Case Doc 4374 Filed 02/12/15 Entered 02/12/15 19:35:54 Desc Main Document Page 1 of 7

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1 Document Page 1 of 7 UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA Charlotte Division IN RE: GARLOCK SEALING TECHNOLOGIES LLC, et al. Debtors. Case No Chapter 11 Jointly Administered APPLICATION OF INDEPENDENT FEE EXAMINER TO AUTHORIZE THE RETENTION AND EMPLOYMENT OF NATIONAL CREDITOR RECOVERY SERVICES, LLC AS ADVISOR AND CONSULTANT TO THE INDEPENDENT FEE EXAMINER PURSUANT TO 327(a) OF THE BANKRUPTCY CODE AND RULE 2014(a) OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE W. Clarkson McDow, Jr., the Independent Fee Examiner in the above captioned jointly administered bankruptcy cases, (the Fee Examiner ) files this Application to Authorize the Retention and Employment of National Creditor Recovery Services, LLC (National CRS) pursuant to 327(a) of the Bankruptcy Code. In support of this Application the Fee Examiner relies on the Declaration of Michael L. Newsom attached hereto as Exhibit A (the Newsom Declaration ). JURISDICTION AND AUTHORITY 1. This Court has jurisdiction over this Application pursuant to 28 U.S.C. 157 and This is a core proceeding within the meaning of 28 U.S.C. 157(b)(2), and venue is proper in this district under 28 U.S.C and 1409.

2 Document Page 2 of 7 INTRODUCTION The Debtors in these jointly administered cases are Garlock Sealing Technologies, LLC, Garrison Litigation Management Group, Ltd., and Anchor Packing Company. On June 10, 2010, (the Petition Date ) the Debtors each filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Western District of North Carolina (the Court ). Each of the Debtors is continuing to operate its business and manage its properties as a debtor-in-possession pursuant to 1107(a) and 1108 of the Bankruptcy Code. The Debtors Chapter 11 cases (the Cases ) are being jointly administered pursuant to Fed. R. Bankr. P On July 15, 2010, this Court entered an Administrative Order Establishing Procedures for Interim Compensation and Reimbursement of Professional Fees and Reimbursement of Expenses for Professionals (the Compensation Order ). [Dkt. 233.] 3. Upon consideration of the size and complexity of these cases and the resulting numerous, lengthy and complex professional fee applications, the Court by Order entered December 24, 2014 (the Fee Examiner Order ) [Dkt ] ordered the appointment of the Fee Examiner. 4. Pursuant to the Fee Examiner Order, W. Clarkson McDow, Jr. was appointed as the Independent Fee Examiner. Additionally, the Fee Examiner Order provides that the Fee Examiner may retain attorneys and other professionals, assistants or consultants to the extent he deems it

3 Document Page 3 of 7 necessary to discharge his duties. The retention of professionals is subject to the Court s approval, under standards equivalent to 11 U.S.C. 327, after notice and an opportunity for a hearing pursuant to Local Rule (e). RELIEF REQUESTED 6. The Fee Examiner respectfully requests the entry of an order pursuant to the Fee Examiner Order approving this Application, retroactive to January 29, 2015, and authorizing the Fee Examiner to retain and employ National CRS as his consultant and advisor with regard to his duties proscribed by the Fee Examiner Order. The Fee Examiner submits that retroactive approval will not prejudice any parties in interest and will allow National CRS to be compensated fairly for services provided. NATIONAL CRS QUALIFICATIONS AND SERVICES TO BE RENDERED 7. The Fee Examiner seeks to retain National CRS as his advisor and consultant because National CRS and Michael L. Newsom, its principal, have experience and knowledge in the field of debtors and creditors rights and, specifically, National CRS and Newsom have the ability to provide substantial assistance with automating the review of fee applications. 8. Michael L. Newsom (Newsom) is the President of National CRS. He holds a Bachelor of Science in Chemical Engineering and a Master of Business Administration, both from the University of Toledo.

4 Document Page 4 of 7 9. Mr. Newsom has created user friendly data base programs capable of replicating Bankruptcy Schedules and Statements of Financial Affairs. Debtor s spreadsheet data can be easily uploaded to be formatted and printed or electronically transferred in final reporting form. In assisting as a financial analyst to the fee examiner in the Sunwest bankruptcy, Mr. Newsom recognized the need for a more efficient way of evaluating fees. Setting up spreadsheets in a format necessary to examine time inputs and professional work was time consuming and did not allow for efficient examination. Mr. Newsom began creating a database program that offered easy to read reports and user friendly access to searching tools. After that project was complete, Mr. Newsom further enhanced the program for more efficient data loading and downloading of spreadsheets, and he set up the database as a menu driven program that did not require the user to have any knowledge of programming. 10. The Fee Examiner submits that National CRS and Newsom are well-qualified to assist the Fee Examiner in this case and its retention is necessary for the Fee Examiner to review the large numbers of fee applications in this case and that the advice and counsel of National CRS and Newsom will be of great benefit to the administration of these cases. 11. The Fee Examiner has requested that National CRS assist him in all aspects related to his duties pursuant to the Fee Examiner Order, including: a. Assisting with the computer assisted review of fee applications;

5 Document Page 5 of 7 b. Identifying billing entries, if any, which appear to be outside of the applicable rules, guidelines and court orders and discuss same with the Fee Examiner and his other professionals, if any; c. Making recommendations to the Fee Examiner regarding any identified issues; d. Assisting in the Fee Examiner and his professionals in the preparation of reports and court filings; and e. Such other duties as the Fee Examiner may request. 10. The Fee Examiner believes that National CRS will materially aid in his ability to perform his duties pursuant to the Fee Examiner Order and that the experience of National CRS and Newsom will enable the Debtor s estates to achieve substantial benefits by maximizing cost control and efficiency. PROFESSIONAL COMPENSATION 11. Subject to the Court s approval in accordance with Sections 330(a) and 331 of the Bankruptcy Code and the Compensation Order, compensation will be payable to National CRS on an hourly basis for the work of Nesome discounted hourly rate of $240 per hour, plus reimbursement of actual, necessary expenses incurred by National CRS in the performance of its duties. This rate is subject to periodic adjustments to reflect economic and other conditions. 12. The hourly rate set forth above was negotiated specifically for this

6 Document Page 6 of 7 engagement, and is 20 percent less than National CRS s standard hourly rate. 13. The Fee Examiner understands that National CRS will apply to this Court for allowance of compensation and reimbursement of expenses in accordance with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Bankruptcy Rules, the Compensation Order and any other Orders of this Court. COMPLIANCE WITH To the best of my knowledge, except as disclosed herein and in the Newsom Declaration, National CRS and Newsom do not represent or hold any interest adverse to the Fee Examiner, to the Debtor, to the Estate or any of the professionals whose fees will be subject to review by the Fee Examiner. As a result, with respect to the matters for which National CRS is to be employed, National CRS and Newsom are disinterested within the meaning of Section 101(14) of the Bankruptcy Code. RETROACTIVE RELIEF REQUESTED 15. Pursuant to the Fee Examiner s request, National CRS commenced this engagement on January 29, 2015, and the Fee Examiner seeks approval of its employment retroactive to January 29, WHEREFORE, the Fee Examiner respectfully requests that the Court enter an order substantially in the form attached hereto (1) granting this Application, (2) authorizing the Fee Examiner to retain and employ National CRS as an advisor and consultant effective January 29, 2015, on the terms

7 Document Page 7 of 7 described in this Application, (3) and for such other and further relief as may be appropriate. Dated this 12 th of February, Respectfully submitted, /s/ W. Clarkson McDow, Jr. W. Clarkson McDow, Jr. Court Appointed Independent Fee Examiner 738 Myrtle Drive Rock Hill, SC Phone: clarksonmcdow@comporium.net

8 Case Doc Filed 02/12/15 Entered 02/12/15 19:35:54 Desc Declaration of Michael L.Newsom Page 1 of 4 UNITED STATES BANKRUPTCY COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA Charlotte Division IN RE: GARLOCK SEALING TECHNOLOGIES LLC, et al. Debtors. Case No Chapter 11 Jointly Administered DECLARATION ON DISINTERESTEDNESS BY MICHAEL L. NEWSOM ON BEHALF OF NATIONAL CREDITOR RECOVERY SERVICES, LLC I, Michael L. Newsom, pursuant to 28 U.S.C. 1746, hereby declare that the following is true to the best of my knowledge, information and belief: 1. I am the President of President of National Creditor Recovery Services, LLC ("National CRS") and make this declaration in support of the Application of W. Clarkson McDow, Jr., the independent Fee Examiner (Fee Examiner) for an Order Approving and Authorizing the Employment of National CRS as the Advisor and Consultant to the Fee Examiner. 2. I submit this Declaration to establish that National CRS and I are each "disinterested persons" as that term is defined in 11 U.S.C. 101(14) in connection with my retention as advisor and consultant to W. Clarkson McDow who has been appointed as the Independent Fee Examiner (the "Fee Examiner") in above-captioned chapter 11 cases of Garlock Sealing Technologies, LLC et al.. (the "Debtors"). 3. I have personal knowledge of the facts set forth herein. 4. I am the only member of National CRS at this time and the information on biographical information attached hereto is true and correct. 5. Services to be rendered by National CRS include: a. Assisting with the computer assisted review of fee applications, including working with professionals submitting fee applications to convert the time to an Access data base and assisting with queries to evaluate the data; b. Identifying billing entries, if any, which appear to be

9 Case Doc Filed 02/12/15 Entered 02/12/15 19:35:54 Desc Declaration of Michael L.Newsom Page 2 of 4 outside of the applicable rules, guidelines and court orders and discuss same with the Fee Examiner and his other professionals, if any; c. Me Making recommendations to the Fee Examiner regarding any identified issues; d. Assisting in the Fee Examiner and his professionals in the preparation of reports and court filings; and e. Other related actions as requested by the Fee Examiner. Such other duties as the Fee Examiner may request 6. Subject to the Court s approval of the retention of National CRS and in accordance with 330(a) and 331 of the Bankruptcy Code, National CRS will file periodic fee applications requesting compensation for its services and reimbursement of its expenses in this case as administrative expenses of the Debtors estates. Such compensation shall be based on the hourly billing rates for its personnel who render service in the case which rates will be subject to periodic adjustment. The regular billing rate for Michael L. Newsom is $300 per hour and for this engagement at the request of the Fee Examiner this rate has been discounted to $ To the best of my knowledge and belief and after due inquiry, neither National CRS nor I have any relationship with any such entity that would be adverse to the Debtor, the Fee Examiner or any creditor or other party in interest in these cases. Neither I nor National CRS is a creditor, former employee, equity security holder, or an insider of the Debtors, or has any interest adverse to that of the Debtors estates or any class of creditors or equity security holders. 8. National CRS is a disinterested person as that term is defined in 101(14) of the Bankruptcy Code. 9. There is no arrangement for National CRS or any of its personnel to receive compensation for services in this case other than in accordance with the Bankruptcy Code. Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury that the foregoing is true and correct. Executed this 11th day of February Michael L. Newsom

10 Case Doc Filed 02/12/15 Entered 02/12/15 19:35:54 Desc Declaration of Michael L.Newsom Page 3 of 4 NATIONAL CREDITOR RECOVERY SERVICES, LLC Clearwater, Florida MICHAEL L. NEWSOM Michael L. Newsom is the President of National Creditor Recover Services, LLC ("National CRS"). He holds a Bachelor of Science in Chemical Engineering and a Master of Business Administration, both from the University of Toledo. Mr. Newsom has extensive experience in financial analysis, strategic and capital planning, profitability analysis, process engineering, production management, and environmental affairs. From 1973 through 1981 he was employed as an engineer with Libby Owen Ford holding various management positions. From 1981 through 1989 Mr. Newsom managed corporate furnace operations at Anchor Glass Container Corporation ("Anchor"), which melted over 5,000 tons of glass per day and was the second largest domestic manufacturer of glass containers in North America. From 1989 through 1993 he was Anchor s Director of Environmental Affairs and from 1993 through 1996 was Anchor s Director of Engineering. From 1997 through the beginning of 2000, he was president of Manufacturing Environmental Associates a consulting firm that specialized in helping manufacturing companies recognize profit improvement through addressing environmental and process issues that stifled production. Mr. Newsom has managed projects to decommission and sell manufacturing plants including glass manufacturing facilities in Los Angeles, CA; Streator, IL; Cliffwood, NJ; and Corsicana, TX. He was also a leader in developing major trades of air emissions credits and gained national recognition for conducting the first trade in the Los Angeles Reclaim Market and for making the first air emission credit trade in the state of Texas. Mr. Newsom worked for Bridge Associates ("Bridge") from 2000 through the end of 2010, when the company was dissolved. During that time he worked as a financial analyst in cases in which Bridge represented debtors and creditors committees as a court appointed financial advisor. Mr. Newsom also was project manager on wind downs of liquidating trusts. In 2011 Mr. Newsom, along with two colleagues, formed Qorval CRS to continue working on cases carried over from Bridge and to focus on moving forward in direction similar to that which was charted while at Bridge. In 2014 Qorval CRS was dissolved, and Mr. Newsom formed National CRS, LLC and continued with similar bankruptcy services. Mr. Newsom has utilized database technology in designing and implementing a bankruptcy claims management program with comprehensive features for such activities

11 Case Doc Filed 02/12/15 Entered 02/12/15 19:35:54 Desc Declaration of Michael L.Newsom Page 4 of 4 NATIONAL CREDITOR RECOVERY SERVICES, LLC Clearwater, Florida as claims reconciliation, objection exhibit generation, distribution calculation, and claimant notification. He also developed a proprietary approach for the evaluation of ordinary course transactions in connection with the analysis of preference defenses. The work was focused in the first few years on defining metrics that could be used in sensitivity analyses of payment practices. This technique was applied to the data preparation and analysis of the avoidance actions on nine bankruptcy cases, including among others, Inacom, Conseco, Spinnaker Industries, Recoton, Durango Georgia Paper, James River Coal, Falcon Industries and others leading to recoveries exceeding $55 million. Knowledge gained from the work done in these cases lead Mr. Newsom in developing a mathematical model that linked baseline preference payment practice to the results of over one thousand settlements. Mr. Newsom provided testimony in the Delaware Bankruptcy Court relating to predicting total preference recoveries utilizing results from his model methodology. Mr. Newsom has also created user friendly data base programs capable of replicating Bankruptcy Schedules and Statements of Financial Affairs. Debtor s spreadsheet data can be easily uploaded to be formatted and printed or electronically transferred in final reporting form. In assisting as a financial analyst to the fee examiner in the Sunwest bankruptcy, Mr. Newsom recognized the need for a more efficient way of evaluating fees. Setting up spreadsheets in a format necessary to examine time inputs and professional work was time consuming and did not allow for efficient examination. Mr. Newsom began creating a database program that offered easy to read reports and user friendly access to searching tools. After that project was complete, Mr. Newsom further enhanced the program for more efficient data loading and downloading of spreadsheets, and he set up the database as a menu driven program that did not require the user to have any knowledge of programming. Mr. Newsom s assignments have included participating as a team member in evaluating the financial viability, production capabilities, and economic value of Hunt Valve, a supplier of equipment to the US Navy; and the financial viability of Crown Central Petroleum, a privately held $1.5 billion petroleum refining and retailer marketing company. During these projects he has been responsible for site visits and evaluations, management and work force interviews and evaluations, equipment and process evaluations, the development and implementation of cost and profit models, the preparation of comprehensive assessment reports to be presented to management, boards of directors, and investors. Also, in his assignments as a financial analyst for debtors and creditors' committees, Mr. Newsom participated in the preparation of business valuations and the generation of liquidation analyses. Mr. Newsom was a feature speaker at the 2012 ABI Southeast Conference discussing the attributes of his mathematical model used for determining Ordinary Course of Business with respect to preferences.