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DRAFT — PREPARED ON STANDBY BASIS; NEVER FILED PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

DEBTOR'S MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS (I) AUTHORIZING THE DEBTOR TO OBTAIN POSTPETITION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), AND 364(d), (II) GRANTING SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS TO THE DIP OBLIGATIONS, (III) GRANTING LIENS AND SECURITY INTERESTS TO THE DIP LENDERS, (IV) AUTHORIZING THE USE OF CASH COLLATERAL, (V) PROVIDING ADEQUATE PROTECTION TO PREPETITION SECURED PARTIES, AND (VI) SCHEDULING A FINAL HEARING

Draft Date: January 18, 2023 Status: DRAFT — PREPARED ON STANDBY BASIS; NEVER FILED C&H Matter No. 1044-00003

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I. PRELIMINARY STATEMENT

Thalassa Americas Inc. ("TAI" or the "Debtor"), a Delaware C-Corporation and wholly-owned subsidiary of Thalassa Shipping & Logistics Société Anonyme ("TSL"), a Greek société anonyme headquartered at 42 Akti Miaouli, Piraeus 18538, Greece, by and through its proposed counsel, Calderwood & Harkness LLP, respectfully submits this motion (the "Motion") pursuant to sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d) of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the "Bankruptcy Code"), Rules 2002, 4001, and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and the Local Rules of the United States Bankruptcy Court for the Southern District of Texas (the "Local Rules"), for entry of interim and final orders (the "Interim Order" and the "Final Order," respectively, and together, the "DIP Orders") authorizing the Debtor to obtain postpetition financing, granting superpriority administrative expense status and liens to the DIP Lenders (as defined below), authorizing the use of cash collateral, providing adequate protection to prepetition secured parties, and scheduling a final hearing. In support of this Motion, the Debtor respectfully represents as follows:

1. TAI maintains its principal office at 1400 McKinney Street, Suite 2200, Houston, Texas 77010. TAI's federal employer identification number is 84-3291057. TAI's registered agent is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801. TAI operates the U.S.-side shipping operations of TSL's global enterprise, including Houston terminal operations, Jones Act–exempt foreign-flag vessel scheduling, and domestic freight brokerage services. For the fiscal year ended December 31, 2021, TAI generated revenue of approximately $312 million. For the fiscal year ended December 31, 2022, TAI's estimated revenue is approximately $198 million, reflecting a decline of approximately 36.5% attributable to the severe downturn in global dry-bulk and containerized freight markets. TAI employs approximately 680 individuals in the United States; TSL's global headcount is approximately 4,200.

2. By this Motion, the Debtor seeks authority to enter into a $75 million superpriority debtor-in-possession credit facility (the "DIP Facility") with Nordbank International AG ("Nordbank"), as DIP administrative agent and collateral agent, and Triton Credit Partners LP ("Triton"), as DIP lender (collectively, the "DIP Lenders"), on the terms and conditions set forth in the DIP Credit Agreement attached hereto as Exhibit C and the DIP Term Sheet attached hereto as Exhibit D. The DIP Facility is essential to fund the Debtor's ongoing operations, preserve going-concern value, pay employees, maintain the fleet, satisfy critical vendor and supplier obligations, fund professional fees and Chapter 11 administrative costs, and facilitate the restructuring process.

3. The consequences of failing to obtain the DIP Facility cannot be overstated. Without immediate access to postpetition financing, the Debtor will be unable to operate its business, resulting in irreparable harm to the estate, its creditors, its approximately 680 employees, and the broader communities served by the Debtor's shipping and logistics operations. The Debtor's unrestricted cash position has deteriorated to critically low levels, and absent interim DIP borrowings, the Debtor will be unable to meet its most basic obligations — including payroll, bunker fuel purchases, port fees, and vessel maintenance — within days of the petition date.

4. At the interim hearing (the "Interim Hearing"), the Debtor requests approval of up to $30 million of the $75 million DIP Facility, which amount is necessary to fund the Debtor's operations during the period between the petition date and the final hearing on this Motion (the "Final Hearing"). The Debtor requests that the Final Hearing be scheduled approximately forty-five (45) days after the petition date, at which time the Debtor will seek approval of the full $75 million DIP Facility and entry of the Final Order.

5. In addition to the DIP financing itself, this Motion seeks authority to use cash collateral in the ordinary course of business, subject to the DIP Budget (as defined below), and to provide adequate protection to the prepetition secured parties — namely, the syndicate of senior secured lenders (the "Prepetition Senior Secured Lenders") holding approximately $540 million in first-priority secured claims, and Dralvecen Mezzanine Capital LLC ("BMC"), which holds approximately $112.3 million in second-priority mezzanine notes — in the form of replacement liens, superpriority administrative expense claims, current cash interest payments (to the Prepetition Senior Secured Lenders), ongoing financial reporting, and maintenance of insurance coverage.

6. The factual representations contained herein are supported by the Declaration of Marcus Hale, President of Thalassa Americas Inc., in Support of First-Day Motions, dated January 14, 2023 (the "Hale Declaration"), a copy of which is attached hereto as Exhibit F and incorporated herein by reference.

II. JURISDICTION AND VENUE

7. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. TAI maintains its principal office at 1400 McKinney Street, Suite 2200, Houston, Texas 77010, which is located within the Southern District of Texas.

8. The statutory bases for the relief sought herein are sections 105(a), 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code, Rules 2002, 4001, and 9014 of the Bankruptcy Rules, and the Local Rules of the United States Bankruptcy Court for the Southern District of Texas.

III. BACKGROUND

A. The Debtor's Business and Corporate Structure

9. TSL was founded in 1987 by the Kostandinos family and is a Greek-headquartered private shipping and logistics conglomerate. TSL owns and operates a fleet of 50 vessels, consisting of 38 dry-bulk carriers (comprising 10 Capesize vessels, 14 Panamax vessels, and 14 Supramax vessels) and 12 sub-Panamax container vessels. TSL provides integrated port-to-door logistics services across the Mediterranean, Black Sea, and transatlantic trade lanes and operates terminal facilities at Piraeus, Thessaloniki, and Houston.

10. As of November 1, 2022, TSL's fleet was appraised at $623 million by Drakos Maritime Valuations Ltd. (Captain Nikos Drakos, principal appraiser), a summary of which is attached hereto as Exhibit G. This represents a decline of $268 million, or approximately 30.1%, from the prior appraisal of $891 million as of January 2022, reflecting the precipitous decline in vessel values across the dry-bulk and container shipping sectors.

11. TAI is a wholly-owned Delaware C-Corporation subsidiary of TSL. TAI was incorporated in 2018 for the purpose of consolidating TSL's U.S.-side operations, including Houston terminal operations, scheduling of Jones Act–exempt foreign-flag vessels serving U.S. ports, and domestic freight brokerage. TAI's operations are integral to TSL's transatlantic trade lane, serving as the primary interface between TSL's fleet and its U.S.-based customers, port facilities, and regulatory counterparts.

12. TSL's equity is held as follows: Dimitrios Kostandinos (Chairman of the Board) holds 62%, and Elena Kostandinos-Pavlou (Vice Chairwoman of the Board) holds 18%, for a combined Kostandinos family interest of 80%. These interests are held through KFO Holdings Société Anonyme ("KFO"), a Greek société anonyme registered at 42 Akti Miaouli, Piraeus 18538, Greece — the same address as TSL's headquarters. The remaining 20% of TSL's equity is held by non-family holders.

13. TSL's key officers include Georgios Andreadis (Chief Executive Officer), Irini Dalakoura (Chief Financial Officer), and Stavros Papageorgiou (General Counsel — Greece). TAI's key officers include Marcus Hale (President), Diana Restrepo (Vice President, Finance), and Jonathan Kurtz (Vice President, Operations).

14. For the fiscal year ended December 31, 2021, TSL generated consolidated revenue of approximately €1.42 billion. For the fiscal year ended December 31, 2022, TSL's estimated consolidated revenue is approximately €987 million, reflecting a decline of approximately 30.5% year-over-year, driven by the severe downturn in global shipping markets described in further detail below.

B. The Prepetition Capital Structure

15. As described below, as of September 30, 2022, the Debtor and its parent are parties to a complex, multi-tranche capital structure with total indebtedness of approximately $847.3 million across secured, mezzanine, unsecured, intercompany, trade, and other obligations.

1. Senior Secured Credit Facility.

16. On June 15, 2019, TSL (as borrower, with TAI as co-borrower for the U.S. Tranche) entered into a senior secured credit agreement (the "Prepetition Credit Agreement") with Nordbank International AG, as administrative agent and collateral agent (in such capacity, the "Prepetition Agent"), and a syndicate of nine lenders (collectively, the "Prepetition Senior Secured Lenders"). Nordbank International AG's principal office is located at Bahnhofstrasse 78, 8001 Zürich, Switzerland, and its senior relationship officer for this account is Henrik Lüdemann, Managing Director.

17. The Prepetition Credit Agreement provides for a total commitment of $685 million across the following lenders:

18. The Prepetition Credit Agreement is structured in three tranches:

(a) Term Loan A ("TLA"): $400 million, amortizing with quarterly principal payments of $10 million.

(b) Revolving Credit Facility: $200 million total commitment.

(c) U.S. Tranche (Term Loan B, "TLB"): $85 million, non-amortizing with a bullet maturity. TAI is a co-borrower on this tranche.

19. The Prepetition Credit Agreement matures on June 15, 2024. Interest accrues at a rate of SOFR plus 375 basis points, with a default rate of an additional 200 basis points.

20. As of September 30, 2022, the outstanding balances under the Prepetition Credit Agreement are as follows:

(a) TLA: $400 million less thirteen quarterly amortization payments of $10 million each (covering the period from the third quarter of 2019 through the third quarter of 2022), resulting in an outstanding balance of $270 million.

(b) Revolving Credit Facility: $185 million drawn of the $200 million commitment, with $15 million remaining undrawn.

(d) Total Outstanding: $270 million + $185 million + $85 million = $540 million.

21. The CUSIP number for the TLA is 87265BAA7.

22. The Prepetition Credit Agreement is secured by first-priority liens on (a) 38 dry-bulk carriers, (b) 12 container vessels, (c) the Houston terminal lease, (d) all accounts receivable of the borrowers, and (e) equity interests in TAI and 14 vessel-owning special purpose vehicles (collectively, the "Prepetition Collateral").

2. Mezzanine Notes.

23. Concurrent with the Prepetition Credit Agreement, on June 15, 2019, TSL issued mezzanine notes (the "Mezzanine Notes") to Dralvecen Mezzanine Capital LLC ("BMC"), 600 Lexington Avenue, 22nd Floor, New York, New York 10022. BMC's senior relationship officer for this account is Rebecca Marsh, Senior Partner. BMC is represented by Kellner & Foss LLP, 1185 Avenue of the Americas, 30th Floor, New York, New York 10036 (Theodore Kellner, Lead Partner; Samantha Ong, Associate).

24. The Mezzanine Notes bear interest at a rate of 11.5% on a PIK toggle basis. Since the second quarter of 2022, interest on the Mezzanine Notes has been paid entirely in kind (i.e., capitalized to principal). As of September 30, 2022, the outstanding principal balance of the Mezzanine Notes is approximately $112.3 million, consisting of the original $100 million principal amount plus approximately $12.3 million in PIK interest capitalized through September 30, 2022. The Mezzanine Notes mature on December 15, 2024.

25. The Mezzanine Notes are secured by second-priority liens on the same collateral that secures the Prepetition Credit Agreement. The relative priorities, rights, and remedies of the Prepetition Senior Secured Lenders and BMC are governed by an Intercreditor Agreement dated June 15, 2019, between Nordbank (as first-lien agent) and BMC (the "Intercreditor Agreement").

3. Unsecured Notes.

26. On March 1, 2020, TSL issued $50 million in aggregate principal amount of unsecured notes (the "Unsecured Notes"), bearing interest at 8.25% per annum, payable semi-annually on June 1 and December 1. The CUSIP number for the Unsecured Notes is 87265BAB5. The Unsecured Notes mature on March 1, 2025. Garrison Trust Company, 100 Wall Street, 16th Floor, New York, New York 10005, serves as indenture trustee under the indenture governing the Unsecured Notes.

27. An informal group of holders of the Unsecured Notes (the "Informal Noteholder Group") has been formed and is represented by Ashford, Brightmoor Group & McKay PC, 299 Park Avenue, 18th Floor, New York, New York 10171 (Carolyn Brightmoor Group, Lead Partner; Robert Mancini, Associate).

28. On December 1, 2022, TSL failed to make the semi-annual interest payment on the Unsecured Notes in the amount of $2,062,500 (calculated as $50,000,000 × 8.25% ÷ 2). The 30-day cure period under the Unsecured Notes indenture expired on January 1, 2023, and no payment was made. As a result, an event of default has occurred and is continuing under the Unsecured Notes indenture.

4. Intercompany Note.

29. TAI owes TSL the sum of $76.4 million under a subordinated intercompany promissory note bearing interest at 5.0% per annum (the "Intercompany Note"). The Intercompany Note is subordinated to all external indebtedness of TAI.

5. Trade Creditors.

30. As of September 30, 2022, TAI had approximately $38.7 million in outstanding trade payables. The largest trade creditor is Olympian Fuel & Supply SA, a bunker fuel supplier located at 7 Iroon Polytechniou, Piraeus 18535, Greece, which is owed approximately $9.2 million.

6. Total Debt Summary.

31. The following table summarizes the Debtor's consolidated indebtedness as of September 30, 2022:

C. Events Precipitating the Chapter 11 Filing

32. The Debtor's financial distress is directly attributable to the severe and sustained downturn in global shipping markets during 2022. The Baltic Dry Index ("BDI"), the principal benchmark for dry-bulk shipping rates, declined approximately 58% between January 2022 and September 2022, reflecting a dramatic contraction in demand for dry-bulk shipping capacity.

33. TSL's average daily time-charter equivalent ("TCE") — the key measure of revenue per vessel per day after deducting voyage expenses — fell from $24,800 per day for the full fiscal year 2021 to $11,200 per day for the third quarter of 2022, a decline of approximately 54.8%. This precipitous decline in TCE rates has severely impaired the cash-generating capacity of the fleet and, by extension, TAI's ability to service its debt obligations and fund its operations.

34. On September 15, 2022, the Debtor breached the Minimum Liquidity Covenant under the Prepetition Credit Agreement. Specifically, unrestricted cash fell to $27.3 million against a minimum requirement of $40 million, representing a shortfall of $12.7 million. This breach triggered a cascade of additional default-related consequences under the Prepetition Credit Agreement.

35. As of September 30, 2022, the Debtor was in breach of two additional financial maintenance covenants under the Prepetition Credit Agreement:

(a) Maximum Net Leverage Ratio: The covenant requires a Maximum Net Leverage Ratio of 5.50x. As of September 30, 2022, the actual Net Leverage Ratio was 7.82x (Net Debt of $770.9 million ÷ LTM EBITDA of $98.6 million).

(b) Minimum Interest Coverage Ratio: The covenant requires a Minimum Interest Coverage Ratio of 2.50x. As of September 30, 2022, the actual Interest Coverage Ratio was 1.74x (LTM EBITDA of $98.6 million ÷ LTM Interest Expense of $56.7 million).

36. On October 10, 2022, following extensive negotiations between the Debtor, TSL, and the Prepetition Agent, the Debtor entered into a Forbearance Agreement with the Prepetition Senior Secured Lender syndicate (with Nordbank acting as agent), pursuant to which the lenders agreed to a 90-day standstill period through January 8, 2023 (the "Forbearance Agreement"). The Forbearance Agreement required, inter alia, that the Debtor engage financial and legal restructuring advisors, commence an assessment of strategic alternatives, and provide enhanced financial reporting to the lender syndicate.

37. An Ad Hoc Group of Senior Secured Lenders (the "Ad Hoc Group") was formed in August 2022, comprising Nordbank International AG, Harborstone Bank plc, Triton Credit Partners LP, and Continental Maritime Lending GmbH, holding collectively $372 million in commitments, representing approximately 54.3% of the $685 million Prepetition Credit Agreement. The Ad Hoc Group is represented by Whitfield, Crane & Burgess LLP, 51 West 52nd Street, 38th Floor, New York, New York 10019 (Graham Whitfield III, Lead Partner; Priya Nandakumar, Senior Associate). The Ad Hoc Group has retained Draycott Advisory Group LLC, 520 Madison Avenue, 20th Floor, New York, New York 10022 (Vanessa Chow, Partner), as its financial advisor.

38. On January 8, 2023, the Forbearance Agreement was extended for a period of sixty (60) additional days, through March 8, 2023 (the "Extended Forbearance Period"), to permit the Debtor to continue negotiations with its key stakeholders and, if necessary, to prepare for a Chapter 11 filing on terms that would maximize value for all constituencies.

39. Kensington Veltrian Partners LLC ("KHP"), the Debtor's financial advisor, has estimated the enterprise value of the TSL/TAI combined business at $580 million to $640 million, with a midpoint of $610 million. KHP's analysis indicates that the fulcrum security in the capital structure is the Mezzanine Notes held by BMC. At the midpoint enterprise value of $610 million, the estimated recovery on the Mezzanine Notes is approximately 62.3%, calculated as ($610 million − $540 million in senior secured claims) ÷ $112.3 million in Mezzanine Notes. KHP's waterfall analysis further indicates that the estimated recovery for holders of the Unsecured Notes in a Chapter 11 scenario is approximately 8 to 14 cents on the dollar.

D. The Debtor's Immediate Need for Postpetition Financing

40. As of the anticipated petition date, TAI's unrestricted cash has fallen to critically low levels. As noted above, unrestricted cash was $27.3 million as of September 15, 2022, and has continued to decline since that date as the Debtor has continued to fund operations during the forbearance period with diminishing revenue and constrained working capital. The Debtor's liquidity position is unsustainable absent immediate access to new financing.

41. TAI requires immediate access to postpetition liquidity for the following purposes, among others:

(a) funding daily vessel operations, including bunker fuel purchases, port fees, pilotage, stevedoring, and logistics services;

(b) meeting biweekly payroll obligations for approximately 680 U.S. employees;

(d) paying critical vendors and suppliers whose continued cooperation is necessary for the Debtor's ongoing operations;

(e) funding professional fees and Chapter 11 administrative costs, which KHP estimates at approximately $18.5 million for the first twelve (12) months of the case; and

(f) preserving going-concern value and avoiding the forced liquidation of fleet assets, which would result in material value destruction for all stakeholders.

42. Without interim DIP borrowings of at least $30 million, the Debtor will be unable to meet its most immediate obligations within days of the petition date. The failure to fund payroll, vessel operations, and critical vendor payments would result in a rapid and irreversible deterioration of the Debtor's business, the loss of employee talent, the potential arrest of vessels, and the destruction of going-concern value that would be available to creditors in a successful reorganization.

43. The Debtor, with the assistance of KHP (James Calloway, Managing Director; 300 Park Avenue, 12th Floor, New York, New York 10022), canvassed the market for DIP financing. KHP contacted potential DIP lenders, including both existing members of the prepetition syndicate and third-party financial institutions, and solicited proposals for debtor-in-possession financing. After evaluating the proposals received, the Debtor and KHP determined that the terms offered by Nordbank and Triton represent the best available terms for the estate, taking into account the overall cost of the facility, the quantum of financing available, the conditions and milestones imposed, and the adequate protection package required. KHP's engagement letter provides for a monthly advisory fee of $250,000, a completion fee of $4.5 million upon execution of a restructuring support agreement (the "RSA"), and a filing fee of $2.0 million upon the filing of a Chapter 11 petition.

44. In addition, Alderney Management Advisors LLC ("Alderney"), located at 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116, has been engaged on a standby basis to provide Chief Restructuring Officer ("CRO") services to the Debtor. The CRO designee is Richard "Rick" Thornberg, a seasoned restructuring professional with extensive experience in the shipping and logistics sector. If the Chapter 11 filing proceeds, Mr. Thornberg would assume the role of CRO and oversee the Debtor's operations, stakeholder negotiations, and DIP compliance throughout the restructuring process.

IV. SUMMARY OF THE DIP FACILITY

45. The following is a summary of the material terms and conditions of the DIP Facility. This summary is qualified in its entirety by reference to the DIP Credit Agreement attached hereto as Exhibit C and the DIP Term Sheet attached hereto as Exhibit D. Capitalized terms used in this Section and not otherwise defined herein have the meanings ascribed to them in the DIP Credit Agreement.

A. DIP Parties

46. The principal parties to the DIP Facility are as follows:

(a) DIP Borrower: Thalassa Americas Inc.

(b) DIP Administrative Agent and Collateral Agent: Nordbank International AG, Bahnhofstrasse 78, 8001 Zürich, Switzerland.

(c) DIP Lenders: Nordbank International AG and Triton Credit Partners LP, 399 Park Avenue, 14th Floor, New York, New York 10022.

47. The Debtor acknowledges that Nordbank serves in a dual capacity as both the Prepetition Agent (holding $137 million of the $685 million Prepetition Credit Agreement) and the proposed DIP Agent and DIP Lender. Similarly, Triton is both a Prepetition Senior Secured Lender (with a $68 million commitment under the Prepetition Credit Agreement) and a proposed DIP Lender. Such dual-role arrangements are common and well-established in Chapter 11 practice and do not, standing alone, raise questions as to the good faith of the DIP Lenders or the propriety of the DIP Facility. The terms of the DIP Facility were negotiated at arm's length with the active participation of the Debtor's independent financial and legal advisors.

B. DIP Commitment and Structure

48. The total commitment under the DIP Facility is $75,000,000. The DIP Facility is structured as a superpriority secured debtor-in-possession credit facility. Upon entry of the Interim Order, up to $30,000,000 of the DIP Facility shall be available for borrowing (the "Interim DIP Amount"). The remaining commitment, up to the full $75,000,000, shall become available upon entry of the Final Order, which the Debtor anticipates will be entered following a hearing to be scheduled approximately forty-five (45) days after the petition date.

C. Interest Rate and Fees

49. Borrowings under the DIP Facility bear interest at a rate of SOFR plus 600 basis points. A commitment fee of 0.50% per annum applies to undrawn commitments under the DIP Facility. In the event of a default under the DIP Credit Agreement, the default rate shall apply, which adds a customary 200 basis points to the otherwise applicable interest rate. Additional customary fees, including a closing fee and an upfront fee, are as specified in the DIP Credit Agreement.

D. Maturity.

50. The DIP Facility matures on the date that is twelve (12) months from the closing date, unless earlier terminated upon the occurrence of certain termination events (including events of default and acceleration events) or upon the effective date of a plan of reorganization confirmed in this Chapter 11 case.

E. Security and Priority

51. The DIP Facility is secured by, and the DIP Obligations are entitled to, the following security interests and priority, as authorized by the applicable provisions of the Bankruptcy Code:

(a) Superpriority Administrative Expense Claims (§ 364(c)(1)): All DIP Obligations shall be entitled to superpriority administrative expense claim status over all other administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, or otherwise, subject only to the Carve-Out (as defined below).

(b) First-Priority Liens on Unencumbered Assets (§ 364(c)(2)): The DIP Lenders shall receive perfected first-priority liens on all assets of the Debtor that are not otherwise subject to valid, perfected, and non-avoidable liens as of the petition date.

(c) Junior Liens on Encumbered Assets (§ 364(c)(3)): The DIP Lenders shall receive perfected junior liens on all assets of the Debtor that are subject to valid, perfected, and non-avoidable liens as of the petition date, to the extent permitted under section 364(c)(3) of the Bankruptcy Code.

(d) First-Priority Priming Liens on Prepetition Collateral (§ 364(d)): The DIP Lenders shall receive perfected first-priority priming liens on all assets of the Debtor, including the Prepetition Collateral, senior to the liens of the Prepetition Senior Secured Lenders and the Prepetition Mezzanine Lender (BMC), subject to the adequate protection provided to such parties as described in Section V of this Motion.

52. The liens and superpriority claims described above are collectively referred to herein as the "DIP Liens" and the "DIP Superpriority Claims," respectively.

F. Conditions Precedent

53. The availability of the DIP Facility is subject to the satisfaction of the following conditions precedent, among others set forth in the DIP Credit Agreement:

(a) entry of the Interim Order (for the initial draw of up to $30 million) or the Final Order (for the full $75 million availability);

(b) execution and delivery of the DIP Credit Agreement and all ancillary loan documents;

(c) satisfaction of customary conditions, including (i) delivery of a 13-week cash flow budget (the "DIP Budget"), (ii) accuracy of all representations and warranties, (iii) delivery of solvency representations, and (iv) the absence of any material adverse change in the Debtor's business, operations, or financial condition;

(d) appointment of Richard Thornberg of Alderney Management Advisors LLC as Chief Restructuring Officer of the Debtor, or implementation of an equivalent oversight mechanism acceptable to the DIP Lenders; and

(e) compliance with all milestones set forth in the DIP Credit Agreement.

G. Milestones.

54. The DIP Credit Agreement imposes the following milestones, each measured from the petition date:

55. Failure to meet any milestone by the applicable deadline constitutes an event of default under the DIP Facility, subject to any applicable cure periods set forth in the DIP Credit Agreement.

H. DIP Budget

56. A detailed 13-week cash flow budget (the "DIP Budget") has been prepared by KHP in consultation with the Debtor's management and the DIP Lenders. The DIP Budget is attached hereto as Exhibit E. The DIP Budget provides for all necessary operating expenses, professional fee reserves, adequate protection payments to the Prepetition Secured Parties, and projected DIP availability over the initial 13-week period.

57. KHP estimates that the total administrative costs of the Chapter 11 case for the first twelve (12) months will be approximately $18.5 million, inclusive of legal fees for the Debtor's counsel, fees of the Debtor's financial advisor, CRO fees and expenses, fees of the U.S. Trustee, fees of the claims and noticing agent, and other customary Chapter 11 administrative costs. These amounts are reflected in the DIP Budget.

58. The DIP Credit Agreement provides that variances from the DIP Budget shall be subject to customary permitted deviations, typically expressed as a percentage variance from budgeted disbursements on a rolling four-week basis, as specified in the DIP Credit Agreement. The Debtor shall update the DIP Budget on a periodic basis in accordance with the requirements of the DIP Credit Agreement and the DIP Orders.

59. The DIP Budget and the factual assumptions underlying it are further described in the Hale Declaration (Exhibit F).

I. Use of DIP Proceeds

60. Proceeds of the DIP Facility shall be used for the following purposes:

(a) working capital and general corporate purposes of the Debtor;

(b) payment of professional fees and administrative costs of the Chapter 11 case;

(d) payment of fees and expenses under the DIP Facility (including interest, commitment fees, closing fees, and agent fees); and

(e) other permitted purposes under the DIP Credit Agreement.

61. Pursuant to the DIP Credit Agreement and the DIP Orders, DIP proceeds shall not be used for certain prohibited purposes, including, without limitation, the investigation of, or prosecution or assertion of claims against, the DIP Lenders or the Prepetition Secured Lenders (including lender liability claims, avoidance actions, or other causes of action), except to the extent funded by the Carve-Out as expressly provided in the DIP Orders.

J. Events of Default

62. The DIP Credit Agreement contains customary events of default, including, without limitation:

(a) failure to make any payment of principal, interest, or fees when due;

(b) material breach of any representation, warranty, or covenant;

(d) dismissal of the Chapter 11 case or conversion of the case to a case under Chapter 7;

(e) appointment of a Chapter 11 trustee or an examiner with expanded powers beyond the scope of section 1106(a)(3) and (4) of the Bankruptcy Code;

(f) entry of an order granting relief from the automatic stay with respect to a material portion of the Prepetition Collateral;

(g) breach of the DIP Budget beyond the permitted variance thresholds; and

(h) failure to comply with any material term of the DIP Orders.

63. Upon the occurrence and during the continuance of an event of default, the DIP Lenders may, subject to the terms of the DIP Orders (including any applicable notice and remedies periods), exercise their rights and remedies under the DIP Credit Agreement and applicable law.

K. Carve-Out.

64. The DIP Liens and DIP Superpriority Claims shall be subject to a carve-out (the "Carve-Out") for the following obligations:

(a) all statutory fees payable to the United States Trustee pursuant to 28 U.S.C. § 1930(a)(6) and any interest thereon payable under 31 U.S.C. § 3717;

(b) all reasonable fees and expenses incurred by professionals retained by the Debtor and any official committee appointed in the Chapter 11 case (collectively, the "Estate Professionals") pursuant to sections 327, 328, or 1103 of the Bankruptcy Code, in each case to the extent allowed by the Court, subject to a specified aggregate cap to be allocated between (i) amounts incurred prior to the delivery of a Carve-Out Trigger Notice (as defined in the DIP Orders) and (ii) amounts incurred after the delivery of a Carve-Out Trigger Notice (the "Post-Trigger Carve-Out Amount"); and

65. The Carve-Out is designed to ensure that Estate Professionals can be compensated for their services even in the event the DIP Lenders exercise their remedies following an event of default. The specific Carve-Out amounts, triggers, and mechanics are set forth in the proposed DIP Orders attached as Exhibits A and B.

V. ADEQUATE PROTECTION FOR PREPETITION SECURED PARTIES

66. The Debtor seeks authority to use cash collateral and to grant the DIP Liens, including priming liens under section 364(d) of the Bankruptcy Code, in connection with the DIP Facility. As a condition to such use and priming, the Debtor proposes to provide adequate protection to the Prepetition Secured Parties as described below.

A. Prepetition First-Lien Secured Parties

67. The Prepetition Senior Secured Lenders hold approximately $540 million in outstanding claims secured by first-priority liens on the Prepetition Collateral, which includes the 50-vessel fleet (appraised at $623 million as of November 1, 2022 by Drakos Maritime Valuations Ltd.), the Houston terminal lease, all accounts receivable, and equity interests in TAI and 14 vessel-owning special purpose vehicles.

68. As adequate protection for the priming of their liens and the use of cash collateral, the Prepetition Senior Secured Lenders shall receive the following:

(a) Replacement Liens. Pursuant to sections 361 and 363(e) of the Bankruptcy Code, the Prepetition Senior Secured Lenders shall receive valid, binding, enforceable, non-avoidable, and automatically perfected replacement liens on all DIP Collateral (other than avoidance action proceeds), to the same extent, validity, and priority as their prepetition liens, junior only to the DIP Liens and the Carve-Out, and senior to the replacement liens of BMC and all other liens and claims.

(b) Superpriority Administrative Expense Claims. Pursuant to section 507(b) of the Bankruptcy Code, to the extent the adequate protection provided herein proves insufficient to protect the Prepetition Senior Secured Lenders against any diminution in the value of their interests in the Prepetition Collateral (including cash collateral), the Prepetition Senior Secured Lenders shall have allowed superpriority administrative expense claims against the estate, junior only to the DIP Superpriority Claims and the Carve-Out, and senior to all other administrative expense claims.

(c) Current Cash Interest Payments. The Debtor shall make current cash interest payments to the Prepetition Senior Secured Lenders at the non-default contract rate of SOFR plus 375 basis points on the outstanding principal balance of $540 million. As an element of the negotiated adequate protection package, the Prepetition Senior Secured Lenders have agreed to waive the default rate premium of an additional 200 basis points during the pendency of the Chapter 11 case, subject to reservation of rights with respect to such default interest.

(d) Adequate Protection Payments. The Debtor shall make periodic cash adequate protection payments to the Prepetition Agent (for the benefit of the Prepetition Senior Secured Lenders) in such amounts and at such intervals as are specified in the DIP Budget.

(e) Financial Reporting. The Debtor shall deliver to the Prepetition Agent (i) monthly financial statements, (ii) weekly cash flow reports, and (iii) variance reports comparing actual results to the DIP Budget, together with such other reports as may be reasonably requested by the Prepetition Agent.

(f) Insurance Maintenance. The Debtor shall maintain all insurance policies covering the Prepetition Collateral, including hull and machinery insurance, protection and indemnity ("P&I") insurance, and property insurance, in each case in amounts and with carriers reasonably satisfactory to the Prepetition Agent. The Debtor's insurance program is brokered through Seaward & Beckett Insurance Brokers Ltd., 71 Fenchurch Street, London EC3M 4BS, United Kingdom (Ian Beckett, principal broker).

(g) Adequate Protection Equity Cushion. The Drakos Maritime Valuations Ltd. fleet appraisal of $623 million, as compared to the Prepetition Senior Secured Lenders' claims of $540 million, provides an equity cushion of approximately $83 million, or approximately 15.4% of the senior secured claims. This equity cushion provides an additional layer of adequate protection for the Prepetition Senior Secured Lenders against any diminution in value.

B. Prepetition Second-Lien Secured Party (BMC)

69. BMC holds approximately $112.3 million in Mezzanine Notes secured by second-priority liens on the Prepetition Collateral, junior to the liens securing the Prepetition Credit Agreement and subject to the Intercreditor Agreement. As adequate protection for the priming of its junior liens and the use of cash collateral, BMC shall receive the following:

(a) Replacement Liens. BMC shall receive valid, binding, enforceable, non-avoidable, and automatically perfected replacement liens on all DIP Collateral, junior to (i) the DIP Liens, (ii) the Carve-Out, and (iii) the replacement liens of the Prepetition Senior Secured Lenders.

(b) Superpriority Administrative Expense Claims. Pursuant to section 507(b) of the Bankruptcy Code, to the extent the adequate protection provided herein proves insufficient, BMC shall have allowed superpriority administrative expense claims against the estate, junior to (i) the DIP Superpriority Claims, (ii) the Carve-Out, and (iii) the superpriority administrative expense claims of the Prepetition Senior Secured Lenders.

70. BMC is not entitled to current cash interest payments as a component of adequate protection. The Mezzanine Notes are structured on a PIK toggle basis, and since the second quarter of 2022, all interest on the Mezzanine Notes has been paid entirely in kind. Accordingly, BMC has not received, and does not expect to receive, current cash interest under the terms of the Mezzanine Notes, and there is no basis for an adequate protection payment of current cash interest to BMC.

71. BMC's interest is further adequately protected by the equity cushion in the Prepetition Collateral. At KHP's midpoint enterprise value of $610 million, after satisfaction of the senior secured claims of $540 million, there remains approximately $70 million of value available to BMC, resulting in an estimated recovery of approximately 62.3% on the $112.3 million in Mezzanine Notes. While this recovery does not represent full payment, it reflects substantial value preservation that would be further enhanced by a successful reorganization. The DIP Facility is designed to facilitate such a reorganization, and accordingly, the adequate protection provided to BMC is appropriate in light of BMC's position in the capital structure and the overall benefits of the DIP Facility to the estate.

C. Intercreditor Agreement Considerations

72. The Intercreditor Agreement dated June 15, 2019, between Nordbank (as first-lien agent) and BMC governs the relative priorities, rights, and remedies of the Prepetition Senior Secured Lenders and BMC with respect to the Prepetition Collateral. The DIP Facility and the priming lien arrangements described herein are consistent with the provisions of the Intercreditor Agreement, which contemplate and generally permit the priming of second-lien interests in connection with debtor-in-possession financing obtained during a bankruptcy case.

73. To the extent the Intercreditor Agreement requires BMC's consent for the priming of its liens or the grant of adequate protection in the form described herein, such consent has been sought in the course of the Debtor's negotiations with BMC and its counsel at Kellner & Foss LLP. The Debtor reserves the right to address any issues arising under the Intercreditor Agreement at the Interim Hearing or the Final Hearing.

VI. LEGAL BASIS FOR THE REQUESTED RELIEF

A. Authority to Obtain Postpetition Financing Under Section 364

74. Section 364 of the Bankruptcy Code governs the obtaining of credit by a debtor in possession. The Debtor seeks authority to obtain credit under sections 364(c) and 364(d) of the Bankruptcy Code, as follows:

(a) Section 364(c)(1) authorizes the Court to approve credit that is entitled to superpriority administrative expense status, having priority over any or all administrative expenses of the kind specified in sections 503(b) or 507(b) of the Bankruptcy Code.

(b) Section 364(c)(2) authorizes the Court to approve credit secured by a lien on property of the estate that is not otherwise subject to a lien.

(c) Section 364(c)(3) authorizes the Court to approve credit secured by a junior lien on property of the estate that is subject to a lien.

(d) Section 364(d)(1) authorizes the Court to approve credit secured by a senior or equal lien on property of the estate that is already subject to a lien, provided that (i) the debtor is unable to obtain credit otherwise and (ii) there is adequate protection of the interest of the existing lienholder.

75. The Debtor has been unable to obtain unsecured credit allowable under section 364(a) or (b) of the Bankruptcy Code. KHP conducted a thorough market canvass and determined that no financial institution was willing to extend unsecured credit to the Debtor in the context of a Chapter 11 filing. The Debtor has also been unable to obtain credit with merely junior lien status under section 364(c)(3). The DIP Lenders have made clear that they will not extend credit without the superpriority administrative expense claim status, the first-priority liens on unencumbered assets, and the first-priority priming liens on the Prepetition Collateral, all as described herein.

76. The terms of the DIP Facility — including the interest rate of SOFR plus 600 basis points, the commitment fee of 0.50% on undrawn amounts, the total commitment of $75 million, and the 12-month maturity — are commercially reasonable and the product of arm's-length negotiation among the Debtor and the DIP Lenders, each of which was represented by independent counsel and financial advisors. KHP's market canvass confirmed that no alternative DIP financing is available on more favorable terms. Accordingly, the DIP Facility satisfies the requirements of sections 364(c) and 364(d) of the Bankruptcy Code.

B. The Business Judgment Standard

77. Courts apply a deferential business judgment standard in evaluating a debtor's decision to obtain postpetition financing under section 364 of the Bankruptcy Code. Under this standard, the Court need not find that the DIP Facility represents the optimal outcome for the estate, but rather that the debtor's decision to enter into the DIP Facility reflects a reasonable exercise of business judgment. See In re Ames Dep't Stores, Inc., 115 B.R. 34, 40 (Bankr. S.D.N.Y. 1990) ("[T]he court need not determine that the proposed agreement is the best available option for the estate, but rather that the agreement falls within the range of reasonableness."); see also In re Farmland Indus., Inc., 294 B.R. 855, 881 (Bankr. W.D. Mo. 2003).

78. The Debtor's decision to enter into the DIP Facility reflects a reasonable exercise of business judgment based on the following considerations:

(a) the critical and immediate need for liquidity to fund ongoing operations and avoid the irreparable destruction of going-concern value;

(b) the absence of alternative financing on better terms, as confirmed by KHP's market canvass;

(c) the commercially reasonable nature of the DIP Facility's pricing and terms, including the interest rate, fees, maturity, and covenants;

(d) the adequate protection afforded to the Prepetition Secured Parties, which satisfies the requirements of sections 361 and 363(e) of the Bankruptcy Code; and

(e) the DIP Facility's central role in facilitating a successful reorganization that will maximize the value of the Debtor's estate for the benefit of all stakeholders.

C. Adequate Protection Under Sections 361 and 363(e)

79. Section 363(e) of the Bankruptcy Code provides that, on request of an entity that has an interest in property used, sold, or leased by the debtor, the Court shall prohibit or condition such use, sale, or lease as is necessary to provide adequate protection of such interest. Section 361 sets forth the permissible forms of adequate protection, including (a) requiring the debtor to make cash payments to the extent the stay results in a decrease in the value of the entity's interest, (b) providing an additional or replacement lien, and (c) granting other relief that will result in the indubitable equivalent of the entity's interest.

80. The adequate protection package described in Section V of this Motion — consisting of replacement liens, superpriority administrative expense claims, current cash interest payments (to the Prepetition Senior Secured Lenders), adequate protection cash payments, financial reporting, insurance maintenance, and the equity cushion — satisfies the requirements of sections 361 and 363(e).

81. In particular, the fleet's appraised value of $623 million, as compared to the Prepetition Senior Secured Lenders' claims of $540 million, provides a substantial equity cushion of approximately $83 million (or approximately 15.4%). Courts routinely recognize equity cushions of this magnitude as sufficient to provide adequate protection. See In re Cont'l Airlines, Inc., 91 F.3d 553, 560 (3d Cir. 1996) (equity cushion is a recognized form of adequate protection); In re Elmira Litho, Inc., 174 B.R. 892, 901 (Bankr. W.D.N.Y. 1994) (equity cushion of 20% deemed sufficient).

82. Moreover, the DIP Facility itself will preserve and potentially enhance the value of the Prepetition Collateral by enabling the Debtor to continue operating its business as a going concern. Without the DIP Facility, the Debtor would be forced to cease operations, resulting in the forced liquidation of fleet assets at fire-sale prices — an outcome that would cause far greater harm to the Prepetition Secured Parties than the priming authorized by this Motion.

D. Authority to Use Cash Collateral Under Section 363(c)(2)

83. Section 363(c)(2) of the Bankruptcy Code provides that a debtor in possession may not use, sell, or lease cash collateral unless (A) each entity that has an interest in such cash collateral consents or (B) the Court, after notice and a hearing, authorizes such use, sale, or lease in accordance with the provisions of section 363. The Debtor seeks authority to use cash collateral (including receivables, cash proceeds, and other cash equivalents constituting proceeds of the Prepetition Collateral) in the ordinary course of its business, subject to the DIP Budget and the adequate protection provisions described in Section V.

84. The Debtor is informed and believes that the Prepetition Secured Parties consent to the use of cash collateral on the terms set forth in the proposed DIP Orders. To the extent such consent is not obtained as to any party, the Debtor respectfully requests that the Court authorize the use of cash collateral pursuant to section 363(c)(2)(B) of the Bankruptcy Code, in light of the adequate protection provided herein.

E. Interim Approval Under Bankruptcy Rule 4001(c)

85. Bankruptcy Rule 4001(c)(2) provides that the Court may authorize the obtaining of credit on an interim basis, after notice and a hearing, pending the final hearing on a motion for postpetition financing. Interim approval may be granted to the extent necessary to avoid immediate and irreparable harm to the estate pending the final hearing. See Fed. R. Bankr. P. 4001(c)(2).

86. The Debtor seeks interim approval for borrowings of up to $30 million under the DIP Facility, representing the Interim DIP Amount. As set forth in the Hale Declaration and the DIP Budget, the Debtor requires immediate access to at least $30 million in new financing to fund its operations, meet payroll, maintain the Houston terminal, pay critical vendors, and preserve going-concern value during the period between the petition date and the Final Hearing. Without interim DIP borrowings, the Debtor will suffer immediate and irreparable harm that cannot be remedied through alternative means.

87. The Debtor requests that the Final Hearing be scheduled approximately forty-five (45) days after the petition date, which will afford the Prepetition Secured Parties, any official committee of unsecured creditors, the United States Trustee, and all other parties in interest a full and fair opportunity to be heard on the terms of the DIP Facility before the Court enters the Final Order authorizing the full $75 million commitment.

F. Section 105(a) Authority

88. Section 105(a) of the Bankruptcy Code provides that "[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title." 11 U.S.C. § 105(a). The relief requested in this Motion is necessary and appropriate to carry out the provisions of the Bankruptcy Code, including the fundamental objective of facilitating the Debtor's reorganization under Chapter 11 while preserving value for the benefit of all stakeholders. Accordingly, to the extent any of the relief sought herein is not expressly authorized by another provision of the Bankruptcy Code, the Court's authority under section 105(a) provides an independent basis for such relief.

VII. THE PROPOSED DIP ORDERS

A. Interim DIP Order

89. The Debtor requests that the Court enter the proposed Interim Order, substantially in the form attached hereto as Exhibit A, which, among other things:

(a) authorizes the Debtor to borrow up to $30 million under the DIP Facility on an interim basis;

(b) grants superpriority administrative expense status to the DIP Obligations under section 364(c)(1) of the Bankruptcy Code, subject to the Carve-Out;

(c) grants the DIP Lenders first-priority priming liens on all Prepetition Collateral under section 364(d) of the Bankruptcy Code;

(d) grants the DIP Lenders first-priority liens on all unencumbered assets of the Debtor under section 364(c)(2) of the Bankruptcy Code;

(e) grants the DIP Lenders junior liens on assets of the Debtor that are subject to certain valid, perfected, and non-avoidable senior permitted liens under section 364(c)(3) of the Bankruptcy Code;

(f) authorizes the Debtor to use cash collateral in the ordinary course of its business, subject to the DIP Budget and the adequate protection provisions set forth in the Interim Order;

DRAFT — PREPARED ON STANDBY BASIS; NEVER FILED PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION
DEBTOR'S MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS (I) AUTHORIZING THE DEBTOR TO OBTAIN POSTPETITION FINANCING PURSUANT TO 11 U.S.C. §§ 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), AND 364(d), (II) GRANTING SUPERPRIORITY ADMINISTRATIVE EXPENSE STATUS TO THE DIP OBLIGATIONS, (III) GRANTING LIENS AND SECURITY INTERESTS TO THE DIP LENDERS, (IV) AUTHORIZING THE USE OF CASH COLLATERAL, (V) PROVIDING ADEQUATE PROTECTION TO PREPETITION SECURED PARTIES, AND (VI) SCHEDULING A FINAL HEARING
Draft Date: January 18, 2023 Status: DRAFT — PREPARED ON STANDBY BASIS; NEVER FILED C&H Matter No. 1044-00003
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I. PRELIMINARY STATEMENT
Thalassa Americas Inc. ("TAI" or the "Debtor"), a Delaware C-Corporation and wholly-owned subsidiary of Thalassa Shipping & Logistics Société Anonyme ("TSL"), a Greek société anonyme headquartered at 42 Akti Miaouli, Piraeus 18538, Greece, by and through its proposed counsel, Calderwood & Harkness LLP, respectfully submits this motion (the "Motion") pursuant to sections 105, 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d) of title 11 of the United States Code, 11 U.S.C. §§ 101–1532 (the "Bankruptcy Code"), Rules 2002, 4001, and 9014 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and the Local Rules of the United States Bankruptcy Court for the Southern District of Texas (the "Local Rules"), for entry of interim and final orders (the "Interim Order" and the "Final Order," respectively, and together, the "DIP Orders") authorizing the Debtor to obtain postpetition financing, granting superpriority administrative expense status and liens to the DIP Lenders (as defined below), authorizing the use of cash collateral, providing adequate protection to prepetition secured parties, and scheduling a final hearing. In support of this Motion, the Debtor respectfully represents as follows:
1. TAI maintains its principal office at 1400 McKinney Street, Suite 2200, Houston, Texas 77010. TAI's federal employer identification number is 84-3291057. TAI's registered agent is Capitol Registered Agents LLC, 1209 Orange Street, Wilmington, Delaware 19801. TAI operates the U.S.-side shipping operations of TSL's global enterprise, including Houston terminal operations, Jones Act–exempt foreign-flag vessel scheduling, and domestic freight brokerage services. For the fiscal year ended December 31, 2021, TAI generated revenue of approximately $312 million. For the fiscal year ended December 31, 2022, TAI's estimated revenue is approximately $198 million, reflecting a decline of approximately 36.5% attributable to the severe downturn in global dry-bulk and containerized freight markets. TAI employs approximately 680 individuals in the United States; TSL's global headcount is approximately 4,200.
2. By this Motion, the Debtor seeks authority to enter into a $75 million superpriority debtor-in-possession credit facility (the "DIP Facility") with Nordbank International AG ("Nordbank"), as DIP administrative agent and collateral agent, and Triton Credit Partners LP ("Triton"), as DIP lender (collectively, the "DIP Lenders"), on the terms and conditions set forth in the DIP Credit Agreement attached hereto as Exhibit C and the DIP Term Sheet attached hereto as Exhibit D. The DIP Facility is essential to fund the Debtor's ongoing operations, preserve going-concern value, pay employees, maintain the fleet, satisfy critical vendor and supplier obligations, fund professional fees and Chapter 11 administrative costs, and facilitate the restructuring process.
3. The consequences of failing to obtain the DIP Facility cannot be overstated. Without immediate access to postpetition financing, the Debtor will be unable to operate its business, resulting in irreparable harm to the estate, its creditors, its approximately 680 employees, and the broader communities served by the Debtor's shipping and logistics operations. The Debtor's unrestricted cash position has deteriorated to critically low levels, and absent interim DIP borrowings, the Debtor will be unable to meet its most basic obligations — including payroll, bunker fuel purchases, port fees, and vessel maintenance — within days of the petition date.
4. At the interim hearing (the "Interim Hearing"), the Debtor requests approval of up to $30 million of the $75 million DIP Facility, which amount is necessary to fund the Debtor's operations during the period between the petition date and the final hearing on this Motion (the "Final Hearing"). The Debtor requests that the Final Hearing be scheduled approximately forty-five (45) days after the petition date, at which time the Debtor will seek approval of the full $75 million DIP Facility and entry of the Final Order.
5. In addition to the DIP financing itself, this Motion seeks authority to use cash collateral in the ordinary course of business, subject to the DIP Budget (as defined below), and to provide adequate protection to the prepetition secured parties — namely, the syndicate of senior secured lenders (the "Prepetition Senior Secured Lenders") holding approximately $540 million in first-priority secured claims, and Dralvecen Mezzanine Capital LLC ("BMC"), which holds approximately $112.3 million in second-priority mezzanine notes — in the form of replacement liens, superpriority administrative expense claims, current cash interest payments (to the Prepetition Senior Secured Lenders), ongoing financial reporting, and maintenance of insurance coverage.
6. The factual representations contained herein are supported by the Declaration of Marcus Hale, President of Thalassa Americas Inc., in Support of First-Day Motions, dated January 14, 2023 (the "Hale Declaration"), a copy of which is attached hereto as Exhibit F and incorporated herein by reference.
II. JURISDICTION AND VENUE
7. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409. TAI maintains its principal office at 1400 McKinney Street, Suite 2200, Houston, Texas 77010, which is located within the Southern District of Texas.
8. The statutory bases for the relief sought herein are sections 105(a), 361, 362, 363, 364(c)(1), 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code, Rules 2002, 4001, and 9014 of the Bankruptcy Rules, and the Local Rules of the United States Bankruptcy Court for the Southern District of Texas.
III. BACKGROUND
A. The Debtor's Business and Corporate Structure
9. TSL was founded in 1987 by the Kostandinos family and is a Greek-headquartered private shipping and logistics conglomerate. TSL owns and operates a fleet of 50 vessels, consisting of 38 dry-bulk carriers (comprising 10 Capesize vessels, 14 Panamax vessels, and 14 Supramax vessels) and 12 sub-Panamax container vessels. TSL provides integrated port-to-door logistics services across the Mediterranean, Black Sea, and transatlantic trade lanes and operates terminal facilities at Piraeus, Thessaloniki, and Houston.
10. As of November 1, 2022, TSL's fleet was appraised at $623 million by Drakos Maritime Valuations Ltd. (Captain Nikos Drakos, principal appraiser), a summary of which is attached hereto as Exhibit G. This represents a decline of $268 million, or approximately 30.1%, from the prior appraisal of $891 million as of January 2022, reflecting the precipitous decline in vessel values across the dry-bulk and container shipping sectors.
11. TAI is a wholly-owned Delaware C-Corporation subsidiary of TSL. TAI was incorporated in 2018 for the purpose of consolidating TSL's U.S.-side operations, including Houston terminal operations, scheduling of Jones Act–exempt foreign-flag vessels serving U.S. ports, and domestic freight brokerage. TAI's operations are integral to TSL's transatlantic trade lane, serving as the primary interface between TSL's fleet and its U.S.-based customers, port facilities, and regulatory counterparts.
12. TSL's equity is held as follows: Dimitrios Kostandinos (Chairman of the Board) holds 62%, and Elena Kostandinos-Pavlou (Vice Chairwoman of the Board) holds 18%, for a combined Kostandinos family interest of 80%. These interests are held through KFO Holdings Société Anonyme ("KFO"), a Greek société anonyme registered at 42 Akti Miaouli, Piraeus 18538, Greece — the same address as TSL's headquarters. The remaining 20% of TSL's equity is held by non-family holders.
13. TSL's key officers include Georgios Andreadis (Chief Executive Officer), Irini Dalakoura (Chief Financial Officer), and Stavros Papageorgiou (General Counsel — Greece). TAI's key officers include Marcus Hale (President), Diana Restrepo (Vice President, Finance), and Jonathan Kurtz (Vice President, Operations).
14. For the fiscal year ended December 31, 2021, TSL generated consolidated revenue of approximately €1.42 billion. For the fiscal year ended December 31, 2022, TSL's estimated consolidated revenue is approximately €987 million, reflecting a decline of approximately 30.5% year-over-year, driven by the severe downturn in global shipping markets described in further detail below.
B. The Prepetition Capital Structure
15. As described below, as of September 30, 2022, the Debtor and its parent are parties to a complex, multi-tranche capital structure with total indebtedness of approximately $847.3 million across secured, mezzanine, unsecured, intercompany, trade, and other obligations.
1. Senior Secured Credit Facility.
16. On June 15, 2019, TSL (as borrower, with TAI as co-borrower for the U.S. Tranche) entered into a senior secured credit agreement (the "Prepetition Credit Agreement") with Nordbank International AG, as administrative agent and collateral agent (in such capacity, the "Prepetition Agent"), and a syndicate of nine lenders (collectively, the "Prepetition Senior Secured Lenders"). Nordbank International AG's principal office is located at Bahnhofstrasse 78, 8001 Zürich, Switzerland, and its senior relationship officer for this account is Henrik Lüdemann, Managing Director.
17. The Prepetition Credit Agreement provides for a total commitment of $685 million across the following lenders:
18. The Prepetition Credit Agreement is structured in three tranches:
(a) Term Loan A ("TLA"): $400 million, amortizing with quarterly principal payments of $10 million.
(b) Revolving Credit Facility: $200 million total commitment.
(c) U.S. Tranche (Term Loan B, "TLB"): $85 million, non-amortizing with a bullet maturity. TAI is a co-borrower on this tranche.
19. The Prepetition Credit Agreement matures on June 15, 2024. Interest accrues at a rate of SOFR plus 375 basis points, with a default rate of an additional 200 basis points.
20. As of September 30, 2022, the outstanding balances under the Prepetition Credit Agreement are as follows:
(a) TLA: $400 million less thirteen quarterly amortization payments of $10 million each (covering the period from the third quarter of 2019 through the third quarter of 2022), resulting in an outstanding balance of $270 million.
(b) Revolving Credit Facility: $185 million drawn of the $200 million commitment, with $15 million remaining undrawn.
(c) TLB (U.S. Tranche): $85 million (full bullet amount outstanding).
(d) Total Outstanding: $270 million + $185 million + $85 million = $540 million.
21. The CUSIP number for the TLA is 87265BAA7.
22. The Prepetition Credit Agreement is secured by first-priority liens on (a) 38 dry-bulk carriers, (b) 12 container vessels, (c) the Houston terminal lease, (d) all accounts receivable of the borrowers, and (e) equity interests in TAI and 14 vessel-owning special purpose vehicles (collectively, the "Prepetition Collateral").
2. Mezzanine Notes.
23. Concurrent with the Prepetition Credit Agreement, on June 15, 2019, TSL issued mezzanine notes (the "Mezzanine Notes") to Dralvecen Mezzanine Capital LLC ("BMC"), 600 Lexington Avenue, 22nd Floor, New York, New York 10022. BMC's senior relationship officer for this account is Rebecca Marsh, Senior Partner. BMC is represented by Kellner & Foss LLP, 1185 Avenue of the Americas, 30th Floor, New York, New York 10036 (Theodore Kellner, Lead Partner; Samantha Ong, Associate).
24. The Mezzanine Notes bear interest at a rate of 11.5% on a PIK toggle basis. Since the second quarter of 2022, interest on the Mezzanine Notes has been paid entirely in kind (i.e., capitalized to principal). As of September 30, 2022, the outstanding principal balance of the Mezzanine Notes is approximately $112.3 million, consisting of the original $100 million principal amount plus approximately $12.3 million in PIK interest capitalized through September 30, 2022. The Mezzanine Notes mature on December 15, 2024.
25. The Mezzanine Notes are secured by second-priority liens on the same collateral that secures the Prepetition Credit Agreement. The relative priorities, rights, and remedies of the Prepetition Senior Secured Lenders and BMC are governed by an Intercreditor Agreement dated June 15, 2019, between Nordbank (as first-lien agent) and BMC (the "Intercreditor Agreement").
3. Unsecured Notes.
26. On March 1, 2020, TSL issued $50 million in aggregate principal amount of unsecured notes (the "Unsecured Notes"), bearing interest at 8.25% per annum, payable semi-annually on June 1 and December 1. The CUSIP number for the Unsecured Notes is 87265BAB5. The Unsecured Notes mature on March 1, 2025. Garrison Trust Company, 100 Wall Street, 16th Floor, New York, New York 10005, serves as indenture trustee under the indenture governing the Unsecured Notes.
27. An informal group of holders of the Unsecured Notes (the "Informal Noteholder Group") has been formed and is represented by Ashford, Brightmoor Group & McKay PC, 299 Park Avenue, 18th Floor, New York, New York 10171 (Carolyn Brightmoor Group, Lead Partner; Robert Mancini, Associate).
28. On December 1, 2022, TSL failed to make the semi-annual interest payment on the Unsecured Notes in the amount of $2,062,500 (calculated as $50,000,000 × 8.25% ÷ 2). The 30-day cure period under the Unsecured Notes indenture expired on January 1, 2023, and no payment was made. As a result, an event of default has occurred and is continuing under the Unsecured Notes indenture.
4. Intercompany Note.
29. TAI owes TSL the sum of $76.4 million under a subordinated intercompany promissory note bearing interest at 5.0% per annum (the "Intercompany Note"). The Intercompany Note is subordinated to all external indebtedness of TAI.
5. Trade Creditors.
30. As of September 30, 2022, TAI had approximately $38.7 million in outstanding trade payables. The largest trade creditor is Olympian Fuel & Supply SA, a bunker fuel supplier located at 7 Iroon Polytechniou, Piraeus 18535, Greece, which is owed approximately $9.2 million.
6. Total Debt Summary.
31. The following table summarizes the Debtor's consolidated indebtedness as of September 30, 2022:
C. Events Precipitating the Chapter 11 Filing
32. The Debtor's financial distress is directly attributable to the severe and sustained downturn in global shipping markets during 2022. The Baltic Dry Index ("BDI"), the principal benchmark for dry-bulk shipping rates, declined approximately 58% between January 2022 and September 2022, reflecting a dramatic contraction in demand for dry-bulk shipping capacity.
33. TSL's average daily time-charter equivalent ("TCE") — the key measure of revenue per vessel per day after deducting voyage expenses — fell from $24,800 per day for the full fiscal year 2021 to $11,200 per day for the third quarter of 2022, a decline of approximately 54.8%. This precipitous decline in TCE rates has severely impaired the cash-generating capacity of the fleet and, by extension, TAI's ability to service its debt obligations and fund its operations.
34. On September 15, 2022, the Debtor breached the Minimum Liquidity Covenant under the Prepetition Credit Agreement. Specifically, unrestricted cash fell to $27.3 million against a minimum requirement of $40 million, representing a shortfall of $12.7 million. This breach triggered a cascade of additional default-related consequences under the Prepetition Credit Agreement.
35. As of September 30, 2022, the Debtor was in breach of two additional financial maintenance covenants under the Prepetition Credit Agreement:
(a) Maximum Net Leverage Ratio: The covenant requires a Maximum Net Leverage Ratio of 5.50x. As of September 30, 2022, the actual Net Leverage Ratio was 7.82x (Net Debt of $770.9 million ÷ LTM EBITDA of $98.6 million).
(b) Minimum Interest Coverage Ratio: The covenant requires a Minimum Interest Coverage Ratio of 2.50x. As of September 30, 2022, the actual Interest Coverage Ratio was 1.74x (LTM EBITDA of $98.6 million ÷ LTM Interest Expense of $56.7 million).
36. On October 10, 2022, following extensive negotiations between the Debtor, TSL, and the Prepetition Agent, the Debtor entered into a Forbearance Agreement with the Prepetition Senior Secured Lender syndicate (with Nordbank acting as agent), pursuant to which the lenders agreed to a 90-day standstill period through January 8, 2023 (the "Forbearance Agreement"). The Forbearance Agreement required, inter alia, that the Debtor engage financial and legal restructuring advisors, commence an assessment of strategic alternatives, and provide enhanced financial reporting to the lender syndicate.
37. An Ad Hoc Group of Senior Secured Lenders (the "Ad Hoc Group") was formed in August 2022, comprising Nordbank International AG, Harborstone Bank plc, Triton Credit Partners LP, and Continental Maritime Lending GmbH, holding collectively $372 million in commitments, representing approximately 54.3% of the $685 million Prepetition Credit Agreement. The Ad Hoc Group is represented by Whitfield, Crane & Burgess LLP, 51 West 52nd Street, 38th Floor, New York, New York 10019 (Graham Whitfield III, Lead Partner; Priya Nandakumar, Senior Associate). The Ad Hoc Group has retained Draycott Advisory Group LLC, 520 Madison Avenue, 20th Floor, New York, New York 10022 (Vanessa Chow, Partner), as its financial advisor.
38. On January 8, 2023, the Forbearance Agreement was extended for a period of sixty (60) additional days, through March 8, 2023 (the "Extended Forbearance Period"), to permit the Debtor to continue negotiations with its key stakeholders and, if necessary, to prepare for a Chapter 11 filing on terms that would maximize value for all constituencies.
39. Kensington Veltrian Partners LLC ("KHP"), the Debtor's financial advisor, has estimated the enterprise value of the TSL/TAI combined business at $580 million to $640 million, with a midpoint of $610 million. KHP's analysis indicates that the fulcrum security in the capital structure is the Mezzanine Notes held by BMC. At the midpoint enterprise value of $610 million, the estimated recovery on the Mezzanine Notes is approximately 62.3%, calculated as ($610 million − $540 million in senior secured claims) ÷ $112.3 million in Mezzanine Notes. KHP's waterfall analysis further indicates that the estimated recovery for holders of the Unsecured Notes in a Chapter 11 scenario is approximately 8 to 14 cents on the dollar.
D. The Debtor's Immediate Need for Postpetition Financing
40. As of the anticipated petition date, TAI's unrestricted cash has fallen to critically low levels. As noted above, unrestricted cash was $27.3 million as of September 15, 2022, and has continued to decline since that date as the Debtor has continued to fund operations during the forbearance period with diminishing revenue and constrained working capital. The Debtor's liquidity position is unsustainable absent immediate access to new financing.
41. TAI requires immediate access to postpetition liquidity for the following purposes, among others:
(a) funding daily vessel operations, including bunker fuel purchases, port fees, pilotage, stevedoring, and logistics services;
(b) meeting biweekly payroll obligations for approximately 680 U.S. employees;
(c) maintaining the Houston terminal operations, including lease payments, equipment maintenance, and security;
(d) paying critical vendors and suppliers whose continued cooperation is necessary for the Debtor's ongoing operations;
(e) funding professional fees and Chapter 11 administrative costs, which KHP estimates at approximately $18.5 million for the first twelve (12) months of the case; and
(f) preserving going-concern value and avoiding the forced liquidation of fleet assets, which would result in material value destruction for all stakeholders.
42. Without interim DIP borrowings of at least $30 million, the Debtor will be unable to meet its most immediate obligations within days of the petition date. The failure to fund payroll, vessel operations, and critical vendor payments would result in a rapid and irreversible deterioration of the Debtor's business, the loss of employee talent, the potential arrest of vessels, and the destruction of going-concern value that would be available to creditors in a successful reorganization.
43. The Debtor, with the assistance of KHP (James Calloway, Managing Director; 300 Park Avenue, 12th Floor, New York, New York 10022), canvassed the market for DIP financing. KHP contacted potential DIP lenders, including both existing members of the prepetition syndicate and third-party financial institutions, and solicited proposals for debtor-in-possession financing. After evaluating the proposals received, the Debtor and KHP determined that the terms offered by Nordbank and Triton represent the best available terms for the estate, taking into account the overall cost of the facility, the quantum of financing available, the conditions and milestones imposed, and the adequate protection package required. KHP's engagement letter provides for a monthly advisory fee of $250,000, a completion fee of $4.5 million upon execution of a restructuring support agreement (the "RSA"), and a filing fee of $2.0 million upon the filing of a Chapter 11 petition.
44. In addition, Alderney Management Advisors LLC ("Alderney"), located at 200 Clarendon Street, 45th Floor, Boston, Massachusetts 02116, has been engaged on a standby basis to provide Chief Restructuring Officer ("CRO") services to the Debtor. The CRO designee is Richard "Rick" Thornberg, a seasoned restructuring professional with extensive experience in the shipping and logistics sector. If the Chapter 11 filing proceeds, Mr. Thornberg would assume the role of CRO and oversee the Debtor's operations, stakeholder negotiations, and DIP compliance throughout the restructuring process.
IV. SUMMARY OF THE DIP FACILITY
45. The following is a summary of the material terms and conditions of the DIP Facility. This summary is qualified in its entirety by reference to the DIP Credit Agreement attached hereto as Exhibit C and the DIP Term Sheet attached hereto as Exhibit D. Capitalized terms used in this Section and not otherwise defined herein have the meanings ascribed to them in the DIP Credit Agreement.
A. DIP Parties
46. The principal parties to the DIP Facility are as follows:
(a) DIP Borrower: Thalassa Americas Inc.
(b) DIP Administrative Agent and Collateral Agent: Nordbank International AG, Bahnhofstrasse 78, 8001 Zürich, Switzerland.
(c) DIP Lenders: Nordbank International AG and Triton Credit Partners LP, 399 Park Avenue, 14th Floor, New York, New York 10022.
47. The Debtor acknowledges that Nordbank serves in a dual capacity as both the Prepetition Agent (holding $137 million of the $685 million Prepetition Credit Agreement) and the proposed DIP Agent and DIP Lender. Similarly, Triton is both a Prepetition Senior Secured Lender (with a $68 million commitment under the Prepetition Credit Agreement) and a proposed DIP Lender. Such dual-role arrangements are common and well-established in Chapter 11 practice and do not, standing alone, raise questions as to the good faith of the DIP Lenders or the propriety of the DIP Facility. The terms of the DIP Facility were negotiated at arm's length with the active participation of the Debtor's independent financial and legal advisors.
B. DIP Commitment and Structure
48. The total commitment under the DIP Facility is $75,000,000. The DIP Facility is structured as a superpriority secured debtor-in-possession credit facility. Upon entry of the Interim Order, up to $30,000,000 of the DIP Facility shall be available for borrowing (the "Interim DIP Amount"). The remaining commitment, up to the full $75,000,000, shall become available upon entry of the Final Order, which the Debtor anticipates will be entered following a hearing to be scheduled approximately forty-five (45) days after the petition date.
C. Interest Rate and Fees
49. Borrowings under the DIP Facility bear interest at a rate of SOFR plus 600 basis points. A commitment fee of 0.50% per annum applies to undrawn commitments under the DIP Facility. In the event of a default under the DIP Credit Agreement, the default rate shall apply, which adds a customary 200 basis points to the otherwise applicable interest rate. Additional customary fees, including a closing fee and an upfront fee, are as specified in the DIP Credit Agreement.
D. Maturity.
50. The DIP Facility matures on the date that is twelve (12) months from the closing date, unless earlier terminated upon the occurrence of certain termination events (including events of default and acceleration events) or upon the effective date of a plan of reorganization confirmed in this Chapter 11 case.
E. Security and Priority
51. The DIP Facility is secured by, and the DIP Obligations are entitled to, the following security interests and priority, as authorized by the applicable provisions of the Bankruptcy Code:
(a) Superpriority Administrative Expense Claims (§ 364(c)(1)): All DIP Obligations shall be entitled to superpriority administrative expense claim status over all other administrative expenses of the kind specified in sections 503(b) and 507(b) of the Bankruptcy Code, or otherwise, subject only to the Carve-Out (as defined below).
(b) First-Priority Liens on Unencumbered Assets (§ 364(c)(2)): The DIP Lenders shall receive perfected first-priority liens on all assets of the Debtor that are not otherwise subject to valid, perfected, and non-avoidable liens as of the petition date.
(c) Junior Liens on Encumbered Assets (§ 364(c)(3)): The DIP Lenders shall receive perfected junior liens on all assets of the Debtor that are subject to valid, perfected, and non-avoidable liens as of the petition date, to the extent permitted under section 364(c)(3) of the Bankruptcy Code.
(d) First-Priority Priming Liens on Prepetition Collateral (§ 364(d)): The DIP Lenders shall receive perfected first-priority priming liens on all assets of the Debtor, including the Prepetition Collateral, senior to the liens of the Prepetition Senior Secured Lenders and the Prepetition Mezzanine Lender (BMC), subject to the adequate protection provided to such parties as described in Section V of this Motion.
52. The liens and superpriority claims described above are collectively referred to herein as the "DIP Liens" and the "DIP Superpriority Claims," respectively.
F. Conditions Precedent
53. The availability of the DIP Facility is subject to the satisfaction of the following conditions precedent, among others set forth in the DIP Credit Agreement:
(a) entry of the Interim Order (for the initial draw of up to $30 million) or the Final Order (for the full $75 million availability);
(b) execution and delivery of the DIP Credit Agreement and all ancillary loan documents;
(c) satisfaction of customary conditions, including (i) delivery of a 13-week cash flow budget (the "DIP Budget"), (ii) accuracy of all representations and warranties, (iii) delivery of solvency representations, and (iv) the absence of any material adverse change in the Debtor's business, operations, or financial condition;
(d) appointment of Richard Thornberg of Alderney Management Advisors LLC as Chief Restructuring Officer of the Debtor, or implementation of an equivalent oversight mechanism acceptable to the DIP Lenders; and
(e) compliance with all milestones set forth in the DIP Credit Agreement.
G. Milestones.
54. The DIP Credit Agreement imposes the following milestones, each measured from the petition date:
55. Failure to meet any milestone by the applicable deadline constitutes an event of default under the DIP Facility, subject to any applicable cure periods set forth in the DIP Credit Agreement.
H. DIP Budget
56. A detailed 13-week cash flow budget (the "DIP Budget") has been prepared by KHP in consultation with the Debtor's management and the DIP Lenders. The DIP Budget is attached hereto as Exhibit E. The DIP Budget provides for all necessary operating expenses, professional fee reserves, adequate protection payments to the Prepetition Secured Parties, and projected DIP availability over the initial 13-week period.
57. KHP estimates that the total administrative costs of the Chapter 11 case for the first twelve (12) months will be approximately $18.5 million, inclusive of legal fees for the Debtor's counsel, fees of the Debtor's financial advisor, CRO fees and expenses, fees of the U.S. Trustee, fees of the claims and noticing agent, and other customary Chapter 11 administrative costs. These amounts are reflected in the DIP Budget.
58. The DIP Credit Agreement provides that variances from the DIP Budget shall be subject to customary permitted deviations, typically expressed as a percentage variance from budgeted disbursements on a rolling four-week basis, as specified in the DIP Credit Agreement. The Debtor shall update the DIP Budget on a periodic basis in accordance with the requirements of the DIP Credit Agreement and the DIP Orders.
59. The DIP Budget and the factual assumptions underlying it are further described in the Hale Declaration (Exhibit F).
I. Use of DIP Proceeds
60. Proceeds of the DIP Facility shall be used for the following purposes:
(a) working capital and general corporate purposes of the Debtor;
(b) payment of professional fees and administrative costs of the Chapter 11 case;
(c) payment of adequate protection obligations to the Prepetition Secured Parties as authorized by the DIP Orders;
(d) payment of fees and expenses under the DIP Facility (including interest, commitment fees, closing fees, and agent fees); and
(e) other permitted purposes under the DIP Credit Agreement.
61. Pursuant to the DIP Credit Agreement and the DIP Orders, DIP proceeds shall not be used for certain prohibited purposes, including, without limitation, the investigation of, or prosecution or assertion of claims against, the DIP Lenders or the Prepetition Secured Lenders (including lender liability claims, avoidance actions, or other causes of action), except to the extent funded by the Carve-Out as expressly provided in the DIP Orders.
J. Events of Default
62. The DIP Credit Agreement contains customary events of default, including, without limitation:
(a) failure to make any payment of principal, interest, or fees when due;
(b) material breach of any representation, warranty, or covenant;
(c) failure to achieve the milestones set forth in the DIP Credit Agreement within the prescribed deadlines;
(d) dismissal of the Chapter 11 case or conversion of the case to a case under Chapter 7;
(e) appointment of a Chapter 11 trustee or an examiner with expanded powers beyond the scope of section 1106(a)(3) and (4) of the Bankruptcy Code;
(f) entry of an order granting relief from the automatic stay with respect to a material portion of the Prepetition Collateral;
(g) breach of the DIP Budget beyond the permitted variance thresholds; and
(h) failure to comply with any material term of the DIP Orders.
63. Upon the occurrence and during the continuance of an event of default, the DIP Lenders may, subject to the terms of the DIP Orders (including any applicable notice and remedies periods), exercise their rights and remedies under the DIP Credit Agreement and applicable law.
K. Carve-Out.
64. The DIP Liens and DIP Superpriority Claims shall be subject to a carve-out (the "Carve-Out") for the following obligations:
(a) all statutory fees payable to the United States Trustee pursuant to 28 U.S.C. § 1930(a)(6) and any interest thereon payable under 31 U.S.C. § 3717;
(b) all reasonable fees and expenses incurred by professionals retained by the Debtor and any official committee appointed in the Chapter 11 case (collectively, the "Estate Professionals") pursuant to sections 327, 328, or 1103 of the Bankruptcy Code, in each case to the extent allowed by the Court, subject to a specified aggregate cap to be allocated between (i) amounts incurred prior to the delivery of a Carve-Out Trigger Notice (as defined in the DIP Orders) and (ii) amounts incurred after the delivery of a Carve-Out Trigger Notice (the "Post-Trigger Carve-Out Amount"); and
(c) all fees payable to the clerk of the Bankruptcy Court.
65. The Carve-Out is designed to ensure that Estate Professionals can be compensated for their services even in the event the DIP Lenders exercise their remedies following an event of default. The specific Carve-Out amounts, triggers, and mechanics are set forth in the proposed DIP Orders attached as Exhibits A and B.
V. ADEQUATE PROTECTION FOR PREPETITION SECURED PARTIES
66. The Debtor seeks authority to use cash collateral and to grant the DIP Liens, including priming liens under section 364(d) of the Bankruptcy Code, in connection with the DIP Facility. As a condition to such use and priming, the Debtor proposes to provide adequate protection to the Prepetition Secured Parties as described below.
A. Prepetition First-Lien Secured Parties
67. The Prepetition Senior Secured Lenders hold approximately $540 million in outstanding claims secured by first-priority liens on the Prepetition Collateral, which includes the 50-vessel fleet (appraised at $623 million as of November 1, 2022 by Drakos Maritime Valuations Ltd.), the Houston terminal lease, all accounts receivable, and equity interests in TAI and 14 vessel-owning special purpose vehicles.
68. As adequate protection for the priming of their liens and the use of cash collateral, the Prepetition Senior Secured Lenders shall receive the following:
(a) Replacement Liens. Pursuant to sections 361 and 363(e) of the Bankruptcy Code, the Prepetition Senior Secured Lenders shall receive valid, binding, enforceable, non-avoidable, and automatically perfected replacement liens on all DIP Collateral (other than avoidance action proceeds), to the same extent, validity, and priority as their prepetition liens, junior only to the DIP Liens and the Carve-Out, and senior to the replacement liens of BMC and all other liens and claims.
(b) Superpriority Administrative Expense Claims. Pursuant to section 507(b) of the Bankruptcy Code, to the extent the adequate protection provided herein proves insufficient to protect the Prepetition Senior Secured Lenders against any diminution in the value of their interests in the Prepetition Collateral (including cash collateral), the Prepetition Senior Secured Lenders shall have allowed superpriority administrative expense claims against the estate, junior only to the DIP Superpriority Claims and the Carve-Out, and senior to all other administrative expense claims.
(c) Current Cash Interest Payments. The Debtor shall make current cash interest payments to the Prepetition Senior Secured Lenders at the non-default contract rate of SOFR plus 375 basis points on the outstanding principal balance of $540 million. As an element of the negotiated adequate protection package, the Prepetition Senior Secured Lenders have agreed to waive the default rate premium of an additional 200 basis points during the pendency of the Chapter 11 case, subject to reservation of rights with respect to such default interest.
(d) Adequate Protection Payments. The Debtor shall make periodic cash adequate protection payments to the Prepetition Agent (for the benefit of the Prepetition Senior Secured Lenders) in such amounts and at such intervals as are specified in the DIP Budget.
(e) Financial Reporting. The Debtor shall deliver to the Prepetition Agent (i) monthly financial statements, (ii) weekly cash flow reports, and (iii) variance reports comparing actual results to the DIP Budget, together with such other reports as may be reasonably requested by the Prepetition Agent.
(f) Insurance Maintenance. The Debtor shall maintain all insurance policies covering the Prepetition Collateral, including hull and machinery insurance, protection and indemnity ("P&I") insurance, and property insurance, in each case in amounts and with carriers reasonably satisfactory to the Prepetition Agent. The Debtor's insurance program is brokered through Seaward & Beckett Insurance Brokers Ltd., 71 Fenchurch Street, London EC3M 4BS, United Kingdom (Ian Beckett, principal broker).
(g) Adequate Protection Equity Cushion. The Drakos Maritime Valuations Ltd. fleet appraisal of $623 million, as compared to the Prepetition Senior Secured Lenders' claims of $540 million, provides an equity cushion of approximately $83 million, or approximately 15.4% of the senior secured claims. This equity cushion provides an additional layer of adequate protection for the Prepetition Senior Secured Lenders against any diminution in value.
B. Prepetition Second-Lien Secured Party (BMC)
69. BMC holds approximately $112.3 million in Mezzanine Notes secured by second-priority liens on the Prepetition Collateral, junior to the liens securing the Prepetition Credit Agreement and subject to the Intercreditor Agreement. As adequate protection for the priming of its junior liens and the use of cash collateral, BMC shall receive the following:
(a) Replacement Liens. BMC shall receive valid, binding, enforceable, non-avoidable, and automatically perfected replacement liens on all DIP Collateral, junior to (i) the DIP Liens, (ii) the Carve-Out, and (iii) the replacement liens of the Prepetition Senior Secured Lenders.
(b) Superpriority Administrative Expense Claims. Pursuant to section 507(b) of the Bankruptcy Code, to the extent the adequate protection provided herein proves insufficient, BMC shall have allowed superpriority administrative expense claims against the estate, junior to (i) the DIP Superpriority Claims, (ii) the Carve-Out, and (iii) the superpriority administrative expense claims of the Prepetition Senior Secured Lenders.
70. BMC is not entitled to current cash interest payments as a component of adequate protection. The Mezzanine Notes are structured on a PIK toggle basis, and since the second quarter of 2022, all interest on the Mezzanine Notes has been paid entirely in kind. Accordingly, BMC has not received, and does not expect to receive, current cash interest under the terms of the Mezzanine Notes, and there is no basis for an adequate protection payment of current cash interest to BMC.
71. BMC's interest is further adequately protected by the equity cushion in the Prepetition Collateral. At KHP's midpoint enterprise value of $610 million, after satisfaction of the senior secured claims of $540 million, there remains approximately $70 million of value available to BMC, resulting in an estimated recovery of approximately 62.3% on the $112.3 million in Mezzanine Notes. While this recovery does not represent full payment, it reflects substantial value preservation that would be further enhanced by a successful reorganization. The DIP Facility is designed to facilitate such a reorganization, and accordingly, the adequate protection provided to BMC is appropriate in light of BMC's position in the capital structure and the overall benefits of the DIP Facility to the estate.
C. Intercreditor Agreement Considerations
72. The Intercreditor Agreement dated June 15, 2019, between Nordbank (as first-lien agent) and BMC governs the relative priorities, rights, and remedies of the Prepetition Senior Secured Lenders and BMC with respect to the Prepetition Collateral. The DIP Facility and the priming lien arrangements described herein are consistent with the provisions of the Intercreditor Agreement, which contemplate and generally permit the priming of second-lien interests in connection with debtor-in-possession financing obtained during a bankruptcy case.
73. To the extent the Intercreditor Agreement requires BMC's consent for the priming of its liens or the grant of adequate protection in the form described herein, such consent has been sought in the course of the Debtor's negotiations with BMC and its counsel at Kellner & Foss LLP. The Debtor reserves the right to address any issues arising under the Intercreditor Agreement at the Interim Hearing or the Final Hearing.
VI. LEGAL BASIS FOR THE REQUESTED RELIEF
A. Authority to Obtain Postpetition Financing Under Section 364
74. Section 364 of the Bankruptcy Code governs the obtaining of credit by a debtor in possession. The Debtor seeks authority to obtain credit under sections 364(c) and 364(d) of the Bankruptcy Code, as follows:
(a) Section 364(c)(1) authorizes the Court to approve credit that is entitled to superpriority administrative expense status, having priority over any or all administrative expenses of the kind specified in sections 503(b) or 507(b) of the Bankruptcy Code.
(b) Section 364(c)(2) authorizes the Court to approve credit secured by a lien on property of the estate that is not otherwise subject to a lien.
(c) Section 364(c)(3) authorizes the Court to approve credit secured by a junior lien on property of the estate that is subject to a lien.
(d) Section 364(d)(1) authorizes the Court to approve credit secured by a senior or equal lien on property of the estate that is already subject to a lien, provided that (i) the debtor is unable to obtain credit otherwise and (ii) there is adequate protection of the interest of the existing lienholder.
75. The Debtor has been unable to obtain unsecured credit allowable under section 364(a) or (b) of the Bankruptcy Code. KHP conducted a thorough market canvass and determined that no financial institution was willing to extend unsecured credit to the Debtor in the context of a Chapter 11 filing. The Debtor has also been unable to obtain credit with merely junior lien status under section 364(c)(3). The DIP Lenders have made clear that they will not extend credit without the superpriority administrative expense claim status, the first-priority liens on unencumbered assets, and the first-priority priming liens on the Prepetition Collateral, all as described herein.
76. The terms of the DIP Facility — including the interest rate of SOFR plus 600 basis points, the commitment fee of 0.50% on undrawn amounts, the total commitment of $75 million, and the 12-month maturity — are commercially reasonable and the product of arm's-length negotiation among the Debtor and the DIP Lenders, each of which was represented by independent counsel and financial advisors. KHP's market canvass confirmed that no alternative DIP financing is available on more favorable terms. Accordingly, the DIP Facility satisfies the requirements of sections 364(c) and 364(d) of the Bankruptcy Code.
B. The Business Judgment Standard
77. Courts apply a deferential business judgment standard in evaluating a debtor's decision to obtain postpetition financing under section 364 of the Bankruptcy Code. Under this standard, the Court need not find that the DIP Facility represents the optimal outcome for the estate, but rather that the debtor's decision to enter into the DIP Facility reflects a reasonable exercise of business judgment. See In re Ames Dep't Stores, Inc., 115 B.R. 34, 40 (Bankr. S.D.N.Y. 1990) ("[T]he court need not determine that the proposed agreement is the best available option for the estate, but rather that the agreement falls within the range of reasonableness."); see also In re Farmland Indus., Inc., 294 B.R. 855, 881 (Bankr. W.D. Mo. 2003).
78. The Debtor's decision to enter into the DIP Facility reflects a reasonable exercise of business judgment based on the following considerations:
(a) the critical and immediate need for liquidity to fund ongoing operations and avoid the irreparable destruction of going-concern value;
(b) the absence of alternative financing on better terms, as confirmed by KHP's market canvass;
(c) the commercially reasonable nature of the DIP Facility's pricing and terms, including the interest rate, fees, maturity, and covenants;
(d) the adequate protection afforded to the Prepetition Secured Parties, which satisfies the requirements of sections 361 and 363(e) of the Bankruptcy Code; and
(e) the DIP Facility's central role in facilitating a successful reorganization that will maximize the value of the Debtor's estate for the benefit of all stakeholders.
C. Adequate Protection Under Sections 361 and 363(e)
79. Section 363(e) of the Bankruptcy Code provides that, on request of an entity that has an interest in property used, sold, or leased by the debtor, the Court shall prohibit or condition such use, sale, or lease as is necessary to provide adequate protection of such interest. Section 361 sets forth the permissible forms of adequate protection, including (a) requiring the debtor to make cash payments to the extent the stay results in a decrease in the value of the entity's interest, (b) providing an additional or replacement lien, and (c) granting other relief that will result in the indubitable equivalent of the entity's interest.
80. The adequate protection package described in Section V of this Motion — consisting of replacement liens, superpriority administrative expense claims, current cash interest payments (to the Prepetition Senior Secured Lenders), adequate protection cash payments, financial reporting, insurance maintenance, and the equity cushion — satisfies the requirements of sections 361 and 363(e).
81. In particular, the fleet's appraised value of $623 million, as compared to the Prepetition Senior Secured Lenders' claims of $540 million, provides a substantial equity cushion of approximately $83 million (or approximately 15.4%). Courts routinely recognize equity cushions of this magnitude as sufficient to provide adequate protection. See In re Cont'l Airlines, Inc., 91 F.3d 553, 560 (3d Cir. 1996) (equity cushion is a recognized form of adequate protection); In re Elmira Litho, Inc., 174 B.R. 892, 901 (Bankr. W.D.N.Y. 1994) (equity cushion of 20% deemed sufficient).
82. Moreover, the DIP Facility itself will preserve and potentially enhance the value of the Prepetition Collateral by enabling the Debtor to continue operating its business as a going concern. Without the DIP Facility, the Debtor would be forced to cease operations, resulting in the forced liquidation of fleet assets at fire-sale prices — an outcome that would cause far greater harm to the Prepetition Secured Parties than the priming authorized by this Motion.
D. Authority to Use Cash Collateral Under Section 363(c)(2)
83. Section 363(c)(2) of the Bankruptcy Code provides that a debtor in possession may not use, sell, or lease cash collateral unless (A) each entity that has an interest in such cash collateral consents or (B) the Court, after notice and a hearing, authorizes such use, sale, or lease in accordance with the provisions of section 363. The Debtor seeks authority to use cash collateral (including receivables, cash proceeds, and other cash equivalents constituting proceeds of the Prepetition Collateral) in the ordinary course of its business, subject to the DIP Budget and the adequate protection provisions described in Section V.
84. The Debtor is informed and believes that the Prepetition Secured Parties consent to the use of cash collateral on the terms set forth in the proposed DIP Orders. To the extent such consent is not obtained as to any party, the Debtor respectfully requests that the Court authorize the use of cash collateral pursuant to section 363(c)(2)(B) of the Bankruptcy Code, in light of the adequate protection provided herein.
E. Interim Approval Under Bankruptcy Rule 4001(c)
85. Bankruptcy Rule 4001(c)(2) provides that the Court may authorize the obtaining of credit on an interim basis, after notice and a hearing, pending the final hearing on a motion for postpetition financing. Interim approval may be granted to the extent necessary to avoid immediate and irreparable harm to the estate pending the final hearing. See Fed. R. Bankr. P. 4001(c)(2).
86. The Debtor seeks interim approval for borrowings of up to $30 million under the DIP Facility, representing the Interim DIP Amount. As set forth in the Hale Declaration and the DIP Budget, the Debtor requires immediate access to at least $30 million in new financing to fund its operations, meet payroll, maintain the Houston terminal, pay critical vendors, and preserve going-concern value during the period between the petition date and the Final Hearing. Without interim DIP borrowings, the Debtor will suffer immediate and irreparable harm that cannot be remedied through alternative means.
87. The Debtor requests that the Final Hearing be scheduled approximately forty-five (45) days after the petition date, which will afford the Prepetition Secured Parties, any official committee of unsecured creditors, the United States Trustee, and all other parties in interest a full and fair opportunity to be heard on the terms of the DIP Facility before the Court enters the Final Order authorizing the full $75 million commitment.
F. Section 105(a) Authority
88. Section 105(a) of the Bankruptcy Code provides that "[t]he court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title." 11 U.S.C. § 105(a). The relief requested in this Motion is necessary and appropriate to carry out the provisions of the Bankruptcy Code, including the fundamental objective of facilitating the Debtor's reorganization under Chapter 11 while preserving value for the benefit of all stakeholders. Accordingly, to the extent any of the relief sought herein is not expressly authorized by another provision of the Bankruptcy Code, the Court's authority under section 105(a) provides an independent basis for such relief.
VII. THE PROPOSED DIP ORDERS
A. Interim DIP Order
89. The Debtor requests that the Court enter the proposed Interim Order, substantially in the form attached hereto as Exhibit A, which, among other things:
(a) authorizes the Debtor to borrow up to $30 million under the DIP Facility on an interim basis;
(b) grants superpriority administrative expense status to the DIP Obligations under section 364(c)(1) of the Bankruptcy Code, subject to the Carve-Out;
(c) grants the DIP Lenders first-priority priming liens on all Prepetition Collateral under section 364(d) of the Bankruptcy Code;
(d) grants the DIP Lenders first-priority liens on all unencumbered assets of the Debtor under section 364(c)(2) of the Bankruptcy Code;
(e) grants the DIP Lenders junior liens on assets of the Debtor that are subject to certain valid, perfected, and non-avoidable senior permitted liens under section 364(c)(3) of the Bankruptcy Code;
(f) authorizes the Debtor to use cash collateral in the ordinary course of its business, subject to the DIP Budget and the adequate protection provisions set forth in the Interim Order;
(g) provides adequate protection to the Prepetition Senior Secured Lenders and to BMC (as the Prepetition Second-Lien Secured Party), as described in Section V of this Motion;
(h) establishes the Carve-Out for the benefit of Estate Professionals and the United States Trustee;
(i) provides that the DIP Obligations shall not be subject to any counterclaim, defense, setoff, reduction, subordination, recharacterization, or recoupment of any kind;
(j) schedules the Final Hearing on approximately the forty-fifth (45th) day after the petition date;
(k) provides customary stipulations regarding the validity, perfection, priority, and enforceability of the Prepetition Liens and the Prepetition Obligations, subject to the rights of parties in interest (including any official committee appointed in the case) to challenge such stipulations within the challenge period established in the Final Order; and
(l) grants such other and further relief as the Court deems just and proper.
B. Final DIP Order
90. At the Final Hearing, the Debtor will request that the Court enter the proposed Final Order, substantially in the form attached hereto as Exhibit B, which, among other things:
(a) authorizes the Debtor to borrow up to the full $75 million DIP Facility commitment on a final basis;
(b) confirms all provisions of the Interim Order on a final basis;
(c) provides additional protections, milestones, reporting requirements, and covenants as set forth in the DIP Credit Agreement and the Final Order;
(d) establishes a challenge period for any challenges to the validity, priority, enforceability, or extent of the Prepetition Liens and the Prepetition Obligations, which challenge period shall be the later of (i) sixty (60) days from the petition date or (ii) seventy-five (75) days from the formation of an Official Committee of Unsecured Creditors appointed in the case;
(e) confirms that the DIP Lenders extended credit in good faith within the meaning of section 364(e) of the Bankruptcy Code, thereby entitling the DIP Lenders to the protections afforded by section 364(e), including protection of their liens and superpriority claims even if the DIP Orders are subsequently modified, amended, stayed, vacated, or reversed on appeal; and
(f) grants such other and further relief as the Court deems just and proper.
VIII. GOOD FAITH UNDER SECTION 364(e)
91. Section 364(e) of the Bankruptcy Code provides that:
"The reversal or modification on appeal of an authorization under this section to obtain credit or incur debt, or of a grant under this section of a priority or a lien, does not affect the validity of any debt so incurred, or any priority or lien so granted, to an entity that extended such credit in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and the incurring of such debt, or the granting of such priority or lien, were stayed pending appeal."
92. The DIP Facility is the product of extensive arm's-length, good-faith negotiations among the Debtor, Nordbank, and Triton, each of which was advised by independent counsel and financial advisors. The negotiations were conducted over a period of several weeks, during which the parties exchanged multiple term sheet proposals, engaged in detailed diligence, and negotiated the terms of the DIP Credit Agreement and the DIP Orders. The Debtor's financial advisor, KHP, participated actively in these negotiations and provided independent analysis of the DIP Facility terms, confirming that the terms are commercially reasonable and within the range of DIP financing available in the current market for similarly situated debtors.
93. The DIP Lenders are extending credit in good faith within the meaning of section 364(e) of the Bankruptcy Code. The fact that Nordbank and Triton hold prepetition secured positions ($137 million and $68 million, respectively, under the Prepetition Credit Agreement) does not disqualify them from serving as DIP Lenders or undermine the good-faith character of their participation in the DIP Facility. Dual-role arrangements — in which prepetition secured lenders also serve as DIP lenders — are common, well-established, and routinely approved in Chapter 11 practice. See, e.g., In re Lyondell Chem. Co., 402 B.R. 571, 588 (Bankr. S.D.N.Y. 2009) (approving DIP facility where prepetition agent served as DIP agent); In re Dune Energy, Inc., 575 B.R. 622, 631 (Bankr. W.D. Tex. 2017) (noting that prepetition lenders frequently provide DIP financing and that such arrangements are not inherently inequitable).
94. No DIP Lender has engaged in any inequitable conduct in connection with the negotiation, documentation, or proposed funding of the DIP Facility. Accordingly, the DIP Lenders are entitled to the protections of section 364(e), and the Debtor respectfully requests that the Court make an express finding of good faith in the DIP Orders.
IX. NOTICE
95. Notice of this Motion has been given (or will be given upon the filing of this Motion) to the following parties or their counsel:
(a) The Office of the United States Trustee for the Southern District of Texas;
(b) Nordbank International AG (as Prepetition Agent), Bahnhofstrasse 78, 8001 Zürich, Switzerland, Attn: Henrik Lüdemann, Managing Director;
(c) Whitfield, Crane & Burgess LLP (counsel to the Ad Hoc Group of Senior Secured Lenders), 51 West 52nd Street, 38th Floor, New York, New York 10019, Attn: Graham Whitfield III;
(d) Kellner & Foss LLP (counsel to Dralvecen Mezzanine Capital LLC), 1185 Avenue of the Americas, 30th Floor, New York, New York 10036, Attn: Theodore Kellner;
(e) Ashford, Brightmoor Group & McKay PC (counsel to the Informal Noteholder Group), 299 Park Avenue, 18th Floor, New York, New York 10171, Attn: Carolyn Brightmoor Group;
(f) Garrison Trust Company (indenture trustee for the Unsecured Notes), 100 Wall Street, 16th Floor, New York, New York 10005;
(g) All parties listed on the Debtor's list of twenty (20) largest unsecured creditors;
(h) Dralvecen Mezzanine Capital LLC, 600 Lexington Avenue, 22nd Floor, New York, New York 10022, Attn: Rebecca Marsh, Senior Partner;
(i) KFO Holdings SA, 42 Akti Miaouli, Piraeus 18538, Greece;
(j) The Internal Revenue Service;
(k) Any official committee of unsecured creditors appointed in this case; and
(l) Such other parties as may be required by the Bankruptcy Code, the Bankruptcy Rules, and the Local Rules of this Court.
96. The Debtor submits that the foregoing notice is sufficient under the circumstances and respectfully submits that no other or further notice of this Motion need be given.
X. CONCLUSION AND PRAYER FOR RELIEF
WHEREFORE, the Debtor respectfully requests that this Court enter:
1. An Interim Order, substantially in the form attached hereto as Exhibit A, authorizing the Debtor to (a) obtain postpetition financing in an aggregate amount up to $30,000,000 on an interim basis under the DIP Facility, (b) grant superpriority administrative expense status and DIP Liens to the DIP Lenders, (c) use cash collateral in the ordinary course of business, (d) provide adequate protection to the Prepetition Senior Secured Lenders and BMC (as the Prepetition Second-Lien Secured Party), and (e) schedule a Final Hearing on the Motion approximately forty-five (45) days after the petition date;
2. A Final Order, substantially in the form attached hereto as Exhibit B, authorizing the Debtor to (a) obtain postpetition financing in the full aggregate amount of $75,000,000 under the DIP Facility on a final basis, (b) confirm on a final basis the superpriority administrative expense status and DIP Liens, (c) authorize the use of cash collateral on a final basis, and (d) provide adequate protection to the Prepetition Senior Secured Lenders and BMC on a final basis; and
3. Such other and further relief as the Court deems just and proper.
XI. SIGNATURE BLOCK AND VERIFICATION
Dated: January 18, 2023 New York, New York
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Nathaniel Bower (Responsible Partner)
Amy Chesterton (Lead Associate) Nathan Ikeda (Working Associate)
780 Third Avenue New York, New York 10017 Telephone: (212) 555-7800 Facsimile: (212) 555-7801
Proposed Counsel to the Debtor, Thalassa Americas Inc.
C&H

DRAFT — PREPARED ON STANDBY BASIS; NEVER FILED PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

I. PRELIMINARY STATEMENT

II. JURISDICTION AND VENUE

III. BACKGROUND

IV. SUMMARY OF THE DIP FACILITY

V. ADEQUATE PROTECTION FOR PREPETITION SECURED PARTIES

VI. LEGAL BASIS FOR THE REQUESTED RELIEF

VII. THE PROPOSED DIP ORDERS

Record

Parties

Dates

Amounts