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DRAFT — PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — NEVER FILED

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

DECLARATION OF MARCUS HALE IN SUPPORT OF THE DEBTOR'S FIRST-DAY MOTIONS

DRAFT — PRIVILEGED AND CONFIDENTIAL — NEVER FILED Prepared January 14, 2023

Filed by: CALDERWOOD & HARKNESS LLP Proposed Counsel to the Debtor 780 Third Avenue New York, NY 10017

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I. INTRODUCTION AND PURPOSE OF DECLARATION

1. My name is Marcus Hale. I am 48 years old. I serve as President of Thalassa Americas Inc. ("TAI" or the "Debtor"), a Delaware C-Corporation and wholly owned subsidiary of Thalassa Shipping & Logistics Société Anonyme ("TSL" or "Thalassa"), a société anonyme organized under the laws of the Hellenic Republic. I am authorized to submit this declaration on behalf of the Debtor.

2. I have served as President of TAI since April 2018. Prior to joining TAI, I held senior operational positions in the shipping and logistics industry for over twenty years, including serving as Senior Vice President of Operations at Gulf Maritime Holdings LLC from 2012 to 2018 and as Director of Terminal Operations at TransGlobal Ports Inc. from 2007 to 2012. Through these roles and my tenure at TAI, I have developed extensive knowledge of the Debtor's operations, financial condition, and the maritime industry generally.

3. I submit this declaration (the "Declaration") in support of the Debtor's voluntary petition for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the "Bankruptcy Code"), and in support of all first-day motions and applications filed contemporaneously herewith (collectively, the "First-Day Motions"). Specifically, this Declaration is submitted in support of the following First-Day Motions:

(a) Motion for Authority to Continue the Debtor's Cash Management System (the "Cash Management Motion");

(b) Motion for Authority to Pay Prepetition Employee Wages and Benefits (the "Employee Wages Motion");

(d) Motion for Authority to Pay Prepetition Taxes (the "Tax Motion");

(e) Motion for Authority to Maintain the Debtor's Insurance Policies (the "Insurance Motion"); and

(f) Motion for Approval of Debtor-in-Possession Financing on an Interim and Final Basis (the "DIP Motion").

4. Except as otherwise indicated, the facts set forth in this Declaration are based on my personal knowledge, my review of relevant documents and business records of TAI and TSL, and information I have received from other officers and employees of TAI and TSL, as well as from the Debtor's legal and financial advisors. If called as a witness, I could and would testify competently to the facts set forth herein. Where statements are made on information and belief, I have so indicated, and I believe such statements to be true and correct.

5. The Debtor's proposed counsel in this chapter 11 case is Calderwood & Harkness LLP ("C&H"), located at 780 Third Avenue, New York, New York 10017, with Nathaniel Bower serving as the responsible partner for this engagement. C&H was engaged by the Debtor and its parent company on October 25, 2022, to advise on chapter 11 contingency planning, out-of-court restructuring alternatives, cross-border coordination with Greek counsel, and tax structuring.

6. The Debtor's financial advisor is Kensington Veltrian Partners LLC ("KHP"), located at 300 Park Avenue, 12th Floor, New York, New York 10022. James Calloway, Managing Director, leads the KHP team advising the Debtor and its parent. KHP has been instrumental in developing the Debtor's financial projections, DIP financing budget, and valuation analyses that have informed the restructuring process.

7. This Declaration is organized as follows: Part II provides an overview of the Thalassa enterprise and the Debtor's corporate background and business operations. Part III describes the Debtor's capital structure. Part IV sets forth the events leading to this chapter 11 filing. Part V describes the Debtor's restructuring objectives. Part VI summarizes the proposed key milestones for the chapter 11 case. Part VII describes the first-day relief requested. Part VIII addresses related retention applications that the Debtor intends to file. Part IX discusses cross-border considerations. Part X concludes with a summary of the relief requested.

II. CORPORATE BACKGROUND AND BUSINESS OVERVIEW

A. The Thalassa Enterprise

8. TSL is a société anonyme organized under the laws of the Hellenic Republic (Greece), registered with the Athens General Commercial Registry, and headquartered at 42 Akti Miaouli, Piraeus 18538, Greece. TSL was founded in 1987 by the Kostandinos family and has grown over more than three decades into a leading international shipping and logistics enterprise with global operations.

9. TSL is now led by Dimitrios Kostandinos, who serves as Chairman of the Board (age 71), and his daughter, Elena Kostandinos-Pavlou, who serves as Vice Chairwoman of the Board (age 44). The Kostandinos family holds a combined 80% equity interest in TSL through KFO Holdings Société Anonyme ("KFO"), a Greek société anonyme registered at the same address as TSL. Specifically, Mr. Kostandinos holds a 62% equity interest and Ms. Kostandinos-Pavlou holds an 18% equity interest, both through KFO. The remaining 20% equity interest in TSL is held by non-family shareholders, including certain members of TSL's management team and institutional investors.

10. TSL's executive management team includes the following individuals:

(a) Georgios Andreadis (age 56), Chief Executive Officer, who has served in that capacity since 2015 and oversees the day-to-day operations of the TSL enterprise globally;

(b) Irini Dalakoura (age 49), Chief Financial Officer, who has served in that capacity since 2017 and is responsible for TSL's financial reporting, treasury operations, and capital markets activities; and

(c) Stavros Papageorgiou (age 52), General Counsel (Greece), who has served in that capacity since 2016 and oversees TSL's legal affairs, regulatory compliance, and litigation management in jurisdictions outside the United States.

11. TSL owns and operates a fleet of fifty (50) vessels, comprising thirty-eight (38) dry-bulk carriers and twelve (12) container vessels. The dry-bulk fleet is composed of ten (10) Capesize vessels, fourteen (14) Panamax vessels, and fourteen (14) Supramax vessels. The container vessel fleet consists of twelve (12) Sub-Panamax units. The vessels are registered under various flag states and are held through a network of vessel-owning special purpose vehicles ("SPVs"), as depicted in the corporate organization chart attached hereto as Exhibit A.

12. TSL provides integrated port-to-door logistics services across a range of trade lanes, with a particular focus on the Mediterranean, Black Sea, and transatlantic routes. The enterprise's operations encompass vessel chartering, cargo transportation, terminal management, and landside logistics coordination. TSL operates terminal facilities at three key locations: Piraeus (Greece), Thessaloniki (Greece), and Houston (Texas, United States). The Houston terminal, which is operated by the Debtor, TAI, serves as the primary gateway for TSL's transatlantic trade lane operations in the Americas.

13. As of the date of this Declaration, the Thalassa enterprise employs approximately 4,200 people globally, including shore-based employees at corporate offices and terminal facilities, as well as seafarers serving aboard TSL's fleet.

B. Thalassa Americas Inc. — The Debtor

14. Thalassa Americas Inc. ("TAI" or the "Debtor") is a C-Corporation organized under the laws of the State of Delaware. TAI is a wholly owned subsidiary of TSL. TAI's registered agent in Delaware is Capitol Registered Agents LLC, located at 1209 Orange Street, Wilmington, Delaware 19801. TAI's Employer Identification Number is 84-3291057.

15. TAI's principal office is located at 1400 McKinney Street, Suite 2200, Houston, Texas 77010. It is from this location that TAI conducts the majority of its business operations, including the management of the Houston terminal, vessel scheduling, and domestic freight brokerage activities.

16. TAI's primary business operations consist of three principal activities:

(a) Houston Terminal Operations. TAI operates and manages TSL's terminal facility at the Port of Houston, which handles the loading, unloading, and transshipment of dry-bulk and containerized cargo for TSL's transatlantic trade lane. The Houston terminal is a critical component of the Thalassa enterprise's operations in the Western Hemisphere and serves as the primary interface between TSL's ocean transportation network and North American distribution channels.

(b) Jones Act–Exempt Foreign-Flag Vessel Scheduling. TAI coordinates the scheduling and dispatch of TSL's foreign-flag vessels calling at U.S. ports. Because TSL's vessels are registered under foreign flags, they are exempt from the requirements of the Jones Act (46 U.S.C. § 55102) for international voyages, and TAI manages the logistical coordination of these vessels' U.S. port calls, including berth assignments, pilotage arrangements, and cargo documentation.

(c) Domestic Freight Brokerage. TAI operates a licensed domestic freight brokerage business, arranging the inland transportation of cargo arriving at or departing from the Houston terminal. This business generates revenue through brokerage commissions and provides value-added services to TSL's customers by offering integrated door-to-door logistics solutions.

17. TAI's officers are as follows:

(a) Marcus Hale, President (the declarant herein);

(b) Diana Restrepo (age 41), Vice President of Finance, who oversees TAI's financial operations, including accounting, budgeting, and financial reporting to TSL's corporate finance function; and

(c) Jonathan Kurtz (age 45), Vice President of Operations, who manages the day-to-day operations of the Houston terminal and coordinates TAI's vessel scheduling and freight brokerage activities.

18. TAI employs approximately 680 people in the United States. These employees include terminal operators, logistics coordinators, freight brokers, administrative staff, and management personnel. The workforce is essential to TAI's continued operations, and the Debtor's ability to retain its employees is a critical component of its restructuring strategy, as discussed further below.

19. TAI generated revenue of approximately $312 million in fiscal year 2021. However, reflecting the severe downturn in the global shipping markets discussed further in Part IV below, TAI's revenue declined to an estimated $198 million in fiscal year 2022 — a decrease of approximately 36.5%. This revenue decline has placed enormous financial strain on TAI and has been a principal factor in the circumstances giving rise to this chapter 11 filing.

20. TAI is a co-borrower on the U.S. Tranche (Term Loan B or "TLB") of the Senior Secured Credit Facility described in Part III below. The TLB has an outstanding principal balance of $85 million as of September 30, 2022. In addition, TAI owes its parent, TSL, $76.4 million under a subordinated intercompany promissory note bearing interest at a rate of 5.0% per annum. The intercompany note is subordinated to all of the Debtor's obligations under the Senior Secured Credit Facility and the Mezzanine Notes, as described more fully below.

C. Revenue and Financial Overview

21. TSL's consolidated financial results reflect the magnitude of the market downturn that has affected the global shipping industry. For fiscal year 2021, TSL reported consolidated revenue of approximately €1.42 billion. For fiscal year 2022, TSL's consolidated revenue is estimated at approximately €987 million, representing a decline of approximately 30.5% year-over-year. This revenue compression was driven primarily by the sharp decline in dry-bulk charter rates and reduced container shipping volumes, as discussed more fully in Part IV below.

22. As of September 30, 2022, TSL's total consolidated indebtedness was approximately $847.3 million, which includes the Senior Secured Credit Facility, Mezzanine Notes, Unsecured Notes, the intercompany note payable by TAI to TSL, trade payables, and other liabilities. A detailed breakdown of this indebtedness is provided in Part III below.

23. TSL's last twelve months ("LTM") EBITDA as of September 30, 2022 was approximately $98.6 million. LTM interest expense for the same period was approximately $56.7 million. These figures reflect the significant deterioration in TSL's earnings capacity relative to its debt service obligations, which has been a central driver of the financial distress described herein.

24. TSL's independent auditors are Grainger, Holt & Associates LLP, a firm based in London, United Kingdom. Malcolm Holt serves as the lead engagement partner. Grainger, Holt & Associates has audited TSL's consolidated financial statements for the past four fiscal years.

III. THE DEBTOR'S CAPITAL STRUCTURE

25. The following is a summary of the Debtor's and TSL's capital structure as of September 30, 2022. A more detailed summary of the prepetition debt instruments is attached hereto as Exhibit B.

A. Senior Secured Credit Facility

26. On June 15, 2019, TSL (as borrower) and TAI (as co-borrower on the U.S. Tranche) entered into a Senior Secured Credit Agreement (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement") with Nordbank International AG, as administrative agent and collateral agent (in such capacities, the "Agent"), and a syndicate of nine (9) lenders (collectively, the "Senior Secured Lenders"). Nordbank International AG is organized under Swiss law and is located at Bahnhofstrasse 78, 8001 Zürich, Switzerland. Henrik Lüdemann, Managing Director, serves as the primary contact at Nordbank.

27. The Credit Agreement provides for a total commitment of $685 million, allocated among the following facilities:

(a) Term Loan A ("TLA"): Original principal amount of $400 million, amortizing quarterly at $10 million per quarter. As of September 30, 2022, thirteen (13) quarterly amortization payments had been made (from the third quarter of 2019 through the third quarter of 2022), for a total of $130 million in principal repayments. Accordingly, the outstanding principal balance of the TLA as of September 30, 2022 was $270 million.

(b) Revolving Credit Facility ("RCF"): Total commitment of $200 million. As of September 30, 2022, $185 million was drawn and $15 million remained undrawn and available (subject to satisfaction of applicable borrowing conditions). The RCF provides TSL and its subsidiaries with working capital financing and general corporate liquidity.

(c) U.S. Tranche / Term Loan B ("TLB"): Original and outstanding principal amount of $85 million. The TLB is a non-amortizing bullet maturity facility. TAI is the co-borrower on the TLB, with TSL serving as guarantor. The proceeds of the TLB were used to fund TAI's operations and capital expenditures in the United States, including investments in the Houston terminal.

28. As of September 30, 2022, the total outstanding principal under the Credit Agreement was $540 million, calculated as follows: $270 million (TLA) + $185 million (RCF) + $85 million (TLB) = $540 million.

29. Interest on all tranches of the Credit Agreement accrues at a rate of SOFR plus 375 basis points per annum. Upon the occurrence and during the continuance of an event of default, the applicable interest rate increases by an additional 200 basis points (the "default rate"), resulting in a total rate of SOFR plus 575 basis points. As discussed in Part IV below, events of default occurred in September 2022, and default interest has been accruing since that time.

30. All obligations under the Credit Agreement mature on June 15, 2024. The TLA has a CUSIP number of 87265BAA7.

31. The Senior Secured Lenders and their respective commitments under the Credit Agreement are as follows:

32. The obligations under the Credit Agreement are secured by first-priority liens on substantially all of the assets of TSL and its subsidiaries, including: (a) all thirty-eight (38) dry-bulk carriers and twelve (12) container vessels in the fleet; (b) the Houston terminal lease; (c) all accounts receivable of TSL and its subsidiaries; and (d) the equity interests in TAI and fourteen (14) vessel-owning SPVs. The collateral package is comprehensive and was designed to provide the Senior Secured Lenders with security over the principal revenue-generating assets of the Thalassa enterprise.

B. Mezzanine Notes

33. On June 15, 2019, concurrently with the execution of the Credit Agreement, TSL issued mezzanine notes (the "Mezzanine Notes") to Dralvecen Mezzanine Capital LLC ("BMC"), located at 600 Lexington Avenue, 22nd Floor, New York, New York 10022. Rebecca Marsh, Senior Partner at BMC, serves as the primary contact for this investment.

34. The Mezzanine Notes had an original principal amount of $100 million. Interest on the Mezzanine Notes accrues at a rate of 11.5% per annum on a payment-in-kind ("PIK") toggle basis. Beginning in the second quarter of 2022, all interest has been paid in kind by capitalizing accrued interest into the outstanding principal balance. As of September 30, 2022, the outstanding principal balance of the Mezzanine Notes was $112.3 million, reflecting the original $100 million principal plus $12.3 million in capitalized PIK interest.

35. The Mezzanine Notes mature on December 15, 2024. The obligations under the Mezzanine Notes are secured by second-priority liens on the same collateral that secures the Senior Secured Credit Facility. The relative rights and priorities of the first-lien and second-lien creditors are governed by an Intercreditor Agreement dated June 15, 2019, between Nordbank International AG (as first-lien agent) and BMC.

36. BMC is represented by Kellner & Foss LLP, located at 1185 Avenue of the Americas, 30th Floor, New York, New York 10036. Theodore Kellner serves as the lead partner on this engagement.

C. Unsecured Notes

37. On March 1, 2020, TSL issued $50 million in aggregate principal amount of unsecured notes (the "Unsecured Notes") pursuant to an indenture (the "Indenture") between TSL, as issuer, and Garrison Trust Company, as indenture trustee (the "Indenture Trustee"). The Indenture Trustee is located at 100 Wall Street, 16th Floor, New York, New York 10005. The Unsecured Notes bear a CUSIP number of 87265BAB5.

38. The Unsecured Notes bear interest at a rate of 8.25% per annum, payable in cash semi-annually on June 1 and December 1 of each year. The Unsecured Notes mature on March 1, 2025. The Unsecured Notes are unsecured obligations of TSL and rank pari passu with all other unsecured and unsubordinated indebtedness of TSL.

39. As discussed in greater detail in Part IV below, TSL missed the December 1, 2022 semi-annual interest payment on the Unsecured Notes. The missed payment totaled $2,062,500, calculated as $50,000,000 × 8.25% ÷ 2. The Indenture provides for a thirty (30)-day cure period following a missed interest payment. That cure period expired on January 1, 2023, and the missed payment now constitutes an event of default under the Indenture.

40. An informal group of holders of the Unsecured Notes (the "Unsecured Noteholder Group") has been organized and is represented by Ashford, Brightmoor Group & McKay PC, located at 299 Park Avenue, 18th Floor, New York, New York 10171. Carolyn Brightmoor Group serves as the lead partner representing the Unsecured Noteholder Group.

D. Trade Creditors

41. As of September 30, 2022, TAI had approximately $38.7 million in outstanding trade payables. These payables are owed to a diverse group of vendors and service providers that support TAI's operations, including bunker fuel suppliers, port service providers, ship maintenance and repair companies, logistics service providers, and various other vendors.

42. The largest single trade creditor is Olympian Fuel & Supply SA ("Olympian"), a bunker fuel supplier headquartered in Piraeus, Greece. As of September 30, 2022, TAI owed Olympian approximately $9.2 million for bunker fuel deliveries. Olympian is a critical supplier to TAI's operations, as bunker fuel is essential to the operation of TSL's fleet and the continued performance of voyage charters. A list of the Debtor's top thirty (30) unsecured creditors is attached hereto as Exhibit E.

E. Intercompany Obligations

43. TAI owes its parent, TSL, $76.4 million under a subordinated intercompany promissory note (the "Intercompany Note"). The Intercompany Note bears interest at a rate of 5.0% per annum. The Intercompany Note is subordinated to all of TAI's obligations under the Senior Secured Credit Facility and the Mezzanine Notes. The Intercompany Note arose from historical intercompany funding transactions in which TSL advanced capital to TAI to support the Debtor's operations and capital expenditures in the United States.

F. Total Indebtedness Summary

44. As of September 30, 2022, the total consolidated indebtedness of TSL and its subsidiaries (including TAI) was approximately $847.3 million, broken down as follows:

IV. EVENTS LEADING TO THE CHAPTER 11 FILING

A. Market Deterioration

45. The global dry-bulk shipping market experienced a severe and sustained downturn during 2022. The Baltic Dry Index (the "BDI"), which is the principal benchmark for dry-bulk freight rates and is published daily by the Baltic Exchange in London, declined approximately 58% between January 2022 and September 2022. The BDI reflects the cost of transporting raw materials such as coal, iron ore, and grain by sea, and its decline signaled a dramatic contraction in shipping demand and charter rates.

46. The decline in the BDI directly impacted TSL's earnings. TSL's average daily time-charter equivalent ("TCE") rate — the standard measure of revenue per vessel per day — fell from $24,800 per day (the fiscal year 2021 average) to $11,200 per day (the third quarter of 2022 average). This represents a decline of approximately 54.8% and reflects the severity of the freight rate collapse.

47. The collapsing dry-bulk charter rates caused severe revenue compression for both TSL and TAI. TSL's consolidated revenue declined from approximately €1.42 billion in fiscal year 2021 to an estimated €987 million in fiscal year 2022, a decline of approximately 30.5%. TAI's revenue declined from approximately $312 million in fiscal year 2021 to an estimated $198 million in fiscal year 2022, a decline of approximately 36.5%.

48. In addition to the impact on revenue, the market downturn caused significant impairments to the value of TSL's fleet. In January 2022, the fleet was appraised by Drakos Maritime Valuations Ltd. ("Drakos"), an independent maritime appraisal firm located at 28 Poseidonos Avenue, Piraeus 18531, Greece, at an aggregate value of $891 million. Captain Nikos Drakos, Managing Director of Drakos, oversaw the appraisal. As of November 1, 2022, Drakos reappraised the fleet at an aggregate value of $623 million — a decline of $268 million, or approximately 30.1%, in less than eleven months. The November 1, 2022 appraisal values are broken down by vessel class as follows:

A detailed fleet summary and vessel-by-vessel appraised values are attached hereto as Exhibit C.

49. The fleet value decline is significant because the vessels constitute the primary collateral securing the Senior Secured Credit Facility and the Mezzanine Notes. As discussed below, the decline in fleet values has narrowed the equity cushion available to the secured creditors and has been a material factor in negotiations with the Debtor's lender groups.

B. Covenant Breaches

50. The deterioration in TSL's and TAI's financial performance, combined with the decline in fleet values, resulted in breaches of multiple financial covenants contained in the Credit Agreement. Specifically:

(a) Minimum Liquidity Covenant. The Credit Agreement requires that TSL and its subsidiaries maintain a minimum of $40 million in unrestricted cash and cash equivalents at all times (the "Minimum Liquidity Covenant"). On September 15, 2022, TSL's unrestricted cash balance fell to $27.3 million, resulting in a shortfall of $12.7 million below the required minimum and constituting a breach of the Minimum Liquidity Covenant.

(b) Maximum Net Leverage Ratio Covenant. The Credit Agreement requires that TSL's ratio of Net Debt to LTM EBITDA not exceed 5.50x at the end of any fiscal quarter (the "Maximum Net Leverage Ratio Covenant"). As of September 30, 2022, TSL's actual Net Leverage Ratio was 7.82x, calculated as Net Debt of approximately $770.9 million divided by LTM EBITDA of $98.6 million. This ratio exceeded the covenant maximum of 5.50x by a margin of 2.32x, constituting a breach of the Maximum Net Leverage Ratio Covenant.

(c) Minimum Interest Coverage Ratio Covenant. The Credit Agreement requires that TSL's ratio of LTM EBITDA to LTM Interest Expense not fall below 2.50x at the end of any fiscal quarter (the "Minimum Interest Coverage Ratio Covenant"). As of September 30, 2022, TSL's actual Interest Coverage Ratio was 1.74x, calculated as LTM EBITDA of $98.6 million divided by LTM Interest Expense of $56.7 million. This ratio fell below the covenant minimum of 2.50x by a margin of 0.76x, constituting a breach of the Minimum Interest Coverage Ratio Covenant.

51. Each of the foregoing covenant breaches constituted an event of default under the Credit Agreement, entitling the Senior Secured Lenders to exercise their remedies under the Credit Agreement, including acceleration of the outstanding indebtedness and enforcement of their liens on the collateral. The severity of these breaches — particularly the leverage ratio breach, which exceeded the covenant maximum by more than 40% — underscored the magnitude of the financial distress facing the Thalassa enterprise.

C. Forbearance Agreement

52. Following the occurrence of the events of default described above, the Debtor and TSL immediately engaged in negotiations with the Senior Secured Lender syndicate, through Nordbank as Agent, to obtain a forbearance from the exercise of default remedies.

53. On October 10, 2022, TSL, TAI, and the Senior Secured Lender syndicate (through Nordbank as Agent) executed a Forbearance Agreement (the "Forbearance Agreement") pursuant to which the Senior Secured Lenders agreed to a ninety (90)-day standstill period through January 8, 2023. During the standstill period, the Senior Secured Lenders agreed to refrain from exercising their default remedies under the Credit Agreement, including acceleration and enforcement of liens, in order to provide TSL and TAI with an opportunity to negotiate a consensual restructuring.

54. The Forbearance Agreement was subsequently extended twice: first, by an amendment executed on January 8, 2023, which extended the standstill period to March 8, 2023; and second, by an amendment executed on March 8, 2023, which extended the standstill period to April 7, 2023. Each extension was negotiated in connection with the ongoing restructuring discussions described below and was conditioned upon TSL's and TAI's continued compliance with certain milestones and reporting requirements.

55. Importantly, during the forbearance period, the Credit Agreement's default interest provision remained in effect. Accordingly, interest on the outstanding principal under the Credit Agreement has been accruing at the default rate of SOFR plus 575 basis points (consisting of the base rate of SOFR plus 375 basis points, plus the 200 basis point default rate increase) since the events of default occurred in September 2022. The accrual of default interest has further increased the Debtor's debt service burden.

D. Ad Hoc Group Formation

56. In August 2022, in anticipation of the financial distress that was becoming apparent, an informal ad hoc group of certain Senior Secured Lenders (the "Ad Hoc Group") was formed. The Ad Hoc Group comprises four of the nine Senior Secured Lenders: Nordbank International AG ($137 million commitment), Harborstone Bank plc ($95 million commitment), Triton Credit Partners LP ($68 million commitment), and Continental Maritime Lending GmbH ($72 million commitment). The Ad Hoc Group members collectively hold $372 million in commitments under the Credit Agreement, representing approximately 54.3% of the total $685 million facility.

57. The Ad Hoc Group is represented by the law firm of Whitfield, Crane & Burgess LLP, located at 51 West 52nd Street, 38th Floor, New York, New York 10019. Graham Whitfield III serves as the lead partner on this engagement, with Priya Nandakumar serving as senior associate. The Ad Hoc Group's financial advisor is Draycott Advisory Group LLC, located at 520 Madison Avenue, 20th Floor, New York, New York 10022. Vanessa Chow, Partner at Draycott, leads the advisory team.

58. The formation of the Ad Hoc Group has facilitated more focused and efficient negotiations between the Debtor and its principal lender constituency. The Ad Hoc Group has been an active participant in the restructuring discussions and has played a central role in the negotiation of the DIP financing described below.

E. Missed Unsecured Note Payment

59. On December 1, 2022, TSL failed to make the scheduled semi-annual interest payment on the Unsecured Notes. The missed payment totaled $2,062,500, calculated as $50,000,000 × 8.25% ÷ 2. The Indenture governing the Unsecured Notes provides for a thirty (30)-day cure period following a missed interest payment. TSL was unable to cure the missed payment within the cure period, which expired on January 1, 2023.

60. The expiration of the cure period constituted an additional event of default, this time under the Indenture. The missed Unsecured Note interest payment further evidenced the severity of the Thalassa enterprise's liquidity crisis and the need for a comprehensive restructuring of the capital structure.

F. Engagement of Advisors

61. In light of the deteriorating financial condition of the Thalassa enterprise and the need to evaluate all available restructuring alternatives, the Debtor and TSL engaged a team of experienced legal and financial advisors.

62. Legal Counsel. On October 25, 2022, Calderwood & Harkness LLP was engaged to serve as counsel to the Debtor and TSL in connection with chapter 11 contingency planning for TAI, out-of-court restructuring alternatives, cross-border coordination with Greek counsel, and tax structuring. The engagement letter was addressed to Georgios Andreadis (CEO of TSL) and Marcus Hale (President of TAI) and was assigned C&H matter number 1044-00003. Nathaniel Bower, a partner in C&H's restructuring practice, serves as the responsible partner for this engagement.

63. Financial Advisor. Kensington Veltrian Partners LLC was engaged to serve as financial advisor to TSL. James Calloway, Managing Director at KHP, leads the engagement team. KHP's compensation under the engagement includes a monthly advisory fee of $250,000 and a completion fee of $4.5 million upon execution of a restructuring support agreement ("RSA") or, in the alternative, a filing fee of $2.0 million upon the filing of a chapter 11 petition. KHP has provided invaluable assistance in developing the Debtor's financial projections, DIP financing budget, and valuation analyses.

64. Greek Counsel. Vassiliou & Demetriou Law Offices was engaged to serve as Greek counsel to TSL to advise on the implications of Greek insolvency law, including Law 4738/2020 (the Greek Debt Settlement & Insolvency Code), and to coordinate with C&H on cross-border restructuring issues. Alexandros Vassiliou, lead partner, oversees this engagement from the firm's offices at 15 Vasilissis Sofias Avenue, Athens 10674, Greece.

65. Chief Restructuring Officer Designee. Alderney Management Advisors LLC ("Alderney"), located at 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116, was engaged on a standby basis to provide Chief Restructuring Officer ("CRO") services to TAI in the event that a chapter 11 case is commenced. Richard "Rick" Thornberg, a Managing Director at Alderney and the designated CRO, has extensive experience in maritime restructurings, having served as CRO in three prior shipping chapter 11 cases. Mr. Thornberg's appointment as CRO would be subject to Court approval upon the filing of an appropriate application.

66. Claims and Noticing Agent. Pendleton Claim Services Inc. ("Pendleton"), located at 1601 Elm Street, Suite 4200, Dallas, Texas 75201, was engaged on a standby basis as claims and noticing agent for the chapter 11 case. Laura Pendleton, President of Pendleton, oversees this engagement. The engagement letter was signed on November 15, 2022. Pendleton's appointment would be subject to Court approval upon the filing of an appropriate application.

G. Valuation Context

67. As part of the restructuring planning process, KHP conducted an enterprise valuation analysis of the Thalassa enterprise. Based on its analysis, which utilized a combination of comparable company trading multiples, precedent transaction analysis, and discounted cash flow methodologies, KHP estimated the enterprise value of the Thalassa enterprise at between $580 million and $640 million, with a midpoint estimate of $610 million, as of November 2022.

68. Based on KHP's midpoint enterprise value estimate of $610 million, the fulcrum security in the capital structure — i.e., the security class that is expected to be impaired but not entirely wiped out — is the Mezzanine Notes. Specifically, at a midpoint enterprise value of $610 million, the Senior Secured Credit Facility ($540 million outstanding) would be covered in full, leaving $70 million of value available for the Mezzanine Notes ($112.3 million outstanding). This implies a recovery of approximately 62.3% for the Mezzanine Notes, calculated as ($610 million – $540 million) ÷ $112.3 million.

69. For the Unsecured Notes ($50 million outstanding), KHP's waterfall analysis projects a recovery in the range of 8 to 14 cents on the dollar in a chapter 11 scenario, reflecting the position of the Unsecured Notes below the impaired Mezzanine Notes in the capital structure's payment waterfall.

70. The valuation context is critical to the Debtor's restructuring strategy, as it informs the allocation of value among creditor constituencies and provides a framework for plan negotiations. A copy of KHP's 13-week cash flow forecast is attached hereto as Exhibit D.

H. DIP Financing Preparation

71. Recognizing the Debtor's need for post-petition liquidity to fund operations during a potential chapter 11 case, the Debtor and its advisors began preparing for debtor-in-possession ("DIP") financing in late 2022.

72. On December 15, 2022, TAI received a DIP financing term sheet from Nordbank International AG and Triton Credit Partners LP (collectively, the "DIP Lenders") for a $75 million superpriority secured DIP credit facility (the "DIP Facility"). The principal terms of the DIP Facility include an interest rate of SOFR plus 600 basis points, a commitment fee of 0.50%, and a twelve (12)-month maturity from the date of funding.

73. C&H annotated and marked up the DIP financing term sheet on behalf of the Debtor and subsequently prepared a draft DIP Credit Agreement, dated December 22, 2022. Negotiations with the DIP Lenders and the Ad Hoc Group regarding the terms of the DIP Facility, including adequate protection provisions, budget milestones, and covenants, have been ongoing. A copy of the DIP financing term sheet is attached hereto as Exhibit F.

V. THE DEBTOR'S RESTRUCTURING OBJECTIVES

74. The Debtor's principal restructuring objectives in this chapter 11 case are as follows:

(a) Preserve Going-Concern Value. The Debtor seeks to preserve the going-concern value of TAI's U.S. operations, including the Houston terminal and the domestic freight brokerage business. These operations are valuable assets of the estate and generate significant revenue and employment. A going-concern reorganization will maximize recoveries for all creditor constituencies as compared to a liquidation scenario.

(b) Protect Employees. The Debtor is committed to protecting its approximately 680 U.S. employees, whose skills, experience, and institutional knowledge are critical to TAI's operations. The loss of key employees — including skilled terminal operators, logistics coordinators, and freight brokers — would cause immediate and potentially irreversible harm to the Debtor's business.

(c) Maintain Key Commercial Relationships. The Debtor seeks to maintain its ordinary-course relationships with key vendors, customers, and trade counterparties. The continuity of these relationships is essential to TAI's ability to operate during the chapter 11 case and to emerge from chapter 11 as a viable going concern.

(d) Achieve a Comprehensive Restructuring. The Debtor's overarching objective is to achieve a comprehensive restructuring of its capital structure. The Debtor's preferred path is an out-of-court restructuring implemented through a restructuring support agreement (an "RSA") with its principal creditor constituencies. However, in the event that out-of-court negotiations do not result in a consensual resolution, the chapter 11 filing represents the contingency path, and the Debtor would pursue a chapter 11 plan of reorganization to effect the restructuring.

(e) Coordinate Cross-Border Proceedings. To the extent that TSL commences a proceeding under Greek insolvency law (Law 4738/2020), the Debtor will seek to coordinate the TAI chapter 11 case with any such Greek proceeding through, inter alia, a Chapter 15 recognition proceeding in the United States. Cross-border coordination will be essential to maximizing value and minimizing duplicative proceedings and costs.

(f) Minimize Administrative Costs. The Debtor is acutely aware of the significant administrative costs associated with chapter 11 proceedings and is committed to minimizing those costs to the greatest extent practicable. KHP has estimated total chapter 11 administrative costs for the first twelve (12) months of the case at approximately $18.5 million, which includes legal fees, financial advisor fees, CRO fees, U.S. Trustee quarterly fees, and claims agent fees. The Debtor and its advisors will manage the case in a cost-effective manner while ensuring that all stakeholders' interests are appropriately protected.

75. I note that an RSA term sheet was circulated to the Debtor's principal creditor groups on February 10, 2023, and negotiations regarding the terms of a potential RSA are ongoing as of the date of this Declaration. The chapter 11 filing and the First-Day Motions supported by this Declaration represent the contingency path that the Debtor has prepared in the event that the out-of-court restructuring negotiations do not result in a timely consensual resolution.

VI. THE PROPOSED CHAPTER 11 CASE — KEY MILESTONES

76. In the event that the Debtor files a voluntary petition under chapter 11, the following timeline of key milestones has been developed by the Debtor and its advisors in consultation with the DIP Lenders and the Ad Hoc Group:

77. The Debtor recognizes that these milestones are subject to change based on the progress of restructuring negotiations, the Court's calendar, and other factors. However, the Debtor is committed to pursuing an expeditious chapter 11 process that minimizes the duration of the case and the associated administrative costs.

78. In addition, if TSL concurrently commences a proceeding under Greek Law 4738/2020, a Chapter 15 recognition proceeding may be filed in this Court or another appropriate United States Bankruptcy Court to facilitate cross-border coordination between the TAI chapter 11 case and the Greek proceeding. The Debtor's legal advisors at C&H and Greek counsel at Vassiliou & Demetriou Law Offices are prepared to coordinate such proceedings as necessary.

VII. FIRST-DAY RELIEF REQUESTED

79. The Debtor has filed or intends to file the following First-Day Motions contemporaneously with the voluntary petition. Each motion is described below, and I respectfully submit that the relief requested in each motion is necessary and appropriate to permit the Debtor to continue its operations, preserve the value of its estate, and facilitate a successful reorganization.

A. Motion for Authority to Continue Cash Management System

80. TAI operates an integrated cash management system (the "Cash Management System") in connection with TSL's global treasury operations. The Cash Management System involves multiple bank accounts maintained at various financial institutions and facilitates the collection of revenue, payment of operating expenses, and management of intercompany fund flows between TAI and TSL.

81. The Cash Management System includes intercompany fund transfers between TAI and TSL, including transactions arising under the $76.4 million Intercompany Note. These intercompany transactions are conducted in the ordinary course of business and are essential to the efficient management of the Thalassa enterprise's global treasury operations and working capital needs.

82. Through the Cash Management Motion, the Debtor requests authority to continue operating the Cash Management System in the ordinary course of business, to maintain its existing bank accounts (including signatory authority and account designations), and to continue intercompany transactions with TSL and its affiliates in the ordinary course, subject to appropriate safeguards and reporting requirements.

83. I believe that the relief requested in the Cash Management Motion is essential. Without this relief, TAI's operations would be immediately and severely disrupted. The Debtor would be required to close its existing bank accounts and open new accounts, which would cause significant delays in the collection of receivables and the payment of operating expenses. Moreover, the disruption of intercompany fund flows would jeopardize the Houston terminal and vessel scheduling operations, which depend on coordinated cash management across the Thalassa enterprise. Such disruption would cause immediate harm to the estate and its stakeholders.

B. Motion for Authority to Pay Prepetition Employee Wages and Benefits

84. TAI employs approximately 680 people in the United States. These employees perform essential functions across all areas of TAI's operations, including terminal operations, vessel scheduling, freight brokerage, finance, administration, and management. The Debtor's employees are its most valuable asset, and their continued service is critical to the preservation of the Debtor's going-concern value.

85. TAI's prepetition employee obligations include, without limitation, accrued wages and salaries, health insurance premiums, retirement plan contributions, payroll taxes (including federal income tax withholding, FICA taxes, and state and local payroll taxes), workers' compensation premiums, and other customary benefits. Many of TAI's employees are paid on a bi-weekly basis, and as of the petition date, there may be accrued but unfunded prepetition wage obligations owed to these employees.

86. Sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code accord priority status to certain employee wage and benefit claims, reflecting Congress's recognition that employees who provide services to a debtor before bankruptcy should not bear the economic burden of the employer's financial distress. Section 363(b) of the Bankruptcy Code authorizes the court to permit the debtor to use estate property other than in the ordinary course of business upon a showing of sound business justification, which the Debtor submits exists here.

87. Without prompt payment of prepetition employee wages and benefits, TAI risks losing essential members of its workforce. Terminal operators, logistics coordinators, and freight brokers possess specialized skills and institutional knowledge that cannot be readily replaced. The departure of even a modest number of key employees could compromise the Debtor's ability to operate the Houston terminal, schedule vessel calls, and maintain its freight brokerage relationships, causing immediate and potentially irreparable harm to the estate.

88. Accordingly, through the Employee Wages Motion, the Debtor requests authority to pay all prepetition employee-related obligations in the ordinary course of business, including wages, salaries, health insurance, retirement benefits, payroll taxes, workers' compensation, and all other customary employee benefits and deductions.

C. Motion for Authority to Pay Critical Vendors

89. TAI depends on certain vendors and service providers whose goods and services are essential to TAI's continued operations and cannot be readily replaced in the market. These "critical vendors" supply goods and services that are vital to the functioning of the Houston terminal, the operation and maintenance of TSL's fleet, and TAI's freight brokerage business.

90. As noted above, the largest trade creditor is Olympian Fuel & Supply SA, to which TAI owes approximately $9.2 million for bunker fuel deliveries. Bunker fuel is essential to the operation of TSL's vessels, and a disruption in fuel supply would have immediate and severe consequences for fleet operations, including the potential for vessel detentions at port, missed charter commitments, and loss of charter revenue. Olympian is one of a limited number of bunker fuel suppliers capable of providing the volumes and grades of fuel required by TSL's fleet in the Gulf of Mexico and transatlantic trade lanes.

91. In addition to Olympian, TAI relies on a number of other critical vendors for port services, ship repair and maintenance, spare parts, provisions, and logistics services. The total trade payables of approximately $38.7 million as of September 30, 2022 reflect the breadth and depth of TAI's vendor relationships.

92. Section 503(b)(9) of the Bankruptcy Code provides administrative expense priority for the value of goods received by the debtor in the ordinary course of the debtor's business within twenty (20) days before the date of the filing of the petition. In addition, courts in this and other jurisdictions have recognized the authority of debtors to pay the prepetition claims of critical vendors where the payment of such claims is necessary to preserve the going-concern value of the estate. See, e.g., In re Kmart Corp., 359 F.3d 866 (7th Cir. 2004).

93. Through the Critical Vendor Motion, the Debtor requests authority to pay prepetition claims of designated critical vendors up to an aggregate cap to be set by the Court, subject to appropriate procedures for the designation of critical vendors and the collection of trade agreements ensuring continued supply.

94. Without this relief, TAI's essential supply chains — particularly for fuel, port services, and vessel maintenance — would be disrupted. Such disruption could lead to vessel detentions at port, the loss of charter revenue, and the deterioration of TAI's relationships with customers and trade counterparties. The resulting harm to the estate would far exceed the cost of paying the critical vendor claims.

D. Motion for Authority to Pay Prepetition Taxes

95. TAI owes various federal, state, and local taxes, fees, and assessments that accrued prepetition. These obligations include, without limitation, federal and state income taxes, sales and use taxes, property taxes, and customs duties and assessments. Many of these tax obligations may be entitled to priority status under Sections 507(a)(8) of the Bankruptcy Code.

96. Failure to pay prepetition tax obligations could result in the imposition of liens on the Debtor's assets, the assessment of penalties and interest, and potential interference with the Debtor's operations. In some cases, governmental authorities may take enforcement action, including the seizure of assets or the revocation of permits and licenses, which could disrupt the Debtor's operations at the Houston terminal and elsewhere.

97. Through the Tax Motion, the Debtor requests authority to pay all prepetition tax obligations in the ordinary course of business as they become due. The Debtor submits that the payment of these obligations is necessary to avoid the imposition of liens, penalties, and other adverse consequences that would diminish the value of the estate.

E. Motion for Authority to Maintain Insurance Policies

98. TAI and TSL maintain comprehensive insurance coverage that is essential to the protection of the Debtor's assets, operations, officers, and directors. The insurance program is brokered through Seaward & Beckett Insurance Brokers Ltd. ("Seaward & Beckett"), located at 71 Fenchurch Street, London EC3M 4BS, United Kingdom. Ian Beckett serves as the Debtor's key contact at Seaward & Beckett.

99. The Debtor's key insurance policies include, without limitation:

(a) Directors and Officers Liability Insurance. TAI maintains a directors and officers ("D&O") liability insurance policy issued by Promontory Indemnity Insurance Co., a Bermuda-domiciled insurer. The D&O policy provides coverage with an aggregate limit of $25 million. The policy number is PII-DO-2022-08847. The D&O policy is critical to the protection of the Debtor's current and former directors and officers, who may face claims in connection with the Debtor's financial distress and this chapter 11 case.

(b) Hull and Machinery Insurance. TSL maintains hull and machinery insurance covering the physical damage to and total loss of vessels in its fleet. This coverage is essential to the protection of the fleet, which constitutes the primary collateral securing the Senior Secured Credit Facility and the Mezzanine Notes.

(c) Protection and Indemnity (P&I) Coverage. TSL maintains protection and indemnity coverage through a P&I club, which provides coverage for third-party liabilities arising from the operation of vessels, including personal injury, cargo claims, pollution, and wreck removal.

(d) General Liability Coverage. TAI maintains general liability insurance providing coverage for claims arising from the Debtor's shore-based operations, including operations at the Houston terminal.

100. The maintenance of the Debtor's insurance policies is critical to the preservation and protection of estate assets, the continued operation of the Debtor's business, and the protection of the Debtor's officers and directors. Many of the insurance policies may have prepetition premium obligations that the Debtor needs to satisfy to maintain coverage. In addition, certain policies may need to be renewed during the pendency of the chapter 11 case.

101. Through the Insurance Motion, the Debtor requests authority to continue all prepetition insurance policies, to pay any prepetition premiums owed in connection therewith, and to renew policies as they come due in the ordinary course of business. Without this relief, the Debtor's insurance coverage could lapse, exposing the estate to potentially catastrophic uninsured losses and exposing the Debtor's officers and directors to personal liability.

F. Motion for Approval of DIP Financing (Interim and Final)

102. TAI requires immediate post-petition liquidity to fund its operations during the chapter 11 case. Without access to debtor-in-possession financing, the Debtor would be unable to fund operating costs, pay its employees, maintain vessels, service the Houston terminal, or otherwise preserve value for all stakeholders.

103. As described in Part IV above, TAI has received a commitment from Nordbank International AG (as DIP Agent) and Triton Credit Partners LP (as DIP lender) for a $75 million superpriority secured debtor-in-possession credit facility (the "DIP Facility"). The DIP Facility was negotiated at arm's length and in good faith between the Debtor and the DIP Lenders, with the active involvement of the Ad Hoc Group.

104. The principal terms of the DIP Facility are as follows:

(a) DIP Lenders: Nordbank International AG (as DIP Agent) and Triton Credit Partners LP.

(b) Facility Amount: $75,000,000.

(d) Commitment Fee: 0.50% on undrawn commitments.

(e) Maturity: Twelve (12) months from the date of initial funding.

(f) Security: Superpriority administrative expense claims under Section 364(c)(1) of the Bankruptcy Code and priming liens under Section 364(d)(1) of the Bankruptcy Code on substantially all of the Debtor's assets.

(g) Adequate Protection: The prepetition Senior Secured Lenders (on the $540 million outstanding under the Credit Agreement) and the Mezzanine Lender (on the $112.3 million outstanding under the Mezzanine Notes) shall receive adequate protection in respect of the priming liens granted to the DIP Lenders, including replacement liens, superpriority administrative expense claims (subordinate to the DIP claims), and current cash payment of interest and fees.

105. The Debtor submits that the DIP Facility satisfies the requirements of Section 364 of the Bankruptcy Code. The Debtor has been unable to obtain unsecured credit allowable under Section 503(b)(1) of the Bankruptcy Code. The DIP Facility provides the liquidity essential to the Debtor's continued operations and the preservation of value for all stakeholders. The terms of the DIP Facility, while reflective of the elevated risk associated with the Debtor's financial condition, are reasonable and comparable to DIP financing facilities approved in other chapter 11 cases of similar size and complexity.

106. With respect to adequate protection, the Debtor submits that the prepetition secured lenders are adequately protected against the diminution in value of their collateral resulting from the priming liens to be granted to the DIP Lenders. As of November 1, 2022, the fleet was appraised by Drakos Maritime Valuations at $623 million. The combined outstanding obligations under the Senior Secured Credit Facility ($540 million) and the Mezzanine Notes ($112.3 million) total approximately $652.3 million. While the fleet value of $623 million is marginally below this combined indebtedness, the replacement liens, superpriority administrative expense claims, and other adequate protection measures provided under the DIP Facility — together with the preservation of the going-concern value of the enterprise through continued operations — provide sufficient adequate protection to the prepetition secured creditors.

107. Through the DIP Motion, the Debtor requests interim authority to borrow up to $30 million under the DIP Facility on an interim basis pending the final DIP approval hearing, which is anticipated to occur on approximately Day 45 of the case. The interim borrowing is necessary to fund the Debtor's immediate post-petition operating expenses, including payroll, vendor payments, vessel operating costs, and professional fees. Final approval of the full $75 million DIP Facility will be sought at the final hearing.

108. KHP has prepared a detailed DIP budget in coordination with the Debtor's management team. The budget projects total administrative costs for the first twelve (12) months of the chapter 11 case at approximately $18.5 million, which includes legal fees for the Debtor's counsel and any official committee's counsel, financial advisor fees, CRO fees, U.S. Trustee quarterly fees, and claims agent fees. The DIP budget also provides for ongoing operating expenses, capital expenditures, and debt service, and is designed to ensure that the Debtor has sufficient liquidity to operate as a going concern throughout the chapter 11 case.

109. Without DIP financing, the Debtor would be unable to meet its post-petition obligations, and its operations would cease in a matter of weeks. The resulting loss of going-concern value would be devastating to all stakeholders, including employees, vendors, customers, and creditors at all levels of the capital structure. I respectfully submit that the approval of the DIP Facility is essential to the success of this chapter 11 case.

VIII. RELATED RETENTION APPLICATIONS

110. In addition to the First-Day Motions described above, the Debtor intends to file contemporaneously the following retention applications:

(a) Application to Retain Calderwood & Harkness LLP as Counsel. The Debtor intends to file an application under Section 327(a) of the Bankruptcy Code to retain Calderwood & Harkness LLP as counsel to the debtor-in-possession. Nathaniel Bower serves as the responsible partner for this engagement. C&H's current billing rates for this engagement are as follows: partners, $1,650 per hour; senior associates, $1,050 per hour; associates, $850 per hour; and paralegals, $425 per hour. The Debtor deposited a retainer of $500,000 with C&H on October 28, 2022. Amy Chesterton serves as the lead associate, and Nathan Ikeda serves as the working associate on this matter.

(b) Application to Retain Kensington Veltrian Partners LLC as Financial Advisor. The Debtor intends to file an application under Section 327(a) of the Bankruptcy Code to retain Kensington Veltrian Partners LLC as financial advisor to the debtor-in-possession. James Calloway, Managing Director, leads the KHP team. KHP's compensation structure includes a monthly advisory fee of $250,000 and a filing fee of $2.0 million, payable upon the filing of a chapter 11 petition. In the event that a restructuring support agreement is executed in lieu of a chapter 11 filing, KHP would be entitled to a completion fee of $4.5 million in lieu of the filing fee.

111. In addition, as noted above, Alderney Management Advisors LLC ("Alderney") has been engaged on a standby basis to provide Chief Restructuring Officer services to TAI. Richard "Rick" Thornberg, the designated CRO, is a seasoned restructuring professional with extensive experience in the maritime industry, having served as CRO in three prior shipping chapter 11 cases. If appointed, Mr. Thornberg would assume day-to-day responsibility for the Debtor's restructuring efforts and would serve as the primary liaison between the Debtor's management team and its advisors, creditor constituencies, and the Court. The retention of Alderney and the appointment of Mr. Thornberg as CRO would be subject to Court approval upon the filing of an appropriate application.

112. Pendleton Claim Services Inc. ("Pendleton") has been engaged on a standby basis as claims and noticing agent for the chapter 11 case. The engagement letter with Pendleton was signed on November 15, 2022. Laura Pendleton, President of Pendleton, oversees this engagement. Pendleton has extensive experience serving as claims and noticing agent in large chapter 11 cases and will provide efficient and reliable claims management and noticing services. The retention of Pendleton would be subject to Court approval upon the filing of an appropriate application.

IX. CROSS-BORDER CONSIDERATIONS

113. As described above, the Debtor's parent, TSL, is a Greek société anonyme with its center of main interests ("COMI") in Piraeus, Greece. TSL's operations are predominantly international in scope, with vessels trading across the Mediterranean, Black Sea, and transatlantic trade lanes, and with terminal operations in Piraeus, Thessaloniki, and Houston.

114. If TSL were to commence a proceeding under Greek insolvency law — specifically, Law 4738/2020, the Greek Debt Settlement & Insolvency Code, which governs insolvency proceedings for Greek corporate entities — a Chapter 15 recognition proceeding could be filed in the United States to facilitate coordination between the Greek proceeding and the TAI chapter 11 case. Chapter 15 of

DRAFT — PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT — NEVER FILED
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
DECLARATION OF MARCUS HALE IN SUPPORT OF THE DEBTOR'S FIRST-DAY MOTIONS
DRAFT — PRIVILEGED AND CONFIDENTIAL — NEVER FILED Prepared January 14, 2023
Filed by: CALDERWOOD & HARKNESS LLP Proposed Counsel to the Debtor 780 Third Avenue New York, NY 10017
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I. INTRODUCTION AND PURPOSE OF DECLARATION
1. My name is Marcus Hale. I am 48 years old. I serve as President of Thalassa Americas Inc. ("TAI" or the "Debtor"), a Delaware C-Corporation and wholly owned subsidiary of Thalassa Shipping & Logistics Société Anonyme ("TSL" or "Thalassa"), a société anonyme organized under the laws of the Hellenic Republic. I am authorized to submit this declaration on behalf of the Debtor.
2. I have served as President of TAI since April 2018. Prior to joining TAI, I held senior operational positions in the shipping and logistics industry for over twenty years, including serving as Senior Vice President of Operations at Gulf Maritime Holdings LLC from 2012 to 2018 and as Director of Terminal Operations at TransGlobal Ports Inc. from 2007 to 2012. Through these roles and my tenure at TAI, I have developed extensive knowledge of the Debtor's operations, financial condition, and the maritime industry generally.
3. I submit this declaration (the "Declaration") in support of the Debtor's voluntary petition for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the "Bankruptcy Code"), and in support of all first-day motions and applications filed contemporaneously herewith (collectively, the "First-Day Motions"). Specifically, this Declaration is submitted in support of the following First-Day Motions:
(a) Motion for Authority to Continue the Debtor's Cash Management System (the "Cash Management Motion");
(b) Motion for Authority to Pay Prepetition Employee Wages and Benefits (the "Employee Wages Motion");
(c) Motion for Authority to Pay Critical Vendors (the "Critical Vendor Motion");
(d) Motion for Authority to Pay Prepetition Taxes (the "Tax Motion");
(e) Motion for Authority to Maintain the Debtor's Insurance Policies (the "Insurance Motion"); and
(f) Motion for Approval of Debtor-in-Possession Financing on an Interim and Final Basis (the "DIP Motion").
4. Except as otherwise indicated, the facts set forth in this Declaration are based on my personal knowledge, my review of relevant documents and business records of TAI and TSL, and information I have received from other officers and employees of TAI and TSL, as well as from the Debtor's legal and financial advisors. If called as a witness, I could and would testify competently to the facts set forth herein. Where statements are made on information and belief, I have so indicated, and I believe such statements to be true and correct.
5. The Debtor's proposed counsel in this chapter 11 case is Calderwood & Harkness LLP ("C&H"), located at 780 Third Avenue, New York, New York 10017, with Nathaniel Bower serving as the responsible partner for this engagement. C&H was engaged by the Debtor and its parent company on October 25, 2022, to advise on chapter 11 contingency planning, out-of-court restructuring alternatives, cross-border coordination with Greek counsel, and tax structuring.
6. The Debtor's financial advisor is Kensington Veltrian Partners LLC ("KHP"), located at 300 Park Avenue, 12th Floor, New York, New York 10022. James Calloway, Managing Director, leads the KHP team advising the Debtor and its parent. KHP has been instrumental in developing the Debtor's financial projections, DIP financing budget, and valuation analyses that have informed the restructuring process.
7. This Declaration is organized as follows: Part II provides an overview of the Thalassa enterprise and the Debtor's corporate background and business operations. Part III describes the Debtor's capital structure. Part IV sets forth the events leading to this chapter 11 filing. Part V describes the Debtor's restructuring objectives. Part VI summarizes the proposed key milestones for the chapter 11 case. Part VII describes the first-day relief requested. Part VIII addresses related retention applications that the Debtor intends to file. Part IX discusses cross-border considerations. Part X concludes with a summary of the relief requested.
II. CORPORATE BACKGROUND AND BUSINESS OVERVIEW
A. The Thalassa Enterprise
8. TSL is a société anonyme organized under the laws of the Hellenic Republic (Greece), registered with the Athens General Commercial Registry, and headquartered at 42 Akti Miaouli, Piraeus 18538, Greece. TSL was founded in 1987 by the Kostandinos family and has grown over more than three decades into a leading international shipping and logistics enterprise with global operations.
9. TSL is now led by Dimitrios Kostandinos, who serves as Chairman of the Board (age 71), and his daughter, Elena Kostandinos-Pavlou, who serves as Vice Chairwoman of the Board (age 44). The Kostandinos family holds a combined 80% equity interest in TSL through KFO Holdings Société Anonyme ("KFO"), a Greek société anonyme registered at the same address as TSL. Specifically, Mr. Kostandinos holds a 62% equity interest and Ms. Kostandinos-Pavlou holds an 18% equity interest, both through KFO. The remaining 20% equity interest in TSL is held by non-family shareholders, including certain members of TSL's management team and institutional investors.
10. TSL's executive management team includes the following individuals:
(a) Georgios Andreadis (age 56), Chief Executive Officer, who has served in that capacity since 2015 and oversees the day-to-day operations of the TSL enterprise globally;
(b) Irini Dalakoura (age 49), Chief Financial Officer, who has served in that capacity since 2017 and is responsible for TSL's financial reporting, treasury operations, and capital markets activities; and
(c) Stavros Papageorgiou (age 52), General Counsel (Greece), who has served in that capacity since 2016 and oversees TSL's legal affairs, regulatory compliance, and litigation management in jurisdictions outside the United States.
11. TSL owns and operates a fleet of fifty (50) vessels, comprising thirty-eight (38) dry-bulk carriers and twelve (12) container vessels. The dry-bulk fleet is composed of ten (10) Capesize vessels, fourteen (14) Panamax vessels, and fourteen (14) Supramax vessels. The container vessel fleet consists of twelve (12) Sub-Panamax units. The vessels are registered under various flag states and are held through a network of vessel-owning special purpose vehicles ("SPVs"), as depicted in the corporate organization chart attached hereto as Exhibit A.
12. TSL provides integrated port-to-door logistics services across a range of trade lanes, with a particular focus on the Mediterranean, Black Sea, and transatlantic routes. The enterprise's operations encompass vessel chartering, cargo transportation, terminal management, and landside logistics coordination. TSL operates terminal facilities at three key locations: Piraeus (Greece), Thessaloniki (Greece), and Houston (Texas, United States). The Houston terminal, which is operated by the Debtor, TAI, serves as the primary gateway for TSL's transatlantic trade lane operations in the Americas.
13. As of the date of this Declaration, the Thalassa enterprise employs approximately 4,200 people globally, including shore-based employees at corporate offices and terminal facilities, as well as seafarers serving aboard TSL's fleet.
B. Thalassa Americas Inc. — The Debtor
14. Thalassa Americas Inc. ("TAI" or the "Debtor") is a C-Corporation organized under the laws of the State of Delaware. TAI is a wholly owned subsidiary of TSL. TAI's registered agent in Delaware is Capitol Registered Agents LLC, located at 1209 Orange Street, Wilmington, Delaware 19801. TAI's Employer Identification Number is 84-3291057.
15. TAI's principal office is located at 1400 McKinney Street, Suite 2200, Houston, Texas 77010. It is from this location that TAI conducts the majority of its business operations, including the management of the Houston terminal, vessel scheduling, and domestic freight brokerage activities.
16. TAI's primary business operations consist of three principal activities:
(a) Houston Terminal Operations. TAI operates and manages TSL's terminal facility at the Port of Houston, which handles the loading, unloading, and transshipment of dry-bulk and containerized cargo for TSL's transatlantic trade lane. The Houston terminal is a critical component of the Thalassa enterprise's operations in the Western Hemisphere and serves as the primary interface between TSL's ocean transportation network and North American distribution channels.
(b) Jones Act–Exempt Foreign-Flag Vessel Scheduling. TAI coordinates the scheduling and dispatch of TSL's foreign-flag vessels calling at U.S. ports. Because TSL's vessels are registered under foreign flags, they are exempt from the requirements of the Jones Act (46 U.S.C. § 55102) for international voyages, and TAI manages the logistical coordination of these vessels' U.S. port calls, including berth assignments, pilotage arrangements, and cargo documentation.
(c) Domestic Freight Brokerage. TAI operates a licensed domestic freight brokerage business, arranging the inland transportation of cargo arriving at or departing from the Houston terminal. This business generates revenue through brokerage commissions and provides value-added services to TSL's customers by offering integrated door-to-door logistics solutions.
17. TAI's officers are as follows:
(a) Marcus Hale, President (the declarant herein);
(b) Diana Restrepo (age 41), Vice President of Finance, who oversees TAI's financial operations, including accounting, budgeting, and financial reporting to TSL's corporate finance function; and
(c) Jonathan Kurtz (age 45), Vice President of Operations, who manages the day-to-day operations of the Houston terminal and coordinates TAI's vessel scheduling and freight brokerage activities.
18. TAI employs approximately 680 people in the United States. These employees include terminal operators, logistics coordinators, freight brokers, administrative staff, and management personnel. The workforce is essential to TAI's continued operations, and the Debtor's ability to retain its employees is a critical component of its restructuring strategy, as discussed further below.
19. TAI generated revenue of approximately $312 million in fiscal year 2021. However, reflecting the severe downturn in the global shipping markets discussed further in Part IV below, TAI's revenue declined to an estimated $198 million in fiscal year 2022 — a decrease of approximately 36.5%. This revenue decline has placed enormous financial strain on TAI and has been a principal factor in the circumstances giving rise to this chapter 11 filing.
20. TAI is a co-borrower on the U.S. Tranche (Term Loan B or "TLB") of the Senior Secured Credit Facility described in Part III below. The TLB has an outstanding principal balance of $85 million as of September 30, 2022. In addition, TAI owes its parent, TSL, $76.4 million under a subordinated intercompany promissory note bearing interest at a rate of 5.0% per annum. The intercompany note is subordinated to all of the Debtor's obligations under the Senior Secured Credit Facility and the Mezzanine Notes, as described more fully below.
C. Revenue and Financial Overview
21. TSL's consolidated financial results reflect the magnitude of the market downturn that has affected the global shipping industry. For fiscal year 2021, TSL reported consolidated revenue of approximately €1.42 billion. For fiscal year 2022, TSL's consolidated revenue is estimated at approximately €987 million, representing a decline of approximately 30.5% year-over-year. This revenue compression was driven primarily by the sharp decline in dry-bulk charter rates and reduced container shipping volumes, as discussed more fully in Part IV below.
22. As of September 30, 2022, TSL's total consolidated indebtedness was approximately $847.3 million, which includes the Senior Secured Credit Facility, Mezzanine Notes, Unsecured Notes, the intercompany note payable by TAI to TSL, trade payables, and other liabilities. A detailed breakdown of this indebtedness is provided in Part III below.
23. TSL's last twelve months ("LTM") EBITDA as of September 30, 2022 was approximately $98.6 million. LTM interest expense for the same period was approximately $56.7 million. These figures reflect the significant deterioration in TSL's earnings capacity relative to its debt service obligations, which has been a central driver of the financial distress described herein.
24. TSL's independent auditors are Grainger, Holt & Associates LLP, a firm based in London, United Kingdom. Malcolm Holt serves as the lead engagement partner. Grainger, Holt & Associates has audited TSL's consolidated financial statements for the past four fiscal years.
III. THE DEBTOR'S CAPITAL STRUCTURE
25. The following is a summary of the Debtor's and TSL's capital structure as of September 30, 2022. A more detailed summary of the prepetition debt instruments is attached hereto as Exhibit B.
A. Senior Secured Credit Facility
26. On June 15, 2019, TSL (as borrower) and TAI (as co-borrower on the U.S. Tranche) entered into a Senior Secured Credit Agreement (as amended, restated, supplemented, or otherwise modified from time to time, the "Credit Agreement") with Nordbank International AG, as administrative agent and collateral agent (in such capacities, the "Agent"), and a syndicate of nine (9) lenders (collectively, the "Senior Secured Lenders"). Nordbank International AG is organized under Swiss law and is located at Bahnhofstrasse 78, 8001 Zürich, Switzerland. Henrik Lüdemann, Managing Director, serves as the primary contact at Nordbank.
27. The Credit Agreement provides for a total commitment of $685 million, allocated among the following facilities:
(a) Term Loan A ("TLA"): Original principal amount of $400 million, amortizing quarterly at $10 million per quarter. As of September 30, 2022, thirteen (13) quarterly amortization payments had been made (from the third quarter of 2019 through the third quarter of 2022), for a total of $130 million in principal repayments. Accordingly, the outstanding principal balance of the TLA as of September 30, 2022 was $270 million.
(b) Revolving Credit Facility ("RCF"): Total commitment of $200 million. As of September 30, 2022, $185 million was drawn and $15 million remained undrawn and available (subject to satisfaction of applicable borrowing conditions). The RCF provides TSL and its subsidiaries with working capital financing and general corporate liquidity.
(c) U.S. Tranche / Term Loan B ("TLB"): Original and outstanding principal amount of $85 million. The TLB is a non-amortizing bullet maturity facility. TAI is the co-borrower on the TLB, with TSL serving as guarantor. The proceeds of the TLB were used to fund TAI's operations and capital expenditures in the United States, including investments in the Houston terminal.
28. As of September 30, 2022, the total outstanding principal under the Credit Agreement was $540 million, calculated as follows: $270 million (TLA) + $185 million (RCF) + $85 million (TLB) = $540 million.
29. Interest on all tranches of the Credit Agreement accrues at a rate of SOFR plus 375 basis points per annum. Upon the occurrence and during the continuance of an event of default, the applicable interest rate increases by an additional 200 basis points (the "default rate"), resulting in a total rate of SOFR plus 575 basis points. As discussed in Part IV below, events of default occurred in September 2022, and default interest has been accruing since that time.
30. All obligations under the Credit Agreement mature on June 15, 2024. The TLA has a CUSIP number of 87265BAA7.
31. The Senior Secured Lenders and their respective commitments under the Credit Agreement are as follows:
32. The obligations under the Credit Agreement are secured by first-priority liens on substantially all of the assets of TSL and its subsidiaries, including: (a) all thirty-eight (38) dry-bulk carriers and twelve (12) container vessels in the fleet; (b) the Houston terminal lease; (c) all accounts receivable of TSL and its subsidiaries; and (d) the equity interests in TAI and fourteen (14) vessel-owning SPVs. The collateral package is comprehensive and was designed to provide the Senior Secured Lenders with security over the principal revenue-generating assets of the Thalassa enterprise.
B. Mezzanine Notes
33. On June 15, 2019, concurrently with the execution of the Credit Agreement, TSL issued mezzanine notes (the "Mezzanine Notes") to Dralvecen Mezzanine Capital LLC ("BMC"), located at 600 Lexington Avenue, 22nd Floor, New York, New York 10022. Rebecca Marsh, Senior Partner at BMC, serves as the primary contact for this investment.
34. The Mezzanine Notes had an original principal amount of $100 million. Interest on the Mezzanine Notes accrues at a rate of 11.5% per annum on a payment-in-kind ("PIK") toggle basis. Beginning in the second quarter of 2022, all interest has been paid in kind by capitalizing accrued interest into the outstanding principal balance. As of September 30, 2022, the outstanding principal balance of the Mezzanine Notes was $112.3 million, reflecting the original $100 million principal plus $12.3 million in capitalized PIK interest.
35. The Mezzanine Notes mature on December 15, 2024. The obligations under the Mezzanine Notes are secured by second-priority liens on the same collateral that secures the Senior Secured Credit Facility. The relative rights and priorities of the first-lien and second-lien creditors are governed by an Intercreditor Agreement dated June 15, 2019, between Nordbank International AG (as first-lien agent) and BMC.
36. BMC is represented by Kellner & Foss LLP, located at 1185 Avenue of the Americas, 30th Floor, New York, New York 10036. Theodore Kellner serves as the lead partner on this engagement.
C. Unsecured Notes
37. On March 1, 2020, TSL issued $50 million in aggregate principal amount of unsecured notes (the "Unsecured Notes") pursuant to an indenture (the "Indenture") between TSL, as issuer, and Garrison Trust Company, as indenture trustee (the "Indenture Trustee"). The Indenture Trustee is located at 100 Wall Street, 16th Floor, New York, New York 10005. The Unsecured Notes bear a CUSIP number of 87265BAB5.
38. The Unsecured Notes bear interest at a rate of 8.25% per annum, payable in cash semi-annually on June 1 and December 1 of each year. The Unsecured Notes mature on March 1, 2025. The Unsecured Notes are unsecured obligations of TSL and rank pari passu with all other unsecured and unsubordinated indebtedness of TSL.
39. As discussed in greater detail in Part IV below, TSL missed the December 1, 2022 semi-annual interest payment on the Unsecured Notes. The missed payment totaled $2,062,500, calculated as $50,000,000 × 8.25% ÷ 2. The Indenture provides for a thirty (30)-day cure period following a missed interest payment. That cure period expired on January 1, 2023, and the missed payment now constitutes an event of default under the Indenture.
40. An informal group of holders of the Unsecured Notes (the "Unsecured Noteholder Group") has been organized and is represented by Ashford, Brightmoor Group & McKay PC, located at 299 Park Avenue, 18th Floor, New York, New York 10171. Carolyn Brightmoor Group serves as the lead partner representing the Unsecured Noteholder Group.
D. Trade Creditors
41. As of September 30, 2022, TAI had approximately $38.7 million in outstanding trade payables. These payables are owed to a diverse group of vendors and service providers that support TAI's operations, including bunker fuel suppliers, port service providers, ship maintenance and repair companies, logistics service providers, and various other vendors.
42. The largest single trade creditor is Olympian Fuel & Supply SA ("Olympian"), a bunker fuel supplier headquartered in Piraeus, Greece. As of September 30, 2022, TAI owed Olympian approximately $9.2 million for bunker fuel deliveries. Olympian is a critical supplier to TAI's operations, as bunker fuel is essential to the operation of TSL's fleet and the continued performance of voyage charters. A list of the Debtor's top thirty (30) unsecured creditors is attached hereto as Exhibit E.
E. Intercompany Obligations
43. TAI owes its parent, TSL, $76.4 million under a subordinated intercompany promissory note (the "Intercompany Note"). The Intercompany Note bears interest at a rate of 5.0% per annum. The Intercompany Note is subordinated to all of TAI's obligations under the Senior Secured Credit Facility and the Mezzanine Notes. The Intercompany Note arose from historical intercompany funding transactions in which TSL advanced capital to TAI to support the Debtor's operations and capital expenditures in the United States.
F. Total Indebtedness Summary
44. As of September 30, 2022, the total consolidated indebtedness of TSL and its subsidiaries (including TAI) was approximately $847.3 million, broken down as follows:
IV. EVENTS LEADING TO THE CHAPTER 11 FILING
A. Market Deterioration
45. The global dry-bulk shipping market experienced a severe and sustained downturn during 2022. The Baltic Dry Index (the "BDI"), which is the principal benchmark for dry-bulk freight rates and is published daily by the Baltic Exchange in London, declined approximately 58% between January 2022 and September 2022. The BDI reflects the cost of transporting raw materials such as coal, iron ore, and grain by sea, and its decline signaled a dramatic contraction in shipping demand and charter rates.
46. The decline in the BDI directly impacted TSL's earnings. TSL's average daily time-charter equivalent ("TCE") rate — the standard measure of revenue per vessel per day — fell from $24,800 per day (the fiscal year 2021 average) to $11,200 per day (the third quarter of 2022 average). This represents a decline of approximately 54.8% and reflects the severity of the freight rate collapse.
47. The collapsing dry-bulk charter rates caused severe revenue compression for both TSL and TAI. TSL's consolidated revenue declined from approximately €1.42 billion in fiscal year 2021 to an estimated €987 million in fiscal year 2022, a decline of approximately 30.5%. TAI's revenue declined from approximately $312 million in fiscal year 2021 to an estimated $198 million in fiscal year 2022, a decline of approximately 36.5%.
48. In addition to the impact on revenue, the market downturn caused significant impairments to the value of TSL's fleet. In January 2022, the fleet was appraised by Drakos Maritime Valuations Ltd. ("Drakos"), an independent maritime appraisal firm located at 28 Poseidonos Avenue, Piraeus 18531, Greece, at an aggregate value of $891 million. Captain Nikos Drakos, Managing Director of Drakos, oversaw the appraisal. As of November 1, 2022, Drakos reappraised the fleet at an aggregate value of $623 million — a decline of $268 million, or approximately 30.1%, in less than eleven months. The November 1, 2022 appraisal values are broken down by vessel class as follows:
A detailed fleet summary and vessel-by-vessel appraised values are attached hereto as Exhibit C.
49. The fleet value decline is significant because the vessels constitute the primary collateral securing the Senior Secured Credit Facility and the Mezzanine Notes. As discussed below, the decline in fleet values has narrowed the equity cushion available to the secured creditors and has been a material factor in negotiations with the Debtor's lender groups.
B. Covenant Breaches
50. The deterioration in TSL's and TAI's financial performance, combined with the decline in fleet values, resulted in breaches of multiple financial covenants contained in the Credit Agreement. Specifically:
(a) Minimum Liquidity Covenant. The Credit Agreement requires that TSL and its subsidiaries maintain a minimum of $40 million in unrestricted cash and cash equivalents at all times (the "Minimum Liquidity Covenant"). On September 15, 2022, TSL's unrestricted cash balance fell to $27.3 million, resulting in a shortfall of $12.7 million below the required minimum and constituting a breach of the Minimum Liquidity Covenant.
(b) Maximum Net Leverage Ratio Covenant. The Credit Agreement requires that TSL's ratio of Net Debt to LTM EBITDA not exceed 5.50x at the end of any fiscal quarter (the "Maximum Net Leverage Ratio Covenant"). As of September 30, 2022, TSL's actual Net Leverage Ratio was 7.82x, calculated as Net Debt of approximately $770.9 million divided by LTM EBITDA of $98.6 million. This ratio exceeded the covenant maximum of 5.50x by a margin of 2.32x, constituting a breach of the Maximum Net Leverage Ratio Covenant.
(c) Minimum Interest Coverage Ratio Covenant. The Credit Agreement requires that TSL's ratio of LTM EBITDA to LTM Interest Expense not fall below 2.50x at the end of any fiscal quarter (the "Minimum Interest Coverage Ratio Covenant"). As of September 30, 2022, TSL's actual Interest Coverage Ratio was 1.74x, calculated as LTM EBITDA of $98.6 million divided by LTM Interest Expense of $56.7 million. This ratio fell below the covenant minimum of 2.50x by a margin of 0.76x, constituting a breach of the Minimum Interest Coverage Ratio Covenant.
51. Each of the foregoing covenant breaches constituted an event of default under the Credit Agreement, entitling the Senior Secured Lenders to exercise their remedies under the Credit Agreement, including acceleration of the outstanding indebtedness and enforcement of their liens on the collateral. The severity of these breaches — particularly the leverage ratio breach, which exceeded the covenant maximum by more than 40% — underscored the magnitude of the financial distress facing the Thalassa enterprise.
C. Forbearance Agreement
52. Following the occurrence of the events of default described above, the Debtor and TSL immediately engaged in negotiations with the Senior Secured Lender syndicate, through Nordbank as Agent, to obtain a forbearance from the exercise of default remedies.
53. On October 10, 2022, TSL, TAI, and the Senior Secured Lender syndicate (through Nordbank as Agent) executed a Forbearance Agreement (the "Forbearance Agreement") pursuant to which the Senior Secured Lenders agreed to a ninety (90)-day standstill period through January 8, 2023. During the standstill period, the Senior Secured Lenders agreed to refrain from exercising their default remedies under the Credit Agreement, including acceleration and enforcement of liens, in order to provide TSL and TAI with an opportunity to negotiate a consensual restructuring.
54. The Forbearance Agreement was subsequently extended twice: first, by an amendment executed on January 8, 2023, which extended the standstill period to March 8, 2023; and second, by an amendment executed on March 8, 2023, which extended the standstill period to April 7, 2023. Each extension was negotiated in connection with the ongoing restructuring discussions described below and was conditioned upon TSL's and TAI's continued compliance with certain milestones and reporting requirements.
55. Importantly, during the forbearance period, the Credit Agreement's default interest provision remained in effect. Accordingly, interest on the outstanding principal under the Credit Agreement has been accruing at the default rate of SOFR plus 575 basis points (consisting of the base rate of SOFR plus 375 basis points, plus the 200 basis point default rate increase) since the events of default occurred in September 2022. The accrual of default interest has further increased the Debtor's debt service burden.
D. Ad Hoc Group Formation
56. In August 2022, in anticipation of the financial distress that was becoming apparent, an informal ad hoc group of certain Senior Secured Lenders (the "Ad Hoc Group") was formed. The Ad Hoc Group comprises four of the nine Senior Secured Lenders: Nordbank International AG ($137 million commitment), Harborstone Bank plc ($95 million commitment), Triton Credit Partners LP ($68 million commitment), and Continental Maritime Lending GmbH ($72 million commitment). The Ad Hoc Group members collectively hold $372 million in commitments under the Credit Agreement, representing approximately 54.3% of the total $685 million facility.
57. The Ad Hoc Group is represented by the law firm of Whitfield, Crane & Burgess LLP, located at 51 West 52nd Street, 38th Floor, New York, New York 10019. Graham Whitfield III serves as the lead partner on this engagement, with Priya Nandakumar serving as senior associate. The Ad Hoc Group's financial advisor is Draycott Advisory Group LLC, located at 520 Madison Avenue, 20th Floor, New York, New York 10022. Vanessa Chow, Partner at Draycott, leads the advisory team.
58. The formation of the Ad Hoc Group has facilitated more focused and efficient negotiations between the Debtor and its principal lender constituency. The Ad Hoc Group has been an active participant in the restructuring discussions and has played a central role in the negotiation of the DIP financing described below.
E. Missed Unsecured Note Payment
59. On December 1, 2022, TSL failed to make the scheduled semi-annual interest payment on the Unsecured Notes. The missed payment totaled $2,062,500, calculated as $50,000,000 × 8.25% ÷ 2. The Indenture governing the Unsecured Notes provides for a thirty (30)-day cure period following a missed interest payment. TSL was unable to cure the missed payment within the cure period, which expired on January 1, 2023.
60. The expiration of the cure period constituted an additional event of default, this time under the Indenture. The missed Unsecured Note interest payment further evidenced the severity of the Thalassa enterprise's liquidity crisis and the need for a comprehensive restructuring of the capital structure.
F. Engagement of Advisors
61. In light of the deteriorating financial condition of the Thalassa enterprise and the need to evaluate all available restructuring alternatives, the Debtor and TSL engaged a team of experienced legal and financial advisors.
62. Legal Counsel. On October 25, 2022, Calderwood & Harkness LLP was engaged to serve as counsel to the Debtor and TSL in connection with chapter 11 contingency planning for TAI, out-of-court restructuring alternatives, cross-border coordination with Greek counsel, and tax structuring. The engagement letter was addressed to Georgios Andreadis (CEO of TSL) and Marcus Hale (President of TAI) and was assigned C&H matter number 1044-00003. Nathaniel Bower, a partner in C&H's restructuring practice, serves as the responsible partner for this engagement.
63. Financial Advisor. Kensington Veltrian Partners LLC was engaged to serve as financial advisor to TSL. James Calloway, Managing Director at KHP, leads the engagement team. KHP's compensation under the engagement includes a monthly advisory fee of $250,000 and a completion fee of $4.5 million upon execution of a restructuring support agreement ("RSA") or, in the alternative, a filing fee of $2.0 million upon the filing of a chapter 11 petition. KHP has provided invaluable assistance in developing the Debtor's financial projections, DIP financing budget, and valuation analyses.
64. Greek Counsel. Vassiliou & Demetriou Law Offices was engaged to serve as Greek counsel to TSL to advise on the implications of Greek insolvency law, including Law 4738/2020 (the Greek Debt Settlement & Insolvency Code), and to coordinate with C&H on cross-border restructuring issues. Alexandros Vassiliou, lead partner, oversees this engagement from the firm's offices at 15 Vasilissis Sofias Avenue, Athens 10674, Greece.
65. Chief Restructuring Officer Designee. Alderney Management Advisors LLC ("Alderney"), located at 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116, was engaged on a standby basis to provide Chief Restructuring Officer ("CRO") services to TAI in the event that a chapter 11 case is commenced. Richard "Rick" Thornberg, a Managing Director at Alderney and the designated CRO, has extensive experience in maritime restructurings, having served as CRO in three prior shipping chapter 11 cases. Mr. Thornberg's appointment as CRO would be subject to Court approval upon the filing of an appropriate application.
66. Claims and Noticing Agent. Pendleton Claim Services Inc. ("Pendleton"), located at 1601 Elm Street, Suite 4200, Dallas, Texas 75201, was engaged on a standby basis as claims and noticing agent for the chapter 11 case. Laura Pendleton, President of Pendleton, oversees this engagement. The engagement letter was signed on November 15, 2022. Pendleton's appointment would be subject to Court approval upon the filing of an appropriate application.
G. Valuation Context
67. As part of the restructuring planning process, KHP conducted an enterprise valuation analysis of the Thalassa enterprise. Based on its analysis, which utilized a combination of comparable company trading multiples, precedent transaction analysis, and discounted cash flow methodologies, KHP estimated the enterprise value of the Thalassa enterprise at between $580 million and $640 million, with a midpoint estimate of $610 million, as of November 2022.
68. Based on KHP's midpoint enterprise value estimate of $610 million, the fulcrum security in the capital structure — i.e., the security class that is expected to be impaired but not entirely wiped out — is the Mezzanine Notes. Specifically, at a midpoint enterprise value of $610 million, the Senior Secured Credit Facility ($540 million outstanding) would be covered in full, leaving $70 million of value available for the Mezzanine Notes ($112.3 million outstanding). This implies a recovery of approximately 62.3% for the Mezzanine Notes, calculated as ($610 million – $540 million) ÷ $112.3 million.
69. For the Unsecured Notes ($50 million outstanding), KHP's waterfall analysis projects a recovery in the range of 8 to 14 cents on the dollar in a chapter 11 scenario, reflecting the position of the Unsecured Notes below the impaired Mezzanine Notes in the capital structure's payment waterfall.
70. The valuation context is critical to the Debtor's restructuring strategy, as it informs the allocation of value among creditor constituencies and provides a framework for plan negotiations. A copy of KHP's 13-week cash flow forecast is attached hereto as Exhibit D.
H. DIP Financing Preparation
71. Recognizing the Debtor's need for post-petition liquidity to fund operations during a potential chapter 11 case, the Debtor and its advisors began preparing for debtor-in-possession ("DIP") financing in late 2022.
72. On December 15, 2022, TAI received a DIP financing term sheet from Nordbank International AG and Triton Credit Partners LP (collectively, the "DIP Lenders") for a $75 million superpriority secured DIP credit facility (the "DIP Facility"). The principal terms of the DIP Facility include an interest rate of SOFR plus 600 basis points, a commitment fee of 0.50%, and a twelve (12)-month maturity from the date of funding.
73. C&H annotated and marked up the DIP financing term sheet on behalf of the Debtor and subsequently prepared a draft DIP Credit Agreement, dated December 22, 2022. Negotiations with the DIP Lenders and the Ad Hoc Group regarding the terms of the DIP Facility, including adequate protection provisions, budget milestones, and covenants, have been ongoing. A copy of the DIP financing term sheet is attached hereto as Exhibit F.
V. THE DEBTOR'S RESTRUCTURING OBJECTIVES
74. The Debtor's principal restructuring objectives in this chapter 11 case are as follows:
(a) Preserve Going-Concern Value. The Debtor seeks to preserve the going-concern value of TAI's U.S. operations, including the Houston terminal and the domestic freight brokerage business. These operations are valuable assets of the estate and generate significant revenue and employment. A going-concern reorganization will maximize recoveries for all creditor constituencies as compared to a liquidation scenario.
(b) Protect Employees. The Debtor is committed to protecting its approximately 680 U.S. employees, whose skills, experience, and institutional knowledge are critical to TAI's operations. The loss of key employees — including skilled terminal operators, logistics coordinators, and freight brokers — would cause immediate and potentially irreversible harm to the Debtor's business.
(c) Maintain Key Commercial Relationships. The Debtor seeks to maintain its ordinary-course relationships with key vendors, customers, and trade counterparties. The continuity of these relationships is essential to TAI's ability to operate during the chapter 11 case and to emerge from chapter 11 as a viable going concern.
(d) Achieve a Comprehensive Restructuring. The Debtor's overarching objective is to achieve a comprehensive restructuring of its capital structure. The Debtor's preferred path is an out-of-court restructuring implemented through a restructuring support agreement (an "RSA") with its principal creditor constituencies. However, in the event that out-of-court negotiations do not result in a consensual resolution, the chapter 11 filing represents the contingency path, and the Debtor would pursue a chapter 11 plan of reorganization to effect the restructuring.
(e) Coordinate Cross-Border Proceedings. To the extent that TSL commences a proceeding under Greek insolvency law (Law 4738/2020), the Debtor will seek to coordinate the TAI chapter 11 case with any such Greek proceeding through, inter alia, a Chapter 15 recognition proceeding in the United States. Cross-border coordination will be essential to maximizing value and minimizing duplicative proceedings and costs.
(f) Minimize Administrative Costs. The Debtor is acutely aware of the significant administrative costs associated with chapter 11 proceedings and is committed to minimizing those costs to the greatest extent practicable. KHP has estimated total chapter 11 administrative costs for the first twelve (12) months of the case at approximately $18.5 million, which includes legal fees, financial advisor fees, CRO fees, U.S. Trustee quarterly fees, and claims agent fees. The Debtor and its advisors will manage the case in a cost-effective manner while ensuring that all stakeholders' interests are appropriately protected.
75. I note that an RSA term sheet was circulated to the Debtor's principal creditor groups on February 10, 2023, and negotiations regarding the terms of a potential RSA are ongoing as of the date of this Declaration. The chapter 11 filing and the First-Day Motions supported by this Declaration represent the contingency path that the Debtor has prepared in the event that the out-of-court restructuring negotiations do not result in a timely consensual resolution.
VI. THE PROPOSED CHAPTER 11 CASE — KEY MILESTONES
76. In the event that the Debtor files a voluntary petition under chapter 11, the following timeline of key milestones has been developed by the Debtor and its advisors in consultation with the DIP Lenders and the Ad Hoc Group:
77. The Debtor recognizes that these milestones are subject to change based on the progress of restructuring negotiations, the Court's calendar, and other factors. However, the Debtor is committed to pursuing an expeditious chapter 11 process that minimizes the duration of the case and the associated administrative costs.
78. In addition, if TSL concurrently commences a proceeding under Greek Law 4738/2020, a Chapter 15 recognition proceeding may be filed in this Court or another appropriate United States Bankruptcy Court to facilitate cross-border coordination between the TAI chapter 11 case and the Greek proceeding. The Debtor's legal advisors at C&H and Greek counsel at Vassiliou & Demetriou Law Offices are prepared to coordinate such proceedings as necessary.
VII. FIRST-DAY RELIEF REQUESTED
79. The Debtor has filed or intends to file the following First-Day Motions contemporaneously with the voluntary petition. Each motion is described below, and I respectfully submit that the relief requested in each motion is necessary and appropriate to permit the Debtor to continue its operations, preserve the value of its estate, and facilitate a successful reorganization.
A. Motion for Authority to Continue Cash Management System
80. TAI operates an integrated cash management system (the "Cash Management System") in connection with TSL's global treasury operations. The Cash Management System involves multiple bank accounts maintained at various financial institutions and facilitates the collection of revenue, payment of operating expenses, and management of intercompany fund flows between TAI and TSL.
81. The Cash Management System includes intercompany fund transfers between TAI and TSL, including transactions arising under the $76.4 million Intercompany Note. These intercompany transactions are conducted in the ordinary course of business and are essential to the efficient management of the Thalassa enterprise's global treasury operations and working capital needs.
82. Through the Cash Management Motion, the Debtor requests authority to continue operating the Cash Management System in the ordinary course of business, to maintain its existing bank accounts (including signatory authority and account designations), and to continue intercompany transactions with TSL and its affiliates in the ordinary course, subject to appropriate safeguards and reporting requirements.
83. I believe that the relief requested in the Cash Management Motion is essential. Without this relief, TAI's operations would be immediately and severely disrupted. The Debtor would be required to close its existing bank accounts and open new accounts, which would cause significant delays in the collection of receivables and the payment of operating expenses. Moreover, the disruption of intercompany fund flows would jeopardize the Houston terminal and vessel scheduling operations, which depend on coordinated cash management across the Thalassa enterprise. Such disruption would cause immediate harm to the estate and its stakeholders.
B. Motion for Authority to Pay Prepetition Employee Wages and Benefits
84. TAI employs approximately 680 people in the United States. These employees perform essential functions across all areas of TAI's operations, including terminal operations, vessel scheduling, freight brokerage, finance, administration, and management. The Debtor's employees are its most valuable asset, and their continued service is critical to the preservation of the Debtor's going-concern value.
85. TAI's prepetition employee obligations include, without limitation, accrued wages and salaries, health insurance premiums, retirement plan contributions, payroll taxes (including federal income tax withholding, FICA taxes, and state and local payroll taxes), workers' compensation premiums, and other customary benefits. Many of TAI's employees are paid on a bi-weekly basis, and as of the petition date, there may be accrued but unfunded prepetition wage obligations owed to these employees.
86. Sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code accord priority status to certain employee wage and benefit claims, reflecting Congress's recognition that employees who provide services to a debtor before bankruptcy should not bear the economic burden of the employer's financial distress. Section 363(b) of the Bankruptcy Code authorizes the court to permit the debtor to use estate property other than in the ordinary course of business upon a showing of sound business justification, which the Debtor submits exists here.
87. Without prompt payment of prepetition employee wages and benefits, TAI risks losing essential members of its workforce. Terminal operators, logistics coordinators, and freight brokers possess specialized skills and institutional knowledge that cannot be readily replaced. The departure of even a modest number of key employees could compromise the Debtor's ability to operate the Houston terminal, schedule vessel calls, and maintain its freight brokerage relationships, causing immediate and potentially irreparable harm to the estate.
88. Accordingly, through the Employee Wages Motion, the Debtor requests authority to pay all prepetition employee-related obligations in the ordinary course of business, including wages, salaries, health insurance, retirement benefits, payroll taxes, workers' compensation, and all other customary employee benefits and deductions.
C. Motion for Authority to Pay Critical Vendors
89. TAI depends on certain vendors and service providers whose goods and services are essential to TAI's continued operations and cannot be readily replaced in the market. These "critical vendors" supply goods and services that are vital to the functioning of the Houston terminal, the operation and maintenance of TSL's fleet, and TAI's freight brokerage business.
90. As noted above, the largest trade creditor is Olympian Fuel & Supply SA, to which TAI owes approximately $9.2 million for bunker fuel deliveries. Bunker fuel is essential to the operation of TSL's vessels, and a disruption in fuel supply would have immediate and severe consequences for fleet operations, including the potential for vessel detentions at port, missed charter commitments, and loss of charter revenue. Olympian is one of a limited number of bunker fuel suppliers capable of providing the volumes and grades of fuel required by TSL's fleet in the Gulf of Mexico and transatlantic trade lanes.
91. In addition to Olympian, TAI relies on a number of other critical vendors for port services, ship repair and maintenance, spare parts, provisions, and logistics services. The total trade payables of approximately $38.7 million as of September 30, 2022 reflect the breadth and depth of TAI's vendor relationships.
92. Section 503(b)(9) of the Bankruptcy Code provides administrative expense priority for the value of goods received by the debtor in the ordinary course of the debtor's business within twenty (20) days before the date of the filing of the petition. In addition, courts in this and other jurisdictions have recognized the authority of debtors to pay the prepetition claims of critical vendors where the payment of such claims is necessary to preserve the going-concern value of the estate. See, e.g., In re Kmart Corp., 359 F.3d 866 (7th Cir. 2004).
93. Through the Critical Vendor Motion, the Debtor requests authority to pay prepetition claims of designated critical vendors up to an aggregate cap to be set by the Court, subject to appropriate procedures for the designation of critical vendors and the collection of trade agreements ensuring continued supply.
94. Without this relief, TAI's essential supply chains — particularly for fuel, port services, and vessel maintenance — would be disrupted. Such disruption could lead to vessel detentions at port, the loss of charter revenue, and the deterioration of TAI's relationships with customers and trade counterparties. The resulting harm to the estate would far exceed the cost of paying the critical vendor claims.
D. Motion for Authority to Pay Prepetition Taxes
95. TAI owes various federal, state, and local taxes, fees, and assessments that accrued prepetition. These obligations include, without limitation, federal and state income taxes, sales and use taxes, property taxes, and customs duties and assessments. Many of these tax obligations may be entitled to priority status under Sections 507(a)(8) of the Bankruptcy Code.
96. Failure to pay prepetition tax obligations could result in the imposition of liens on the Debtor's assets, the assessment of penalties and interest, and potential interference with the Debtor's operations. In some cases, governmental authorities may take enforcement action, including the seizure of assets or the revocation of permits and licenses, which could disrupt the Debtor's operations at the Houston terminal and elsewhere.
97. Through the Tax Motion, the Debtor requests authority to pay all prepetition tax obligations in the ordinary course of business as they become due. The Debtor submits that the payment of these obligations is necessary to avoid the imposition of liens, penalties, and other adverse consequences that would diminish the value of the estate.
E. Motion for Authority to Maintain Insurance Policies
98. TAI and TSL maintain comprehensive insurance coverage that is essential to the protection of the Debtor's assets, operations, officers, and directors. The insurance program is brokered through Seaward & Beckett Insurance Brokers Ltd. ("Seaward & Beckett"), located at 71 Fenchurch Street, London EC3M 4BS, United Kingdom. Ian Beckett serves as the Debtor's key contact at Seaward & Beckett.
99. The Debtor's key insurance policies include, without limitation:
(a) Directors and Officers Liability Insurance. TAI maintains a directors and officers ("D&O") liability insurance policy issued by Promontory Indemnity Insurance Co., a Bermuda-domiciled insurer. The D&O policy provides coverage with an aggregate limit of $25 million. The policy number is PII-DO-2022-08847. The D&O policy is critical to the protection of the Debtor's current and former directors and officers, who may face claims in connection with the Debtor's financial distress and this chapter 11 case.
(b) Hull and Machinery Insurance. TSL maintains hull and machinery insurance covering the physical damage to and total loss of vessels in its fleet. This coverage is essential to the protection of the fleet, which constitutes the primary collateral securing the Senior Secured Credit Facility and the Mezzanine Notes.
(c) Protection and Indemnity (P&I) Coverage. TSL maintains protection and indemnity coverage through a P&I club, which provides coverage for third-party liabilities arising from the operation of vessels, including personal injury, cargo claims, pollution, and wreck removal.
(d) General Liability Coverage. TAI maintains general liability insurance providing coverage for claims arising from the Debtor's shore-based operations, including operations at the Houston terminal.
100. The maintenance of the Debtor's insurance policies is critical to the preservation and protection of estate assets, the continued operation of the Debtor's business, and the protection of the Debtor's officers and directors. Many of the insurance policies may have prepetition premium obligations that the Debtor needs to satisfy to maintain coverage. In addition, certain policies may need to be renewed during the pendency of the chapter 11 case.
101. Through the Insurance Motion, the Debtor requests authority to continue all prepetition insurance policies, to pay any prepetition premiums owed in connection therewith, and to renew policies as they come due in the ordinary course of business. Without this relief, the Debtor's insurance coverage could lapse, exposing the estate to potentially catastrophic uninsured losses and exposing the Debtor's officers and directors to personal liability.
F. Motion for Approval of DIP Financing (Interim and Final)
102. TAI requires immediate post-petition liquidity to fund its operations during the chapter 11 case. Without access to debtor-in-possession financing, the Debtor would be unable to fund operating costs, pay its employees, maintain vessels, service the Houston terminal, or otherwise preserve value for all stakeholders.
103. As described in Part IV above, TAI has received a commitment from Nordbank International AG (as DIP Agent) and Triton Credit Partners LP (as DIP lender) for a $75 million superpriority secured debtor-in-possession credit facility (the "DIP Facility"). The DIP Facility was negotiated at arm's length and in good faith between the Debtor and the DIP Lenders, with the active involvement of the Ad Hoc Group.
104. The principal terms of the DIP Facility are as follows:
(a) DIP Lenders: Nordbank International AG (as DIP Agent) and Triton Credit Partners LP.
(b) Facility Amount: $75,000,000.
(c) Interest Rate: SOFR plus 600 basis points per annum.
(d) Commitment Fee: 0.50% on undrawn commitments.
(e) Maturity: Twelve (12) months from the date of initial funding.
(f) Security: Superpriority administrative expense claims under Section 364(c)(1) of the Bankruptcy Code and priming liens under Section 364(d)(1) of the Bankruptcy Code on substantially all of the Debtor's assets.
(g) Adequate Protection: The prepetition Senior Secured Lenders (on the $540 million outstanding under the Credit Agreement) and the Mezzanine Lender (on the $112.3 million outstanding under the Mezzanine Notes) shall receive adequate protection in respect of the priming liens granted to the DIP Lenders, including replacement liens, superpriority administrative expense claims (subordinate to the DIP claims), and current cash payment of interest and fees.
105. The Debtor submits that the DIP Facility satisfies the requirements of Section 364 of the Bankruptcy Code. The Debtor has been unable to obtain unsecured credit allowable under Section 503(b)(1) of the Bankruptcy Code. The DIP Facility provides the liquidity essential to the Debtor's continued operations and the preservation of value for all stakeholders. The terms of the DIP Facility, while reflective of the elevated risk associated with the Debtor's financial condition, are reasonable and comparable to DIP financing facilities approved in other chapter 11 cases of similar size and complexity.
106. With respect to adequate protection, the Debtor submits that the prepetition secured lenders are adequately protected against the diminution in value of their collateral resulting from the priming liens to be granted to the DIP Lenders. As of November 1, 2022, the fleet was appraised by Drakos Maritime Valuations at $623 million. The combined outstanding obligations under the Senior Secured Credit Facility ($540 million) and the Mezzanine Notes ($112.3 million) total approximately $652.3 million. While the fleet value of $623 million is marginally below this combined indebtedness, the replacement liens, superpriority administrative expense claims, and other adequate protection measures provided under the DIP Facility — together with the preservation of the going-concern value of the enterprise through continued operations — provide sufficient adequate protection to the prepetition secured creditors.
107. Through the DIP Motion, the Debtor requests interim authority to borrow up to $30 million under the DIP Facility on an interim basis pending the final DIP approval hearing, which is anticipated to occur on approximately Day 45 of the case. The interim borrowing is necessary to fund the Debtor's immediate post-petition operating expenses, including payroll, vendor payments, vessel operating costs, and professional fees. Final approval of the full $75 million DIP Facility will be sought at the final hearing.
108. KHP has prepared a detailed DIP budget in coordination with the Debtor's management team. The budget projects total administrative costs for the first twelve (12) months of the chapter 11 case at approximately $18.5 million, which includes legal fees for the Debtor's counsel and any official committee's counsel, financial advisor fees, CRO fees, U.S. Trustee quarterly fees, and claims agent fees. The DIP budget also provides for ongoing operating expenses, capital expenditures, and debt service, and is designed to ensure that the Debtor has sufficient liquidity to operate as a going concern throughout the chapter 11 case.
109. Without DIP financing, the Debtor would be unable to meet its post-petition obligations, and its operations would cease in a matter of weeks. The resulting loss of going-concern value would be devastating to all stakeholders, including employees, vendors, customers, and creditors at all levels of the capital structure. I respectfully submit that the approval of the DIP Facility is essential to the success of this chapter 11 case.
VIII. RELATED RETENTION APPLICATIONS
110. In addition to the First-Day Motions described above, the Debtor intends to file contemporaneously the following retention applications:
(a) Application to Retain Calderwood & Harkness LLP as Counsel. The Debtor intends to file an application under Section 327(a) of the Bankruptcy Code to retain Calderwood & Harkness LLP as counsel to the debtor-in-possession. Nathaniel Bower serves as the responsible partner for this engagement. C&H's current billing rates for this engagement are as follows: partners, $1,650 per hour; senior associates, $1,050 per hour; associates, $850 per hour; and paralegals, $425 per hour. The Debtor deposited a retainer of $500,000 with C&H on October 28, 2022. Amy Chesterton serves as the lead associate, and Nathan Ikeda serves as the working associate on this matter.
(b) Application to Retain Kensington Veltrian Partners LLC as Financial Advisor. The Debtor intends to file an application under Section 327(a) of the Bankruptcy Code to retain Kensington Veltrian Partners LLC as financial advisor to the debtor-in-possession. James Calloway, Managing Director, leads the KHP team. KHP's compensation structure includes a monthly advisory fee of $250,000 and a filing fee of $2.0 million, payable upon the filing of a chapter 11 petition. In the event that a restructuring support agreement is executed in lieu of a chapter 11 filing, KHP would be entitled to a completion fee of $4.5 million in lieu of the filing fee.
111. In addition, as noted above, Alderney Management Advisors LLC ("Alderney") has been engaged on a standby basis to provide Chief Restructuring Officer services to TAI. Richard "Rick" Thornberg, the designated CRO, is a seasoned restructuring professional with extensive experience in the maritime industry, having served as CRO in three prior shipping chapter 11 cases. If appointed, Mr. Thornberg would assume day-to-day responsibility for the Debtor's restructuring efforts and would serve as the primary liaison between the Debtor's management team and its advisors, creditor constituencies, and the Court. The retention of Alderney and the appointment of Mr. Thornberg as CRO would be subject to Court approval upon the filing of an appropriate application.
112. Pendleton Claim Services Inc. ("Pendleton") has been engaged on a standby basis as claims and noticing agent for the chapter 11 case. The engagement letter with Pendleton was signed on November 15, 2022. Laura Pendleton, President of Pendleton, oversees this engagement. Pendleton has extensive experience serving as claims and noticing agent in large chapter 11 cases and will provide efficient and reliable claims management and noticing services. The retention of Pendleton would be subject to Court approval upon the filing of an appropriate application.
IX. CROSS-BORDER CONSIDERATIONS
113. As described above, the Debtor's parent, TSL, is a Greek société anonyme with its center of main interests ("COMI") in Piraeus, Greece. TSL's operations are predominantly international in scope, with vessels trading across the Mediterranean, Black Sea, and transatlantic trade lanes, and with terminal operations in Piraeus, Thessaloniki, and Houston.
114. If TSL were to commence a proceeding under Greek insolvency law — specifically, Law 4738/2020, the Greek Debt Settlement & Insolvency Code, which governs insolvency proceedings for Greek corporate entities — a Chapter 15 recognition proceeding could be filed in the United States to facilitate coordination between the Greek proceeding and the TAI chapter 11 case. Chapter 15 of