
11 1. The Debtors each filed a voluntary petition under chapter 11 on April 27, 2 2020 (“Petition Date”). The cases were ordered jointly administered by order entered on3 May 1, 2020 (docket #50) with Wave Computing, Inc. as the lead case. Donlin Recano 4 was appointed as the claims, noticing and solicitation agent on behalf of the Debtors by 5 order entered on May 1, 2020 (docket #54). 6 2. The Debtors confirmed a Sixth Amended Plan of Reorganization by order o7 this Court entered on February 16, 2021 (the “Plan”) (see docket #1172). The Plan 8 became effective on February 26, 2021 (see docket #1227). 9 3. ROGER MILTON: Wave objects to Claim #38 filed by ROGER MILTON 10 (“Mr. Milton” or “Milton”), which proof of claim was filed with the Court on August 4, 2020 11 in the case of Wave Computing, Inc., in the amount of $81,250.00 of which $16,350.00 i12 a priority wage claim and the balance of $64,900.00 is a general unsecured, non-priority 13 claim (the “Claim”)2. A true and correct copy of the Milton Claim is attached as Exhibit “A14 to the Declaration of Julie H. Rome-Banks filed concurrently herewith and is incorporate15 herein by reference. 16 4. Wave objects3 to the Milton Claim for the following reasons: 17 A. Mr. Milton was employed by Wave as the Regional Sales Director –18 North America pursuant to a written offer of employment dated 19 October 18, 2018. Mr. Milton accepted the offer of employment fro20 2 The Milton Claim was also filed with Donlin Recano, the appointed claims and 21 noticing agent in these cases, and was assigned claim #61 on the Donlin Recano claims22 register. 3 Prior to confirmation of the Plan, Debtors’ appointed bankruptcy counsel Sidley 23 Austin LLP filed the DEBTORS’ AMENDED FIFTH OMNIBUS OBJECTION TO 24 CERTAIN PROOFS OF CLAIMS (RECLASSIFIED CLAIMS) (the “Omnibus Objections”)and therein objected to the Milton Claim by requesting reclassification of the entire Milton25 Claim as an unsecured non-priority claim. However, no substantive objections were made to the Milton Claim in the Omnibus Objections. The Court made no ruling at a 26 status conference held on February 25, 2021 with respect to the Milton Claim. The objections contained herein filed by the Reorganized Debtors supersede those objection27 contained in the Omnibus Objections filed by Sidley Austin LLP. 28
21 Wave by countersigning that offer of employment on or about 2 October 26, 2018 and indicating he would report to work on October3 31, 2018. A true and correct copy of the executed employment lette4 is attached as Exhibit “A” to the Declaration of Desi Banatao filed in 5 support hereof and incorporated herein by reference (the “Banatao 6 Declaration”). 7 B. Mr. Milton’s compensation with Wave consisted of a semi-monthly 8 salary of $6,875.00 per pay period for an annual gross salary of 9 $165,000, together with quarterly incentive compensation of $18,7510 per quarter or more. For the first quarter of Mr. Milton’s employment11 the quarterly incentive compensation would be prorated based on 12 the total number of complete days of employment during that fiscal 13 quarter. To be eligible for quarterly incentive compensation, Mr. 14 Milton need to meet performance requirements associated with his 15 position as Regional Sales Director – North America. In short, Mr. 16 Milton as the Regional Sales Director - North America was expected17 to generate new sales for Wave. 18 C. During the time of his employment from approximately October 31, 19 2018 until he was laid off by the Debtor on December 1, 2019 as par20 of a general reduction in force, Mr. Milton did not perform his duties 21 as Regional Sales Director for North America so as to be entitled to 22 incentive compensation. Specifically, attached as Exhibit “B” to the 23 Banatao Declaration is a true and correct copy of the Sales Policy 24 Quota/Commission Plan for 2019 which was provided to Mr. Milton 25 shortly after his employment commenced (the “Sales Policy”). The 26 Sales Policy outlined the commission plan and expectations for 27 Wave’s sales team members, including the Vice President of Sales 28 and Regional Sales Directors (identified as “RSD”) in the Sales
31 Policy. Mr. Milton was a Regional Sales Director and as such the 2 Sales Policy was applicable to him. 3 D. In addition to the Sales Policy, Wave provided Mr. Milton with 4 specific sales quotas which he was expected to achieve during each5 quarter of 2019 as targets to be entitled to incentive compensation. 6 A true and correct of the sales quotas for Mr. Milton (identified a 7 “comp sheet”) are attached as Exhibit “C” to the Banatao Declaratio8 and are incorporated herein by reference. As reflected in Exhibit 9 “C”, Mr. Milton was required to generate revenue including revenue 10 from sales as well as from sales of service and maintenance 11 contracts, in the first quarter of 2019 of $550,000. Also as reflected 12 in Exhibit “C”, Mr. Milton was required to generate cumulative 13 revenue including revenue from service and maintenance contracts 14 by the third quarter of 2019 of $1,450,000. 15 E. During the time of his employment from approximately November, 16 2018 until he was laid off by the Debtor on December 1, 2019 as par17 of a general reduction in force, Mr. Milton’s performance of his dutie18 as Regional Sales Director-North America did not generate sufficien19 revenues to the Debtor so as to entitle Mr. Milton to any incentive 20 compensation. Specifically, the chart attached as Exhibit “D” to the 21 Banatao Declaration and incorporated herein by reference illustrates22 the sales that Mr. Milton achieved during his employment with the 23 Debtors. Mr. Milton generated sales on three specific dates: (i) on 24 March 4, 2019, Mr. Milton generated four sales which collectively 25 totaled the sum of $90,000, which were Mr. Milton’s only sales in the26 first quarter of 2019; (ii) on July 5, 2019, Mr. Milton generated a 27 single sale in the amount of $100,000, which sale was in the third 28 quarter of 2019; and, (iii) on September 25, 2019, Mr. Milton
41 generated additional revenue through the sale of maintenance and 2 service contracts in the amount of $370,000, which sale was also in 3 the third quarter. The total of Mr. Milton’s third quarter 2019 sales 4 was therefore $475,000. As reflected in Exhibit “D” to the Banatao 5 Declaration, when comparing the above sales by quarter to the 6 quotas required for Mr. Milton to receive incentive compensation set7 forth in the 2019 comp sheet attached as Exhibit “C” to the Banatao 8 Declaration, Mr. Milton failed to achieve the required quotas for the 9 first and third quarters of 2019 so as to be entitled to any incentive 10 compensation. Mr. Milton failed to achieve any sales during the 11 second and fourth quarters of 2019 and therefore did not earn any 12 incentive compensation during those quarters. Accordingly, the 13 Milton Claim for $81,250.00 representing three quarters of incentive 14 compensation was not earned by Mr. Milton and the Milton Claim 15 should be disallowed in its entirety. 16 F. As noted above, the Debtors filed their voluntary petition on the 17 Petition Date of April 27, 2020. The 180-day period preceding the 18 Petition Date during which priority wage claims could potentially 19 earned by former employees of Wave pursuant to 11 U.S.C. 20 §507(a)(4) therefore extended from October 31, 2019 to April 26, 21 2020, the day before the Petition Date. Mr. Milton generated no ne22 sales during the period from the start of the wage priority period of 23 October 31, 2019 until he was terminated on December 1, 2019 24 which might have entitled him to incentive compensation during the 25 priority wage period. Given that Mr. Milton’s bi-monthly salary 26 compensation was previously paid by Wave for the period through 27 December 1, 2019 when he was laid off by Wave, there is no 28 additional compensation owed to Mr. Milton by Wave during the
51 priority wage period. Accordingly, any request for priority wages 2 and/or commissions should be denied and the Court should disallow3 the priority wage portion of the Milton Claim asserted in the 4 maximum statutory amount of $13,650.00. 5 G. Although Mr. Milton attached a copy of his employment agreement t6 his Proof of Claim, he failed to attach any information to support 7 sales that he personally generated during any of the quarters of his 8 employment with Wave. This failure to attach such supporting 9 documents to his Claim has the legal effect of rendering the Milton 10 Claim lacking in prima facie validity pursuant to Fed.R.Bank. Proc. 11 3001(f). Mr. Milton as a creditor bears the ultimate burden of provin12 his claim. See generally, In re Consolidated Pioneer Mortgage, (9th 13 Cir. BAP 1995) 178 B.R. 222, aff’d 91 F.3d 151 (9th Cir. 1996). 14 WHEREFORE, Wave prays as follows: 15 A. That Claim #38 of Roger Milton filed in the amount of $81,250.00 be 16 disallowed in its entirety; and, 17 B. For such other and further relief as the Court deems just and proper. 18 Dated: August 25, 2021 BINDER & MALTER, LLP 19 By: /s/ Julie H. Rome-Banks 20 Julie H. Rome-Banks Attorneys for Reorganized Debtors 21 22 23 24 25 26 27 28