Objection Deadline: November 6, 2020 11:59pm (Eastern Prevailing Time)
Richard J. Cooper
Lisa M. Schweitzer
Luke A. Barefoot
Thomas S. Kessler
CLEARY GOTTLIEB STEEN & HAMILTON LLP
One Liberty Plaza
New York, New York 10006
Telephone: (212) 225-2000
Facsimile: (212) 225-3999
Counsel to the Debtors
and Debtors-in-Possession
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
x
In re:
:
Chapter 11
:
LATAM Airlines Group S.A., et al.,
:
Case No. 20-11254 (JLG)
:
Debtors.
1:
Jointly Administered
Related Docket Nos. 1050, 1138
x
1 The Debtors in these Chapter 11 Cases, along with the last four digits of each Debtor’s tax identification
number (as applicable), are: LATAM Airlines Group S.A. (59-2605885); Lan Cargo S.A. (98-0058786); Transporte Aéreo S.A. (96-9512807); Inversiones Lan S.A. (96-5758100); Technical Training LATAM S.A. (96-847880K); LATAM Travel Chile II S.A. (76-2628945); Lan Pax Group S.A. (96-9696800); Fast Air Almacenes de Carga S.A. (96-6315202); Línea Aérea Carguera de Colombia S.A. (26-4065780); Aerovías de Integración Regional S.A. (98-0640393); LATAM Finance Ltd. (N/A); LATAM Airlines Ecuador S.A. (98-0383677); Professional Airline Cargo Services, LLC (35-2639894); Cargo Handling Airport Services, LLC (30-1133972); Maintenance Service Experts, LLC (30-1130248); Lan Cargo Repair Station LLC (83-0460010); Prime Airport Services Inc. (59-1934486); Professional Airline Maintenance Services LLC (37-1910216); Connecta Corporation (20-5157324); Peuco Finance Ltd. (N/A); Latam Airlines Perú S.A. (52-2195500); Inversiones Aéreas S.A. (N/A); Holdco Colombia II SpA (76-9310053); Holdco Colombia I SpA (76-9336885); Holdco Ecuador S.A. (76-3884082); Lan Cargo Inversiones S.A. (96-9696908); Lan Cargo Overseas Ltd. (85-7752959); Mas Investment Ltd. (85-7753009); Professional Airlines Services Inc. 0623014); Piquero Leasing Limited (N/A); TAM S.A. (N/A); TAM Linhas Aéreas S.A. (65-0773334); Aerolinhas Brasileiras S.A. (98-0177579); Prismah Fidelidade Ltda. (N/A); Fidelidade Viagens e Turismo S.A. (27-2563952); TP Franchising Ltda. (N/A); Holdco I S.A. (76-1530348) and Multiplus Corredora de Seguros Ltda. (N/A). For the purpose of these Chapter 11 Cases, the service address for the Debtors is: 6500 NW 22nd Street Miami, FL 33131.
2
NOTICE OF EXPANSION OF SCOPE OF SERVICES TO BE PROVIDED TO THE
BRAZILIAN DEBTORS UNDER THIS COURT’S ORDER AUTHORIZING THE
RETENTION OF ERNST & YOUNG AUDITORES INDEPENDENTES S.S.
PLEASE TAKE NOTICE that on October 1, 2020, the Court entered the Order
Authorizing the Retention and Employment of Ernst & Young Auditores Independentes S.S. as
Auditors of the Brazilian Debtors Nunc Pro Tunc to July 9, 2020, ECF No. 1138 (the “EY
Retention Order”),
2authorizing the above-captioned debtors and debtors in possession (the
“Debtors”) to employ Ernst & Young Auditores Independentes S.S. (“EY Brazil”).
PLEASE TAKE FURTHER NOTICE that Paragraph 7 of the EY Retention Order
provides the following:
To the extent that, during the pendency of these chapter 11 cases, the Debtors
require EY Brazil to perform professional services other than those set forth in the
Engagement Letter and services related to those set forth in the Engagement Letter,
the Debtors shall file such agreements with the Court and serve such agreements
upon the applicable notice parties. To the extent any parties object, within ten days
of such new agreements being served, to the additional proposed agreements with
EY Brazil, the Debtors shall promptly schedule a hearing before the Court. Absent
a timely objection, such additional agreements and all additional services pursuant
thereto shall be deemed approved by the Court (without the need for any further
Court order) and be subject to the provisions of this Order. This procedure shall
not abridge the Debtors’ right to file ordinary applications seeking expansions of
EY Brazil’s services, if the Debtors deem it appropriate to do so.
PLEASE TAKE FURTHER NOTICE that the Brazilian Debtors have entered into an
additional statement of work with EY Brazil, which is attached hereto as Exhibit A (the
“Additional Engagement Letter”). Also attached as Exhibit A is a computer-generated English
translation of the additional Engagement Letter.
2 Capitalized terms used but not otherwise defined herein have the meaning given to them in the EY Retention
Order.
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PLEASE TAKE FURTHER NOTICE that under the Additional Engagement Letter, EY
Brazil intends to perform the following additional services:
3Issuing an interfirm review report to the independent auditors of LATAM Airlines Group
S.A. regarding the special purpose consolidated financial statements of TAM S.A.
(“reporting package”) - unaudited and prepared in Portuguese, for the nine-month period
ending September 30, 2020.
PLEASE TAKE FURTHER NOTICE that any party wishing to oppose the expansion
of the scope of the Debtors’ retention of EY Brazil to include the services set forth in the Additional
Engagement Letter must file an objection with the Bankruptcy Court on or before November 6,
2020 (the “Objection Deadline”). Any such objection must be served on counsel for the Debtors
so as to be received by the Objection Deadline.
PLEASE TAKE FURTHER NOTICE that absent a timely objection, the Additional
Engagement Letter, and all additional services pursuant thereto, shall be deemed approved by the
Court (without the need for any further Court order) and be subject to the provisions of the EY
Retention Order.
3 The summaries of certain terms of the Engagement Letter herein are qualified in their entirety by reference to the
provisions of the Engagement Letter. To the extent there is any discrepancy between the summaries contained in this Notice and the terms of the Engagement Letter, the terms of the Engagement Letter shall control.
2
PLEASE TAKE FURTHER NOTICE that if an objection is timely filed and served, and
not subsequently resolved, the matter will be scheduled for a hearing.
Dated:
October 27, 2020
New York, New York
/s/ Luke A. Barefoot
Richard J. Cooper, Esq.
Lisa M. Schweitzer, Esq.
Luke A. Barefoot, Esq.
Thomas S. Kessler, Esq.
CLEARY GOTTLIEB STEEN & HAMILTON LLP
One Liberty Plaza
New York, New York 10006
Telephone: (212) 225-2000
Facsimile: (212) 225-3999
Counsel to the Debtors
and Debtors-in-Possession
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Pg 4 of 4
EXHIBIT A
CW2355637
São Paulo Corporate Towers
Av. Presidente Juscelino Kubitschek, 1.909 Vila Nova Conceição
04543-011 - São Paulo – SP - Brasil Tel: +55 11 2573-3000 ey.com.br
SEGUNDO TERMO ADITIVO AO CONTRATO DE PRESTAÇÃO DE SERVIÇOS PRP 376.2020/SP
Pelo presente instrumento particular e na melhor forma de direito, as partes a seguir qualificadas, ERNST &
YOUNG AUDITORES INDEPENDENTES S.S. (doravante denominada EY Brasil), Companhia com sede na
Av. Pres. Juscelino Kubitschek, 1909 - Torre Norte, 04543-011, São Paulo -SP, Brasil, inscrita no Cadastro Nacional das Pessoas Jurídicas do Ministério da Fazenda (CNPJ/MF) sob o nº 61.366.936/0001-25, sociedade simples de direito privado constituída segundo as leis brasileiras, neste instrumento podendo ser referida como “Nós”; e
TAM S.A. com sede na Rua Verbo Divino 2001, São Paulo, SP, inscrita no Cadastro Nacional das Pessoas
Jurídicas do Ministério da Fazenda (CPF/MF) sob o nº 01.832.635/0001-18 e,
TAM LINHAS AÉREAS S/A (“LATAM Brasil”), com sede na Rua Verbo Divino, 2.001, andar 17, Chácara
Santo Antônio, São Paulo/SP, CEP 04719-002, inscrita no CNPJ sob nº. 02.012.862/0001-60 e doravante denominadas CONTRATANTE;
ABSA AEROLINHAS BRASILEIRAS S/A, com sede na Rod Santos Dumont Km 66, S/n, S.v.p. Lado Esquerdo
| Campinas - SP, CEP: 13052-970, inscrita no CNPJ sob nº. 00.074.635/0001-33, que neste ato é representada conforme seus atos constitutivos, doravante denominada “INTERVENIENTE ANUENTE”; Interveniente anuente em conjunto com as Contratadas serão denominadas como Companhia para fins deste Contrato;
Considerando que:
I. As Partes firmaram Contrato de Prestação de Serviços com efeitos a partir de 27 de abril de 2020 (“Contrato”), sob o número PRP 376.2020/SP, seguido de Aditivo em 22 de setembro de 2020;
II. As Partes desejam ampliar o escopo do Contrato e, consequentemente, o valor dos honorários devidos pela Prestação de Serviços;
RESOLVEM as Partes formalizar seus entendimentos, mediante a celebração do presente 2º Aditivo ao Contrato (“ 2º Aditivo”), de acordo com os seguintes termos e condições.
CLÁUSULA PRIMEIRA
1.1. As Partes resolvem ampliar o escopo do Contrato, anexo 1 – proposta comercial, clausula 1, Escopo de Reporting Package, única e exclusivamente para inclusão do seguinte item:
vi. Emitir relatório de revisão interfirma para os auditores externos da LATAM Airlines Group S.A. sobre as informações financeiras consolidadas de propósito específico da TAM S.A. consolidado (“reporting
package”) - não auditadas e preparadas em português, para o período de 9 meses, findos em 30 de
setembro de 2020.
CLÁUSULA SEGUNDA
2.1. Pelo serviço previsto na Cláusula Primeira acima, a CONTRATANTE pagará os honorários complementares aproximado no montante de R$100.000,00 (cem mil reais). As Partes ressaltam que estes honorários serão acrescidos de impostos de PIS, COFINS e ISS, portanto assim totalizando R$116.618,08 (cento e dezesseis mil, seiscentos e dezoito reais e oito centavos).
Em virtude que a Companhia estar sob proteção do Capítulo 11 do United States Bankruptcy Code ("Código de Falências dos Estados Unidos da América "), os honorários serão faturados após as horas incorridas serem aprovadas pela United States Bankruptcy Court of the Southern District of New York (Vara de Falências do Distrito Sul de Nova Iorque, Estados Unidos da América). As taxas horas aprovadas, conforme contrato original PRP 376.2020/SP são as seguintes:
DocuSign Envelope ID: D5D02DBD-A1EA-43A3-BADE-96C84888FB33
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Pg 2 of 6
Rank taxa/hora Partner R$ 684 Executive Director R$ 494 Senior Manager R$ 408 Manager R$ 291 Senior R$ 169 Staff 2 R$ 117 Staff 1 R$ 102 Trainee R$ 73 Média taxa/hora R$292
2.2. As Partes ressaltam que os honorários reais podem exceder essa estimativa dependendo das mudanças ocorridas nos negócios (ex: natureza dos negócios ou mudança das entidades da Companhia) ou trabalhos não previstos no escopo, nesta hipótese, as Partes deverão formalizar o novo montante por meio de novo Termo Aditivo.
E por estarem justas e contratadas, as partes firmam o presente em duas vias de igual teor e forma, na presença das duas testemunhas abaixo assinadas, cujos efeitos retroagem a 06 de outubro de 2020.
São Paulo, 21 de outubro de 2020.
TAM S.A. TAM Linhas Aéreas S/A
ABSA AEROLINHAS BRASILEIRAS S.A. ERNST & YOUNG AUDITORES INDEPENDENTES S.S.
Testemunhas:
Adriana Farias Valeria Pérez
Gerente sênior de Controladoria LATAM Gerente sênior de auditoria EY Brasil
TRANSLATION TO FOLLOW
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04543-011 - São Paulo – SP - Brasil Tel: +55 11 2573-3000
ey.com.br
SECOND ADDENDUM TO THE SERVICE AGREEMENT PRP 376.2020/SP
ERNST & YOUNG AUDITORES INDEPENDENTES S.S. (hereinafter referred to as “EY Brazil” or
“We”), Company with its headquarters at Av. Pres. Juscelino Kubitschek, 1909 - Torre Norte, 04543-011, São Paulo-SP, Brazil, registered with Brazilian IRS Registry of Legal Entities (CNPJ/MF) under No. 61.366.936/0001-25, a private company, organized under the laws of Brazil, and
TAM S.A., with its headquarters at Rua Verbo Divino 2001, São Paulo, SP, registered with CNPJ/MF
under No. 01.832.635/0001-18, and
TAM LINHAS AÉREAS S/A, with its headquarters at Rua Verbo Divino, 2.001, floor 17, Chácara Santo
Antônio, São Paulo/SP, ZIP 04719-002, registered with CNPJ under No. 02.012.862/0001-60 (hereinafter referred to, together with TAM S.A., as “SERVICE RECIPIENT”);
ABSA AEROLINHAS BRASILEIRAS S/A, with its headquarters at Rod Santos Dumont Km 66, S/n,
S.v.p. Lado Esquerdo | Campinas - SP, ZIP: 13052-970, registered with CNPJ under No. 00.074.635/0001-33, herein represented as per its articles of incorporation (hereinafter referred to as “CONSENTING INTERVENING PARTY”); Consenting intervening party together with the Service Recipients are referred to as “Company” or “you” for the purpose of this Agreement;
Whereas:
I. The Parties have entered into a Service Agreement, effective as of April 27, 2020 (the “Agreement”) under number PRP 376.2020/SP, followed by [the] Addendum dated September 22, 2020; II. The Parties wish to expand the scope of the Agreement and, consequently, the amount of fees due for the Provision of Services;
NOW, THEREFORE, the Parties RESOLVE to formally state their understanding, through the execution of this Second Addendum to the Agreement (“Addendum”), under the following terms and conditions.
CLAUSE ONE
1.1. The Parties hereby agree to expand the scope of the Agreement, attachment 1 - commercial proposal, clause 1, Scope of Reporting Package, solely and exclusively to include the following item:
vi. Issuing an interfirm review report to the independent auditors of LATAM Airlines Group S.A. regarding the special purpose consolidated financial statements of TAM S.A. (“reporting
package”) - unaudited and prepared in Portuguese, for the nine-month period ending September
30, 2020.
CLAUSE TWO
2.1. For the service provided in Clause One above, the SERVICE RECIPIENT shall pay additional fees in the amount of R$ 100,000.00 (one hundred thousand reais). The Parties emphasize that these fees will increase by PIS, COFINS and ISS taxes, thus totaling R$ 116,618.08 (one hundred and sixteen thousand, six hundred and eighteen reais and eight cents).
Since the Company is under the protection of Chapter 11 of the United States Bankruptcy Code, fees will be billed after the hours incurred are approved by the United States Bankruptcy Court for the Southern District of New York (United States Bankruptcy Court of the Southern District of New York).
Rank LATAM rate Partner R$ 684 Executive Director R$ 494 Senior Manager R$ 408 Manager R$ 291 Senior R$ 169 Staff 2 R$ 117 Staff 1 R$ 102 Trainee R$ 73
Average hourly rate R$292
2.2. The Parties emphasize that the actual fees may exceed this estimate depending on changes in business (e.g. nature of business or changes in the Company’s organizational structure) or work not provided for in the scope; in this case, the Parties shall formalize the new amount by means of a new Addendum.
And for being fair and bound, the Parties hereby sign in two counterparts of equal form and content, in the presence of two undersigned witnesses, which shall effective retroactively as of October 6, 2020. São Paulo, October 21, 2020.
ERNST & YOUNG
Auditores Independentes S.S. CRC-2SP015199/O-6
Ezequiel Litvac
Accountant CRC-1SP249186/O-5
TAM S.A. TAM Linhas Aéreas S/A
ABSA AEROLINHAS BRASILEIRAS S.A. Witnesses:
Adriana Farias Valeria Pérez
Senior Manager – Controllership LATAM Senior Manager – Assurance EY Brazil
CPF: CPF: 239.076.078-30
