Contract analysis

1. The Debtors, Crestline Packaging Solutions LLC and CPS Holdings Inc., by and through their undersigned counsel, Calderwood & Harkness LLP, respectfully move this Court (the "Court"), pursuant to Federal Rule of Bankruptcy Procedure 1015(b) and Local Bankruptcy Rule 1015-1 of the United States Bankruptcy Court for the Northern District of Ohio, for entry of an order (the "Proposed Order," substantially in the form

2. On June 20, 2022 (the "Petition Date"), each of the Debtors filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the "Bankruptcy Code"), commencing the above-captioned cases. The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.

3. Joint administration is sought solely for procedural convenience and to reduce the administrative burden on the Court, the Clerk's Office, the Office of the United States Trustee, and all parties in interest. Importantly, this Motion does not seek, and the relief requested herein will not effect, a substantive consolidation of the Debtors' estates. Each Debtor's estate will remain separate and distinct, and all cr

4. This Court has jurisdiction to consider and determine this Motion 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 referring all proceedings arising under, arising in, or related to cases under Title 11 of the United States Code to this Court.

5. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2)(A), as it concerns the administration of the Debtors' estates.

6. Venue of these Chapter 11 cases and this Motion is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. Crestline Packaging Solutions LLC is headquartered at 4710 Industrial Corridor Drive, Akron, Ohio 44308, which is located within the Northern District of Ohio, Eastern Division. Crestline has maintained its principal place of business and the center of its operations within this District for more than

7. The legal predicates for the relief requested herein are Federal Rule of Bankruptcy Procedure 1015(b), 11 U.S.C. § 105(a), and Local Bankruptcy Rule 1015-1.

III. BACKGROUND A. The Debtors' Business and Corporate Structure

8. Crestline Packaging Solutions LLC is an Ohio limited liability company formed on March 12, 2007, pursuant to the laws of the State of Ohio. Crestline is headquartered in Akron, Ohio, and is engaged in the design, engineering, and manufacture of industrial packaging solutions. Crestline's product portfolio includes high-density polyethylene ("HDPE") drums, intermediate bulk containers ("IBCs"), steel pails, and spe

9. Crestline operates four manufacturing facilities strategically positioned across the Midwest and Southern regions of the United States, as follows: (a) Plant 1 (Headquarters): 4710 Industrial Corridor Drive, Akron, Ohio 44308. This facility serves as Crestline's corporate headquarters and primary HDPE drum manufacturing plant. Plant 1 employs approximately 480 individuals, including corporate management, administr

10. As of the Petition Date, the Debtors employed approximately 1,420 individuals across all four facilities. The Debtors are committed to preserving these jobs through the Chapter 11 process and believe that the orderly and efficient administration of these cases — facilitated by the joint administration sought herein — is essential to achieving that goal.

11. For the fiscal year ended December 31, 2021 ("FY2021"), Crestline generated total revenue of approximately $312.6 million and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $38.4 million. The Debtors' businesses remain fundamentally sound, and the Chapter 11 filing is principally attributable to the capital structure challenges described below and not to a failure of t

12. CPS Holdings Inc. is a Delaware corporation, incorporated on June 15, 2017, with its registered agent at 1209 Orange Street, Wilmington, Delaware 19801, care of National Corporate Services, Inc. CPS Holdings was formed in connection with the leveraged buyout of Crestline's business completed on October 13, 2017 (the "LBO"), pursuant to which Thornfield Capital Partners LP ("Thornfield") acquired 100% of the equit

13. Thornfield Capital Partners LP is a Delaware limited partnership with principal offices located at 590 Lexington Avenue, Suite 3200, New York, New York 10022. Thornfield is a private equity firm focused on investments in industrial and manufacturing businesses. Thornfield holds 100% of the issued and outstanding equity of CPS Holdings Inc.

14. CPS Holdings is the direct and sole parent of Crestline Packaging Solutions LLC and holds a 100% membership interest in Crestline. CPS Holdings serves as an intermediate holding entity in the organizational structure and was created as part of the LBO to facilitate the capital structure and governance arrangements required by the transaction. The primary asset of CPS Holdings is its 100% membership interest in Cr

15. Both Crestline and CPS Holdings are co-debtors in these Chapter 11 cases. The corporate organizational structure is straightforward: Thornfield Capital Partners LP owns 100% of CPS Holdings Inc., which in turn owns 100% of Crestline Packaging Solutions LLC. There are no other direct or indirect subsidiaries of either Debtor.

16. The Debtors share common management. Marcus J. Reinholdt serves as Chief Executive Officer of both Debtors. Dana Kowalski serves as Chief Financial Officer of both Debtors. Preston Yee serves as General Counsel and Secretary of both Debtors. Each of these individuals serves in his or her respective capacity for both entities and has done so continuously since the LBO in 2017. There are no employees of CPS Holding

17. The Debtors' Chapter 11 filing was precipitated by a combination of factors, principally relating to the debt incurred in connection with the 2017 LBO and the subsequent deterioration in Crestline's financial performance due to rising resin costs, supply chain disruptions, and margin compression in key end markets during 2021 and the first quarter of 2022.

18. In the first quarter of 2022, Crestline breached the maximum Total Net Leverage Ratio covenant set forth in Section 7.11 of the First Lien Credit Agreement, dated as of October 13, 2017 (as amended, restated, supplemented, or otherwise modified from time to time, the "First Lien Credit Agreement"), by and among Crestline, as the Borrower, CPS Holdings, as the Parent Guarantor, Ridgeline National Bank, N.A., as Ad

19. On April 22, 2022, the Administrative Agent delivered a Notice of Default to the Debtors pursuant to the terms of the First Lien Credit Agreement. The delivery of the Notice of Default under the First Lien Credit Agreement also triggered a cross-default under Section 6.01(e) of that certain Indenture, dated as of October 13, 2017 (as amended, restated, supplemented, or otherwise modified from time to time, the "S

20. Following the delivery of the Notice of Default, the Debtors engaged in intensive negotiations with the Administrative Agent, the Ad Hoc Group of First Lien Lenders, and the Ad Hoc Group of Second Lien Noteholders. On May 18, 2022, the Debtors, the Administrative Agent, and the requisite lenders under the First Lien Credit Agreement entered into a Forbearance Agreement (the "Forbearance Agreement"), pursuant to w

21. During the Forbearance Period, the Debtors, together with their key stakeholders, negotiated and finalized the terms of a prepackaged plan of reorganization (the "Prepackaged Plan") designed to substantially delever the Debtors' balance sheet and position the reorganized enterprise for long-term operational and financial success. The Debtors are pursuing confirmation of the Prepackaged Plan on an expedited basis,

22. As of the Petition Date, the Debtors' total funded indebtedness was approximately $247.3 million, comprised of the following: (a) Revolving Credit Facility: $32.6 million drawn under the revolving credit facility established pursuant to the First Lien Credit Agreement, with Ridgeline National Bank, N.A. serving as Administrative Agent and Collateral Agent. (b) First Lien Term Loan: $158.7 million outstanding unde

23. CPS Holdings is a co-obligor and/or guarantor with respect to each of the foregoing debt instruments, further demonstrating the interrelated nature of the Debtors' capital structures and the appropriateness of joint administration.

24. By this Motion, the Debtors respectfully request that the Court enter an order, substantially in the form attached hereto as Exhibit A, directing the joint administration of the Chapter 11 cases of Crestline Packaging Solutions LLC, Case No. 22-51247, and CPS Holdings Inc., Case No. 22-51248, under Case No. 22-51247 for procedural purposes only, pursuant to Federal Rule of Bankruptcy Procedure 1015(b).

25. Specifically, the Debtors request that the Court authorize the Clerk of the Court to maintain one consolidated docket, one case file, and one set of pleadings for the jointly administered cases under the lead case number 22-51247. All pleadings, motions, applications, orders, notices, and other filings in the jointly administered cases shall be filed and maintained under the lead case number and under the followi

26. Any order entered by the Court in the jointly administered cases shall apply to each Debtor individually unless the Court specifies otherwise in such order.

V. BASIS FOR RELIEF A. Legal Standard — Bankruptcy Rule 1015(b)

27. Federal Rule of Bankruptcy Procedure 1015(b) provides, in relevant part: "If a joint petition or two or more petitions are pending in the same court by or against (1) a husband and wife, or (2) a partnership and one or more of its general partners, or (3) two or more general partners, or (4) a debtor and an affiliate, the court may order a joint administration of the estates."

28. The term "affiliate" is defined in Section 101(2) of the Bankruptcy Code and includes, inter alia, an "entity that directly or indirectly owns, controls, or holds with power to vote, 20 percent or more of the outstanding voting securities of the debtor." 11 U.S.C. § 101(2)(A). CPS Holdings is an "affiliate" of Crestline within the meaning of Section 101(2), as CPS Holdings directly owns 100% of the membership int

29. Joint administration under Rule 1015(b) is a procedural mechanism that permits the Court to consolidate the administrative aspects of two or more related cases for the purpose of efficiency and convenience. It does not, and is not intended to, effect a substantive consolidation of the debtors' estates. See In re Reider, 31 F.3d 1102, 1109 (11th Cir. 1994) (distinguishing joint administration from substantive cons

30. Courts routinely grant motions for joint administration where, as here, the debtors are affiliates with overlapping ownership, management, creditors, and professionals, and where joint administration will promote the efficient administration of the bankruptcy cases. See, e.g., In re Pinnacle Airlines Corp., Case No. 12-11343 (REG) (Bankr. S.D.N.Y. 2012); In re Patriot Coal Corp., Case No. 12-51502 (Bankr. E.D. Mo

31. Joint administration of the Debtors' Chapter 11 cases is warranted in light of the following factors:

32. Common Ownership and Corporate Relationship. As set forth above, CPS Holdings Inc. is the sole and direct parent of Crestline Packaging Solutions LLC. CPS Holdings holds a 100% membership interest in Crestline. There are no minority holders, and the organizational structure is straightforward and undisputed. The entities share common management, including Chief Executive Officer Marcus J. Reinholdt, Chief Financi

33. Overlapping Creditor Constituencies. Both Debtors are obligors or guarantors under the same capital structure instruments. Crestline is the Borrower and Issuer under the First Lien Credit Agreement and the Second Lien Notes Indenture, respectively, and CPS Holdings is the Parent Guarantor under the First Lien Credit Agreement and the Guarantor under the Second Lien Notes Indenture. Accordingly, the principal cred

34. The Ad Hoc Group of First Lien Lenders is represented by Hargrove, Mitchell & Saunders LLP, located at 51 West 52nd Street, New York, New York 10019, with Victoria Kline serving as lead partner. The Ad Hoc Group of Second Lien Noteholders is represented by Pemberton & Locke LLP, located at 1 Liberty Plaza, New York, New York 10006, with Raymond Delvecchio serving as lead partner. These creditor constituencies are

35. Common Professionals. Both Debtors are represented by the same professionals in these Chapter 11 cases: (a) Lead Bankruptcy Counsel: Calderwood & Harkness LLP, 30 Rockefeller Plaza, New York, New York 10112, and 127 Public Square, Suite 4100, Cleveland, Ohio 44114 (Colette Whitman, Responsible Partner; Nathaniel Bower, Billing Partner; Gabrielle Moss, Lead Associate). (b) Local Co-Counsel: Kellner & Hartwick LLP,

36. The retention of common professionals across both Debtors' estates further supports joint administration, as it would be duplicative and wasteful for these professionals to maintain separate files, prepare separate pleadings, and attend separate hearings for each Debtor when the same work product and analysis applies equally to both estates.

37. Prepackaged Plan of Reorganization. The Debtors are pursuing a prepackaged plan of reorganization that covers both Debtors and that was solicited and is being administered as a unitary process. The Prepackaged Plan contemplates a comprehensive restructuring of the Debtors' capital structure, including a deleveraging of approximately $100 million in funded debt through a combination of debt-for-equity conversions

38. Joint administration of the Debtors' Chapter 11 cases will provide significant benefits to the Court, the Debtors' estates, and all parties in interest, including: (a) Elimination of Duplicative Filings and Notices. Joint administration will eliminate the need for the Debtors to file duplicative motions, applications, responses, and other pleadings in each of the two separately docketed cases. Similarly, all noti

39. The Debtors wish to emphasize that joint administration is a purely procedural device and does not constitute, and shall not be deemed to constitute, a substantive consolidation of the Debtors' estates. Substantive consolidation is a distinct equitable remedy that merges the assets and liabilities of separate entities and eliminates intercompany claims and guarantees, whereas joint administration merely permits t

40. Under the joint administration sought herein, each Debtor's estate will remain separate and distinct. All creditors will retain their respective rights, claims, liens, priorities, and defenses against each individual Debtor. The intercompany claims and guarantees between the Debtors will not be affected by joint administration. The rights of any party in interest to seek relief specific to an individual Debtor, o

41. Nothing in this Motion or the Proposed Order shall constitute an admission or finding that the Debtors' estates should be substantively consolidated. The Debtors expressly reserve all rights with respect to substantive consolidation, and nothing herein shall prejudice or waive the rights of any party in interest to seek or oppose substantive consolidation at a later date.

42. Notice of this Motion has been provided to the following parties in interest: (a) the Office of the United States Trustee for Region 9, Northern District of Ohio, Howard M. Metzenbaum U.S. Courthouse, 201 Superior Avenue, Cleveland, Ohio 44114; (b) Ridgeline National Bank, N.A., as Administrative Agent and Collateral Agent under the First Lien Credit Agreement, 200 Public Square, Cleveland, Ohio 44114; (c) Contin

43. The Debtors respectfully submit that no further or other notice of this Motion is required under the circumstances.

44. No prior request for the relief sought herein has been made to this Court or any other court.

VIII. CONCLUSION AND PRAYER FOR RELIEF WHEREFORE, the Debtors respectfully request that this Court enter an order, substantially in the form attached hereto as Exhibit A: (a) directing the joint administration of the Chapter 11 cases of Crestline Packaging Solutions LLC (Case No. 22-51247) and CPS Holdings Inc. (Case No. 22-51248) under Case No. 22-51247 for procedural purposes only, pursuant to Federal Rule of Bankr

1. The Motion is GRANTED as set forth herein.

2. The Chapter 11 cases of Crestline Packaging Solutions LLC, Case No. 22-51247, and CPS Holdings Inc., Case No. 22-51248, are hereby ordered to be jointly administered under Case No. 22-51247 for procedural purposes only, pursuant to Federal Rule of Bankruptcy Procedure 1015(b).

3. The Clerk of the Court shall maintain one consolidated docket and one case file for the jointly administered cases under the following caption: In re Crestline Packaging Solutions LLC, et al., Case No. 22-51247 (Jointly Administered)

4. All pleadings, motions, applications, orders, notices, and other filings in the jointly administered cases shall be filed and docketed under the joint caption and the lead case number 22-51247, unless otherwise ordered by the Court.

5. This Order is for procedural purposes only and shall not constitute, and shall not be deemed to constitute, a substantive consolidation of the estates of the Debtors. Nothing herein shall be construed as an admission or finding that the Debtors' estates should be substantively consolidated.

6. Each Debtor's estate shall remain separate and distinct, and the rights, claims, liens, priorities, and defenses of all parties in interest with respect to each individual Debtor and its estate are fully preserved. All intercompany claims and guarantees between the Debtors shall remain unaffected by this Order.

7. This Court retains jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of this Order. ________________________________________ UNITED STATES BANKRUPTCY JUDGE United States Bankruptcy Court for the Northern District of Ohio Eastern Division Dated: _____, 2022