P roposed SpecialA ircrafta ttorneys ford ebtors and D ebtors in P ossession

Transcription

1 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 1 of 105 Hearing Date: August 4, 2016 at 9:00 a.m. (CT) Objection Deadline: July 28, 2016 at 4:00 p.m. (CT) Stephen A. Youngman ( ) WEIL, GOTSHAL & MANGES LLP 200 Crescent Court, Suite 300 Dallas, Texas Telephone: (214) Facsimile: (214) Gary T. Holtzer (pro hac vice) Kelly DiBlasi (pro hac vice) WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York Telephone: (212) Facsimile: (212) A ttorneys ford ebtors and D ebtors in P ossession Jasmine Ball (pro hac vice) Richard F. Hahn (pro hac vice) DEBEVOISE & PLIMPTON LLP 919 Third Avenue New York, New York Telephone: (212) Facsimile: (212) P roposed SpecialA ircrafta ttorneys ford ebtors and D ebtors in P ossession IN TH E UN ITE D S TA TE S B A N KRUP TC Y C O URT FO R TH E N O RTH E RN D IS TRIC T O F TE X A S D A L L A S D IV IS IO N x : In re: : C hapter11 : C H C GRO UP L TD.etal., : C ase N o (B JH ) : : D ebtors. : (JointlyA d ministered) : x D E B TO RS M O TIO N FO R A N O RD E R P URS UA N T TO S E C TIO N S 105A N D 363 O F TH E B A N KRUP TC Y C O D E A N D FE D E RA L RUL E O F B A N KRUP TC Y P RO C E D URE 6004(h)A UTH O RIZIN G TH E A M E N D E D L E A S IN G S TRUC TURE S A N D E N TRY IN TO C E RTA IN S E C URITY A RRA N GE M E N TS W ITH RE S P E C T TO TH RE E H E L IC O P TE RS A H E A RIN G W IL L B E C O N D UC TE D O N TH IS M A TTE R O N A UGUS T 4,2016 A T 9:00 A.M.IN C O URTRO O M #2,14TH FL O O R O F TH E UN ITE D S TA TE S B A N KRUP TC Y C O URT FO R TH E N O RTH E RN D IS TRIC T O F TE X A S,D A L L A S D IV IS IO N,E A RL E C A B E L L FE D E RA L B UIL D IN G,1100 C O M M E RC E S T.,D A L L A S, TE X A S

2 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 2 of 105 TO THE HONORABLE BARBARA J. HOUSER, UNITED STATES BANKRUPTCY JUDGE: CHC Group Ltd. and its above-captioned debtor affiliates, as debtors and debtors in possession (collectively, the D ebtors 1 ), respectfully represent as follows: Relief Requ ested 1. The Debtors hereby submit this motion (the M otion ) pursuant to sections 105(a) and 363(b) of title 11 of the United States Code (the B ankru ptcyc ode ) and Rule 6004(h) of the Federal Rules of Bankruptcy Procedure (the B ankru ptcyru les ) respectfully requesting entry of an order, substantially in the form attached hereto as E xhibitb (the O rder ), authorizing the amended leasing structure related to three Sikorsky helicopters with MSN , and (each a H elicopter, and collectively, the H elicopters ) and entry into replacement security arrangements related thereto (the S ecu rity A rrangements ) for the benefit of The Milestone Aviation Asset Holding Group No. 8 Ltd. (together with The Milestone Aviation Asset Holding Group No. 25 Ltd., as original Trustor and Initial Beneficiary, M ilestone ). Ju risdiction and V enu e 2. The United States Bankruptcy Court for the Northern District of Texas (the C ou rt ) has jurisdiction over this matter pursuant to 28 U.S.C. 157 and This matter is a core proceeding within the meaning of 28 U.S.C. 157(b). Venue is proper pursuant to 28 U.S.C and A list of the Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal tax identification number, where applicable, is attached hereto as E xhibita. 2

3 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 3 of 105 B ackgrou nd 3. On May 5, 2016 (the P etition D ate ), each of the Debtors commenced with this Court a voluntary case under chapter 11 of the Bankruptcy Code. The Debtors are authorized to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examiner has been appointed in these chapter 11 cases. 4. The Debtors chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Bankruptcy Rule 1015(b) and Rule of the Local Bankruptcy Rules of the United States Bankruptcy Court for the Northern District of Texas [Docket No. 52]. The D ebtors B u sinesses 5. The Debtors, together with their non-debtor affiliates (collectively, C H C ), comprise a global commercial helicopter services company, primarily engaged in providing helicopter services to the offshore oil and gas industry. CHC also provides helicopter services for search and rescue and emergency medical services to various government agencies. In addition, CHC maintains the industry s largest independent helicopter maintenance, repair, and overhaul business, which services helicopter fleets for both CHC as well as third-party customers. CHC manages its domestic and overseas businesses from its headquarters in Irving, Texas and its sales force from an office in Houston, Texas. CHC maintains one of its primary engine overhaul facilities in Fort Collins, Colorado. Only certain entities within CHC primarily the issuers or guarantors of the Debtors funded debt are Debtors in the chapter 11 proceedings. CHC s other entities, including certain operating entities, are not debtors in these cases and are continuing to conduct their businesses in the ordinary course. 3

4 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 4 of Additional information about the Debtors businesses, capital structure and the circumstances leading to the commencement of these chapter 11 cases can be found in the D eclaration of RobertA.D elgenio in Su pportof the D ebtors C hapter1 1 P etitions and Requ estforfirstd ay Relief (the D elgenio D eclaration ) [Docket No. 13]. The N ew S ecu ritya rrangements 7. In connection with the commencement of its chapter 11 cases, CHC has undertaken to formulate a revised business plan to address the high cost/weakened revenue environment. As an ongoing component of that plan and of the chapter 11 process, CHC has identified cost savings to be achieved through a significant reduction in their fleet by eliminating helicopters and other related equipment that currently are not, or soon will not be, used to generate revenue in CHC s businesses. In addition, CHC is in the process of reducing the complexity of its fleet, which will decrease costs associated with crew training, inventory and maintenance. This reduction and rationalization of CHC s fleet will create a significant surplus of helicopters and other related equipment owned and leased by CHC. 8. As of the Petition Date, CHC maintained a fleet of approximately 230 helicopters comprised of the medium variant (8 to 15 passengers) and heavy variant (16 to 26 passengers) collectively (the C H C Fleet ). A significant portion of the CHC Fleet is comprised of new technology helicopters which have greater range, passenger capacity, enhanced safety systems, and the ability to operate in variable conditions. Of the 230 helicopters in the CHC Fleet as of the Petition Date, CHC owned 67 helicopters and CHC leased the remainder from various third-party lessors. In most cases, CHC subleases helicopters to affiliated operating entities. These leasing structures provide maximum regulatory and business flexibility while 4

5 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 5 of 105 also ensuring that each CHC entity will have the necessary fleet for the region in which it operates. 9. In the ordinary course of business, CHC moves helicopters to different regions across the globe based on the applicable supply and demand for the Debtors services in these regions and the availability of the necessary type of helicopter. In connection with the Debtors efforts to reduce and rationalize the CHC Fleet, the Debtors determined that it is necessary to transfer, and change the registration of, the Helicopters with MSN and (the TransferringH elicopters ) from their current operating base in St. John s, Canada to the United Kingdom in order to ensure that there is adequate availability of helicopters to supply the demand in that region. Additionally, the Debtors changed the country of registration for the Helicopter with MSN which is currently leased by Debtor CHC Helicopters (Barbados) Limited to Debtor CHC Global Operations International ULC ( C H C Global ) from Canada to the Cayman Islands. 10. Debtor Heli-One Canada ULC leases the Transferring Helicopters pursuant to certain Aircraft Lease Agreements, which are guaranteed by Debtor CHC Group Ltd. Non-debtor CHC Helicopters Canada Inc. originally subleased these Helicopters from Heli-One Canada ULC. In order to effectuate the transfer of the two Transferring Helicopters to the United Kingdom, Heli-One Canada ULC terminated the existing subleases and entered into standard replacement subleases, which permitted the care, custody and operation of the Transferring Helicopters to be transferred to the current sublessee, non-debtor CHC Scotia, Limited ( S cotia ). 11. Similarly, to change the registration for the Helicopter with MSN to the Cayman Islands, CHC Helicopters (Barbados) Limited terminated the existing sublease 5

6 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 6 of 105 with CHC Global Operation Canada (2008) ULC and entered into a replacement sublease (together with the replacement subleases for the Transferring Helicopters, the S u bleases ) with CHC Global. 12. Prior to the implementation of the Subleases, the existing sublease structures for the Helicopters provided security arrangements for the benefit of Milestone, as the beneficial owner of the Helicopters. 2 Thus, in connection with the Subleases, CHC is required to enter into Security Arrangements, which are substantially identical to those that were in existence for the benefit of Milestone prior to the transfer of the Helicopters. 13. The Security Arrangements for the Transferring Helicopters include, among other documents, (a) new sublease security assignments, substantially in the form attached hereto as E xhibitc and D, respectively, through which the applicable lessee will assign its interests in the applicable sublease, (b) guarantee confirmation agreements, substantially in the form attached hereto as E xhibite and F, respectively, which provide that all of the guarantee and indemnity obligations of Debtor CHC Group Ltd. in favor of Milestone in the original security arrangements will remain in full force and effect notwithstanding the execution of the new subleases, and (c) a deregistration power of attorney, substantially in the form attached hereto as E xhibits G and H, respectively, which confers an irrevocable and unconditional power of attorney in favor of the lessor to, among other things, consent to the transfer of the registration of the relevant Helicopter. 2 The direct lessor and counterparty to the Aircraft Lease Agreements and the beneficiary of the lease guarantee and the security arrangements for the Transferring Helicopters is Wells Fargo Bank Northwest, National Association and for MSN is Wilmington Trust SP Services (Dublin) Limited, in their capacity as the trustee of the Helicopters. Milestone is the owner participant and controlling party with respect to the Helicopters. 6

7 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 7 of The Security Arrangements for the Helicopter with MSN include, among other documents, (a) a new sublease security assignment, substantially in the form attached hereto as E xhibiti, (b) a guarantee confirmation agreement, substantially in the form attached hereto as E xhibitj, (c) a deregistration power of attorney, substantially in the form attached hereto as E xhibitk, and (d) an Irrevocable De-Registration and Export Request Authorisation, substantially in form attached hereto as E xhibitl. 15. The amendments to the leasing structure for the Helicopters and the Security Arrangements provide that upon approval by the Court, all such documentation shall be deemed to have been entered into immediately prior to the Petition Date for the purposes of the Bankruptcy Code. Accordingly, the Debtors reserve the right to reject the lease documents related to the Helicopters and the Security Arrangements pursuant to section 365 of the Bankruptcy Code. Similarly, Milestone and its affiliates preserve all rights to assert a claim, if any, including administrative expense claims under sections 365(d)(5) and 503(b), or any rights or claims under the Convention on International Interests in Mobile Equipment (the C onvention ) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the P rotocol ), if such Convention and Protocol is applicable The Debtors believe that the entry into the amended leasing structure and the related required Security Arrangements will provide the Debtors with the ability to continue to operate its helicopter fleet in a value maximizing manner, for the benefit of the Debtors estates and all creditors. 3 Notwithstanding anything set forth in this Motion or in the exhibits and other documents relating thereto, Milestone and its affiliates does not consent to any assertions set forth in this Motion that may affect their rights under the Convention or Protocol, and expressly reserves its right to challenge these assertions. 7

8 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 8 of 105 B asis forrelief 17. The Debtors believe that entry into the amended leasing structure and the related Security Arrangements is in the ordinary course of business of the Debtors. However, in an abundance of caution the Debtors are seeking approval under sections 105(a) and 363(b) of the Bankruptcy Code. The Bankruptcy Code authorizes the use of property outside the ordinary course of business with court approval and given a valid business reason. More specifically, section 363 of the Bankruptcy Code, in pertinent part, authorizes a debtor in possession to use, sell, or lease, other than in the course of business, property of the estate, after notice and a hearing. 11 U.S.C. 363(b)(1). Although section 363 does not specify a standard for determining when it is appropriate for a court to authorize the use, sale, or lease of property of the estate, courts routinely authorize the use of debtor s property if it is based upon the reasonable business judgment of the debtor. See,e.g,Institu tionalc red itors of C ont la irl ines, Inc.v.C ont la irl ines,inc.(in re C ont la irl ines,inc.),780 F.2d 1223, 1226 (5th Cir. 1986) ( for the debtor-in-possession or trustee to satisfy its fiduciary duty to the debtor, creditors and equity holders, there must be some articulated business justification for using, selling, or leasing the property outside the ordinary course of business. ) (citing In re L ionelc orp., 722 F.2d 1063, 1071 (2d Cir.1983)); In re A SA RC O,L L C,441 B.R. 813, 830 (S.D. Tex. 2010) (same); In re M artin, 91 F.3d 389, 395 (3d Cir. 1996); In re Elpida M emory,inc., No (CSS), 2012 WL , at *5 (Bankr. D. Del. Nov. 20, 2012); In re M ontgomery W ard H oldingc orp., 242 B.R. 147, 153 (D. Del. 1999). 18. The standard for approval of the use of property outside the ordinary course of business is a deferential one. See GB L H old ingc o.,inc.v.b lackbu rn/travis/c ole, L td.(in re State P arkb ld g.grp.,l td.), 331 B.R. 251, 254 (Bankr. N.D. Tex. 2005) ( [g]reat judicial deference is given to the Trustee s exercise of business judgment. ). 8

9 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 9 of In addition, the Court also may grant the requested relief pursuant to its equitable powers under section 105(a) of the Bankruptcy Code, which provides 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). 20. Based on the foregoing considerations, the Debtors respectfully submit that the decision to enter into the amended leasing structure and Security Arrangements represents a reasonable exercise of the Debtors business judgment. The amended leasing structure and Security Arrangements will enable the Debtors to continue to operate their fleet in the ordinary course of business in a value maximizing method. Court approval of the amended leasing structure and Security Arrangements will also allow the Debtors to properly effectuate the transfer of the Transferring Helicopters to the United Kingdom as well as the transfer of registration for the Helicopter with MSN Therefore, Debtors believe they have a good business reason to enter into the amended leasing structure and Security Arrangements. 21. Based on the foregoing, the Debtors respectfully request that the Court approve the amended leasing structure and authorize Debtors to enter into the Security Arrangements, as such action is a reasonable exercise of Debtor s business judgment and is supported by a good business reason. Reservation of Rights 22. Notwithstanding anything contained or requested in this Motion or the Security Arrangements, nothing herein contemplates or constitutes an assumption of any lease or executory contract with Milestone, including the Security Arrangements or the amended lease documents related to the Helicopters, pursuant to section 365 of the Bankruptcy Code. 9

10 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 10 of 105 Ru le 6004(h)W aiver 23. The Debtors respectfully request that any order approving this Motion be effective immediately, thereby waiving the 14-day stay period imposed by Bankruptcy Rule 6004(h). Waiver of the stay period is necessary for the amended leasing structure and Security Arrangements to be executed and implemented as expeditiously as possible and within the time frames contemplated by the parties in order that the Debtors could continue to operate its fleet in the ordinary course of business. N otice 24. No trustee, examiner or creditors committee has been appointed in these chapter 11 cases. Notice of this Motion shall be given to: (i) the Office of the United States Trustee for the Northern District of Texas; (ii) Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY (Attn: Douglas Mannal, Esq. and Kenneth H. Eckstein, Esq.), counsel to the Official Committee of Unsecured Creditors; (iii) Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, Bank of America Tower, New York, NY (Attn: Michael S. Stamer, Esq.), counsel to an informal group of certain unaffiliated holders of the 9.250% Senior Secured Notes Due 2020; (iv) Norton Rose Fulbright, 2200 Ross Avenue, Suite 3600, Dallas, TX (Attn: Louis R. Strubeck, Jr., Esq. and Richard P. Borden, Esq.), counsel to certain secured lenders under the Revolving Credit Agreement; (v) Paul Hastings LLP, 75 East 55th Street, New York, NY (Attn: Leslie A. Plaskon, Esq. and Andrew V. Tenzer, Esq.), counsel to the administrative agent under the ABL Credit Agreement; (vi) The Bank of New York Mellon, 101 Barclay Street, Floor 4 East, New York, NY (Attn: International Corporate Trust), in its capacity as indenture trustee under the 9.250% Senior Secured Notes due 2020 and under the 9.375% Senior Notes due 2021; (vii) the Securities and Exchange Commission; (viii) the Internal Revenue Service; (ix) counsel to Milestone (Sidley 10

11 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 11 of 105 Austin LLP, 787 Seventh Ave, New York, NY 10019, Attn: Michael G. Burke, Esq. and Dennis Kao, Esq.); and (x) all parties who have requested notice in these chapter 11 cases pursuant to Bankruptcy Rule Due to the nature of the relief requested herein, the Debtors respectfully submit that no further notice of this Motion is required. N o P riorrequ est 25. No previous request for the relief sought herein has been made to this or any other Court. 11

12 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 12 of 105 WHEREFORE, the Debtors respectfully request that the Court enter an order (a) authorizing the amended leasing structures and authorizing the Debtors to enter into, and perform under, the Security Arrangements and (b) granting such other and further relief as this Court may deem just and proper. Dated: By: New York, New York July 1, 2016 /s/jasmine B a l DEBEVOISE & PLIMPTON LLP Jasmine Ball (pro hac vice) Richard F. Hahn (pro hac vice) 919 Third Avenue New York, New York Telephone: (212) Facsimile: (212) jball@debevoise.com rfhahn@debevoise.com P roposed SpecialA ircrafta ttorneys for D ebtors and D ebtors in P ossession WEIL, GOTSHAL & MANGES LLP Stephen A. Youngman ( ) 200 Crescent Court, Suite 300 Dallas, Texas Telephone: (214) Facsimile: (214) stephen.youngman@weil.com -and- Gary T. Holtzer (pro hac vice) Kelly DiBlasi (pro hac vice) 767 Fifth Avenue New York, New York Telephone: (212) Facsimile: (212) gary.holtzer@weil.com A ttorneys ford ebtors and D ebtors in P ossession 12

13 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 13 of 105 E xhibita D ebtors L astfou rd igits L astfou rd igits D ebtor of of D ebtor FederalTax I.D. FederalTax I.D. N o. N o. CHC Group Ltd CHC Hoofddorp B.V Holding SARL 8004 CHC Leasing (Ireland) Limited 8230 Capital Aviation Services B.V CHC Netherlands B.V CHC Cayman ABL Borrower Ltd CHC Norway Acquisition Co AS 6777 CHC Cayman ABL Holdings Ltd Heli-One (Netherlands) B.V CHC Cayman Investments I Ltd Heli-One (Norway) AS 2437 CHC Den Helder B.V Heli-One (U.S.) Inc CHC Global Operations (2008) ULC 7214 Heli-One (UK) Limited 2451 CHC Global Operations Canada (2008) ULC 6979 Heli-One Canada ULC 8735 CHC Global Operations International ULC 8751 Heli-One Holdings (UK) Limited 6780 CHC Helicopter (1) S.à r.l Heli-One Leasing (Norway) AS 2441 CHC Helicopter (2) S.à r.l Heli-One Leasing ULC N/A CHC Helicopter (3) S.à r.l Heli-One USA Inc CHC Helicopter (4) S.à r.l Heliworld Leasing Limited 2464 CHC Helicopter (5) S.à r.l Integra Leasing AS 2439 CHC Helicopter Australia Pty Ltd 2402 Lloyd Bass Strait Helicopters Pty. Ltd CHC Helicopter Holding S.à r.l Lloyd Helicopter Services Limited 6781 CHC Helicopter S.A Lloyd Helicopter Services Pty. Ltd CHC Helicopters (Barbados) Limited 7985 Lloyd Helicopters International Pty. Ltd CHC Helicopters (Barbados) SRL N/A Lloyd Helicopters Pty. Ltd CHC Holding (UK) Limited 2198 Management Aviation Limited 2135 CHC Holding NL B.V. 6801

14 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 14 of 105 E xhibitb P roposed Form of O rder

15 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 15 of 105 IN TH E UN ITE D S TA TE S B A N KRUP TC Y C O URT FO R TH E N O RTH E RN D IS TRIC T O F TE X A S D A L L A S D IV IS IO N x : In re: : C hapter11 : C H C GRO UP L TD.et al., : C ase N o (B JH ) : : D ebtors. : (JointlyA d ministered) : x O RD E R GRA N TIN G D E B TO RS M O TIO N FO R A N O RD E R P URS UA N T TO S E C TIO N S 105A N D 363O F TH E B A N KRUP TC Y C O D E A N D FE D E RA L RUL E O F B A N KRUP TC Y P RO C E D URE 6004(h)A UTH O RIZIN G TH E A M E N D E D L E A S IN G S TRUC TURE S A N D E N TRY IN TO C E RTA IN S E C URITY A RRA N GE M E N TS W ITH RE S P E C T TO TH RE E H E L IC O P TE RS Upon the motion dated July 1, 2016 (the M otion) 1 of CHC Group Ltd. and its above-captioned debtor affiliates (collectively, the D ebtors ), pursuant to sections 105(a) and 363(b) of the Bankruptcy Code and Bankruptcy Rule 6004(h), requesting entry of an order authorizing the amended leasing structures of three Sikorsky helicopters with MSN , 1 Unless otherwise defined herein, all capitalized terms shall have the meaning ascribed to them in the Motion.

16 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 16 of and (the H elicopters ) and the Debtors entry into replacement security arrangements (the S ecu ritya rrangements ) for the benefit of Milestone related thereto, and upon consideration of the Del Genio Declaration; and the Court having jurisdiction to consider the Motion and the relief requested therein pursuant to 28 U.S.C. 1334; and consideration of the Motion and the requested relief being a core proceeding the Bankruptcy Court can determine pursuant to 28 U.S.C. 157(b)(2); and venue being proper before this Court pursuant to 28 U.S.C and 1409; and due and proper notice of the Motion having been provided to (i) the Office of the United States Trustee for the Northern District of Texas; (ii) Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the Americas, New York, NY (Attn: Douglas Mannal, Esq. and Kenneth H. Eckstein, Esq.), counsel to the Official Committee of Unsecured Creditors; (iii) Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, Bank of America Tower, New York, NY (Attn: Michael S. Stamer, Esq.), counsel to an informal group of certain unaffiliated holders of the 9.250% Senior Secured Notes Due 2020; (iv) Norton Rose Fulbright, 2200 Ross Avenue, Suite 3600, Dallas, TX (Attn: Louis R. Strubeck, Jr., Esq. and Richard P. Borden, Esq.), counsel to certain secured lenders under the Revolving Credit Agreement; (v) Paul Hastings LLP, 75 East 55th Street, New York, NY (Attn: Leslie A. Plaskon, Esq. and Andrew V. Tenzer, Esq.), counsel to the administrative agent under the ABL Credit Agreement; (vi) The Bank of New York Mellon, 101 Barclay Street, Floor 4 East, New York, NY (Attn: International Corporate Trust), in its capacity as indenture trustee under the 9.250% Senior Secured Notes due 2020 and under the 9.375% Senior Notes due 2021; (vii) the Securities and Exchange Commission; (viii) the Internal Revenue Service; (ix) counsel to Milestone (Sidley Austin LLP, 787 Seventh Ave, New York, NY 10019, Attn: Michael G. Burke, Esq. and Dennis Kao, Esq.); and (x) all parties who have requested notice in these chapter 2

17 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 17 of cases pursuant to Bankruptcy Rule 2002, and no other or further notice need be provided; and the relief requested in the Motion being in the best interests of the Debtors and their estates and creditors; and the Court having reviewed the Motion and having held a hearing before the Court with appearances of parties in interest noted in the transcript thereof (the H earing ); and the Court having considered the arguments of counsel made, and the evidence proffered and adduced, at the Hearing, it is hereby ORDERED that: 1. The relief requested in the Motion is granted. 2. Pursuant to sections 105(a) and 363(b)(1) of the Bankruptcy Code, CHC is hereby authorized to enter into the Security Arrangements, and entry into the Subleases and amendment to the existing leases relating to the Subleases and Security Arrangements is hereby approved. 3. CHC is hereby authorized to execute and deliver all instruments and documents and take any additional actions as are necessary or appropriate to implement and effectuate the entry into and performance under the Security Arrangements and this Order. 4. Notwithstanding anything to the contrary, for the purposes of the Bankruptcy Code, the Subleases, Security Arrangements and any related documents entered into in connection therewith, shall be deemed to have been entered into immediately prior to the Petition Date. 5. The Motion and this Order shall neither abridge nor modify the rights and remedies, if any, of any party (including Milestone and its affiliates) under the Bankruptcy Code, the Convention on International Interests in Mobile Equipment (the C onvention ) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (the P rotocol ), if such Convention and Protocol are applicable. 3

18 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 18 of Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of this Order are immediately effective and enforceable upon its entry. 7. The notice procedures set forth in the Motion are good and sufficient notice and satisfy Bankruptcy Rules 2002(a) and 9014 by providing the counterparties with a notice and an opportunity to object and be heard at a hearing. 8. This Court retains exclusive jurisdiction with respect to all matters arising from or related to the implementation, interpretation, and enforcement of this Order. ### END OF ORDER ### 4

19 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 19 of 105 Respectfully Submitted, D E B E V O IS E & P L IM P TO N L L P /s/jasmine B a l Jasmine Ball (pro hac vice) Richard F. Hahn (pro hac vice) 919 Third Avenue New York, New York Telephone: (212) Facsimile: (212) jball@debevoise.com rfhahn@debevoise.com P roposed SpecialA ircrafta ttorneys for D ebtors and D ebtors in P ossession W E IL,GO TS H A L & M A N GE S L L P Stephen A. Youngman ( ) 200 Crescent Court, Suite 300 Dallas, Texas Telephone: (214) Facsimile: (214) stephen.youngman@weil.com -and- Gary T. Holtzer (pro hac vice) Kelly DiBlasi (pro hac vice) 767 Fifth Avenue New York, New York Telephone: (212) Facsimile: (212) gary.holtzer@weil.com A ttorneys ford ebtors and D ebtors in P ossession 5

20 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 20 of 105 Exhibit C MSN New Sublease Security Assignment

21 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 21 of 105 CLIFFORD CHANCE EXECUTION VERSION DATED 2016 HELI-ONE CANADA ULC AS ASSIGNOR AND WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION NOT IN ITS INDIVIDUAL CAPACITY, EXCEPT AS PROVIDED HEREIN, BUT OTHERWISE SOLELY AS OWNER TRUSTEE AS ASSIGNEE ASSIGNMENT OF SUB-LEASE MSN v

22 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 22 of 105 CONTENTS Clause Page 1. Definitions Assignment Perfection Termination Representations and Undertakings Assignor's Continuing Obligations Exercise of Rights and Enforcement Continuing Security and Other Provisions Power of Attorney Further Assurance Miscellaneous Successors in Title, Assignment and Transfer Notices Governing Law and Jurisdiction Counterparts Schedule 1 Form of Notice of Assignment Schedule 2 Form of Acknowledgment of Assignment Execution Page Sublease Assignment MSN v

23 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 23 of 105 THIS ASSIGNMENT OF SUB-LEASE is made on 2016 BETWEEN: (1) HELI-ONE CANADA ULC, an unlimited liability company incorporated under the laws of Canada, having its registered office at 4740 Agar Drive, Richmond, British Columbia, V7B 1Α3 Canada (the "Assignor"); and (2) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity, except as provided herein, but otherwise solely as Owner Trustee pursuant to and as defined in the Declaration of Trust, a national banking association organised and existing under the laws of the United States of America, not in its individual capacity, but solely as Owner Trustee, whose registered office is at 299 South Main St., 5 th Floor, Salt Lake City, Utah 84111, United States of America (the "Assignee"). WHEREAS: (A) (B) (C) Pursuant to the Lease Agreement (as defined below), the Assignee has agreed to lease and the Assignor has agreed to take on lease the Aircraft (as defined below) on the terms and subject to the conditions contained in the Lease Agreement. Pursuant to the Sub-Lease Agreement (as defined below), the Assignor has agreed to sub-lease the Aircraft to the Sub-Lessee (as defined below) on the terms and subject to the conditions contained in the Sub-Lease Agreement. It is a condition precedent to the sub-lease of the Aircraft to the Sub-Lessee that the Assignor executes this Assignment in favour of the Assignee. THIS ASSIGNMENT WITNESSES as follows: 1. DEFINITIONS 1.1 In this Assignment (including the recitals), capitalised terms and expressions not otherwise defined shall, unless the context otherwise requires, have the meanings given to them in the Lease Agreement (including terms defined therein by reference to another document or agreement) and: "Aircraft" means the one (1) Sikorsky S92A aircraft with manufacturer's serial number and registration mark G-WNST. "Aircraft General Terms Agreement" means the aircraft lease general terms agreement no dated 16 May 2016 (as amended from time to time) between the Assignor as lessor and the Sub-Lessee as lessee. "Collateral" means all of the rights, title and interest, present and future, of the Assignor in, to and under the Sub-Lease Agreement. "continuing" means, in relation to an Event of Default or a Sub-Lease Event, if such Event of Default or Sub-Lease Event has not been remedied or permanently waived, v

24 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 24 of 105 provided that an Event of Default or Sub-Lease Event shall be incapable of being remedied without the written consent of the relevant lessor once that lessor has exercised any of its rights pursuant to the Lease Agreement or the Sub-Lease Agreement (as the case may be). "Event of Default" has the meaning given to such term in the Lease Agreement. "Event of Loss" has the meaning given to such term in the Lease Agreement. "Lease Agreement" means the aircraft lease agreement dated 21 February 2014 between the Assignee as lessor and CHC Helicopters (Barbados) Limited as lessee in relation to the Aircraft, as amended and novated by a novation agreement dated on 6 May 2014 between the Assignee as lessor, CHC Helicopters (Barbados) Limited as existing lessee and Assignor as replacement lessee. "Secured Obligations" means any and all liabilities and obligations (whether actual or contingent, whether now existing or hereafter arising, whether or not for the payment of money, and including, without limitation, any obligations or liabilities to pay damages) which are now or which may be at any time and from time to time hereafter be due, owing, payable or incurred or be expressed to be due, owing, or payable from or by the Assignor to the Assignee pursuant to the Lease Agreement from time to time. "Sub-Lease Agreement" means the sublease agreement comprising (i) the Aircraft General Terms Agreement and (ii) an aircraft specific lease agreement no dated 10 June 2016, each between the Assignor as lessor and the Sub-Lessee as sublessee in relation to the Aircraft, and any other sublease agreement entered into from time to time in respect of which the Assignor has served a notice in accordance with Clause of this Assignment, as amended, supplemented and novated from time to time. "Sub-Lease Event" means each of the events in Appendix 8 of the Aircraft General Terms Agreement. "Sub-Lessee" means CHC Scotia Limited and any other Permitted Sub-Lessee from time to time. 1.2 Capitalised terms used herein shall, save as expressly defined herein, have the same meanings as ascribed thereto in the Lease Agreement. 2. ASSIGNMENT 2.1 As continuing security for the payment, performance and discharge by the Assignor of the Secured Obligations, the Assignor hereby, with full title guarantee, assigns to the Assignee by way of security, all of its rights, title and interest, present and future, in and to the Collateral. 2.2 To the extent that any of the Collateral is not at any time assigned pursuant to Clause 2.1, the Assignor hereby, but subject as provided in Clause 4, by way of first fixed charge, with full title guarantee, charges and agrees to charge to, and creates and agrees to create in favour of, the Assignee a first priority security interest in and over the Collateral to the fullest extent permitted by applicable law v

25 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 25 of PERFECTION The Assignor shall, forthwith upon execution of this Assignment notify the Sub- Lessee of this Assignment by executing and delivering to the Sub-Lessee, a notice of assignment to the Sub-Lessee in the form set out in Schedule 1 to this Assignment and procure that the Sub-Lessee acknowledges the assignment by signing and returning the acknowledgment set out in Schedule 2 to this Agreement. 4. TERMINATION If at any time the Secured Obligations have been discharged in full, and so long as the Assignee has not been advised by appropriate legal counsel that, by reason of the application of any bankruptcy, insolvency or other applicable laws affecting creditors' rights and the discharge of obligations, the Assignee will or will become likely to be obliged to pay to or to account to the Assignor or any liquidator or trustee in bankruptcy of the Assignor any amount corresponding to all or any part of the amount paid in or towards such discharge, then the Assignee will, at the request and cost of the Assignor, on a without recourse or warranty basis (but free and clear of any Liens created by or through the Assignee), reassign to the Assignor the property expressed to be assigned and/or charged hereby, release the Liens expressed to be granted hereunder and, upon the request and at the cost of the Assignor, discharge and carry out such other actions as may be requested of it to release such Liens. 5. REPRESENTATIONS AND UNDERTAKINGS 5.1 Representations The Assignor hereby represents and warrants to the Assignee as of the date hereof and, in respect of sub-clauses 5.1.1, 5.1.2, 5.1.3, and below (but excluding subclause 5.1.5) for the duration of this Assignment, that: it has and will have the necessary power and authority to enable it to enter into and perform its obligations under this Assignment; there is no restriction on the Assignor's ability to assign all or any of its rights under the Sub-Lease Agreement whether contained in the Sub-Lease Agreement or in any other document; it is the legal and beneficial owner of the Collateral free from any security interest except as created by this Assignment; it has not prior to the date hereof sold or disposed of, will not sell or dispose of, and has not assigned, charged or otherwise encumbered any of the Collateral or agreed to the creation by any other person of any assignment, charge or other encumbrance over the Collateral (otherwise than pursuant to this Assignment); the Sub-Lease Agreement is in full force and effect, enforceable in accordance with its terms and at the date specified above, and the Assignor is not in breach of any of its obligations under the Sub-Lease Agreement; v

26 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 26 of the Sub-Lease Agreement constitutes the legal, valid and binding obligations of the Assignor and has not been varied or amended in any way or cancelled and the Assignor is not in default thereunder; this Assignment constitutes the legal, valid and binding obligations of the Assignor enforceable in accordance with its terms and creates an effective first priority security interest over the Collateral; to its knowledge, no Event of Loss has occurred; it will, for so long as the Assignee shall not have executed a discharge of the security created hereby (and subject to this Assignment), remain the sole owner of the Collateral; and to its knowledge there are no actions, suits or proceedings pending or threatened by or against the Assignor in connection with or arising out of the Collateral. 5.2 Undertakings The Assignor undertakes to the Assignee that for so long as any of the Secured Obligations remain outstanding and subject to Clause 7.1: it will pay and discharge all moneys and liabilities and perform all obligations whatsoever which are now or at any time hereafter may be due, owing, payable or outstanding by the Assignor to the Assignee pursuant to this Assignment; it will promptly upon demand and at its own cost do or permit to be done all such things and duly execute and deliver any further documents reasonably required by the Assignee as are necessary to obtain the full benefit of this Assignment or for better securing the rights of the Assignee hereunder; it will perform all of its obligations under the Lease Agreement, the Sub-Lease Agreement and the other Lease Documents to which it is a party including but not limited to paying, when due, all taxes, assessments, governmental charges and levies on the Collateral or incurred in connection with the Collateral or this Assignment; it will not do or permit to be done, any act or thing which would jeopardise the rights of the Assignee in the Collateral or which would adversely affect or diminish the value of the Collateral; it will not, without the prior written consent of the Assignee, assign or otherwise dispose of the Collateral or create or incur, nor shall it voluntarily permit the creation, incurrence or existence of, any Lien in or upon the Collateral, save for the Lien constituted by this Assignment or a Permitted Lien; it will not exercise any right of set off or counterclaim against the Assignee over the Collateral; v

27 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 27 of it will not sell, convey, transfer, assign or otherwise dispose of all or any part of the Collateral or any interest therein or agree or attempt or purport to do so other than in favour of the Assignee pursuant hereto; it will not, without the prior written consent of the Assignee (which shall not be unreasonably withheld or delayed), amend or agree to amend the terms of the Sub-Lease Agreement and any other Lease Document nor waive any provision or grant any consent, waiver or approval in respect thereof; upon the occurrence of an Event of Default and while the same is continuing, it will not exercise any rights or powers conferred on it under the Sub-Lease Agreement unless and until requested to do so by the Assignee whereupon the Assignor agrees that it will do so, at its own cost and expense, provided always that the Assignee shall not be responsible in any way whatsoever in the event that the exercise by the Assignor of any of its rights or powers under the Sub-Lease Agreement be thereafter adjudged improper; in connection with a new subleasing to a Permitted Sub-Lessee pursuant to the Lease Agreement, Assignor shall serve a new notice of assignment on the Permitted Sub-Lessee in the form set out in Schedule 1 and procure that a new acknowledgement of assignment in the form set out in Schedule 2 is provided by such Permitted Sub-Lessee to the Assignee; the Assignor shall promptly notify the Assignee in writing if the Assignor becomes aware of the occurrence of an Event of Default or a Sub-Lease Event (other than an Event of Default or a Sub-Lease Event existing at the date hereof) or an Event of Loss; and the Assignor will send a copy of any claim or notice received or given by it under the Sub-Lease Agreement or the Collateral forthwith to the Assignee, and shall promptly furnish to the Assignee such information and reports as are in the possession of the Assignor and are not subject to confidentiality restrictions with respect to the Collateral as the Assignee may from time to time reasonably require. 6. ASSIGNOR'S CONTINUING OBLIGATIONS Notwithstanding anything herein contained: the Assignor shall remain fully liable under the Lease Agreement, the Sub- Lease Agreement, this Assignment and the other Lease Documents, as the case may be, to perform all the obligations assumed by it thereunder, notwithstanding that the assignment under Clause 2.1 has been made, and nothing herein contained and no exercise by the Assignee of its rights under this Assignment or any other Lease Document shall constitute or be deemed to constitute an assumption or acceptance by the Assignee of any such obligations; the Assignee shall not be under any obligation or liability under the Lease Documents by reason of this Assignment or anything arising out of, or in connection with, it; and v

28 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 28 of the Assignee shall not be under any obligation of any kind: (a) (b) (c) (d) to assume or to perform or fulfil any obligation of the Assignor in, under or pursuant to the Lease Agreement, the Sub-Lease Agreement or any of the Lease Documents including the Collateral or be under any liability whatsoever as a result of any failure of the Assignor to perform any of its obligations in connection therewith; to make any payment assumed by the Assignor under any of the Lease Documents including the Collateral; to enforce against any of the parties thereto any term or condition of any of the Lease Documents including the Collateral or to enforce any rights and benefits hereby assigned or to which the Assignee may at any time be entitled; and/or to make any enquiries as to the nature or sufficiency of any payment received by the Assignee hereunder or to make any claim or to take any action to collect any moneys hereby assigned. 7. EXERCISE OF RIGHTS AND ENFORCEMENT 7.1 Subject always to the terms of this Agreement, the Assignor shall be entitled to exercise all rights and powers arising under the Sub-Lease Agreement until the occurrence of an Event of Default which is continuing in accordance with the Lease Agreement upon which, the Assignee shall be entitled to exercise all such rights and powers when they arise and the Assignor shall thereupon cease to exercise any such rights or powers unless so exercised with the prior written consent of the Assignor. 7.2 After the occurrence of an Event of Default which is continuing in accordance with the Lease Agreement or if the Assignor fails in any way to comply with the provisions of this Assignment, the Assignee shall be entitled (without being in any way obliged to do so, or responsible for so doing), without prior notice, consent or authority to or from the Assignor or prior authorisation from any court, to enforce all or any part of the security constituted by this Assignment in any manner it sees fit. Without limiting any of the rights conferred on the Assignee by this Clause 7.2, the Assignee shall be entitled to: (a) (b) (c) (d) exercise all of the rights in relation to the Collateral; assign any or all of the Collateral to any person on such terms and in such order as the Assignee considers appropriate; collect, recover or compromise, and give a good discharge for, any moneys paid or payable to the Assignor under or in respect of the Collateral, and enforce any rights or claims arising under or in respect of the Collateral; and otherwise enforce the security interest granted by this Assignment pursuant to the relevant provisions of this Assignment and all applicable laws v

29 Case bjh11 Doc 441 Filed 07/01/16 Entered 07/01/16 14:32:46 Page 29 of CONTINUING SECURITY AND OTHER PROVISIONS 8.1 Continuing Security It is declared and agreed that as and with effect from the date hereof: the security created by this Assignment shall: (a) (b) (c) (d) (e) be held by the Assignee as continuing security for the payment, performance and discharge of the Secured Obligations and performance of the Assignor's obligations to the Assignee under the Lease Agreement, this Assignment and the Lease Documents and accordingly the security so created shall not be satisfied by any intermediate payment or satisfaction of any part of the Secured Obligations; be in addition to and shall not in any way prejudice or affect the security created by any deposit of documents, or any guarantee, lien, bill, note, mortgage or other Lien now or hereafter held by the Assignee or any right or remedy of the Assignee thereunder, and shall not be in any way prejudiced or affected thereby, or by the invalidity or unenforceability thereof, or by the Assignee releasing, modifying or refraining from perfecting or enforcing any of the same or granting time or indulgence or compounding with any person liable; not be discharged, impaired, prejudiced or otherwise affected by any amendment, modification, variation, supplement, novation, restatement or replacement of all or any part of the Secured Obligations or the Lease Agreement, this Assignment or any Lease Document; not be discharged, impaired, prejudiced or otherwise affected by any other act, fact, matter, event, circumstance, omission or thing (including, without limitation the invalidity, unenforceability or illegality of any of the Secured Obligations or the bankruptcy, liquidation, winding-up, insolvency, dissolution, administration, examinership, rehabilitation, reorganisation or amalgamation of, or other analogous event of or with respect to the Assignor or any other person but excluding the full payment, performance and discharge of the Secured Obligations) which, but for this provision, might operate to discharge, impair, prejudice or otherwise affect the rights of the Assignee under the Lease Agreement, this Assignment or any other Lease Document or which, but for this provision, might constitute a legal or equitable discharge of the security hereby created; not be discharged, impaired, prejudiced or otherwise affected by any failure by the Assignee to take or enforce any other security or guarantee taken or agreed to be taken for all or any of the Secured Obligations or under or pursuant to the Lease Agreement, this Assignment or any other Lease Document or otherwise; v