Case Doc 11 Filed 10/04/18 Page 1 of 23

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1 Case Doc 11 Filed 10/04/18 Page 1 of 23 I1V THE UNITED STATES BAl~KRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ) Chapter 11 ATD CORPORATION, et al.,i ) Case No O Debtors. ) (Joint Administration Requested) DEBTORS' MOTION FOR ENTRY OF INTERIM AND FINAL ORDERS (I) AUTHORIZING THE DEBTORS TO (A) CONTINUE TO OPERATE THEIR CASH MANAGEMENT SYSTE~+I, (B) HONOR CERTAIN PREPETITION OBLIGATIONS RELATED THERETO, (C) MAINTAIN EXISTING BUSINESS FORMS, AND (D) PERFORlt~ INTERCOMPANY TRANSACTIONS, AND (II) GRANTING RELATEll RELIEF The above-captioned debtors and debtors in possession (collectively, the "Debtors") respectfully state as follows in support of this motion (this "Motion"):2 Relief Requested 1. The Debtors seek entry of interim and final orders, substantially in the forms attached hereto as Exhibit A and Exhibit B (the "Interim Order" and the "Final Order," respectively): (a) authorizing the Debtors to (i) continue to operate their cash management system, (ii) honor certain prepetition obligations related thereto, (iii) maintain existing business forms in the ordinary course of business, and (iv) continue to perform the Intercompany Transactions (as such terms are defined below) consistent with.historical practice; (b) granting administrative I The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, where applicable, include: ATD Corporation (3683); Accelerate Holdings Corp. (0528); American Tire Distributors Holdings, Inc. (6143); American Tire Distributors, Ina (4594); Rubbr Automotive Services, LLC (3334); The Hercules Tire &Rubber Company (3365); Terry's Tire Town Holdings, Inc. (7464); Tire Pros Francorp (1361); and Hercules Asia Pacific, LLC (2499). The location of the Debtors' service address in these chapter l l cases is Herbert Wayne Court, Suite 150, Huntersville, North Carolina The facts and circumstances supporting this Motion are set forth in the Declaratzvn of William Williarns, Chief Financial Officer of ATD Corporation, in Support of Chapter 11 Petitions and First Day Motions (the "First Day Declaration"), filed contemporaneously with this Motion and incorporated by reference herein. KE

2 Case Doc 11 Filed 10/04/18 Page 2 of 23 expense status to postpetition intercoryipany balances;3 and (c) granting related relief. Iti addition, the Debtors request that the Court schedule a final hearing approximately 21 days from the Petition Date (as defined below). Jurisdiction and Venue 2. The United States Bankruptcy Court for the District of Delaware (the"court") has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing ONder of Reference from the United States District Court for the District of Delaware, dated February 29, The Debtors confirm their consent, pursuant to Rule 7008 of the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), to the entry of a final order by the Court in connection with this Motion to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments in connection herewith consistent with Article III of the United States Constitution. 3. Venue is proper pursuant to 28 U.S.C and The bases for the relief requested herein are sections 105, 345, 363, 503, and 507 of title 11 of the United States Code, 11 U.S.C (the "Bankruptcyode"), Bankruptcy Rules 6003 and 6004, and Rules (fl, and (m) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the "Local Rules"). 3 Because the Debtors engage in intercompany transactions (as further described below) on a regular basis, and because such transactions are common among similar enterprises, the Debtors believe the intercompany transactions are ordinary course transactions within the meaning of section 363(c)(1) of the Bankruptcy Code and, therefore, do not require the Court's approval. Nonetheless, out of an abundance of caution, the Debtors are seeking express authority to engage in such transactions on a postpetition basis. The continued performance of the ordinary course intercompany transactions is necessary to ensure the Debtors' ability to operate their business during these chapter 11 cases.

3 Case Doc 11 Filed 10/04/18 Page 3 of 23 Bacl~~round 5. The Debtors are the largest distributor of replacement tires in North America based on dollar amount of wholesale sales. With their network of over 140 distribution centers and 1,400 delivery vehicles, the Debtors service a geographic region covering more than 90 percent of the replacement tiro market for passenger vehicles and light trucks in the United States. In addition, the Debtors' proprietary Hercules li brand is the number one private tire brand in North America based on unit sales. The Debtors are headquartered in Huntersville, North Carolina. Non-Debtor affiliate National Tire Distributors Inc. and its subsidiaries operate on of the largest replacement tire distributors in Canada, with 23 distribution centers throughout the country. The Debtors and their non-debtor subsidiaries generated approximately $5.2 billion in revenue in fiscal year 2017 and currently employ approximately 5,500 people in the United States and Canada. As of the date hereof (the "Petition Date"), the Debtors have approximately $2.6 billion in funded debt. 6. On the Petition Date, each Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The Debtors are operating their business and managing their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. Concurrently with the filing of this Motion, the Debtors filed a motion requesting procedural consolidation and joint administration of these chapter 11 cases pursuant to Bankruptcy Rule 1015(b). No request for the appointment ~f a trustee or examiner has been made in these chapter 11 cases, and no committees have been appointed or designated. The Cash A'Iana~ement System I. Over~t~ie«. 7. In the ordinary course of business, the Debtors operate a complex cash management system, which is summarized on Exhibit 1 annexed to Exhibit A attached hereto (the"cash Management System"). Non-Debtor Canadian affiliates, National Tire Distributors Inc. ("NTD") 3

4 Case Doc 11 Filed 10/04/18 Page 4 of 23 and Hercules Tire International Inc. ("HTI"), maintain independent cash management systems that, through manual and automatic Intercompany Transactions (as defined herein), transact periodically with the Debtors' Cash Management System. The Debtors use their Cash Management System to transfer and distribute funds and to facilitate cash monitoring, forecasting, and reporting. The Debtors' treasury department, located primarily in Huntersville, North Carolina, maintains daily oversight over the Cash Management System and implements cash management controls for entering, processing, and releasing funds, including in connection with intercompany transactions. 8. Additionally, the Debtors' corporate accounting and cash forecasting departments regularly reconcile the Debtors' books and records to ensure that all transfers are accounted for properly. As illustrated in the Cash Management System diagram, the Cash Management System is based around two main disbursement accounts and is organized to facilitate the seamless collection and disbursement of cash under the Debtors' asset-based lending revolving credit facility (the"abl Facility"), which is described in greater detail in the First Day Declaration. 9. The Debtors' Cash Management System facilitates the timely and efficient collection, management, and disbursement of funds used in the Debtors' business. The Debtors estimate that cash collections average approximately $417.5 million per month, including cash receipts, credit card receipts, and certain e-commerce sales. In addition, the Debtors estimate that total disbursements will range between $288.0 million and $419.9 million per month during these chapter 11 cases. Because of the nature of the Debtors' business and the disruption. to the business that would result if they were forced to close their existing bank accounts, it is critical that the existing Cash Management System remain in place. 4

5 Case Doc 11 Filed 10/04/18 Page 5 of 23 II. The Cash 1Vianagement System As of the Petition Date, the Debtors' Cash Management System includes a total of 26 bank accounts, each of which is identified on Exhibit 2 annexed to Exhibit A attached hereto. The Debtors' bank accounts (each, a Bank Account, and collectively, the "Bank Accounts") are primarily held at Bank of America Merrill Lynch ("Bank of America"), with the remaining Bank Accounts held at the following banking institutions (together with Bank of America, collectively, the "Cash Management Banks"): four Bank Accounts held at JP Morgan Chase Bank ("Chase"); one Bank Account held at Wells Fargo Bank, N.A. ("Wells Faro"); one Bank Account held at Citibank, N.A. ("Citibank"); one Bank account held at First Merchants Bank ("First Merchants"); e one Bank Account held at Key Bank ("Kev Bank"); and one Banlc Account held at Bank of the West ("Bank of the West"). 11. The Cash Management System consists of two discrete systems, which correspond to the Debtors major business divisions. The two Debtor entities that operate the separate cash management systems are: American Tire Distributors, Inc., which operates a system on account of the Debtors' U.S. distribution activities ("ATD," and the associated accounts, the "ATD Accounts"); and Hercules Tire &Rubber Company, which operates a system on account of Hercules' U.S. activities ("HTR," and the associated accounts, the "HTR Accounts"). 4 The Cash Management System described herein reflects the Cash Management System as of the date of this Motion. As described below, postpetition the Cash Management System will adjust to reflect the terms of the Debtors' postpetition financing agreements. 5

6 Case Doc 11 Filed 10/04/18 Page 6 of 23 A. The A`I'D Accounts. 12. ATD maintains 10 depository accounts at Banlc of America and one depository account at First Merchants (each account, an "ATD Main Depository Account," and collectively, the "ATD Main Depository Accounts"). The ATD Main Depository Accounts receive incoming funds from tl~e Debtors' U.S. customer receipts, and the Debtors deposit funds to a specific ATD Main Depository Account depending on the location of receipt and method of payment. Credit card sales are processed through athird-party processor and the proceeds are deposited, net of fees, chargebacks, and returns, into three separate ATD Main Depository Accounts designed to receive online credit card, Paypal, and credit card sales. 13. Each day, the cash contained in the ATD Main Depository Accounts is swept and applied to pay down the ABL Facility in the amount of the previous day's ending balance. To fund the Debtors' operations, ATD estimates their disbursement needs daily and draws down on the ABL Facility in accordance with the then-applicable borrowing base. Funds from the ABL Facility are then transferred via wire or automated-clearing-house ("ACH") to ATD's main disbursement account (the"atd Main Disbursement Account"). 14. ATD utilizes funds in the ATD Main Disbursement Account to satisfy obligations to vendors, employees, and various taxing authorities in the ordinary course of business. To satisfy these obligations, amounts are drawn, as needed, from the ATD Main Disbursement Account and are deposited into (a) four separate ATD subsidiary disbursement accounts (the"atd Subsidiary Disbursement Accounts"), (b) two ATD depository account for ATD's Voluntary Employee Beneficiary Association Plan (the"atd VEBA Depository Accounts"), which disburses funds on account of vacation time credits and health benefits, and (c) the HTR Main Disbursement Account (as defined herein) for amounts owed to HTR on account of ATD's purchase of HTR tires. D

7 Case Doc 11 Filed 10/04/18 Page 7 of The Debtors maintain ali of the ATD Subsidiary Disbursement Accounts at Bank of America. These accounts include: (a) a payroll processing account which is used to fund payroll for ATD employees; (b) an account used to fund various payments associated with the Debtors' employee benefit plans; (c) an account used to fund various A'I'D accounts payables made via check including, but not limited to, check payments made to vendors;s and (d) an account which makes disbursements related to certain distribution center locations. B. The HTR Accounts. 16. HTR maintains two active depository accounts, one at Chase, and one at Key Bank (each, an "HTR Depository Account," and collectively, the "HTR Depository Accounts"). These accounts receive customer receipts from Latin America as well as customer receipts from certain employees of Michelin. Funds in the Key Bank HTR Depository Account are transferred to HTR's only disbursement account (the "HTR Main Disbursement Account") on an as needed basis. 17. Cash in the HTR Main Disbursement Account is periodically swept to pay down the ABL Facility, and as with the ATD Main Disbursement Account, HTR draws down on the ABL Facility on an as needed basis to fund HTR's operational funding needs in accordance with the then-applicable borrowing base. IIL Bank Accounts. 18. The Bank Accounts and the Cash Management System are described further in the following table. 5 All corporate accounts payable payments made via wire or ACH are disbursed from the ATD Main Disbursement Account. 6 Michelin provides an employee discount to their employees purchasing tires from the Debtors. 7

8 Case Doc 11 Filed 10/04/18 Page 8 of 23 w ~ ~~ <.... au.~~~~ii~~s~ ~ t v ATD Main Depository Accounts ATD DC Depository (-6003) ATD ACH Depository (-9965) ATD Credit PPC Depository (-3737) ATD Cash Depository (-2514) ATD TDI South Depository (-9772) ATD TDI North Depository (-9785) ATD TDI Manassas Depository (-1281) ATD DTE Depository (-7579) Main Credit Card Depository (-3212) TireBuyer Depository (-7393) rubbr.com Depository (-4925) ATD Main Disbursement Account ATD Main Disbursement (-3019) ATD Subsidiary Disbursement Accounts ATD Payroll (-3207) ATD Accounts Payable (-8413) ATD Employee Welfare (-8480) ATD TDI Disbursement (-9561) ATD VEBA Depository Accounts VEBA Vacation (-3186) VEBA Medical and Dental Claims (-3373) Tire Pros Francorp. Depository Account TirePros Francorp BAML Account (-8789) TTTR Depository Accounts HTR Chase Depository (-4503) Michelin Employee Depository (-5261) HTR Main Disbursement Account BOA Main Disbursement (-2128) fltr Inactive Accounts HTR Bank of the West Disbursement (-3884) BTU BanI~ ~.ccounts The ATD Main Depository Accounts receive funds from the Debtors' incoming U.S. customer receipts which are deposited into the various accounts based on the location of receipt and method of payment. The previous day's balances held in the ATD Main Depository Accounts are automatically swept daily and applied to pay down the ABL Facility. The ATD Main Disbursement Account is funded as needed from the ABL Facility. The ATD Main Disbursement Account (a) pays operating expenses via wire and ACH and (b) disburses amounts as needed to the various ATD Subsidiary Disbursement Accounts. The ATD Subsidiary Disbursement Accounts disburse payments on account of ATD payroll, operating expenses being paid via check, ATD employee benefit payments, and operating expenses of certain distribution center locations. The ATD VEBA Depository Accounts receive funds from the ATD Main Disbursement Account and disburses funds bi-weekly via check to certain employees on account of vacation time credits, and to pay claims on employee medical and dental insurance claims. Tire Pros franchisee fees are deposited into the Tire Pros Francorp, depository account ending in 8789 which disburses funds on account of marketing costs required under the franchise agreements. HTR Bank ~ecouut~ Customer receipts primarily received from Latin America are deposited into the HTR Depository Accounts. Funds from the Michelin employee depository account ending in 5261 are transferred to the HTR Main Disbursement Account on an as needed basis to fund HTR's operational funding needs. The HTR Main Disbursement Account is funded as needed from the ABL Facility and the Michelin employee depository account ending in The HTR Main Disbursement Account funds HTR operating expenses via wire, ACH, and check. There is no activity in the HTR inactive accounts.

9 Case Doc 11 Filed 10/04/18 Page 9 of 23 HTR JP Mangan Chase Bank USD Check Disbursement (-7966) I-ITR JP Morgan Chase Bank USD Wire Disbursement (-9583) HTR JP Morgan Chase Bank Disbursement (-0401) 19. On a monthly basis the Debtors pay approximately $120,000 in service fees to the Cash Management Banks (the "Bank Fees"). The Debtors paid approximately $1.56 million on account of Bank Fees in 2017 and approximately $720,000 so far in The Debtors estimate that they owe approximately $120,000 on account of Bank Fees as of the Petition Date, $84,000 of which will come due and payable within the interim period. The Debtors request authority to pay outstanding Bank Fees, including any prepetition amounts, in the ordinary course of business on a postpetition basis. IV. Compliance with the Bankruptcy Code and Guidelines. A. Compliance with U.S. Trustee Guidelines and Section 345 of the Bankruptcy Code. 20. Section 345(a) of the Bankruptcy Code governs a debtor's cash deposits during a chapter 11 case and authorizes deposits of money as "will yield the maximum reasonable net return on such money, taking into account the safety of such deposit or investment." In order to comply with section 345 of the Bankruptcy Code, the Office of the United States Trustee for the District of Delaware's (the "U.S. Trustee") Operating Guidelines and Reporting Rega~irements for Debtors in Possession and Trustees (the "U.S. Trustee Guidelines") generally require chapter 11 debtors to, among other things, deposit all estate funds into an account with an authorized depository that agrees to comply with the requirements of the U.S. Trustee. All of the Cash Management Banks are designated as authorized depositories under the U.S. Trustee Guidelines and are insured by the Federal Deposit Insurance Corporation.

10 Case Doc 11 Filed 10/04/18 Page 10 of Because all of the Lash Management Banks are U.S. Trustee authorized depositories, the Debtors are in compliance with the U.S. Trustee Guidelines with respect to the use of authorized depositories. B. Compliance with U.S. Trustee Guidelines as to Business Forms. 22. As part of the Cash Management System, the Debtors utilize a number of preprinted business forms in the ordinary course of their business, including letterhead, purchase orders, invoices, and preprinted and future checks (the "Business Forms"). The U.S. Trustee Guidelines require that the Cash Management Banks print "Debtor in Possession" and the bankruptcy case number on checks issued after the Petition Date. 23. To minimize expenses to their estates and avoid confusion on the part of employees, customers, vendors, and suppliers during the pendency of these chapter 11 cases, the Debtors request that the Court authorize their continued use of all Business Forms in existence immediately before the Petition Date, without reference to the Debtors' status as debtors in possession. If the Debtors exhaust their existing supply of checks during these chapter 11 cases, the Debtors will print or order checks with the designation "Debtor in Possession" and the corresponding bankruptcy case number, and with respect to any Business Farms that exist or are generated electronically, the Debtors shall ensure that such electronic Business Forms are clearly labeled "Debtor In Possession." V. Intercompany Transactions. 24. In the ordinary course of business, the Debtors maintain business relationships with each other and certain of their non-debtor affiliates (the "Intercompany Transactions") resulting in intercompany receivables and payables. At any given time, as a result of the Intercompany Transactions, there may be claims owing by one Debtor to another Debtor or non-debtor affiliate (collectively, the "Intercompany Claims"). These Intercompany Transactions occur as part of the 10

11 Case Doc 11 Filed 10/04/18 Page 11 of 23 ordinary course operation of the Cash Management System, and at any given time there may be Intercompany Claims owing between Debtors or between a Debtor and anon-debtor affiliate in connection with the receipt and disbursement of funds. 25. Between the Debtors, Intercompany Transactions occur when funds are transferred from various Bank Accounts, including, for example, funds transferred from the ATD Main Disbursement Account to the HTR Main Disbursement Account. More specifically, ATD periodically engages in Intercompany Transactions to, among other things, purchase tires from HTR and fund other necessary operating expenses. These disbursements and transfers create Intercompany Claims between Debtors and certain non-debtor affiliates. The Debtors have historically reflected Intercompany Claims as journal entry receivables and payables, as applicable, in the respective Debtor's accounting system. The Debtors closely track all fund transfers in their respective accounting system and, therefore, can ascertain, trace, and account for all Intercompany Transactions. 26. The Debtors also provide certain shared services to non-debtor affiliate National Tire Distributors Inc. (together with its affiliates, "NTD") through a shared services agreement (the"shared. Services Agreement") that provides, among other things, IT services and procurement and treasury support in exchange for a fixed fee and reimbursement of expenses. The Debtors intend to continue the Shared Services Agreement in the ordinary course of business. Although the Debtors do not anticipate that any amounts are due and owing under the Shared Services Agreement, out of an abundance of caution, the Debtors seek authority to continue the Shared Services Agreement on a postpetition basis in the ordinary course of business and consistent with past practices. 11.

12 Case Doc 11 Filed 10/04/18 Page 12 of TI~e Intercompany Transactions are an essential component of the Debtors' operations and centralized Cash Management System. The Intercompany Transactions are trackable, and the Debtors intend. to account for all postpetition Intercompany Transactions in accordance with past practice. Any interruption of the Intercompany Transactions would severely disrupt the Debtors' operations and result in great harm to the Debtors' estates and their stakeholders. Accordingly, the Debtors seek authority and, to the extent applicable, relief from the automatic stay to continue the Intercompany Transactions in the ordinary course of business on a postpetition basis, in a manner substantially consistent with the Debtors' past practice? VI. The Fuel Card Program. 28. As part of the Cash Management System, the Debtors maintain fuel cards (collectively, the "Fuel Cards") issued by Comdata Inc. (the"fuel Card Program"). In the ordinary course of business, the Debtors' employees use the Fuel Cards to purchase fuel for a particular delivery vehicle in the Debtors' fleet. As of the Petition Date, the Debtors have approximately 1,100 active Fuel Cards which the Debtors pay on a monthly basis in the amount of approximately $1,800,000 per month. As of the Petition Date, there is approximately $2,000,000 in accrued and unpaid amounts on account of the Fuel Card Program, the entirety of which will become due and payable during the interim period. The Debtors seek authority to pay amounts owed on account of the Fuel Card Program, including the prepetition amounts, and la continue ttie Fuel Card Program in the ordinary course of business on a postpetition basis consistent with past practice. ~ This Motion provides an overview of the Debtors' typical Intercompany Transactions. The relief requested herein is applicable with respect to all Intercompany Transactions and is not limited to those Intercompany Transactions described in this Motion. To the extent that there are any outstanding prepetition obligations related to Intercompany Transactions not described herein, the Debtors, out of an abundance of caution, seek authority to honor such obligations. 12

13 Case Doc 11 Filed 10/04/18 Page 13 of 23 III. vpayment. 29. In the ordinary course of business, the Debtors also periodically make payments to vendors via American Express' vpayment ("vpa~ent"). vpayment is a virtual payment solution that allows the Debtors to make payments using asingle-use account number for a given transaction. The Debtors are required to activate each individual vpayment account by providing vpayment account parameters to American Express to settle each transaction. The Debtors also seek authority to continue using vpayment in the ordinary course of business on a postpetition basis consistent with past practice. Basis for Relief I. The Court Should Authorize the Debtors to Continue to Use the Cash Management System and Pay the Bank Fees. 30. The U.S. Trustee Guidelines require debtors in possession to, among other things: a. establish one debtor in possession bank account for all estate monies required for the payment of taxes, including payroll taxes; b. close all existing bank accounts and open new debtor in possession accounts; and c. maintain a separate debtor in possession account for cash collateral. 31. These requirements are intended to provide a clear line of demarcation between prepetition and postpetition transactions and operations and to pt event inadvertent payment of prepetition claims. Considering, however,"that the Debtors' business and financial affairs are complex and require the collection, disbursement, and movement of funds through the Debtors' bank accounts, enforcement of these provisions of the U.S. Trustee Guidelines during these chapter 11 cases would severely disrupt the Debtors' operations. Accordingly, the Debtors t espectfully request that the Court allow them to operate each of the Bank Accounts listed on 13

14 Case Doc 11 Filed 10/04/18 Page 14 of 23 Exhibit 2 annexed to Exhibit A attached hereto, as they were maintained in the ordinary course of business before the Petition Date. 32. The continuation of the Cash Management System is permitted pursuant to section 363(c)(1) of the Bankruptcy Code, which authorizes a debtor in possession to "use property of the estate in the ordinary course of business without notice or a hearing." 11 U.S.C. 363(c)(1). Bankruptcy courts routinely treat requests for authority to continue utilizing existing cash management systems as a relatively "simple matter." In Ne Baldwin-United Corp., 79 B.R. 321, 327 (Bankr. S.D. Ohio 1987). In addition, in granting such relief, courts recognize that an integrated cash management system "allows efficient utilization of cash resources and recognizes the impracticalities of maintaining separate cash accounts for the many different purposes that require cash." In Ne Colz.lmbia Gas Sys., Inc., 136 B.R. 930, 934 (Bankr. D. Del. 1992), aff'd in t~elevantpart, 997 F.2d 1039, 1061 (3d Cir. 1993). 33. Here, requiring the Debtors to adopt a new, segmented cash management system during these chapter 11 cases would be expensive, burdensome, and unnecessarily disruptive to the Debtors' operations. Importantly, the Cash Management System provides the Debtors with the ability to instantaneously track and report the location and amount of funds, which, in turn, allows management to track and control such funds, ensure cash availability, and reduce administrative costs through a centralized method of coordinating the collection and movement of funds. Any disruption of the Cash Management System could have a negative effect on the Debtors' restructuring efforts. Indeed, absent the relief requested herein, requiring the Debtors to adopt a new, segmented cash management system would needlessly reduce the value of the Debtors' business enterprise. By contrast, maintaining the current Cash Management System will facilitate the Debtors' transition into chapter 11 by, among other things, minimizing delays in 14

15 Case Doc 11 Filed 10/04/18 Page 15 of 23 paying postpetition debts and eliminating administrative i~lefficiencies. Finally, maiiitainiiig the current Cash Management System will allow the Debtors' treasury and accounting employees to focus on their daily responsibilities. 34. Moreover, the Debtors respectfully submit that parties in interest will not be harmed by their maintenance of the Cash Management System, including maintenance of the Bank Accounts and the Intercompany Transactions, because the Debtors have implemented appropriate mechanisms to ensure that unauthorized payments will not be made on account of obligations incurred before the Petition Date. Specifically, with the assistance of their advisors, the Debtors have implemented internal control procedures that prohibit payments on account of prepetition debts without the prior approval of the Debtors' respective treasury departments. In light of such protective measures, the Debtors submit that maintaining the Cash Management System is in the best interests of their estates and creditors. 35. Courts in this district routinely allow debtors in large chapter 11 cases to maintain their existing cash management systems and such relief generally is non-controversial. See, e.g., In re VER Technologies Holdco LLC, No (KG)(Bankr. D. Del. May 4, 2018) (authorizing the debtors to continue using the cash management system maintained by the debtors prepetition); In Ne EV EneNgy Partners, L.P., No (CSS)(Bankr. D. Del. Apr. 25, 2018) (same); In re PES Holdings, LLC', No (KG)(Barrkr. D. Del. Jan. 23, 2018) (same); Ira re GSTAutoLeather, Inc., No (LSS)(Bankr. D. Del. Nov. 13, 2017) (same); In re Dex Media, Inc., No (KG)(Bankr. D. Del. May 16, 2016) (same).$ g Because of the voluminous nature of the orders cited herein, such orders have not been' attached to this motion. Copies of these orders are available upon request to the Debtors' proposed counsel. 1S

16 Case Doc 11 Filed 10/04/18 Page 16 of 23 II. Authorizing the Debtors to Continue ITsing Debit, moire, Cream Card, and ACS Payments is Warranted. 36. The Debtors request that the Court grant further relief from the U.S. Trustee Guidelines to the extent they require the Debtors to make all disbursements by check. In particular, the U.S. Trustee Guidelines require that all receipts and all disbursements of estate funds must be made by check with a notation representing the reason for the disbursement. As discussed above, in the ordinary course of business, the Debtors conduct transactions through wires, ACH transactions, direct deposits, and other similar methods. If the Debtors' ability to conduct transactions by these methods is impaired, the Debtors may be unable to perform under certain contracts, and payments to vendors could be delayed, resulting in unnecessary disruption to their business operations and the incurrence of additional costs to their estates. III. Authorizing the Banks to Continue to Maintain, Service, and Administer the Bank Accounts in the Ordinary Course of Business is `Varranted. 37. As discussed above, implementing the U.S. Trustee Guidelines would needlessly interrupt the Debtors' operations and impair the Debtors' efforts to preserve the value of their estates and reorganize in an efficient manner. Thus, the Debtors respectfully request that the Court authorize the banks to continue to maintain, service, and administer the Bank Accounts as accounts of the Debtors as debtors in possession, without interruption and in the ordinary course of business. In this regard, the banks should be authorized to receive, process, honor, and pay any and all checks, ACH transfers and other instructions, and drafts payable through, drawn, or directed on such Bank Accounts after the Petition Date by holders, makers, or other parties entitled to issue instructions with respect thereto. Notwithstanding the foregoing, any check, draft, or other notification that the Debtors advise the banks to have been drawn, issued, or otherwise presented before the Petition Date may be honored by the banks only to the extent authorized by order of the Court.

17 Case Doc 11 Filed 10/04/18 Page 17 of The Debtors further request that the Court authorize the banks to accept and honor all representations from the Debtors as to which checks, drafts, wires, or ACH transfers should be honored or dishonored consistent with any order of the Court and governing law, whether such checks, drafts, wires, or ACH transfers are dated before or subsequent to the Petition Date. The Debtors also request that, to the extent a bank honors a prepetition check or other item drawn on any account either: (a) at the direction of the Debtors; (b) in a good-faith belief that the Court has authorized such prepetition check or item to be honored; or (c) as a result of a mistake made despite implementation of customary item handling procedures, such bank will not be deemed to be liable to the Debtors, their estates, or any other party on account of such prepetition check or other item honored postpetition. The Debtors respectfully submit that such relief is reasonable and appropriate because the Cash Management Banks are not in a position to independently verify or audit whether a particular item may be paid in accordance with a Court order or otherwise. 39. Moreover, the Debtors request that the Court authorize the Cash Management Banks to (a) continue to charge the Debtors the Bank Fees, as applicable, and (b) charge-back returned items to the Banlc Accounts, whether such items are dated before, on, or subsequent to the Petition Date, in the ordinary course of business. The Debtors further request that the Court authorize the Debtors to pay any Bank Fees, including prepetition amounts. The Debtors further request that the Court order that liens on any of the Bank Accounts granted to creditors wiry not have priority over the Banlc Fees of the respective bank at which the Bank Account is located. 40. Courts in this district have waived the U.S. Trustee Guidelines in operating Chapter 11 cases with ongoing business operations and restructuring efforts. See, e.g., In re VER Technologies Holdco LLC, No (KG)(Bankr. D. Del. May 4, 2018) (authorizing the debtors' continued use of existing bank accounts); In Ne EV Energy Partners, L.P., No

18 Case Doc 11 Filed 10/04/18 Page 18 of 23 (CSS)(Bankr. D. Del. Apr. 25, 2018) (same); In re PAS Holdings, LLC, No (KGj (Bankr. D. Del. Jan. 23, 2018) (same); In Ne Charming Charlie Holdings Inc., No (CSS) (Bankr. D. Del. Jan. 10, 2018) (same); In re GSTAutoLeather, Inc., No (LLS)(Bankr. D. Del. Nov. 3, 2017) (same).9 IV. The Requested Waivers Are Appropriate. A. The Court Should Authorize the Debtors to Continue Using the Business Forms. 41. To avoid disruption of the Cash Management System and unnecessary expense, the Debtors request that they be authorized to continue to use the Business Forms substantially in the form existing immediately before the Petition Date, without reference to their status as debtors in possession. The Debtors submit that parties in interest will not be prejudiced by this relief. Parties doing business with the Debtors undoubtedly will be aware of their status as debtors in possession and, thus, changing business forms is unnecessary and would be unduly burdensome. If the Debtors e~aust their existing supply of checks during these chapter 11 cases, the Debtors will print or order checks with the designation "Debtor in Possession" and the corresponding bankruptcy number, and with respect to any Business Forms that exist or are generated electronically, the Debtors shall ensure that such electronic Business Forms are clearly labeled "Debtor In Possession." 42. In other large chapter 11 cases, courts in this district have allowed debtors to use their prepetition business forms without the "debtor in possession" label. See, e.g., In re VER Technologies Holdco LLC, No (KG) (Bankr. D. Del. May 4, 2018) (authorizing debtors' continued use of preprinted business forms without a "Debtor in Possession" marking until the ~ Because of the voluminous nature of the orders cited herein, such orders have not been attached to this motion. Copies of these orders are available upon request to the Debtors' proposed counsel. 18

19 Case Doc 11 Filed 10/04/18 Page 19 of 23 supply is exhausted); In Ne Charming CharCze Holdzngs Inc., No (CSS) (Bankr. D. Del. Jan. 10, 2018) (same); In re GSTAutoLeatheN, Inc., No (LSS) (Bankr. D. Del. Nov. 13, 2017) (same); In re Aerogroup Int'll, Inc., No (KJC) (Bankr. D. Del. Sept. 18, 2017) (same); In re True Religion Apparel, Inc., No (CSS) (Bankr. D. Del. July 6, 2017) (same). V. The Court Should Authorize the Debtors to Continue Conducting Intercompany Transactions in the Ordinary Course and Grant Administrative Priority Status to Postpetition Intercompany Claims Among the Debtors. 43. The Debtors' funds move through the Cash Management System as described above. At any given time, there may be Intercompany Claims owed by one Debtor or non-debtor entity to another Debtor or anon-debtor entity. Intercompany Transactions are made between and among Debtor and non-debtor affiliates in the ordinary course as part of the Cash Management System. The Debtors track all fund transfers in their accounting system and can ascertain, trace, and account for all Intercompany Transactions previously described. The Debtors, moreover, will continue to maintain records of such Intercompany Transactions. If the Intercompany Transactions were to be discontinued, the Cash Management System and related administrative controls would be disrupted to the Debtors' and their estates' detriment. Accordingly, the Debtors respectfully submit that the continued performance of the Intercompany Transactions is in the best interest of the Debtors' estates and their creditors and, therefore, the Debtors should be permitted to continue such performance. 44. The Debtors further request that pursuant to sections 364(b) and 503(b)(1) of the Bankruptcy Code, all postpetition payments between or among a Debtor and another Debtor on account of an Intercompany Transaction be accorded superpriority administrative expense status, which would result in a superpriority administrative expense claim in favor of the applicable Debtor-payor that has priority over any administrative expense claim that arises under 19

20 Case Doc 11 Filed 10/04/18 Page 20 of 23 section 503(b) of the Bankruptcy Code. This relief will ensure that each entity receiving payments from a Debtor will continue to bear ultimate repayment responsibility for such ordinary course transactions, thereby reducing the risk that these transactions would jeopardize the recoveries available to each Debtor's respective creditors. For the avoidance of doubt, the relief requested herein with respect to the postpetition Intercompany Transactions and the intercompany balances resulting therefrom shall not constitute an admission of the Debtors or any other party as to the validity, priority, or status of any prepetition intercompany balance or the Intercompany Transactions) from which such intercompany balance may have arisen. 45. Courts in this district have routinely granted superpriority administrative expense status to postpetition intercompany transfers in other large chapter 11 cases for similar reasons. See, e.g., In re VER Technologies Holdco LLC, No (KG)(Bankr. D. Del. May 4, 2018) (granting superpriority administrative expense status to intercompany claims); In re GST AutoLeather, Inc., No (LSS)(Bankr. D. Del. Nov. 13, 2017) (same); In re Aerogroatip Intl, Inc., No (KJC)(Bankr. D. Del. Sept. 18, 2017) (same); In ~e True Relzgion Apparel, Inc., No (CSS)(Bankr. D. Del. July 6, 2017) (same); In re TK Holdings Inc., No (BLS)(Bankr. D. Del. June 27, 2017) (same). The Requirements of Bankruptcy Rule 6003 Are Satisfied 4G. Bankruptcy Rule 6003 empowers a court to grant relief within the rrst 21 clays after the Petition Date "to the extent that relief is necessary to avoid immediate and irreparable harm." For the reasons discussed above, authorizing the Debtors to continue to operate their Cash Management System as well as granting the other relief requested herein is integral to the Debtors' ability to transition their operations into these chapter 11 cases. Failure to receive such authorization and other relief during the first 21 days of these chapter 11 cases would severely disrupt the Debtors' operations at this critical juncture. For the reasons discussed herein, the relief 20

21 Case Doc 11 Filed 10/04/18 Page 21 of 23 requested is necessary in order for the Debtors to operate their businesses in the ordinary course and preserve the ongoing value of the Debtors' operations and maximize the value of their estates for the benefit of all stakeholders. The Motion requests relief from procedural rules and requirements that pertain to matters of immediate significance or which involve deadlines sooner than 21 days after the Petition Date. Accordingly, the Debtors submit that they have satisfied the "immediate and irreparable" standard of Bankruptcy Rule 6003 to support granting the relief requested herein. `'Vaiver of Bankruptcy Rule 6004(a) and 6004(h) 47. To implement the foregoing successfully, the Debtors seek a waiver of the notice requirements under Bankruptcy Rule 6004(a) and the 14-day stay of an order authorizing the use, sale, or lease of property under Bankruptcy Rule 6004(h). Reservation of Rights 48. Nothing contained herein is intended or shall be construed as: (a) an admission as to the amount of, basis for, or validity of any claim against the Debtors under the Bankruptcy Code or other applicable nonbankruptcy law; (b) a waiver of the Debtors' or any other party in interest's right to dispute any claim, (c) a promise or requirement to pay any particular claim; (d) an implication or admission that any particular claim is of a type specified or defined in this Motion; (e) a request or authorization to assume, adopt, ~r reject any agreetlient, contract, or lease pursuant to section 365 of the Bankruptcy Code; (flan admission as to the validity, priority, enforceability, or perfection of any lien on, security interest in, or other encumbrance on property of the Debtors' estates; or (g) a waiver of any claims or causes of action which may exist against any entity under the Bankruptcy Code or any other applicable law. If the Court grants the relief sought herein, any payment made pursuant to the Court's order is not intended and should not be construed as an 21

22 Case Doc 11 Filed 10/04/18 Page 22 of 23 admission as to the validity of any particular claim or a waiver of the Debtors' rights to subsequently dispute such claim. Notice 49. The Debtors have provided notice of this Motion to the following parties or their respective counsel: (a) the office of the U.S. Trustee for the District of Delaware; (b) the holders of the 301argest unsecured claims against the Debtors (on a consolidated basis); (c) the agent under the Debtors' prepetition asset-based facility; (d) the agent under the Debtors' prepetition term loan facility; (e) the indenture trustee for the Debtors' senior subordinated notes; (~ the ad hoc committee for the Debtors' senior subordinated noteholders; (g) the ad hoc committee for the Debtors' prepetition term loan facility; (h) the United States Attorney's Office for the District of Delaware; (i) the Internal Revenue Service; (j) the office of the attorneys general for the states in which the Debtors operate; (k) the Cash Management Banks; and (1) any party that has requested notice pursuant to Bankruptcy Rule As this Motion is seeking "first day" relief, within two business days of the hearing on this Motion, the Debtors will serve copies of this Motion and any order entered in respect to this Motion as required by Local Rule (m). The Debtors submit that, in light of the nature of the relief requested, no other or further notice need be given. No Prior Request 50. No prior request for the relief sought in this Motion has been made to this or any other court. [Rernaznder of page intentionalcy left blank. ] 22

23 Case Doc 11 Filed 10/04/18 Page 23 of 23 WHEREFORE, the Debtors respectfully request that the Court enter the Interim Order and the Final Order granting the relief requested herein and such other relief as the Court deems appropriate under the circumstances. Dated: October 4, 2018 Wilmington, Delaware Laura D~,~}S Jones (DE Bar I~7o. 2 36) Timothy P. Cairns (DE Bar No. 4228) Joseph M. Mulvihill (DE Bar No. 6061) PACHULSKI STANG ZIEI3L &JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware (Courier 19801) Telephone: (302) Facsimile: (302) Ijones@pszjlaw.com tcairns@pszjlaw.com jmulvihill@pszj law.com -and- James H.M. Sprayregen, P.C. Anup Sathy, P.C. (pro hac vice pending) Chad J. Husnick, P.C. (pro hac vice pending) Spencer Winters (pro hac vice pending) KIR~LAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, Illinois Telephone: (312) Facsimile: (312) james.sprayregen@kirkland.com anup, sathy@kirkland. com chad.husnick@kirkland.com sperycer.winters@kirkland. com Proposed Counsel to the Debtors and Debtors in Possession

24 Case Doc 11-1 Filed 10/04/18 Page 1 of 16 Exhibit A Proposed Interim Order

25 Case Doc 11-1 Filed 10/04/18 Page 2 of 16 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ATD CORPORATION, et al.,l Debtors. Chapter 11 Case No (`) (Joint Administration Requested) Re: Docket No. INTERIM ORDER (I) AUTHORIZING THE DEBTORS TO (A) CONTINUE TO OPERATE THEIR CASH MANAGEMENT SYSTEM, (B) HONOR CERTAIN PREPETITION OBLIGATIONS RELATED THERETO, (C) MAINTAIN EXISTING BUSINESS FORMS, (D) PERFORM INTERCOMPANY TRANSACTIONS, AND (II) GRANTING RELATED RELIEF Upon the motion (the"motion")2 of the above-captioned debtors and debtors in possession (collectively, the "Debtors") for entry of an order (this "Interim Order"): (a) authorizing the Debtors to (i) continue to operate their Cash Management System, (ii) pay any undisputed prepetition or postpetition amounts outstanding on account of the Bank Fees, (iii) maintain existing Business Forms in the ordinary course of business, (iv) continue to perform the Intercompany Transactions consistent with historical practice, and (b) granting related relief, all as more fully set forth in the Motion; and upon the First Day Declaration; and this Court having jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Afnended Standing Order of Reference from the United States District Court for the District of Delaware, dated February 29, 2012; and The Debtors in these chapter 11 cases, along with the last four digits of each Debtor's federal tax identification number, where applicable, include: ATD Corporation (3683); Accelerate Holdings Corp. (0528); American Tire Distributors Holdings, Inc. (6143); American Tire Distributors, Inc. (4594); Rubbr Automotive Services, LLC (3334); The Hercules Tire &Rubber Company (3365); Terry's Tire Town Holdings, Inc. (7464); Tire Pros Francorp (1361); and Hercules Asia Pacific, LLC (2499). The location of the Debtors' service address in these chapter 11 cases is Herbert Wayne Court, Suite 150, Huntersville, North Carolina Capitalized terms used but not otherwise defined herein have the meanings ascribed to them in the Motion.

26 Case Doc 11-1 Filed 10/04/18 Page 3 of 16 that this Court may enter a final order consistent with Article III of the United States Constitution; and this Court having found that venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C and 1409; and this Court having found that the relief requested in the Motion is in the best interests of the Debtors' estates, their creditors, and other parties in interest; and this Court having found that the Debtors' notice of the Motion and opportunity for a hearing on the Motion were appropriate under the circumstances and no other notice need be provided; and this Court having reviewed the Motion and having heard the statements in support of the relief requested therein at a hearing before this Court (the "Hearin "); and this Court having determined that the legal and factual bases set forth in the Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had before this Court; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. The Motion is granted on an interim basis as set forth in this Interim Order, 2. The final hearing (the "Final Hearing") on the Motion shall be held on, 2018, at :.m., prevailing Eastern Time. Any objections or responses to entry of a final order on the Motion shall be filed on or before 4:00 p.m. prevailing Eastern Time on, 2018, and served on the following parties: (a) the Debtors, ATD Corporation, Herbert Wayne Court, Suite 150, Huntersville, North Carolina 28078, Attn: Gail Sharps Myers, General Counsel; (b) proposed counsel to the Debtors, Kirkland &Ellis LLY, ~~U North LaSalle, Chicago, Illinois 60654, Attn: Anup Sathy, P.C., Chad J. Husnick, P.C., and Spencer Winters; (c) proposed cocounsel to the Debtors, Pachulslci Stang Ziehl &Jones LLP, 919 North Market Street, 17th Floor, P.O. Box 8705, Wilmington, Delaware (Courier 19801), Attn: Laura Davis Jones; (d) the Office of the United States Trustee for the District of Delaware, 844 King Street, Suite 2207, Lockbox 35, Wilmington, Delaware 19801, Attn: Timothy J. Fox, Jr., Esq.; (e) counsel to