1006-00002 · Crestline Packaging Solutions LLC · Professional Retention

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UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

APPLICATION OF DEBTORS FOR ENTRY OF AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF CALDERWOOD & HARKNESS LLP AS COUNSEL TO THE DEBTORS AND DEBTORS IN POSSESSION, NUNC PRO TUNC TO THE PETITION DATE

Crestline Packaging Solutions LLC ("Crestline" or "CPS") and CPS Holdings Inc. ("CPS Holdings" and, together with Crestline, the "Debtors"), as debtors and debtors in possession in the above-captioned Chapter 11 cases, hereby submit this Application (this "Application") for entry of an order, substantially in the form attached hereto as Exhibit B (the "Proposed Order"), authorizing the employment and retention of Calderwood & Harkness LLP ("C&H" or the "Firm") as general bankruptcy counsel to the Debtors and Debtors in Possession, nunc pro tunc to the Petition Date (as defined below), pursuant to sections 327(a), 328(a), and 330 of title 11 of the United States Code (the "Bankruptcy Code"), Rules 2014(a) and 2016 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and the applicable local rules of this Court. In support of this Application, the Debtors respectfully represent as follows:

I. PRELIMINARY STATEMENT

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

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

3. C&H has been advising the Debtors since the pre-petition period in connection with a range of critical restructuring matters, including, without limitation: (a) the analysis and evaluation of restructuring alternatives available to the Debtors; (b) the negotiation of the Forbearance Agreement executed on May 18, 2022 (the "Forbearance Agreement") with Ridgeline National Bank, N.A. ("Ridgeline"), as administrative agent, and consenting first lien lenders; (c) the negotiation and execution of the Restructuring Support Agreement dated July 8, 2022 (the "RSA") among the Debtors, Thornfield Capital Partners LP, and the members of the Ad Hoc Group of First Lien Lenders and the Ad Hoc Group of Second Lien Noteholders; (d) the preparation and filing of the Chapter 11 petitions, first day motions, and all related pleadings; (e) the preparation of the prepackaged Chapter 11 plan of reorganization (Dkt. 47) and the related disclosure statement (Dkt. 48); and (f) the prosecution of all proceedings in these Chapter 11 cases.

4. Calderwood & Harkness LLP maintains its principal offices at 30 Rockefeller Plaza, New York, New York 10112, and maintains a regional office in Ohio at 127 Public Square, Suite 4100, Cleveland, Ohio 44114. The Firm's Bankruptcy & Restructuring practice group is one of the largest and most experienced in the country, and the attorneys assigned to this engagement possess deep expertise in the areas of bankruptcy, restructuring, corporate finance, and related disciplines. As more fully described in the Declaration of Colette Whitman attached hereto as Exhibit A (the "Whitman Declaration"), C&H is well qualified to serve as general bankruptcy counsel to the Debtors in these Chapter 11 cases.

II. JURISDICTION AND VENUE

5. This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and 1334 and the general order of reference from the United States District Court for the Northern District of Ohio. This Application constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(A), as it concerns the administration of these Chapter 11 estates. Venue of these Chapter 11 cases and this Application is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409.

III. BACKGROUND

A. The Debtors' Business

6. Crestline Packaging Solutions LLC is an Ohio-headquartered manufacturer of specialty chemical packaging and industrial containment products. The Company's product portfolio includes high-density polyethylene ("HDPE") drums, intermediate bulk containers ("IBCs"), steel pails, and specialty containment vessels designed for the safe storage, handling, and transport of hazardous and non-hazardous chemicals, petrochemical products, and agricultural inputs. Crestline's customer base is concentrated in the chemical, petrochemical, and agricultural sectors, with longstanding relationships with several Fortune 500 chemical companies and regional agricultural cooperatives across the Midwest and Gulf Coast.

7. As of the Petition Date, Crestline operates four manufacturing plants located in three states:

(a) Akron, Ohio (Headquarters & Plant 1): 4710 Industrial Corridor Drive, Akron, Ohio 44308 — the Company's corporate headquarters and its largest manufacturing facility, which houses the primary HDPE drum and IBC production lines, as well as the Company's principal administrative, finance, and sales functions;

(b) Evansville, Indiana (Plant 2): 2255 Commerce Parkway, Evansville, Indiana 47725 — a facility dedicated to steel pail manufacturing and secondary packaging operations, serving customers in the southern Indiana, Kentucky, and Tennessee markets;

(c) Baton Rouge, Louisiana (Plant 3): 8100 River Road, Baton Rouge, Louisiana 70820 — a facility focused on specialty containment vessels and large-format IBCs, strategically located to serve the concentration of petrochemical refining operations along the Gulf Coast; and

(d) Ravenna, Ohio (Plant 4): 1480 State Route 59, Ravenna, Ohio 44266 — a secondary production facility specializing in custom drum fabrication and serving as overflow capacity for Plant 1.

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

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

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

B. The Debtors' Capital Structure

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

12. The First Lien Credit Agreement (the "First Lien Credit Agreement") was entered into on October 13, 2017, by and among Crestline, as borrower, CPS Holdings, as guarantor, the lenders party thereto, and Ridgeline National Bank, N.A., as administrative agent and collateral agent. The First Lien Credit Agreement governs both the revolving credit facility and the first lien term loan. The 9.75% Senior Secured Second Lien Notes due 2025 (the "Second Lien Notes") were issued pursuant to an indenture dated as of October 13, 2017 (the "Second Lien Notes Indenture"), by and among Crestline, as issuer, CPS Holdings, as guarantor, and Continental Fiduciary Trust Company, as indenture trustee. Both the first lien and second lien obligations are secured by substantially all of the Debtors' assets, with the Second Lien Notes subordinated to the first lien obligations pursuant to an intercreditor agreement.

C. Events Leading to the Chapter 11 Filing

13. The Debtors' financial difficulties arose from a confluence of adverse market conditions that severely impacted the Company's operating performance beginning in late 2020 and accelerating through 2021 and into the first quarter of 2022. In particular, the Debtors experienced a significant increase in the cost of high-density polyethylene resin — the Company's single largest raw material input — driven by global supply chain disruptions attributable to the COVID-19 pandemic, winter storm disruptions in the Gulf Coast petrochemical corridor, and broader inflationary pressures. These cost increases, combined with contractual limitations on the Debtors' ability to pass through raw material cost increases to customers in a timely manner, resulted in substantial margin compression.

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

15. As of the end of the first quarter of 2022, the Debtors' total net leverage ratio stood at approximately 8.50x (calculated as Total Net Debt of $247.3 million divided by TTM EBITDA of $29.1 million), which was in material breach of the maximum total net leverage ratio covenant of 5.75x set forth in Section 7.11 of the First Lien Credit Agreement. The Debtors' leverage ratio exceeded the covenant threshold by approximately 2.75x, representing a breach of approximately 47.8% above the permitted level.

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

17. Following delivery of the Notice of Default, the Debtors, with the assistance of C&H and Aldersgate Advisory Group LLC, their financial advisor, engaged in intensive negotiations with Ridgeline and the first lien lender group. These negotiations resulted in the execution of a Forbearance Agreement on May 18, 2022, pursuant to which Ridgeline and consenting first lien lenders holding approximately 68% of the outstanding first lien term loan principal agreed to forbear from exercising remedies with respect to the leverage ratio covenant default for an initial period of 45 days, through July 2, 2022. The forbearance period was subsequently extended by amendment to July 15, 2022, to allow additional time for the negotiation of the RSA and completion of plan-related documentation.

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

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

IV. RELIEF REQUESTED

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

V. SCOPE OF SERVICES TO BE PROVIDED

21. Subject to Court approval, C&H is expected to render the following professional services in connection with these Chapter 11 cases, among others:

(a) Advise the Debtors with respect to their rights, powers, and duties as debtors and debtors in possession under Chapter 11 of the Bankruptcy Code, including the fiduciary obligations of the Debtors' officers and directors;

(b) Prepare and file on behalf of the Debtors all necessary and appropriate motions, applications, answers, orders, reports, schedules, and other pleadings and documents in connection with these Chapter 11 cases;

(c) Attend meetings and negotiate with representatives of creditors, equity holders, and other parties in interest, including the Ad Hoc Group of First Lien Lenders, the Ad Hoc Group of Second Lien Noteholders, Ridgeline National Bank, N.A. (in its various capacities), Continental Fiduciary Trust Company, and any official committee appointed in these cases;

(d) Represent the Debtors at all hearings before this Court, including hearings on first day motions, the disclosure statement hearing, the confirmation hearing, and any other court proceedings arising in or related to these Chapter 11 cases;

(e) Advise and assist the Debtors in connection with the prepackaged plan of reorganization (Dkt. 47) and the related disclosure statement (Dkt. 48), including all matters relating to solicitation procedures, disclosure statement preparation and approval, plan confirmation, and plan consummation;

(f) Advise the Debtors concerning the Restructuring Support Agreement dated July 8, 2022, including compliance with the milestones, covenants, and other obligations set forth therein;

(g) Advise the Debtors in connection with the debtor-in-possession financing facility, consisting of a $30.0 million senior secured superpriority revolving credit facility with Ridgeline National Bank, N.A., as DIP agent and lender (the "DIP Facility"), including negotiation, documentation, and compliance with the terms thereof;

(h) Advise the Debtors regarding the assumption, assumption and assignment, or rejection of executory contracts and unexpired leases pursuant to section 365 of the Bankruptcy Code;

(i) Advise the Debtors regarding the exit financing arrangements contemplated by the plan of reorganization, including the new first lien take-back term loan credit agreement in the amount of $12.5 million, bearing interest at SOFR + 550 basis points, with a five-year maturity (the "Exit Facility"), and the negotiation and documentation thereof;

(j) Advise the Debtors regarding corporate governance matters, tax matters, and transactional matters arising in the context of or in connection with these Chapter 11 cases, including matters relating to the Debtors' post-reorganization corporate structure;

(k) Perform all other necessary and appropriate legal services for the Debtors in connection with the prosecution and administration of these Chapter 11 cases.

22. In performing the foregoing services, C&H will coordinate closely with the other professionals retained or to be retained by the Debtors in these cases, including: (a) Kellner & Hartwick LLP, as local co-counsel for the Debtors in the Northern District of Ohio; (b) Aldersgate Advisory Group LLC, as financial advisor to the Debtors; and (c) Dralvecen Reyes Linley CPAs LLP & Associates LLP, as tax and accounting advisor to the Debtors. C&H will use reasonable efforts to avoid unnecessary duplication of services among the Debtors' retained professionals and will endeavor to allocate responsibilities among such professionals in an efficient and cost-effective manner.

VI. C&H'S QUALIFICATIONS

23. Calderwood & Harkness LLP is a full-service law firm with offices in New York, Cleveland, Chicago, Los Angeles, Washington, D.C., and London, among other locations. The Firm's Bankruptcy & Restructuring practice group is nationally recognized for its representation of debtors, secured and unsecured creditors, equity sponsors, acquirors, and other parties in interest in some of the largest and most complex Chapter 11 restructurings in the United States. C&H's attorneys bring to this engagement deep experience across a wide range of industries and restructuring formats, including prepackaged, prearranged, and traditional Chapter 11 proceedings, as well as out-of-court restructurings and distressed M&A transactions.

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

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

VII. PROFESSIONAL COMPENSATION

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

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

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

29. In addition to compensation for professional services, C&H will seek reimbursement of reasonable and necessary out-of-pocket expenses incurred in connection with the prosecution and administration of these Chapter 11 cases, including, without limitation, expenses for travel, lodging, meals, photocopying, facsimile transmission, telephone and other telecommunications charges, messenger and courier services, computerized legal research, filing fees, and similar charges. All such expenses will be subject to disclosure in C&H's interim and final fee applications and approval by the Court.

VIII. PREPETITION RETAINER

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

31. The Retainer was applied to fees and expenses for professional services rendered by C&H in connection with the Debtors' pre-petition restructuring efforts, including the analysis of restructuring alternatives, negotiation of the Forbearance Agreement, preparation for the Chapter 11 filing, and related matters. To the extent that any portion of the Retainer has not been fully applied to pre-petition fees and expenses, such unapplied balance will be held by C&H in its escrow or trust account and will be applied to post-petition fees and expenses as may be allowed by the Court, or returned to the Debtors' estates as may be appropriate and as directed by the Court.

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

IX. DISINTERESTEDNESS AND ABSENCE OF ADVERSE INTEREST

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

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

(a) The Debtors: Crestline Packaging Solutions LLC and CPS Holdings Inc.;

(b) Equity Sponsor: Thornfield Capital Partners LP, including Julian Ashford (Managing Partner) and Rebecca Strand (Deal Partner);

(c) Officers and Directors of the Debtors: Marcus J. Reinholdt (Chief Executive Officer), Dana Kowalski (Chief Financial Officer), and Preston Yee (General Counsel);

(d) Administrative Agent and Collateral Agent: Ridgeline National Bank, N.A. (in its capacities as administrative agent, collateral agent under the First Lien Credit Agreement, and DIP agent under the DIP Facility);

(e) Members of the Ad Hoc Group of First Lien Lenders: Blackmoor Capital Management LLC (Arthur Ng, Portfolio Manager), Greystone Fixed Income Partners LP (Sandra Ibanez, Managing Director), and Wexford Opportunity Fund III LP (Derek Loomis, Principal);

(f) Members of the Ad Hoc Group of Second Lien Noteholders: Fenwick Structured Credit Fund II LP (Liam Driscoll, Portfolio Manager) and Millhaven Capital Advisors LLC (Karen Ostrowski, Managing Director);

(g) Indenture Trustee: Continental Fiduciary Trust Company;

(h) Counsel to Creditor Groups: Hargrove, Mitchell & Saunders LLP (Victoria Kline, Partner, and Thomas Frey, Partner), as counsel to the Ad Hoc Group of First Lien Lenders, and Pemberton & Locke LLP (Raymond Delvecchio, Partner, and Nia Patterson, Partner), as counsel to the Ad Hoc Group of Second Lien Noteholders;

(i) Other Retained Professionals: Kellner & Hartwick LLP (Bruce Tatelman, Partner), as local co-counsel to the Debtors; Aldersgate Advisory Group LLC (Priya Narayanan, Managing Director), as financial advisor to the Debtors; Dralvecen Reyes Linley CPAs LLP & Associates LLP (Catherine Holtz, Partner), as tax and accounting advisor to the Debtors; and Pinnacle Claims Administration LLC, as claims and noticing agent;

(j) Insurance Carrier: Apex Indemnity Insurance Company, as the Debtors' D&O tail insurance carrier;

(k) Key Contract Counterparties: Northstar Polymers Inc. (resin supplier), Meridian Industrial Leasing Corp. (equipment lessor), and Benchmark Real Estate Holdings LLC (warehouse landlord);

(l) The United States Trustee: The United States Trustee for Region 9.

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

36. C&H may, in the ordinary course of its practice, have represented or currently represent certain of the entities identified above in matters that are wholly unrelated to the Debtors or these Chapter 11 cases. Such representations do not create any actual conflict of interest, do not give rise to any disqualifying adverse interest, and do not impair C&H's ability to represent the Debtors' estates faithfully and effectively in these proceedings. None of such representations involve the Debtors or any matter connected with the Debtors' businesses, assets, liabilities, or these Chapter 11 cases.

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

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

X. NUNC PRO TUNC RELIEF

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

40. Since the Petition Date, C&H has been actively and continuously providing essential legal services to the Debtors in connection with the commencement and prosecution of these Chapter 11 cases, including, without limitation, the preparation and filing of the Debtors' Chapter 11 petitions, schedules, and statements of financial affairs; the preparation and prosecution of first day motions and related filings; attendance at the first day hearing; negotiations with the Debtors' principal creditor constituencies and the United States Trustee; and the continued preparation of the prepackaged plan and disclosure statement for submission to the Court.

41. There is ample cause for the approval of C&H's retention on a nunc pro tunc basis. This Application is being filed promptly after the Petition Date and within the time permitted by the Bankruptcy Rules and applicable orders of this Court. The services rendered by C&H since the Petition Date have been and continue to be necessary and essential for the preservation and administration of these estates, and any delay in the provision of such services would have been detrimental to the Debtors and their creditors. Nunc pro tunc approval is routinely granted in circumstances such as these, where counsel has been engaged from the inception of the case and the retention application is filed without undue delay. See, e.g., In re Mushroom Transp. Co., 382 F.3d 325, 339 (3d Cir. 2004); In re Jarvis, 53 F.3d 416, 421 (1st Cir. 1995).

XI. BASIS FOR RELIEF

42. Section 327(a) of the Bankruptcy Code provides that a debtor in possession may, with court approval, employ one or more attorneys that do not hold or represent an interest adverse to the estate and that are disinterested persons, to represent or assist the debtor in possession in carrying out its duties under the Bankruptcy Code. 11 U.S.C. § 327(a). As demonstrated herein and in the Whitman Declaration, C&H satisfies the requirements of section 327(a): C&H does not hold or represent any interest adverse to the estates of the Debtors, and C&H is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code.

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

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

45. Bankruptcy Rule 2014(a) requires that an application for the employment of a professional person be accompanied by a verified statement of the person to be employed, setting forth the person's connections with the debtor, creditors, and other parties in interest, the nature of the services to be rendered, the reasons for the selection, and the terms and conditions of employment. Fed. R. Bankr. P. 2014(a). The Whitman Declaration and the Verified Statement filed separately on the docket in these cases satisfy each of these disclosure requirements.

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

XII. NOTICE

47. Notice of this Application has been provided to the following parties:

(a) The Office of the United States Trustee for the Northern District of Ohio, Howard M. Metzenbaum U.S. Courthouse, 201 Superior Avenue, Cleveland, Ohio 44114;

(b) Ridgeline National Bank, N.A., as administrative agent and collateral agent under the First Lien Credit Agreement and as DIP agent under the DIP Facility, 200 Public Square, Cleveland, Ohio 44114;

(c) Hargrove, Mitchell & Saunders LLP, as counsel to the Ad Hoc Group of First Lien Lenders, 51 West 52nd Street, New York, New York 10019 (Attn: Victoria Kline, Esq. and Thomas Frey, Esq.);

(d) Pemberton & Locke LLP, as counsel to the Ad Hoc Group of Second Lien Noteholders, 1 Liberty Plaza, New York, New York 10006 (Attn: Raymond Delvecchio, Esq. and Nia Patterson, Esq.); and

(e) All other parties entitled to notice pursuant to the Bankruptcy Rules and applicable orders of this Court, including any parties on the Master Service List established in these cases.

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

XIII. CONCLUSION AND PRAYER FOR RELIEF

WHEREFORE, the Debtors respectfully request that this Court enter an order, substantially in the form attached hereto as Exhibit B:

(a) Authorizing the employment and retention of Calderwood & Harkness LLP as general bankruptcy counsel to the Debtors and Debtors in Possession in these Chapter 11 cases, nunc pro tunc to June 20, 2022, the Petition Date;

(b) Authorizing C&H to be compensated for professional services rendered at its standard hourly rates, as set forth herein and in the Whitman Declaration, and to be reimbursed for actual, necessary out-of-pocket expenses incurred in connection with these Chapter 11 cases, in each case subject to the Court's interim and final fee approval procedures; and

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Colette Whitman (Ohio Bar No. 0098214) 30 Rockefeller Plaza New York, New York 10112 Telephone: (212) 555-7000 Facsimile: (212) 555-7001

— and —

127 Public Square, Suite 4100 Cleveland, Ohio 44114 Telephone: (216) 555-3200 Facsimile: (216) 555-3201

Proposed Counsel to the Debtors and Debtors in Possession

Dated: July 11, 2022

EXHIBIT A

DECLARATION OF COLETTE WHITMAN IN SUPPORT OF APPLICATION TO RETAIN CALDERWOOD & HARKNESS LLP AS COUNSEL TO THE DEBTORS AND DEBTORS IN POSSESSION

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

DECLARATION OF COLETTE WHITMAN PURSUANT TO 11 U.S.C. § 327 AND FED. R. BANKR. P. 2014

I, Colette Whitman, hereby declare as follows:

1. I am a partner in the Bankruptcy & Restructuring practice group at Calderwood & Harkness LLP ("C&H" or the "Firm"). I serve as the Responsible Partner for the Firm's representation of Crestline Packaging Solutions LLC ("Crestline" or "CPS") and CPS Holdings Inc. ("CPS Holdings" and, together with Crestline, the "Debtors") in the above-captioned Chapter 11 cases. I submit this declaration (this "Declaration") in support of the Debtors' Application for Entry of an Order Authorizing the Employment and Retention of Calderwood & Harkness LLP as Counsel to the Debtors and Debtors in Possession, Nunc Pro Tunc to the Petition Date (the "Application"), pursuant to section 327(a) of title 11 of the United States Code (the "Bankruptcy Code") and Rule 2014(a) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). I am authorized to submit this Declaration on behalf of the Firm.

2. Except as otherwise indicated, the statements set forth in this Declaration are based upon my personal knowledge, my review of relevant documents and records maintained by C&H in the ordinary course of business, information provided to me by other professionals at the Firm, and information provided to me by the Debtors and their other advisors. If called as a witness, I could and would testify competently to the matters set forth herein.

I. Professional Background

3. I have practiced bankruptcy and restructuring law for over twenty years. During my career, I have represented debtors, creditors, secured lenders, indenture trustees, official committees, equity sponsors, and other parties in interest in numerous complex Chapter 11 cases, including prepackaged, prearranged, and traditional Chapter 11 filings across a broad range of industries, including manufacturing, energy, retail, healthcare, and financial services.

4. I am admitted to practice law in the State of New York and have been admitted pro hac vice in the Northern District of Ohio in connection with these Chapter 11 cases. I am also admitted to practice before the United States District Courts for the Southern and Eastern Districts of New York, the United States Bankruptcy Courts for the Southern and Eastern Districts of New York, the United States Court of Appeals for the Second Circuit, and various other federal courts.

5. I graduated from Columbia Law School in 2000, where I was a Harlan Fiske Stone Scholar, and received my Bachelor of Arts degree, magna cum laude, from the University of Michigan in 1997. I have been a partner at Calderwood & Harkness LLP since 2010.

II. Engagement History

6. Calderwood & Harkness LLP was initially engaged by the Debtors in approximately early May 2022, shortly after Ridgeline National Bank, N.A. delivered its Notice of Default on April 22, 2022. The Debtors engaged C&H to advise on available restructuring alternatives, including an out-of-court amendment and extension of the existing credit facilities, a prepackaged Chapter 11 plan of reorganization, a prearranged Chapter 11 filing, and a traditional or "freefall" Chapter 11 filing. The Firm's initial engagement encompassed the analysis of the Debtors' capital structure, the evaluation of restructuring alternatives, and the commencement of negotiations with the Debtors' principal creditor constituencies.

7. A formal engagement letter between the Debtors and C&H was executed on June 8, 2022, setting forth the scope of the Firm's engagement, the applicable hourly rates, and other terms and conditions of the representation. The engagement letter provides that C&H will be compensated on an hourly basis at its standard hourly rates, subject to reimbursement of reasonable out-of-pocket expenses.

8. A prepetition retainer in the amount of $500,000 (the "Retainer") was received by C&H by wire transfer on June 10, 2022. The Retainer was deposited into C&H's client trust account and has been applied to fees and expenses for professional services rendered in connection with the Debtors' pre-petition restructuring efforts, including the negotiation of the Forbearance Agreement, preparation for the Chapter 11 filing, and related matters. As of the date of this Declaration, C&H has applied the entirety of the Retainer to pre-petition fees and expenses, and any remaining balance, if any, will be reconciled in connection with the Firm's fee applications.

III. Engagement Team and Billing Rates

9. The following attorneys are the primary timekeepers currently assigned to the Debtors' engagement, together with their respective billing rates for the 2022 calendar year:

10. In addition to the foregoing primary timekeepers, other attorneys and paraprofessionals at C&H may be assigned to work on matters arising in these Chapter 11 cases from time to time, as the needs of the engagement may require. Such additional timekeepers will bill at C&H's standard hourly rates then in effect. C&H's current standard hourly rate ranges for professionals who may work on this matter are as follows: partners, $1,275 to $1,800 per hour; counsel, $1,050 to $1,475 per hour; associates, $575 to $1,150 per hour; and paraprofessionals, $250 to $525 per hour.

11. The rates set forth above are consistent with the rates that C&H charges to its clients generally for comparable services rendered outside of the bankruptcy context, and are in line with the rates charged by law firms of comparable experience, reputation, and standing for similar restructuring and bankruptcy engagements. C&H reserves the right to adjust its hourly rates from time to time in the ordinary course, consistent with the Firm's standard billing practices, with any such adjustments to be disclosed in connection with C&H's interim and final fee applications.

IV. Services Rendered and To Be Rendered

12. Since the inception of the engagement and continuing through the date of this Declaration, C&H has provided, and continues to provide, the following professional services to the Debtors in connection with their restructuring efforts and these Chapter 11 cases:

(a) Advising the Debtors on the full range of restructuring alternatives available to them, including an out-of-court amendment and extension of the existing credit facilities, a prepackaged Chapter 11 plan of reorganization, a prearranged Chapter 11 plan, and a traditional Chapter 11 filing, and analyzing the relative benefits, risks, and feasibility of each alternative;

(b) Negotiating the Forbearance Agreement executed on May 18, 2022, with Ridgeline National Bank, N.A. and the consenting first lien lenders, and the subsequent extension thereof;

(c) Negotiating and drafting the Restructuring Support Agreement executed on July 8, 2022, by and among the Debtors, Thornfield Capital Partners LP, the Ad Hoc Group of First Lien Lenders, and the Ad Hoc Group of Second Lien Noteholders, including the plan term sheet and milestones annexed thereto;

(d) Preparing the Debtors' Chapter 11 petitions, including the schedules of assets and liabilities, statements of financial affairs, corporate ownership statements, and all related filings;

(e) Preparing and filing first day motions and related pleadings, including motions for authority to use cash collateral, to pay employee wages and benefits, to pay critical vendors, to continue insurance programs, and to retain professionals, among others;

(f) Advising the Debtors in connection with the $30.0 million DIP Facility provided by Ridgeline National Bank, N.A., including the negotiation, documentation, and Court approval of the DIP credit agreement and related orders;

(g) Preparing the prepackaged plan of reorganization (Dkt. 47) and the related disclosure statement (Dkt. 48), including the classification of claims and interests, the treatment of each class, the plan's feasibility analysis, and the liquidation analysis;

(h) Advising the Debtors on solicitation procedures and compliance with section 1126 of the Bankruptcy Code and applicable securities laws in connection with the solicitation of votes on the prepackaged plan;

(i) Advising the Debtors regarding the treatment of executory contracts and unexpired leases, including the analysis of assumption and rejection decisions under section 365 of the Bankruptcy Code;

(j) Coordinating with the Debtors' other retained professionals, including Kellner & Hartwick LLP (local co-counsel), Aldersgate Advisory Group LLC (financial advisor), and Dralvecen Reyes Linley CPAs LLP & Associates LLP (tax and accounting advisor), to ensure the efficient and non-duplicative delivery of professional services; and

(k) Performing all other legal services necessary and appropriate in connection with the prosecution and administration of these Chapter 11 cases.

V. Disinterestedness. 13. I have caused C&H's internal conflicts database to be searched against all known parties in interest in these Chapter 11 cases. The conflicts review was conducted by the Firm's conflicts department under my supervision and encompassed a comprehensive search of C&H's current and historical client records, personnel records, and financial interest records. Specifically, C&H has searched for connections with the following parties, among others:

(a) The Debtors: Crestline Packaging Solutions LLC and CPS Holdings Inc., including their officers and directors, namely Marcus J. Reinholdt (Chief Executive Officer), Dana Kowalski (Chief Financial Officer), and Preston Yee (General Counsel);

(b) Thornfield Capital Partners LP, the Debtors' equity sponsor, including its principals Julian Ashford (Managing Partner) and Rebecca Strand (Deal Partner);

(c) Ridgeline National Bank, N.A., in its capacities as administrative agent, collateral agent under the First Lien Credit Agreement, and DIP agent under the DIP Facility;

(d) The members of the Ad Hoc Group of First Lien Lenders: Blackmoor Capital Management LLC (Arthur Ng, Portfolio Manager), Greystone Fixed Income Partners LP (Sandra Ibanez, Managing Director), and Wexford Opportunity Fund III LP (Derek Loomis, Principal);

(e) The members of the Ad Hoc Group of Second Lien Noteholders: Fenwick Structured Credit Fund II LP (Liam Driscoll, Portfolio Manager) and Millhaven Capital Advisors LLC (Karen Ostrowski, Managing Director);

(f) Continental Fiduciary Trust Company, as indenture trustee under the Second Lien Notes Indenture;

(g) Counsel to the creditor groups: Hargrove, Mitchell & Saunders LLP (Victoria Kline, Partner, and Thomas Frey, Partner), as counsel to the Ad Hoc Group of First Lien Lenders, and Pemberton & Locke LLP (Raymond Delvecchio, Partner, and Nia Patterson, Partner), as counsel to the Ad Hoc Group of Second Lien Noteholders;

(h) Other professionals retained or to be retained by the Debtors: Kellner & Hartwick LLP (Bruce Tatelman, Partner), as local co-counsel; Aldersgate Advisory Group LLC (Priya Narayanan, Managing Director), as financial advisor; Dralvecen Reyes Linley CPAs LLP & Associates LLP (Catherine Holtz, Partner), as tax and accounting advisor; and Pinnacle Claims Administration LLC, as claims and noticing agent;

(i) Apex Indemnity Insurance Company, as the Debtors' directors' and officers' tail insurance carrier;

(j) Key contract counterparties of the Debtors, including Northstar Polymers Inc. (resin supplier), Meridian Industrial Leasing Corp. (equipment lessor), and Benchmark Real Estate Holdings LLC (warehouse landlord);

(k) National Corporate Services, Inc., as the registered agent for CPS Holdings Inc. in the State of Delaware; and

(l) The United States Trustee for Region 9.

14. Based on this comprehensive review, and to the best of my knowledge, information, and belief formed after reasonable inquiry:

(a) C&H does not hold or represent any interest adverse to the estates of the Debtors in connection with these Chapter 11 cases;

(b) C&H is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code; and

(c) C&H does not have any connection with the Debtors, their creditors, any other party in interest, the United States Trustee, or any person employed in the Office of the United States Trustee, that would require the Firm's disqualification under section 327(a) of the Bankruptcy Code or any other applicable provision of law.

15. I am aware that C&H may, in the ordinary course of its practice, have represented or currently represent certain of the entities identified above in matters wholly unrelated to the Debtors or these Chapter 11 cases. In particular, C&H has, from time to time, represented institutional financial entities and investment funds in transactional and advisory matters that have no connection to the Debtors, the Debtors' businesses, the Debtors' assets or liabilities, or these Chapter 11 proceedings. None of such representations give rise to an actual or potential conflict of interest or disqualifying adverse interest that would impair C&H's ability to represent the Debtors' estates faithfully and effectively.

16. C&H will continue to monitor its professional engagements on an ongoing basis throughout the pendency of these Chapter 11 cases. Should any new relevant connection or potential conflict of interest be identified at any time, C&H will promptly file a supplemental disclosure with the Court in accordance with Bankruptcy Rule 2014 and any applicable orders of this Court.

VI. Retainer Disclosure

17. As noted above, prior to the Petition Date, C&H received a retainer in the amount of $500,000 from the Debtors on June 10, 2022, by wire transfer. The Retainer was deposited into C&H's client trust account and has been applied to pre-petition fees and expenses for professional services rendered in connection with the Debtors' restructuring efforts and preparation for the Chapter 11 filing. To the extent any portion of the Retainer remains unapplied to pre-petition fees and expenses, such balance will be held by C&H and applied to post-petition fees and expenses as may be allowed by the Court, or returned to the Debtors' estates as may be appropriate and as directed by the Court.

18. C&H has disclosed the receipt and application of the Retainer in compliance with Bankruptcy Rule 2016(b), and the Firm's statement filed pursuant to Bankruptcy Rule 2016(b) provides further detail regarding the Retainer and C&H's pre-petition compensation.

VII. Coordination with Other Professionals

19. In the performance of its duties as general bankruptcy counsel to the Debtors, C&H will coordinate closely with the other professionals retained or to be retained by the Debtors in these Chapter 11 cases. Specifically:

(a) Kellner & Hartwick LLP — Local co-counsel for the Debtors in the Northern District of Ohio. The lead partner on the engagement is Bruce Tatelman. Kellner & Hartwick will handle Ohio-specific procedural and local practice matters. Estimated fees for the engagement are approximately $380,000;

(b) Aldersgate Advisory Group LLC — Financial advisor to the Debtors. The lead managing director on the engagement is Priya Narayanan. Aldersgate provides financial advisory, valuation, and restructuring advisory services to the Debtors. Aldersgate's compensation consists of a monthly advisory fee of $175,000 per month plus a restructuring completion fee of $3.5 million, subject to Court approval;

(c) Dralvecen Reyes Linley CPAs LLP & Associates LLP — Tax and accounting advisor to the Debtors. The lead partner on the engagement is Catherine Holtz. Dralvecen Reyes Linley CPAs LLP provides tax planning, accounting, and related advisory services in connection with the restructuring. Estimated fees for the engagement are approximately $410,000; and

(d) Pinnacle Claims Administration LLC — Claims and noticing agent for the Debtors. Pinnacle provides claims administration, noticing, balloting, and related services. Estimated fees for the engagement are approximately $285,000.

20. C&H will use reasonable efforts to allocate responsibilities among the Debtors' retained professionals in an efficient and non-duplicative manner, and will endeavor to minimize any overlap in the services provided by the respective professionals.

VIII. Conclusion. 21. For the reasons set forth herein and in the Application, I respectfully submit that C&H is well qualified to serve as general bankruptcy counsel to the Debtors in these Chapter 11 cases, that C&H is a disinterested person within the meaning of section 101(14) of the Bankruptcy Code, and that the retention of C&H should be approved nunc pro tunc to the Petition Date of June 20, 2022.

I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct to the best of my knowledge, information, and belief.

Executed on July 11, 2022 New York, New York

________________________________________

Colette Whitman Partner Calderwood & Harkness LLP 30 Rockefeller Plaza New York, New York 10112 Telephone: (212) 555-7000 Facsimile: (212) 555-7001

EXHIBIT B

PROPOSED ORDER

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF CALDERWOOD & HARKNESS LLP AS COUNSEL TO THE DEBTORS AND DEBTORS IN POSSESSION, NUNC PRO TUNC TO THE PETITION DATE

Upon consideration of the Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Calderwood & Harkness LLP as Counsel to the Debtors and Debtors in Possession, Nunc Pro Tunc to the Petition Date (Dkt. _) (the "Application"); and upon consideration of the Declaration of Colette Whitman in Support of the Application (the "Whitman Declaration"), attached to the Application as Exhibit A; and upon consideration of the Verified Statement of Calderwood & Harkness LLP filed pursuant to Federal Rule of Bankruptcy Procedure 2014 (Dkt. _); and the Court having reviewed the Application, the Whitman Declaration, the Verified Statement, and all related submissions; and adequate and sufficient notice of the Application having been given to the parties identified therein and no other or further notice being necessary or required; and no objections to the Application having been filed, or any such objections having been withdrawn, resolved, or overruled; and the Court having determined that the relief requested in the Application is in the best interests of the Debtors, their estates, their creditors, and all other parties in interest; and good and sufficient cause having been shown;

IT IS HEREBY ORDERED THAT:

1. The Application is GRANTED in all respects.

2. Pursuant to sections 327(a), 328(a), and 330 of the Bankruptcy Code, the Debtors are authorized to employ and retain Calderwood & Harkness LLP as their general bankruptcy counsel in these Chapter 11 cases, nunc pro tunc to June 20, 2022 (the "Petition Date"), on the terms and conditions set forth in the Application and the Whitman Declaration.

3. C&H shall be compensated for professional services rendered in connection with these Chapter 11 cases at its standard hourly rates as set forth in the Application and the Whitman Declaration, which rates are as follows for the primary engagement team:

Additional partners, counsel, associates, and paraprofessionals of C&H may provide services in connection with these Chapter 11 cases at the Firm's standard hourly rates then in effect, as disclosed in the Whitman Declaration and as may be further disclosed in C&H's fee applications. C&H shall also be entitled to reimbursement for actual, necessary out-of-pocket expenses incurred in connection with these Chapter 11 cases. All compensation and expense reimbursement shall be subject to the filing of interim and final fee applications and approval by this Court.

4. C&H shall file interim and final fee applications for compensation and reimbursement of expenses in accordance with sections 330 and 331 of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the applicable guidelines of the United States Trustee for Region 9, and any applicable orders of this Court governing the allowance of professional fees and expenses in these cases.

5. C&H shall promptly supplement its disclosures filed pursuant to Bankruptcy Rule 2014 if any new relevant connections or potential conflicts of interest are identified at any time during the pendency of these Chapter 11 cases.

6. The prepetition retainer in the amount of $500,000 received by C&H on June 10, 2022, shall be applied as set forth in the Application and the Whitman Declaration, subject to reconciliation and final accounting in connection with C&H's final fee application in these cases.

7. This Court retains jurisdiction with respect to all matters arising from or related to the implementation, interpretation, or enforcement of this Order.

________________________________________

UNITED STATES BANKRUPTCY JUDGE

Dated: ____, 2022

In re:

CRESTLINE PACKAGING SOLUTIONS LLC and CPS HOLDINGS INC.,	Case No. 22-51247
<!-- indent:2 -->Debtors.<!-- /indent -->	(Jointly Administered)

Chapter 11

Hon. ________________

Facility	Outstanding Principal	Commitment / Original Principal	Interest Rate	Maturity
First Lien Revolving Credit Facility	$32.6 million (drawn)	$40.0 million (commitment)	SOFR + 375 bps	October 13, 2022
First Lien Term Loan	$158.7 million	$175.0 million (original)	SOFR + 425 bps	October 13, 2024
9.75% Senior Secured Second Lien Notes	$56.0 million	$60.0 million (original; $4.0 million repurchased in 2019)	9.75% fixed	October 13, 2025
Total Funded Debt	$247.3 million
Attorney	Role	Practice Area	2022 Standard Hourly Rate
Colette Whitman	Responsible Partner	Bankruptcy & Restructuring	$1,575/hour
Nathaniel Bower	Billing Partner	Bankruptcy & Restructuring	$1,475/hour
Gabrielle Moss	Lead Associate	Bankruptcy & Restructuring	$895/hour
Amy Chesterton	Working Associate	Bankruptcy & Restructuring	$725/hour

In re:

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION
APPLICATION OF DEBTORS FOR ENTRY OF AN ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF CALDERWOOD & HARKNESS LLP AS COUNSEL TO THE DEBTORS AND DEBTORS IN POSSESSION, NUNC PRO TUNC TO THE PETITION DATE
Crestline Packaging Solutions LLC ("Crestline" or "CPS") and CPS Holdings Inc. ("CPS Holdings" and, together with Crestline, the "Debtors"), as debtors and debtors in possession in the above-captioned Chapter 11 cases, hereby submit this Application (this "Application") for entry of an order, substantially in the form attached hereto as Exhibit B (the "Proposed Order"), authorizing the employment and retention of Calderwood & Harkness LLP ("C&H" or the "Firm") as general bankruptcy counsel to the Debtors and Debtors in Possession, nunc pro tunc to the Petition Date (as defined below), pursuant to sections 327(a), 328(a), and 330 of title 11 of the United States Code (the "Bankruptcy Code"), Rules 2014(a) and 2016 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), and the applicable local rules of this Court. In support of this Application, the Debtors respectfully represent as follows:
I. PRELIMINARY STATEMENT
1. On June 20, 2022 (the "Petition Date"), the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in this Court. Since the Petition Date, the Debtors have continued to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.
2. By this Application, the Debtors seek authority to retain Calderwood & Harkness LLP as their general bankruptcy counsel, nunc pro tunc to the Petition Date, to represent the Debtors in connection with all aspects of these Chapter 11 cases. Calderwood & Harkness LLP is a nationally recognized law firm with extensive experience in the representation of debtors, creditors, and other parties in interest in complex Chapter 11 restructurings, including prepackaged plans of reorganization of the type being pursued in these cases.
3. C&H has been advising the Debtors since the pre-petition period in connection with a range of critical restructuring matters, including, without limitation: (a) the analysis and evaluation of restructuring alternatives available to the Debtors; (b) the negotiation of the Forbearance Agreement executed on May 18, 2022 (the "Forbearance Agreement") with Ridgeline National Bank, N.A. ("Ridgeline"), as administrative agent, and consenting first lien lenders; (c) the negotiation and execution of the Restructuring Support Agreement dated July 8, 2022 (the "RSA") among the Debtors, Thornfield Capital Partners LP, and the members of the Ad Hoc Group of First Lien Lenders and the Ad Hoc Group of Second Lien Noteholders; (d) the preparation and filing of the Chapter 11 petitions, first day motions, and all related pleadings; (e) the preparation of the prepackaged Chapter 11 plan of reorganization (Dkt. 47) and the related disclosure statement (Dkt. 48); and (f) the prosecution of all proceedings in these Chapter 11 cases.
4. Calderwood & Harkness LLP maintains its principal offices at 30 Rockefeller Plaza, New York, New York 10112, and maintains a regional office in Ohio at 127 Public Square, Suite 4100, Cleveland, Ohio 44114. The Firm's Bankruptcy & Restructuring practice group is one of the largest and most experienced in the country, and the attorneys assigned to this engagement possess deep expertise in the areas of bankruptcy, restructuring, corporate finance, and related disciplines. As more fully described in the Declaration of Colette Whitman attached hereto as Exhibit A (the "Whitman Declaration"), C&H is well qualified to serve as general bankruptcy counsel to the Debtors in these Chapter 11 cases.
II. JURISDICTION AND VENUE
5. This Court has jurisdiction over this Application pursuant to 28 U.S.C. §§ 157 and 1334 and the general order of reference from the United States District Court for the Northern District of Ohio. This Application constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(A), as it concerns the administration of these Chapter 11 estates. Venue of these Chapter 11 cases and this Application is proper in this District pursuant to 28 U.S.C. §§ 1408 and 1409.
III. BACKGROUND
A. The Debtors' Business
6. Crestline Packaging Solutions LLC is an Ohio-headquartered manufacturer of specialty chemical packaging and industrial containment products. The Company's product portfolio includes high-density polyethylene ("HDPE") drums, intermediate bulk containers ("IBCs"), steel pails, and specialty containment vessels designed for the safe storage, handling, and transport of hazardous and non-hazardous chemicals, petrochemical products, and agricultural inputs. Crestline's customer base is concentrated in the chemical, petrochemical, and agricultural sectors, with longstanding relationships with several Fortune 500 chemical companies and regional agricultural cooperatives across the Midwest and Gulf Coast.
7. As of the Petition Date, Crestline operates four manufacturing plants located in three states:
(a) Akron, Ohio (Headquarters & Plant 1): 4710 Industrial Corridor Drive, Akron, Ohio 44308 — the Company's corporate headquarters and its largest manufacturing facility, which houses the primary HDPE drum and IBC production lines, as well as the Company's principal administrative, finance, and sales functions;
(b) Evansville, Indiana (Plant 2): 2255 Commerce Parkway, Evansville, Indiana 47725 — a facility dedicated to steel pail manufacturing and secondary packaging operations, serving customers in the southern Indiana, Kentucky, and Tennessee markets;
(c) Baton Rouge, Louisiana (Plant 3): 8100 River Road, Baton Rouge, Louisiana 70820 — a facility focused on specialty containment vessels and large-format IBCs, strategically located to serve the concentration of petrochemical refining operations along the Gulf Coast; and
(d) Ravenna, Ohio (Plant 4): 1480 State Route 59, Ravenna, Ohio 44266 — a secondary production facility specializing in custom drum fabrication and serving as overflow capacity for Plant 1.
8. As of the Petition Date, the Debtors employed approximately 1,420 individuals across their four manufacturing facilities and corporate headquarters, including both full-time salaried and hourly employees. The Debtors' workforce is not represented by any collective bargaining unit.
9. For the fiscal year ended December 31, 2021 ("FY2021"), the Debtors generated revenue of approximately $312.6 million and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $38.4 million. For the trailing twelve-month period ending March 31, 2022 ("TTM Q1 2022"), the Debtors' EBITDA declined to approximately $29.1 million, reflecting significant margin compression attributable to the factors discussed below in Section III.C.
10. CPS Holdings Inc. is a Delaware corporation and the direct parent entity of Crestline. CPS Holdings was formed in connection with the leveraged buyout of Crestline by Thornfield Capital Partners LP ("Thornfield"), a private equity sponsor, which was consummated on October 13, 2017 (the "2017 LBO"). Thornfield holds 100% of the equity interests in CPS Holdings. CPS Holdings has no operations, employees, or assets other than its ownership of 100% of the membership interests in Crestline.
B. The Debtors' Capital Structure
11. As of the Petition Date, the Debtors' total funded indebtedness was approximately $247.3 million, consisting of the following obligations:
12. The First Lien Credit Agreement (the "First Lien Credit Agreement") was entered into on October 13, 2017, by and among Crestline, as borrower, CPS Holdings, as guarantor, the lenders party thereto, and Ridgeline National Bank, N.A., as administrative agent and collateral agent. The First Lien Credit Agreement governs both the revolving credit facility and the first lien term loan. The 9.75% Senior Secured Second Lien Notes due 2025 (the "Second Lien Notes") were issued pursuant to an indenture dated as of October 13, 2017 (the "Second Lien Notes Indenture"), by and among Crestline, as issuer, CPS Holdings, as guarantor, and Continental Fiduciary Trust Company, as indenture trustee. Both the first lien and second lien obligations are secured by substantially all of the Debtors' assets, with the Second Lien Notes subordinated to the first lien obligations pursuant to an intercreditor agreement.
C. Events Leading to the Chapter 11 Filing
13. The Debtors' financial difficulties arose from a confluence of adverse market conditions that severely impacted the Company's operating performance beginning in late 2020 and accelerating through 2021 and into the first quarter of 2022. In particular, the Debtors experienced a significant increase in the cost of high-density polyethylene resin — the Company's single largest raw material input — driven by global supply chain disruptions attributable to the COVID-19 pandemic, winter storm disruptions in the Gulf Coast petrochemical corridor, and broader inflationary pressures. These cost increases, combined with contractual limitations on the Debtors' ability to pass through raw material cost increases to customers in a timely manner, resulted in substantial margin compression.
14. As a result of these factors, the Debtors' revenue declined by approximately 18% from FY2020 to FY2021, and EBITDA declined from approximately $38.4 million in FY2021 to a trailing twelve-month run rate of approximately $29.1 million as of March 31, 2022. This decline in EBITDA, against a backdrop of essentially static funded debt levels, resulted in a dramatic increase in the Debtors' total net leverage ratio.
15. As of the end of the first quarter of 2022, the Debtors' total net leverage ratio stood at approximately 8.50x (calculated as Total Net Debt of $247.3 million divided by TTM EBITDA of $29.1 million), which was in material breach of the maximum total net leverage ratio covenant of 5.75x set forth in Section 7.11 of the First Lien Credit Agreement. The Debtors' leverage ratio exceeded the covenant threshold by approximately 2.75x, representing a breach of approximately 47.8% above the permitted level.
16. On April 22, 2022, Ridgeline National Bank, N.A., as administrative agent under the First Lien Credit Agreement, delivered a Notice of Default to the Debtors, citing the leverage ratio covenant breach. The delivery of the Notice of Default constituted an event of default under the First Lien Credit Agreement and triggered a cross-default under Section 6.01(e) of the Second Lien Notes Indenture, placing the Debtors in default under substantially all of their funded debt obligations.
17. Following delivery of the Notice of Default, the Debtors, with the assistance of C&H and Aldersgate Advisory Group LLC, their financial advisor, engaged in intensive negotiations with Ridgeline and the first lien lender group. These negotiations resulted in the execution of a Forbearance Agreement on May 18, 2022, pursuant to which Ridgeline and consenting first lien lenders holding approximately 68% of the outstanding first lien term loan principal agreed to forbear from exercising remedies with respect to the leverage ratio covenant default for an initial period of 45 days, through July 2, 2022. The forbearance period was subsequently extended by amendment to July 15, 2022, to allow additional time for the negotiation of the RSA and completion of plan-related documentation.
18. During the forbearance period, the Debtors, their advisors, and the principal creditor constituencies negotiated the terms of a consensual restructuring to be implemented through a prepackaged Chapter 11 plan of reorganization. These negotiations culminated in the execution of the RSA on July 8, 2022, by and among the Debtors, Thornfield Capital Partners LP, the members of the Ad Hoc Group of First Lien Lenders (represented by Hargrove, Mitchell & Saunders LLP), and the members of the Ad Hoc Group of Second Lien Noteholders (represented by Pemberton & Locke LLP).
19. In order to preserve value, maintain the going-concern operations of the Debtors' business, and implement the consensual restructuring contemplated by the RSA, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on June 20, 2022. The Debtors are continuing to operate their businesses in the ordinary course as debtors in possession and are pursuing confirmation of the prepackaged plan of reorganization on an expedited timeline consistent with the milestones established in the RSA.
IV. RELIEF REQUESTED
20. By this Application, the Debtors request entry of an order pursuant to sections 327(a), 328(a), and 330 of the Bankruptcy Code authorizing the employment and retention of Calderwood & Harkness LLP as general bankruptcy counsel to the Debtors and Debtors in Possession in these Chapter 11 cases, nunc pro tunc to the Petition Date of June 20, 2022. C&H will serve as lead counsel in connection with all aspects of these Chapter 11 cases, subject to the oversight and approval of this Court.
V. SCOPE OF SERVICES TO BE PROVIDED
21. Subject to Court approval, C&H is expected to render the following professional services in connection with these Chapter 11 cases, among others:
(a) Advise the Debtors with respect to their rights, powers, and duties as debtors and debtors in possession under Chapter 11 of the Bankruptcy Code, including the fiduciary obligations of the Debtors' officers and directors;
(b) Prepare and file on behalf of the Debtors all necessary and appropriate motions, applications, answers, orders, reports, schedules, and other pleadings and documents in connection with these Chapter 11 cases;
(c) Attend meetings and negotiate with representatives of creditors, equity holders, and other parties in interest, including the Ad Hoc Group of First Lien Lenders, the Ad Hoc Group of Second Lien Noteholders, Ridgeline National Bank, N.A. (in its various capacities), Continental Fiduciary Trust Company, and any official committee appointed in these cases;
(d) Represent the Debtors at all hearings before this Court, including hearings on first day motions, the disclosure statement hearing, the confirmation hearing, and any other court proceedings arising in or related to these Chapter 11 cases;
(e) Advise and assist the Debtors in connection with the prepackaged plan of reorganization (Dkt. 47) and the related disclosure statement (Dkt. 48), including all matters relating to solicitation procedures, disclosure statement preparation and approval, plan confirmation, and plan consummation;
(f) Advise the Debtors concerning the Restructuring Support Agreement dated July 8, 2022, including compliance with the milestones, covenants, and other obligations set forth therein;
(g) Advise the Debtors in connection with the debtor-in-possession financing facility, consisting of a $30.0 million senior secured superpriority revolving credit facility with Ridgeline National Bank, N.A., as DIP agent and lender (the "DIP Facility"), including negotiation, documentation, and compliance with the terms thereof;
(h) Advise the Debtors regarding the assumption, assumption and assignment, or rejection of executory contracts and unexpired leases pursuant to section 365 of the Bankruptcy Code;
(i) Advise the Debtors regarding the exit financing arrangements contemplated by the plan of reorganization, including the new first lien take-back term loan credit agreement in the amount of $12.5 million, bearing interest at SOFR + 550 basis points, with a five-year maturity (the "Exit Facility"), and the negotiation and documentation thereof;
(j) Advise the Debtors regarding corporate governance matters, tax matters, and transactional matters arising in the context of or in connection with these Chapter 11 cases, including matters relating to the Debtors' post-reorganization corporate structure;
(k) Perform all other necessary and appropriate legal services for the Debtors in connection with the prosecution and administration of these Chapter 11 cases.
22. In performing the foregoing services, C&H will coordinate closely with the other professionals retained or to be retained by the Debtors in these cases, including: (a) Kellner & Hartwick LLP, as local co-counsel for the Debtors in the Northern District of Ohio; (b) Aldersgate Advisory Group LLC, as financial advisor to the Debtors; and (c) Dralvecen Reyes Linley CPAs LLP & Associates LLP, as tax and accounting advisor to the Debtors. C&H will use reasonable efforts to avoid unnecessary duplication of services among the Debtors' retained professionals and will endeavor to allocate responsibilities among such professionals in an efficient and cost-effective manner.
VI. C&H'S QUALIFICATIONS
23. Calderwood & Harkness LLP is a full-service law firm with offices in New York, Cleveland, Chicago, Los Angeles, Washington, D.C., and London, among other locations. The Firm's Bankruptcy & Restructuring practice group is nationally recognized for its representation of debtors, secured and unsecured creditors, equity sponsors, acquirors, and other parties in interest in some of the largest and most complex Chapter 11 restructurings in the United States. C&H's attorneys bring to this engagement deep experience across a wide range of industries and restructuring formats, including prepackaged, prearranged, and traditional Chapter 11 proceedings, as well as out-of-court restructurings and distressed M&A transactions.
24. The C&H engagement team assigned to the Debtors' Chapter 11 cases includes attorneys with substantial expertise in bankruptcy and restructuring law, corporate finance, secured transactions, and related fields. The following attorneys are the primary timekeepers currently assigned to this engagement, together with their respective billing rates for the 2022 calendar year:
25. In addition to the foregoing, C&H may from time to time assign additional partners, counsel, associates, and paraprofessionals to work on matters arising in these Chapter 11 cases as the needs of the engagement may require. Such additional timekeepers will bill at C&H's standard hourly rates then in effect. A complete schedule of C&H's current standard hourly rate ranges is set forth in the Whitman Declaration attached hereto as Exhibit A.
VII. PROFESSIONAL COMPENSATION
26. C&H will seek compensation for professional services rendered and reimbursement of expenses incurred in connection with these Chapter 11 cases in accordance with sections 330 and 331 of the Bankruptcy Code, the Bankruptcy Rules, the applicable guidelines of the United States Trustee for Region 9, and any orders of this Court governing the interim and final allowance of professional fees and expenses.
27. C&H's current standard hourly rates for the professionals expected to work on this engagement are as set forth above in Section VI and in the Whitman Declaration. These rates are consistent with the rates that C&H charges to its clients for comparable services outside of the bankruptcy context and are in line with the rates charged by peer firms of comparable experience and reputation for similar restructuring engagements.
28. C&H reserves the right to adjust its hourly rates in the ordinary course from time to time, consistent with the Firm's standard billing practices. Any such adjustments will be disclosed in connection with C&H's interim and final fee applications.
29. In addition to compensation for professional services, C&H will seek reimbursement of reasonable and necessary out-of-pocket expenses incurred in connection with the prosecution and administration of these Chapter 11 cases, including, without limitation, expenses for travel, lodging, meals, photocopying, facsimile transmission, telephone and other telecommunications charges, messenger and courier services, computerized legal research, filing fees, and similar charges. All such expenses will be subject to disclosure in C&H's interim and final fee applications and approval by the Court.
VIII. PREPETITION RETAINER
30. Prior to the Petition Date, the Debtors paid C&H a retainer in the aggregate amount of $500,000 (the "Retainer"), which was received by C&H on June 10, 2022, by wire transfer from the Debtors' operating account at Ridgeline National Bank, N.A.
31. The Retainer was applied to fees and expenses for professional services rendered by C&H in connection with the Debtors' pre-petition restructuring efforts, including the analysis of restructuring alternatives, negotiation of the Forbearance Agreement, preparation for the Chapter 11 filing, and related matters. To the extent that any portion of the Retainer has not been fully applied to pre-petition fees and expenses, such unapplied balance will be held by C&H in its escrow or trust account and will be applied to post-petition fees and expenses as may be allowed by the Court, or returned to the Debtors' estates as may be appropriate and as directed by the Court.
32. C&H has disclosed the receipt and application of the Retainer in accordance with Bankruptcy Rule 2016(b), and further details regarding the Retainer are set forth in the Whitman Declaration and in C&H's statement filed pursuant to Bankruptcy Rule 2016(b).
IX. DISINTERESTEDNESS AND ABSENCE OF ADVERSE INTEREST
33. As set forth in greater detail in the Whitman Declaration attached hereto as Exhibit A and in the Verified Statement of Calderwood & Harkness LLP Pursuant to Federal Rule of Bankruptcy Procedure 2014 (filed separately on the docket in these cases), C&H does not hold or represent an interest adverse to the estates of the Debtors, and C&H is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code.
34. In connection with the preparation of this Application and the Whitman Declaration, C&H has conducted an extensive and thorough review of its internal conflicts database to identify any connections between C&H and the Debtors, their officers and directors, their creditors, equity holders, and all other known parties in interest in these Chapter 11 cases. Specifically, C&H has searched for connections with the following parties, among others:
(a) The Debtors: Crestline Packaging Solutions LLC and CPS Holdings Inc.;
(b) Equity Sponsor: Thornfield Capital Partners LP, including Julian Ashford (Managing Partner) and Rebecca Strand (Deal Partner);
(c) Officers and Directors of the Debtors: Marcus J. Reinholdt (Chief Executive Officer), Dana Kowalski (Chief Financial Officer), and Preston Yee (General Counsel);
(d) Administrative Agent and Collateral Agent: Ridgeline National Bank, N.A. (in its capacities as administrative agent, collateral agent under the First Lien Credit Agreement, and DIP agent under the DIP Facility);
(e) Members of the Ad Hoc Group of First Lien Lenders: Blackmoor Capital Management LLC (Arthur Ng, Portfolio Manager), Greystone Fixed Income Partners LP (Sandra Ibanez, Managing Director), and Wexford Opportunity Fund III LP (Derek Loomis, Principal);
(f) Members of the Ad Hoc Group of Second Lien Noteholders: Fenwick Structured Credit Fund II LP (Liam Driscoll, Portfolio Manager) and Millhaven Capital Advisors LLC (Karen Ostrowski, Managing Director);
(g) Indenture Trustee: Continental Fiduciary Trust Company;
(h) Counsel to Creditor Groups: Hargrove, Mitchell & Saunders LLP (Victoria Kline, Partner, and Thomas Frey, Partner), as counsel to the Ad Hoc Group of First Lien Lenders, and Pemberton & Locke LLP (Raymond Delvecchio, Partner, and Nia Patterson, Partner), as counsel to the Ad Hoc Group of Second Lien Noteholders;
(i) Other Retained Professionals: Kellner & Hartwick LLP (Bruce Tatelman, Partner), as local co-counsel to the Debtors; Aldersgate Advisory Group LLC (Priya Narayanan, Managing Director), as financial advisor to the Debtors; Dralvecen Reyes Linley CPAs LLP & Associates LLP (Catherine Holtz, Partner), as tax and accounting advisor to the Debtors; and Pinnacle Claims Administration LLC, as claims and noticing agent;
(j) Insurance Carrier: Apex Indemnity Insurance Company, as the Debtors' D&O tail insurance carrier;
(k) Key Contract Counterparties: Northstar Polymers Inc. (resin supplier), Meridian Industrial Leasing Corp. (equipment lessor), and Benchmark Real Estate Holdings LLC (warehouse landlord);
(l) The United States Trustee: The United States Trustee for Region 9.
35. Based on C&H's comprehensive conflicts review, the Firm has confirmed that C&H does not have any connection to the Debtors, their creditors, or other parties in interest in these Chapter 11 cases that would disqualify the Firm from serving as counsel to the Debtors under section 327(a) of the Bankruptcy Code.
36. C&H may, in the ordinary course of its practice, have represented or currently represent certain of the entities identified above in matters that are wholly unrelated to the Debtors or these Chapter 11 cases. Such representations do not create any actual conflict of interest, do not give rise to any disqualifying adverse interest, and do not impair C&H's ability to represent the Debtors' estates faithfully and effectively in these proceedings. None of such representations involve the Debtors or any matter connected with the Debtors' businesses, assets, liabilities, or these Chapter 11 cases.
37. C&H will continue to monitor its professional engagements on an ongoing basis and, if any new relevant connections or potential conflicts of interest are identified at any time during the pendency of these cases, C&H will promptly file a supplemental disclosure with the Court in accordance with Bankruptcy Rule 2014 and applicable orders of this Court.
38. Further detail concerning C&H's connections with the Debtors and parties in interest is set forth in the Verified Statement filed separately pursuant to Federal Rule of Bankruptcy Procedure 2014.
X. NUNC PRO TUNC RELIEF
39. The Debtors respectfully request that the retention of C&H as general bankruptcy counsel be approved nunc pro tunc to the Petition Date of June 20, 2022, so that C&H may be compensated for professional services rendered and expenses incurred from and after the Petition Date, subject to the Court's fee approval procedures.
40. Since the Petition Date, C&H has been actively and continuously providing essential legal services to the Debtors in connection with the commencement and prosecution of these Chapter 11 cases, including, without limitation, the preparation and filing of the Debtors' Chapter 11 petitions, schedules, and statements of financial affairs; the preparation and prosecution of first day motions and related filings; attendance at the first day hearing; negotiations with the Debtors' principal creditor constituencies and the United States Trustee; and the continued preparation of the prepackaged plan and disclosure statement for submission to the Court.
41. There is ample cause for the approval of C&H's retention on a nunc pro tunc basis. This Application is being filed promptly after the Petition Date and within the time permitted by the Bankruptcy Rules and applicable orders of this Court. The services rendered by C&H since the Petition Date have been and continue to be necessary and essential for the preservation and administration of these estates, and any delay in the provision of such services would have been detrimental to the Debtors and their creditors. Nunc pro tunc approval is routinely granted in circumstances such as these, where counsel has been engaged from the inception of the case and the retention application is filed without undue delay. See, e.g., In re Mushroom Transp. Co., 382 F.3d 325, 339 (3d Cir. 2004); In re Jarvis, 53 F.3d 416, 421 (1st Cir. 1995).
XI. BASIS FOR RELIEF
42. Section 327(a) of the Bankruptcy Code provides that a debtor in possession may, with court approval, employ one or more attorneys that do not hold or represent an interest adverse to the estate and that are disinterested persons, to represent or assist the debtor in possession in carrying out its duties under the Bankruptcy Code. 11 U.S.C. § 327(a). As demonstrated herein and in the Whitman Declaration, C&H satisfies the requirements of section 327(a): C&H does not hold or represent any interest adverse to the estates of the Debtors, and C&H is a "disinterested person" within the meaning of section 101(14) of the Bankruptcy Code.
43. Section 328(a) of the Bankruptcy Code provides that the Court may approve the employment of a professional person under section 327 on any reasonable terms and conditions of employment, including on a retainer, on an hourly basis, on a fixed or percentage fee basis, or on a contingent fee basis. 11 U.S.C. § 328(a). Here, the Debtors propose to compensate C&H on an hourly basis at the Firm's standard hourly rates, which are reasonable and consistent with the rates charged by comparable firms for similar engagements.
44. Section 330 of the Bankruptcy Code authorizes the Court, after notice and a hearing, to award a professional person employed under section 327 reasonable compensation for actual, necessary services rendered by such professional, and reimbursement for actual, necessary expenses. 11 U.S.C. § 330(a)(1). C&H's compensation will be subject to the Court's review and approval through the interim and final fee application process.
45. Bankruptcy Rule 2014(a) requires that an application for the employment of a professional person be accompanied by a verified statement of the person to be employed, setting forth the person's connections with the debtor, creditors, and other parties in interest, the nature of the services to be rendered, the reasons for the selection, and the terms and conditions of employment. Fed. R. Bankr. P. 2014(a). The Whitman Declaration and the Verified Statement filed separately on the docket in these cases satisfy each of these disclosure requirements.
46. C&H satisfies each and every requirement for retention as counsel to the Debtors under the foregoing provisions, as set forth herein and in the Whitman Declaration.
XII. NOTICE
47. Notice of this Application has been provided to the following parties:
(a) The Office of the United States Trustee for the Northern District of Ohio, Howard M. Metzenbaum U.S. Courthouse, 201 Superior Avenue, Cleveland, Ohio 44114;
(b) Ridgeline National Bank, N.A., as administrative agent and collateral agent under the First Lien Credit Agreement and as DIP agent under the DIP Facility, 200 Public Square, Cleveland, Ohio 44114;
(c) Hargrove, Mitchell & Saunders LLP, as counsel to the Ad Hoc Group of First Lien Lenders, 51 West 52nd Street, New York, New York 10019 (Attn: Victoria Kline, Esq. and Thomas Frey, Esq.);
(d) Pemberton & Locke LLP, as counsel to the Ad Hoc Group of Second Lien Noteholders, 1 Liberty Plaza, New York, New York 10006 (Attn: Raymond Delvecchio, Esq. and Nia Patterson, Esq.); and
(e) All other parties entitled to notice pursuant to the Bankruptcy Rules and applicable orders of this Court, including any parties on the Master Service List established in these cases.
48. The Debtors respectfully submit that no further notice of this Application is necessary or required under the circumstances.
XIII. CONCLUSION AND PRAYER FOR RELIEF
WHEREFORE, the Debtors respectfully request that this Court enter an order, substantially in the form attached hereto as Exhibit B:
(a) Authorizing the employment and retention of Calderwood & Harkness LLP as general bankruptcy counsel to the Debtors and Debtors in Possession in these Chapter 11 cases, nunc pro tunc to June 20, 2022, the Petition Date;
(b) Authorizing C&H to be compensated for professional services rendered at its standard hourly rates, as set forth herein and in the Whitman Declaration, and to be reimbursed for actual, necessary out-of-pocket expenses incurred in connection with these Chapter 11 cases, in each case subject to the Court's interim and final fee approval procedures; and
(c) Granting such other and further relief as this Court deems just, proper, and equitable.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Colette Whitman (Ohio Bar No. 0098214) 30 Rockefeller Plaza New York, New York 10112 Telephone: (212) 555-7000 Facsimile: (212) 555-7001
— and —
127 Public Square, Suite 4100 Cleveland, Ohio 44114 Telephone: (216) 555-3200 Facsimile: (216) 555-3201
Proposed Counsel to the Debtors and Debtors in Possession
Dated: July 11, 2022
EXHIBIT A
DECLARATION OF COLETTE WHITMAN IN SUPPORT OF APPLICATION TO RETAIN CALDERWOOD & HARKNESS LLP AS COUNSEL TO THE DEBTORS AND DEBTORS IN POSSESSION
UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION
DECLARATION OF COLETTE WHITMAN PURSUANT TO 11 U.S.C. § 327 AND FED. R. BANKR. P. 2014
I, Colette Whitman, hereby declare as follows:
1. I am a partner in the Bankruptcy & Restructuring practice group at Calderwood & Harkness LLP ("C&H" or the "Firm"). I serve as the Responsible Partner for the Firm's representation of Crestline Packaging Solutions LLC ("Crestline" or "CPS") and CPS Holdings Inc. ("CPS Holdings" and, together with Crestline, the "Debtors") in the above-captioned Chapter 11 cases. I submit this declaration (this "Declaration") in support of the Debtors' Application for Entry of an Order Authorizing the Employment and Retention of Calderwood & Harkness LLP as Counsel to the Debtors and Debtors in Possession, Nunc Pro Tunc to the Petition Date (the "Application"), pursuant to section 327(a) of title 11 of the United States Code (the "Bankruptcy Code") and Rule 2014(a) of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"). I am authorized to submit this Declaration on behalf of the Firm.
2. Except as otherwise indicated, the statements set forth in this Declaration are based upon my personal knowledge, my review of relevant documents and records maintained by C&H in the ordinary course of business, information provided to me by other professionals at the Firm, and information provided to me by the Debtors and their other advisors. If called as a witness, I could and would testify competently to the matters set forth herein.
I. Professional Background
3. I have practiced bankruptcy and restructuring law for over twenty years. During my career, I have represented debtors, creditors, secured lenders, indenture trustees, official committees, equity sponsors, and other parties in interest in numerous complex Chapter 11 cases, including prepackaged, prearranged, and traditional Chapter 11 filings across a broad range of industries, including manufacturing, energy, retail, healthcare, and financial services.
4. I am admitted to practice law in the State of New York and have been admitted pro hac vice in the Northern District of Ohio in connection with these Chapter 11 cases. I am also admitted to practice before the United States District Courts for the Southern and Eastern Districts of New York, the United States Bankruptcy Courts for the Southern and Eastern Districts of New York, the United States Court of Appeals for the Second Circuit, and various other federal courts.
5. I graduated from Columbia Law School in 2000, where I was a Harlan Fiske Stone Scholar, and received my Bachelor of Arts degree, magna cum laude, from the University of Michigan in 1997. I have been a partner at Calderwood & Harkness LLP since 2010.
II. Engagement History
6. Calderwood & Harkness LLP was initially engaged by the Debtors in approximately early May 2022, shortly after Ridgeline National Bank, N.A. delivered its Notice of Default on April 22, 2022. The Debtors engaged C&H to advise on available restructuring alternatives, including an out-of-court amendment and extension of the existing credit facilities, a prepackaged Chapter 11 plan of reorganization, a prearranged Chapter 11 filing, and a traditional or "freefall" Chapter 11 filing. The Firm's initial engagement encompassed the analysis of the Debtors' capital structure, the evaluation of restructuring alternatives, and the commencement of negotiations with the Debtors' principal creditor constituencies.
7. A formal engagement letter between the Debtors and C&H was executed on June 8, 2022, setting forth the scope of the Firm's engagement, the applicable hourly rates, and other terms and conditions of the representation. The engagement letter provides that C&H will be compensated on an hourly basis at its standard hourly rates, subject to reimbursement of reasonable out-of-pocket expenses.
8. A prepetition retainer in the amount of $500,000 (the "Retainer") was received by C&H by wire transfer on June 10, 2022. The Retainer was deposited into C&H's client trust account and has been applied to fees and expenses for professional services rendered in connection with the Debtors' pre-petition restructuring efforts, including the negotiation of the Forbearance Agreement, preparation for the Chapter 11 filing, and related matters. As of the date of this Declaration, C&H has applied the entirety of the Retainer to pre-petition fees and expenses, and any remaining balance, if any, will be reconciled in connection with the Firm's fee applications.
III. Engagement Team and Billing Rates
9. The following attorneys are the primary timekeepers currently assigned to the Debtors' engagement, together with their respective billing rates for the 2022 calendar year:
10. In addition to the foregoing primary timekeepers, other attorneys and paraprofessionals at C&H may be assigned to work on matters arising in these Chapter 11 cases from time to time, as the needs of the engagement may require. Such additional timekeepers will bill at C&H's standard hourly rates then in effect. C&H's current standard hourly rate ranges for professionals who may work on this matter are as follows: partners, $1,275 to $1,800 per hour; counsel, $1,050 to $1,475 per hour; associates, $575 to $1,150 per hour; and paraprofessionals, $250 to $525 per hour.
11. The rates set forth above are consistent with the rates that C&H charges to its clients generally for comparable services rendered outside of the bankruptcy context, and are in line with the rates charged by law firms of comparable experience, reputation, and standing for similar restructuring and bankruptcy engagements. C&H reserves the right to adjust its hourly rates from time to time in the ordinary course, consistent with the Firm's standard billing practices, with any such adjustments to be disclosed in connection with C&H's interim and final fee applications.
IV. Services Rendered and To Be Rendered
12. Since the inception of the engagement and continuing through the date of this Declaration, C&H has provided, and continues to provide, the following professional services to the Debtors in connection with their restructuring efforts and these Chapter 11 cases:
(a) Advising the Debtors on the full range of restructuring alternatives available to them, including an out-of-court amendment and extension of the existing credit facilities, a prepackaged Chapter 11 plan of reorganization, a prearranged Chapter 11 plan, and a traditional Chapter 11 filing, and analyzing the relative benefits, risks, and feasibility of each alternative;
(b) Negotiating the Forbearance Agreement executed on May 18, 2022, with Ridgeline National Bank, N.A. and the consenting first lien lenders, and the subsequent extension thereof;
(c) Negotiating and drafting the Restructuring Support Agreement executed on July 8, 2022, by and among the Debtors, Thornfield Capital Partners LP, the Ad Hoc Group of First Lien Lenders, and the Ad Hoc Group of Second Lien Noteholders, including the plan term sheet and milestones annexed thereto;
(d) Preparing the Debtors' Chapter 11 petitions, including the schedules of assets and liabilities, statements of financial affairs, corporate ownership statements, and all related filings;
(e) Preparing and filing first day motions and related pleadings, including motions for authority to use cash collateral, to pay employee wages and benefits, to pay critical vendors, to continue insurance programs, and to retain professionals, among others;
(f) Advising the Debtors in connection with the $30.0 million DIP Facility provided by Ridgeline National Bank, N.A., including the negotiation, documentation, and Court approval of the DIP credit agreement and related orders;
(g) Preparing the prepackaged plan of reorganization (Dkt. 47) and the related disclosure statement (Dkt. 48), including the classification of claims and interests, the treatment of each class, the plan's feasibility analysis, and the liquidation analysis;
(h) Advising the Debtors on solicitation procedures and compliance with section 1126 of the Bankruptcy Code and applicable securities laws in connection with the solicitation of votes on the prepackaged plan;
(i) Advising the Debtors regarding the treatment of executory contracts and unexpired leases, including the analysis of assumption and rejection decisions under section 365 of the Bankruptcy Code;
(j) Coordinating with the Debtors' other retained professionals, including Kellner & Hartwick LLP (local co-counsel), Aldersgate Advisory Group LLC (financial advisor), and Dralvecen Reyes Linley CPAs LLP & Associates LLP (tax and accounting advisor), to ensure the efficient and non-duplicative delivery of professional services; and
(k) Performing all other legal services necessary and appropriate in connection with the prosecution and administration of these Chapter 11 cases.
V. Disinterestedness. 13. I have caused C&H's internal conflicts database to be searched against all known parties in interest in these Chapter 11 cases. The conflicts review was conducted by the Firm's conflicts department under my supervision and encompassed a comprehensive search of C&H's current and historical client records, personnel records, and financial interest records. Specifically, C&H has searched for connections with the following parties, among others:
(a) The Debtors: Crestline Packaging Solutions LLC and CPS Holdings Inc., including their officers and directors, namely Marcus J. Reinholdt (Chief Executive Officer), Dana Kowalski (Chief Financial Officer), and Preston Yee (General Counsel);
(b) Thornfield Capital Partners LP, the Debtors' equity sponsor, including its principals Julian Ashford (Managing Partner) and Rebecca Strand (Deal Partner);
(c) Ridgeline National Bank, N.A., in its capacities as administrative agent, collateral agent under the First Lien Credit Agreement, and DIP agent under the DIP Facility;
(d) The members of the Ad Hoc Group of First Lien Lenders: Blackmoor Capital Management LLC (Arthur Ng, Portfolio Manager), Greystone Fixed Income Partners LP (Sandra Ibanez, Managing Director), and Wexford Opportunity Fund III LP (Derek Loomis, Principal);
(e) The members of the Ad Hoc Group of Second Lien Noteholders: Fenwick Structured Credit Fund II LP (Liam Driscoll, Portfolio Manager) and Millhaven Capital Advisors LLC (Karen Ostrowski, Managing Director);
(f) Continental Fiduciary Trust Company, as indenture trustee under the Second Lien Notes Indenture;
(g) Counsel to the creditor groups: Hargrove, Mitchell & Saunders LLP (Victoria Kline, Partner, and Thomas Frey, Partner), as counsel to the Ad Hoc Group of First Lien Lenders, and Pemberton & Locke LLP (Raymond Delvecchio, Partner, and Nia Patterson, Partner), as counsel to the Ad Hoc Group of Second Lien Noteholders;
(h) Other professionals retained or to be retained by the Debtors: Kellner & Hartwick LLP (Bruce Tatelman, Partner), as local co-counsel; Aldersgate Advisory Group LLC (Priya Narayanan, Managing Director), as financial advisor; Dralvecen Reyes Linley CPAs LLP & Associates LLP (Catherine Holtz, Partner), as tax and accounting advisor; and Pinnacle Claims Administration LLC, as claims and noticing agent;
(i) Apex Indemnity Insurance Company, as the Debtors' directors' and officers' tail insurance carrier;
(j) Key contract counterparties of the Debtors, including Northstar Polymers Inc. (resin supplier), Meridian Industrial Leasing Corp. (equipment lessor), and Benchmark Real Estate Holdings LLC (warehouse landlord);
(k) National Corporate Services, Inc., as the registered agent for CPS Holdings Inc. in the State of Delaware; and
(l) The United States Trustee for Region 9.
14. Based on this comprehensive review, and to the best of my knowledge, information, and belief formed after reasonable inquiry:
(a) C&H does not hold or represent any interest adverse to the estates of the Debtors in connection with these Chapter 11 cases;
(b) C&H is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code; and
(c) C&H does not have any connection with the Debtors, their creditors, any other party in interest, the United States Trustee, or any person employed in the Office of the United States Trustee, that would require the Firm's disqualification under section 327(a) of the Bankruptcy Code or any other applicable provision of law.
15. I am aware that C&H may, in the ordinary course of its practice, have represented or currently represent certain of the entities identified above in matters wholly unrelated to the Debtors or these Chapter 11 cases. In particular, C&H has, from time to time, represented institutional financial entities and investment funds in transactional and advisory matters that have no connection to the Debtors, the Debtors' businesses, the Debtors' assets or liabilities, or these Chapter 11 proceedings. None of such representations give rise to an actual or potential conflict of interest or disqualifying adverse interest that would impair C&H's ability to represent the Debtors' estates faithfully and effectively.
16. C&H will continue to monitor its professional engagements on an ongoing basis throughout the pendency of these Chapter 11 cases. Should any new relevant connection or potential conflict of interest be identified at any time, C&H will promptly file a supplemental disclosure with the Court in accordance with Bankruptcy Rule 2014 and any applicable orders of this Court.
VI. Retainer Disclosure
17. As noted above, prior to the Petition Date, C&H received a retainer in the amount of $500,000 from the Debtors on June 10, 2022, by wire transfer. The Retainer was deposited into C&H's client trust account and has been applied to pre-petition fees and expenses for professional services rendered in connection with the Debtors' restructuring efforts and preparation for the Chapter 11 filing. To the extent any portion of the Retainer remains unapplied to pre-petition fees and expenses, such balance will be held by C&H and applied to post-petition fees and expenses as may be allowed by the Court, or returned to the Debtors' estates as may be appropriate and as directed by the Court.
18. C&H has disclosed the receipt and application of the Retainer in compliance with Bankruptcy Rule 2016(b), and the Firm's statement filed pursuant to Bankruptcy Rule 2016(b) provides further detail regarding the Retainer and C&H's pre-petition compensation.
VII. Coordination with Other Professionals
19. In the performance of its duties as general bankruptcy counsel to the Debtors, C&H will coordinate closely with the other professionals retained or to be retained by the Debtors in these Chapter 11 cases. Specifically:
(a) Kellner & Hartwick LLP — Local co-counsel for the Debtors in the Northern District of Ohio. The lead partner on the engagement is Bruce Tatelman. Kellner & Hartwick will handle Ohio-specific procedural and local practice matters. Estimated fees for the engagement are approximately $380,000;
(b) Aldersgate Advisory Group LLC — Financial advisor to the Debtors. The lead managing director on the engagement is Priya Narayanan. Aldersgate provides financial advisory, valuation, and restructuring advisory services to the Debtors. Aldersgate's compensation consists of a monthly advisory fee of $175,000 per month plus a restructuring completion fee of $3.5 million, subject to Court approval;
(c) Dralvecen Reyes Linley CPAs LLP & Associates LLP — Tax and accounting advisor to the Debtors. The lead partner on the engagement is Catherine Holtz. Dralvecen Reyes Linley CPAs LLP provides tax planning, accounting, and related advisory services in connection with the restructuring. Estimated fees for the engagement are approximately $410,000; and
(d) Pinnacle Claims Administration LLC — Claims and noticing agent for the Debtors. Pinnacle provides claims administration, noticing, balloting, and related services. Estimated fees for the engagement are approximately $285,000.
20. C&H will use reasonable efforts to allocate responsibilities among the Debtors' retained professionals in an efficient and non-duplicative manner, and will endeavor to minimize any overlap in the services provided by the respective professionals.
VIII. Conclusion. 21. For the reasons set forth herein and in the Application, I respectfully submit that C&H is well qualified to serve as general bankruptcy counsel to the Debtors in these Chapter 11 cases, that C&H is a disinterested person within the meaning of section 101(14) of the Bankruptcy Code, and that the retention of C&H should be approved nunc pro tunc to the Petition Date of June 20, 2022.
I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct to the best of my knowledge, information, and belief.
Executed on July 11, 2022 New York, New York
________________________________________
Colette Whitman Partner Calderwood & Harkness LLP 30 Rockefeller Plaza New York, New York 10112 Telephone: (212) 555-7000 Facsimile: (212) 555-7001
EXHIBIT B
PROPOSED ORDER
UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION
ORDER AUTHORIZING THE EMPLOYMENT AND RETENTION OF CALDERWOOD & HARKNESS LLP AS COUNSEL TO THE DEBTORS AND DEBTORS IN POSSESSION, NUNC PRO TUNC TO THE PETITION DATE
Upon consideration of the Application of Debtors for Entry of an Order Authorizing the Employment and Retention of Calderwood & Harkness LLP as Counsel to the Debtors and Debtors in Possession, Nunc Pro Tunc to the Petition Date (Dkt. _) (the "Application"); and upon consideration of the Declaration of Colette Whitman in Support of the Application (the "Whitman Declaration"), attached to the Application as Exhibit A; and upon consideration of the Verified Statement of Calderwood & Harkness LLP filed pursuant to Federal Rule of Bankruptcy Procedure 2014 (Dkt. _); and the Court having reviewed the Application, the Whitman Declaration, the Verified Statement, and all related submissions; and adequate and sufficient notice of the Application having been given to the parties identified therein and no other or further notice being necessary or required; and no objections to the Application having been filed, or any such objections having been withdrawn, resolved, or overruled; and the Court having determined that the relief requested in the Application is in the best interests of the Debtors, their estates, their creditors, and all other parties in interest; and good and sufficient cause having been shown;
IT IS HEREBY ORDERED THAT:
1. The Application is GRANTED in all respects.
2. Pursuant to sections 327(a), 328(a), and 330 of the Bankruptcy Code, the Debtors are authorized to employ and retain Calderwood & Harkness LLP as their general bankruptcy counsel in these Chapter 11 cases, nunc pro tunc to June 20, 2022 (the "Petition Date"), on the terms and conditions set forth in the Application and the Whitman Declaration.
3. C&H shall be compensated for professional services rendered in connection with these Chapter 11 cases at its standard hourly rates as set forth in the Application and the Whitman Declaration, which rates are as follows for the primary engagement team:
Additional partners, counsel, associates, and paraprofessionals of C&H may provide services in connection with these Chapter 11 cases at the Firm's standard hourly rates then in effect, as disclosed in the Whitman Declaration and as may be further disclosed in C&H's fee applications. C&H shall also be entitled to reimbursement for actual, necessary out-of-pocket expenses incurred in connection with these Chapter 11 cases. All compensation and expense reimbursement shall be subject to the filing of interim and final fee applications and approval by this Court.
4. C&H shall file interim and final fee applications for compensation and reimbursement of expenses in accordance with sections 330 and 331 of the Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, the applicable guidelines of the United States Trustee for Region 9, and any applicable orders of this Court governing the allowance of professional fees and expenses in these cases.
5. C&H shall promptly supplement its disclosures filed pursuant to Bankruptcy Rule 2014 if any new relevant connections or potential conflicts of interest are identified at any time during the pendency of these Chapter 11 cases.
6. The prepetition retainer in the amount of $500,000 received by C&H on June 10, 2022, shall be applied as set forth in the Application and the Whitman Declaration, subject to reconciliation and final accounting in connection with C&H's final fee application in these cases.
7. This Court retains jurisdiction with respect to all matters arising from or related to the implementation, interpretation, or enforcement of this Order.
________________________________________
UNITED STATES BANKRUPTCY JUDGE
Dated: ____, 2022
In re:
CRESTLINE PACKAGING SOLUTIONS LLC and CPS HOLDINGS INC., | Case No. 22-51247
Debtors. | (Jointly Administered)
Chapter 11
Hon. ________________
Facility | Outstanding Principal | Commitment / Original Principal | Interest Rate | Maturity
First Lien Revolving Credit Facility | $32.6 million (drawn) | $40.0 million (commitment) | SOFR + 375 bps | October 13, 2022
First Lien Term Loan | $158.7 million | $175.0 million (original) | SOFR + 425 bps | October 13, 2024
9.75% Senior Secured Second Lien Notes | $56.0 million | $60.0 million (original; $4.0 million repurchased in 2019) | 9.75% fixed | October 13, 2025
Total Funded Debt | $247.3 million
Attorney | Role | Practice Area | 2022 Standard Hourly Rate
Colette Whitman | Responsible Partner | Bankruptcy & Restructuring | $1,575/hour
Nathaniel Bower | Billing Partner | Bankruptcy & Restructuring | $1,475/hour
Gabrielle Moss | Lead Associate | Bankruptcy & Restructuring | $895/hour
Amy Chesterton | Working Associate | Bankruptcy & Restructuring | $725/hour
In re:
CRESTLINE PACKAGING SOLUTIONS LLC and CPS HOLDINGS INC., | Case No. 22-51247
Debtors. | (Jointly Administered)
Chapter 11
Attorney | Position | 2022 Standard Hourly Rate
Colette Whitman | Partner | $1,575/hour
Nathaniel Bower | Partner | $1,475/hour
Gabrielle Moss | Associate | $895/hour
Amy Chesterton | Associate | $725/hour
In re:
CRESTLINE PACKAGING SOLUTIONS LLC and CPS HOLDINGS INC., | Case No. 22-51247
Debtors. | (Jointly Administered)
Chapter 11
Attorney | Position | 2022 Standard Hourly Rate
Colette Whitman | Partner | $1,575/hour
Nathaniel Bower | Partner | $1,475/hour
Gabrielle Moss | Associate | $895/hour
Amy Chesterton | Associate | $725/hour

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

I. PRELIMINARY STATEMENT

II. JURISDICTION AND VENUE

III. BACKGROUND

IV. RELIEF REQUESTED

V. SCOPE OF SERVICES TO BE PROVIDED

VI. C&H'S QUALIFICATIONS

VII. PROFESSIONAL COMPENSATION

VIII. PREPETITION RETAINER

IX. DISINTERESTEDNESS AND ABSENCE OF ADVERSE INTEREST

X. NUNC PRO TUNC RELIEF

XI. BASIS FOR RELIEF

XII. NOTICE

XIII. CONCLUSION AND PRAYER FOR RELIEF

CALDERWOOD & HARKNESS LLP

EXHIBIT A

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

EXHIBIT B

PROPOSED ORDER

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION

IT IS HEREBY ORDERED THAT:

UNITED STATES BANKRUPTCY JUDGE

Record

Parties

Dates

Amounts