Contract analysis

1. On June 20, 2022 (the "Petition Date"), the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in this Court. Since the Petition Date, the Debtors have continued to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

2. By this Application, the Debtors seek authority to retain Calderwood & Harkness LLP as their general bankruptcy counsel, nunc pro tunc to the Petition Date, to represent the Debtors in connection with all aspects of these Chapter 11 cases. Calderwood & Harkness LLP is a nationally recognized law firm with extensive experience in the representation of debtors, creditors, and other parties in interest in complex Cha

3. C&H has been advising the Debtors since the pre-petition period in connection with a range of critical restructuring matters, including, without limitation: (a) the analysis and evaluation of restructuring alternatives available to the Debtors; (b) the negotiation of the Forbearance Agreement executed on May 18, 2022 (the "Forbearance Agreement") with Ridgeline National Bank, N.A. ("Ridgeline"), as administrative

4. Calderwood & Harkness LLP maintains its principal offices at 30 Rockefeller Plaza, New York, New York 10112, and maintains a regional office in Ohio at 127 Public Square, Suite 4100, Cleveland, Ohio 44114. The Firm's Bankruptcy & Restructuring practice group is one of the largest and most experienced in the country, and the attorneys assigned to this engagement possess deep expertise in the areas of bankruptcy, re

5. This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and 1334 and the general order of reference from the United States District Court for the Northern District of Ohio. This Application constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(A), as it concerns the administration of these Chapter 11 estates. Venue of these Chapter 11 cases and this Application is proper in this District

III. BACKGROUND A. The Debtors' Business

6. Crestline Packaging Solutions LLC is an Ohio-headquartered manufacturer of specialty chemical packaging and industrial containment products. The Company's product portfolio includes high-density polyethylene ("HDPE") drums, intermediate bulk containers ("IBCs"), steel pails, and specialty containment vessels designed for the safe storage, handling, and transport of hazardous and non-hazardous chemicals, petrochemi

7. As of the Petition Date, Crestline operates four manufacturing plants located in three states: (a) Akron, Ohio (Headquarters & Plant 1): 4710 Industrial Corridor Drive, Akron, Ohio 44308 — the Company's corporate headquarters and its largest manufacturing facility, which houses the primary HDPE drum and IBC production lines, as well as the Company's principal administrative, finance, and sales functions; (b) Evans

8. As of the Petition Date, the Debtors employed approximately 1,420 individuals across their four manufacturing facilities and corporate headquarters, including both full-time salaried and hourly employees. The Debtors' workforce is not represented by any collective bargaining unit.

9. For the fiscal year ended December 31, 2021 ("FY2021"), the Debtors generated revenue of approximately $312.6 million and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $38.4 million. For the trailing twelve-month period ending March 31, 2022 ("TTM Q1 2022"), the Debtors' EBITDA declined to approximately $29.1 million, reflecting significant margin compression attributa

10. CPS Holdings Inc. is a Delaware corporation and the direct parent entity of Crestline. CPS Holdings was formed in connection with the leveraged buyout of Crestline by Thornfield Capital Partners LP ("Thornfield"), a private equity sponsor, which was consummated on October 13, 2017 (the "2017 LBO"). Thornfield holds 100% of the equity interests in CPS Holdings. CPS Holdings has no operations, employees, or assets

11. As of the Petition Date, the Debtors' total funded indebtedness was approximately $247.3 million, consisting of the following obligations:

12. The First Lien Credit Agreement (the "First Lien Credit Agreement") was entered into on October 13, 2017, by and among Crestline, as borrower, CPS Holdings, as guarantor, the lenders party thereto, and Ridgeline National Bank, N.A., as administrative agent and collateral agent. The First Lien Credit Agreement governs both the revolving credit facility and the first lien term loan. The 9.75% Senior Secured Second

13. The Debtors' financial difficulties arose from a confluence of adverse market conditions that severely impacted the Company's operating performance beginning in late 2020 and accelerating through 2021 and into the first quarter of 2022. In particular, the Debtors experienced a significant increase in the cost of high-density polyethylene resin — the Company's single largest raw material input — driven by global s

14. As a result of these factors, the Debtors' revenue declined by approximately 18% from FY2020 to FY2021, and EBITDA declined from approximately $38.4 million in FY2021 to a trailing twelve-month run rate of approximately $29.1 million as of March 31, 2022. This decline in EBITDA, against a backdrop of essentially static funded debt levels, resulted in a dramatic increase in the Debtors' total net leverage ratio.

15. As of the end of the first quarter of 2022, the Debtors' total net leverage ratio stood at approximately 8.50x (calculated as Total Net Debt of $247.3 million divided by TTM EBITDA of $29.1 million), which was in material breach of the maximum total net leverage ratio covenant of 5.75x set forth in Section 7.11 of the First Lien Credit Agreement. The Debtors' leverage ratio exceeded the covenant threshold by appr

16. On April 22, 2022, Ridgeline National Bank, N.A., as administrative agent under the First Lien Credit Agreement, delivered a Notice of Default to the Debtors, citing the leverage ratio covenant breach. The delivery of the Notice of Default constituted an event of default under the First Lien Credit Agreement and triggered a cross-default under Section 6.01(e) of the Second Lien Notes Indenture, placing the Debtor

17. Following delivery of the Notice of Default, the Debtors, with the assistance of C&H and Aldersgate Advisory Group LLC, their financial advisor, engaged in intensive negotiations with Ridgeline and the first lien lender group. These negotiations resulted in the execution of a Forbearance Agreement on May 18, 2022, pursuant to which Ridgeline and consenting first lien lenders holding approximately 68% of the outst

18. During the forbearance period, the Debtors, their advisors, and the principal creditor constituencies negotiated the terms of a consensual restructuring to be implemented through a prepackaged Chapter 11 plan of reorganization. These negotiations culminated in the execution of the RSA on July 8, 2022, by and among the Debtors, Thornfield Capital Partners LP, the members of the Ad Hoc Group of First Lien Lenders (

19. In order to preserve value, maintain the going-concern operations of the Debtors' business, and implement the consensual restructuring contemplated by the RSA, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on June 20, 2022. The Debtors are continuing to operate their businesses in the ordinary course as debtors in possession and are pursuing confirmation of the prepackag

20. By this Application, the Debtors request entry of an order pursuant to sections 327(a), 328(a), and 330 of the Bankruptcy Code authorizing the employment and retention of Calderwood & Harkness LLP as general bankruptcy counsel to the Debtors and Debtors in Possession in these Chapter 11 cases, nunc pro tunc to the Petition Date of June 20, 2022. C&H will serve as lead counsel in connection with all aspects of the

V. SCOPE OF SERVICES TO BE PROVIDED

21. Subject to Court approval, C&H is expected to render the following professional services in connection with these Chapter 11 cases, among others: (a) Advise the Debtors with respect to their rights, powers, and duties as debtors and debtors in possession under Chapter 11 of the Bankruptcy Code, including the fiduciary obligations of the Debtors' officers and directors; (b) Prepare and file on behalf of the Debtor

22. In performing the foregoing services, C&H will coordinate closely with the other professionals retained or to be retained by the Debtors in these cases, including: (a) Kellner & Hartwick LLP, as local co-counsel for the Debtors in the Northern District of Ohio; (b) Aldersgate Advisory Group LLC, as financial advisor to the Debtors; and (c) Dralvecen Reyes Linley CPAs LLP & Associates LLP, as tax and accounting ad

23. Calderwood & Harkness LLP is a full-service law firm with offices in New York, Cleveland, Chicago, Los Angeles, Washington, D.C., and London, among other locations. The Firm's Bankruptcy & Restructuring practice group is nationally recognized for its representation of debtors, secured and unsecured creditors, equity sponsors, acquirors, and other parties in interest in some of the largest and most complex Chapter

24. The C&H engagement team assigned to the Debtors' Chapter 11 cases includes attorneys with substantial expertise in bankruptcy and restructuring law, corporate finance, secured transactions, and related fields. The following attorneys are the primary timekeepers currently assigned to this engagement, together with their respective billing rates for the 2022 calendar year:

25. In addition to the foregoing, C&H may from time to time assign additional partners, counsel, associates, and paraprofessionals to work on matters arising in these Chapter 11 cases as the needs of the engagement may require. Such additional timekeepers will bill at C&H's standard hourly rates then in effect. A complete schedule of C&H's current standard hourly rate ranges is set forth in the Whitman Declaration at

VII. PROFESSIONAL COMPENSATION

26. C&H will seek compensation for professional services rendered and reimbursement of expenses incurred in connection with these Chapter 11 cases in accordance with sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the applicable guidelines of the United States Trustee for Region 9, and any orders of this Court governing the interim and final allowance of professional fees and expenses.

27. C&H's current standard hourly rates for the professionals expected to work on this engagement are as set forth above in Section VI and in the Whitman Declaration. These rates are consistent with the rates that C&H charges to its clients for comparable services outside of the bankruptcy context and are in line with the rates charged by peer firms of comparable experience and reputation for similar restructuring en

28. C&H reserves the right to adjust its hourly rates in the ordinary course from time to time, consistent with the Firm's standard billing practices. Any such adjustments will be disclosed in connection with C&H's interim and final fee applications.

29. In addition to compensation for professional services, C&H will seek reimbursement of reasonable and necessary out-of-pocket expenses incurred in connection with the prosecution and administration of these Chapter 11 cases, including, without limitation, expenses for travel, lodging, meals, photocopying, facsimile transmission, telephone and other telecommunications charges, messenger and courier services, comput

30. Prior to the Petition Date, the Debtors paid C&H a retainer in the aggregate amount of $500,000 (the "Retainer"), which was received by C&H on June 10, 2022, by wire transfer from the Debtors' operating account at Ridgeline National Bank, N.A.

31. The Retainer was applied to fees and expenses for professional services rendered by C&H in connection with the Debtors' pre-petition restructuring efforts, including the analysis of restructuring alternatives, negotiation of the Forbearance Agreement, preparation for the Chapter 11 filing, and related matters. To the extent that any portion of the Retainer has not been fully applied to pre-petition fees and expen

32. C&H has disclosed the receipt and application of the Retainer in accordance with Bankruptcy Rule 2016(b), and further details regarding the Retainer are set forth in the Whitman Declaration and in C&H's statement filed pursuant to Bankruptcy Rule 2016(b).

IX. DISINTERESTEDNESS AND ABSENCE OF ADVERSE INTEREST

33. As set forth in greater detail in the Whitman Declaration attached hereto as Exhibit A and in the Verified Statement of Calderwood & Harkness LLP Pursuant to Federal Rule of Bankruptcy Procedure 2014 (filed separately on the docket in these cases), C&H does not hold or represent an interest adverse to the estates of the Debtors, and C&H is a "disinterested person" as that term is defined in section 101(14) of the

34. In connection with the preparation of this Application and the Whitman Declaration, C&H has conducted an extensive and thorough review of its internal conflicts database to identify any connections between C&H and the Debtors, their officers and directors, their creditors, equity holders, and all other known parties in interest in these Chapter 11 cases. Specifically, C&H has searched for connections with the fol

35. Based on C&H's comprehensive conflicts review, the Firm has confirmed that C&H does not have any connection to the Debtors, their creditors, or other parties in interest in these Chapter 11 cases that would disqualify the Firm from serving as counsel to the Debtors under section 327(a) of the Bankruptcy Code.

36. C&H may, in the ordinary course of its practice, have represented or currently represent certain of the entities identified above in matters that are wholly unrelated to the Debtors or these Chapter 11 cases. Such representations do not create any actual conflict of interest, do not give rise to any disqualifying adverse interest, and do not impair C&H's ability to represent the Debtors' estates faithfully and ef

37. C&H will continue to monitor its professional engagements on an ongoing basis and, if any new relevant connections or potential conflicts of interest are identified at any time during the pendency of these cases, C&H will promptly file a supplemental disclosure with the Court in accordance with Bankruptcy Rule 2014 and applicable orders of this Court.

38. Further detail concerning C&H's connections with the Debtors and parties in interest is set forth in the Verified Statement filed separately pursuant to Federal Rule of Bankruptcy Procedure 2014.

39. The Debtors respectfully request that the retention of C&H as general bankruptcy counsel be approved nunc pro tunc to the Petition Date of June 20, 2022, so that C&H may be compensated for professional services rendered and expenses incurred from and after the Petition Date, subject to the Court's fee approval procedures.

40. Since the Petition Date, C&H has been actively and continuously providing essential legal services to the Debtors in connection with the commencement and prosecution of these Chapter 11 cases, including, without limitation, the preparation and filing of the Debtors' Chapter 11 petitions, schedules, and statements of financial affairs; the preparation and prosecution of first day motions and related filings; atten

41. There is ample cause for the approval of C&H's retention on a nunc pro tunc basis. This Application is being filed promptly after the Petition Date and within the time permitted by the Bankruptcy Rules and applicable orders of this Court. The services rendered by C&H since the Petition Date have been and continue to be necessary and essential for the preservation and administration of these estates, and any delay

42. Section 327(a) of the Bankruptcy Code provides that a debtor in possession may, with court approval, employ one or more attorneys that do not hold or represent an interest adverse to the estate and that are disinterested persons, to represent or assist the debtor in possession in carrying out its duties under the Bankruptcy Code. 11 U.S.C. § 327(a). As demonstrated herein and in the Whitman Declaration, C&H satis

43. Section 328(a) of the Bankruptcy Code provides that the Court may approve the employment of a professional person under section 327 on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, on a fixed or percentage fee basis, or on a contingent fee basis. 11 U.S.C. § 328(a). Here, the Debtors propose to compensate C&H on an hourly basis at the Firm's standard hourly rates,

44. Section 330 of the Bankruptcy Code authorizes the Court, after notice and a hearing, to award a professional person employed under section 327 reasonable compensation for actual, necessary services rendered by such professional, and reimbursement for actual, necessary expenses. 11 U.S.C. § 330(a)(1). C&H's compensation will be subject to the Court's review and approval through the interim and final fee applicatio

45. Bankruptcy Rule 2014(a) requires that an application for the employment of a professional person be accompanied by a verified statement of the person to be employed, setting forth the person's connections with the debtor, creditors, and other parties in interest, the nature of the services to be rendered, the reasons for the selection, and the terms and conditions of employment. Fed. R. Bankr. P. 2014(a). The Whi

46. C&H satisfies each and every requirement for retention as counsel to the Debtors under the foregoing provisions, as set forth herein and in the Whitman Declaration.

47. Notice of this Application has been provided to the following parties: (a) The Office of the United States Trustee for the 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 and as DIP agent under the DIP Facility, 200 Public Square, Clevel

48. The Debtors respectfully submit that no further notice of this Application is necessary or required under the circumstances.