Case 18-12221-KJC Doc 155 Filed 10/15/18 Page 1 of 7 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 ATD CORPORATION, et al., 1 Case No. 18-12221 (KJC Debtors. (Jointly Administered DEBTORS MOTION FOR ENTRY OF AN ORDER SHORTENING NOTICE OF HEARING ON DISCLOSURE STATEMENT UNDER LOCAL RULE 3017-1(A The above-captioned debtors and debtors in possession (collectively, the Debtors respectfully state as follows in support of this motion (this Motion : Relief Requested 1. The Debtors seek entry of an order, substantially in the form attached hereto as Exhibit A (a shortening notice of the hearing on the relief requested in the Disclosure Statement Motion (as defined herein (the Disclosure Statement Hearing so that, notwithstanding Local Rule 3017-1(a, such motion may be heard on November 15, 2018, at 10:00 a.m. prevailing Eastern Time or such other date and time as the Court may direct, and (b granting related relief. Jurisdiction and Venue 2. The United States Bankruptcy Court for the District of Delaware (the Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334 and the Amended Standing Order of Reference from the United States District Court for the District of Delaware, 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, where applicable, include: ATD Corporation (3683; Accelerate Holdings Corp. (0528; American Tire Distributors Holdings, Inc. (6143; American Tire Distributors, Inc. (4594; Rubbr Automotive Services, LLC (3334; The Hercules Tire & Rubber Company (3365; Terry s Tire Town Holdings, Inc. (7464; Tire Pros Francorp (1361; and Hercules Asia Pacific, LLC (2499. The location of the Debtors service address in these chapter 11 cases is 12200 Herbert Wayne Court, Suite 150, Huntersville, North Carolina 28078.
Case 18-12221-KJC Doc 155 Filed 10/15/18 Page 2 of 7 dated February 29, 2012. The Debtors confirm their consent, pursuant to Rule 7008 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules, to the entry of a final order by the Court in connection with this Motion to the extent that it is later determined that the Court, absent consent of the parties, cannot enter final orders or judgments in connection herewith consistent with Article III of the United States Constitution. 3. Venue is proper pursuant to 28 U.S.C. 1408 and 1409. 4. The bases for the relief requested herein are section 105(a of title 11 of the United States Code, 11 U.S.C. 101 1532 (the Bankruptcy Code, Bankruptcy Rule 9006, and Rule 9006-1 of the Local Rules of the United States Bankruptcy Court for the District of Delaware (the Local Rules. Background 5. The Debtors are the largest distributor of replacement tires in North America based on dollar amount of wholesale sales. With their network of over 140 distribution centers and 1,400 delivery vehicles, the Debtors service a geographic region covering more than 90 percent of the replacement tire market for passenger vehicles and light trucks in the United States. In addition, the Debtors proprietary Hercules brand is the number one private tire brand in North America based on unit sales. The Debtors are headquartered in Huntersville, North Carolina. Non-Debtor affiliate National Tire Distributors Inc. and its subsidiaries operate one of the largest replacement tire distributors in Canada, with 23 distribution centers throughout the country. The Debtors and their non-debtor subsidiaries generated approximately $5.2 billion in revenue in fiscal year 2017 and currently employ approximately 5,500 people in the United States and Canada. As of October 4, 2018 (the Petition Date, the Debtors have approximately $2.6 billion in funded debt. 2
Case 18-12221-KJC Doc 155 Filed 10/15/18 Page 3 of 7 6. On the Petition Date, each Debtor filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The Debtors continue to operate their businesses and manage their properties as debtors and debtors in possession pursuant to sections 1107(a and 1108 of the Bankruptcy Code. The Debtors chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015(b [Docket No. 97]. No party has requested the appointment of a trustee or examiner in these chapter 11 cases. 7. Contemporaneously herewith, the Debtors have filed the Debtors Motion for Entry of an Order (I Approving the Adequacy of the Disclosure Statement, (II Approving the Solicitation and Notice Procedures, (III Approving the Forms of Ballots and Notices in Connection Therewith, (IV Scheduling Certain Dates with Respect Thereto, (V Shortening Certain Objection Periods and Notice Requirements Related Thereto, and (V Granting Related Relief (the Disclosure Statement Motion 2, the Disclosure Statement for the Joint Plan of Reorganization of ATD Corporation and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (the Disclosure Statement, and the Joint Plan of Reorganization of ATD Corporation and its Debtor Affiliates Pursuant to Chapter 11 of the Bankruptcy Code (the Plan. Basis for Relief 8. Bankruptcy Rules 2002 and 3017 require at least twenty-eight (28 days notice of the hearing on approval of a disclosure statement and the objection deadline related thereto. See Fed. R. Bankr. P. 2002(b, (d and 3017(a. Additionally, Local Rule 3017-1(a provides that the hearing on approval of a disclosure statement shall be at least thirty-five (35 days following 2 Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Disclosure Statement Motion. 3
Case 18-12221-KJC Doc 155 Filed 10/15/18 Page 4 of 7 service of the disclosure statement and the objection deadline shall be at least twenty-eight (28 days from service of the disclosure statement. See Del. Bankr. L.R. 3017-1(a. Pursuant to this Motion, the Debtors seek only to shorten notice of the Disclosure Statement Hearing under Local Rule 3017-1(a. 9. Prior to the Petition Date, the Debtors reached an agreement with certain of their key stakeholders on a comprehensive restructuring of over $2.5 billion in funded debt, documented in the restructuring support agreement. Since the Petition Date, support for the restructuring support agreement has only increased. On October 5, 2018, the Debtors announced a deal in principal with their prepetition term loan lenders, the terms of which were incorporated into the Amended and Restated Restructuring Support Agreement dated October 10, 2018 (the RSA. As of the filing of this Motion, the RSA is supported by holders of approximately 75 percent of the principal amount outstanding under the senior subordinated notes, holders of approximately 67 percent of the aggregate outstanding principal amount under the prepetition term loan, and the sponsors. 10. The restructuring transactions contemplated by the Plan and the RSA will, among other things, (a significantly deleverage the Debtors balance sheet, reducing the Debtors funded debt obligations by over $1 billion, (b distribute 95 percent of new equity to the Debtors existing noteholders; (c amend the existing term loan facility, including providing additional collateral and credit support, modifying certain covenants and economic provisions (including the interest rate, and extending the maturity by three years, and (d pay all allowed unsecured claims in full in the ordinary course of business, including the general unsecured claims of vendors and other participants in the Debtors supply chain, to ensure the uninterrupted flow of inventory. 4
Case 18-12221-KJC Doc 155 Filed 10/15/18 Page 5 of 7 11. With widespread support across the Debtors capital structure, the Debtors seek to shorten notice of the hearing on the relief requested in the Disclosure Statement Motion so that such motion may be heard on November 15, 2018. Expedited consideration of the Disclosure Statement will allow the Debtors to pursue a confirmation timeline that contemplates emergence before the end of the year without interfering with the holiday season. Absent the limited relief requested herein, such a result would likely be unattainable. Accordingly, the Debtors believe it is in the best interests of all stakeholders to move these chapter 11 cases forward to ensure the Debtors have every opportunity to emerge from chapter 11 on a timely basis. Importantly, given the level of consensus, no parties should be prejudiced by the relief requested. 12. Further, the relief requested in the motion complies with the requirements of Bankruptcy Rule 2002(b (requiring 28 days notice of a disclosure statement hearing and the deadline for filing objections thereto and one component of Local Rule 3017-1 (requiring 28 days notice of the deadline for objecting to a disclosure statement and 35 days notice of the hearing on a disclosure statement. Pursuant to the motion, parties will receive 28 days notice of the deadline for objections to the Disclosure Statement, and they will receive 31 days notice of the Disclosure Statement hearing, shortening the time under Local Rule 3017-1 by only four days. 13. For these reasons, the Debtors respectfully request that the Court enter an order, substantially in the form attached as Exhibit A, approving the relief requested herein. Notice 14. The Debtors have provided notice of this Motion to the following parties or their respective counsel: (a the office of the U.S. Trustee for the District of Delaware; (b the holders of the 30 largest unsecured claims against the Debtors (on a consolidated basis; (c the agent 5
Case 18-12221-KJC Doc 155 Filed 10/15/18 Page 6 of 7 under the Debtors prepetition asset-based facility; (d the agent under the Debtors prepetition term loan facility; (e the indenture trustee for the Debtors senior subordinated notes; (f the ad hoc committee for the Debtors senior subordinated noteholders; (g the Term Lender Committee; (h the United States Attorney s Office for the District of Delaware; (i the Internal Revenue Service; (j the office of the attorneys general for the states in which the Debtors operate; and (k any party that has requested notice pursuant to Bankruptcy Rule 2002. The Debtors submit that, in light of the nature of the relief requested, no other or further notice need be given. No Prior Request 15. No prior request for the relief sought in this Motion has been made to this or any other court. [Remainder of page intentionally left blank] 6
Case 18-12221-KJC Doc 155 Filed 10/15/18 Page 7 of 7 WHEREFORE, the Debtors respectfully request that the Court enter an order, substantially in the form attached hereto as Exhibit A, granting (a the relief requested herein and (b such other relief as the Court deems appropriate under the circumstances. Dated: October 15, 2018 /s/ Laura Davis Jones Wilmington, Delaware Laura Davis Jones (DE Bar No. 2436 Timothy P. Cairns (DE Bar No. 4228 Joseph M. Mulvihill (DE Bar No. 6061 PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, Delaware 19899-8705 (Courier 19801 Telephone: (302 652-4100 Facsimile: (302 652-4400 Email: ljones@pszjlaw.com tcairns@pszjlaw.com jmulvihill@pszjlaw.com - and - James H.M. Sprayregen, P.C. Anup Sathy, P.C. (admitted pro hac vice Chad J. Husnick, P.C. (admitted pro hac vice Spencer Winters (admitted pro hac vice KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Chicago, Illinois 60654 Telephone: (312 862-2000 Facsimile: (312 862-2200 Email: james.sprayregen@kirkland.com anup.sathy@kirkland.com chad.husnick@kirkland.com spencer.winters@kirkland.com Proposed Counsel to the Debtors and Debtors in Possession
Case 18-12221-KJC Doc 155-1 Filed 10/15/18 Page 1 of 3 EXHIBIT A Proposed Order
Case 18-12221-KJC Doc 155-1 Filed 10/15/18 Page 2 of 3 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 ATD CORPORATION, et al., 1 Case No. 18-12221 (KJC Debtors. (Jointly Administered Re: Docket No. ORDER SHORTENING NOTICE OF HEARING ON DISCLOSURE STATEMENT Upon the motion (the Motion 2 of the above-captioned debtors (the Debtors for entry of an order shortening notice of the Disclosure Statement Hearing and setting the Disclosure Statement Hearing for November 15, 2018 at 10:00 a.m.; and upon due and sufficient notice of the Motion having been provided under the particular circumstances, and it appearing that no other or further notice need be provided; and the Court having jurisdiction to consider the Motion and the relief requested therein in accordance with 28 U.S.C. 157 and 1334; and consideration of the Motion and the relief requested therein being a core proceeding pursuant to 28 U.S.C. 157(b(2; and that this Court may enter a final order consistent with Article III of the United States Constitution; and venue being proper before this Court under 28 U.S.C. 1408 and 1409; and the Court having found and determined that the relief requested is in the best interests of the Debtors, their Estates, and creditors, and any parties in interest; and that the legal 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, where applicable, include: ATD Corporation (3683; Accelerate Holdings Corp. (0528; American Tire Distributors Holdings, Inc. (6143; American Tire Distributors, Inc. (4594; Rubbr Automotive Services, LLC (3334; The Hercules Tire & Rubber Company (3365; Terry s Tire Town Holdings, Inc. (7464; Tire Pros Francorp (1361; and Hercules Asia Pacific, LLC (2499. The location of the Debtors service address in these chapter 11 cases is 12200 Herbert Wayne Court, Suite 150, Huntersville, North Carolina 28078. 2 Capitalized terms used herein and not otherwise defined shall have the meanings given to them in the Motion.
Case 18-12221-KJC Doc 155-1 Filed 10/15/18 Page 3 of 3 and factual bases set forth in the Motion establish just cause for the relief granted herein; and after due deliberation and sufficient cause appearing therefor, it is HEREBY ORDERED THAT: 1. The Motion is granted in its entirety. 2. The deadline for filing objections to the Disclosure Statement shall be November 12, 2018, at 4:00 p.m. prevailing Eastern Time, and the deadline for filing a response to any timely filed objections shall be November 14, 2018, at 4:00 p.m. prevailing Eastern Time. 3. The Debtors will distribute copies of this Order within one (1 business day of entry of this Order, to the list of all parties required to be notified under Rule 2002 of the Bankruptcy Rules and Rule 2002-1 of the Local Rules. 4. The Disclosure Statement Hearing shall be held on November 15, 2018, at 10:00 a.m. prevailing Eastern Time. 5. The Court shall retain jurisdiction over the implementation and interpretation of this Order. Dated:, 2018 Wilmington, Delaware The Honorable Kevin J. Carey United States Bankruptcy Judge 2