Case 15-11498 Doc 5 Filed 07/13/15 Page 1 of 25 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SIGNAL INTERNATIONAL, INC., et al. 1 Debtors. Chapter 11 Case No. 15-11498 ( ) (Joint Administration Requested) DEBTORS MOTION FOR INTERIM AND FINAL ORDERS PURSUANT TO SECTION 366 OF THE BANKRUPTCY CODE (I) PROHIBITING UTILITY COMPANIES FROM ALTERING, REFUSING, OR DISCONTINUING UTILITY SERVICES, (II) DEEMING UTILITY COMPANIES ADEQUATELY ASSURED OF FUTURE PERFORMANCE, (III) ESTABLISHING PROCEDURES FOR DETERMINING ADEQUATE ASSURANCE OF PAYMENT, AND (IV) SETTING A FINAL HEARING RELATED THERETO The above-captioned debtors and debtors in possession (collectively, the Debtors ) hereby submit this motion (the Motion ) for entry of interim and final orders, substantially in the forms attached hereto as Exhibits A and B (the Interim Order and the Final Order, respectively, and together, the Proposed Orders ), pursuant to section 366 of title 11 of the United States Code, 11 U.S.C. 101 1532 (the Bankruptcy Code ), (i) prohibiting the Debtors utility service providers from altering, refusing, or discontinuing utility services on account of unpaid prepetition invoices, (ii) deeming the Debtors utility service providers adequately assured of future performance, (iii) establishing procedures for determining additional adequate assurance of future payment and authorizing the Debtors to provide adequate assurance of future payment to the Debtors utility service providers, and (iv) setting a final hearing related thereto. In support of this Motion, the Debtors rely upon and incorporate by reference the Declaration of Christopher S. Cunningham in Support of Chapter 11 Petitions and 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Signal International, Inc. (4248); Signal Ship Repair, LLC (2642); Signal International, LLC (5074); Signal International Texas GP, LLC (3050); and Signal International Texas, L.P. (5066). The Debtors principal offices are located at RSA Battle House Tower, 11 North Water Street, Mobile, Alabama 36602.
Case 15-11498 Doc 5 Filed 07/13/15 Page 2 of 25 First Day Motions (the First Day Declaration ), 2 which was filed with the Court concurrently herewith. In further support of this Motion, the Debtors respectfully state as follows: JURISDICTION AND VENUE 1. The Court has jurisdiction over this Motion 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 February 29, 2012. Venue of the Debtors chapter 11 cases in this district is proper pursuant to 28 U.S.C. 1408 and 1409. This is a core proceeding pursuant to 28 U.S.C. 157(b), and the Court may enter a final order consistent with Article III of the United States Constitution. The legal authority for the relief requested herein is sections 105(a) and 366(b) of the Bankruptcy Code. BACKGROUND 2. On the date hereof (the Petition Date ), the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. 3. The Debtors continue to operate their business as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No request has been made for the appointment of a trustee or examiner and no official committee has been established in these chapter 11 cases. 4. Additional information about the Debtors business, their capital and debt structure, and the events leading up to the Petition Date can be found in the First Day Declaration. 2 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the First Day Declaration. 2
Case 15-11498 Doc 5 Filed 07/13/15 Page 3 of 25 The Utility Services and Utility Companies 5. In the normal course of operation of their business, the Debtors obtain electricity, sewer, water, telecommunications, waste disposal, and other similar services (collectively, the Utility Services ) from various utility companies (the Utility Companies ). 3 A list of Utility Companies that provide Utility Services to the Debtors as of the Petition Date is attached hereto as Exhibit C (the Utility Service List ). 4 On average, the Debtors spend approximately $282,796.00 per month on the Utility Services. 6. In general, the Debtors have established a good payment history with virtually all of the Utility Companies and have made payments on a regular and timely basis. To the best of the Debtors knowledge, there are no material defaults or arrearages of any significance with respect to the Debtors undisputed Utility Services invoices, other than payment interruptions that may be caused by the commencement of these chapter 11 cases. RELIEF REQUESTED 7. The Debtors respectfully request that the Court enter the Interim Order, in the form attached hereto as Exhibit A, and the Final Order, in the form attached hereto as Exhibit B, (i) prohibiting the Utility Companies from altering, refusing, or discontinuing Utility Services on account of prepetition invoices, including the making of demands for security deposits or 3 Section 366 of the Bankruptcy Code applies to entities that provide services that are traditionally provided by utilities, including services that cannot be readily obtained or replaced elsewhere or which constitute a monopoly with respect to the service provided. See One Stop Realtour Place, Inc. v. Allegiance Telecom, Inc. (In re One Stop Realtour Place, Inc.), 268 B.R. 530 (Bankr. E.D. Pa. 2001) (deeming mobile phone service provider a utility); In re Good Time Charlie s Ltd., 25 B.R. 226 (Bankr. E.D. Pa. 1982) (finding landlord was a utility because it was the sole source of electrical supply to debtor-tenant). 4 The Debtors have endeavored to identify all of the Utility Companies and list them on the Utility Service List. However, inadvertent omissions may have occurred, and the omission from the Utility Service List of any entity providing utility services to the Debtors shall not be construed as an admission, waiver, acknowledgment, or consent that section 366 of the Bankruptcy Code does not apply to such entity. If the Debtors identify any entity that was inadvertently excluded from Utility Service List, the Debtors will promptly provide such entity with a copy of this Motion and either the (i) Interim Order or (ii) if entered, the Final Order. In addition, the inclusion of any entity on the Utility Service List is not an admission that such entity is a utility with the meaning of section 366 of the Bankruptcy Code, and the Debtors reserve all rights with respect thereto. 3
Case 15-11498 Doc 5 Filed 07/13/15 Page 4 of 25 accelerated payment terms, (ii) determining that the Debtors have provided each of the Utility Companies with adequate assurance of payment within the meaning of section 366 of the Bankruptcy Code ( Adequate Assurance ), based, among other things, on the Debtors establishment of a segregated account containing an amount equal to 50% of the Debtors estimated monthly cost of the Utility Services, which may be adjusted by the Debtors to account for the termination of certain Utility Services by the Debtors on account of any closed business locations, by agreement between the Debtors and the affected Utility Company, or to account for the addition of a Utility Company to the Utility Service List, (iii) establishing procedures for determining additional Adequate Assurance, if any, and authorizing the Debtors to provide Adequate Assurance to the Utility Companies (the Assurance Procedures ), and (iv) setting a final hearing (the Final Hearing ) on the proposed Adequate Assurance Procedures. 8. Specifically with respect to Adequate Assurance, the Debtors propose to establish a segregated account containing an initial aggregate amount of $141,398.00, which is equal to 50% of the Debtors estimated monthly cost of the Utility Services. BASIS FOR RELIEF 9. The Utility Services are essential to the operation of the Debtors business and will continue to be necessary during these chapter 11 cases. The termination or cessation (even if only temporary) of Utility Services because of payment defaults related to prepetition Utility Services would result in a significant disruption to the Debtors business operations. Unanticipated delays in the Debtors ability to meet their customers production needs would result in substantial and irreparable harm to the Debtors and would impair the Debtors efforts to preserve and maximize the value of their estates during these chapter 11 cases. It is therefore critical that the Utility Services continue uninterrupted. 4
Case 15-11498 Doc 5 Filed 07/13/15 Page 5 of 25 10. Section 366 of the Bankruptcy Code provides that, in a chapter 11 case, during the initial thirty (30) days after the commencement of the case, utilities may not alter, refuse or discontinue service to, or discriminate against, a debtor solely on the basis of the commencement of its case or the existence of prepetition debts owed by the debtor. After the thirty-day period, however, under section 366(c) of the Bankruptcy Code, utilities may discontinue service to a debtor if the debtor does not provide adequate assurance of future performance of its postpetition obligations in a form that is satisfactory to the utility, subject to the Court s ability to modify the amount of adequate assurance. 11 U.S.C. 366(c)(2). 11. The Debtors intend to pay when due all undisputed postpetition charges for Utility Services. And the Debtors expect their available cash including cash made available under the proposed DIP Facility will be more than sufficient to pay for the Debtors postpetition use of Utility Services. Nonetheless, the Debtors propose to deposit a sum of $141,398.00, equal to 50% of the Debtors estimated monthly cost of Utility Services, into a newly-created segregated bank account within twenty (20) days of the Petition Date (the Utility Deposit ) as Adequate Assurance. The Utility Deposit will be either interest-bearing or non-interest-bearing at the Debtors election. 12. While the form of Adequate Assurance may be limited to the types of security enumerated in section 366(c)(1)(A) of the Bankruptcy Code, 5 the determination of the amount of Adequate Assurance is within the discretion of the Court. It is well established that the requirement that a utility receive adequate assurance of payment does not require guarantee of payment. Instead, the protection granted to a utility is intended to avoid exposing the utility to an unreasonable risk of nonpayment. 5 This section of the Bankruptcy Code provides that assurance of payment may be in the form of a cash deposit, letter of credit, certificate of deposit, surety bond, prepayment of utility consumption, or another form of security that is mutually agreed upon by the utility and the debtor. 11 U.S.C. 366(c)(1)(A). 5
Case 15-11498 Doc 5 Filed 07/13/15 Page 6 of 25 13. The Debtors submit that the Utility Deposit constitutes sufficient Adequate Assurance for the Utility Companies. However, should any Utility Company disagree, the Debtors propose to establish the Assurance Procedures under which a Utility Company may request additional Adequate Assurance. If any Utility Company believes additional Adequate Assurance is required, it may request such additional assurance pursuant to the procedures set forth herein. The proposed Assurance Procedures are as follows: (i) (ii) If a Utility Company is not satisfied with the assurance of future payment provided by the Debtors, the Utility Company must serve a written request (a Request ) upon: (a) the Debtors, Signal International, Inc., RSA Battle House Tower, 11 North Water Street, Mobile, Alabama 36602, Attn: Chris Cunningham; (b) counsel to the Debtors, Young Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 North King Street, Wilmington, Delaware 19801, Attn: Travis G. Buchanan, Esq.; (c) counsel to the DIP Lenders, Burr & Forman LLP, 420 North 20 th Street, Suite 3400, Birmingham, Alabama 35203, Attn: Derek F. Meek, Esq., and Morris, Nichols, Arsht & Tunnell LLP, 1201 North Market Street, 16 th Floor, Wilmington, Delaware 19801, Attn: Eric Schwartz, Esq.; and (d) counsel to any statutory committee appointed in these chapter 11 cases. The Request must: (a) set forth the locations(s) for which Utility Services are provided, the account number(s) for such location(s), and the outstanding balance for each account; (b) provide a report on and certifying the Debtors payment history on each account for the previous twelve months; (c) disclose any existing security deposit; and (d) provide an explanation of why the Utility Deposit is not sufficient Adequate Assurance of payment. (iii) Without further order of the Court, the Debtors may, in consultation with the DIP Lenders, enter into agreements granting additional Adequate Assurance to a Utility Company and/or extending the Debtors time to file a Determination Motion (as defined below). The Debtors may reduce the amount of the Utility Deposit by any amount allocated to a particular Utility Company to the extent consistent with any alternative adequate assurance arrangements mutually agreed to by the Debtors and the affected Utility Company. (iv) If the Debtors believe a Request is unreasonable, then they shall, within thirty (30) days after receipt of a Request (or such later date as agreed to by the Debtors and the requesting Utility Company), file a motion (the Determination Motion ) pursuant to section 366(c)(3) of the Bankruptcy Code seeking a determination from the Court that the Utility Deposit, plus 6
Case 15-11498 Doc 5 Filed 07/13/15 Page 7 of 25 any additional consideration offered by the Debtors, constitutes Adequate Assurance of payment. Pending notice and a hearing on the Determination Motion, the Utility Company that is the subject of the unresolved Request may not alter, refuse, or discontinue services to the Debtors. (v) The Utility Deposit shall be deemed Adequate Assurance of payment for any Utility Company that fails to make a Request. (vi) Pending resolution of any such Determination Motion, the Utility Company filing such Request shall be prohibited from altering, refusing, or discontinuing service to the Debtors on account of the commencement of these chapter 11 cases, unpaid charges for prepetition services, or on account of any objections to the Debtors proposed Adequate Assurance. 14. The Debtors request a final hearing on this Motion to be held within 25 days of the Petition Date to ensure that, if a Utility Company argues it can unilaterally refuse service to the Debtors on the 31st day after the Petition Date, the Debtors will have the opportunity, to the extent necessary, to request that the Court make such modifications to the Assurance Procedures in time to avoid any potential termination of the Utility Services. The Utility Companies Will Not Be Prejudiced by the Relief Requested 15. On a monthly basis, the Debtors receive numerous individual invoices for Utility Services from the Utility Companies, with whom the Debtors may have multiple utility accounts. To the best of the Debtors knowledge, there are no material defaults or arrearages with respect to the undisputed Utility Service invoices, other than payment interruptions that may be caused by commencement of these chapter 11 cases. 16. The Debtors proposed method of furnishing Adequate Assurance is not prejudicial to the rights of any Utility Company and is in the best interests of the Debtors estates. Because uninterrupted Utility Services are vital to the continued operation of the Debtors business and, consequently, to the success of their chapter 11 cases, the relief requested herein is necessary and in the best interests of the Debtors estates and creditors. Such relief 7
Case 15-11498 Doc 5 Filed 07/13/15 Page 8 of 25 ensures that the Debtors business operations will not be disrupted, and also provides both Utility Companies and the Debtors with an orderly, fair procedure for determining Adequate Assurance. 17. Accordingly, for all of the foregoing reasons, the Debtors submit that cause exists for granting the relief requested herein. REQUIREMENTS OF BANKRUPTCY RULE 6003 ARE SATISFIED 18. As described above, the relief requested in this Motion is necessary to avoid immediate and irreparable harm. Accordingly, the Debtors submit that they have satisfied the requirements of Bankruptcy Rule 6003. WAIVER OF BANKRUPTCY RULES 6004(a) AND 6004(h) 19. To successfully implement the foregoing immediately and for the reasons set forth above, the Debtors seek a waiver of the notice requirements under Bankruptcy Rule 6004(a) and the 14-day stay under Bankruptcy Rule 6004(h), to the extent that it applies. NOTICE 20. Notice of this Motion will be provided to: (i) the Office of the United States Trustee for the District of Delaware; (ii) the Securities and Exchange Commission; (iii) the Office of the United States Attorney General for the District of Delaware; (iv) the Internal Revenue Service; (v) the parties included on the Debtors consolidated list of thirty (30) largest unsecured creditors, as filed with the Debtors chapter 11 petitions; (vi) counsel to the Debtors prepetition and proposed postpetition secured lenders; and (vii) the Utility Companies. Notice of this Motion and any order entered hereon will be served in accordance with Rule 9013-1(m) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware. In light of the nature of the relief requested herein, the Debtors submit that no other or further notice is necessary. 8
Case 15-11498 Doc 5 Filed 07/13/15 Page 9 of 25 WHEREFORE, the Debtors respectfully request that the Court enter the Interim Order, substantially in the form attached hereto as Exhibit A, and the Final Order, substantially in the form attached hereto as Exhibit B, granting the relief requested by this Motion and such further relief as may be just and proper under the circumstances. Dated: July 12, 2015 Wilmington, Delaware YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Jaime Luton Chapman M. Blake Cleary (No. 3614) Jaime Luton Chapman (No. 4936) Travis G. Buchanan (No. 5595) Rodney Square 1000 North King Street Wilmington, Delaware 19801 Telephone: (302) 571-6600 Facsimile: (302) 571-1253 Proposed Counsel to the Debtors and Debtors in Possession 9
Case 15-11498 Doc 5 Filed 07/13/15 Page 10 of 25 EXHIBIT A Proposed Interim Order
Case 15-11498 Doc 5 Filed 07/13/15 Page 11 of 25 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SIGNAL INTERNATIONAL, INC., et al. 1 Debtors. Chapter 11 Case No. 15-11498 ( ) Jointly Administered RE: Docket No. INTERIM ORDER PURSUANT TO SECTION 366 OF THE BANKRUPTCY CODE (I) PROHIBITING UTILITY COMPANIES FROM ALTERING, REFUSING, OR DISCONTINUING UTILITY SERVICES, (II) DEEMING UTILITY COMPANIES ADEQUATELY ASSURED OF FUTURE PERFORMANCE, AND (III) SETTING A FINAL HEARING RELATED THERETO Upon the motion (the Motion ) 2 of the Debtors requesting entry of interim and final orders, pursuant to section 366 of the Bankruptcy Code, (i) prohibiting Utility Companies from altering, refusing, or discontinuing Utility Services, (ii) deeming Utility Companies adequately assured of future performance, (iii) establishing procedures for determining adequate assurance of payment, and (iv) setting a final hearing related thereto, all as described more fully in the Motion; and upon the First Day Declaration; and it appearing that this 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; and it appearing that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A) and this Court may enter a final order consistent with Article III of the United States Constitution; and proper and adequate notice of the Motion and the hearing thereon having been given; and it appearing that no other or further notice being necessary; and it appearing that 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Signal International, Inc. (4248); Signal Ship Repair, LLC (2642); Signal International, LLC (5074); Signal International Texas GP, LLC (3050); and Signal International Texas, L.P. (5066). The Debtors principal offices are located at RSA Battle House Tower, 11 North Water Street, Mobile, Alabama 36602. 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.
Case 15-11498 Doc 5 Filed 07/13/15 Page 12 of 25 the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and this Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their estates, their creditors, and other parties in interest; and after due deliberation and sufficient cause appearing therefor; it is hereby ORDERED, ADJUDGED, AND DECREED that: 1. The Motion is GRANTED on an INTERIM BASIS as set forth herein. 2. The Debtors are authorized, but not directed, to pay on a timely basis, in accordance with their prepetition practices, all undisputed invoices for postpetition Utility Services provided by the Utility Companies to the Debtors. 3. Subject to paragraph 4 below, the Debtors shall, on or before the date which is 20 days after the Petition Date, deposit a sum of $141,398.00, which is equal to 50% of the Debtors estimated monthly cost of the Utility Services (the Utility Deposit ) into a newly created segregated bank account (the Utility Deposit Account ), with such Utility Deposit to be held in escrow, pending further order of this Court, which shall constitute adequate assurance of payment for each Utility Company for postpetition Utility Services provided to the Debtors. The Utility Deposit Account may be either interest-bearing or non-interest-bearing at the Debtors election. 4. The Utility Deposit Account shall be maintained with a minimum balance of $141,398.00, equal to 50% of the Debtors estimated monthly cost of the Utility Services, which may be adjusted by the Debtors (i) to account for the termination of Utility Services by the Debtors regardless of any Requests and/or agreements with Utility Companies, (ii) in accordance with the terms of any agreement between the Debtors and the affected Utility Company, and (iii) to account for the addition of a Utility Company to the Utility Service List. 2
Case 15-11498 Doc 5 Filed 07/13/15 Page 13 of 25 5. Pending entry of the Final Order, the Utility Companies are prohibited from altering, refusing, or discontinuing Utility Services on the basis of (i) the commencement of the Debtors chapter 11 cases, (ii) any unpaid invoice for Utility Services, or (iii) any objections to the Debtors proposed adequate assurance provided before the Petition Date, and from requiring the Debtors to furnish any additional deposit or other security to the Utility Companies for the continued provision of Utility Services. 6. If any Utility Company believes additional Adequate Assurance is required, it may request such additional assurance by serving a written request (a Request ) upon: (i) the Debtors, Signal International, Inc., RSA Battle House Tower, 11 North Water Street, Mobile, Alabama 36602, Attn: Chris Cunningham; (ii) counsel to the Debtors, Young Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 North King Street, Wilmington, Delaware 19801, Attn: Travis G. Buchanan, Esq.; (iii) counsel to the DIP Lenders, (a) Burr & Forman LLP, 420 North 20 th Street, Suite 3400, Birmingham, Alabama 35203, Attn: Derek F. Meek, Esq. and (b) Morris, Nichols, Arsht & Tunnell LLP, 1201 North Market Street, 16 th Floor, Wilmington, Delaware 19801, Attn: Eric Schwartz, Esq.; and (iv) counsel to any statutory committee appointed in these chapter 11 cases. 7. Each Request must: (i) set forth the locations(s) for which Utility Services are provided, the account number(s) for such location(s), and the outstanding balance for each account; (ii) provide a report on and certifying the Debtors payment history on each account for the previous twelve months; (iii) disclose any existing security deposit; and (iv) provide an explanation of why the Utility Deposit is not sufficient Adequate Assurance of payment. 8. If the Debtors believe a Request is unreasonable, then they shall, within 30 days after receipt of a Request (or such later date agreed to by the Debtors and the requesting party), 3
Case 15-11498 Doc 5 Filed 07/13/15 Page 14 of 25 file a motion (the Determination Motion ) pursuant to section 366(c)(3) of the Bankruptcy Code seeking a determination from this Court that the Utility Deposit, plus any additional consideration offered by the Debtors, constitutes Adequate Assurance of payment. 9. Pending notice and a hearing on a Determination Motion or other resolution of a Request, the Utility Company filing such Request shall be prohibited from altering, refusing, or discontinuing service to the Debtors on account of the commencement of these chapter 11 cases, unpaid charges for prepetition services, or any objections to the Debtors proposed Adequate Assurance. 10. Without further order of this Court, subject to any order approving the DIP Facility, the Debtors may, in consultation with the DIP Lenders, enter into agreements granting additional Adequate Assurance to a Utility Company and/or extending the Debtors time to file a Determination Motion. The Debtors may reduce the amount of the Utility Deposit by any amount allocated to a particular Utility Company to the extent consistent with any alternative adequate assurance arrangements mutually agreed to by the Debtors and the affected Utility Company. 11. The Utility Deposit shall be deemed Adequate Assurance of payment for any Utility Company that fails to make a Request. 12. The relief granted herein is for all Utility Companies providing Utility Services to the Debtors and is not limited to those listed on the Utility Service List attached as Exhibit C to the Motion. The Debtors are authorized to supplement, as necessary, the Utility Service List and this Interim Order shall apply to any such Utility Company that is subsequently added to the Utility Service List. Any such supplement to the Utility Service List shall be filed with this Court. 4
Case 15-11498 Doc 5 Filed 07/13/15 Page 15 of 25 13. Nothing in this Interim Order or the Motion or any action taken in implementation of this Order shall be deemed to constitute prepetition assumption or adoption of any agreement pursuant to section 365 of the Bankruptcy Code. 14. Notwithstanding anything to the contrary herein, any payment made or authorization contained herein shall be subject to the requirements imposed on the Debtors under any order approving the DIP Facility. 15. The deadline by which objections to the Motion and the Final Order must be filed is, 2015, at 4:00 p.m. (ET). Objections must be served on: (i) counsel to the Debtors, Young Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 North King Street, Wilmington, Delaware 19801, Attn: M. Blake Cleary, Esq. and Jaime Luton Chapman, Esq.; (ii) the Office of the United States Trustee for the District of Delaware, 844 King Street, Suite 2207, Wilmington, Delaware, 19801, Attn: Tiiara N.A. Patton, Esq.; (iii) counsel to the DIP Lenders, (a) Burr & Forman LLP, 420 North 20 th Street, Suite 3400, Birmingham, Alabama 35203, Attn: Derek F. Meek, Esq. and (b) Morris, Nichols, Arsht & Tunnell LLP, 1201 North Market Street, 16 th Floor, Wilmington, Delaware 19801, Attn: Eric Schwartz, Esq.; and (iv) counsel to any statutory committee appointed in these chapter 11 cases. A final hearing, if required, on the Motion will be held on, 2015, at.m. (ET). If no objections are filed to the Motion, this Court may enter the Final Order without further notice or hearing. 16. The Debtors shall serve this Order on the Utility Companies within forty-eight (48) hours of entry of this Order. 17. The requirements of Bankruptcy Rule 6003(b) are satisfied. 5
Case 15-11498 Doc 5 Filed 07/13/15 Page 16 of 25 18. The requirements set forth in Bankruptcy Rule 6004(a) are hereby waived, and pursuant to Bankruptcy Rule 6004(h), the terms and provisions of this Order shall be immediately effective and enforceable upon its entry. 19. This Court shall retain jurisdiction over any and all matters arising from or related to the interpretation or implementation of this Order. Dated:, 2015 Wilmington, Delaware United States Bankruptcy Judge 6
Case 15-11498 Doc 5 Filed 07/13/15 Page 17 of 25 EXHIBIT B Proposed Final Order
Case 15-11498 Doc 5 Filed 07/13/15 Page 18 of 25 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: SIGNAL INTERNATIONAL, INC., et al. 1 Debtors. Chapter 11 Case No. 15-11498 ( ) Jointly Administered RE: Docket Nos. FINAL ORDER PURSUANT TO SECTION 366 OF THE BANKRUPTCY CODE (I) PROHIBITING UTILITY COMPANIES FROM ALTERING, REFUSING, OR DISCONTINUING UTILITY SERVICES AND (II) DEEMING UTILITY COMPANIES ADEQUATELY ASSURED OF FUTURE PERFORMANCE Upon the motion (the Motion ) 2 of the Debtors requesting entry of interim and final orders, pursuant to section 366 of the Bankruptcy Code, (i) prohibiting Utility Companies from altering, refusing, or discontinuing Utility Services, (ii) deeming Utility Companies adequately assured of future performance, (iii) establishing procedures for determining adequate assurance of payment, and (iv) setting a final hearing related thereto, all as described more fully in the Motion; and upon the First Day Declaration; and the Interim Order having been entered; and it appearing that this 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; and it appearing that this is a core proceeding pursuant to 28 U.S.C. 157(b)(2)(A) and this Court may enter a final order consistent with Article III of the United States Constitution; and proper and adequate notice of the Motion and the hearing thereon having been given; and it appearing that no other or further 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, are: Signal International, Inc. (4248); Signal Ship Repair, LLC (2642); Signal International, LLC (5074); Signal International Texas GP, LLC (3050); and Signal International Texas, L.P. (5066). The Debtors principal offices are located at RSA Battle House Tower, 11 North Water Street, Mobile, Alabama 36602. 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Motion.
Case 15-11498 Doc 5 Filed 07/13/15 Page 19 of 25 notice being necessary; and it appearing that the legal and factual bases set forth in the Motion establish just cause for the relief granted herein; and this Court having determined that the relief sought in the Motion is in the best interests of the Debtors, their estates, their creditors, and other parties in interest; and after due deliberation and sufficient cause appearing therefor; it is hereby ORDERED, ADJUDGED, AND DECREED that: 1. The Motion is GRANTED on a FINAL BASIS as set forth herein. 2. The Debtors are authorized, but not directed, to pay on a timely basis, in accordance with their prepetition practices, all undisputed invoices for postpetition Utility Services provided by the Utility Companies to the Debtors. 3. Subject to paragraph 4 below, to the extent not already deposited, the Debtors shall, within five days of the entry of this Order, deposit a sum of $141,398.00, which is equal to 50% of the Debtors estimated monthly cost of the Utility Services (the Utility Deposit ) into a newly created segregated bank account (the Utility Deposit Account ), with such Utility Deposit to be held in escrow, pending further order of this Court, which shall constitute adequate assurance of payment for each Utility Company for postpetition Utility Services provided to the Debtors. The Utility Deposit Account may be either interest-bearing or non-interest-bearing at the Debtors election. 4. The Utility Deposit Account shall be maintained with a minimum balance of $141,398.00, equal to 50% of the Debtors estimated monthly cost of the Utility Services, which may be adjusted by the Debtors (i) to account for the termination of Utility Services by the Debtors regardless of any Requests and/or agreements with Utility Companies, (ii) in accordance with the terms of any agreement between the Debtors and the affected Utility Company, and (iii) to account for the addition of a Utility Company to the Utility Service List. Upon the 2
Case 15-11498 Doc 5 Filed 07/13/15 Page 20 of 25 effective date of a chapter 11 plan, the Debtors may close the Utility Deposit account without further notice or hearing. 5. The Utility Companies are prohibited from altering, refusing, or discontinuing Utility Services on the basis of (i) the commencement of the Debtors chapter 11 cases, (ii) any unpaid invoice for Utility Services, or (iii) any objections to the Debtors proposed adequate assurance provided before the Petition Date, and from requiring the Debtors to furnish any additional deposit or other security to the Utility Companies for the continued provision of Utility Services. 6. If any Utility Company believes additional Adequate Assurance is required, it may request such additional assurance by serving a written request (a Request ) upon: (i) the Debtors, Signal International, Inc., RSA Battle House Tower, 11 North Water Street, Mobile, Alabama 36602, Attn: Chris Cunningham; (ii) counsel to the Debtors, Young Conaway Stargatt & Taylor, LLP, Rodney Square, 1000 North King Street, Wilmington, Delaware 19801, Attn: Travis G. Buchanan, Esq.; (iii) counsel to the DIP Lenders, (a) Burr & Forman LLP, 420 North 20 th Street, Suite 3400, Birmingham, Alabama 35203, Attn: Derek F. Meek, Esq. and (b) Morris, Nichols, Arsht & Tunnell LLP, 1201 North Market Street, 16 th Floor, Wilmington, Delaware 19801, Attn: Eric Schwartz; and (iv) counsel to any statutory committee appointed in these chapter 11 cases. 7. Each Request must: (i) set forth the locations(s) for which Utility Services are provided, the account number(s) for such location(s), and the outstanding balance for each account; (ii) provide a report on and certifying the Debtors payment history on each account for the previous twelve months; (iii) disclose any existing security deposit; and (iv) provide an explanation of why the Utility Deposit is not sufficient Adequate Assurance of payment. 3
Case 15-11498 Doc 5 Filed 07/13/15 Page 21 of 25 8. If the Debtors believe a Request is unreasonable, then they shall, within 30 days after receipt of a Request (or such later date agreed to by the Debtors and the requesting party), file a motion (the Determination Motion ) pursuant to section 366(c)(3) of the Bankruptcy Code seeking a determination from this Court that the Utility Deposit, plus any additional consideration offered by the Debtors, constitutes Adequate Assurance of payment. 9. Pending notice and a hearing on a Determination Motion or other resolution of a Request, the Utility Company filing such Request shall be prohibited from altering, refusing, or discontinuing service to the Debtors on account of the commencement of these chapter 11 cases, unpaid charges for prepetition services, or any objections to the Debtors proposed Adequate Assurance. 10. Without further order of this Court, subject to any order approving the DIP Facility, the Debtors may, after consultation with the DIP Lenders, enter into agreements granting additional Adequate Assurance to a Utility Company and/or extending the Debtors time to file a Determination Motion. The Debtors may reduce the amount of the Utility Deposit by any amount allocated to a particular Utility Company to the extent consistent with any alternative adequate assurance arrangements mutually agreed to by the Debtors and the affected Utility Company. 11. The Utility Deposit shall be deemed Adequate Assurance of payment for any Utility Company that fails to make a Request. 12. Nothing in this Order or the Motion or any action taken in implementation of this Order shall be deemed to constitute prepetition assumption or adoption of any agreement pursuant to section 365 of the Bankruptcy Code. 4
Case 15-11498 Doc 5 Filed 07/13/15 Page 22 of 25 13. The relief granted herein is for all Utility Companies providing Utility Services to the Debtors and is not limited to those listed on the Utility Service List attached as Exhibit C to the Motion. The Debtors are authorized to supplement, as necessary, the Utility Service List and this Final Order shall apply to any such Utility Company that is subsequently added to the Utility Service List. Any such supplement to the Utility Service List shall be filed with this Court. 14. Notwithstanding anything to the contrary herein, any payment made or authorization contained herein shall be subject to the requirements imposed on the Debtors under any order approving the DIP Facility. 15. The Debtors shall serve this Order on the Utility Companies. 16. The requirements set forth in Bankruptcy Rule 6004(a) are hereby waived, and pursuant to Bankruptcy Rule 6004(h), the terms and provisions of this Order shall be immediately effective and enforceable upon its entry. 17. This Court shall retain jurisdiction over any and all matters arising from or related to the interpretation or implementation of this Order. Dated:, 2015 Wilmington, Delaware United States Bankruptcy Judge 5
Case 15-11498 Doc 5 Filed 07/13/15 Page 23 of 25 EXHIBIT C Utility Service List
Case 15-11498 Doc 5 Filed 07/13/15 Page 24 of 25 Utility Providers Vendor Account # Service(s) Provided Average Monthly Cost ACC BUSINESS 00001196061 MPLS/Dedicated Internet $30,058.93 ACCUCONFERENCE BY TALKPATH LLC 2460734 Phone $250.00 AISG, INC. Phone/Internet $420.00 ALABAMA POWER COMPANY 172-1325A Power $600.00 ALABAMA POWER COMPANY 18621-03009 Power $901.52 ALABAMA POWER COMPANY 27654-76026 Power $286.58 ALABAMA POWER COMPANY 39196-04026 Power $34,869.44 ALABAMA POWER COMPANY 01031-81059 Power $92.19 ALABAMA POWER COMPANY 29124-76023 Power $4,260.21 ALABAMA POWER COMPANY 19884-76036 Power $691.81 AT&T 251 M20-1220 001 Phone/Internet $1,936.53 AT&T 281 899-2125 540 1 Phone/Internet $54.22 AT&T 228 M41-5320 320 Phone/Internet $1,339.34 AT&T 228 M41-3724 724 Phone/Internet $405.95 AT&T 251 M20-7144 144 0534 Phone/Internet $20.28 AT&T MOBILITY BES02388985 Phone $10,725.28 BULLSEYE TELECOM 004CA46 Phone/Internet $1,627.84 C SPIRE WIRELESS 0072622489 Phone $146.86 CITY OF ORANGE 00700660-001 Water/Sewer $90.39 COMCAST CABLE 09544 259866-01-2 Cable $88.86 COMCAST OF HOUSTON, LLC 8777 70 319 0849011 Cable $154.61 DELTA SANITATION OF MS, LLC 000193 Waste management $5,802.17 DELTACOM 1058 (EarthLink) 12977229 Phone $1,187.61 DELTACOM 1058 (EarthLink) 12981270 Phone $2,634.85 ENTERGY 3291214 Power $292.82 ENTERGY 3291185 Power $295.00 EQUINOX COMMUNICATIONS 1306 Phone $643.39 MISSISSIPPI POWER CO 04112-14036 Power $38,473.06
Case 15-11498 Doc 5 Filed 07/13/15 Page 25 of 25 MISSISSIPPI POWER CO 06561-64037 Power * MISSISSIPPI POWER CO 08241-64052 Power * MISSISSIPPI POWER CO 13281-64031 Power * MISSISSIPPI POWER CO 13491-64031 Power * MISSISSIPPI POWER CO 40131-63047 Power * MOBILE AREA WATER AND SEWER SYSTEM 0207191301 Water / Sewer $191.21 MOBILE AREA WATER AND SEWER SYSTEM 0207195301 Water / Sewer $612.67 MOBILE AREA WATER AND SEWER SYSTEM 0207189301 Water / Sewer $1,621.95 MOBILE AREA WATER AND SEWER SYSTEM 0207190301 Water / Sewer $107.73 MOBILE AREA WATER AND SEWER SYSTEM 0216585300 Water / Sewer $103.95 MOBILE AREA WATER AND SEWER SYSTEM 0101210301 Water / Sewer $103.64 MOBILE AREA WATER AND SEWER SYSTEM 0207188301 Water / Sewer $299.25 MOBILE GAS SERVICE CORP. 330169800 Gas $80.01 MOBILE GAS SERVICE CORP. 330160655 Gas $1,571.02 MOBILE GAS SERVICE CORP. 330160487 Gas $32.41 PASCAGOULA UTILITIES 1875850000 Gas $6.96 PASCAGOULA UTILITIES 1875169500 Gas / Water / Sewer $17,302.46 REPUBLIC SERVICES #986 3-0986-0004896 Waste management $3,282.84 SINGING RIVER EPA 87015001 Power $102,509.07 SINGING RIVER EPA 87011001 Power $6,581.73 SINGING RIVER EPA 87016001 Power * SINGING RIVER EPA 86983001 Power * TEAM WASTE OF GULF COAST, LLC 18077 Waste management $500.00 TEKLINKS, INC. MPLS/Dedicated Internet $4,168.02 TRANS NATIONAL COMMUNICATIONS (TNCI) 101048 Phone $557.22 VERIZON WIRELESS 421512736-00001 Phone $4,813.71 * Where indicated, the adequate assurance deposit for the Utility Company is listed in the aggregate and not broken out by individual account. 2