Case Doc 1089 Filed 10/26/15 Entered 10/26/15 13:57:27 Desc Main Document Page 1 of 76 UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT

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1 Document Page 1 of 76 UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT In re O.W. Bunker Holding North America Inc., et al., 1 Debtors. : : : : : : : Chapter 11 Case No (JAM)) Jointly Administered FIRST AMENDED DISCLOSURE STATEMENT WITH RESPECT TO THE DEBTORS LIQUIDATION PLANS 1 The last four digits of the Debtors taxpayer identification numbers follow in parentheses: O.W. Bunker Holding North America Inc. (7474), O.W. Bunker North America Inc. (7158) and O.W. Bunker USA Inc. (3556). The Debtors address is 281 Tresser Blvd., 2 Stamford Plaza, 15th Floor, Stamford, CT v15

2 Document Page 2 of 76 THIS IS NOT A SOLICITATION OF ACCEPTANCES OR REJECTIONS OF THE DEBTORS LIQUIDATION PLANS. NEITHER ACCEPTANCES NOR REJECTIONS OF THE DEBTORS LIQUIDATION PLANS MAY BE SOLICITED UNTIL A DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF CONNECTICUT. THIS DISCLOSURE STATEMENT HAS BEEN SUBMITTED TO THE BANKRUPTCY COURT FOR APPROVAL, BUT HAS NOT YET BEEN APPROVED. INFORMATION CONTAINED IN THIS DISCLOSURE STATEMENT IS SUBJECT TO COMPLETION, AMENDMENT, AND SUPPLEMENTATION. DISCLAIMER THIS DISCLOSURE STATEMENT CONTAINS A SUMMARY OF CERTAIN PROVISIONS OF THE DEBTORS PLANS AND CERTAIN OTHER DOCUMENTS AND FINANCIAL INFORMATION. THIS DISCLOSURE STATEMENT HAS BEEN PREPARED IN ACCORDANCE WITH SECTION 1125 OF THE BANKRUPTCY CODE AND RULES 3016(B) AND (C) OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE AND NOT NECESSARILY IN ACCORDANCE WITH FEDERAL OR STATE SECURITIES LAWS OR OTHER NONBANKRUPTCY LAW. THE INFORMATION INCLUDED HEREIN IS FOR PURPOSES OF SOLICITING ACCEPTANCE OF THE PLAN AND SHOULD NOT BE RELIED UPON FOR ANY PURPOSE OTHER THAN TO DETERMINE HOW AND WHETHER TO VOTE ON THE PLAN. THE DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR AND ACCURATE. THE SUMMARIES OF THE FINANCIAL INFORMATION AND THE DOCUMENTS WHICH ARE ATTACHED HERETO OR INCORPORATED BY REFERENCE HEREIN ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO SUCH INFORMATION AND DOCUMENTS. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THIS DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN, OR THE OTHER DOCUMENTS AND FINANCIAL INFORMATION INCORPORATED HEREIN BY REFERENCE, THE PLAN OR THE OTHER DOCUMENTS AND FINANCIAL INFORMATION, AS THE CASE MAY BE, SHALL GOVERN FOR ALL PURPOSES. THE STATEMENTS AND FINANCIAL INFORMATION CONTAINED HEREIN HAVE BEEN MADE AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFIED. HOLDERS OF CLAIMS AND EQUITY INTERESTS REVIEWING THIS DISCLOSURE STATEMENT SHOULD NOT INFER AT THE TIME OF SUCH REVIEW THAT THERE HAVE BEEN NO CHANGES IN THE FACTS SET FORTH HEREIN SINCE THE DATE HEREOF. EACH HOLDER OF A CLAIM OR EQUITY INTEREST ENTITLED TO VOTE ON THE PLAN SHOULD CAREFULLY REVIEW THIS DISCLOSURE STATEMENT AND THE PLAN IN THEIR ENTIRETY BEFORE CASTING A BALLOT. THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE LEGAL, BUSINESS, FINANCIAL, OR TAX -2-

3 Document Page 3 of 76 ADVICE. ANY PERSONS DESIRING ANY SUCH ADVICE OR OTHER ADVICE SHOULD CONSULT WITH THEIR OWN ADVISORS. NO PARTY IS AUTHORIZED TO GIVE ANY INFORMATION WITH RESPECT TO THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS DISCLOSURE STATEMENT. NO REPRESENTATIONS CONCERNING THE DEBTORS OR THE VALUE OF THEIR PROPERTY HAVE BEEN AUTHORIZED BY THE DEBTORS OTHER THAN AS SET FORTH IN THIS DISCLOSURE STATEMENT. ANY INFORMATION, REPRESENTATIONS OR INDUCEMENTS MADE TO OBTAIN AN ACCEPTANCE OF THE PLAN OTHER THAN, OR INCONSISTENT WITH, THE INFORMATION CONTAINED HEREIN AND IN THE PLAN SHOULD NOT BE RELIED UPON BY ANY HOLDER OF A CLAIM OR EQUITY INTEREST. WITH RESPECT TO CONTESTED MATTERS, ADVERSARY PROCEEDINGS, AND OTHER PENDING, THREATENED OR POTENTIAL LITIGATION OR ACTIONS, THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE AND MAY NOT BE CONSTRUED AS AN ADMISSION OF FACT, LIABILITY, STIPULATION OR WAIVER, BUT RATHER AS A STATEMENT MADE IN SETTLEMENT NEGOTIATIONS. THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE STATEMENTS CONTAINED HEREIN. ALTHOUGH THE DEBTORS HAVE USED THEIR BEST EFFORTS TO ENSURE THE ACCURACY OF THE FINANCIAL INFORMATION PROVIDED IN THIS DISCLOSURE STATEMENT, THE FINANCIAL INFORMATION CONTAINED IN, OR INCORPORATED BY REFERENCE INTO, THIS DISCLOSURE STATEMENT HAS NOT BEEN AUDITED UNLESS INDICATED. FOR THE CONVENIENCE OF HOLDERS OF CLAIMS AND EQUITY INTERESTS, THIS DISCLOSURE STATEMENT SUMMARIZES THE TERMS OF THE PLAN, BUT THE PLAN ITSELF QUALIFIES ALL SUMMARIES. THE DISCLOSURE STATEMENT MAY NOT BE RELIED ON FOR ANY PURPOSE OTHER THAN TO DETERMINE WHETHER TO VOTE TO ACCEPT OR TO REJECT THE PLAN, AND NOTHING STATED HEREIN SHALL CONSTITUTE AN ADMISSION OF ANY FACT OR LIABILITY BY ANY PARTY, OR BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS OR ANY OTHER PARTY, OR BE DEEMED CONCLUSIVE EVIDENCE OF THE TAX OR OTHER LEGAL EFFECTS OF THE PLAN ON ANY DEBTORS OR HOLDERS OF CLAIMS OR EQUITY INTERESTS. CERTAIN OF THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT, BY NATURE, ARE FORWARD-LOOKING AND CONTAIN ESTIMATES AND ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL BE REFLECTIVE OF ACTUAL OUTCOMES. ALL HOLDERS OF CLAIMS OR EQUITY INTERESTS SHOULD CAREFULLY READ AND CONSIDER FULLY SECTION VII, RISK FACTORS TO BE CONSIDERED, OF THIS DISCLOSURE STATEMENT BEFORE VOTING TO ACCEPT OR REJECT THE PLAN. -3-

4 Document Page 4 of 76 THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE AS OF THE DATE HEREOF, UNLESS ANOTHER TIME IS SPECIFIED HEREIN, AND THE DELIVERY OF THIS DISCLOSURE STATEMENT SHALL NOT CREATE AN IMPLICATION THAT THERE HAVE BEEN NO CHANGES IN THE INFORMATION STATED SINCE THE DATE HEREOF. HOLDERS OF CLAIMS AGAINST AND EQUITY INTERESTS IN THE DEBTORS SHOULD CAREFULLY READ THIS DISCLOSURE STATEMENT IN ITS ENTIRETY, INCLUDING THE PLAN, AND ANY OTHER EXHIBITS THERETO. -4-

5 Document Page 5 of 76 TABLE OF CONTENTS Page I. INTRODUCTION... 1 II. SOLICITATION AND VOTING PROCEDURES... 4 A. Chapter 11 Generally... 4 B. Notice to Holders of Claims and Equity Interests... 5 C. Voting Procedures, Ballots, and Voting Deadline... 6 D. Solicitation and Right to Vote on the Plan... 7 E. Class A Election F. Release Opt Out Election G. Disclosure Statement Enclosures H. Confirmation Hearing III. OVERVIEW OF THE DEBTORS AND THEIR BUSINESSES; DESCRIPTION OF EVENTS LEADING TO COMMENCEMENT OF THE CASES A. Background B. Reasons for Commencing the Chapter 11 Cases C. Significant Events Which Occurred During the Chapter 11 Cases D. Major Matters During the Chapter 11 Bankruptcy Cases IV. THE LIQUIDATION PLANS A. Overall Structure of the Plan B. Unclassified Claims C. Classification and Treatment of Claims and Equity Interests D. Special Provision Regarding Unimpaired and Reinstated Claims E. Means for Implementation of the Plan F. Corporate Governance G. The Liquidating Trusts H. Confirmation of the Plan I. Provisions Governing Distributions J. Retention of Jurisdiction K. Executory Contracts and Unexpired Leases L. Procedures for Resolving Disputed, Contingent, and Unliquidated Claims M. Effectiveness of the Plan i-

6 Document Page 6 of 76 TABLE OF CONTENTS (continued) Page N. Miscellaneous Provisions V. CONFIRMATION OF THE PLAN A. General Requirements of Section B. Unfair Discrimination and Fair and Equitable Tests C. Feasibility D. Best Interests Test E. Acceptance and Cramdown VI. CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN A. Tax Consequences to the Debtors B. Tax Consequences To Creditors and Liquidating Trust Beneficiaries C. Tax Consequences to Holders of Equity Interests VII. RISK FACTORS TO BE CONSIDERED A. Failure to Receive Requisite Acceptances of the Plan B. Failure to Confirm the Plan C. Failure to Consummate the Plan D. Delays of Confirmation or the Effective Date E. Risk of Successfully Creating Value in Liquidation Trust F. Forward Looking Statements in this Disclosure Statement May Prove to be Inaccurate VIII. ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN A. Liquidation Under Chapter 7 of the Bankruptcy Code B. Alternative Plan(s) of Reorganization C. Dismissal of the Chapter 11 Cases IX. CONCLUSION AND RECOMMENDATION ii-

7 Document Page 7 of 76 I. INTRODUCTION The Debtors 2 in the Chapter 11 Cases submit this Disclosure Statement pursuant to section 1125 of the Bankruptcy Code to Holders of Claims against, and Equity Interests in, the Debtors in connection with (a) the solicitation of acceptances of the Debtors Liquidation Plans (the Plan ) filed by the Debtors with the Bankruptcy Court and (b) the Confirmation Hearing scheduled to begin on December 10, 2015 at 10:00 a.m. prevailing Eastern Time at the United States Bankruptcy Court, 157 Church Street, 18 th Floor, New Haven, CT and may continue thereafter as the Court may direct. The Debtors each filed a petition for relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court on November 13, Concurrently with the filing of this Disclosure Statement, the Debtors filed the Plan, which sets forth how Claims against, and Equity Interests in, the Debtors will be treated. This Disclosure Statement describes certain aspects of the Plan, the Debtors former operations, significant events occurring in the Chapter 11 Cases, and other related matters. FOR A COMPLETE UNDERSTANDING OF THE PLAN, YOU SHOULD READ THE DISCLOSURE STATEMENT, THE PLAN, AND THE EXHIBITS AND SUPPLEMENTS THERETO IN THEIR ENTIRETY. OWB Holding has no assets apart from its Equity Interests in OWB NA and OWB USA, which Equity Interests will be cancelled and will receive no Distributions pursuant to the Plan. Accordingly, as to OWB Holding only, the Plan constitutes a motion by which OWB Holding requests that the Bankruptcy Court dissolve or grant OWB Holding the authority to dissolve on the Effective Date pursuant to applicable state law. The Plan provides for the liquidation and conversion of all of OWB NA s and OWB USA s remaining assets to Cash, and the distribution of the net proceeds realized therefrom to the Holders of Allowed Claims in accordance with the priorities established by the Bankruptcy Code and such priorities have been modified by the agreements embodied in the Plan. Pursuant to the Plan the assets of OWB USA will be contributed to the OWB USA Liquidating Trust and the assets of OWB NA will be contributed to the OWB NA Liquidating Trust, maintained in separate accounts, and used to pay the costs and expenses of the applicable Liquidating Trust (including the costs of each Liquidating Trust s Professionals) and to make Distributions in accordance with the Plan. 3 The primary unliquidated assets of OWB NA s and OWB USA s Estates are the Debtors interests in Supply Receivables and certain pending litigation. This litigation includes dozens of interpleader and maritime arrest actions pending in jurisdictions throughout the U.S. and abroad relating to the Debtors Supply Receivables. In these proceedings, the Debtors have asserted or 2 Unless otherwise defined herein, all capitalized terms herein shall have the meanings ascribed to them in the Plan. 3 This summary is intended solely to provide an overview of the Plan. The summary shall not be binding on any of the Debtors, and in the event of any conflict between the summary and any provision of the Plan, the Plan is controlling.

8 Document Page 8 of 76 may assert a Claim against a contract counterparty, customer, vessel, posted bond, escrow account, or interpleader stake securing the Debtors right to payment on its receivables. Other suppliers, brokers and intermediaries, including ING Bank as purported assignee of the Debtors and certain of their affiliates Supply Receivables, have asserted or may assert competing claims in these interpleader and arrest actions. In addition to Supply Receivables at issue in pending litigation, OWB USA and OWB NA both have a substantial number of Supply Receivables that are not the subject of pending litigation and that remain to be collected directly from customers. The Debtors, with the cooperation of ING Bank, have begun the process of making demands for payment on account of these remaining Supply Receivables, by which demands customers are being instructed to pay the Contract Supplier in respect of a given Supply Receivable according to the terms of the relevant outstanding invoice. The Debtors intend to work diligently to collect these outstanding Supply Receivables prior to the Confirmation Hearing. As a result of, among other things, disputes between the Debtors and ING Bank, which are described in more detail in section III.D.6, the Debtors, the Committee, and ING Bank participated in mediation with Judge Alan H. Nevas (ret.), formerly of the United States District Court for the District of Connecticut. As a result of these mediation sessions, the Debtors, the Committee, and ING Bank reached a global resolution of their disputes, which is embodied in the Plan as well as the terms of the Confirmation Alternative Settlement, which is described in more detail in Section III.D.7. Though negotiations with NuStar are continuing, there is no agreement with NuStar at this time and there is no guarantee that an agreement with NuStar will occur in the future. Additional information regarding the settlement discussions with NuStar as well as the details of the Confirmation Alternative Settlement are contained in Section III.D.7. The Debtors believe the Plan provides the best possible opportunity for Holders of Allowed General Unsecured Claims to maximize their recoveries from the Debtors Estates. ING Bank has asserted Claims against OWB NA and OWB USA that are currently estimated to be in excess of $715 million and $734 million, respectively, certain of which Claims are secured by Liens that the Debtors have sought to avoid through litigation pending before the Bankruptcy Court as preferential transfers pursuant chapter 5 of the Bankruptcy Code. Among the features of the settlement with ING Bank embodied in the Plan, the agreed waterfall in accordance with which the Liquidating Trusts will make Distributions provides substantial value to the Debtors general unsecured creditors who would otherwise run a substantial risk of having their Allowed Claims massively diluted by ING Bank s Allowed Claims even in the event the Debtors were successful in avoiding ING Bank s Liens. Specifically, the agreed waterfall includes a preferential distribution to certain non-ing Bank affiliated and non-owb affiliated general unsecured creditors that elect or are deemed to elect to take a preferred distribution from the Liquidating Trusts in exchange for assigning any maritime lien rights they may have against the Debtors customers property (including vessels), returning to the Debtors Estates any funds collected in connection with their prior enforcement of their maritime lien rights, and waiving their ability to assert administrative expense status with respect to Claims that the Debtors and the Committee have determined do not qualify for such -2-

9 Document Page 9 of 76 treatment. The Debtors projections indicate that, should the Plan be confirmed, proceeds from the liquidation of the Liquidating Trust Assets will be sufficient to fund the preferred Distributions for OWB USA s and OWB NA s general unsecured creditors that are not Foreign Affiliates or ING Bank, which distributions the Debtors estimate could amount to a 25% recovery for Electing OWB NA Claimants and a 40% recovery for Electing OWB USA Claimants. The Debtors believe that creditor recoveries are at substantial risk absent confirmation of the Plan. Absent confirmation of the Plan and the embodied settlement with ING Bank, should the Debtors be unsuccessful in seeking avoidance of ING Bank s Liens, the Secured Claim held by ING Bank would almost certainly result in no Distributions being made to Holders of General Unsecured Claims. Although the Debtors and the Committee believe that the avoidance action against ING Bank ultimately would be successful, the Debtors Estates may lack the resources necessary to pursue the litigation, and the time necessary to litigate the action against ING Bank to a conclusion would at a minimum substantially delay Distributions to creditors. Moreover, as noted above, even if the Debtors were successful in avoiding ING Bank s Liens, the size of ING Bank s general unsecured claim would severely dilute recoveries to other Holders of Allowed General Unsecured Claims, unless the Debtors were successful in further time consuming and costly litigation seeking to subordinate or otherwise disallow ING Bank s resulting unsecured Claims. In sum, the Debtors and the Committee believe that Holders of Allowed Claims will fare better under the Plan than under a Chapter 7 liquidation of OWB NA and OWB USA or any other plan alternative. Attached as exhibits to this Disclosure Statement are copies of the following: 1. The Plan (Exhibit A); 2. Liquidation Analysis (Exhibit B). 3. The List of Joint Direction Receivables (Exhibit C) 4. The Confirmation Alternative Settlement (Exhibit D) In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Claims (including Fee Claims) and Priority Tax Claims have not been classified under the Plan. Section IV.B-C. below describes the treatment of Allowed Unclassified Claims. The following table briefly summarizes the treatment of the Classes of Allowed Claims and Allowed Equity Interests. Class Designation Impairment Entitlement to Vote Estimated Recovery 1 Non-Tax Priority Claims Against OWB USA NO NO 100.0% -3-

10 Document Page 10 of 76 2 Secured Claims Against OWB USA 3 OWB USA Affiliated Unsecured Claims 4 OWB USA Unaffiliated Trade Claims NO NO 100.0% YES YES 0.4% YES YES Electing OWB USA Claimants 39.9% Non-Electing OWB USA Claimants 0.4% 5 Subordinated Claims Against OWB USA YES NO 0.0% 6 Equity Interests in OWB USA YES NO 0.0% 7 Non-Tax Priority Claims Against OWB NA 8 Secured Claims Against OWB NA 9 OWB NA Affiliated Unsecured Claims 10 OWB NA Unaffiliated Trade Claims NO NO 100.0% NO NO 100.0% YES YES 1.0% YES YES Electing OWB NA Claimants 25.6% Non-Electing OWB NA Claimants 1.0% 11 Subordinated Claims Against OWB NA YES NO 0.0% 12 Equity Interests in OWB NA YES NO 0.0% II. SOLICITATION AND VOTING PROCEDURES A. Chapter 11 Generally Under chapter 11 of the Bankruptcy Code, a debtor may reorganize its business or liquidate its assets for the benefit of its creditors, interest holders (such as shareholders, partners or members), and other parties in interest. The culmination of many chapter 11 cases is the confirmation of a plan specifying the treatment to be afforded to holders of claims against or interests in a debtor. -4-

11 Document Page 11 of 76 A chapter 11 plan is made effective only after it has been confirmed by the bankruptcy court. Upon the effective date of a plan, it becomes binding upon the debtor, any issuer of securities under the plan, any person acquiring property under the plan, and any creditor or interest holder of the debtor. Subject to certain limited exceptions, confirmation of the plan releases the debtor from any debt that arose before the date of confirmation of the plan in exchange for the consideration specified under the confirmed plan. Thus, following confirmation, creditors and interest holders are deprived of their pre-bankruptcy rights and entitlements and instead are limited solely to the rights and entitlements specified by the plan. In these Chapter 11 Cases, the Plan specifies the payments, distributions and other treatment to be afforded to Holders of Allowed Claims against the Debtors. Holders of Subordinated Claims against OWB NA, Subordinated Claims against OWB USA, and Equity Interests in the Debtors will not receive any Distributions under the Plan. Certain Holders of Allowed Claims are entitled to vote on the Plan. To confirm the Plan, certain voting requirements and statutory tests must be satisfied. The statutory tests are designed in large measure to protect the interests of Holders of Claims against, or Equity Interests, in the Debtors that either are not entitled to vote on the Plan or that vote to reject the Plan, but nevertheless will be bound by the provisions of the Plan if it is confirmed. For a more complete description of the requirements of such tests and how the Plan satisfies such tests, see Section V of this Disclosure Statement. B. Notice to Holders of Claims and Equity Interests On [October, 2015], after notice and a hearing, the Bankruptcy Court approved this Disclosure Statement as containing adequate information to enable hypothetical, reasonable investors typical of the Holders of Claims and Equity Interests in each Class under the Plan to make an informed judgment as to whether to reject or accept the Plan. Approval of the Disclosure Statement by the Bankruptcy Court does not constitute a determination as to the fairness or the merits of the Plan and does not guarantee that the Bankruptcy Court will approve the Plan. The Debtors believe that the Plan provides for the best possible recoveries to creditors and believes that acceptance of the Plan is in the best interests of each and every Class of creditors entitled to vote. The Debtors recommend that you vote to ACCEPT the Plan accompanying this Disclosure Statement. ALL HOLDERS OF CLAIMS AND/OR EQUITY INTERESTS SHOULD READ THIS DISCLOSURE STATEMENT AND ALL EXHIBITS HERETO, INCLUDING THE PLAN, BEFORE VOTING ON THE PLAN. ALL EXHIBITS OR SCHEDULES TO THIS DISCLOSURE STATEMENT ARE ANNEXED HERETO AND SUPPLEMENTED WITH CERTAIN ADDITIONAL MATERIALS. FINAL EXHIBITS IN CONNECTION WITH PLAN WILL BE FILED IN A PLAN SUPPLEMENT NO LATER THAN TEN (10) BUSINESS DAYS BEFORE THE VOTING DEADLINE. THE PLAN PROVISION SUMMARIES AND ALL OTHER STATEMENTS MADE IN THIS DISCLOSURE STATEMENT ARE QUALIFIED IN THEIR ENTIRETY BY -5-

12 Document Page 12 of 76 REFERENCE TO THE PLAN, THE EXHIBITS ATTACHED HERETO, AND ANY OTHER DOCUMENTS REFERENCED HEREIN OR THEREIN. C. Voting Procedures, Ballots, and Voting Deadline After carefully reviewing this Disclosure Statement, including the exhibits hereto and the detailed instructions accompanying your Ballot, each Holder of an Allowed Claim in an Impaired Class entitled to vote should vote to accept or reject the Plan on the enclosed Ballot, sign the Ballot, and return the Ballot in the pre-addressed envelope so that it is received no later than December 3, 2015 at 4:00 p.m. prevailing Eastern Time (the Voting Deadline ). All Ballots other than Ballots in respect of Class 3 OWB USA Affiliated Unsecured Claims that are ING Bank Deficiency Claims or Ballots in respect of Class 9 OWB NA Affiliated Unsecured Claims that are ING Bank Deficiency Claims must be returned to by first class mail, overnight delivery, or to counsel to the Debtors, which pursuant to the Solicitation Procedures Order will be acting as the Debtors balloting agent, at the following address: MONTGOMERY, McCRACKEN, WALKER & RHOADS, LLP 123 South Broad Street Philadelphia, PA Attn: Davis Lee Wright dwright@mmwr.com Tel: All Ballots received in respect of Class 3 OWB USA Affiliated Unsecured Claims that are ING Bank Deficiency Claims or Class 9 OWB NA Affiliated Unsecured Claims that are ING Bank Deficiency Claims must be returned by first class mail, overnight delivery, or to the ING Tabulation Agent at the following address: LUCID ISSUER SERVICES LIMITED Leroy House 436 Essex Road London, NI 3QP England Attention: David Shilson Tel: +44 (0) owbunker@lucid.is.com If you received a damaged Ballot, lost your Ballot, or if you have any questions concerning the Ballot or the voting procedures generally, please contact the Balloting Agent or counsel to ING Bank (if you are the Holder of a Class 3 OWB USA Affiliated Unsecured Claim that is an ING Bank Deficiency Claims or a Class 9 OWB NA Affiliated Unsecured Claim that is an ING Bank Deficiency Claim) at the addresses indicated above. TO BE COUNTED YOUR BALLOT MUST BE SIGNED AND RECEIVED BY THE BALLOTING AGENT OR COUNSEL TO ING BANK N.V., AS APPLICABLE, AT THE ADDRESSES INDICATED ABOVE BY THE VOTING DEADLINE. ANY BALLOT RECEIVED WHICH DOES NOT INDICATE AN ACCEPTANCE OR REJECTION OF THE -6-

13 Document Page 13 of 76 PLAN OR WHICH INDICATES BOTH ACCEPTANCE AND REJECTION OF THE PLAN WILL NOT BE COUNTED. ONLY SIGNED AND COMPLETED BALLOTS WILL BE ACCEPTED. VOTING ON THE PLAN BY EACH HOLDER OF AN IMPAIRED CLAIM ENTITLED TO VOTE ON THE PLAN IS IMPORTANT. IF YOU HOLD CLAIMS IN MORE THAN ONE CLASS, YOU MAY RECEIVE MORE THAN ONE BALLOT. YOU SHOULD COMPLETE, SIGN, AND RETURN EACH BALLOT YOU RECEIVE. Cash. Unless otherwise indicated, all amounts used or referenced herein or in the Plan are in Pursuant to the Bankruptcy Code, only classes of claims against or equity interests in a debtor that are impaired under the terms and provisions of a plan are entitled to vote to accept or reject a plan. A class is impaired if the legal, equitable, or contractual rights attaching to the claims or equity interests of that class are modified, other than by curing defaults and reinstating maturities or by payment in full in cash. Classes of claims and equity interests that are not impaired are not entitled to vote on a plan and are deemed to have accepted a plan. In addition, classes of claims and equity interests that receive no distributions under a plan are not entitled to vote on the plan and are deemed to have rejected the plan. The classification of Claims and Equity Interests for the Chapter 11 Cases is summarized, together with notations as to whether each Class of Claims or Equity Interests is Impaired or Unimpaired, under Article III of the Plan: Treatment of Claims and Equity Interests. Pursuant to section 502 of the Bankruptcy Code and Bankruptcy Rule 3018 and in accordance with the Order (I) Approving Disclosure Statement, (II) Approving Procedures to Solicit votes on the Debtors Liquidation Plans, and (III) Establishing Notice and Objection Procedures for Confirmation of the Debtors Liquidation Plans (the Solicitation Procedures Order ), the Bankruptcy Court may estimate and temporarily allow a Claim for voting on the Plan. In most cases, each Ballot enclosed with this Disclosure Statement has been encoded with the amount of your Claim for voting purposes (if your claim is or becomes a Disputed Claim, this amount may not be the amount ultimately Allowed for purposes of Distributions) and the Debtor and Class to which your Claim has been attributed. PLEASE FOLLOW THE DIRECTIONS ON THE ENCLOSED BALLOT(S) CAREFULLY. The Plan and the Disclosure Statement can be reviewed at the Office of the Clerk of the Bankruptcy Court, or on the Bankruptcy Court s website at (PACER login required). You may also obtain a copy of the Plan, the Disclosure Statement, and all exhibits to the Disclosure Statement by contacting Davis Lee Wright, Montgomery, McCracken, Walker & Rhoads, LLP, 123 South Broad Street, Philadelphia, PA 19109; Tel.: (215) D. Solicitation and Right to Vote on the Plan Pursuant to the provisions of the Bankruptcy Code, only Holders of Allowed Claims or Allowed Equity Interests that are Impaired under the terms and provisions of the Plan are entitled -7-

14 Document Page 14 of 76 to vote to accept or reject the Plan. Holders of Allowed Claims or Equity Interests in Classes of Claims or Equity Interests that are Unimpaired under the terms of the Plan are conclusively presumed to have accepted the Plan and are not entitled to vote. Holders of Claims in Classes 1, 2, 7, and 8 are Unimpaired, are conclusively presumed to have accepted the Plan, and therefore do not have the right to vote on the Plan. Holders of Claims or Equity Interests in Classes 5, 6, 11, and 12 will not receive or maintain any property under the Plan, and therefore are conclusively presumed to reject the Plan. Holders of Claims in Classes 3, 4, 9, and 10 are Impaired and entitled to receive certain property under the Plan. Therefore, the Debtors are soliciting acceptances from Holders of Allowed Claims in Classes 3, 4, 9, and 10. The Bankruptcy Code defines acceptance of a plan by a class of claims as acceptance by creditors in that class that hold at least two-thirds in dollar amount and more than one-half in number of the claims voting to accept or reject the plan. For a complete description of the requirements for confirmation of the Plan, see Section V herein Confirmation of the Plan. If an Impaired Class of Claims or Equity Interests rejects the Plan or is deemed to reject the Plan, the Debtors have the right to request confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code. Section 1129(b) of the Bankruptcy Code permits the confirmation of the Plan notwithstanding its non-acceptance by one or more Impaired Classes of Claims or Equity Interests if the proponent thereof (in these cases, the Debtors) comply with the provisions of that section. Under that section, a plan may be confirmed by a court if it does not discriminate unfairly and is fair and equitable with respect to each non-accepting class. For a more detailed description of the requirements for confirmation of a non-consensual plan, see Section V.E. herein Acceptance and Cramdown. THE DEBTORS ARE THE PROPONENTS OF THE PLAN, BELIEVE THAT THE PLAN IS LIKELY TO PROVIDE THE MAXIMUM ACHIEVABLE RECOVERY FOR UNSECURED CREDITORS, AND RECOMMEND THAT CREDITORS VOTE TO ACCEPT THE PLAN. THE DEBTORS ALSO REFER TO AND INCORPORATE HEREIN THE LETTER OF SUPPORT FOR THE PLAN ACCOMPANYING THIS DISCLOSURE STATEMENT PROVIDED BY THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS ALSO RECOMMENDING THAT CREDITORS VOTE TO ACCEPT THE PLAN. The Debtors believe that through the Plan, (a) Holders of Allowed Claims against OWB NA and OWB USA will obtain substantially greater recovery from such Debtors Estates than the recovery that would be available if the assets of those Debtors were liquidated under Chapter 7 of the Bankruptcy Code and (b) the Plan will afford Holders of Allowed Claims the opportunity to obtain a recovery greater than would be afforded under any other plan not supported by the Debtors. The Disclosure Statement Order provides that any non-voting holder of a Claim who is a member of an Impaired Class entitled to vote on the Plan, but in which no votes are actually cast, -8-

15 Document Page 15 of 76 will be deemed to have accepted the Plan for purposes of sections 1129(a)(8) and 1129(b) of the Bankruptcy Code but such acceptance may not be used for the purpose of effectuating a cramdown. Pursuant to the Solicitation Procedures Order, solely for purposes of voting to accept or reject the Plan and not for the purpose of allowance of, or distribution on account of, a Claim and without prejudice to the rights of the Debtors or other parties in interest in any other context, each Claim within a Class of Claims entitled to vote to accept or reject the Plan will be temporarily Allowed in an amount equal to: (a) The claim listed in a Debtor s Schedules, provided that (i) such claim is not scheduled as contingent, unliquidated, undetermined or disputed and (ii) no proof of claim has been timely filed (or otherwise deemed timely filed by the Bankruptcy Court under applicable law); (b) The noncontingent and liquidated amount specified in a Proof of Claim timely filed with the Bankruptcy Court (or otherwise deemed timely filed by the Bankruptcy Court under applicable law) to the extent the Proof of Claim is not the subject of an objection filed no later than the Voting Record Date (or, if such Claim has been resolved pursuant to a stipulation or order entered by the Bankruptcy Court, or otherwise resolved by the Bankruptcy Court, with the amount of such Claim is set forth in such stipulation or order); (c) The amount temporarily allowed by the Bankruptcy Court for voting purposes, pursuant to Bankruptcy Rule 3018(a), provided that a motion is brought, notice is provided, and a hearing is held prior to the Confirmation Hearing, in accordance with the Bankruptcy Code and the Bankruptcy Rules; (d) With respect to Ballots cast by alleged creditors whose claims (i) are not listed on a Debtors Schedules or (ii) are listed as disputed, contingent and/or unliquidated on a Debtors Schedules, but who have timely filed Proofs of Claim in unliquidated or unknown amounts that are not the subject of an objection filed before the commencement of the Confirmation Hearing, such Ballots shall be counted in determining whether the numerosity requirement of section 1126(c) of the Bankruptcy Code has been met, but shall not be counted in determining whether the aggregate claim amount requirement has been met. If a creditor seeks to have a claim temporarily allowed for purposes of voting to accept or reject the Plan pursuant to Bankruptcy Rule 3018(a), such creditor is required to file a motion ( Claims Estimation Motion ) for such relief no later than November 16, 2015 at 4:00 p.m. prevailing Eastern Time, and that the Bankruptcy Court will schedule a hearing on such motion for a date prior to the Confirmation Hearing. If a creditor casts a Ballot and has timely filed a Proof of Claim (or has otherwise filed a Proof of Claim that has been deemed timely filed by the Bankruptcy Court under applicable law) but the creditor s Claim is the subject of an objection filed no later than the Voting Record Date, that creditor s Ballot will not be counted, unless such Claim is temporarily allowed by the Bankruptcy Court for voting purposes, pursuant to Bankruptcy Rule 3018(a), after a Claims Estimation Motion is brought by such creditor, notice is provided, and a hearing is held by the Bankruptcy Court prior to the Confirmation Hearing. Notwithstanding the foregoing, if an objection to a Claim requests that such Claim be -9-

16 Document Page 16 of 76 reclassified and/or allowed in a fixed, reduced amount, such claimant s Ballot shall be counted in such reduced amount and/or as the reclassified category. The following types of voting procedures will be used in tabulating Ballots: (a) For purposes of the numerosity requirement of section 1126(c) of the Bankruptcy Code, separate claims held by a single creditor in a particular Class will be aggregated as if such creditor held one claim against the Debtors in such class, and the votes related to such claims will be treated as a single vote to accept or reject the Plan. (b) Holders of Claims must vote all of their Claims within a particular Class either to accept or reject the Plan and may not split the vote. Accordingly, a Ballot (or multiple Ballots with respect to multiple Claims within a single Class) that partially rejects and partially accepts the Plan will not be counted. (c) a Ballot shall be disregarded if the Bankruptcy Court determines, after notice and a hearing, that a vote was not solicited or procured in good faith or in accordance with the Bankruptcy Code; (d) all votes to accept or reject the Plan must be cast by using the appropriate Ballot and in accordance with the voting instructions attached to each Ballot and/or as set forth on the Ballot and votes cast in any other manner may not be counted; (e) Ballots in respect of Class 3 and Class 9 Claims that are ING Bank Deficiency Claims shall be delivered to Lucid Issuer Services Limited, a third-party vendor (the ING Tabulation Agent ) that will be retained by ING Bank (and not by the Debtors). The ING Tabulation Agent will be solely responsible for coordinating the tabulation of votes on such Claims and the preparation of master Ballots ( Master Ballots ) reporting the results of voting on ING Bank Deficiency Claims in each of Class 3 and Class 9. ING Bank will submit the Master Ballots to the Balloting Agent by the Voting Deadline. 4 The Balloting Agent will not be required to independently verify the information reported by the ING Tabulation Agent; (f) Ballots must be delivered to the Balloting Agent (or the ING Tabulation Agent if the Ballots are in respect of ING Bank Deficiency Claims) by first class mail, overnight delivery or electronic mail; be counted; not be counted; (g) (h) any Ballot that is unsigned or has a non-original signature shall not any Ballot that partially accepts and partially rejects the Plan shall 4 The Balloting Agent will provide the ING Tabulation Agent with forms of Ballot and Master Ballot to be delivered to the Holders of ING Deficiency Claims. The ING Tabulation Agent will be solely responsible for completing and delivering the Ballots to Holders of ING Deficiency Claims in Classes 3 and

17 Document Page 17 of 76 (i) any Person entitled to vote to accept or reject the Plan may change its vote before the Voting Deadline by casting a superseding Ballot so that it is received by the Balloting Agent on or before the Voting Deadline; (j) as to any Person that is entitled to vote and casts more than one Ballot voting the same Claim before the Voting Deadline, only the last Ballot timely received shall count; (k) if the Balloting Agent receives multiple Ballots in one Class from the Holder of a Claim on the same day but which are voted inconsistently, only the Ballots accepting the Plan shall be counted; (l) any executed Ballot timely received by the Balloting Agent that does not indicate either an acceptance or a rejection of the Plan shall not be counted; and (m) any executed Ballot that indicates both acceptance and rejection of the Plan shall not be counted. Please see the Solicitation Procedures Order attached hereto as Exhibit B and your Ballot for other provisions concerning solicitation and voting. E. Class A Election. The Ballots distributed to Holders of OWB NA Unaffiliated Trade Claims and Holders of OWB USA Unaffiliated Trade Claims will include an option to opt out of the OWB NA Class A Election or the OWB USA Class A Election, as applicable. 1. OWB NA Class A Election. Each Holder of an Allowed OWB NA Unaffiliated Trade Claim (whether or not such Holder votes to accept or reject the Plan) will have the opportunity to elect to receive an OWB NA Class A Trust Interest, which will entitle such Holder to a participate in Distributions made on account of a liquidation preference that will be paid prior to any Distributions made on account of ING Bank s allowed claims (among other Claims) up to the lesser of (i) its Pro Rata Share of $2.5 million and (ii) 25% of such Holder s Allowed OWB NA Unaffiliated Trade Claim. In order to receive this preferential treatment under the Plan the electing Holder must: (a) assign to the OWB NA Liquidating Trust any and all of such Holder s Assigned Rights (which include all rights to assert maritime lien claims directly against vessels in respect of OWB NA Supply Receivables); (b) return any and all proceeds collected at any time on or after the Petition Date on account of such Holder s Assigned Rights to the OWB NA Liquidating Trust other than Distributions received pursuant to the Plan; and (c) waive any and all rights to seek administrative priority status under section 503(b)(9) of the Bankruptcy Code with respect to any of such Holder s Claims against OWB NA except to the extent (i) Section 503(b)(9) Claims held by such Holder are included on the OWB NA 503(b)(9) Schedule or (ii) such Holder, OWB NA, the Committee, and ING Bank may otherwise agree. Holders of Allowed OWB NA Unaffiliated Trade Claims that do not wish to accept the OWB NA Class A Election and the preferential treatment making such an election -11-

18 Document Page 18 of 76 will afford them must return a Ballot voting to accept or reject the Plan and must affirmatively decline to accept the OWB NA Class A Election by checking the appropriate box on the Ballot. Holders of Allowed OWB NA Unaffiliated Trade Claims that (i) fail to timely deliver a Ballot to the Balloting Agent, (ii) fail to affirmatively decline the OWB NA Class A Election as permitted on the Ballot, or (iii) fail to vote to accept or reject the Plan on their Ballot will be deemed to have made the OWB NA Class A Election. 2. OWB USA Class A Election. Each Holder of an Allowed OWB USA Unaffiliated Trade Claim (whether or not such Holder votes to accept or reject the Plan) will have the opportunity to elect to receive an OWB USA Class A Trust Interest, which will entitle such Holder to a participate in Distributions made on account of a liquidation preference that will be paid prior to any Distributions made on account of ING Bank s allowed Claims (among other Claims) up to the lesser of (i) its Pro Rata Share of $5.3 million and (ii) 40% of such Holder s Allowed OWB USA Unaffiliated Trade Claim. In order to receive this preferential treatment under the Plan the electing Holder must: (a) assign to the OWB USA Liquidating Trust any and all of such Holder s Assigned Rights (which include all rights to assert maritime lien claims directly against vessels in respect of OWB USA Supply Receivables); (b) return any and all proceeds collected any time on or after the Petition Date on account of such Holder s Assigned Rights to the OWB USA Liquidating Trust other than Distributions received pursuant to the Plan; and (c) waive any and all rights to seek administrative priority status under section 503(b)(9) of the Bankruptcy Code with respect to any of such Holder s Claims against OWB USA. Holders of Allowed OWB USA Unaffiliated Trade Claims that do not wish to accept the OWB USA Class A Election and the preferential treatment making such an election will afford them must return a Ballot voting to accept or reject the Plan and must affirmatively decline to accept the OWB USA Class A Election by checking the appropriate box on the Ballot. Holders of Allowed OWB USA Unaffiliated Trade Claims that (i) fail to timely deliver a Ballot to the Balloting Agent, (ii) fail to affirmatively decline the OWB USA Class A Election as permitted on the Ballot, or (iii) fail to vote to accept or reject the Plan on their Ballot will be deemed to have made the OWB USA Class A Election. F. Release Opt Out Election Holders of Allowed OWB USA Unaffiliated Trade Claims and Allowed OWB NA Unaffiliated Trade Claims that decline the OWB USA Class A Election and the OWB NA Class A Election, respectively, may choose to opt out of providing the releases provided for in Article XIII.E of the Plan by marking the appropriate box on the Ballots that will be distributed to such Holders in respect of the Claims. Holders that do not return ballots and, also, affirmatively opt out of the releases provided in the Plan by checking the appropriate box on the ballots will be deemed to have granted such releases. G. Disclosure Statement Enclosures If you are entitled to vote on the Plan, accompanying this Disclosure Statement are copies of (a) the notice of, among other things, the time for submitting Ballots to accept or reject the -12-

19 Document Page 19 of 76 Plan, the date, time, and place of the Confirmation Hearing, and the time for filing objections to confirmation of the Plan; (b) one or more Ballots (with accompanying return postage pre-paid envelopes) to be used by you in voting to accept or reject the Plan; and (c) other solicitation documents substantially in the form approved by the Bankruptcy Court pursuant to the Solicitation Procedures Order. H. Confirmation Hearing Pursuant to section 1128 of the Bankruptcy Code, the Confirmation Hearing will be held before the Honorable Julie A. Manning, at the United States Bankruptcy Court, District of Connecticut, 157 Church Street, 18th Floor, New Haven, CT beginning on December 10, 2015 at 10:00 a.m prevailing Eastern Time and continuing thereafter as the Court may direct. The Bankruptcy Court has directed that objections, if any, to confirmation of the Plan be served and filed that they are received on or before December, 3, 2015 at 4:00 p.m. prevailing Eastern Time and limited to twenty (20) pages. Objections to confirmation of the Plan are governed by Bankruptcy Rule Any objection to confirmation must be made in writing and specify in detail the name and address of the objector, all grounds for the objection and amount of the Claim held by the objector. Objections must be filed with the United States Bankruptcy Court, and served by first class mail, overnight delivery, or so that they are received by the Bankruptcy Court (with a copy to Chambers) and the following parties on or before December, 3, 2015 at 4:00 p.m. prevailing Eastern Time. 1. To the Debtors: Natalie D. Ramsey and Davis Lee Wright Montgomery, McCracken, Walker & Rhoads, LLP 123 South Broad Street Philadelphia, PA nramsey@mmwr.com dwright@mmwr.com -and- Michael Enright Patrick M. Birney Robinson & Cole LLP 280 Trumbull Street Hartford, CT menright@rc.com pbirney@rc.com -13-

20 Document Page 20 of To the Committee: Michael P. Richman, Peter S. Partee, Sr., and Robert A. Rich Hunton & Williams LLP 200 Park Avenue New York, NY To ING Bank: Daniel J. Guyder and Joseph Badtke-Berkow Allen & Overy LLP 1221 Avenue of the Americas New York, NY and- Craig I. Lifland Halloran & Sage LLP 225 Asylum Street Hartford, CT To the United States Trustee: Holley L. Claiborn Office of the United States Trustee The Giaimo Federal Building 150 Court Street, Room 302 New Haven, CT III. OVERVIEW OF THE DEBTORS AND THEIR BUSINESSES; DESCRIPTION OF EVENTS LEADING TO COMMENCEMENT OF THE CASES A. Background OWB Holding is a Connecticut corporation and is the direct, one hundred percent Holder of all of the Equity Interests of OWB NA (a Connecticut corporation) and OWB USA (a Texas corporation). OWB Holding does not have any active business operations. OWB Holding, OWB NA, and OWB USA are part of an international family of companies (collectively, the OW Bunker Companies ) owned directly or indirectly by OW Bunker A/S, an entity organized under the laws of Denmark. Prior to the Petition Date, OWB NA and OWB USA conducted the United States operations of the OW Bunker Companies, providing marine fuel oil (also known as -14-

21 Document Page 21 of 76 bunkers ) to vessels on the order of various shipping companies and vessel interests, including container, bulk, and tanker ships as well as passenger cruise lines and the off-shore shipping industry. The OW Bunker Companies, originally founded in 1980 in Aalborg, Denmark, were a part of Ove Wrist, a Danish ship handling company dating back to the 1950s. Following a decade of expansion limited to Scandinavia and Northern Europe, the OW Bunker Companies started Singapore operations in Beginning in 2007, the OW Bunker Companies entered into a period of rapid expansion, ultimately becoming a leading global marine fuel company with operations in 29 countries and in some of the world s busiest and most important ports. Globally, the OW Bunker Companies controlled approximately 7% of the marine fuel market. OWB NA generally operated on the physical distributor side of the OW Bunker Companies, sourcing bunkers from oil companies and refineries, transporting and storing the bunkers, and blending the fuel to the specifications requested by its customers. OWB USA operated on the reselling side of the OW Bunker Companies, managing the supply within the United States of bunkers for customers, in liaison with other OW Bunker Companies. Each of the Debtors respective boards of directors is currently composed of Hans Staal Jonassen and Adrian Tolson. Hans Staal Jonassen is the sole officer for each of the Debtors. B. Reasons for Commencing the Chapter 11 Cases In March 2014, OW Bunker A/S and Altor Fund II launched an initial public offering ( IPO ) of OW Bunker A/S on NASDAQ Copenhagen in one of the largest transactions in Denmark in this decade. The IPO valued OW Bunker A/S at approximately $980 million. Within six (6) months of the IPO, fraud allegations in the Singapore operation and trading losses at the parent-level wiped out OW Bunker A/S s equity. On October 23, 2014, OW Bunker A/S indicated that it had recognized unrealized risk management losses of $24.5 million due to a slide in oil price. Shortly thereafter, on November 5, 2014, those potential trading losses were increased from $24.5 million to $150 million. Additionally, OW Bunker A/S disclosed that it discovered suspected fraudulent activity by senior employees of its Singaporebased subsidiary, Dynamic Oil Trading (Singapore) Pte. Ltd., amounting to an additional $125 million in losses. In light of these reports, thirteen of OW Bunker A/S fifteen banks, who were collectively owed approximately $650 million, refused to extend additional credit. The continued extension of credit was absolutely vital for the OW Bunker Companies because of the nature of the marine fuel supply market. The OW Bunker Companies purchased from suppliers on credit and delivered to customers on credit. The termination of borrowing essentially eliminated the OW Bunker Companies ability to operate their businesses. Trading of OW Bunker A/S shares was suspended by NASDAQ Copenhagen on November 5, On November 6, 2014, OW Bunker A/S announced the commencement of an in-court restructuring of each of O.W. Bunker & Trading A/S and O.W. Supply & Trading -15-

22 Document Page 22 of 76 A/S, two Danish subsidiaries, at the probate court in Aalborg, Denmark. The in-court restructuring failed and the Danish subsidiaries filed for bankruptcy in Aalborg. The probate court entered an order declaring the Danish subsidiaries bankrupt, and appointed legal and financial trustees to wind up the businesses on November 7, Following the collapse of the Debtors Danish parent, the Debtors were left in a near impossible position. With their vendors and creditors refusing to extend credit, alleging defaults, issuing payment accelerations, and demanding reclamation and cash on delivery demands, the Debtors found themselves with limited options. Accordingly, in an operation of their business judgment, the Debtors commenced the Chapter 11 Cases by filing voluntary petitions in the Bankruptcy Court on the Petition Date. C. Significant Events Which Occurred During the Chapter 11 Cases 1. Operations. Since the Petition Date, the Debtors have continued in possession and management of their assets as debtors-in-possession under section 1107(a) of the Bankruptcy Code. The Debtors have not engaged in marine fueling operations since before the Petition Date. As discussed in section III.D.2., shortly after the Petition Date, in the midst of plummeting oil prices on world markets, the Debtors announced their intentions to sell certain assets to generate operating revenue. 2. Debtors Professionals. The Debtors retained the law firms of Montgomery, McCracken, Walker, & Rhoads, LLP as primary counsel and Robinson & Cole LLP as Connecticut counsel. The Debtors also engaged Alvarez & Marsal North America, LLC as their financial advisor. 3. Formation of the Committee. On November 25, 2014, the U.S. Trustee appointed the Committee pursuant to section 1102(a)(1) of the Bankruptcy Code as the statutory representative of all unsecured creditors in the Chapter 11 Cases. The Committee is comprised of five (5) entities: (a) NuStar Energy Services, Inc.; (b) Phillips 66 Company; (c) Tesoro Refining & Marketing Company, LLC; (d) Chevron Marine Products, LLC; and (e) Lunday- Thagard Company. The Committee engaged Hunton & Williams LLP as its counsel and Gavin/Solmonese LLC as financial advisor. No other official or unofficial committees were formed during these Chapter 11 Cases. D. Major Matters During the Chapter 11 Bankruptcy Cases 1. First Day Relief In connection with the filing of their Chapter 11 Cases, the Debtors sought various forms of relief. The purpose of this relief was to minimize disruptions caused by the commencement of the bankruptcy cases and establish procedures to ensure that the Chapter 11 Cases run with administrative efficiency. At a hearing to consider their requested first day relief, the Debtors obtained authority: (a) to pay pre-petition taxes, (b) to jointly administer (but not substantively consolidate) the Chapter 11 Cases, (c) to extend the deadline to file their Schedules, (d) to maintain their pre-petition bank accounts, and (e) to establish procedures to address asserted reclamation claims. -16-