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1 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 1 of 12 Hearing Date May 23, 2018 at 1000 a.m. (Prevailing Eastern Time) Objection Deadline May 16, 2018 at 400 p.m. (Prevailing Eastern Time) TOGUT, SEGAL & SEGAL LLP One Penn Plaza Suite 3335 New York, New York (212) Albert Togut Frank A. Oswald Brian F. Moore Lauren L. Peacock Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re Chapter 11 TOISA LIMITED, et al., Case No (SCC) Debtors. 1 (Jointly Administered) x DEBTORS MOTION FOR ENTRY OF AN ORDER APPROVING PROCEDURES FOR THE REJECTION OF PREPETITION CONTRACTS PURSUANT TO SECTION 365(b) OF THE BANKRUPTCY CODE 1 The Debtors in these chapter 11 cases are as follows Trade Prosperity, Inc.; Toisa Limited; United Courage, Inc.; Trade Vision, Inc.; United Journey, Inc.; United Kalavryta, Inc.; Trade Sky, Inc.; Trade Industrial Development Corporation; United Honor, Inc.; Trade Will, Inc.; United Leadership Inc.; United Seas, Inc.; United Dynamic, Inc.; United Emblem, Inc.; United Ideal Inc.; Trade Unity, Inc.; Trade Quest, Inc.; Trade Spirit, Inc.; Trade Resource, Inc.; United Ambassador, Inc.; Edgewater Offshore Shipping, Ltd.; United Banner, Inc.; Toisa Horizon, Inc.; and Trade and Transport Inc.

2 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 2 of 12 TO THE HONORABLE JUDGE SHELLEY C. CHAPMAN UNITED STATES BANKRUPTCY JUDGE Toisa Limited ( Toisa ) and certain of its affiliates, as debtors and debtors in possession (collectively, the Debtors ) in the above-captioned chapter 11 cases, hereby make this motion (the Motion ), pursuant to sections 105(a) and 365(a) of Title 11 of the United States Code (the Bankruptcy Code ), Rule 6006 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rule (a) of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Southern District of New York (the Local Rules ) for entry of an order authorizing and approving procedures to allow the Debtors to reject certain of their executory contracts, including certain time charter contracts. In support of this Motion, the Debtors submit the Declaration the Debtors Chief Restructuring Officer, Jonathan Joff Mitchell (the Mitchell Declaration ), attached hereto as Exhibit A and respectfully represent JURISDICTION AND VENUE 1. This Court has jurisdiction to consider the Motion and the relief requested herein pursuant to 28 U.S.C. 157 and Consideration of this Motion is a core proceeding pursuant to 28 U.S.C. 157(b). Venue is proper in this district pursuant to 28 U.S.C and The statutory predicates for the relief requested herein are sections 105(a) and 365(a) of the Bankruptcy Code, Bankruptcy Rule 6006, and Local Rule A. The Chapter 11 Cases BACKGROUND 3. On January 29, 2017 (the Petition Date ), the Debtors each commenced a case by filing a petition for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. The 2

3 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 3 of 12 Debtors chapter 11 cases (the Chapter 11 Cases ) have been consolidated for procedural purposes only and are being jointly administered. 4. The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to Bankruptcy Code sections 1107 and On May 18, 2017, the United States Trustee for the Southern District of New York appointed the Official Committee of Unsecured Creditors (the Creditors Committee ). On February 7, 2018, the United States Trustee filed the Third Amended Notice of Appointment of Official Committee of Unsecured Creditors [Dkt. No. 474]. No trustee or examiner has been appointed in the Debtors Chapter 11 Cases. 6. An Informal Committee of Secured Lenders (the Informal Committee ) was also formed consisting of the following lenders BNP Paribas S.A.; Citibank Europe plc UK Branch; Citibank N.A. London Branch; Commerzbank AG; Commonwealth Bank of Australia; Credit Agricole Corporate and Investment Bank; Danish Ship Finance A/S; DNB (UK) Limited; DVB Bank America N.V.; Export-Import Bank of China; HSH Nordbank AG; ING Bank N.V., London Branch; National Bank of Greece S.A.; Royal Bank of Scotland plc; and Unicredit Bank AG. 7. On December 31, 2017, the Debtors filed a motion seeking approval of a term sheet memorializing the agreements reached at formal mediation sessions in London (the 9019 Motion ) [Dkt. No. 416]. The parties agreed, among other things, to make certain governance changes, including appointing Jonathan Joff Mitchell of Zolfo Cooper Management, LLC ( Zolfo Cooper ) as Chief Restructuring Officer ( CRO ). 8. On January 22, 2018, this Court entered an order approving the 9019 Motion (the 9019 Order ) [Dkt. No. 457] and an order approving Mr. Mitchell s appointment and retaining Zolfo Cooper [Dkt. No. 458]. Mr. Mitchell became the Debtors CRO effective on January 29, See Dkt. Nos. 457,

4 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 4 of On January 31, 2018, the Debtors filed a notice confirming that the corporate governance changes pursuant to the 9019 Order had been implemented. See Dkt. No On March 2, 2018, this Court entered an order expanding the scope of Zolfo Cooper s retention to authorize the Debtors to designate John Jason Keyes as the Debtors Chief Financial Officer ( CFO ). See Dkt. No B. The Sale of the Debtors Oceangoing Fleet 11. On March 30, 2018, the Court entered an order approving procedures for the sale of certain of the Debtors vessels pursuant to section 363 of the Bankruptcy Code and the assignment of the contracts for the purchase of six (6) tankers currently under construction pursuant to section 365 of the Bankruptcy Code [Dkt. No. 526]. The Court also approved the Debtors retention and employment of the experienced shipbroker, H. Clarkson & Company Limited ( Clarkson ) to facilitate the sale of, and maximize the value obtained for, the vessels [Dkt. No. 536]. 12. Among other assets, the Debtors are selling their tanker vessels and their seven bulk carrier vessels named Trade Quest, Trade Spirit, Trade Unity, Trade Prosperity, Trade Resource, Trade Vision, and Trade Will (collectively, the Bulkers ). Mitchell Decl. 3. The Bulkers are all Kamsarmax bulkers capable of carrying approximately 81,000 tons of dry cargo in seven holds or hatches. See id As set forth in the chart below, each of the Bulkers is currently out on hire under time charters and may continue to be on hire until the term ends. See id. 5. 4

5 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 5 of 12 Debtor / Vessel Charter Party Date of Entry Vessel Owner Trade Quest Inc. Trade Quest Louis Dreyfus Company May 3, 2016 Trade Spirit Inc. Trade Spirit Louis Dreyfus Company July 1, 2016 Trade Resource Inc. Trade Resource Cargill International SA Sept. 12, 2016 Trade Will Inc. Trade Will Cargill International SA Sept. 12, 2016 Trade Unity Inc. Trade Unity Bunge SA July 14, 2017 Trade Prosperity Inc. Trade Louis Dreyfus Company Oct. 6, 2017 Prosperity Trade Vision Inc. Trade Vision Ausca Shipping Ltd. Jan. 11, 2018 C. The Debtors are Examining their Executory Contracts Due to the Sales 14. The Debtors are party to many executory contracts (the Contracts ), including the prepetition time charters (the Charters ), which they may not require once the sales have closed. See id. 8. In light of this, the Debtors are employing their business judgment to examine whether the Contracts (including the Charters) continue to benefit these Chapter 11 estates. See id By way of example, the Charters may no longer benefit the Debtors when the Bulkers are sold. See id. Prior to the Petition Date, the Bulkers operated in a weak dry goods market that produced negative returns. See id. 10. The market remained depressed in 2017 and early 2018, but the market has recently begun to improve. See id. As a result, each of the Charters is for a below market rate, which is locked in for the term of the Charter. See id. 16. Unless the Charters are rejected or otherwise terminated, they will be sold with the Bulkers. Because the Charters are below market, however, they may not be 2 The Debtors are also examining their postpetition contracts, including the postpetition time charters, which they may at some time in the future elect to terminate pursuant to those contract terms in the ordinary course of business. 5

6 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 6 of 12 desirable to a buyer and could hinder a sale. See id. 11. As a result, the Debtors have solicited bids for the Bulkers with and without their Charters. See id. 17. Although the Debtors are still reviewing their Contracts (and may assume and assign certain Contracts, including certain Charters, in connection with the administration of these Chapter 11 Cases or a chapter 11 plan), there will inevitably be Contracts that no longer provide any benefit to these estates and should therefore be rejected at the earliest possible time to conserve the resources of the estates. See id. 12. Accordingly, the Debtors require procedures to reject Contracts that will no longer be beneficial to these Chapter 11 estates. See id. RELIEF REQUESTED 18. By this Motion, Debtors seek entry of an order (the Order ) pursuant to sections 105(a) and 365(a) of the Bankruptcy Code, Bankruptcy Rule 6006, and Local Rule (a) authorizing and approving procedures to allow the Debtors to reject certain of their executory contracts, including the Charters, substantially in the form annexed hereto as Exhibit B. THE PROPOSED CONTRACT REJECTION PROCEDURES 19. By this Motion, the Debtors request authority to reject any or all of its Contracts, including any Charters, pursuant to section 365(a) of the Bankruptcy Code through the following contract rejection procedures (the Rejection Procedures ) Filing and Service of Rejection Notice. The Debtors will file on the docket for these Chapter 11 Cases a notice (the Rejection Notice ) setting forth the proposed rejection of one or more Contracts 3 and will serve the Rejection Notice via Federal Express or other overnight mail delivery service on 3 Consistent with Rule 6006(f) of the Bankruptcy Rules, however, no more than 100 unexpired Contracts will be contained on any one Rejection Notice. 6

7 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 7 of 12 (i) (ii) (iii) the non-debtor counter party (and its counsel, if known) under the respective Contract at the last known address available to the Debtors, counsel for the Informal Committee, counsel for the Creditors Committee (collectively, the Rejection Notice Parties ). Form of the Rejection Notice. The Rejection Notice shall be substantially in the form of Exhibit 1 annexed to the proposed Order. The Rejection Notice shall include the following information, to the best of the Debtor s knowledge (i) (ii) (iii) the name and address of the Contract counterparty, a brief description of the Contract to be rejected, and a copy of the Order granting this Motion. Objections. Should a party in interest object to the Debtors proposed rejection of a Contract, such party must file and serve a written objection so that such objection is filed with this Court and actually received by counsel to the Debtors and the Rejection Notice Parties no later than six (6) calendar days after the date the Rejection Notice is filed. Rejection Date. If no objection to a Rejection Notice is timely filed and served, the applicable Contract shall be deemed rejected on the effective date set forth in the Rejection Notice, or, if no such date is set forth, six (6) calendar days after the date of the Rejection Notice (each, a Rejection Date ) without regard to whether the Rejection Date is a Saturday, Sunday or legal holiday within the meaning of Bankruptcy Rule Hearing. If a timely objection to a Rejection Notice is filed and received in accordance with the Rejection Procedures, the Debtors shall schedule a hearing on such objection and shall provide at least seven calendar (7) days notice of such hearing to the Rejection Notice Parties. If the Court ultimately upholds the Debtors determination to reject the applicable Contract, then the applicable Contract shall be deemed rejected (i) as of the Rejection Date, or (ii) as otherwise determined by the Court as set forth in any order overruling such objection. Rejection Claims. Claims arising out of the rejection of the Contracts must be filed on or before forty-five (45) calendar days after the Rejection Date. If no proof of claim is timely filed, such claimant shall be forever barred from asserting a claim for rejection damages and from participating in any distributions that may be made in connection with the Chapter 11 Cases. Bar to Setoff. If the Debtors have deposited funds with a Contract counterparty as a security deposit or other arrangement, such Contract counterparty may not 7

8 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 8 of 12 setoff or otherwise use such deposit without the prior authority of the Court or agreement of the parties The Debtors believe that these Rejection Procedures will streamline the Debtors ability to reject burdensome Contracts which will minimize unnecessary postpetition obligations and reduce the likelihood that such agreements hinder the sales while providing Contract counterparties with adequate notice of the rejection of any such Contract and an opportunity to object to such rejection within a reasonable time period. BASIS FOR RELIEF A. The Rejection Procedures Are Necessary and Appropriate in these Chapter 11 Cases and Comply with Section 365 of the Bankruptcy Code 21. Section 365 of the Bankruptcy Code empowers a debtor in possession, subject to court approval, to reject an executory contract or unexpired lease. See 11 U.S.C. 365(a). The rejection of a contract by a debtor is subject to review under the business judgment standard. See, e.g., Orion Pictures Corp. v. Showtime Networks, Inc. (In re Orion Pictures Corp.), 4 F.3d 1095, (2d Cir. 1993) ( [Section] 365 permits the trustee or debtor-in-possession, subject to the approval of the bankruptcy court, to go through the inventory of executory contracts of the debtor and decide which ones it would be beneficial to adhere to and which ones it would be beneficial to reject. ). 22. Rejection is appropriate based solely on the resulting benefit to the estate. See In re Balco Equities Ltd., Inc., 323 B.R. 85, 98 (Bankr. S.D.N.Y. 2005) (providing that an executory contract may be rejected provided that the rejection would benefit the estate, a decision that resides with the Trustee in his business judgment. ). The business 4 Additionally, the Order authorizes the Debtors to execute and deliver all instruments and documents and take all actions as may be necessary or appropriate to implement and effectuate the Rejection Procedures. For the avoidance of doubt, the Rejection Procedures are without prejudice to the Debtors rights to assume, assign, or seek further or other relief with respect to the Contracts. 8

9 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 9 of 12 judgment standard is therefore satisfied when a debtor determines that rejection will benefit the estate. See In re Old Carco LLC, 406 B.R. 180, 188 (Bankr. S.D.N.Y. 2009); In re Child World, Inc., 142 B.R. 87, 90 (Bankr. S.D.N.Y. 1992) (deferring to the business judgment of the debtor that advantages of rejection outweigh the disadvantages); In re Stable Mews Assoc., Inc., 41 B.R. 594, 596 (Bankr. S.D.N.Y. 1984) ( [The business judgment test] requires only that the [debtor] demonstrate that rejection of the [contract] will benefit the estate. ); see also In re Sabine Oil & Gas Corp., 547 B.R. 66, 71 (Bankr. S.D.N.Y. 2016) ( The bankruptcy court generally defers to a debtor s determination as to whether rejection of an executory contract is advantageous unless the decision to reject is the product of bad faith, whim, or caprice. ). 23. Finally, section 105 of the Bankruptcy Code provides, in relevant part, that [t]he Court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. 11 U.S.C. 105(a). 24. Implementation of the proposed Rejection Procedures complies with section 365 of the Bankruptcy Code and is well within the Court s equitable powers under section 105 of the Bankruptcy Code. 25. At base, the Rejection Procedures are consistent with section 365 of Bankruptcy Code because the Debtors and its advisors will only issue a Rejection Notice if the Debtors determine in their reasonable business judgment that such Contract has no marketable value beneficial to the Debtors estates. See Mitchell Decl. 12, 13. Moreover, the Contract counterparties will receive advance notice of the Debtors intent to reject their respective Contract prior to its rejection and will have an opportunity to object 9

10 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 10 of 12 to such rejection in a reasonable time period. With these procedures in place, the protections of section 365 remain and no Contract counterparty will be unduly prejudiced The Rejection Procedures will also greatly reduce costs and avoid delay. In addition to avoiding incurring unnecessary administrative charges by rejecting Contracts that provide no tangible benefit to the Debtors estates, the Rejection Procedures will save substantial legal expense and Court time that would otherwise be incurred if multiple hearings were held on separate motions with respect to every Contract that the Debtors determine should be rejected. Importantly, the Rejection Procedures also allow the Debtors to act expeditiously to close sales where potential bidders do not wish to acquire vessels with the Debtors contracts in place. See Mitchell Decl. 7 (noting Clarkson has solicited bids for the Bulkers with and without the Charters). The Rejection Procedures are thus necessary under section 105 of the Bankruptcy Code so that the Debtors can maximize value for the benefit of all parties in interest. 27. Other courts have put similar procedures in place in reliance on sections 105 where, as here, there is a need for the expeditious resolution of multiple executory contracts. See, e.g., In re ARO Liquidation, Inc., Ch. 11 Case No (SHL) (Bankr. S.D.N.Y. Sept. 13, 2016) (Dkt. No. 809) (approving debtors procedures, which were included in an order approving a sale of substantially all of the debtors assets, permitting the debtors to reject executory contracts by filing and serving a rejection notice on contract counter parties); In re SunEdison, Inc., Ch. 11 Case No (SMB) (Bankr. S.D.N.Y. May 13, 2016) (Dkt. No. 280) (approving debtors procedures permitting the debtors to object to executory contracts by filing and serving a rejection notice); In re Grubb & Ellis Co., Ch. 11 Case No (MG) (Bankr. S.D.N.Y. March 23, 2012) (Dkt. No. 814) 5 The Rejection Procedures also comply with Rule 6006(f) of the Bankruptcy Rules. 10

11 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 11 of 12 (same); In re MF Global Holdings Ltd., Case No (MG) (Bankr. S.D.N.Y. March 6, 2012) (Dkt. No. 527) (same); In re Borders Grp., Inc., Ch. 11 Case No (MG) (Bankr. S.D.N.Y. June 2, 2011) (Dkt. No. 964) (same); In re The Great Atl. & Pac. Tea Co., Ch. 11 Case No (RDD) (Bankr. S.D.N.Y. Feb. 7, 2011) (Dkt. No. 734) (same). 28. In sum, the proposed Rejection Procedures balance the need for an expeditious reduction of burdensome costs to the Debtors estate while providing the Contract counterparties with appropriate notice and an opportunity to be heard. For these reasons and those set forth above, the Debtors respectfully request that the Court grant the Motion and enter the Order approving the Rejection Procedures. NOTICE 29. Notice of this Motion has been given to (a) the United States Trustee; (b) counsel for the Informal Committee; (c) the Debtors prepetition lenders; (d) counsel for the Creditors Committee; (e) all parties in interest under Bankruptcy Rule 2002; (f) all counterparties to the Charters; and (g) any other party entitled to notice pursuant to Local Bankruptcy Rule (b) and which has filed a notice of appearance in these Chapter 11 Cases. The Debtors submit that no other or further notice need be provided. RESERVATION OF RIGHTS 30. The Debtors reserve the right to file additional documents and present such further information or evidence to the Court as may be appropriate in support of the relief requested herein. NO PRIOR REQUEST 31. No prior application for the relief requested herein has been made to this or any other Court. 11

12 scc Doc 576 Filed 05/09/18 Entered 05/09/ Main Document Pg 12 of 12 CONCLUSION WHEREFORE, the Debtors respectfully request entry of an order authorizing and approving the Rejection Procedures to allow the Debtors to reject certain of their executory contracts, and granting such other and further relief as may be just and proper. Dated New York, New York May 9, 2018 TOISA LIMITED, et al., Debtors and Debtors in Possession By Their Counsel TOGUT, SEGAL & SEGAL LLP, By /s/ Frank A. Oswald ALBERT TOGUT FRANK A. OSWALD BRIAN F. MOORE LAUREN L. PEACOCK One Penn Plaza, Suite 3335 New York, New York (212)

13 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit A Mitchell Declaration Pg 1 of 5 EXHIBIT A

14 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit A Mitchell Declaration Pg 2 of 5 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re Chapter 11 TOISA LIMITED, et al., Case No (SCC) Debtors. 1 (Jointly Administered) x DECLARATION OF JONATHAN MITCHELL IN SUPPORT OF THE DEBTORS MOTION FOR ENTRY OF AN ORDER APPROVING PROCEDURES FOR THE REJECTION OF PREPETITION CONTRACTS PURSUANT TO SECTION 365(b) OF THE BANKRUPTCY CODE Pursuant to 28 U.S.C. 1746, I, Jonathan Mitchell, hereby declare as follows under the penalty of perjury to the best of my knowledge, information, and belief 1. I am a Senior Managing Director of Zolfo Cooper, LLC, a New Jersey limited liability company, an affiliate of Zolfo Cooper Management, LLC, a corporate advisory and restructuring services firm which has its principal office at 1114 Avenue of the Americas, 41st Floor, New York, New York Pursuant to this Court s orders dated January 22, 2018, I became the Debtors Chief Restructuring Officer effective on January 29, See Dkt. Nos. 457, 458. I am authorized to make this declaration (this Declaration ) on behalf of the Debtors in support of their Motion 1 The Debtors in these Chapter 11 Cases are as follows Trade Prosperity, Inc.; Toisa Limited; United Courage, Inc.; Trade Vision, Inc.; United Journey, Inc.; United Kalavryta, Inc.; Trade Sky, Inc.; Trade Industrial Development Corporation; United Honor, Inc.; Trade Will, Inc.; United Leadership Inc.; United Seas, Inc.; United Dynamic, Inc.; United Emblem, Inc.; United Ideal Inc.; Trade Unity, Inc.; Trade Quest, Inc.; Trade Spirit, Inc.; Trade Resource, Inc.; United Ambassador, Inc.; Edgewater Offshore Shipping, Ltd.; United Banner, Inc.; Toisa Horizon, Inc.; and Trade and Transport Inc.

15 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit A Mitchell Declaration Pg 3 of 5 for an Order Approving Procedures for the Rejection of Prepetition Contracts Pursuant to Section 365(b) of the Bankruptcy Code (the Motion ) Except as otherwise indicated, I have personal knowledge of the matters set forth herein and, if called as a witness, would testify competently thereto. 3 The Sale of the Debtors Vessels 3. Among other assets, the Debtors are in the process of selling their tanker vessels and their seven bulk carrier vessels named Trade Quest, Trade Spirit, Trade Unity, Trade Prosperity, Trade Resource, Trade Vision, and Trade Will (collectively, the Bulkers ) pursuant to section 363 of the Bankruptcy Code. The Debtors anticipate that the sales will begin to close as early as mid-may of this year. 4. The Bulkers are all Kamsarmax bulkers capable of carrying approximately 81,000 tons of dry cargo in seven holds or hatches. 5. As set forth in the chart below, each of the Bulkers is currently out on hire under time charters and may continue to be on hire until each term ends. Debtor / Vessel Charter Party Date of Entry Vessel Owner Trade Quest Inc. Trade Quest Louis Dreyfus Company May 3, 2016 Trade Spirit Inc. Trade Spirit Louis Dreyfus Company July 1, 2016 Trade Resource Inc. Trade Resource Cargill International SA Sept. 12, 2016 Trade Will Inc. Trade Will Cargill International SA Sept. 12, 2016 Trade Unity Inc. Trade Unity Bunge SA July 14, Capitalized terms that are not otherwise defined herein shall have the same meaning ascribed to them in the Motion. 3 Certain of the disclosures herein relate to matters within the knowledge of other professionals of the Debtors and are based on information provided to me by them. 2

16 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit A Mitchell Declaration Pg 4 of 5 Debtor / Vessel Charter Party Date of Entry Vessel Owner Trade Prosperity Inc. Trade Louis Dreyfus Company Oct. 6, 2017 Prosperity Trade Vision Inc. Trade Vision Ausca Shipping Ltd. Jan. 11, The Debtors have retained and employed the experienced shipbroker, H. Clarkson & Company Limited ( Clarkson ) to facilitate the sale of, and maximize the value obtained for, the Bulkers and their other vessels. 7. As part of the sale process, Clarkson is soliciting and the Debtors may accept bids for the Bulkers with and without the time charters. The Debtors Are Examining Their Executory Contracts 8. The Debtors are party to many executory contracts (the Contracts ), including the prepetition time charters (the Charters ), which the Debtors may have no commercial need for once the sales have closed. 9. Accordingly, the Debtors are currently in the process of employing their business judgment to examine whether the Contracts (including the Charters) continue to benefit these Chapter 11 estates. For example, the Charters may no longer benefit the Debtors when the Bulkers are sold. 10. Prior to the Petition Date, the seven Bulkers operated in a weak dry goods market that produced negative returns. The market remained depressed in 2017 and early 2018, but the market has recently begun to improve. As a result, each Charter is locked into a below-market rate for the term of the Charter. 11. The Charters may not be desirable to a buyer and could hinder a sale. This is why the Debtors may accept bids for the Bulkers with and without their Charters. 3

17 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit A Mitchell Declaration Pg 5 of Although the Debtors are still reviewing their Contracts (and may assume and assign certain Contracts at a later date), there will inevitably be Contracts that the Debtors, in their reasonable business judgment, determine no longer provide any benefit to these estates. In that event, the Debtors will seek to reject those Contracts at the earliest possible time to conserve the resources of the estates. The Rejection Procedures Will Benefit These Chapter 11 Estates 13. The Debtors therefore seek an order entering the Rejection Procedures so they may reject Contracts that will no longer be beneficial to these Chapter 11 estates after the sales in an efficient and expeditious manner. 14. It is my belief that the Rejection Procedures will streamline the Debtors ability to reject burdensome Contracts (including the Charters) while also providing the Contract counterparties with adequate notice of the rejection and an opportunity to object within a reasonable time period. 15. It is also my belief that the Rejection Procedures allow the Debtors to reject contracts prior to the closing of sales where potential bidders do not wish to acquire vessels with the Debtors contracts in place. 16. Accordingly, it is my business judgment that the Rejection Procedures balance the respective needs of the parties and are in the best interests of the Debtors. Pursuant to 28 U.S.C. 1746, I declare under penalty of perjury that the foregoing statements are true and correct to the best of my knowledge and belief. Dated May 9, 2018 New York, New York /s/ Jonathan Mitchell Jonathan Joff Mitchell Chief Restructuring Officer Toisa Limited, et al., Debtors and Debtors in Possession 4

18 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 1 of 9 EXHIBIT B

19 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 2 of 9 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re Chapter 11 TOISA LIMITED, et al., Case No (SCC) Debtors. 1 (Jointly Administered) x ORDER APPROVING PROCEDURES FOR THE REJECTION OF PREPETITION CONTRACTS PURSUANT TO SECTION 365(b) OF THE BANKRUPTCY CODE Upon the motion (the Motion ) 2 of Toisa Limited ( Toisa ) and certain of its affiliates, as debtors and debtors in possession (collectively, the Debtors ) in the above-captioned chapter 11 cases, pursuant to sections 105(a), and 365(a) of title 11 of the United States Code (the Bankruptcy Code ), Rule 6006 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), and Rule (a) of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Southern District of New York (the Local Rules ) for entry of an order (this Order ) authorizing and approving procedures to allow the Debtors to reject certain of their executory contracts, including certain prepetition time charter contracts, all as more fully set forth in the Motion; and the Declaration of Jonathan Joff Mitchell in support of the motion; and this Court having jurisdiction to consider the Motion and the relief requested therein; 1 The Debtors in these chapter 11 cases are as follows Trade Prosperity, Inc.; Toisa Limited; United Courage, Inc.; Trade Vision, Inc.; United Journey, Inc.; United Kalavryta, Inc.; Trade Sky, Inc.; Trade Industrial Development Corporation; United Honor, Inc.; Trade Will, Inc.; United Leadership Inc.; United Seas, Inc.; United Dynamic, Inc.; United Emblem, Inc.; United Ideal Inc.; Trade Unity, Inc.; Trade Quest, Inc.; Trade Spirit, Inc.; Trade Resource, Inc.; United Ambassador, Inc.; Edgewater Offshore Shipping, Ltd.; United Banner, Inc.; Toisa Horizon, Inc.; and Trade and Transport Inc. 2 Unless otherwise defined herein, all capitalized terms shall have the meanings ascribed to them in the Motion.

20 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 3 of 9 and it appearing that venue of this case and this Motion in this district is proper; and it appearing that this matter is a core proceeding pursuant to 28 U.S.C. 157(b); and notice of the Motion having been provided to all parties entitled to receive such notice; and no other or further notice need be given; and upon the record of the hearing on the Motion; and this Court having determined that the relief requested in the Motion is in the best interests of the Debtors, its estates, its creditors, and other parties-in-interest; and after due deliberation thereon; and good and sufficient cause appearing therefor, it is hereby ORDERED, ADJUDGED, AND DECREED THAT 1. The Motion is GRANTED as provided herein. 2. The following procedures (the Rejection Procedures ) for the Debtors rejection of Contracts pursuant to section 365(a) of the Bankruptcy Code are hereby approved and established in the Debtors chapter 11 cases Filing and Service of Rejection Notice. The Debtors will file on the docket for these Chapter 11 Cases a notice (the Rejection Notice ) setting forth the proposed rejection of one or more Contracts 3 and will serve the Rejection Notice via Federal Express or other overnight mail delivery service on (i) the non- Debtor counter party (and its counsel, if known) under the respective Contract at the last known address available to the Debtors, (ii) counsel for the Informal Committee, (iii) and counsel for the Creditors Committee; (collectively, the Rejection Notice Parties ). Form of the Rejection Notice. The Rejection Notice shall be substantially in the form of Exhibit 1 annexed to the proposed Order. The Rejection Notice shall include the following information, to the best of the Debtor s knowledge (i) (ii) (iii) the name and address of the Contract counterparty, a brief description of the Contract to be rejected, and a copy of the Order granting this Motion. 3 Consistent with Rule 6006(f) of the Bankruptcy Rules, however, no more than 100 unexpired Contracts will be contained on any one Rejection Notice. 2

21 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 4 of 9 Objections. Should a party in interest object to the Debtors proposed rejection of a Contract, such party must file and serve a written objection so that such objection is filed with this Court and actually received by counsel to the Debtors and the Rejection Notice Parties no later than six (6) calendar days after the date the Rejection Notice is filed. Rejection Date. If no objection to a Rejection Notice is timely filed and served, the applicable Contract shall be deemed rejected on the effective date set forth in the Rejection Notice, or, if no such date is set forth, six (6) calendar days after the date of the Rejection Notice (each, a Rejection Date ) without regard to whether the Rejection Date is a Saturday, Sunday or legal holiday within the meaning of Bankruptcy Rule Hearing. If a timely objection to a Rejection Notice is filed and received in accordance with the Rejection Procedures, the Debtors shall schedule a hearing on such objection and shall provide at least seven calendar (7) days notice of such hearing to the Rejection Notice Parties. If the Court ultimately upholds the Debtors determination to reject the applicable Contract, then the applicable Contract shall be deemed rejected (i) as of the Rejection Date, or (ii) as otherwise determined by the Court as set forth in any order overruling such objection. Rejection Claims. Claims arising out of the rejection of the Contracts must be filed on or before forty-five (45) calendar days after the Rejection Date. If no proof of claim is timely filed, such claimant shall be forever barred from asserting a claim for rejection damages and from participating in any distributions that may be made in connection with the Chapter 11 Cases. Bar to Setoff. If the Debtors have deposited funds with a Contract counterparty as a security deposit or other arrangement, such Contract counterparty may not setoff or otherwise use such deposit without the prior authority of the Court or agreement of the parties. 3. Pursuant to section 365(a) of the Bankruptcy Code, the Debtors rejection of Contracts in accordance with the Rejection Procedures set forth in this Order are hereby approved and such Rejection Procedures shall govern the rejection of Contracts, except to the extent the Debtors and a Contract counterparty have agreed otherwise in writing after the Petition Date, in which case the terms of such agreement shall govern the rejection of Contracts with respect to such counterparty. 4. The Debtors are hereby authorized to execute and deliver all instruments and documents, and take such other actions, as may be necessary or 3

22 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 5 of 9 appropriate to implement and effectuate the Rejection Procedures as approved by this Order. 5. Entry of this Order is without prejudice to the rights of the Debtors, including, but not limited to, the right to assume, assign, or seek further, other, or different relief regarding the Contracts pursuant to, among other things, section 365 of the Bankruptcy Code. Notwithstanding the relief granted herein and any actions taken hereunder, nothing in the Motion or this Order shall constitute, nor is it intended to constitute (i) an admission as to the validity or priority of any claim against the Debtors; (ii) a waiver of the Debtors right to dispute any claim; (iii) a waiver of any right to assume or assume and assign Contracts under section 365 of the Bankruptcy Code, or (iv) an assumption or adoption of any Contract pursuant to section 365 of the Bankruptcy Code. 6. This Court shall retain jurisdiction to hear and determine all matters arising from or related to the implementation, interpretation and/or enforcement of this Order. Dated New York, New York May, 2018 HONORABLE SHELLEY C. CHAPMAN UNITED STATES BANKRUPTCY JUDGE 4

23 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 6 of 9 EXHIBIT 1

24 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 7 of 9 TOGUT, SEGAL & SEGAL LLP One Penn Plaza Suite 3335 New York, New York (212) Albert Togut Frank A. Oswald Brian F. Moore Lauren L. Peacock UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re Chapter 11 TOISA LIMITED, et al., Case No (SCC) Debtors. 1 (Jointly Administered) x NOTICE OF REJECTION OF EXECUTORY CONTRACTS PLEASE TAKE NOTICE that, on, 2018, the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court ) entered the enclosed order (the Procedures Order ) in the Chapter 11 Cases of the above-captioned debtors and debtors in possession (collectively, the Debtors ) [Dkt No. ], which among other things, approved expedited procedures for the rejection of executory contracts, including certain time charter contracts. PLEASE TAKE FURTHER NOTICE that, pursuant to the terms of the Procedures Order, the Debtors hereby provide notice (this Rejection Notice ) of its intent to reject the contracts listed on Exhibit A hereto (the Contracts ). PLEASE TAKE FURTHER NOTICE that, pursuant to the terms of the Procedures Order, if no objection to this Rejection Notice is timely filed and served, the applicable Contract shall be deemed rejected on the effective date set forth in this Rejection Notice, or, if no such date is set forth, six (6) calendar days after the date of this Rejection Notice (each, a Rejection Date ) without regard to whether the Rejection Date is a Saturday, Sunday or legal holiday within the meaning of Rule 9006 of the Federal Rules of Bankruptcy Procedure. PLEASE TAKE FURTHER NOTICE that, objections, if any, to this Rejection Notice must be filed and served so that such objection is filed with the Bankruptcy Court and actually received no later than six (6) calendar days after the date 1 The Debtors in these chapter 11 cases are as follows Trade Prosperity, Inc.; Toisa Limited; United Courage, Inc.; Trade Vision, Inc.; United Journey, Inc.; United Kalavryta, Inc.; Trade Sky, Inc.; Trade Industrial Development Corporation; United Honor, Inc.; Trade Will, Inc.; United Leadership Inc.; United Seas, Inc.; United Dynamic, Inc.; United Emblem, Inc.; United Ideal Inc.; Trade Unity, Inc.; Trade Quest, Inc.; Trade Spirit, Inc.; Trade Resource, Inc.; United Ambassador, Inc.; Edgewater Offshore Shipping, Ltd.; United Banner, Inc.; Toisa Horizon, Inc.; and Trade and Transport Inc.

25 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 8 of 9 this Rejection Notice is filed by (i) (ii) (iii) (iv) each of the Contract counterparty listed on Exhibit A hereto; counsel to the Debtors, Togut, Segal & Segal LLP, One Penn Plaza, Suite 3335, New York, New York (Attn Frank A. Oswald, Esq. and Brian F. Moore, Esq.); counsel to the Informal Committee, Cadwalader, Wickersham & Taft LLP, 200 Liberty Street, New York, New York (Attn Gregory M. Petrick, Esq. and Michele C. Maman, Esq.); and counsel to the Creditors Committee, Sheppard, Mullin, Richter & Hampton LLP, 30 Rockefeller Plaza, New York, New York (Attn Craig A. Wolfe, Esq. and Jason R. Alderson, Esq.) (collectively, the (collectively, the Rejection Notice Parties ). PLEASE TAKE FURTHER NOTICE that, if timely objection to this Rejection Notice is filed and received in accordance with the Rejection Procedures, the Debtors shall schedule a hearing on such objection and shall provide at least seven (7) calendar days notice of such hearing to the Rejection Notice Parties. If the Court ultimately upholds the Debtors determination to reject the applicable Contract, then the applicable Contract shall be deemed rejected (i) as of the Rejection Date, or (ii) as otherwise determined by the Court as set forth in any order overruling such objection. PLEASE TAKE FURTHER NOTICE that, pursuant to the terms of the Procedures Order, for any claim that you may assert against the Debtors as a result of the rejection of any Contract, you must submit a proof of claim for damages arising from such rejection, if any, on or before forty-five (45) calendar days after the Rejection Date. If no proof of claim is timely filed, you shall be forever barred from asserting a claim for rejection damages and from participating in any distributions that may be made in connection with these Chapter 11 Cases. [concludes on following page] 2

26 scc Doc Filed 05/09/18 Entered 05/09/ Exhibit B Proposed Order Pg 9 of 9 PLEASE TAKE FURTHER NOTICE that, pursuant to the terms of the Procedures Order, if the Debtors have deposited monies with the Contract counterparty as a security deposit or otherwise, the Contract counterparty may not setoff or otherwise use such deposit without the prior authorization of the Bankruptcy Court. Dated New York, New York, 2018 TOISA LIMITED, et al., Debtors and Debtors in Possession By Their Counsel TOGUT, SEGAL & SEGAL LLP, By ALBERT TOGUT FRANK A. OSWALD BRIAN F. MOORE LAUREN L. PEACOCK One Penn Plaza, Suite 3335 New York, New York (212)

27 scc Doc Filed 05/09/18 Entered 05/09/ Notice of Hearing Pg 1 of 3 TOGUT, SEGAL & SEGAL LLP One Penn Plaza Suite 3335 New York, New York (212) Albert Togut Frank A. Oswald Brian F. Moore Lauren L. Peacock Counsel to the Debtors and Debtors in Possession Hearing Date May 23, 2018 at 1000 a.m. (Prevailing Eastern Time) Objection Deadline May 16, 2018 at 400 p.m. (Prevailing Eastern Time) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re Chapter 11 TOISA LIMITED, et al., Case No (SCC) Debtors. 1 (Jointly Administered) x NOTICE OF HEARING OF THE DEBTORS MOTION FOR ENTRY OF AN ORDER APPROVING PROCEDURES FOR THE REJECTION OF PREPETITION CONTRACTS PURSUANT TO SECTION 365(b) OF THE BANKRUPTCY CODE PLEASE TAKE NOTICE that, on May 9, 2018, Toisa Limited and certain of its affiliates, as debtors and debtors in possession in the above-captioned cases (collectively, the Debtors ), filed the Debtors Motion for Entry of an Order Approving Procedures for the Rejection of Prepetition Contracts Pursuant to Section 365(b) of the Bankruptcy Code (the Motion ). 2 1 The Debtors in these Chapter 11 Cases are as follows Trade Prosperity, Inc.; Toisa Limited; United Courage, Inc.; Trade Vision, Inc.; United Journey, Inc.; United Kalavryta, Inc.; Trade Sky, Inc.; Trade Industrial Development Corporation; United Honor, Inc.; Trade Will, Inc.; United Leadership Inc.; United Seas, Inc.; United Dynamic, Inc.; United Emblem, Inc.; United Ideal Inc.; Trade Unity, Inc.; Trade Quest, Inc.; Trade Spirit, Inc.; Trade Resource, Inc.; United Ambassador, Inc.; Edgewater Offshore Shipping, Ltd.; United Banner, Inc.; Toisa Horizon, Inc.; and Trade and Transport Inc. 2 Capitalized terms used but not defined herein shall have the meaning ascribed to such term in the Motion.

28 scc Doc Filed 05/09/18 Entered 05/09/ Notice of Hearing Pg 2 of 3 PLEASE TAKE FURTHER NOTICE that objections, if any, to the Motion must be made in writing, stating in detail the reasons therefor, and must be filed with the Clerk of the Bankruptcy Court, so as to be actually received by (i) Togut, Segal & Segal LLP, bankruptcy counsel for the Debtors and Debtors in Possession, One Penn Plaza, Suite 3335, New York, New York 10119, Attn Frank A. Oswald, Esq. (frankoswald@teamtogut.com); (ii) Sheppard Mullin Richter & Hampton LLP, counsel for the Official Committee of Unsecured Creditors, 30 Rockefeller Plaza New York, New York 10112, Attn Craig A. Wolfe, Esq. (cwolfe@sheppardmullin.com); (iii) Cadwalader, Wickersham and Taft LLP, counsel for the Informal Committee, 200 Liberty Street, New York, New York 10281, Attn Gregory M. Petrick, Esq. (Gregory.petrick@cwt.com) and Michele C. Maman, Esq. (Michele.maman@cwt.com); and (iv) the Office of the United States Trustee for Region 2, Attn Paul Schwartzberg, Esq. (Paul.Schwartzberg@usdoj.gov), U.S. Federal Office Building, 201 Varick Street, Suite 1006, New York, New York 10014, no later than 400 p.m. (prevailing Eastern Time) on May 16, 2018 (the Objection Deadline ). PLEASE TAKE FURTHER NOTICE that a hearing to consider the Motion will be held before the Honorable Shelley C. Chapman, United States Bankruptcy Judge, on May 23, 2018 at 1000 a.m. (prevailing Eastern Time) in Room 623 of the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court ), One Bowling Green, New York, New York , or as soon thereafter as counsel may be heard. 2

29 scc Doc Filed 05/09/18 Entered 05/09/ Notice of Hearing Pg 3 of 3 PLEASE TAKE FURTHER NOTICE that unless a written objection to the Motion, with proof of service, is timely filed and served by the Objection Deadline, the Bankruptcy Court may enter the proposed Order, substantially in the form attached to the Motion, without a hearing. DATED New York, New York May 9, 2018 TOGUT, SEGAL & SEGAL LLP, Counsel to the Debtors and Debtors in Possession TOISA LIMITED, et al., By /s/frank A. Oswald ALBERT TOGUT FRANK A. OSWALD BRIAN F. MOORE LAUREN L. PEACOCK One Penn Plaza, Suite 3335 New York, New York (212)