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Case 8:10-bk-16743-TA
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RON BENDER (SBN 143364) TODD M. ARNOLD (SBN 221868) LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 10250 Constellation Boulevard, Suite 1700 Los Angeles, California 90067 Telephone: (310) 229-1234 Facsimile: (310) 229-1244 Email: rb@lnbyb.com; tma@lnbyb.com Attorneys for Chapter 11 Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA (SANTA ANA DIVISION) In re: WESTCLIFF MEDICAL LABORATORIES, INC., Debtor. __________________________________ BIOLABS, INC., Debtor. __________________________________ Affects Both Debtors Affects WESTCLIFF MEDICAL LABORATORIES, INC. only Affects BIOLABS, INC. only Lead Case No. 8:10-bk-16743-TA Jointly Administered with Case No. 8:10-bk16746-TA Chapter 11 Cases
NOTICE OF MOTION AND FOURTH MOTION FOR AUTHORITY TO CONTINUE PAYING SENIOR MANAGEMENT COMPENSATION; DECLARATION OF MATTHEW PAKKALA IN SUPPORT THEREOF [No Hearing Required Unless Requested Pursuant to Local Bankruptcy Rule 9013-1(o)]
PLEASE TAKE NOTICE that Westcliff Medical Laboratories, Inc. and BioLabs, Inc., the Chapter 11 debtors and debtors in possession herein (collectively, the Debtors), hereby move, by way of this Fourth Motion for Authority to Continue Paying Senior Management Compensation (the Fourth Motion), for an order authorizing the Debtors to continue their retention and payment of compensation to Matthew Pakkala (Pakkala), the Debtors Chief
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Restructuring Officer, in the manner described in the annexed Memorandum of Points and Authorities. In summary, pursuant to the last three motions related to Pakkalas retention and compensation, the Court authorized the following compensation for Pakkala: (1) a fixed fee of $50,000 for services rendered during the month of August 2010, (2) a fixed fee of $40,000 for services rendered during the month of September 2010, (3) a fixed fee of $25,000 for services rendered during the month of October 2010, (4) from November 1, 2010 through March 31, 2011, an hourly rate of $595 for services provided by Pakkala on an as needed basis, (4) from March 31, 2011 through August 31, 2011, an hourly rate of $6751 for services provided by Pakkala on an as needed basis, and (6) continued reimbursement of Pakkala for his expenses. By way of this Fourth Motion, the Debtors are seeking the following terms for the continued retention and compensation of Pakkala: (1) from September 1, 2011 through May 31, 2012, an hourly rate of $675 for services provided by Pakkala on an as needed basis, and (2) continued reimbursement of Pakkala for his expenses. As discussed in the annexed Memorandum of Points and Authorities, the Debtors believe that these terms are fair and reasonable based on the number of tasks that the Debtors still need Pakkala to perform and Pakkalas proven record of delivering exceptional results for the Debtors. PLEASE TAKE FURTHER NOTICE that this Fourth Motion is based upon this Notice and Second Motion, the memorandum of Points and Authorities and declaration annexed hereto, the record in these cases and all arguments made at the hearing on the Fourth Motion, if any. PLEASE TAKE FURTHER NOTICE that Local Bankruptcy Rule 9013-1(o)(1)requires that any response and request for hearing on this Fourth Motion must be filed with the Court and served on the Office of the United States Trustee and Debtors counsel, whose name and address is set forth in the upper, left-hand corner of this Notice, within fourteen (14) days after the date of
Pakkala was charging an hourly rate of $595 during the last interim period for November 1, 2010 through March 31, 2011. The increase of Pakkalas hourly rate conforms with the increase in Pakkalas hourly rate charged by his firm FTI Consulting. However, the current hourly rate of $675 being charged to the estate is still lower than Pakkalas current regular hourly billing rate of $780, as Pakkala has always provided a discounted rate to the Debtors bankruptcy estates.
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the service of this Notice. The failure to timely respond to this Fourth Motion may be deemed to be consent to the relief requested in this Fourth Motion. WHEREFORE, the Debtors respectfully request that the Court enter an order: (1) (2) granting the Fourth Motion in its entirety; authorizing the Debtors to continue their retention and payment of Pakkala in the
manner described in the annexed Memorandum of Points and Authorities; and (3) affording such further and other relief as may be appropriate. WESTCLIFF MEDICAL LABORATORIES, INC. -andBIOLABS, INC. /s/ Todd M. Arnold RON BENDER TODD M. ARNOLD LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. Attorneys for Chapter 11 Debtors and Debtors in Possession
Dated: August 31, 2011
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MEMORANDUM OF POINTS AND AUTHORITIES I. COMPANY BACKGROUND AND CHAPTER 11 BANKRUPTCY FILINGS Westcliff Medical Laboratories, Inc. (Westcliff) and BioLabs, Inc. (BioLabs), the Chapter 11 debtors and debtors in possession herein (collectively, the Debtors), commenced their bankruptcy cases by filing voluntary petitions under Chapter 11 of 11 U.S.C. 101 et seq. (the Bankruptcy Code) on May 19, 2010 (the Petition Date). The Debtors continue to manage their financial affairs and operate their bankruptcy estates as debtors in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. BioLabs is the parent company to Westcliff, which is the operating company. The only material asset owned by BioLabs is its stock interest in the Debtor. Biolabs was organized for the purposes of acquiring 100% of the capital stock and other equity interests of Westcliff. Westcliff was founded in 1964 as a community-based laboratory and is headquartered in Santa Ana, California. Westcliff was the operator of approximately 170 branded, stand-alone, patient service center laboratories and STAT labs that provide various services, including clinical testing, pathology, reporting and support services for the benefit of thousands of out-patients throughout California. The Debtors had nearly 1000 employees. Working directly with patients and with contracted payors, including United Health, Aetna, Cigna, Blue Cross, Medi-Cal and Medicare, Westcliff had grown and became a leading out-patient laboratory service company. Westcliff averaged approximately 8,500 clinical requests per day and approximately 1,200 pathology requests per day, and performs approximately 250,000 cytology and 70,000 biopsy tests on an annual basis. Based on this performance, the Debtors had approximately $97 million in net revenue in 2009 and were the third largest clinical laboratory in California. While the Debtors revenue was significant, due to the small profit margins in this business, despite substantial and continuing cost cutting measures undertaken by the Debtors, the
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Debtors were simply not able to operate sufficiently profitably to enable the Debtors to repay their debts. The Debtors suffered a net loss of approximately $87 million in 2008 (including expenses and write offs of approximately $171 million) on net revenue of approximately $84 million. The Debtors suffered a net loss of approximately $13 million in 2009 (including expenses and write offs of approximately $110 million) on net revenue of approximately $97 million. While the Debtors instituted as many expense reductions as were reasonably possible, the Debtors losses continued. Since the beginning of 2009, the Debtors were unable to make any debt service payments to a group of lenders (the Senior Lenders) for whom GE Business Financial Services, Inc. acts as agent (in such capacity, the Senior Loan Agent), and the Debtors were unable to remain current with their other debt obligations, including payments owing to former owners of companies the Debtors previously purchased as part of the Debtors overall growth strategy. Indeed, the Debtors were only able to survive financially over the past
approximately seventeen months because the Senior Loan Agent provided the Debtors with emergency funding to cover payroll and other vital expenses. II. THE ASSET SALE PROCESS Given the Debtors financial predicament, it became clear to the Debtors in early 2009 that the only viable option available to the Debtors to avoid a shut down of their business and the loss of employment by all of the Debtors employees would be for the Debtors to sell their business as a going concern to the highest bidder. The Debtors were therefore engaged in an active sale process since early, 2009. After having engaged in substantial due diligence and negotiations with a number of different prospective buyers over the past many months, the Debtors concluded that LabWest, Inc. (LabWest) fka Wave Newco, Inc., a wholly-owned subsidiary of Laboratory Corporation of America (LabCorp) was the optimal buyer of the Debtors assets for three primary reasons. First, LabCorp, which is in the same business as Westcliff but is a much larger company,
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expressed the greatest interest in purchasing the Debtors assets. Second, it was clear that LabCorp as a strategic buyer was willing to pay a substantially higher price for the Debtors assets than any other prospective buyer. Third, LabCorp clearly has the financial means to consummate its purchase of the Debtors assets. On May 17, 2010 (two days prior to the Petition Date), the Debtors into an Asset Purchase Agreement (the APA) with LabCorp, which, among other things, provided for the Debtors to sell the Debtors business assets (excluding cash and accounts receivable) to LabCorp. Subject to certain adjustments, LabCorp agreed to pay to the Debtors the sum of $57.5 million, while leaving with the Debtors, among other things, all of the Debtors accounts receivable and all of the Debtors cash. The purchase price offered by LabCorp was substantially higher than the purchase price that any other buyer was willing to pay for the Debtors assets. In order to make sure that the purchase price being paid by LabCorp was the highest price possible, the Debtors conducted an auction sale of their assets following the Courts approval of overbid procedures. No party offered to pay more for the Debtors assets than LabCorp, which was consistent with the Debtors expectations. The Debtors therefore requested and urged the Court to approve the Debtors sale of their assets to LabCorp on a very expedited basis because of the severe risk of a deterioration of Westcliffs business resulting from the Debtors bankruptcy filings. This is a highly sensitive and extremely competitive industry, and the Debtors were very concerned that Westcliff may not be able to retain its customer base for any extended period of time while operating as a debtor in bankruptcy. The Debtors therefore concluded that an expedited sale of their assets was necessary to avoid immediate and irreparable harm to the Debtors business, creditors and bankruptcy estates and to avoid a downward adjustment in LabCorps purchase price (or a complete walk away) which were provided for in the asset purchase agreement if there was a meaningful reduction in Westcliffs post-petition business volume pending the closing of the sale. At the urging of the Debtors (with the full support of the Official Committee of Unsecured Creditors (the Committee) and the Senior Lenders), the Court approved the Debtors proposed
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sale of their assets to LabCorp at a hearing held on June 3, 2010, and the Court entered an order approving the Debtors sale of their assets to LabCorp on June 9, 2010. Prior to the sale hearing, the Debtors, the Creditors Committee and the Senior Lenders reached an agreement on an allocation of the LabCorp purchase price and the balance of the Debtors assets, which agreement has since been approved by the Court. On June 16, 2010 (the Closing Date), LabWest consummated its purchase of the Debtors assets pursuant to the APA and the motion to approve the sale under the APA and the order thereon (the Sale Order). Around the time of the Closing Date, the Federal Trade Commission (the "FTC") began an inquiry in alleged anti-competitive activity concerning LabWests acquisition of the Debtors assets. In the months after the Closing Date, the FTC and LabWest initiated a multitude of litigation against each other. After protracted litigation the issues between LabWest and the FTC were resolved or abandoned. The Debtors were tenants under approximately 163 real property leases (the RP Leases) as of the Petition Date. LabWest assumed or rejected approximately 116 RP Leases as of the Closing Date. Pursuant to the APA between the parties (as amended) and the Sale Order, the Debtors identified, inter alia, 47 RP Leases that LabWest, at its option, could designate for assumption or rejection after the Closing Date. Within the time originally allowed by the APA, LabWest designated 35 of these 47 RP Leases to either be rejected or to be assumed by the Debtors and assigned to LabWest. For the remaining 12 RP Leases, however, LabWest requested that the Debtors extend the time that LabWest may designate the Leases to either be rejected or assumed by the Debtors an assigned to LabWest. The Debtors agreed to seek to extend the time as requested. On September 15, 2010, the Court entered an order approving such request and extending the time for LabWest to assume or reject the RP Leases to December 15, 2010. Thereafter, due to the pending FTC litigation and based on agreements from affected landlords, the Court approved a further extension to and including March 16, 2011 for LabWest designate
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the open RP Leases for assumption and assignment or rejection. designations on all of the RP Leases.
LabWest has now made
Also as a result of the FTC litigation, certain hold-separate agreements between the FTC and LabWest, and injunctions, LabWest was not to make designations regarding over 100 nonreal property leases and contracts (the Leases and Contracts) within the time allowed by the APA. As a result, on December 10, 2010, the Debtors, LabWest, and the Official Committee of Unsecured Creditors (the Committee) signed a stipulation to extend the deadline for LabWest to designate contracts and non-real property leases from December 14, 2010 to March 14, 2011. That stipulation was approved by the Court. Due to continuing issues with the FTC, the Debtors, LabWest, and the Committee filed a stipulation to further extend the deadline for LabWest to designate contracts and non-real property leases from March 14, 2011 to and including May 13, 2011. That stipulation was approved by the Court. On May 13, 2011, LabWest made its final designations on the Leases and Contracts. Shortly thereafter, the Debtors filed their omnibus motion to reject Leases and Contracts designated by LabWest for rejection. The order granting that motion was entered and the
deadline to file rejection claims arising from the rejection of the Leases and Contracts (as well as other rejected leases and contracts) has passed. While awaiting LabWests final designations on the Leases and Contracts, the Debtors conducted a significant analysis of the scheduled and filed claims in the Debtors cases. The Debtors filed five omnibus objections to claims and some specific objections to claims, whereby the Debtors objected to approximately 70 claims. With the exception of the objection to the claim of Descartes Systems included in one of the omnibus objections to claims, which was continued and is pending before the Court, all of the foregoing omnibus objections to claims were sustained by the Court. In addition to the foregoing, the Debtors have entered into a number of stipulations resolving claims, which stipulations have been approved by the Court, and made two amendments to the Debtors Schedules of Assets and Liabilities. As a result of the foregoing efforts, the
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majority of the relatively small number of claims that are still subject to potential claims objections relate to the Leases and Contracts that, until recently, were still subject to potential assumption or rejection by LabWest, and, therefore, could not be resolved on a final basis. III. THE STATUS OF THE DEBTORS DISCLOSURE STATEMENT AND PLAN The Debtors intent has always been to file a plan or plans jointly with the Committee. Since the Debtors wanted to make the information in any disclosure statement(s) describing any plan(s) as accurate as possible, and because information regarding assets and liabilities would be the most material information contained in the disclosure statement(s), the Debtors decided to wait until after the designation deadlines set forth above to pass before preparing any disclosure statements and plans so that the Debtors and the Committee could develop more accurate information on these quintessential disclosures. Since the passing of the foregoing deadlines, the Debtors have prepared a joint disclosure statement and plan for the Debtors, which the Debtors intend to file jointly with the Committee. At present, the Committee is reviewing the aforementioned joint disclosure statement and plan. As soon as the Debtors have received input from the Committee on the foregoing documents, the Debtors and the Committee should be in a position to file a joint disclosure statement and plan. The Debtors believe that the disclosure statement and plan will be filed by the middle of September 2011. IV. PRIOR EMPLOYMENT OF FTI AND PAKKALA On May 20, 2010, the Debtors filed their application (the Application) seeking authorization, pursuant to Sections 105 and 363 of the Bankruptcy Code (A) to employ and retain FTI Consulting, Inc. (FTI) to provide a Chief Restructuring Officer and temporary employees and (B) to designate Matthew Pakkala (Pakkala) as the Debtors Chief Restructuring Officer, nunc pro tunc to the Petition Date of May 19, 2010.
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On June 16, 2010, upon consideration of the Application, the declarations in support of the Application, the FTI Engagement Contract (attached as Exhibit A to the Application), and the Court being satisfied, based on the representations made in the Application and the declarations in support thereof that FTI does not represent or hold any interest adverse to the Debtors or the Debtors estates with respect to the matters upon which it was to be engaged and was sufficiently disinterested as that term is defined under Section 101(14) of the Bankruptcy Code, as modified by 1107(b) of the Bankruptcy Code, and that the Debtors continued employment of FTI and Pakkala was necessary and in the best interests of the Debtors, the Debtors estates, their creditors, and all parties in interest and such continued employment being supported by the Committee, the Court entered an order (the First Interim Order). Pursuant the First Interim Order, the Court, among other things, (1) approved the Application, (2) authorized the Debtors to continue to retain and employ FTI and Pakkala on a final basis for an interim period through June 3, 2010, on the terms and conditions set forth in the Application, the Engagement Contract, and the Pakkala Declaration, subject to the following amendments to such terms (a) in the event the Debtors sought to have FTI personnel assume additional executive officer positions that are different than the positions disclosed in the Application, or to materially change the terms of the engagement by modifying the functions of the executive officer personnel, a motion to modify the retention shall be filed, (b) no principal, employee, or independent contractor of FTI and its affiliates shall serve as a director of the Debtors during the pendency of the Chapter 11 Cases, (c) for temporary employees providing services at an hourly rate, FTI shall file with the U.S. Trustee and the Committee, reports of compensation earned and expenses incurred on a quarterly basis, (3) authorized the Debtors to continue to designate Pakkala as the Chief Restructuring Officer on a final basis for an interim period to and through June 3, 2010, (4) approved the terms and conditions of FTIs retainer set forth in the Engagement Contract on a final basis for an interim period to and through June 3, 2010; (5) authorized, but did not require, FTI, without further order of the Court, in its sole discretion, to (a) hold its retainer and apply it to FTIs final bill for postpetition fees and expenses
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incurred during these cases, with any excess then to be refunded to the Debtors estates, or (b) to apply the retainer to fees and expenses incurred by FTI as FTIs engagement in these cases proceeds; and it is further, (6) authorized the Debtors to pay FTI in such amounts and at such times as are provided in the Engagement Contract on a final basis for an interim period as accrued through June 3, 2010 without further order of this Court, and (7) continued the hearing on the Application to June 3, 2010. On June 18, 2010, the Court entered its second interim order on the Application (the Second Interim Order). Pursuant to the Second Interim Order, the Court, among other things, (1) extended the original June 3, 2010 interim period in the First Interim Order to June 23, 2010, and (2) continued the hearing on the Application to June 23, 2010. On June 25, 2010, the Court entered a third interim order on the Application (the Third Interim Order), the terms and form of which were stipulated to by the Debtors and the Committee. Pursuant to the Third Interim Order, the Court, among other things, (1) extended the extended June 23, 2010 interim period in the Second Interim Order to July 31, 2010, and (2) ordered that the terms of any continued employment of Pakkala or compensation to be paid to FTI for any period from and after August 1, 2010 shall be the subject of a further written stipulated order entered into by and between Pakkala, the Committee, and the Debtors or a further order of the Court if no such stipulated order can be agreed upon. On July 7, 2010, the Debtors filed their Motion for Authority to Continue Paying Senior Management Compensation (the First Motion). Pursuant to the First Motion, the Debtors sought, among other things, an order authorizing the Debtors to continue their retention and payment of compensation to FTI and Pakkala as follows: (1) a fixed fee of $50,000 for services rendered during the month of August 2010, (2) a fixed fee of $40,000 for services rendered during the month of September 2010, and (3) continued reimbursement of Pakkala for his expenses. On July 28, 2010, the Court held a hearing on the First Motion. Upon consideration of the First Motion and that no oppositions had been filed to the First Motion, granted the First Motion.
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On September 8, 2010, the Debtors filed their Second Motion for Authority to Continue Paying Senior Management Compensation (the Second Motion). Pursuant to the Second
Motion, the Debtors sought, among other things, an order authorizing the Debtors to continue their retention and payment of compensation to FTI and Pakkala as follows: (1) a fixed fee of $25,000 for services rendered during the month of October 2010, (2) from November 1, 2010 through March 31, 2011, an hourly rate of $595 for services provided by Pakkala on an as needed basis, and (3) continued reimbursement of Pakkala for his expenses. On October 8, 2010, the Court entered an order granting the Second Motion. On March 14, 2011, the Debtors filed their Third Motion for Authority to Continue Paying Senior Management Compensation (the Third Motion). Pursuant to the Third Motion, the Debtors sought, among other things, an order authorizing the Debtors to continue their retention and payment of compensation to FTI and Pakkala as follows: (1) from April 1, 2011 through August 31, 2011, an hourly rate of $6752 for services provided by Pakkala on an as needed basis, and (2) continued reimbursement of Pakkala for his expenses. V. REQUESTED CONTINUED EMPLOYMENT OF FTI AND PAKKALA Based on the facts described above and below, the Debtors believe that the Committee and other parties in interest will support the Fourth Motion. However, due to the fact that the Debtors ability to continue to retain and pay compensation to FTI and Pakkala under the Third Motion expires on August 31, 2011, the Debtors decided to file the Fourth Motion as soon as possible out of an abundance of caution. In the event the Committee has any issues with the relief requested by the Fourth Motion, the Debtors will work with the Committee to resolve such issues so that an agreed order can be submitted to the Court.
Pakkala was charging an hourly rate of $595 during the last interim period for November 1, 2010 through March 31, 2011. The increase of Pakkalas hourly rate conforms with the increase in Pakkalas hourly rate charged by his firm FTI Consulting. However, the current hourly rate of $675 being charged to the estate is still lower than Pakkalas current regular hourly billing rate of $780, as Pakkala has always provided a discounted rate to the Debtors bankruptcy estates.
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The Debtors have agreed to terms for the continued retention and payment of FTI and Pakkala, which terms the Debtors believe are clearly in the best interests of the estates. As discussed above, Pakkala is the Debtors Chief Restructuring Officer. Pursuant to the Fourth Motion, the Debtors are seeking to extend their retention of FTI/Pakkala from September 1, 2011 through May 31, 2012. The following is a summary of the more important components to Pakkalas job functions that will be performed during the extended retention period: Responsibility for, and management of, the estates cash accounts and related reporting; Responsibility for, and development of, ongoing cash flow forecasts; Responsibility for, and oversight of, billing, error processing, and health plan and IPA reconciliations underway to ensure maximum recovery of proceeds to estates; Responsibility for, and oversight of, transition agreement and relationship between Westcliff and Biolabs regarding employees, vendors and ongoing cost allocation issues; Evaluation and resolution of Westcliff claims against third-parties; Creditor and Secured Lender relationship management and reporting; Responsibility for all required reporting and other aspects necessary for the administration of the Debtors bankruptcy estates; Evaluation and resolution of claims against the Debtors, a process which is already well underway; Responsibility for other unforeseen issues related to the day-to-day administration of the estates; Responsibility for other tasks falling under the purview of my duties as the Debtors Chief Restructuring Officer; Responsibility for overseeing the Debtors efforts to prepare a disclosure statement and plan and obtain approval and confirmation of the same; and Responsibility for overseeing the implementation of any confirmed plan.
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The Debtors propose to compensate Pakkala for the foregoing services provided on an as needed basis for the period of September 1, 2011 through May 31, 2012 by paying him (1) an hourly rate of $675, and (2) reimbursement for his expenses. The amount of time spent by Pakkala each month is largely dependent on the information requests made by other professionals and what is required to propose, obtain confirmation of, and perform under a plan. While, based on the foregoing, it is difficult to determine with absolute certainty the amount of time that will be spent by Pakkala in a given month, the prior months are somewhat instructive. In May, June, and July of 2011, Pakkala provided 8.4, 6.1, and 0.4 hours of services, respectively, and was compensated $5,670.00, $4,117.50, and $270.00 for that time. VI. CONCLUSION WHEREFORE, the Debtors respectfully request that the Court enter an order: (1) (2) granting the Fourth Motion in its entirety; authorizing the Debtors to continue their retention and payment of Pakkala in the
manner described in the annexed Memorandum of Points and Authorities; and (3) affording such further and other relief as may be appropriate. WESTCLIFF MEDICAL LABORATORIES, INC. -andBIOLABS, INC. /s/ Todd M. Arnold RON BENDER TODD M. ARNOLD LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. Attorneys for Chapter 11 Debtors and Debtors in Possession
Dated: March 31, 2011
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DECLARATION OF MATTHEW PAKKALA I, MATTHEW PAKKALA, HEREBY DECLARE AS FOLLOWS: 1. I have personal knowledge of the facts stated herein and would and could
competently testify thereto. 2. I am a Senior Managing Director of FTI Consulting, Inc. (FTI). My business
office is located at 633 West 5th Street, 16th Floor, Los Angeles, California, 90071. 3. I hold a B.A. from the University of California, San Diego, a J.D. from Loyola
Law School, and an M.B.A. from the Anderson School of Business at UCLA. I have more than 13 years of restructuring and related advisory and management experience. My work focuses on advising distressed and underperforming companies on restructuring alternatives and strategies for maximizing performance and value, and my expertise includes providing financial and operational restructuring, asset sales and expert witness services in the healthcare, retail, manufacturing and airline industries. Prior to joining FTI, I worked in the restructuring groups of PricewaterhouseCoopers and Price Waterhouse in Los Angeles. 4. FTI is a global business advisory firm with over 3,000 professionals located in
major business centers around the world. FTI provides services in areas ranging from corporate finance and interim management to economic consulting, forensic and litigation consulting, strategic communications and technology. FTIs clients include many corporations in the Global 1000 as well as a majority of the largest 25 banks and top 100 law firms in the world. 5. FTI has advised management, senior lenders and unsecured creditors in many of
the most significant restructurings and turnarounds in recent years. FTI and its professionals have also recently provided interim management services in a number of healthcare and other restructurings including, but not limited to, Downey Regional Medical Center, Fremont Investment & Loan, SyntaxBrillian, Daughters of Charity Health System; Methodist Hospital, Gary, IN; Quincy Medical Center; Nanticoke Memorial; Northern Berkshire; Regional Medical Center Memphis; and Boca Raton Community Hospital. 6. Effective on or about April 1, 2010, I became the Chief Restructuring Officer
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(CRO) for Westcliff Medical Laboratories, Inc. (Westcliff) and its parent corporation, BioLabs, Inc. (BioLabs), Chapter 11 Debtors and Debtors in Possession (collectively, the Debtors). 7. Westcliff Medical Laboratories, Inc. (Westcliff) and BioLabs, Inc. (BioLabs),
the Chapter 11 debtors and debtors in possession herein (collectively, the Debtors), commenced their bankruptcy cases by filing voluntary petitions under Chapter 11 of 11 U.S.C. 101 et seq. (the Bankruptcy Code) on May 19, 2010 (the Petition Date). The Debtors continue to manage their financial affairs and operate their bankruptcy estates as debtors in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. 8. BioLabs is the parent company to Westcliff, which is the operating company. The
only material asset owned by BioLabs is its stock interest in the Debtor. Biolabs was organized for the purposes of acquiring 100% of the capital stock and other equity interests of Westcliff. 9. I am informed that, Westcliff was founded in 1964 as a community-based Westcliff was the operator of
laboratory and is headquartered in Santa Ana, California.
approximately 170 branded, stand-alone, patient service center laboratories and STAT labs that provide various services, including clinical testing, pathology, reporting and support services for the benefit of thousands of out-patients throughout California. The Debtors had nearly 1000 employees. 10. Working directly with patients and with contracted payors, including United
Health, Aetna, Cigna, Blue Cross, Medi-Cal and Medicare, Westcliff had grown and became a leading out-patient laboratory service company. 11. I am informed that, Westcliff averaged approximately 8,500 clinical requests per
day and approximately 1,200 pathology requests per day, and performs approximately 250,000 cytology and 70,000 biopsy tests on an annual basis. I am informed that, based on this
performance, the Debtors had approximately $97 million in net revenue in 2009 and were the third largest clinical laboratory in California. 12. I am informed that, while the Debtors revenue was significant, due to the small
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profit margins in this business, despite substantial and continuing cost cutting measures undertaken by the Debtors, the Debtors were simply not able to operate sufficiently profitably to enable the Debtors to repay their debts. 13. I am informed that, the Debtors suffered a net loss of approximately $87 million in
2008 (including expenses and write offs of approximately $171 million) on net revenue of approximately $84 million. The Debtors suffered a net loss of approximately $13 million in 2009 (including expenses and write offs of approximately $110 million) on net revenue of approximately $97 million. 14. I am informed that, while the Debtors instituted as many expense reductions as
were reasonably possible, the Debtors losses continued. I am informed that, since the beginning of 2009, the Debtors were unable to make any debt service payments to a group of lenders (the Senior Lenders) for whom GE Business Financial Services, Inc. acts as agent (in such capacity, the Senior Loan Agent), and the Debtors were unable to remain current with their other debt obligations, including payments owing to former owners of companies the Debtors previously purchased as part of the Debtors overall growth strategy. I am informed that, the Debtors were only able to survive financially over the past approximately seventeen months because the Senior Loan Agent provided the Debtors with emergency funding to cover payroll and other vital expenses. 15. I understand that, given the Debtors financial predicament, it became clear to the
Debtors in early 2009 that the only viable option available to the Debtors to avoid a shut down of their business and the loss of employment by all of the Debtors employees would be for the Debtors to sell their business as a going concern to the highest bidder. I am informed that, the Debtors were therefore engaged in an active sale process since early, 2009. 16. After having engaged in substantial due diligence and negotiations with a number
of different prospective buyers over the past many months, the Debtors concluded that LabWest, Inc. (LabWest) fka Wave Newco, Inc., a wholly-owned subsidiary of Laboratory Corporation of America (LabCorp) was the optimal buyer of the Debtors assets for three primary reasons.
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First, LabCorp, which is in the same business as Westcliff but is a much larger company, expressed the greatest interest in purchasing the Debtors assets. Second, it was clear that LabCorp as a strategic buyer was willing to pay a substantially higher price for the Debtors assets than any other prospective buyer. Third, LabCorp clearly has the financial means to consummate its purchase of the Debtors assets. 17. On May 17, 2010 (two days prior to the Petition Date), the Debtors into an Asset
Purchase Agreement (the APA) with LabCorp, which, among other things, provided for the Debtors to sell the Debtors business assets (excluding cash and accounts receivable) to LabCorp. 18. Subject to certain adjustments, LabCorp agreed to pay to the Debtors the sum of
$57.5 million, while leaving with the Debtors, among other things, all of the Debtors accounts receivable and all of the Debtors cash. The purchase price offered by LabCorp was substantially higher than the purchase price that any other buyer was willing to pay for the Debtors assets. 19. In order to make sure that the purchase price being paid by LabCorp was the
highest price possible, the Debtors conducted an auction sale of their assets following the Courts approval of overbid procedures. No party offered to pay more for the Debtors assets than LabCorp, which was consistent with the Debtors expectations. 20. The Debtors therefore requested and urged the Court to approve the Debtors sale
of their assets to LabCorp on a very expedited basis because of the severe risk of a deterioration of Westcliffs business resulting from the Debtors bankruptcy filings. This is a highly sensitive and extremely competitive industry, and the Debtors were very concerned that Westcliff may not be able to retain its customer base for any extended period of time while operating as a debtor in bankruptcy. The Debtors therefore concluded that an expedited sale of their assets was necessary to avoid immediate and irreparable harm to the Debtors business, creditors and bankruptcy estates and to avoid a downward adjustment in LabCorps purchase price (or a complete walk away) which were provided for in the asset purchase agreement if there was a meaningful reduction in Westcliffs post-petition business volume pending the closing of the sale. 21. At the urging of the Debtors (with the full support of the Official Committee of
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Unsecured Creditors (the Committee) and the Senior Lenders), the Court approved the Debtors proposed sale of their assets to LabCorp at a hearing held on June 3, 2010, and the Court entered an order approving the Debtors sale of their assets to LabCorp on June 9, 2010. Prior to the sale hearing, the Debtors, the Creditors Committee and the Senior Lenders reached an agreement on an allocation of the LabCorp purchase price and the balance of the Debtors assets, which agreement has since been approved by the Court. 22. On June 16, 2010 (the Closing Date), LabWest consummated its purchase of the
Debtors assets pursuant to the APA and the motion to approve the sale under the APA and the order thereon (the Sale Order). 23. Around the time of the Closing Date, the Federal Trade Commission (the "FTC")
began an inquiry in alleged anti-competitive activity concerning LabWests acquisition of the Debtors assets. In the months after the Closing Date, the FTC and LabWest initiated a multitude of litigation against each other. After protracted litigation the issues between LabWest and the FTC were resolved or abandoned. 24. The Debtors were tenants under approximately 163 real property leases (the RP
Leases) as of the Petition Date. LabWest assumed or rejected approximately 116 RP Leases as of the Closing Date. Pursuant to the APA between the parties (as amended) and the Sale Order, the Debtors identified, inter alia, 47 RP Leases that LabWest, at its option, could designate for assumption or rejection after the Closing Date. Within the time originally allowed by the APA, LabWest designated 35 of these 47 RP Leases to either be rejected or to be assumed by the Debtors and assigned to LabWest. For the remaining 12 RP Leases, however, LabWest requested that the Debtors extend the time that LabWest may designate the Leases to either be rejected or assumed by the Debtors an assigned to LabWest. The Debtors agreed to seek to extend the time as requested. On September 15, 2010, the Court entered an order approving such request and extending the time for LabWest to assume or reject the RP Leases to December 15, 2010. Thereafter, due to the pending FTC litigation and based on agreements from affected landlords, the Court approved a further extension to and including March 16, 2011 for LabWest designate
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the open RP Leases for assumption and assignment or rejection. designations on all of the RP Leases. 25.
LabWest has now made
Also as a result of the FTC litigation, certain hold-separate agreements between the
FTC and LabWest, and injunctions, LabWest was not to make designations regarding over 100 non-real property leases and contracts (the Leases and Contracts) within the time allowed by the APA. As a result, on December 10, 2010, the Debtors, LabWest, and the Official Committee of Unsecured Creditors (the Committee) signed a stipulation to extend the deadline for LabWest to designate contracts and non-real property leases from December 14, 2010 to March 14, 2011. That stipulation was approved by the Court. Due to continuing issues with the FTC, the Debtors, LabWest, and the Committee filed a stipulation to further extend the deadline for LabWest to designate contracts and non-real property leases from March 14, 2011 to and including May 13, 2011. That stipulation was approved by the Court. 26. Contracts. On May 13, 2011, LabWest made its final designations on the Leases and Shortly thereafter, the Debtors filed their omnibus motion to reject Leases and
Contracts designated by LabWest for rejection. The order granting that motion was entered and the deadline to file rejection claims arising from the rejection of the Leases and Contracts (as well as other rejected leases and contracts) has passed. 27. While awaiting LabWests final designations on the Leases and Contracts, the
Debtors conducted a significant analysis of the scheduled and filed claims in the Debtors cases. The Debtors filed five omnibus objections to claims and some specific objections to claims, whereby the Debtors objected to approximately 70 claims. With the exception of the objection to the claim of Descartes Systems included in one of the omnibus objections to claims, which was continued and is pending before the Court, all of the foregoing omnibus objections to claims were sustained by the Court. 28. In addition to the foregoing, the Debtors have entered into a number of stipulations
resolving claims, which stipulations have been approved by the Court, and made two amendments to the Debtors Schedules of Assets and Liabilities. As a result of the foregoing efforts, the
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majority of the relatively small number of claims that are still subject to potential claims objections relate to the Leases and Contracts that, until recently, were still subject to potential assumption or rejection by LabWest, and, therefore, could not be resolved on a final basis. 29. The Debtors intent has always been to file a plan or plans jointly with the
Committee. Since the Debtors wanted to make the information in any disclosure statement(s) describing any plan(s) as accurate as possible, and because information regarding assets and liabilities would be the most material information contained in the disclosure statement(s), the Debtors decided to wait until after the designation deadlines set forth above to pass before preparing any disclosure statements and plans so that the Debtors and the Committee could develop more accurate information on these quintessential disclosures. 30. Since the passing of the foregoing deadlines, the Debtors have prepared a joint
disclosure statement and plan for the Debtors, which the Debtors intend to file jointly with the Committee. At present, the Committee is reviewing the aforementioned joint disclosure
statement and plan. As soon as the Debtors have received input from the Committee on the foregoing documents, the Debtors and the Committee should be in a position to file a joint disclosure statement and plan. I believe that the disclosure statement and plan will be filed by the middle of September 2011. 31. On May 20, 2010, the Debtors filed their application (the Application) seeking
authorization, pursuant to Sections 105 and 363 of the Bankruptcy Code (A) to employ and retain FTI Consulting, Inc. (FTI) to provide a Chief Restructuring Officer and temporary employees and (B) to designate me as the Debtors Chief Restructuring Officer, nunc pro tunc to the Petition Date of May 19, 2010. 32. On June 16, 2010, upon consideration of the Application, the declarations in
support of the Application, the FTI Engagement Contract (attached as Exhibit A to the Application), and the Court being satisfied, based on the representations made in the Application and the declarations in support thereof that FTI does not represent or hold any interest adverse to the Debtors or the Debtors estates with respect to the matters upon which it was to be engaged
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and was sufficiently disinterested as that term is defined under Section 101(14) of the Bankruptcy Code, as modified by 1107(b) of the Bankruptcy Code, and that the Debtors continued employment of FTI and me was necessary and in the best interests of the Debtors, the Debtors estates, their creditors, and all parties in interest and such continued employment being supported by the Committee, the Court entered an order (the First Interim Order). 33. Pursuant the First Interim Order, the Court, among other things, (1) approved the
Application, (2) authorized the Debtors to continue to retain and employ FTI and me on a final basis for an interim period through June 3, 2010, on the terms and conditions set forth in the Application, the Engagement Contract, and my Declaration, subject to the following amendments to such terms (a) in the event the Debtors sought to have FTI personnel assume additional executive officer positions that are different than the positions disclosed in the Application, or to materially change the terms of the engagement by modifying the functions of the executive officer personnel, a motion to modify the retention shall be filed, (b) no principal, employee, or independent contractor of FTI and its affiliates shall serve as a director of the Debtors during the pendency of the Chapter 11 Cases, (c) for temporary employees providing services at an hourly rate, FTI shall file with the U.S. Trustee and the Committee, reports of compensation earned and expenses incurred on a quarterly basis, (3) authorized the Debtors to continue to designate me as the Chief Restructuring Officer on a final basis for an interim period to and through June 3, 2010, (4) approved the terms and conditions of FTIs retainer set forth in the Engagement Contract on a final basis for an interim period to and through June 3, 2010; (5) authorized, but did not require, FTI, without further order of the Court, in its sole discretion, to (a) hold its retainer and apply it to FTIs final bill for postpetition fees and expenses incurred during these cases, with any excess then to be refunded to the Debtors estates, or (b) to apply the retainer to fees and expenses incurred by FTI as FTIs engagement in these cases proceeds; and it is further, (6) authorized the Debtors to pay FTI in such amounts and at such times as are provided in the Engagement Contract on a final basis for an interim period as accrued through June 3, 2010 without further order of this Court, and (7) continued the hearing on the Application to June 3, 2010.
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34.
On June 18, 2010, the Court entered its second interim order on the Application
(the Second Interim Order). Pursuant to the Second Interim Order, the Court, among other things, (1) extended the original June 3, 2010 interim period in the First Interim Order to June 23, 2010, and (2) continued the hearing on the Application to June 23, 2010. 35. On June 25, 2010, the Court entered a third interim order on the Application (the
Third Interim Order), the terms and form of which were stipulated to by the Debtors and the Committee. Pursuant to the Third Interim Order, the Court, among other things, (1) extended the extended June 23, 2010 interim period in the Second Interim Order to July 31, 2010, and (2) ordered that the terms of any continued employment of me or compensation to be paid to FTI for any period from and after August 1, 2010 shall be the subject of a further written stipulated order entered into by and among me, the Committee, and the Debtors or a further order of the Court if no such stipulated order can be agreed upon. 36. On July 7, 2010, the Debtors filed their Motion for Authority to Continue Paying Pursuant to the First Motion, the
Senior Management Compensation (the First Motion).
Debtors sought, among other things, an order authorizing the Debtors to continue their retention and payment of compensation to FTI and me as follows: (1) a fixed fee of $50,000 for services rendered during the month of August 2010, (2) a fixed fee of $40,000 for services rendered during the month of September 2010, and (3) continued reimbursement to me for my expenses. On July 28, 2010, the Court held a hearing on the First Motion. Upon consideration of the First Motion and that no oppositions had been filed to the First Motion, granted the First Motion. 37. On September 8, 2010, the Debtors filed their Second Motion for Authority to
Continue Paying Senior Management Compensation (the Second Motion). Pursuant to the Second Motion, the Debtors sought, among other things, an order authorizing the Debtors to continue their retention and payment of compensation to FTI and Pakkala as follows: (1) a fixed fee of $25,000 for services rendered during the month of October 2010, (2) from November 1, 2010 through March 31, 2011, an hourly rate of $595 for services provided by me on an as needed basis, and (3) continued reimbursement to me of my expenses. On October 8, 2010, the
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Court entered an order granting the Second Motion. 38. On March 14, 2011, the Debtors filed their Third Motion for Authority to Continue
Paying Senior Management Compensation (the Third Motion). Pursuant to the Third Motion, the Debtors sought, among other things, an order authorizing the Debtors to continue their retention and payment of compensation to FTI and me as follows: (1) from April 1, 2011 through August 31, 2011, an hourly rate of $6753 for services provided by me on an as needed basis, and (2) continued reimbursement to me of my expenses. 39. The Debtors have agreed to terms for the continued retention and payment of FTI
and me, which terms I believe are clearly in the best interests of the estates. As discussed above, I am the Debtors Chief Restructuring Officer. Pursuant to the Fourth Motion, the Debtors are seeking to extend their retention of FTI and me from September 1, 2011 through May 31, 2012. The following is a summary of the more important components of my job functions that will be performed during the extended retention period: Responsibility for, and management of, the estates cash accounts and related reporting; Responsibility for, and development of, ongoing cash flow forecasts; Responsibility for, and oversight of, billing, error processing, and health plan and IPA reconciliations underway to ensure maximum recovery of proceeds to estates; Responsibility for, and oversight of, transition agreement and relationship between Westcliff and Biolabs regarding employees, vendors and ongoing cost allocation issues; Evaluation and resolution of Westcliff claims against third-parties; Creditor and Secured Lender relationship management and reporting;
I was charging an hourly rate of $595 during the last interim period for November 1, 2010 through March 31, 2011. The increase my hourly rate conforms with the increase in my hourly rate charged by my firm FTI Consulting. However, the current hourly rate of $675 being charged to the estate is still lower than my current regular hourly billing rate of $780, as I have always provided a discounted rate to the Debtors bankruptcy estates.
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Responsibility for all required reporting and other aspects necessary for the administration of the Debtors bankruptcy estates;
Evaluation and resolution of claims against the Debtors, a process which is already well underway;
Responsibility for other unforeseen issues related to the day-to-day administration of the estates;
Responsibility for other tasks falling under the purview of my duties as the Debtors Chief Restructuring Officer;
Responsibility for overseeing the Debtors efforts to prepare a disclosure statement and plan and obtain approval and confirmation of the same; and
Responsibility for overseeing the implementation of any confirmed plan. The Debtors propose to compensate me for the foregoing services provided on an
as needed basis for the period of September 1, 2011 through May 31, 2012 by paying me (1) an hourly rate of $675, and (2) reimbursement for my expenses. 41. The amount of time spent by me each month is largely dependent on the
information requests made by other professionals and what is required to propose, obtain confirmation of, and perform under a plan. While, based on the foregoing, it is difficult to determine with absolute certainty the amount of time that will be spent by me in a given month, the prior months are somewhat instructive. In May, June, and July of 2011, I provided 8.4, 6.1, and 0.4 hours of services, respectively, and was compensated $5,670.00, $4,117.50, and $270.00 for that time.
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42.
Since I believe there is continued economic value to the estates from actively
managing the transition, collection, claims resolution, and plan confirmation and implementation progress, and because I believe that the Debtors would incur substantially higher expenses and achieve substantially worse results without me and FTI, I believe that the continued retention of me and FTI as set forth above is in the best interests of the Debtors and their estates. I declare under penalty of perjury that the foregoing is true and correct to the best of my knowledge, information and belief. Executed on this 31st day of August 2011, at Los Angeles, California. /s/ Matthew Pakkala MATTHEW PAKKALA
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NOTE: When using this form to indicate service of a proposed order, DO NOT list any person or entity in Category I. Proposed orders do not generate an NEF because only orders that have been entered are placed on the CM/ECF docket.
SUPPLEMENTAL PROOF OF SERVICE OF DOCUMENT

I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: 10250 Constellation Boulevard, Suite 1700, Los Angeles, CA 90067 A true and correct copy of the foregoing document described as NOTICE OF MOTION AND FOURTH MOTION FOR AUTHORITY TO CONTINUE PAYING SENIOR MANAGEMENT COMPENSATION; DECLARATION OF MATTHEW PAKKALA IN SUPPORT THEREOF will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner indicated below: I. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) Pursuant to controlling General Order(s) and Local Bankruptcy Rule(s) (LBR), the foregoing document will be served by the court via NEF and hyperlink to the document. On September 1, 2011, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following person(s) are on the Electronic Mail Notice List to receive NEF transmission at the email address(es) indicated below: Raymond G Alvarado ralvarado@alvaradosmith.com Todd M Arnold tma@lnbrb.com Phillip Ashman mgolod@mcqueenashman.com, pashman@mcqueenashman.com;bkumamoto@mcqueenashman.com Richard L Barnett rick@barnettrubin.com, rlbsec@barnettrubin.com Ron Bender rb@lnbrb.com Eric S Bershatski ericbershatski@tilemlaw.com Ronald K Brown rkbgwhw@aol.com Jennifer Witherell Crastz jcrastz@hemar-rousso.com Carol J Fogleman mfrost@bwslaw.com Anthony A Friedman aaf@lnbrb.com John-patrick M Fritz jpf@lnbrb.com Jeffrey K Garfinkle bkgroup@buchalter.com, jgarfinkle@buchalter.com;jmealeyhatch@buchalter.com;docket@buchalter.com Fredric Glass fglass@fairharborcapital.com Nancy S Goldenberg nancy.goldenberg@usdoj.gov D Edward Hays ehays@marshackhays.com Michael J Heyman michael.heyman@klgates.com Mark D Houle mark.houle@pillsburylaw.com Jacqueline L James jlj@lnbyb.com Jeff D Kahane jkahane@duanemorris.com Andy Kong Kong.Andy@ArentFox.com Rodger M Landau rlandau@lgbfirm.com, kmoss@lgbfirm.com Matthew A Lesnick matt@lesnicklaw.com Michael B Lubic michael.lubic@klgates.com Frank F McGinn ffm@bostonbusinesslaw.com Elissa Miller emiller@sulmeyerlaw.com, asokolowski@sulmeyerlaw.com Aram Ordubegian ordubegian.aram@arentfox.com Ernie Zachary Park ernie.park@bewleylaw.com Richard Park Richard.Park@usdoj.gov Justin E Rawlins jrawlins@winston.com, docketla@winston.com Benjamin Seigel bseigel@buchalter.com, IFS_filing@buchalter.com David B Shemano dshemano@pwkllp.com Philip E Strok pstrok@wgllp.com
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. August 2010
F 9013-3.1.PROOF.SERVICE
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United States Trustee (SA) ustpregion16.sa.ecf@usdoj.gov Howard J Weg hweg@pwkllp.com Sharon Z Weiss sharon.weiss@hro.com, raul.morales@hro.com Joseph M Welch jwelch@buchalter.com, jmealey-hatch@buchalter.com;docket@buchalter.com Johnny White , seb@blakeleyllp.com;bblakeley@blakeleyllp.com;rclifford@blakeleyllp.com Service information continued on attached page
II. SERVED BY U.S. MAIL OR OVERNIGHT MAIL(indicate method for each person or entity served): On September 1, 2011, I served the following person(s) and/or entity(ies) at the last known address(es) in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States Mail, first class, postage prepaid, and/or with an overnight mail service addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed. Service by U.S. Mail The Hon. Theodor C. Albert United States Bankruptcy Court 411 West Fourth Street Santa Ana, CA 92701
Service information continued on attached page (by U.S. Mail) III. SERVED BY PERSONAL DELIVERY, FACSIMILE TRANSMISSION OR EMAIL (indicate method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on Fill in Date Document is Filed, I served the following person(s) and/or entity(ies) by personal delivery, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on the judge will be completed no later than 24 hours after the document is filed. Service information continued on attached page I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. September 1, 2011 Date Lourdes Cruz Type Name /s/ Lourdes Cruz Signature
This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California. August 2010
F 9013-3.1.PROOF.SERVICE
Case 8:10-bk-16743-TA
In re Westcliff Medical Laboratories In re BioLabs, Inc. File No. 4367 RSN
Service by U.S. MAIL or NEF if marked with *
Desc
Debtors Westcliff Medical Laboratories, Inc. BioLabs, Inc. c/o FTI Consulting 633 West Fifth Street, 16th Floor Los Angeles, CA 90071 Counsel for LGSM Laguna Hills, LLC Ronald K. Brown, Jr. NEF* Law Offices of Ronald K. Brown, Jr. 901 Dove Street, Suite 120 Newport Beach, CA 92660 Steven A. Oldham, Sr. Staff Atty State of CA, Dept. of Health Care Services Office of Legal Services-MS 0010 P.O. Box 997413 Sacramento, CA 95899-7413 RSN Counsel to Creditor Google Scott E. Blakeley/Johnny White Blakeley & Blakeley 2 Park Plaza, Suite 400 Irvine, CA 92614 Counsel for ACE Ron Oliner Duane Morris LLP Suite 2200 One Market Plaza, Spear Tower San Francisco, CA 94105-1127
Committee-RSN Benjamin Seigel/Jeffrey Garfinkle NEF * Buchalter Nemer 1000 Wilshire Boulevard, Suite 1500 Los Angeles, California 90017-2457 Counsel for Health Net, Inc.-RSN Pillsbury Winthrop Shaw Pittman LLP Attn: Mark D. Houle, Esq. NEF * 650 Town Center Drive, Suite 700 Costa Mesa, CA 92626-7122 RSN Rita A. Woodard Treasurer-Tax Collector 221 S. Mooney Blvd., Room 104-E Visalia, CA 93291-4593 RSN City and County of San Francisco Treasurer/Tax Collector-Legal Section; Attn Robert L. Fletcher, Jr. P.O. Box 7426 San Francisco, CA 94120-7426 Counsel for ACE Jeff Kahane NEF * Duane Morris LLP 865 S. Figueroa Street, Suite 3100 Los Angeles, CA 90017-5450
Frank Cadigan Nancy Goldenberg Terry Biers Office of the U.S. Trustee NEF * 411 West Fourth St. Suite 9041 Santa Ana, CA 92701 RSN Los Angeles County Treasurer and Tax Collector P.O. Box 54110 Los Angeles, CA 90054-0110 RSN Robert Brill, Of Counsel Grant Callison, VP Cambridge Healthcare Properties, Inc. 1717 Main Street, 59th Floor Dallas, TX 75201 Counsel for Hologic, Inc. and Third Wave Technologies Jonathan Braverman Baker, Braverman & Barbadoro P.C. 50 Braintree Hill Office Park, Suite 108 Braintree, MA 02184-8734
Case 8:10-bk-16743-TA
In re Westcliff Medical Laboratories In re BioLabs, Inc. File No. 4367 Creditor Committee
Desc
SPECIALTY LABORATORIES Attn: Sharon Z. Weiss Holes Roberts & Owen LLP 800 W. Olympic Blvd., 4th Floor Los Angeles, CA 90015-1367 DIASORIN INC. Attn: Neal Domeyer 1951 Northwestern Avenue P.O. Box 285 Stillwater, MN 55082 GENZYME CORPORATION Attn: D. Ross Martin Ropes & Gray LLP One International Place Boston, MA 02110
SIEMENS HEALTHCARE DIAGNOSTICS Attn: Yesim Brisbane P.O. Box 6101, MS 802 Newark, DE 19714-6101
ROCHE DIAGNOSTICS CORPORATION Attn: Wayne Mathias 9115 Hague Road Indianapolis, IN 46250
QIAGEN Attn: Jonathan Isaac 1201 Clopper Road Gaithersburg, MD 20878
IRVINE CORPORATE CENTER, LLC Attn: Jim Savory 252 Clayton Street Denver, CO 80206

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Case 8:10-bk-16743-TA

Dated: August 31, 2011

LabWest has now made

Dated: March 31, 2011

laboratory and is headquartered in Santa Ana, California.

LabWest has now made

Senior Management Compensation (the First Motion).

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SUPPLEMENTAL PROOF OF SERVICE OF DOCUMENT

QIAGEN Attn: Jonathan Isaac 1201 Clopper Road Gaithersburg, MD 20878

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