Case CSS Doc 1256 Filed 05/17/16 Page 1 of 20 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

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1 Case CSS Doc 1256 Filed 05/17/16 Page 1 of 20 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re GRIDWAY ENERGY HOLDINGS, INC. et al., Debtors x Chapter 11 Case No (CSS) Jointly Administered Hearing Date June 8, 2016 at 1000 a.m. ET Obj. Deadline May 31, 2016, at 400 p.m. ET DEBTORS MOTION FOR ENTRY OF AN ORDER (I) APPROVING THE DISMISSAL OF THE DEBTORS REMAINING CHAPTER 11 CASES; (II) AUTHORIZING THE DISSOLUTION OF THE REMAINING DEBTORS CORPORATE ENTITIES; (III) APPROVING FINAL PROFESSIONAL FEE PROCESS; AND (IV) GRANTING RELATED RELIEF The above-captioned debtors and debtors in possession (collectively, the Debtors ), pursuant to sections 105(a), 305 and 1112(b) of title 11 of the United States Code (the Bankruptcy Code ), hereby submit this motion (the Motion ) for entry of an order, substantially in the form attached hereto as Exhibit A (the Proposed Order ), (i) approving the dismissal of the Debtors Chapter 11 Cases (as defined below); (ii) authorizing, in the Debtors sole discretion, the dissolution of their corporate entities; (iii) approving the final Professional Fee Process (as defined below); and (iv) granting related relief. In support of this Motion, the Debtors respectfully represent as follows 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are Gridway Energy Holdings, Inc. (5072); Glacial Energy Holdings (3292); Glacial Energy, Inc. (1189); Glacial Energy of Maryland, Inc. (7173); Glacial Energy of California, Inc. (1795); Glacial Energy of Illinois, Inc. (1796); Glacial Energy of New Jersey, Inc. (8671); Glacial Energy of Washington DC, Inc. (5548); Glacial Energy of Michigan, Inc. (7110); Glacial Natural Gas, Inc. (0165); and Negawatt Business Solutions, Inc. (f/k/a Gridway Energy Partners, Inc.) (7086). The location of the headquarters of the Debtors is 5326 Yacht Haven Grande, Box 36, St. Thomas, VI

2 Case CSS Doc 1256 Filed 05/17/16 Page 2 of 20 PRELIMINARY STATEMENT 2 1. Through the Platinum/Agera Sale and the Ziphany Sale, the Debtors and certain of their affiliates, who each filed voluntary petitions for relief under the Bankruptcy Code, negotiated and obtained Bankruptcy Court approval of the sale of substantially all of their assets during the pendency of these Chapter 11 Cases. Pursuant to the terms of a subsequent settlement agreement between certain parties in interest embodied in the Settlement Order, Agera agreed to fund certain fees and expenses associated with the administration of these Chapter 11 Cases until the Debtors operations and assets were transitioned to Agera pursuant to the terms of the Platinum/Agera APA and the Platinum/Agera Sale Order. 2. The operations and assets of the Dismissed Debtors were successfully transitioned to Agera, and accordingly, on October 16, 2015, the Court entered an order [Docket No. 1118] dismissing their chapter 11 cases. 3 In accordance with the aforementioned Settlement Order, Agera has continued to fund certain administrative fees and expenses associated with the remaining cases Chapter 11 Cases. 3. On or about March 15, 2016, the last of the Debtors operations and assets was successfully transitioned in accordance with the terms of the Platinum/Agera APA and Platinum/Agera Sale Order. Therefore, the Debtors no longer have any basis or purpose for continuing the Chapter 11 Cases. Moreover, in connection with the terms of the Platinum/Agera Sale, either the Debtors have paid or Agera has agreed to assume or provide payment of a Capitalized terms used but not otherwise defined in the Preliminary Statement shall have the meanings ascribed to such terms in the body of the Motion. 3 The Debtors affiliated entities were (i) Ziphany, LLC; (ii) Glacial Energy of New York; (iii) Glacial VI, LLC; (iv) Negawatt Business Solutions; (v) Glacial Energy of Texas; (vi) Glacial Energy of Ohio, Inc.; (vii) Glacial Energy of Pennsylvania, Inc.; and (viii) Glacial Energy of New England, Inc. (collectively, the Dismissed Debtors ). By order of the Court, the dismissal of the chapter 11 cases for the Dismissed Debtors became effective upon the filing of a Certification on October 29, 2015, and the final fee applications for Professionals (as defined below) are to be heard in connection with the dismissal or conversion of the remaining Chapter 11 Cases. 2

3 Case CSS Doc 1256 Filed 05/17/16 Page 3 of 20 majority of the administrative expense liabilities that have accrued against the Debtors since the Commencement Date. 4. At this stage of the Chapter 11 Cases, the Debtors do not have any unencumbered funds available for distribution to general unsecured creditors, and therefore, they submit that cause exists to dismiss the Chapter 11 Cases. Consistent with the terms of the Global Settlement Order, upon entry of the Proposed Order approving dismissal of these Chapter 11 Cases, additional distributions may be made by the Debtors (at the direction of the Creditors Committee) from the Settlement Fund to holders of Allowed Eligible Administrative Claims. 5. The Debtors have been in consultation with Agera and the Creditors Committee concerning the relief being requested herein. Each has reviewed the Motion and consents to entry of the Proposed Order granting the relief requested. JURISDICTION 6. The Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334, and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, dated as of February 29, 2012 (the Amended Standing Order ). This is a core proceeding pursuant to 28 U.S.C. 157(b)(2). Venue is proper in this Court pursuant to 28 U.S.C and The statutory and legal predicates for the relief requested herein are sections 105(a), 305 and 1112(b) of the Bankruptcy Code. GENERAL BACKGROUND 7. On April 10, 2014 (the Commencement Date ), each of the Debtors and the Dismissed Debtors filed a petition with the Court under chapter 11 of the Bankruptcy Code, thereby commencing these cases (the Chapter 11 Cases ). The Debtors continue to operate their businesses and manage their properties as debtors in possession as authorized by sections (a) and 1108 of the Bankruptcy Code. 3

4 Case CSS Doc 1256 Filed 05/17/16 Page 4 of On April 24, 2014, the United States Trustee for the District of Delaware (the U.S. Trustee ) appointed an official committee of unsecured creditors (the Creditors Committee ). No trustee or examiner has been appointed in the Debtors Chapter 11 Cases. 9. Information regarding the Debtors history and business operations, their capital structure and primary secured indebtedness, and the events leading up to the commencement of the Chapter 11 Cases can be found in the Declaration of Randy Lennan in Support of Chapter 11 Petitions and First Day Motions [Docket No. 10] (the First Day Declaration ), which is incorporated herein by reference. RELEVANT BACKGROUND 4 A. The Platinum/Agera Sale 10. On the Commencement Date, the Debtors filed a motion seeking approval of certain sales procedures and related relief [Docket No. 13] (the Sale Motion ). Pursuant to the Sale Motion, the Debtors proposed to sell substantially all of their assets to Vantage Commodities Financial Services I, LLC ( Vantage ), as the stalking-horse bidder, or to such other purchaser who submitted a higher and better offer pursuant to the sale-and-bidding procedures proposed in the Sale Motion. 11. On May 12, 2014, following extensive negotiations between the Debtors, the Creditors Committee, Vantage, and EDF Trading North America LLC ( EDFT and, together with Vantage, the Lenders ), the parties reached a global settlement (the Global Settlement ) on the terms and conditions set forth in the Joint Motion of the Debtors, Official Committee of Unsecured Creditors, Vantage Commodities Financial Services I, LLC and EDF Trading North America LLC for Entry of an Order Approving Settlement and Compromise The term Debtors shall include the Dismissed Debtors to the extent that it references events that occurred before October 29, 2015 when the chapter 11 cases of the Dismissed Debtors were dismissed by order of this Court. 4

5 Case CSS Doc 1256 Filed 05/17/16 Page 5 of 20 Pursuant to 11 U.S.C. 105(a) and Fed. R. Bankr. P [Docket No. 270] (the Global Settlement Motion ) that resolved, among other things, issues in connection with the Sale Motion. Pursuant to the terms of the Global Settlement, the assets of Ziphany, LLC and Negawatt Business Solutions, Inc. were excluded from the proposed asset sale. The Global Settlement also provided for the creation of a settlement fund (the Settlement Fund ) of $1.3 million to pay the fees and expenses incurred by the Creditors Committee and its professionals (the Committee Expenses ) as well as certain allowed Eligible Administrative Claims (as defined in the Global Settlement Motion). On May 30, 2014, the Debtors and the Creditors Committee jointly filed the Global Settlement Motion seeking Court approval of the terms of the Global Settlement. On June 19, 2014, the Court entered an order [Docket No. 381] (the Global Settlement Order ) approving the Global Settlement. 12. On May 14, 2014, the Court entered an order [Docket No. 191] that, among other things, approved bidding procedures for the sale of substantially all of the Debtors assets (excluding the assets of Ziphany and NBS) (the Platinum/Agera Sale ). 5 On June 10, 2014, in accordance with that order, the Debtors commenced an auction, at the conclusion of which on June 11, 2014, the Debtors selected Platinum Partners Value Arbitrage Fund LP ( Platinum ) as the successful bidder. On June 17, 2014, the Court entered an order [Docket No. 377] (the Platinum/Agera Sale Order ) approving the Platinum/Agera Sale to Platinum. Pursuant to section of the Asset Purchase Agreement by and Among Glacial Energy Holdings and Platinum Partners Value Arbitrage Fund LP (the Platinum/Agera APA ), Agera Energy LLC ( Agera ) was designated by Platinum as the Designated Buyer (as defined in the By separate motion, the Debtors subsequently sought approval of the sale (the Ziphany Sale ) of substantially all of the assets Ziphany to JKMV ACQ LLC. On January 7, 2015, the Court entered an order [Docket No. 748] approving the Ziphany Sale. 5

6 Case CSS Doc 1256 Filed 05/17/16 Page 6 of 20 APA). Among the assets sold to Platinum were the selling Debtors causes of action under chapter 5 of the Bankruptcy Code. 13. On June 18, 2014, the Economic Closing of the sale of substantially all of the Debtors assets to Agera occurred whereby, among other things, Agera paid the purchase price under the APA. However, in order to facilitate, among other things, Agera s regulatory licensure process with the various jurisdictions public utility commissions, the Asset Transfer Closing was deferred. In order to operate the Debtors businesses between the Economic Closing and the Asset Transfer Closing, the Debtors and Agera entered into a Transition Services Agreement (the TSA ) pursuant to which the Debtors provided certain services to Agera for which Agera was financially obligated. 14. On February 23, 2015, a partial asset transfer closing (the Initial Partial Asset Closing ) occurred, pursuant to which each of (i) Glacial Energy of New York, (ii) Glacial VI, LLC, (iii) Gridway Energy Holdings, Inc., (iv) Negawatt Business Solutions, and (v) Glacial Energy Holdings transferred certain of their assets to Agera, pursuant to the terms of the Platinum/Agera APA. See Docket Nos. 846 and On July 13, 2015, a second partial asset transfer closing (the Second Partial Asset Closing ) occurred, pursuant to which each of (i) Glacial Energy of Texas, (ii) Glacial Energy of Ohio, Inc., (iii) Glacial Energy of Pennsylvania, Inc., (iv) Glacial Energy of New England, Inc., and (v) Glacial Natural Gas, Inc. transferred certain of their assets to Agera, pursuant to the terms of the Platinum/Agera APA. See Docket No On December 10, 2015, a third partial asset transfer closing (the Third Partial Asset Closing ) occurred, pursuant to which Glacial Energy of California, Inc

7 Case CSS Doc 1256 Filed 05/17/16 Page 7 of 20 transferred certain of its assets to Agera, pursuant to the Platinum/Agera APA. See Docket No On March 15, 2016, the fourth and final asset transfer closing (the Fourth Partial Asset Closing ) occurred, pursuant to which each of Glacial Energy of Maryland, Inc., Glacial Energy of Illinois, Inc., Glacial Energy of New Jersey, Inc., Glacial Energy of Washington, DC, Inc., and Glacial Energy of Michigan, Inc. transferred certain of their assets to Agera in accordance with the Platinum/Agera APA and the Platinum/Agera Sale Order. 6 See Docket No Upon information and belief, the Debtors (and the Dismissed Debtors) have obtained orders of this Court authorizing the rejection of all of their executory contracts and unexpired lease not otherwise assumed by Agera in connection with the Platinum/Agera Sale. B. The Eligible Administrative Claims Process 19. By order dated July 16, 2014 (the Bar Date Order ) [Docket No. 431], the Court established August 26, 2014 as the deadline (the Eligible Administrative Claim Bar Date ) for any entity asserting an Eligible Administrative Claim (i.e. a claim which, if allowed, would be entitled to receive a recovery from the Settlement Fund) to file a specially designated Eligible Administrative Claim proof of claim form. 20. Approximately sixty-one (61) Eligible Administrative Claims (the Filed Eligible Administrative Claims ) were filed prior to the Eligible Administrative Claim Bar Date. Given the trajectory of these Chapter 11 Cases and the limited funds available to litigate these claims, the Creditors Committee (in consultation with the Debtors) reviewed the Filed Certain other asset transfers occurred with respect to, among other assets, intellectual property and other intangible assets, related equipment, and trailing accounts receivable. 7

8 Case CSS Doc 1256 Filed 05/17/16 Page 8 of 20 Eligible Claims, and sought to settle and allow such claims to the extent a colorable basis was asserted with respect to such claims By order entered by the Court on January 16, 2015 [Docket No. 767] (the Order Allowing Eligible Administrative Claims ), the Court approved seven stipulations of settlement allowing seven Filed Eligible Administrative Claims (collectively, the Allowed Eligible Administrative Claims ). 22. Following entry of the Order Allowing Eligible Administrative Claims, the Creditors Committee filed a motion [Docket No. 839] to authorize distributions from the Settlement Fund to holders of Allowed Eligible Administrative Claims, which motion was approved by Court order entered April 9, 2015 [Docket No. 910] (the Distribution Order ). 23. Pursuant to the Distribution Order, the Debtors were authorized and directed subject to the Creditors Committee s review, consent and direction to the Debtors to (i) commence initial distributions on a pro rata basis from the Settlement Fund to holders of Allowed Eligible Administrative Claims; and (ii) maintain a reserve in the Settlement Fund sufficient to cover any anticipated unpaid Committee Expenses (such amount to be established in the discretion and at the direction of the Creditors Committee), pending final allowance of Committee Expenses and payment in full of all Committee Expenses, at which point, a final distribution to holders of Allowed Eligible Administrative Claims on a pro rata basis from the Settlement Fund can be made. 7 The Creditors Committee separately filed two omnibus claim objections (see Docket Nos. 597 & 598) to certain of the Filed Eligible Administrative Claims to the extent either (i) insufficient documentation or information was provided to support the Filed Eligible Administrative Claims asserted administrative expense status or (ii) such claims were misclassified and/or the Debtors did not have any liability with respect to such claims. The Court has granted such objections via orders entered on December 10, See Docket Nos. 691 &

9 Case CSS Doc 1256 Filed 05/17/16 Page 9 of Pursuant to the Global Settlement Order, Distribution Order, and Order Approving Settlement By And Among The Debtors, Platinum Partners Value Arbitrage Fund LP And Agera Energy LLC [Docket No. 905], the Settlement Fund (which is held by the Debtors in a segregated bank account) is administered by RPA Advisors, LLC at the direction of the Creditors Committee. Initial distributions to holders of Allowed Eligible Administrative Claims were made by the Debtors (at the direction of the Creditors Committee) on or about May 1, As of the date hereof, the Creditors Committee estimates that, taking into account an appropriate reserve sufficient to pay accrued unpaid Committee Expenses and estimated Committee Expenses (to be incurred in connection with this Motion, final fee applications, and final distributions from the Settlement Fund), an additional approximately $20,000 (or such other amount as reasonably determined by the Creditors Committee, in consultation with the Debtors) may be available for distribution to holders of Allowed Eligible Administrative Claims. C. The Wind-Down of the Chapter 11 Cases 26. On October 27, 2014, the Debtors filed the Debtors Motion Pursuant to Sections 105 and 363(b) of the Bankruptcy Code and Bankruptcy Rule 9019 for an Order Approving and Authorizing the Wind-Down Term Sheet by and Between the Debtors and Vantage Commodities Financial Services I, LLC [Docket No. 572] (the Wind-Down Budgeting Motion ). On November 24, 2014, the Court entered an order [Docket No. 646] (the Wind-Down Budgeting Order ) that approved an agreement between the Debtors, the

10 Case CSS Doc 1256 Filed 05/17/16 Page 10 of 20 Lenders, and the Creditors Committee that provided for, among other things, the funding of the Chapter 11 Cases through December 31, 2014, in order to wind down the Debtors businesses On February 27, 2015, the Debtors filed a Motion for an Order (I) Converting Cases to Chapter 7 of the Bankruptcy Code and (II) Setting Bar Date for Filing Final Chapter 11 Professional Fee Applications and Establishing a Hearing Date Thereon (the Conversion Motion ) [Docket No. 837]. As set forth in the Conversion Motion, the Wind- Down Budgeting Order only provided funding through December As a result, the Debtors had insufficient funds to pay U.S. Trustee s fees and professional expenses necessary to enable it to continue in chapter Thereafter, the Debtors and Agera engaged in negotiations to address the funding issues, ultimately reaching agreement on a settlement that would enable the Debtors to continue in chapter 11 while Agera obtained certain regulatory approvals and performed other critical tasks necessary to transition the Debtors operations. 29. Accordingly, on March 6, 2015, the Debtors filed the Debtors Motion for Entry of an Order, Pursuant to Section 105(a) of the Bankruptcy Code and Bankruptcy Rule 9019, Approving Settlement By and Among the Debtors, Platinum Partners Value Arbitrage Fund LP, and Agera Energy LLC [Docket No. 862] (the Settlement Motion ). 9 On April 6, 2015, the Court entered an order [Docket No. 905] (the Settlement Order ), which approved the settlement pursuant to which Agera agreed to fund certain fees and expenses associated with 8 It should be noted that, pursuant to the Wind-Down Budgeting Order, the Lenders also waived and released, among other things, any and all claims against the Debtors, the Professionals, and each of their officers, directors, shareholders, partners, members, employees, agents, servants, counsel, representatives, participants, or any of their successors or assigns of any of the foregoing that may have arisen out of, connected with or in any way related to the Debtors or the Chapter 11 Cases. 9 The Debtors also withdrew the Conversion Motion without prejudice

11 Case CSS Doc 1256 Filed 05/17/16 Page 11 of 20 these Chapter 11 Cases, in accordance with the terms of the Settlement Order, until it had fully transitioned the Debtors operations. 30. Upon the Initial Partial Asset Closing and the Second Partial Asset Closing that transferred the operations and certain assets of certain of the Debtors to Agera, the bankruptcy cases of the Dismissed Debtors were dismissed by order of this Court, effective as of October 29, As a result of the Third Partial Asset Closing and the Fourth Partial Asset Closing, Agera has now fully transitioned the operations and the assets of the remaining Debtors and cause exists to dismiss the remaining Chapter 11 Cases. RELIEF REQUESTED 32. By this Motion, the Debtors seek entry of the Proposed Order, substantially in the form attached hereto as Exhibit A, (i) approving the dismissal of the Debtors Chapter 11 Cases, as identified on Exhibit 1 of the Proposed Order, upon the filing of a certification of counsel substantially in the form attached hereto as Exhibit B (the Certification ) as soon as reasonably practicable following the payment of any then-accrued and unpaid professional fees, fees owed to the U.S. Trustee (the U.S. Trustee Fees ) and final distributions (if any, as may be directed by the Creditors Committee) from the Settlement Fund, (ii) approving the payment of any approved and unpaid fees and expenses of any Professionals (as defined below) retained in the Chapter 11 Cases (the Professional Fees ) in accordance with the process as described below (the Professional Fee Process ), (iii) authorizing, in the Debtors sole discretion, the dissolution of their corporate entities, and (iv) granting certain other related relief Contemporaneously herewith, the Debtors have filed notice of Philip Spillane s intent to resign as the Debtors sole officer, effective upon the dismissal of these Chapter 11 Cases. 11

12 Case CSS Doc 1256 Filed 05/17/16 Page 12 of 20 I. Professional Fee Process 33. In connection with the Chapter 11 Cases, the Debtors and the Creditors Committee have retained professionals (the Professionals ) who have been paid in accordance with this Court s Order Establishing Procedures for Interim Compensation and Reimbursement of Expenses of Professionals [Docket No. 220] (the Interim Compensation Procedures Order ). Accordingly, the Professionals have filed interim fee applications pursuant to the Interim Compensation Procedures Order. The Professionals monthly fee applications at least through December 31, 2015 (to the extent required) have been filed and approved on an interim basis pursuant to the Interim Compensation Procedures Order. 34. The Debtors propose that Professionals file outstanding monthly (if any) and final fee applications prior to or within three (3) business days of the entry of the Proposed Order and that the applications be heard at the next scheduled omnibus hearing date. 11 Upon the entry of an order or orders on the final fee applications, the Debtors shall be authorized to pay (including from the Settlement Fund with respect to any outstanding Committee Expenses) all of the allowed and unpaid fees and expenses of Professionals in accordance with the Interim Compensation Order, the Global Settlement Order, the Settlement Order, and the Distribution Order. 35. As stated previously, either the Debtors have paid or Agera has agreed to assume or provide payment of administrative expense liabilities which have accrued against the Debtors since the Commencement Date. Accordingly, the Debtors do not believe that there are any administrative expense claims aside from those claims for Professional Fees The Debtors have consulted with the U.S. Trustee with respect to the proposed hearing date for hearing the final fee applications, and the U.S. Trustee does not object. 12

13 Case CSS Doc 1256 Filed 05/17/16 Page 13 of 20 I. Approval of Dismissal Process BASIS FOR RELIEF REQUESTED A. Dismissal of the Remaining Chapter 11 Cases Is Warranted Under Section 1112(b) of the Bankruptcy Code. 36. The Court should approve the dismissal process because the Debtors lack the financial ability to bear the costs associated with formulating and confirming a plan of reorganization or liquidation and have no remaining assets to administer, and conversion of the Debtors Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code serves no purpose under these circumstances. 37. Under section 1112(b) of the Bankruptcy Code, a court may dismiss a debtor s chapter 11 case for cause. 11 U.S.C. 1112(b); In re Albany Partners, Ltd., 749 F.2d 670, 674 (11th Cir. 1984); In re Blunt, 236 B.R. 861, 864 (Bankr. M.D. Fla. 1999). Section 1112(b) of the Bankruptcy Code states, in pertinent part, on request of any party in interest or the United States trustee or bankruptcy administrator, and after notice and a hearing, the court may... dismiss a case under this chapter... for cause.... A determination of cause is made by the court on a case-by-case basis. Albany Partners, 749 F.2d at 674. In addition, the decision to dismiss a case is particularly delegated to the bankruptcy court s sound discretion. See In re Camden Ordinance Mfg. Co. of Arkansas, Inc., 1999 WL , at *2 (Bankr. E.D. Pa. 1999) (citing In re Atlas Supply Corp., 837 F.2d 1061, 1063 (5th Cir. 1988)). Therefore, it is clear that the Court is authorized to dismiss the Debtors Chapter 11 Cases upon a showing of cause. 38. The legislative history of section 1112(b) of the Bankruptcy Code and relevant case authority indicate that a court has wide discretion to use its equitable powers to dispose of a debtor s case. H.R. Rep. No. 595, 95 th Cong., 1 st Sess. 405 (1977); S.Rep. No. 989, 95 th Cong., 2d Sess. 117 (1978), reprinted in 1978 U.S.C.C.A.N ; see also In re Preferred

14 Case CSS Doc 1256 Filed 05/17/16 Page 14 of 20 Door Co., 990 F.2d 547, 549 (10th Cir. 1993) (stating that a court has broad discretion to dismiss a bankruptcy case); In re Sullivan Cent. Plaza I, Ltd., 935 F.2d 723, 728 (5th Cir. 1991) (stating that a determination of whether cause exists under section 1112(b) of the Bankruptcy Code rests in the sound discretion of the bankruptcy court); In re Koerner, 800 F.2d 1358, 1367 & n.7 (5th Cir. 1986) (stating that a bankruptcy court is afforded wide discretion under section 1112(b) of the Bankruptcy Code); Albany Partners, 749 F.2d at 674 (same). 39. Section 1112(b) of the Bankruptcy Code provides a nonexclusive list of sixteen grounds for dismissal. 11 U.S.C. 1112(b)(4)(A)-(P); Frieouf v. United States, 938 F.2d 1099, 1102 (10th Cir. 1991) (stating that section 1112(b) of the Bankruptcy Code s list is nonexhaustive); In re Blunt, 236 B.R. at 864 (same). One such ground is where a party in interest shows that there is an inability to effectuate a plan [of reorganization]. 11 U.S.C. 1112(b)(2)(A); Preferred Door Co., 990 F.2d at 549; Sullivan Cent. Plaza I, 935 F.2d at 728. Here, the Court may dismiss the Debtors Chapter 11 Cases because the Debtors are unable to confirm a plan. 40. Inability to confirm a plan arises when a debtor lacks the capacity to formulate a plan or carry one out or where the core for a workable plan of reorganization does not exist. See Preferred Door, 990 F.2d at 549 (quoting Hall v. Vance, 887 F.2d 1041, 1044 (10th Cir. 1989)) (finding an inability to effectuate a plan arises where debtor lacks capacity to formulate a plan or carry one out); In re Blunt, 236 B.R. at 865 (finding cause to dismiss debtor s case under section 1112(b)(2) of the Bankruptcy Code where core for a workable plan of reorganization found to be nonexistent). 41. Here, it is simply not possible for the Debtors to confirm a chapter 11 plan. The Debtors have sold substantially all of their assets and are no longer conducting any

15 Case CSS Doc 1256 Filed 05/17/16 Page 15 of 20 business operations. As such, there is no business to reorganize, no viable assets to liquidate, and the Debtors have insufficient funds to confirm a plan of liquidation. By continuing in bankruptcy, the Debtors would likely incur additional administrative expenses, which there will be no funds to satisfy. In sum, the Debtors have met their burden of proof to show that cause exists to dismiss their Chapter 11 Cases under section 1112(b) of the Bankruptcy Code due to their inability to effectuate a plan of reorganization. 42. Once a court determines that cause exists to dismiss a chapter 11 case, the court must also evaluate whether dismissal is in the best interests of the estate and creditors. See In re Superior Sliding & Window, Inc., 14 F.3d 240, 243 (4th Cir. 1994); In re Mazzocone, 183 B.R. 402, 411 (Bankr. E.D. Pa. 1995), aff d, 200 B.R. 568 (E.D. Pa. 1996); In re Warner, 83 B.R. 807, 809 (Bankr. M.D. Fla. 1988). A variety of factors demonstrate that it is in the best interests of the Debtors estates and creditors to dismiss their Chapter 11 Cases. 43. A dismissal of a debtor s chapter 11 case meets the best-interests-ofcreditors test where a debtor has nothing left to reorganize and the debtor s assets are fixed and liquidated. See In re BTS, Inc., 247 B.R. 301, 310 (Bankr. N.D. Okla. 2000); In re Camden Ordinance Mfg. Co. of Arkansas, Inc., 245 B.R. 794, 799 (E.D. Pa. 2000) (finding that a reorganization to salvage a business which ceased doing business was not feasible); In re Brogdon Inv. Co., 22 B.R. 546, 549 (Bankr. N.D. Ga. 1982) (dismissing chapter 11 case in part where there was simply nothing to reorganize and no reason to continue the reorganization). As noted above, the Debtors have no business left to reorganize as all of the Debtors assets have been sold to the Agera. 44. Additionally, dismissal of the Debtors Chapter 11 Cases is warranted because the alternative conversion to chapter 7 would not serve the best interests of the

16 Case CSS Doc 1256 Filed 05/17/16 Page 16 of 20 Debtors estates and creditors for the reasons discussed above. One element of the best-interests tests focuses upon whether the economic value of the estate is greater inside or outside of bankruptcy. In re Clark, 1995 WL , at *5 (N.D. Ill. 1995); In re Staff Inv. Co., 146 B.R. 256, 261 (Bankr. E.D. Cal. 1993). The prime criterion for assessing the best interests of the estate is the maximization of value as an economic enterprise. See id. Here, the Debtors have no assets for a chapter 7 trustee to liquidate or administer. Moreover, the appointment of a chapter 7 trustee would only serve to create additional administrative professional fees and expenses for which there are simply no available funds to satisfy. 45. Numerous courts, both in this district and others, have approved dismissals under similar circumstances where the debtor lacks the requisite financial ability to confirm a chapter 11 plan and/or the costs associated with plan confirmation would eliminate the possibility of a meaningful creditor recovery. See, e.g., Official Comm. of Unsecured Creditors v. CIT Grp./Bus. Credit Inc. (In re Jevic Holding Corp.), 787 F.3d 173 (3d Cir. 2015); In re Int l Garden Prods., Inc., et al., Case No (KJC) (Bankr. D. Del. Oct. 8, 2011); In re Penson Worldwide, Inc., Case No (PJW) (Bankr. D. Del. Sept. 20, 2013); In re Pure Beauty Salons & Boutiques, Inc., Case No (MFW) (Bankr. D. Del. June 27, 2013). B. Dismissal of the Remaining Chapter 11 Cases Is Warranted Under Section 305(a)(1) of the Bankruptcy Code. 46. Alternatively, cause exists to dismiss the Debtors Chapter 11 Cases pursuant to section 305(a) of the Bankruptcy Code, which provides, in pertinent part 11 U.S.C. 305(a). (a) The court, after notice and a hearing, may dismiss a case under this title, or may suspend all proceedings in a case under this title, at any time if (1) the interests of creditors and the debtor would be better served by such dismissal or suspension;

17 Case CSS Doc 1256 Filed 05/17/16 Page 17 of In applying section 305(a) of the Bankruptcy Code, courts have considered a wide range of factors, including, but not limited to (a) (b) (c) (d) economy and efficiency of administration; whether federal proceedings are necessary to reach a just and equitable solution; whether there is an alternative means of achieving an equitable distribution of assets; and whether the debtor and the creditors are able to work out a less expensive out-of-court arrangement which better serves the interests in the case. See In re Crown Village Farm, LLC, Case No (KG), U.S. Bankr. LEXIS at *24 (Bankr. D. Del. June 12, 2009) (enumerating section 305(a) factors and denying motion only because dismissal or abstention would have a deleterious effect on the administration of the debtor s chapter 11 case which would languish while core issues were tried elsewhere ); see also In re Mazzocone, 200 B.R. 568, 575 (E.D. Pa. 1996). However, the exact factors to be considered and the weight to be given to each of them is highly sensitive to the facts of each individual case. Mazzocone, 200 B.R. at Dismissal of the Debtors Chapter 11 Cases is warranted under section 305(a)(1) of the Bankruptcy Code for the same reasons that cause exists to dismiss these cases pursuant to section 1112(b) of the Bankruptcy Code. That is, the estates have no remaining assets to be distributed by the Debtors following entry of the Proposed Order (except for the remaining assets in the Settlement Fund, which will be finally distributed by the Debtors following entry of the Proposed Order at the direction of the Creditors Committee pursuant to the Global Settlement Order, Distribution Order, and Settlement Order), and therefore, no remaining bankruptcy purpose exists. Keeping the Debtors in bankruptcy either under chapter

18 Case CSS Doc 1256 Filed 05/17/16 Page 18 of or chapter 7 will not yield results that provide a distribution to creditors and would only serve to create administrative liabilities of the estates that will go unsatisfied. II. Certification of Counsel and Request for Dismissal 49. After final distributions (if any) are made by the Debtors from the Settlement Fund to holders of Allowed Eligible Administrative Claims (at the direction of the Creditors Committee), and the U.S. Trustee Fees and Professional Fees have been paid, the Debtors request that the Court dismiss the Chapter 11 Cases upon the filing of the Certification, at which time the cases will be dismissed without the need for a further Order of the Court. III. Additional Distributions from Settlement Fund to Holders of Allowed Eligible Administrative Claims and De Minimis Remaining Funds in Settlement Fund 50. As noted above, the Creditors Committee estimates that, taking into account an appropriate reserve necessary to pay accrued unpaid Committee Expenses and estimated Committee Expenses (to be incurred in connection with this Motion, final fee applications, and final distributions, if any, from the Settlement Fund), an additional approximately $20,000 (or such other amount as reasonably determined by the Creditors Committee, in consultation with the Debtors) may be available for distribution to holders of Allowed Eligible Administrative Claims. 51. The Debtors are already authorized to make additional distributions from the Settlement Fund pursuant to the Global Settlement Order, Distribution Order, and Settlement Order, and will proceed with such distributions (if any) immediately following entry of the Proposed Order at the direction of the Creditors Committee. To the extent that following additional distributions (if any) to holders of Allowed Eligible Administrative Claims and payment of final Committee Expenses (which will occur after the final hearing on the Professional Fees), de minimis funds of less than $5,000 remain in the Settlement Fund, the

19 Case CSS Doc 1256 Filed 05/17/16 Page 19 of 20 Debtors request authority to donate such remaining funds to the ABI Endowment Fund or other charity at the direction of the Creditors Committee. IV. Authority to Dissolve the Remaining Debtors Corporate Entities 52. The Debtors submit that the relief requested in this Motion with respect to the proposed dissolution of the Debtors corporate entities is appropriate under the circumstances. The Debtors corporate entities have no further business to conduct or purpose for incorporation, and absent their prompt dissolution, the Debtors corporate entities may continue to be burdened by accruing tax liabilities. Thus, it may be in the best interests of the Debtors estates to have the Debtors corporate entities, which have no further business operations or purpose, dissolve as soon as practicable. NOTICE 53. Notice of this Motion has been given to (i) the U.S. Trustee; (ii) counsel to the Debtors prepetition secured lender; (iii) counsel to the Creditors Committee; (iv) counsel to Agera; and (v) all parties requesting notice in the Debtors Chapter 11 Cases pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure as of the date hereof. Additionally, the Debtors intend to serve a one-page notice upon the filing of this Motion, substantially in the form attached hereto as Exhibit C, via first-class mail, postage-prepaid, upon all creditors and parties in interest in the Debtors Chapter 11 Cases. In light of the nature of the relief requested, the Debtors submit that no further notice is required or needed under the circumstances. 54. A copy of the Motion will be available on the Court s website Additional copies of the Motion will be available for free on the website maintained by Rust Consulting / Omni Bankruptcy ( Rust ), the claims and noticing agent in the Chapter 11 Cases, at http//omnimgt.com/sblite/gridwayenergy/

20 Case CSS Doc 1256 Filed 05/17/16 Page 20 of 20 CONCLUSION WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form attached hereto as Exhibit A, (i) approving the dismissal of the Debtors Chapter 11 Cases; (ii) authorizing, in the Debtors sole discretion, the dissolution of their corporate entities; (iii) approving the proposed Professional Fee Process; and (iv) granting such other and further relief as the Court may deem just and proper. Dated May 17, 2016 Wilmington, Delaware YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Donald J. Bowman, Jr Michael R. Nestor (No. 3526) Joseph M. Barry (No. 4221) Donald J. Bowman, Jr. (No. 4383) Rodney Square 1000 North King Street Wilmington, Delaware Telephone Facsimile Attorneys for the Debtors and Debtors in Possession

21 Case CSS Doc Filed 05/17/16 Page 1 of 2 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re GRIDWAY ENERGY HOLDINGS, et al., Debtors x x Chapter 11 Case No (CSS) Jointly Administered Hearing Date June 8, 2016 at 1000 a.m. ET Objection Deadline May 31, 2016 at 400 p.m. ET NOTICE OF MOTION TO (I) THE U.S. TRUSTEE; (II) COUNSEL TO THE DEBTORS PREPETITION SECURED LENDER; (III) COUNSEL TO THE CREDITORS COMMITTEE; (IV) COUNSEL TO AGERA; AND (V) ALL PARTIES REQUESTING NOTICE IN THE DEBTORS CHAPTER 11 CASES PURSUANT TO RULE 2002 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AS OF THE DATE HEREOF. ADDITIONALLY, THE DEBTORS INTEND TO SERVE A ONE-PAGE NOTICE UPON THE FILING OF THE MOTION, SUBSTANTIALLY IN THE FORM ATTACHED TO THE MOTION AS EXHIBIT C, VIA FIRST-CLASS MAIL, POSTAGE-PREPAID, UPON ALL CREDITORS AND PARTIES IN INTEREST IN THE DEBTORS CHAPTER 11 CASES. PLEASE TAKE NOTICE that the debtors and debtors in possession in the abovecaptioned cases (each, a Debtor and, collectively, the Debtors ) have filed the attached Debtors Motion for Entry of an Order (I) Approving the Dismissal of the Debtors Remaining Chapter 11 Cases; (II) Authorizing the Dissolution of the Remaining Debtors Corporate Entities; (III) Approving Final Professional Fee Process; and (IV) Granting Related Relief (the Motion ). PLEASE TAKE FURTHER NOTICE that any objections to the relief requested in the Motion must be filed on or before May 31, 2016 at 400 p.m. (ET) (the Objection Deadline ) with the United States Bankruptcy Court for the District of Delaware, 824 N. Market Street, 3 rd Floor, Wilmington, Delaware At the same time, you must serve a copy of your objection upon the undersigned counsel to the Debtors so as to be received on or before the Objection Deadline. 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are Gridway Energy Holdings, Inc. (5072); Glacial Energy Holdings (3292); Glacial Energy, Inc. (1189); Glacial Energy of Maryland, Inc. (7173); Glacial Energy of California, Inc. (1795); Glacial Energy of Illinois, Inc. (1796); Glacial Energy of New Jersey, Inc. (8671); Glacial Energy of Washington DC, Inc. (5548); Glacial Energy of Michigan, Inc. (7110); Glacial Natural Gas, Inc. (0165); and Negawatt Business Solutions, Inc. (f/k/a Gridway Energy Partners, Inc.) (7086). The location of the headquarters of the Debtors is 5326 Yacht Haven Grande, Box , St. Thomas, VI

22 Case CSS Doc Filed 05/17/16 Page 2 of 2 PLEASE TAKE FURTHER NOTICE THAT A HEARING TO CONSIDER THE MOTION WILL BE HELD ON JUNE 8, 2016 AT 1000 A.M. (ET) BEFORE THE HONORABLE CHRISTOPHER S. SONTCHI, IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE, 824 N. MARKET STREET, 5 TH FLOOR, COURTROOM #6, WILMINGTON, DELAWARE PLEASE TAKE FURTHER NOTICE THAT IF YOU FAIL TO RESPOND TO THE MOTION IN ACCORDANCE WITH THIS NOTICE, THE COURT MAY GRANT THE RELIEF REQUESTED THEREIN WITHOUT FURTHER NOTICE OR A HEARING. Dated May 17, 2016 Wilmington, Delaware YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Donald J. Bowman, Jr. Michael R. Nestor (No. 3526) Joseph M. Barry (No. 4221) Donald J. Bowman, Jr. (No. 4383) Travis G. Buchanan (No. 5595) Rodney Square 1000 North King Street Wilmington, Delaware Telephone Facsimile Attorneys for the Debtors and Debtors in Possession

23 Case CSS Doc Filed 05/17/16 Page 1 of 7 EXHIBIT A Dismissal Order

24 Case CSS Doc Filed 05/17/16 Page 2 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE x In re GRIDWAY ENERGY HOLDINGS, INC. et al., Debtors x Chapter 11 Case No (CSS) Jointly Administered Ref. Docket No. ORDER (I) APPROVING THE DISMISSAL OF THE DEBTORS REMAINING CHAPTER 11 CASES; (II) AUTHORIZING THE DISSOLUTION OF THE REMAINING DEBTORS CORPORATE ENTITIES; (III) APPROVING FINAL PROFESSIONAL FEE PROCESS; AND (IV) GRANTING RELATED RELIEF Upon consideration of the motion (the Motion ) 2 of the debtors in the abovecaptioned chapter 11 cases (collectively, the Debtors ) for entry of an order, pursuant to pursuant to sections 105(a), 305 and 1112(b) of title 11 of the United States Code (the Bankruptcy Code ), (i) approving the dismissal of the Debtors Chapter 11 Cases, as identified on Exhibit 1, attached hereto, (ii) authorizing, in the Debtors sole discretion, the dissolution of their corporate entities, (iii) approving the Professional Fee Process, and (iv) granting related relief; and due and proper notice of the Motion having been given; and it appearing that no other or further notice of the Motion is required; and it appearing that the Court has jurisdiction to consider the Motion in accordance with 28 U.S.C. 157 and 1334 and the Amended Standing Order; and it appearing that this is a core proceeding pursuant to 28 U.S.C. 157(b); and it 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are Gridway Energy Holdings, Inc. (5072); Glacial Energy Holdings (3292); Glacial Energy, Inc. (1189); Glacial Energy of Maryland, Inc. (7173); Glacial Energy of California, Inc. (1795); Glacial Energy of Illinois, Inc. (1796); Glacial Energy of New Jersey, Inc. (8671); Glacial Energy of Washington DC, Inc. (5548); Glacial Energy of Michigan, Inc. (7110); Glacial Natural Gas, Inc. (0165); and Negawatt Business Solutions, Inc. (f/k/a Gridway Energy Partners, Inc.) (7086). The location of the headquarters of the Debtors is 5326 Yacht Haven Grande, Box 36, St. Thomas, VI Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Motion

25 Case CSS Doc Filed 05/17/16 Page 3 of 7 appearing that venue of this proceeding and the Motion is proper pursuant to 28 U.S.C and 1409; and it appearing that the relief requested in the Motion and provided for herein is in the best interest of the Debtors, their estates, and creditors; and after due deliberation thereon and with sufficient cause appearing therefor IT IS HEREBY ORDERED THAT 1. The Motion is granted as set forth herein. 2. As soon as reasonably practicable following final distributions (if any) from the Settlement Fund to holders of Allowed Eligible Administrative Claims (at the direction of the Creditors Committee) and payment of any remaining outstanding U.S. Trustee Fees and Professional Fees, the Debtors shall file a certification (the Certification ), substantially in the form of Exhibit B attached to Motion, and thereupon, the Debtors Chapter 11, as identified on Exhibit 1, attached hereto, shall be dismissed without further order of this Court. 3. All monthly operating reports must be filed and all U.S. Trustee Fees must be paid within thirty (30) days of entry of this Order and must be done prior to the filing of the Certification. 4. All Final Fee Applications in connection the Chapter 11 Cases shall be filed within three (3) business days of the entry of this Order, and a hearing to consider the Final Fee Applications shall be held on June 28, 2016 at 1100 a.m. (ET) with objections due on or before June 21, 2016 at 400 p.m. (ET). 5. As soon as reasonably practicable following the filing of the Certification, the Clerk of this Court shall (a) reflect the dismissal of the Debtors Chapter 11 Cases (i) on the dockets of the respective Debtor cases and (ii) on the docket for those cases being jointly administered under Case No and (b) close the Debtors Chapter 11 Cases

26 Case CSS Doc Filed 05/17/16 Page 4 of 7 6. The right of the Debtors to file future petitions for relief under chapters 7 or 11 of the Bankruptcy Code is preserved to the fullest extent allowed by, among other sections, section 349 of the Bankruptcy Code. 7. Notwithstanding section 349 of the Bankruptcy Code, all orders of the Court entered in the Debtors Chapter 11 Cases shall survive the dismissal of the Debtor cases. 8. For the avoidance of doubt, the Debtors shall continue to hold the Settlement Fund established pursuant to the Order Granting Joint Motion of the Debtors and Official Committee of Unsecured Creditors for Entry of an Order Approving Settlement and Compromise [Docket No. 381] (the Global Settlement Order ) in a segregated bank account (as required pursuant to the Global Settlement Order), and RPA Advisors, LLC shall continue to have authority to administer the Settlement Fund and additional distributions (if any) from the Settlement Fund solely as directed by the Creditors Committee pursuant to the Global Settlement Order, Order in Furtherance of Committee Global Settlement Determining That (I) Claims Filed by Platinum Partners Value Arbitrage Fund LP and Electric Reliability Council of Texas (ERCOT) are not Eligible Administrative Claims under the Committee Global Settlement; and (II) Authorizing Distributions from Committee Settlement Fund to Holders of Allowed Eligible Administrative Claims [Docket No. 910] (the Distribution Order ), and Order Approving Settlement By And Among The Debtors, Platinum Partners Value Arbitrage Fund LP And Agera Energy LLC [Docket No. 905] (the Settlement Order ); provided that Platinum and Agera will not be required to pay any fees or expenses incurred by RPA Advisors in connection with such distributions, and subject to a cap of $5,000, reasonable expenses incurred by RPA Advisors at the direction of the Creditors Committee in connection with any further

27 Case CSS Doc Filed 05/17/16 Page 5 of 7 distributions from the Settlement Fund shall be deemed allowed Committee Expenses and may be paid directly to RPA Advisors from the Settlement Fund. 9. Notwithstanding anything to the contrary in the Global Settlement Order or Distribution Order, to the extent that following additional distributions (if any) to holders of Allowed Eligible Administrative Claims and payment of final Committee Expenses from the Settlement Fund, de minimis funds of less than $5,000 remain in the Settlement Fund, the Debtors are hereby authorized to donate such remaining funds to the ABI Endowment Fund or other charity at the direction of the Creditors Committee. 10. The Court shall retain jurisdiction with respect to any matters, claims, rights, or disputes arising from or relating to the implementation of any order of this Court entered in the Debtors Chapter 11 Cases. 11. Effective upon the filing of the Certification, (i) the Debtors retention of Young Conaway Stargatt & Taylor, LLP ( Young Conaway ) shall be terminated; and (ii) the Creditors Committee (a) shall dissolve and members thereof shall be and released from all rights, duties and obligations from or related to the Chapter 11 Cases; and (b) the Creditors Committee s retention of Lowenstein Sandler LLP, The Rosner Law Group LLC, and FTI Consulting, Inc. shall be terminated. 12. The Debtors and the Creditors Committee are authorized to take all actions necessary to effectuate the relief granted pursuant to this Order in accordance with the Motion. 13. Notwithstanding any provisions in the Bankruptcy Code or Bankruptcy Rules to the contrary, the terms and conditions of this Order shall be immediately effective and enforceable upon its entry