Contract analysis

1. This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the General Order of Reference entered by the United States District Court for the Northern District of Ohio, dated April 4, 2012. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2), including but not limited to 28 U.S.C. § 157(b)(2)(L) (confirmations of plans). Venue of these Chapter 11 cases is proper in thi

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW The Court, having considered the entire record in these Chapter 11 cases, including without limitation the Plan, the Disclosure Statement, the Plan Supplement, the declarations filed in support of confirmation, the testimony and evidence presented at the Confirmation Hearing, and the arguments of counsel, hereby makes the following findings of fact and conclusions of law. E

2. On June 20, 2022 (the "Petition Date"), each of the Debtors filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in this Court. The Debtors have continued in possession of their respective properties and have continued to manage and operate their respective businesses as debtors in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner, or statutory c

3. On June 21, 2022, the Court conducted an expedited hearing on the Debtors' First Day Motions, and all such motions were heard and approved by orders entered on that date and thereafter.

4. On June 24, 2022, the Court entered the Interim Order (I) Authorizing the Debtors to Obtain Senior Secured Superpriority Postpetition Financing, (II) Granting Liens and Superpriority Administrative Expense Status, (III) Authorizing the Use of Cash Collateral, and (IV) Granting Related Relief (Dkt. 29) (the "Interim DIP Order"), approving, on an interim basis, a $30.0 million senior secured superpriority revolving

5. On July 8, 2022, the Debtors, CPS Holdings Inc., Thornfield Capital Partners LP (the "Equity Sponsor"), the Ad Hoc Group of First Lien Lenders (represented by Hargrove, Mitchell & Saunders LLP, lead partner Victoria Kline, Esq.), and the Ad Hoc Group of Second Lien Noteholders (represented by Pemberton & Locke LLP, lead partner Raymond Delvecchio, Esq.) executed that certain Restructuring Support Agreement (the "R

6. Prepetition solicitation of votes on the Plan was conducted in compliance with applicable non-bankruptcy law, including applicable federal and state securities laws, and Section 1126(b) of the Bankruptcy Code. Post-petition tabulation and solicitation confirmation commenced on July 19, 2022, following the filing of the Plan and Disclosure Statement. The voting deadline was August 3, 2022 at 5:00 p.m. (Eastern Time

7. On August 10, 2022, the Court entered the Order Approving the Disclosure Statement as Containing Adequate Information Within the Meaning of 11 U.S.C. § 1125 (Dkt. 78), finding and concluding that the Disclosure Statement contained adequate information to enable holders of claims and interests in each impaired class to make an informed judgment about the Plan.

8. On August 29, 2022, the Court conducted the Confirmation Hearing. At the Confirmation Hearing, the Court received evidence and heard argument concerning whether the Plan satisfies the requirements for confirmation set forth in Section 1129 of the Bankruptcy Code. B. Burden of Proof

9. The Debtors, as proponents of the Plan, bear the burden of proving the requirements of 11 U.S.C. § 1129(a) by a preponderance of the evidence. See In re Dow Cascade & Co.., 456 F.3d 668, 675 (6th Cir. 2006); In re Am. Solar King Corp., 90 B.R. 808, 819 (Bankr. W.D. Tex. 1988). Based upon the totality of the evidence presented, including the declarations filed in support of confirmation, the testimony of witnesses

10. The Plan complies with all applicable provisions of the Bankruptcy Code, including, without limitation, Sections 1122 and 1123 of the Bankruptcy Code, thereby satisfying the requirements of Section 1129(a)(1).

11. Section 1122 — Classification of Claims and Interests. Consistent with Section 1122 of the Bankruptcy Code, the Plan properly classifies all claims against and interests in the Debtors into the following six classes, each of which contains only claims or interests that are substantially similar to the other claims or interests within such class: (a) Class 1 — Other Priority Claims. Class 1 consists of all Allowed

12. The Court finds that the classification of claims and interests under the Plan is reasonable and does not unfairly discriminate between or among holders of claims or interests. Each class of claims contains only claims that are substantially similar to the other claims within such class, and each class of interests contains only interests that are substantially similar to the other interests within such class, as

13. Section 1123 — Contents of Plan. The Plan satisfies all requirements of Section 1123 of the Bankruptcy Code. Specifically: (a) The Plan properly designates the classes of claims and interests that are impaired (Classes 2, 3, 4, and 6) and unimpaired (Class 1) under the Plan, and specifies the treatment of each impaired class, in accordance with Sections 1123(a)(1), (a)(2), and (a)(3). (b) The Plan provides the sa

14. The Debtors, as proponents of the Plan, have complied with all applicable provisions of the Bankruptcy Code in connection with the solicitation of acceptances or rejections of the Plan, thereby satisfying the requirements of Section 1129(a)(2). Specifically: (a) The Debtors are proper debtors under Section 109 of the Bankruptcy Code. (b) The Debtors have complied with the applicable provisions of Sections 1125 an

15. The Plan has been proposed in good faith and not by any means forbidden by law, thereby satisfying the requirements of Section 1129(a)(3). The Court finds that the Plan is the product of extensive, arm's-length negotiations among the Debtors, Thornfield Capital Partners LP (the Equity Sponsor), the Ad Hoc Group of First Lien Lenders, and the Ad Hoc Group of Second Lien Noteholders, and their respective legal and

16. The members of the Ad Hoc Group of First Lien Lenders include Blackmoor Capital Management LLC, Greystone Fixed Income Partners LP, and Wexford Opportunity Fund III LP, which together hold approximately 68% in principal amount of the outstanding first lien term loan. The members of the Ad Hoc Group of Second Lien Noteholders include Fenwick Structured Credit Fund II LP and Millhaven Capital Advisors LLC, which to

17. The RSA executed on July 8, 2022 reflects the culmination of good-faith negotiations that commenced following the Notice of Default delivered by Ridgeline National Bank, N.A. as administrative agent under the Prepetition First Lien Credit Agreement on April 22, 2022, and during the subsequent forbearance period commencing May 18, 2022. The declarations of Dana Kowalski, the Chief Financial Officer of Crestline Pa

18. The Court further finds that the Plan was proposed with the legitimate and honest purpose of maximizing the value of the Debtors' estates and effectuating a successful reorganization, and not for any improper purpose or by any means forbidden by law. F. Section 1129(a)(4) — Payments for Services or Costs

19. All payments made or to be made by the Debtors, or by a person issuing securities or acquiring property under the Plan, for services or for costs and expenses in, or in connection with, these Chapter 11 cases, or in connection with the Plan and incident to these Chapter 11 cases, have been approved by, or are subject to the approval of, the Court as reasonable, thereby satisfying the requirements of Section 1129(

20. All professional fees and expenses in these Chapter 11 cases are subject to allowance by the Court pursuant to final fee applications filed in accordance with 11 U.S.C. § 330 and the applicable orders and procedures established by this Court. The Court notes the following estimated professional fees: (a) Calderwood & Harkness LLP (debtor's lead restructuring counsel): estimated fees of approximately $4.2 million,

21. Total estimated professional fees for the Debtors' retained professionals are approximately $9.3 million in the aggregate. All such fees and expenses are subject to final approval by the Court pursuant to applicable provisions of the Bankruptcy Code and the orders of this Court. G. Section 1129(a)(5) — Disclosure of Identity of Officers, Directors, and Insiders

22. The Debtors have disclosed in the Plan Supplement the identity and affiliations of each individual proposed to serve as an officer, director, or manager of the reorganized Debtors after confirmation of the Plan, as well as the identity of any insider that will be employed or retained by the reorganized Debtors and the nature of any compensation for such insider, thereby satisfying the requirements of Section 1129

23. The current senior management of Crestline Packaging Solutions LLC consists of: Marcus J. Reinholdt, Chief Executive Officer; Dana Kowalski, Chief Financial Officer; and Preston Yee, General Counsel. The identities and qualifications of the proposed members of the new board of directors/managers of the reorganized Debtors have been disclosed in the Plan Supplement and are approved by this Court. H. Section 1129(a

24. The Plan does not provide for any change in rates over which a governmental regulatory commission has jurisdiction and that will require regulatory approval after confirmation of the Plan. Accordingly, Section 1129(a)(6) of the Bankruptcy Code is either satisfied or inapplicable to these Chapter 11 cases.

I. Section 1129(a)(7) — Best Interests of Creditors Test

25. With respect to each impaired class of claims or interests that has not accepted the Plan, each holder of a claim or interest in such class will receive or retain under the Plan, on account of such claim or interest, property of a value, as of the Effective Date of the Plan, that is not less than the amount that such holder would so receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptc

26. The liquidation analysis prepared by Aldersgate Advisory Group LLC, under the direction of lead managing director Priya Narayanan, as set forth in Exhibit E to the Disclosure Statement and as supported by the Narayanan Declaration (Dkt. 95), demonstrates the following: (a) The estimated aggregate value of the Debtors' assets in a hypothetical Chapter 7 liquidation ranges from approximately $96.2 million (low case

27. Under the Plan, by contrast, the recoveries for each impaired class are materially higher than would be achieved in a Chapter 7 liquidation: (a) Holders of Class 2 First Lien Secured Claims receive 92% of the reorganized equity, valued at approximately $167.9 million at the midpoint, plus $12.5 million in new first lien take-back term loan obligations, for a total estimated recovery of approximately $180.4 millio

28. Accordingly, the Plan provides recoveries to each impaired class of claims and interests that are at least equal to, and in most cases materially greater than, the recoveries that such holders would receive in a Chapter 7 liquidation, and the requirements of Section 1129(a)(7) are satisfied. J. Section 1129(a)(8) — Acceptance by Each Class

29. Each impaired class of claims has voted to accept the Plan within the meaning of Section 1126(c) of the Bankruptcy Code, as certified by the Tabulation Declaration of Pinnacle Claims Administration LLC (Dkt. 93). The voting results are as follows: (a) Class 2 (First Lien Secured Claims): 94.7% in amount and 87.5% in number voted to accept the Plan, which exceeds the required thresholds of at least two-thirds in a

30. Class 1 (Other Priority Claims) is Unimpaired under the Plan and is conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code.

31. Class 5 (Intercompany Claims) is deemed to accept or reject the Plan as applicable under the terms of the Plan.

32. Class 6 (Existing Equity Interests) is Impaired under the Plan, receives no distribution on account of such interests, and is conclusively deemed to have rejected the Plan pursuant to Section 1126(g) of the Bankruptcy Code. However, because all other impaired classes entitled to vote (Classes 2, 3, and 4) have voted to accept the Plan, the requirements of Section 1129(a)(8) may be satisfied through the applicatio

33. The Plan provides that all Allowed administrative expense claims, including all Allowed professional fee claims, shall be paid in full in cash on the Effective Date or as soon as reasonably practicable thereafter, or as otherwise permitted under the Bankruptcy Code, the Plan, or any order of this Court. The Plan further provides that all Allowed priority tax claims under Section 507(a)(8) of the Bankruptcy Code s

34. At least one class of claims that is impaired under the Plan has accepted the Plan, determined without including any acceptance of the Plan by any insider, thereby satisfying the requirements of Section 1129(a)(10). Specifically, each of Classes 2, 3, and 4 — all of which are impaired under the Plan — has voted to accept the Plan, and none of the accepting votes were cast by insiders of the Debtors. M. Section 11

35. Confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Debtors or any successor to the Debtors under the Plan, other than such liquidation or reorganization as is proposed in the Plan, thereby satisfying the requirements of Section 1129(a)(11).

36. The Court has considered the feasibility analysis prepared by Aldersgate Advisory Group LLC, as testified to by Priya Narayanan, Managing Director, and by Dana Kowalski, Chief Financial Officer of Crestline Packaging Solutions LLC, and finds as follows: (a) The reorganized enterprise value of the Debtors at the midpoint is approximately $195.0 million, within a range of approximately $180.0 million to approximate

37. All fees payable under 28 U.S.C. § 1930, including quarterly fees payable to the United States Trustee, have been paid to date, or the Plan provides for the payment of all such fees on or before the Effective Date and continuing thereafter as required until the closing of these Chapter 11 cases. Accordingly, the requirements of Section 1129(a)(12) are satisfied. O. Section 1129(a)(13) — Retiree Benefits

38. The Plan provides for the continued payment of all retiree benefits, as defined in Section 1114 of the Bankruptcy Code, if any, at the level established pursuant to subsection (e)(1)(B) or (g) of Section 1114 of the Bankruptcy Code, at any time prior to confirmation of the Plan, for the duration of the period the Debtors have obligated themselves to provide such benefits, as required by Section 1129(a)(13). Accor

39. The remaining requirements of Section 1129(a)(14) (regarding domestic support obligations), Section 1129(a)(15) (regarding individual debtor provisions), and Section 1129(a)(16) (regarding transfers of property by nonprofit entities) are either satisfied or inapplicable to these corporate Chapter 11 cases. Neither of the Debtors is an individual, and neither of the Debtors is a nonprofit entity. Accordingly, Sect

40. To the extent that the requirements of Section 1129(a)(8) are not satisfied with respect to Class 6 (Existing Equity Interests of Thornfield Capital Partners LP), which is deemed to have rejected the Plan pursuant to Section 1126(g), the Plan nonetheless satisfies the requirements of Section 1129(b) of the Bankruptcy Code and is confirmed pursuant thereto.

41. With respect to Class 6, the Plan is "fair and equitable" within the meaning of Section 1129(b)(2)(C) of the Bankruptcy Code because (a) no class of claims or interests junior to Class 6 receives or retains any property under the Plan on account of such junior claims or interests, and (b) no holder of any claim or interest that is senior to Class 6 receives more than full payment of such holder's allowed claim. T

42. The Plan does not discriminate unfairly with respect to any impaired class of claims or interests that has not accepted the Plan within the meaning of Section 1129(b)(1) of the Bankruptcy Code. The treatment of Class 6 is a direct result of the application of the absolute priority rule, given that senior classes of creditors are not being paid in full under the Plan. R. Adequate Notice

43. Due, proper, timely, and adequate notice of the Plan, the Disclosure Statement, the Confirmation Hearing, the voting deadline, all deadlines for filing objections to confirmation, and all other related matters was provided to all creditors, interest holders, and parties in interest entitled to receive such notice, in accordance with the Bankruptcy Code, the Bankruptcy Rules, the Local Rules of this Court, and all

44. The Office of the United States Trustee for Region 9, located at the Howard M. Metzenbaum U.S. Courthouse, 201 Superior Avenue, Cleveland, Ohio 44114, received proper and timely notice of the Plan, the Disclosure Statement, the Confirmation Hearing, and all related matters.

45. Adequate and sufficient notice of the Confirmation Hearing was given in compliance with Bankruptcy Rules 2002(b) and 3017, and no further notice is necessary or required.

III. ORDER Based upon the foregoing Findings of Fact and Conclusions of Law, and upon the entire record of the Confirmation Hearing, and after due deliberation thereon, and good and sufficient cause appearing therefor: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED as follows: A. Confirmation of the Plan

46. The Prepackaged Plan of Reorganization of Crestline Packaging Solutions LLC and CPS Holdings Inc. (Dkt. 47), including all exhibits, supplements, appendices, schedules, and related documents, as modified, amended, or supplemented through the date hereof, is hereby CONFIRMED in all respects pursuant to Section 1129 of the Bankruptcy Code. The terms and provisions of the Plan and the Plan Supplement (Dkt. 89) are h

47. All objections to confirmation of the Plan, and all reservations of rights contained therein, that have not been withdrawn, waived, settled, or otherwise resolved prior to or during the Confirmation Hearing, are hereby OVERRULED on the merits for the reasons stated on the record at the Confirmation Hearing and as set forth in this Order. C. Classification and Treatment of Claims and Interests

48. The classification and treatment of claims against and interests in the Debtors under the Plan are hereby approved in their entirety. The treatment of each class is as follows: (a) Class 1 (Other Priority Claims): Unimpaired. Holders of Allowed Class 1 Claims shall be paid in full in cash on the Effective Date or as soon as reasonably practicable thereafter, in accordance with the terms of the Plan. Estimated rec

1. New First Lien Take-Back Term Loan

49. The Debtors and the reorganized Debtors, as applicable, are hereby authorized and directed, without further order of this Court and without the need for any further corporate or other organizational action, to enter into the new first lien take-back term loan credit agreement on the Effective Date, on the following terms and such other terms as set forth in the Plan Supplement: (a) Administrative Agent: Ridgeline

50. The terms and conditions of the new first lien take-back term loan credit agreement, substantially in the form set forth in the Plan Supplement, including all related security documents, guarantees, and ancillary agreements, are hereby approved. All liens and security interests granted pursuant to the new first lien take-back term loan credit agreement shall be deemed valid, binding, perfected, and enforceable up

51. On or as soon as reasonably practicable after the Effective Date, the reorganized Debtors shall issue and distribute ninety-two percent (92%) of the reorganized equity of reorganized Crestline Packaging Solutions LLC to holders of Allowed Class 2 First Lien Secured Claims, pro rata in accordance with the amount of each such holder's Allowed Class 2 Claim, and eight percent (8%) of the reorganized equity of reorga

52. Warrants to purchase an additional five percent (5%) of the reorganized equity of reorganized Crestline Packaging Solutions LLC shall be issued and distributed to holders of Allowed Class 3 Second Lien Secured Claims, pro rata in accordance with the amount of each such holder's Allowed Class 3 Claim. Such warrants shall have a strike price equal to the plan equity value and shall be subject to dilution by the man

53. All reorganized equity and warrants issued and distributed pursuant to the Plan shall be issued without registration under the Securities Act of 1933, as amended, or any applicable state or local securities laws, in reliance upon Section 1145(a) of the Bankruptcy Code and/or other applicable exemptions from registration.