20-12212-mew Doc 1128 Filed 04/20/21 Entered 04/20/21 10 ...

4822-3748-0677 v.3

Andrew G. Dietderich

Brian D. Glueckstein

Alexa J. Kranzley

SULLIVAN & CROMWELL LLP

125 Broad Street

New York, NY 10004-2498

Telephone: (212) 558-4000

Facsimile: (212) 558-3588

Counsel to the Debtors

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

____________________________________________

In re

GARRETT MOTION INC., et al.,1

Debtors.

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Chapter 11

Case No. 20-12212 (MEW)

Jointly Administered

DECLARATION OF BRUCE MENDELSOHN IN SUPPORT OF

CONFIRMATION OF DEBTORS’ AMENDED JOINT PLAN OF

REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE

I, Bruce Mendelsohn, pursuant to 28 U.S.C. § 1746, hereby declare under penalty

of perjury that the following is true and correct to the best of my knowledge, information, and

belief:

1. I am a Partner and the Head of Global Restructuring at Perella Weinberg

Partners L.P. (“PWP”). PWP was engaged in March 2020 to be restructuring investment banker

to Garrett Motion Inc. and its affiliated debtors and debtors-in-possession (collectively, the

1 The last four digits of Garrett Motion Inc.’s tax identification number are 3189. Due to the large number of

debtor entities in these Chapter 11 Cases, which are being jointly administered, a complete list of the Debtors

and the last four digits of their federal tax identification numbers is not provided herein. A complete list of such

information may be obtained on the website of the Debtors’ proposed claims and noticing agent at

http://www.kccllc.net/garrettmotion. The Debtors’ corporate headquarters is located at La Pièce 16, Rolle,

Switzerland.

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“Debtors”).

2. PWP is a financial services firm providing corporate advisory and asset

management services to clients around the world, with offices in Austin, Calgary, Chicago,

Denver, Houston, London, Los Angeles, Munich, New York, Paris and San Francisco. PWP’s

corporate advisory practice is focused on providing clients with advice related to mergers and

acquisitions and financial restructurings. PWP’s mergers and acquisitions practice advises both

public and private companies. Its financial restructuring practice works with companies,

investors and other parties-in-interest in turn-around and distressed situations. In addition, an

affiliate of PWP has an asset management business, which offers multiple investment vehicles

focused on alternative investment products.

3. PWP and its professionals have extensive experience working with

financially troubled companies across a variety of industries in complex financial restructuring

both out of court and in chapter 11 cases. Major in-court restructurings in which PWP has been

involved include In re California Resources Corporation, Case No. 20-33568 (Bankr. S.D.

Tex.); In re Bristow Group, Inc., Case No. 19-32713 (DRJ) (Bankr. S.D. Tex.); In re Halcón

Resources Corporation, Case No. 19-34446 (DRJ) (Bankr. S.D. Tex.); In re Fieldwood Energy

LLC, Case No. 18-30648 (DRJ) (Bankr. S.D. Tex.); In re Seadrill Limited, Case No. 17-60079

(DRJ) (Bankr. S.D. Tex.); In re CARBO Ceramics Inc., Case No. 20-31973 (MI) (Bankr. S.D.

Tex.); In re Alta Mesa Resources, Inc., Case No. 19-35133 (MI) (Bankr. S.D. Tex.); In re

Approach Resources Inc., Case No. 19-36444 (MI) (Bankr. S.D. Tex.); In re Legacy Reserves

Inc., Case No. 19-33395 (MI) (Bankr. S.D. Tex.); In re Hexion Holdings LLC, Case No. 19-

10684 (KG) (Bankr. D. Del.); In re Windstream Holdings, Inc., Case No. 19-22312 (RDD)

(Bankr. S.D.N.Y.); In re PG&E Corporation and Pacific Gas and Electric Company, Case No.


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19-30088 (DM) (Bankr. N.D. Cal.); In re iHeartMedia, Inc., Case No. 18-31274 (MI) (Bankr.

S.D. Tex.); In re Gastar Exploration Inc., Case No. 18-36057 (MI) (Bankr. S.D. Tex.); In re EV

Energy Partners, L.P., Case No. 18-10814 (CSS) (Bankr. D. Del.); In re Memorial Production

Partners LP, Case No. 17-30262 (MI) (Bankr. S.D. Tex.); In re Pacific Drilling S.A., Case No.

17-13193 (MEW) (Bankr. S.D.N.Y.); In re Ocean Rig UDW Inc., Case No. 17-10736 (MG)

(Bankr. S.D.N.Y.); In re Bonanza Creek Energy, Inc., Case No. 17-10015 (KJC) (Bankr. D.

Del); In re Breitburn Energy Partners LP, Case No. 16-11390 (SMB) (Bankr. S.D.N.Y.); In re

Chaparral Energy, Inc., Case No. 16-11144 (LSS) (Bankr. D. Del.); In re Stone Energy Corp.,

Case No. 16-36390 (MI) (Bankr. S.D. Tex.); In re Atlas Resource Partners, L.P., Case No. 16-

12149 (SHL) (Bankr. S.D.N.Y); and In re Pacific Sunwear of California, Inc., Case No. 16-

10882 (LSS) (Bankr. D. Del.). PWP’s professionals also provided services in connection with

the out-of-court restructurings of numerous companies, including: Algeco Group; Blackhawk

Mining; Danaos Corporation; International Automotive Components Group; Key Energy

Services; Medical Depot Holdings; Pernix Therapeutics; Proserv; Savers; Sprint Industrial

Holdings; and WeWork Companies.

4. I submit this declaration (this “Declaration”) in support of confirmation of

the Debtors’ Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code,

filed contemporaneously herewith (including the Plan Supplement and all other exhibits and

schedules thereto and as may be amended, modified or supplemented from time to time, the

“Plan”).2 I have reviewed, and I am generally familiar with, the terms and provisions of the

Plan, the documents comprising the Plan Supplement, the Disclosure Statement for Debtors’

2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the:

(a) Debtors’ Memorandum of Law in Support of Confirmation of Debtors’ Amended Joint Plan of

Reorganization Under Chapter 11 of the Bankruptcy Code (the “Plan Confirmation Brief”), filed

contemporaneously herewith, or (b) Plan, as applicable.


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Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code [D.I. 1019]

(including all exhibits and schedules thereto, the “Disclosure Statement”), the proposed

Confirmation Order, and the requirements for confirmation of the Plan under section 1129 of the

Bankruptcy Code.

5. I am generally familiar with the Debtors’ day-to-day operations and

financial affairs. Except as otherwise indicated, the facts set forth in this Declaration (or

incorporated by reference herein) are based upon my personal knowledge, my review of relevant

documents and the Debtors’ books and records, my discussions with members of the Debtors’

senior management and the Debtors’ other advisors, information provided to me by employees

working under my supervision or employees of the Debtors, my opinion based upon my

experience, or upon information supplied to me by the Debtors or the Debtors’ counsel and other

advisors. If called upon to testify, I would testify competently to the facts set forth herein. I am

authorized to submit this Declaration on behalf of the Debtors.

I. The Plan Support Agreement and Equity Backstop Commitment Agreement

6. On January 11, 2021, following an extensive competitive sale process,

including a weeks-long auction that included multiple rounds, the Debtors entered into the Plan

Support Agreement. In connection with the Plan Support Agreement, the Debtors entered into

the Equity Backstop Commitment Agreement on January 22, 2021. On February 15, 2021,

following further negotiations, the Plan Support Agreement was amended and restated to, among

other things, add certain of the Consenting Lenders as parties. On March 9, 2021, the Plan

Support Agreement was further amended to reflect changes agreed to in court-ordered mediation

among the Debtors and their stakeholders. In connection therewith, the Debtors and the Equity

Backstop Parties also entered into a replacement Equity Backstop Commitment Agreement on

March 9, 2021. On March 12, 2021, the Court entered an order approving the Debtors’ entry


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into the Plan Support Agreement and Equity Backstop Commitment Agreement.

7. The Plan reflects, among other things, the transactions contemplated by

the Plan Support Agreement and Equity Backstop Commitment Agreement. The Plan and the

transactions embodied therein, and the documents and agreements necessary to implement the

Plan, are the product of good faith and arm’s-length negotiations among the Debtors, the Plan

Sponsors, Honeywell, the Additional Investors, the Consenting Lenders, the Consenting

Noteholders, the UCC and the Equity Committee. The final proposal from the COH Group (as

defined in the Disclosure Statement), reflected in the Plan Support Agreement and being

implemented through the Plan, was considered at length by the GMI Board of Directors and

unanimously approved as representing the highest and best available transaction to maximize

recoveries for all stakeholders. It was also independently considered and approved by the

Boards of Directors of ASASCO and GMHI, including their independent directors.

II. The Exit Facilities

8. I believe that the terms and conditions of the Exit Facilities Documents,

and the Debtors’ entry into such Exit Facilities Documents, including all actions, undertakings,

and transactions contemplated thereby, and payment of all fees, indemnities and expenses

provided for thereunder, are essential elements of the Plan, necessary for the consummation

thereof, and in the best interests of the Debtors, the Estates and Holders of Claims and Interests.

I believe that the Exit Facilities Documents were negotiated in good faith and at arm’s length.

Additionally, it is my belief based on my experience that the Exit Facilities are critical to the

overall success and feasibility of the Plan, and that the Debtors have exercised reasonable

business judgment in determining to enter into the Exit Facilities Documents.

III. The Debtors’ Plan Is Feasible

9. I am advised that section 1129(a)(11) of the Bankruptcy Code permits a


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chapter 11 plan to be confirmed if it is feasible, i.e., it is not likely to be followed by liquidation

or the need for further financial reorganization. I understand that, in the context of the Plan,

feasibility is generally established by demonstrating the Debtors’ ability to implement the

provisions of the Plan with a reasonable assurance of success.

10. Based upon my understanding of the Plan, the advice of the Debtors’ other

advisors and counsel, and my experience with the Debtors’ business and industry, I believe that

the Plan is feasible. The Plan leaves the Debtors with a sustainable capital structure at

acceptable leverage (with a path to further de-lever) that will enable the Debtors to compete

more effectively in a dynamic and evolving industry. I believe that the Reorganized Debtors will

emerge from chapter 11 with adequate liquidity and working capital supporting a strong balance

sheet. The Debtors have also prepared financial projections for the calendar years 2021 through

2024 based on a number of assumptions with respect to the future performance of the

Reorganized Debtors’ operations (the “Financial Projections”). (See Disclosure Statement,

Appendix D.) I believe that, as set forth in the Financial Projections, an analysis of these factors

in the context of the Chapter 11 Cases demonstrates that the Plan is feasible.

11. From my personal involvement in the formation of the Plan, I understand

that the Debtors, together with their advisors and stakeholders—including the future owners of

the Reorganized Debtors—thoroughly analyzed the Reorganized Debtors’ ability to meet their

obligations under the Plan post-emergence. I believe that Confirmation of the Plan is not likely

to be followed by liquidation or the need for further reorganization. I further believe that the

Financial Projections for the Reorganized Debtors demonstrate that the Reorganized Debtors

expect to be able to meet their respective obligations under the Plan while maintaining sufficient

liquidity and capital resources. For the foregoing reasons, it is my belief that the Plan satisfies


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the feasibility requirement of section 1129(a)(11) of the Bankruptcy Code.

IV. The Honeywell Settlement

12. I understand that the Plan provides for implementation of the Honeywell

Settlement. I believe that the Honeywell Settlement is fair, equitable and in the best interests of

the Debtors and their Estates, stakeholders and other parties-in-interest. Specifically, it is my

view that the Honeywell Settlement benefits all of the Debtors’ stakeholders. As part of the

Honeywell Settlement, the Debtors negotiated to pay down a significant portion of the obligation

to Honeywell up front, and then for the right to partially repay the Honeywell obligation within

the first 18 months and in full at any time. This, in my opinion, increases the Debtors’ flexibility

to the benefit of all stakeholders.

13. Prior to entering into the Plan Support Agreement, the Debtors carefully

considered the overall value that could be obtained through all available transactions, including

those that did not include a settlement with Honeywell. The Debtors concluded that any

alternative transaction available to them that involved litigation with Honeywell would not

deliver more value to stakeholders. It is my understanding that the implied value of the

transaction embodied in the Plan, including the Honeywell Settlement, is well within the range of

Enterprise Value determined independently by PWP and Morgan Stanley. (See Disclosure

Statement, Appendix E.)

I declare under penalty of perjury that the foregoing is true and correct to the best

of my knowledge, information, and belief.

Dated: April 20, 2021

/s/ Bruce Mendelsohn

Bruce Mendelsohn

Partner

Perella Weinberg Partners


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