Contract analysis

I. PRELIMINARY STATEMENT Thalassa Americas Inc. ("TAI" or the "Debtor"), debtor and debtor-in-possession in the above-captioned Chapter 11 case, respectfully submits this application (the "Application") pursuant to sections 327(a) and 328(a) of title 11 of the United States Code (the "Bankruptcy Code") and Rule 2014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") for entry of an order, substanti

II. JURISDICTION AND VENUE This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended General Order of Reference from the United States District Court for the Southern District of Texas. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), as it concerns the administration of the Debtor's estate. Venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and

III. BACKGROUND A. The Debtor and Its Business

1. TAI is a Delaware C-Corporation (Employer Identification Number: 84-3291057) and a wholly-owned subsidiary of Thalassa Shipping & Logistics Société Anonyme ("TSL"), a société anonyme organized and existing under the laws of the Hellenic Republic and headquartered at 42 Akti Miaouli, Piraeus 18538, Greece. TSL is one of the leading mid-market international shipping and logistics companies operating in the dry-bulk

2. TSL was founded in 1987 by the Kostandinos family. Chairman Dimitrios Kostandinos and Vice Chairwoman Elena Kostandinos-Pavlou hold a combined eighty percent (80%) of TSL's equity through KFO Holdings Société Anonyme ("KFO"), a Greek holding company. Specifically, Mr. Kostandinos holds approximately sixty-two percent (62%) of TSL equity and Ms. Kostandinos-Pavlou holds approximately eighteen percent (18%) of TSL e

3. TAI is registered with the Delaware Secretary of State. Its registered agent in Delaware is Capitol Registered Agents LLC, located at 1209 Orange Street, Wilmington, Delaware 19801. TAI was incorporated on March 12, 2018 to serve as the primary U.S. operating subsidiary of TSL and to facilitate the expansion of TSL's commercial activities in the United States.

4. TAI conducts the U.S.-side operations of the TSL enterprise, including the management of Houston terminal operations at the Port of Houston, Jones Act–exempt foreign-flag vessel scheduling for TSL's fleet calling at U.S. ports, and a domestic freight brokerage business that serves as an intermediary between U.S. shippers and the TSL fleet as well as third-party tonnage providers. TAI's Houston terminal operations

5. For the fiscal year ended December 31, 2021, TAI reported total revenue of approximately $312 million. For the fiscal year ended December 31, 2022, TAI's estimated total revenue is approximately $198 million, reflecting a year-over-year decline of approximately 36.5%. This decline is principally attributable to the collapse in dry-bulk charter rates and the broader deterioration in global shipping markets describe

6. TAI currently employs approximately 680 employees in the United States, including approximately 420 employees in the Houston metropolitan area and approximately 260 employees in other U.S. locations. These employees are part of TSL's approximately 4,200 employees globally, including approximately 2,800 seafarers and approximately 1,400 shore-based personnel.

7. TSL owns and operates a fleet of fifty (50) vessels, consisting of thirty-eight (38) dry-bulk carriers and twelve (12) container vessels. As of November 1, 2022, the fleet was appraised by Drakos Maritime Valuations Ltd. ("Drakos"), an independent maritime appraisal firm based in Piraeus, Greece, at an aggregate fair market value of approximately $623 million. This represents a decline of approximately $268 millio

8. TSL's consolidated revenue declined from approximately €1.42 billion for the fiscal year ended December 31, 2021 to an estimated €987 million for the fiscal year ended December 31, 2022, representing a decline of approximately 30.5%. This decline was driven principally by collapsing dry-bulk charter rates. The Baltic Dry Index, a widely followed composite index of dry-bulk shipping rates, declined approximately 58

9. TAI's current officers are: Marcus Hale, President; Diana Restrepo, Vice President of Finance; and Jonathan Kurtz, Vice President of Operations. Mr. Hale has served as President of TAI since its incorporation in 2018 and oversees all U.S.-side operations. Ms. Restrepo joined TAI in 2019 and is responsible for financial reporting, treasury management, and budgeting for the U.S. operations. Mr. Kurtz joined TAI in 2

10. TSL's officers and board include: Georgios Andreadis, Chief Executive Officer; Irini Dalakoura, Chief Financial Officer; and Stavros Papageorgiou, General Counsel (Greece). Mr. Andreadis has served as CEO of TSL since 2015 and reports to the TSL board of directors, which is chaired by Dimitrios Kostandinos. Ms. Dalakoura has served as CFO since 2017. Mr. Papageorgiou has served as General Counsel since 2012 and o

11. The Debtor's capital structure is summarized below. A more detailed description of each facility follows. Senior Secured Credit Facility. Pursuant to a Credit Agreement dated as of June 15, 2019 (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement"), among TSL (as borrower), TAI (as co-borrower for the U.S. Tranche), Nordbank International AG ("Nordbank"), as Adminis

12. The total outstanding indebtedness under the Credit Agreement as of September 30, 2022 was approximately $540 million, consisting of $270 million under Term Loan A, $185 million under the Revolving Credit Facility, and $85 million under Term Loan B (the U.S. Tranche). The Credit Agreement bears interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") plus 375 basis points, with an additional 200

13. The obligations under the Credit Agreement are secured by first-priority liens on substantially all of the assets of TSL and TAI, including thirty-eight (38) dry-bulk carriers, twelve (12) container vessels, the Houston terminal lease, all accounts receivable of TSL and TAI, the equity interests in TAI, and the equity interests in fourteen (14) vessel-owning special purpose vehicles organized under Greek and Libe

14. The syndicate members and their respective commitments under the Credit Agreement are as follows:

15. Mezzanine Notes. Pursuant to a Note Purchase Agreement dated as of June 15, 2019, TAI issued mezzanine notes (the "Mezzanine Notes") in the original aggregate principal amount of $100 million to Dralvecen Mezzanine Capital LLC ("BMC"). As of September 30, 2022, the outstanding balance of the Mezzanine Notes was approximately $112.3 million, reflecting the original $100 million principal amount plus approximately

16. Unsecured Notes. TAI has outstanding $50 million in aggregate principal amount of 8.25% senior unsecured notes due March 1, 2025 (the "Unsecured Notes"), issued pursuant to an Indenture dated as of March 1, 2020 between TAI and Garrison Trust Company, as indenture trustee (the "Indenture Trustee"). The Indenture Trustee's principal office is located at 100 Wall Street, 16th Floor, New York, New York 10005. The Un

17. Intercompany Note. TAI owes TSL an aggregate of approximately $76.4 million pursuant to a subordinated intercompany promissory note dated March 12, 2018 (the "Intercompany Note"), bearing interest at 5.0% per annum. The Intercompany Note is structurally and contractually subordinated to all external indebtedness of TAI and is expected to be treated as an equity-like claim for purposes of any plan of reorganizatio

18. Trade Payables. As of September 30, 2022, TAI had outstanding trade payables of approximately $38.7 million owed to various vendors and suppliers. The largest single trade creditor is Olympian Fuel & Supply SA ("Olympian"), a Greek-based bunker fuel supplier, which is owed approximately $9.2 million for fuel and supply deliveries to TSL vessels calling at U.S. ports.

19. Summary of Total Debt. As of September 30, 2022, the Debtor's total funded debt and other liabilities across all facilities (including trade and other payables but excluding the subordinated Intercompany Note) were approximately $847.3 million, summarized as follows: C. Events Leading to the Chapter 11 Filing

20. The events leading to the commencement of this Chapter 11 case may be summarized as follows:

21. September 15, 2022 — Minimum Liquidity Covenant Breach. On or about September 15, 2022, TSL breached the Minimum Liquidity Covenant set forth in Section 7.11(c) of the Credit Agreement. The Minimum Liquidity Covenant requires TSL to maintain unrestricted cash and cash equivalents of not less than $40 million at all times. As of September 15, 2022, TSL's unrestricted cash had fallen to approximately $27.3 million,

22. September 30, 2022 — Leverage and Coverage Ratio Breaches. As of September 30, 2022, TSL was in breach of two additional financial covenants under the Credit Agreement: (a) Maximum Net Leverage Ratio. The Credit Agreement requires TSL to maintain a Maximum Net Leverage Ratio (defined as Net Debt divided by trailing twelve-month EBITDA) of not greater than 5.50x. As of September 30, 2022, TSL's Net Leverage Ratio

23. October 10, 2022 — Forbearance Agreement. On October 10, 2022, TSL, TAI, Nordbank (as Administrative Agent), and the requisite majority of the Senior Secured Lender syndicate executed a Forbearance Agreement (the "Forbearance Agreement") pursuant to which the Senior Secured Lenders agreed to forbear from exercising their rights and remedies arising from the foregoing covenant defaults for a period of ninety (90)

24. October 25, 2022 — Retention of Calderwood & Harkness LLP. On October 25, 2022, TAI and TSL retained Calderwood & Harkness LLP as restructuring counsel to advise on Chapter 11 contingency planning for TAI, out-of-court restructuring alternatives for the broader TSL enterprise, cross-border coordination with Vassiliou & Demetriou Law Offices (Greek counsel to TSL), and related tax structuring matters. The engageme

25. December 1, 2022 — Missed Interest Payment on Unsecured Notes. On December 1, 2022, TAI failed to make the semi-annual interest payment due on the Unsecured Notes in the amount of $2,062,500 (calculated as $50 million multiplied by 8.25% per annum, divided by two). The Indenture governing the Unsecured Notes provides for a thirty (30) day cure period following the scheduled payment date, which expired on January

26. January 8, 2023 — First Forbearance Extension. On January 8, 2023, the Initial Forbearance Period was extended by agreement of the requisite parties through March 8, 2023 (the "Extended Forbearance Period"), subject to substantially the same terms and conditions as the original Forbearance Agreement, with the addition of a requirement that TAI and TSL deliver a term sheet for a proposed restructuring support agre

27. Throughout the prepetition period, the Debtor, with the assistance of C&H and its financial advisor, Kensington Veltrian Partners LLC, has continued to explore all available restructuring alternatives, including a comprehensive out-of-court restructuring, a prepackaged or prenegotiated Chapter 11 plan, a standalone Chapter 11 filing by TAI with coordinated proceedings in Greece under Greek Law 4738/2020, and one

28. By this Application, the Debtor seeks entry of an order, substantially in the form of the Proposed Order attached hereto as Exhibit C, authorizing the Debtor to retain and employ Calderwood & Harkness LLP as its counsel in this Chapter 11 case, nunc pro tunc to the Petition Date, pursuant to sections 327(a) and 328(a) of the Bankruptcy Code. The Debtor further requests that the Court approve C&H's standard hourly

V. BASIS FOR RELIEF A. Statutory Authority — Section 327(a)

29. Section 327(a) of the Bankruptcy Code provides, in relevant part: Except as otherwise provided in this section, the trustee, with the court's approval, may employ one or more attorneys, accountants, appraisers, auctioneers, or other professional persons, that do not hold or represent an interest adverse to the estate, and that are disinterested persons, to represent or assist the trustee in carrying out the trust

30. Section 1107(a) of the Bankruptcy Code grants a debtor-in-possession the rights and powers of a trustee under section 327(a), subject to certain exceptions not applicable here. Accordingly, the Debtor, as debtor-in-possession, is authorized to seek retention of C&H as its counsel, provided that C&H satisfies the disinterestedness and adverse interest requirements of section 327(a).

31. Section 101(14) of the Bankruptcy Code defines a "disinterested person" as a person that: (A) is not a creditor, an equity security holder, or an insider; (B) is not and was not, within 2 years before the date of the filing of the petition, a director, officer, or employee of the debtor; and (C) does not have an interest materially adverse to the interest of the estate or of any class of creditors or equity secur

32. C&H satisfies each of these requirements. Specifically: (a) C&H is not a creditor of the Debtor. While C&H may hold a prepetition claim for fees and expenses incurred prior to the Petition Date, it is well established that the existence of a prepetition claim for professional services does not, standing alone, disqualify a firm from retention under section 327(a). See, e.g., In re AroChem Corp., 176 F.3d 610, 623

33. As more fully set forth in the Verified Statement attached hereto as Exhibit B, C&H has disclosed all connections with the Debtor, its creditors, and other parties in interest as required by Rule 2014(a) of the Bankruptcy Rules. Based on the foregoing, C&H is eligible for retention as counsel to the Debtor under section 327(a) of the Bankruptcy Code. B. C&H's Qualifications and Experience

34. Calderwood & Harkness LLP is a nationally recognized law firm with a well-established bankruptcy, restructuring, and insolvency practice. The Firm's principal office is located at 780 Third Avenue, New York, New York 10017. C&H maintains additional offices in Washington, D.C., Houston, Texas, and London, England. The Firm's restructuring practice regularly represents debtors, creditors, acquirers, lenders, and ot

35. The C&H engagement team assigned to this matter has extensive experience in complex cross-border restructurings, maritime and shipping insolvency matters, Chapter 11 proceedings of all sizes and complexity, and out-of-court restructurings and liability management transactions. The team has particular expertise in the unique legal issues that arise in the restructuring of international shipping companies, includin

36. Since its initial retention on October 25, 2022, C&H has developed an intimate familiarity with the Debtor's business operations, financial condition, capital structure, intercompany relationships, creditor constituencies, and the full range of restructuring alternatives under consideration. The Firm has conducted extensive due diligence, prepared detailed analytical memoranda, drafted all first-day motions and r

37. Replacing C&H at this juncture would deprive the Debtor's estate of the significant benefit of this accumulated institutional knowledge. Any successor counsel would be required to invest substantial time and resources to achieve the same level of familiarity with the Debtor's affairs, resulting in duplicative costs to the estate and potentially significant delays in the administration of the case. The Debtor beli

38. If retained, C&H will provide the following legal services to the Debtor in connection with the administration of this Chapter 11 case: (a) Advise the Debtor with respect to its powers, duties, and responsibilities as debtor-in-possession under the Bankruptcy Code, including but not limited to the requirements of sections 1107 and 1108 of the Bankruptcy Code and the applicable Bankruptcy Rules. (b) Prepare and fi

39. The following attorneys and professionals at Calderwood & Harkness LLP will serve as the primary engagement team for this matter, subject to modification as the needs of the case require: Nathaniel Bower — Partner, Bankruptcy & Restructuring. Mr. Bower will serve as the Responsible Partner and lead attorney on this engagement and as the primary point of contact for the Debtor, the Court, the United States Trustee

40. In addition to the foregoing team members, C&H may assign additional attorneys, paraprofessionals, and support staff to this matter as the needs of the case require. The Debtor will identify any such additional professionals in its interim fee applications to the extent required by applicable guidelines.

VII. PROFESSIONAL COMPENSATION — TERMS OF ENGAGEMENT A. Billing Rates

41. C&H's current standard hourly billing rates, effective as of 2022, are as follows:

42. These rates are consistent with the rates charged by C&H to its other clients for comparable services and are reflective of the rates charged by firms of comparable size, experience, and reputation for similar engagements. C&H's rates are subject to periodic adjustment in accordance with the Firm's customary practice, typically on an annual basis. Any adjustments to C&H's rates will be disclosed in the Debtor's i

43. C&H will seek compensation for professional services rendered and reimbursement of actual, necessary, and reasonable out-of-pocket expenses incurred in accordance with sections 330 and 331 of the Bankruptcy Code, the applicable Bankruptcy Rules, the Local Rules of this Court, and the guidelines promulgated by the Office of the United States Trustee. C&H will comply with any order governing professional compensati

44. Prior to the Petition Date, the Debtor (through its parent, TSL) paid C&H a retainer in the amount of $500,000 (the "Retainer"), which was deposited on October 28, 2022 into C&H's Interest on Lawyers' Trust Account ("IOLTA") at Greaves Bancorp The Retainer was applied in part against fees and expenses incurred by C&H for prepetition services rendered to the Debtor and TSL. As of the date hereof, the Debtor estima

45. C&H commenced its engagement on October 25, 2022, pursuant to an engagement letter of even date (the "Initial Engagement Letter"), assigned Matter No. 1044-00003 within C&H's internal matter management system. The Initial Engagement Letter was addressed jointly to Georgios Andreadis, Chief Executive Officer of TSL, and Marcus Hale, President of TAI, as a joint engagement covering both TSL and TAI with respect to

46. On November 5, 2022, a supplemental engagement letter (the "Supplemental Engagement Letter") was executed, which expanded the scope of C&H's engagement to include tax advisory services under the direction of Sylvia Hartwell, Specialist Tax Partner. The Supplemental Engagement Letter confirmed that tax advisory services would be billed at C&H's standard hourly rates and would be subject to the same terms and condi

47. Between the engagement date of October 25, 2022 and the anticipated Petition Date, C&H has performed substantial prepetition services on behalf of the Debtor and TSL, including, without limitation, the following: (a) Analysis of Chapter 11 viability, venue selection, and filing strategy for TAI; (b) Analysis of center of main interest ("COMI") for purposes of Chapter 15 recognition and coordination with Greek pro

48. C&H will seek payment of prepetition fees and expenses in a separate application, to the extent applicable and permitted by applicable law. C&H acknowledges that any prepetition claims for fees and expenses are subject to the Court's review under the operative provisions of the Bankruptcy Code and the applicable guidelines of the United States Trustee.

VIII. DISCLOSURE OF CONNECTIONS — VERIFIED STATEMENT PURSUANT TO RULE 2014 A. Overview.

49. Attached hereto as Exhibit B is the Verified Statement of Nathaniel Bower, a partner at Calderwood & Harkness LLP, filed pursuant to Rule 2014(a) of the Federal Rules of Bankruptcy Procedure (the "Verified Statement"). The Verified Statement discloses all of C&H's connections with the Debtor, its creditors, any other party in interest, their respective attorneys and accountants, the United States Trustee, and any

50. C&H represents the Debtor, Thalassa Americas Inc., and its parent entity, Thalassa Shipping & Logistics Société Anonyme, in connection with the restructuring engagement described herein. The joint engagement was established pursuant to the Initial Engagement Letter dated October 25, 2022, as supplemented by the Supplemental Engagement Letter dated November 5, 2022.

51. C&H does not represent KFO Holdings Société Anonyme, the family holding company through which Dimitrios Kostandinos and Elena Kostandinos-Pavlou hold their interests in TSL, in any capacity. Although KFO is a party to certain RSA-related documents under negotiation, KFO is independently advised by separate counsel, and C&H has not provided legal advice to KFO or its individual principals.

52. C&H has no prior or current engagement with Dimitrios Kostandinos, Elena Kostandinos-Pavlou, Georgios Andreadis, Irini Dalakoura, Stavros Papageorgiou, Marcus Hale, Diana Restrepo, or Jonathan Kurtz in their individual capacities. C&H has had communications with each of these individuals in connection with the restructuring engagement, but such communications have been conducted in their respective capacities as