Contract analysis

I. Executive Summary The purpose of this memorandum is to catalog and analyze all material executory contracts and unexpired leases to which Thalassa Americas Inc. ("TAI") is a party, in connection with the Chapter 11 contingency plan being prepared for a potential filing in the United States Bankruptcy Court for the Southern District of Texas (Houston Division). This memorandum is intended to inform the firm's strat

II. Legal Framework — Section 365 of the Bankruptcy Code A. Overview of Section 365

Section 365(a) of the Bankruptcy Code provides that, "subject to the court's approval, the trustee may assume or reject any executory contract or unexpired lease of the debtor." 11 U.S.C. § 365(a). This provision applies with equal force to a debtor-in-possession, which possesses all the rights, powers, and duties of a trustee under Section 1107(a) of the Bankruptcy Code. The ability to assume or reject executory con

Section 365(b)(2) provides that the debtor is not required to cure defaults arising from so-called "ipso facto" clauses — that is, contract provisions that are triggered solely by the debtor's insolvency, financial condition, or the commencement of a bankruptcy case. 11 U.S.C. § 365(b)(2). Ipso facto clauses are unenforceable in bankruptcy, and the debtor may assume a contract notwithstanding any such provision. This

Section 365(g) provides that the rejection of an executory contract or unexpired lease constitutes a breach of such contract or lease. 11 U.S.C. § 365(g)(1). If the contract has not been assumed previously, the breach is deemed to have occurred immediately before the date of the filing of the petition, giving rise to a general unsecured prepetition claim for damages. This is a critical feature of the rejection mechan

Section 365(f) authorizes the debtor to assign an executory contract or unexpired lease to a third party, notwithstanding any provision in the contract or applicable law that restricts, conditions, or prohibits the assignment. 11 U.S.C. § 365(f)(1). This override of contractual anti-assignment provisions is a powerful tool in the bankruptcy context, enabling the debtor to capture the economic value of favorable contr

III. Methodology Our analysis is based on a comprehensive review of the contracts, leases, and related documentation provided by TAI management and the company's financial advisors. The specific sources of information and analytical methodology are set forth below. Document Review. We reviewed the contracts and leases provided by Diana Restrepo, Vice President of Finance at TAI; Jonathan Kurtz, Vice President of Oper

IV. Category A — Real Property Leases TAI is party to four real property leases, encompassing its principal terminal facility, corporate office, a secondary warehouse, and a parking/auxiliary storage lot. The real property leases represent the physical infrastructure essential to TAI's Houston-based operations and are among the most significant contracts in this analysis, both in terms of operational importance and e

Section 365(d)(4) Deadline: As a lease of nonresidential real property, the Houston terminal lease is subject to the 120-day assumption deadline under Section 365(d)(4) of the Bankruptcy Code, with a single 90-day extension available for cause. Failure to assume the lease within this timeframe would result in the deemed rejection of the lease by operation of law, which would be catastrophic to TAI's reorganization pr

V. Category B — Vessel Charter Agreements B.1. Overview of TAI's Vessel Chartering Role TAI does not own any vessels directly. All 50 vessels in the TSL fleet — comprising 38 dry-bulk carriers and 12 container vessels — are owned by TSL or by 14 vessel-owning special purpose vehicles ("SPVs") organized under TSL. The fleet was appraised by Drakos Maritime Valuations Ltd. as of November 1, 2022, at an aggregate fair m

VI. Category C — Freight Brokerage and Logistics Contracts C.1. Freight Brokerage License and Carrier Agreements TAI holds a Federal Motor Carrier Safety Administration ("FMCSA") freight broker license (motor carrier authority) and operates a domestic freight brokerage arm that arranges drayage and inland transportation services for cargo moving to and from the Houston terminal. TAI is party to six master brokerage a

VII. Category D — Vendor and Supply Agreements D.1. Overview TAI's accounts payable as of September 30, 2022, include approximately $14.2 million attributable directly to TAI, out of the $38.7 million in consolidated trade payables for the TSL group. The balance of approximately $24.5 million relates to TSL and non-U.S. entities within the group and is not the direct obligation of TAI. The distinction between TAI's d