Case Doc 12 Filed 06/10/13 Page 1 of 32 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE. x : : : : : : : x.

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1 Case Doc 12 Filed 06/10/13 Page 1 of 32 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: EXIDE TECHNOLOGIES, Debtor x : : : : : : : x Chapter 11 Case No DEBTOR S MOTION FOR ORDER PURSUANT TO 11 U.S.C. 105, 361, 362, 363, 364, 1107, AND 1108 AND BANKRUPTCY RULE 6003 AUTHORIZING DEBTOR TO (I) MAINTAIN EXISTING INSURANCE POLICIES AND PAY ALL INSURANCE OBLIGATIONS ARISING THEREUNDER; (II) RENEW, REVISE, EXTEND, SUPPLEMENT, CHANGE, OR ENTER INTO NEW INSURANCE POLICIES; AND (III) CONTINUE TO HONOR INSURANCE PREMIUM FINANCING OBLIGATIONS Exide Technologies, the debtor and debtor in possession in the above-captioned case ( Exide or the Debtor ) hereby moves (the Motion ) this Court for entry of an order, pursuant to sections 105, 361, 362, 363, 364, 1107 and 1108 of title 11 of the United States Code (the Bankruptcy Code ) and Rule 6003 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ), authorizing, but not directing, the Debtor to: (i) maintain its existing insurance policies and pay all insurance obligations arising thereunder or in connection therewith; (ii) renew, revise, extend, supplement, change or enter into new insurance coverage and insurance premium financing as needed in its business judgment; and (iii) continue to honor insurance premium financing obligations. In support of the Motion, the Debtor relies upon and incorporates by reference the Declaration of Phillip A. Damaska in Support of Chapter 11 Petition and First Day Pleadings (the First Day Declaration ), filed with the Court concurrently 1 The last four digits of the Debtor s taxpayer identification number are The Debtor s corporate headquarters are located at Deerfield Parkway, Building 200, Milton, Georgia

2 Case Doc 12 Filed 06/10/13 Page 2 of 32 herewith. In further support of the Motion, the Debtor, by and through its proposed undersigned counsel, respectfully represents: JURISDICTION AND VENUE 1. This Court has jurisdiction to consider this Motion under 28 U.S.C. 157 and This is a core proceeding under 28 U.S.C. 157(b). Venue of this case and this Motion in this District is proper under 28 U.S.C and The legal predicates for the relief requested herein are sections 105, 361, 362, 363, 364, 1107 and 1108 of the Bankruptcy Code, and Bankruptcy Rule Pursuant to Rule (f) of the Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the District of Delaware (the Local Bankruptcy Rules ), the Debtor consents to the entry of a final judgment or order with respect to this Motion if it is determined that this Court would lack Article III jurisdiction to enter such final order or judgment absent the consent of the parties. BACKGROUND A. The Chapter 11 Case 4. On the date hereof (the Petition Date ), the Debtor commenced a case by filing a petition for relief under chapter 11 of the Bankruptcy Code (the Chapter 11 Case ). 2 2 The Debtor s predecessor has a chapter 11 case currently pending in this District (Case No ) (the Previous Chapter 11 Case ). The Previous Chapter 11 Case was filed on April 15, 2002, and the Debtor and certain of its U.S. subsidiaries emerged from chapter 11 on May 5, There is one claim remaining open in the Previous Chapter 11 Case. In addition, there is a pending adversary proceeding in which a settlement agreement to allow a general unsecured, non-priority claim has been approved by this Court, but is awaiting final approval from the state chancery court to become effective. The Debtor will confer with this Court regarding the disposition of the Previous Chapter 11 Case at the appropriate time. 2

3 Case Doc 12 Filed 06/10/13 Page 3 of The Debtor continues to operate its business and manage its property as debtor and debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. 6. To date, no creditors committee has been appointed by the United States Trustee. No trustee or examiner has been appointed in the Chapter 11 Case. B. The Debtor s Business 7. The Debtor, Exide, which together with its direct and indirect subsidiaries (collectively, the Company ), has operations in more than 80 countries, is a global leader in stored electrical energy solutions and one of the world s largest producers and recyclers of leadacid batteries. 8. The Company s four global business groups Transportation Americas, Transportation Europe and Rest of World ( ROW ), Industrial Energy Americas, and Industrial Energy Europe and ROW provide a comprehensive range of stored electrical energy products and services for industrial and transportation applications. The Company manufactures and distributes transportation and industrial batteries in North America, Europe, Asia, the Middle East, India, Australia, and New Zealand. In the transportation segments, the Company distributes and markets transportation batteries, which include starting, lighting, and ignition batteries for cars, trucks, off-road vehicles, agricultural and construction vehicles, motorcycles, recreational vehicles, marine, and other applications to a broad range of retailers, distributors of replacement or after-market batteries, and automotive original equipment manufacturers ( OEM ). The Company s industrial batteries consist of motive power batteries and network power applications. Motive power batteries are used in the material handling industry for equipment such as electric fork-lift trucks as well as in other machinery, including floor cleaning machinery, powered wheelchairs, railroad locomotives, mining equipment, and electric road 3

4 Case Doc 12 Filed 06/10/13 Page 4 of 32 vehicles. Network power batteries provide energy storage solutions for critical systems that require uninterrupted power supply and are used to power, among other things, telecommunications systems, computer installations and data centers, hospitals, air traffic control systems, security systems, electric utilities, railways, and various military applications. The Company has a diverse customer base that includes a number of major end-user customers, retail and OEM, and includes market winners and industry leaders. 9. The Debtor, headquartered in Milton, Georgia, operates 13 manufacturing facilities in the United States. The Debtor also operates approximately 74 branches 3 throughout North America, which sell and distribute batteries and other products to customers, battery specialists, retail stores, and OEM dealers. In addition, branch locations collect spent batteries for the Debtor s recycling facilities. Exide has five smelters, three of which are currently active battery collection and recycling facilities. 4 These facilities reclaim lead by recycling spent leadacid batteries, which are obtained for recycling from Exide s customers and outside spent-battery collectors. In fiscal year 2013, approximately 530,575 tons of batteries, plant scrap, and range lead were recycled at Exide s smelters or by a third party at Exide s request, which efforts enabled Exide to better control the cost of the principal raw material lead used in making its products. In the United States, the Debtor historically has obtained the vast majority of its lead requirements from its recycling operations On average, branch locations are approximately 20,000 square feet in size and are generally leased for periods of 29 to 42 months. The smelter furnaces melt lead from spent (i.e., expired) batteries to extract the lead so that it can be re-used to make new batteries. In contrast, the Company obtains the majority of its lead requirements for its ROW operations on the open market from third-party suppliers. 4

5 Case Doc 12 Filed 06/10/13 Page 5 of Additional factual background information about the Debtor, including its business operations, its corporate and capital structures, its restructuring efforts, and the events leading to the filing of the Chapter 11 Case, is set forth in detail in the First Day Declaration. 6 RELIEF REQUESTED 11. By this Motion, the Debtor requests entry of an order authorizing, but not directing, the Debtor to (i) maintain existing Insurance Policies (as defined below) and to pay on an uninterrupted basis all premiums, deductibles and administration fees (the Insurance Obligations ) arising thereunder or in connection therewith, including any Insurance Obligations for prepetition periods; (ii) renew, revise, extend, supplement, change or enter into new insurance policies as needed in its business judgment without further order of the Court; and (iii) continue to honor insurance premium financing obligations (the Premium Financing Obligations ). 12. The Debtor requests that the Court (a) authorize all banks to receive, process, honor and pay any and all checks, drafts, electronic transfers and other forms of payment used by the Debtor to pay the Insurance Obligations and Premium Financing Obligations, whether presented before, on or after the Petition Date; provided that there are sufficient good funds standing to the Debtor s credit in the applicable accounts to cover such payments and (b) authorize the Debtor to issue new postpetition checks to replace any checks, drafts and other forms of payment, or effect new postpetition electronic transfers, which may be inadvertently dishonored or rejected and to reimburse any expenses that may be incurred as a result of any bank s failure to honor a prepetition check. 6 Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the First Day Declaration. 5

6 Case Doc 12 Filed 06/10/13 Page 6 of For the reasons set forth herein, the Debtor submits that the relief requested is in the best interest of the Debtor, its estate, creditors, and other parties in interest, and therefore, should be granted. BASIS FOR RELIEF A. Overview of Insurance Policies 14. In the ordinary course of its business operations, the Debtor maintains various insurance policies providing coverage for, among other things, general liability, workers compensation liability, directors and officers liability, umbrella liability, automotive liability, pollution and remediation, crime, special risk, fiduciary liability, legal liability, property, and nuclear liability (collectively, the Insurance Policies ). For the policy period of 2012 to 2013, the total annual premiums under the Insurance Policies equaled approximately $9.9 million. The Insurance Policies, which the Debtor have obtained through third-party insurance carriers (collectively, the Insurance Carriers ), and their corresponding annual premiums, are listed on Exhibit A attached hereto. 7 As of the Petition Date, prepetition amounts due and owing pursuant to the Insurance Policies are approximately $1.2 million. By the Motion, the Debtor requests authorization, but not the direction, to pay these prepetition amounts. 15. The Insurance Policies are essential to the preservation of the value of the Debtor s business, property and assets. Not only are some of the Insurance Policies required by various regulations, laws and contracts that govern the Debtor s commercial activities, section 1112(b)(4)(C) of the Bankruptcy Code provides that failure to maintain appropriate insurance that poses a risk to the estate or to the public is cause for mandatory conversion or dismissal 7 The Debtor believes that Exhibit A is a complete list of its Insurance Policies. However, to the extent that any Insurance Policy has been omitted from that list, the Debtor requests that the order granting the relief sought herein apply to any and all of the Debtor s Insurance Policies in connection with the Insurance Programs. 6

7 Case Doc 12 Filed 06/10/13 Page 7 of 32 of a chapter 11 case. 11 U.S.C. 1112(b)(4)(C). Moreover, the Operating and Reporting Guidelines Issued for Debtor in Possession and Trustees by the Office of the United States Trustee for the District of Delaware (the Guidelines ) require the Debtor to maintain insurance coverage throughout the pendency of the Chapter 11 Case. B. Premium Financing Agreements 16. It is not always economically advantageous for the Debtor to pay the premiums on all of its insurance policies on a lump-sum basis. Accordingly, in the ordinary course of the Debtor s business, the Debtor finances the premiums on some of its policies pursuant to premium financing agreements ( PFAs ) with third-party lenders. 17. Exide has two outstanding PFAs (the Existing PFAs ) with AFCO Premium Credit LLC ( AFCO ), with whom the Debtor pays monthly installments. With respect to its first PFA with AFCO, the Debtor presently pays $33,400 per month. Under the first PFA, the Debtor is obligated to make, in addition to a down payment of $33,400, a total of nine monthly installment payments of $33,400 to AFCO on the 15th of each month. The first PFA covers a policy period of December 15, 2012 through December 14, 2013, and the first monthly installment payment for the current policy period was due on January 15, Under the second PFA, the Debtor is obligated to make, in addition to a down payment of $256,000, a total of ten monthly installment payments of $527,500 to AFCO on the first of each month. The second PFA covers a policy period of September 1, 2012 through August 31, 2013, and the first monthly installment payment for the current policy period was due October 1, Copies of the Existing PFAs are attached hereto as Exhibit B attached hereto. 18. If the Debtor is unable to continue making payments on the Existing PFAs, AFCO will be permitted to terminate the Policies to recoup their losses. The Debtor would then be required to obtain replacement insurance on an expedited basis and at tremendous 7

8 Case Doc 12 Filed 06/10/13 Page 8 of 32 cost to the estate. If the Debtor is required to obtain replacement insurance and to pay a lump sum premium for such insurance policy in advance this payment would be likely greater than what the Debtor currently pays. Even if these Insurance Providers were not permitted to terminate the agreements, any interruption of payment would have a severe, adverse effect on the Debtor s ability to finance premiums for future policies. 19. In light of the importance of maintaining insurance coverage with respect to its business activities and preserving liquidity by financing its insurance premiums, the Debtor believes it is in the best interest of its estate to receive Court approval to honor its obligations under the PFAs and, as necessary, renew or enter into new such agreements. C. Workers Compensation 20. Under the laws of the various jurisdictions in which it operates, the Debtor is required to maintain policies and programs to provide Employees with workers compensation benefits (the Workers Compensation Benefits ). The Debtor s primary workers compensation insurance is provided by Zurich American Insurance Company ( Zurich ) under a high deductible program and is administered by TristarREM (the WC Policy ). 8 In connection with the WC Policy, the Debtor pays monthly premiums to March USA of approximately $978,300 (including surcharges), which are subsequently disbursed to Zurich. The Debtor has also posted a letter of credit in favor of Zurich, of which the amount outstanding is $20,868,000 for claim runoff collateral. As of the Petition Date, approximately 300 claims were pending for which the Debtor had reserved approximately $13,377, As administrator of the WC Policy, 8 9 To the extent that any claim predates the Debtor s relationship with TristarREM or a claim is for over $1,000,000, Zurich manages such claims and is paid directly by the Debtor on a monthly basis. At this time, there are no claims exceeding $1,000,000. This is amount is unfunded and reflects reserves less the prepaid amounts as of March 31,

9 Case Doc 12 Filed 06/10/13 Page 9 of 32 TristarREM pays the total of all benefits, damages and expenses resulting from any accident or disease for which the Debtor is legally liable. The Debtor reimburses TristarREM each month for all such payments made on its behalf (up to the deductible and/or policy year limits). 21. Failure to maintain workers compensation insurance could result in administrative or legal proceedings against the Debtor and its officers and directors. In accordance with this obligation, the Debtor maintains workers compensation insurance policies in all jurisdictions where it operates. Accordingly, the Debtor seeks authority to pay all workers compensation obligations, including any outstanding insurance premiums and any other amounts related to prepetition workers compensation claims as they become due in the ordinary course of the Debtor s business. In addition, the Debtor seeks to honor the Workers Compensation Benefits and continue the Workers Compensation Benefits in the ordinary course on a postpetition basis in accordance with prepetition practices. APPLICABLE AUTHORITY A. Payment of the Insurance Obligations and Premium Financing Obligations and Maintenance of the Insurance Programs Is Necessary To Comply with Applicable Law, the Terms of the Debtor s Customer Contracts, and the Requirements of the U.S. Trustee. 22. Maintenance of insurance coverage under the various Insurance Policies is required under the Guidelines, the laws of the various states in which the Debtor operates, and the Debtor s various financial agreements. See Guidelines 3 (requiring proof of insurance coverage). Given these requirements, the maintenance of the Debtor s Insurance Programs and Insurance Policies through payment of the Insurance Obligations and Premium Financing Obligations and the renewal, revision, extension, supplementation, change, or entering into new insurance coverage, as needed in the Debtor s business judgment without further order of the Court is necessary and essential to the Debtor s operation of its business during this Chapter 11 9

10 Case Doc 12 Filed 06/10/13 Page 10 of 32 Case. In addition, the Debtor is required to maintain insurance under many of its customer contracts. Because such contracts are the source of the vast majority of the Debtor s revenue, the Debtor s inability to maintain insurance coverage would be disastrous and could doom the Debtor s prospects for a successful reorganization to the detriment of all stakeholders. B. The Bankruptcy Code, the Necessity of Payment Doctrine and the U.S. Trustee Guidelines Support Payment of the Insurance Obligations and Premium Financing Obligations. 23. Bankruptcy Code section 363(b)(1) provides: The trustee, after notice and a hearing, may use, sell, or lease, other than in the ordinary course of business, property of the estate U.S.C. 363(b)(1). Section 363(b)(1), operating in conjunction with Bankruptcy Code section 105(a) and the judicially created necessity of payment doctrine, support the proposed payments of Insurance Obligations and Premium Financing Obligations. The Debtor submits that the use of estate funds for the payment of any Insurance Obligations and Premium Financing Obligations are necessary costs of preserving its estate, and is permitted under Bankruptcy Code sections 1107 and 1108, which require the Debtor to honor its fiduciary duties as debtor in possession. Moreover, the U.S. Trustee Guidelines require maintenance of the Insurance Obligations. 24. Under the necessity of payment doctrine and Bankruptcy Code section 105(a), courts have consistently permitted immediate payment of prepetition obligations where necessary to preserve or enhance the value of a debtor s estate of the benefit of all creditors. See, e.g., Miltenberger v. Logansport Ry. Co., 106 U.S. 286, 309 (1882). The modern application of the doctrine of necessity is largely unchanged from the Court s reasoning in Miltenberger. See In re Lehigh & New Eng. Ry. Co., 657 F.2d 570, (3d Cir. 1981) ( [I]n order to justify payment under the necessity of payment rule, a real and immediate threat must exist that failure to pay will place the continued operation of the [debtor] in serious jeopardy. ); see also In re Just 10

11 Case Doc 12 Filed 06/10/13 Page 11 of 32 for Feet, Inc., 242 B.R. 821, 825 (Bankr. D. Del. 1999) ( The Supreme Court, the Third Circuit and the District of Delaware all recognize the court s power to authorize payment of pre-petition claims when such payment is necessary for the debtor s survival during chapter 11. ); In re Columbia Gas Sys., Inc., 171 B.R. 189, (Bankr. D. Del. 1994). C. Payment of the Insurance Obligations and Premium Financing Obligations Is Authorized Under Bankruptcy Code Sections 1107(a) and Payment of the Insurance Obligations and Premium Financing Obligations is also authorized under Bankruptcy Code sections 1107 and The Debtor, operating its business as debtor in possession under Bankruptcy Code sections 1107(a) and 1108, is a fiduciary holding the bankruptcy estate and operating the business for the benefit of its creditors and (if the value justifies) equity owners. In re CoServ, L.L.C., 273 B.R. 487, 497 (Bankr. N.D. Tex. 2002). Implicit in the duties of a chapter 11 debtor in possession is the duty to protect and preserve the estate, including an operating business s going-concern value. Id. 26. Payment of the Insurance Obligations and Premium Financing Obligations and the renewal, revision, extension, supplementation, change or entering into new insurance policies, as needed in the Debtor s business judgment, are necessary to ensuring the Debtor s ongoing operations. As noted above, insurance coverage is required by the Guidelines. Moreover, as fiduciary for the bankruptcy estate, the Debtor could be violating its duties if it in any way jeopardizes the coverage provided under the Insurance Policies. 27. As described above, non-payment of the Insurance Obligations and Premium Financing Obligations could result in cancellation of the Insurance Policies, in which case the Debtor would not only be in violation of the Guidelines, the laws of various states in which the Debtor operates and various contractual agreements, but also may be unable to find alternative insurance coverage and consulting services, or find such alternatives only at a much 11

12 Case Doc 12 Filed 06/10/13 Page 12 of 32 higher cost than the Debtor currently incurs. Therefore, the potential harm and economic disadvantage that would stem from the cancellation of the Insurance Policies, and failure to renew the Insurance Policies or revise, extend, supplement, change or enter into new insurance arrangements as needed in the Debtor s business judgment, are grossly disproportionate to the amount of the Insurance Obligations and Premium Financing Obligations, and the costs to renew, revise, extend, supplement, change or enter into new insurance coverage. 28. Accordingly, to meet its fiduciary duties as debtor in possession under Bankruptcy sections 1107(a) and 1108, the Debtor must be authorized to pay the Insurance Obligations and Premium Financing Obligations and to renew, revise, extend, supplement, change or enter into new Insurance Policies, as needed in its business judgment. The Debtor thus seeks authority to pay all Insurance Obligations and Premium Financing Obligations that may become due with respect to the Insurance Policies if such payment is necessary in its business judgment in order to avoid cancellation or interruption of insurance coverage. In addition, the Debtor seeks authority to renew, revise, extend, supplement, change or enter into new Insurance Policies, as needed in its business judgment. D. Payment of the Premium Financing Obligations Is Warranted Under Sections 361, 362 and 363 of the Bankruptcy Code. 29. Pursuant to the PFAs, AFCO maintains a security interest in unearned premiums (the Unearned Premiums ). Security interests created by premium financing agreements generally are recognized as secured claims in bankruptcy to the extent of the amount of unearned premiums financed pursuant to such agreements. See TIFCO, Inc. v. U.S. Repeating Arms Co. (In re U.S. Repeating Arms Co.), 67 B.R. 990, (Bankr. D. Conn. 1986); Drabkin v. A.I. Credit Corp. (In re Auto-Train Corp.), 9 B.R. 159, (Bankr. D.D.C. 1981). As a secured creditor, AFCO would be entitled to seek relief from the automatic stay, either to 12

13 Case Doc 12 Filed 06/10/13 Page 13 of 32 cancel the financed policies in accordance with the terms of the PFAs, or to seek adequate protection of its investment. See Universal Motor Express, 72 B.R. at 211 (recognizing that a default under the financing arrangement and the resulting decline in value of the unearned premiums justified relief from the automatic stay). 30. As secured creditors, insurance premium financiers are entitled to adequate protection of the value of their security to protect them against diminution in the value of their collateral. Adequate protection may take many forms, including relief from the automatic stay and authority to apply unearned premiums to the outstanding debt. Where the unearned premiums have diminished to less than the amount of the outstanding debt, cash payments may suffice as adequate protection of the insurance premium financier s interest. See TIFCO, 67 B.R. at Accordingly, AFCO may be entitled to adequate protection of its interests in the Unearned Premiums under section 363(e) of the Bankruptcy Code. The Debtor s failure to provide such adequate protection for example by failing to pay the ongoing installments due under the PFAs may constitute cause under section 362(d) of the Bankruptcy Code for AFCO to obtain relief from the automatic stay and terminate the financed policies. 32. In addition, under the terms of the PFAs, AFCO may cancel the financed policies for non-payment and may accelerate and declare due and payable the entire unpaid premiums upon the Debtor s failure to pay the monthly Premium Financing Obligations. Because the Debtor is required to maintain insurance coverage during the Chapter 11 Case, the cancellation of these policies would be particularly disastrous. See Guidelines Even if the Debtor was successful in preventing AFCO from lifting the automatic stay to pursue its remedies, such litigation likely would be contested and costly to the 13

14 Case Doc 12 Filed 06/10/13 Page 14 of 32 Debtor s estate and would distract the Debtor and its employees from its efforts towards consummating a sale transaction. More importantly, if unsuccessful in the automatic stay litigation, the Debtor may be unable to find a carrier willing to provide it similar insurance coverage or a company willing to finance the premiums without charging significantly higher premiums and fees. 34. Courts in this district have routinely granted the same or similar relief as requested in this Motion to chapter 11 Debtor. See, e.g., In re LCI Holding Company, Inc., Case No (KG) (Bankr. D. Del. Dec. 13, 2012); In re WP Steel Venture LLC, Case No (KJC) (Bankr. D. Del. Jun. 1, 2012); In re AFA Inv. Inc., Case No (MFW) (Bankr. D. Del. Apr. 3, 2012); In re Pemco World Air Servs., Inc., Case No (MFW) (Bankr. D. Del. Mar. 6, 2012); In re Filene s Basement, LLC, Case No (KJC) (Bankr. D. Del. Nov. 4, 2011); In re DSI Holdings, Inc., Case No (KJC) (Bankr. D. Del. June 28, 2011); In re Ambassadors Int l, Inc., Case No (KG) (Bankr. D. Del. Apr. 5, 2011). RESERVATION OF RIGHTS 35. Nothing contained herein is or should be construed as: (a) an admission as to the validity of any claim against the Debtor; (b) a waiver of the Debtor s rights to dispute any claim on any grounds; (c) a promise to pay any claim; (d) an assumption or rejection of any executory contract or unexpired lease pursuant to section 365 of the Bankruptcy Code; or (e) otherwise affecting the Debtor s rights under Bankruptcy Code section 365 to assume or reject any executory contract or unexpired lease with any party subject to this Motion. 14

15 Case Doc 12 Filed 06/10/13 Page 15 of 32 IMMEDIATE RELIEF IS NECESSARY TO AVOID IMMEDIATE AND IRREPARABLE HARM 36. Bankruptcy Rule 6003 provides that the relief requested in this Motion may be granted if the relief is necessary to avoid immediate and irreparable harm. Fed. R. Bankr. P. 6003; see also In re First NLC Fin. Servs., LLC, 382 B.R. 547, (Bankr. S.D. Fla. 2008) (holding that Rule 6003 permits entry of retention orders on an interim basis to avoid irreparable harm). The Third Circuit has interpreted the language immediate and irreparable harm in the context of preliminary injunctions. In that context, the court has instructed that irreparable harm is a continuing harm which cannot be adequately redressed by final relief on the merits and for which money damages cannot provide adequate compensation. See, e.g., Norfolk S. Ry. Co. v. City of Pittsburgh, 235 Fed. App x 907, 910 (3d Cir. 2007) (citing Glasco v. Hills, 558 F.2d 179, 181 (3d Cir. 1977)). Furthermore, the harm must be shown to be actual and imminent, not speculative or unsubstantiated. See, e.g., Acierno v. New Castle County, 40 F.3d 645, (3d Cir. 1994). The Debtor submits that the Insurance Policies are necessary, and for the reasons already set forth herein, the relief requested in this Motion is necessary to avoid immediate and irreparable harm to the Debtor. WAIVER OF STAY UNDER BANKRUPTCY RULE 6004(h) 37. The Debtor also requests that the Court waive the stay imposed by Bankruptcy Rule 6004(h), which provides that [a]n order authorizing the use, sale, or lease of property other than cash collateral is stayed until the expiration of 14 days after entry of the order, unless the court orders otherwise. Fed. R. Bankr. P. 6004(h). As described above, the relief that the Debtor seeks in this Motion is necessary for the Debtor to operate its business without interruption and to preserve value for its estate. Accordingly, the Debtor respectfully 15

16 Case Doc 12 Filed 06/10/13 Page 16 of 32 requests that the Court waive the fourteen (14) day stay imposed by Bankruptcy Rule 6004(h), to the extent applicable, as the exigent nature of the relief sought herein justifies immediate relief. NOTICE 38. Notice of the Motion will be given to: (i) the Office of the United States Trustee for the District of Delaware; (ii) the Office of the United States Attorney for the District of Delaware; (iii) counsel to the agent under the proposed debtor in possession financing; (iv) counsel to the agent for the Debtor s prepetition secured lenders; (v) the indenture trustee for each of the Debtor s secured and unsecured outstanding bond issuances; (vi) counsel to the unofficial committee of senior secured noteholders; (vii) the Internal Revenue Service; (viii) the Securities and Exchange Commission; (ix) the Insurance Carriers; (x) all applicable banks and other financial institutions; (xi) the parties included on the Debtor s list of twenty (20) largest unsecured creditors; and (xii) all parties entitled to notice pursuant to Local Bankruptcy Rule (m) (collectively, the Notice Parties ). The Debtor submits that no other or further notice need be provided. Court or any other court. NO PRIOR REQUEST 39. No previous request for the relief sought herein has been made to this 16

17 Case Doc 12 Filed 06/10/13 Page 17 of 32 CONCLUSION WHEREFORE, the Debtor respectfully requests that the Court enter an order, substantially in the form annexed hereto, granting the relief requested in the Motion and such other and further relief as may be just and proper. Dated: Wilmington, Delaware June 10, 2013 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP /s/ Anthony W. Clark Anthony W. Clark (I.D. No. 2051) One Rodney Square P.O. Box 636 Wilmington, Delaware Telephone: (302) Fax: (302) and - Kenneth S. Ziman (pro hac vice admission pending) J. Eric Ivester (pro hac vice admission pending) Four Times Square New York, New York Telephone: (212) Fax: (212) and - James J. Mazza, Jr. (pro hac vice admission pending) 155 N. Wacker Dr. Chicago, Illinois Telephone: (312) Fax: (312) Proposed Counsel for Debtor and Debtor in Possession 17

18 Case Doc 12 Filed 06/10/13 Page 18 of 32 EXHIBIT A Schedule of Insurance Policies

19 Case Doc 12 Filed 06/10/13 Page 19 of 32 Policy Type General Liability (US); General Liability (Canada) & Foreign General Liability Master DIC Policy Number(s) GLO ; ; UIC Exhibit A Schedule of Insurance Policies Effective Date Expiration Date 07/01/ /01/2013 Zurich American Ins. Co. & Zurich Insurance Company Carrier Premium 1 $395,025 Foreign / FOS Policy /01/ /01/2013 Zurich Insurance Plc, UK Branch --- Automobile Liability BAP /01/ /01/2013 Zurich American Ins. Co. $503,631 (AOS) & AF Workers' Compensation WC (AOS); WC (MA, WI); UIC /01/ /01/2013 American Zurich Insurance Company & Zurich American Ins. Co. $975,601 Umbrella Liability ($25M Excess of XOO G /01/ /01/2013 ACE Property & Casualty Insurance $533,505 Primary) Company Excess Liability ($25M xs $25M) US LI11A 07/01/ /01/2013 XL Insurance America, Inc. $125,000 Excess Liability ($25M xs $50M) EXC /01/ /01/2013 Great American Insurance Co. of NY $75,000 Excess Liability ($25M xs $75M) AEC /01/ /01/2013 American Zurich Insurance Company $50,501 Pollution and Remediation Legal Liability (Domestic & Canadian) PEC Domestic 12/15/ /15/2013 Greenwich Insurance Company $329,803 PCN Canadian 12/15/ /15/2013 XL Ins. Company Limited Environmental Freedom of Services ES EV10A 5/15/2010 5/14/2013 XL Ins. Co. Limited --- Policy Spain Environmental Freedom of Services Policy (Portugal) Closure/Post Closure (MS, TX, GA) PEC /15/ /15/2013 Indian Harbor Ins. Company $537,676 1 The premium amounts do not include taxes and fees.

20 Case Doc 12 Filed 06/10/13 Page 20 of 32 Policy Type Policy Number(s) Effective Date Expiration Date Carrier Premium 1 Closure/Post Closure PEC /15/ /14/2013 Indian Harbor Ins. Company --- Property All Risks (Canada) COM /18/2013 Royal & Sun Alliance Insurance Company --- of Canada Boiler & Machinery (Canada) EBI /18/2013 Royal & Sun Alliance Insurance Company --- of Canada Global Property Program US PR12A 09/01/ /01/2013 XL Insurance America, Inc. $1,235,920 PGL N /01/ /01/2013 ACE American Insurance Company $475, /01/ /01/2013 Westport Insurance Corporation $665,000 PPR /01/ /01/2013 Zurich American Insurance Company $308,750 AJJ130728B12 09/01/ /01/2013 Certain Underwriters at Lloyds Syndicate $118, via Validus Group 4NAAG60v002 09/01/ /01/2013 Liberty Mutual Insurance Company $332,500 XPD /01/ /01/2013 HDI-Gerling American Insurance Company $132,000 DP /01/ /01/2013 Lloyds of London $224,250 DP /01/ /01/2013 Lloyds of London $1,306,250 P000431/010 09/01/ /01/2013 Allied World Assurance Company Ltd. $299,000 PRP /01/ /01/2013 Arch Insurance (Bermuda) a division of $176,000 Arch Reinsurance Ltd. Australia Local Property Policy AU PR12A 09/01/ /01/2013 XL s EuroPass --- Canada Local Property Policy CA PR12A 09/01/ /01/2013 XL s EuroPass --- China Local Property Policy BC PR12A 09/01/ /01/2013 XL s EuroPass --- Mexico Local Property Policy MX PR12A 09/01/ /01/2013 XL s EuroPass --- New Zealand Local Property Policy AU PR12A 09/01/ /01/2013 XL s EuroPass --- Poland Local Property Policy PL PR12A 09/01/ /01/2013 XL s EuroPass --- XL Europass Policy GB PR12A 09/01/ /01/2013 XL s EuroPass --- Austria (EP) Local Property Policy --- Belgium (EP) Local Property Policy --- Denmark (EP) Local Property Policy --- Finland (EP) Local Property Policy --- France (EP) Local Property Policy --- 2

21 Case Doc 12 Filed 06/10/13 Page 21 of 32 Policy Type Policy Number(s) Effective Date Expiration Date Carrier Premium 1 Germany (EP) Local Property Policy --- Italy (EP) Local Property Policy --- Netherlands (EP) Local Property --- Policy Norway (EP) Local Property Policy --- Portugal (EP) Local Property Policy --- Spain (EP) Local Property Policy --- Sweden (EP) Local Property Policy --- UK (EP) Local Property Policy --- India Local Property Policy TBD 09/01/ /01/2013 XL s EuroPass --- Belarus Local Property Policy TBD 09/01/ /01/2013 XL s EuroPass --- Russia Local Property Policy TBD 09/01/ /01/2013 XL s EuroPass --- California Earthquake ELF /01/ /01/2013 Axis Surplus Insurance Company $45,000 California Earthquake SHR /01/ /01/2013 Shelter Reinsurance Company $15,000 California Earthquake 12MP /01/ /01/2013 American Empire Surplus Lines Insurance $15,000 Company California Earthquake SHR /01/ /01/2013 Shelter Reinsurance Company $5,625 California Earthquake NSAUK090 09/01/ /01/2013 Aspen Insurance UK Ltd. $16,875 Directors & Officers Liability /05/ /05/2014 Federal Ins. Co. $650,000 Excess Directors & Officers Liability DOC /05/ /05/2014 Zurich American Ins. Co. $341,250 Excess Directors & Officers Liability /05/ /05/2014 Travelers Casualty & Surety Company of $276,000 America Excess Directors & Officers Liability MAN739296/01/ /05/ /05/2014 AXIS Ins. Co. $243,500 Excess Directors & Officers Liability /05/ /05/2014 Continental Casualty Co. $206,000 Excess Side A DIC Directors & /05/ /05/2014 Allied World National Assurance Co. $195,000 Officers Liability Excess Side A DIC Directors & /05/ /05/2014 Federal Ins. Co. $127,000 Officers Liability Excess Side A DIC Directors & /05/ /05/2014 Illinois National Insurance Co. $63,500 Officers Liability Fiduciary Liability /05/ /05/2014 Federal Ins. Co. $102,905 Crime /05/ /05/2014 Federal Ins. Co. $100,000 3

22 Case Doc 12 Filed 06/10/13 Page 22 of 32 Policy Type Employment Practices Liability (EPL) Policy Number(s) EPLI Effective Date Expiration Date Carrier Premium 1 05/05/ /05/2014 Alterra Bermuda $145, CHISR02A - MSW 4

23 Case Doc 12 Filed 06/10/13 Page 23 of 32 EXHIBIT B Premium Financing Agreements CHISR02A - MSW

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30 Case Doc 12 Filed 06/10/13 Page 30 of 32 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: EXIDE TECHNOLOGIES, Debtor x : : : : : : : x Chapter 11 Case No Related Docket No. ORDER GRANTING DEBTOR S MOTION FOR ORDER PURSUANT TO 11 U.S.C. 105, 361, 362, 363, 1107 AND 1108 AND FED. R. BANKR. P AUTHORIZING DEBTOR TO (I) MAINTAIN EXISTING INSURANCE POLICIES AND PAY ALL INSURANCE OBLIGATIONS ARISING THEREUNDER AND (II) RENEW, REVISE, EXTEND, SUPPLEMENT, CHANGE OR ENTER INTO NEW INSURANCE POLICIES Upon the motion (the Motion ) 2 of the Debtor for an order, pursuant to sections 105, 351, 362, 363, 1007, and 1008 of title 11 of the United States Code (the Bankruptcy Code ), and Rule 6003 of the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules ) authorizing, but not directing, the Debtor to (i) maintain existing insurance policies and pay all insurance obligations arising thereunder; (ii) renew, revise, extend, supplement, change or enter into new insurance coverage and insurance premium financing as needed in their business judgment; and (iii) continue to honor insurance premium financing obligations; and upon the First Day Declaration; and due and sufficient notice of the Motion having been given under the particular circumstances; and it appearing that no other or further notice need be provided; and it appearing that the relief requested by the Motion is in the best interests of the Debtor, its estate, its creditors, its stakeholders, and other parties in interest; and after due deliberation thereon, and 1 2 The last four digits of the Debtor s taxpayer identification number are The Debtor s corporate headquarters are located at Deerfield Parkway, Building 200, Milton, Georgia Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Motion.

31 Case Doc 12 Filed 06/10/13 Page 31 of 32 sufficient cause appearing therefor, it is hereby ORDERED, ADJUDGED AND DECREED that: 1. The Motion is GRANTED as set forth herein. 2. The Debtor is authorized, but not directed, to maintain its Insurance Policies and to pay the Insurance Obligations and Premium Financing Obligations arising under or in connection with the Insurance Policies as such Insurance Obligations and Premium Financing Obligations become due. The Debtor is authorized, but not directed, to pay of all Insurance Obligations and Premium Financing Obligations attributable to the prepetition period. 3. Without further order of this Court, the Debtor is authorized, but not directed, to renew, revise, extend, supplement, change or enter into new insurance coverage and premium financing agreements as needed in its business judgment. 4. The Debtor is authorized, but not directed, to continue its insurance premium financing and to pay its regular monthly installment payments under the PFAs as the same become due. 5. All applicable banks and other financial institutions are authorized to rely on the Debtor s direction to pay amounts in accordance with this Order provided that there are sufficient good funds standing in the Debtor s credit in the applicable accounts to make the payments and all applicable banks shall not have any liability to any party for relying on the Debtor s direction. 6. Neither the provisions contained herein, nor any actions or payments made by the Debtor pursuant to this order, shall be deemed an admission as to the validity of the underlying obligation or a waiver of any rights the Debtor or any other party in interest may have to subsequently dispute such obligation on any ground that applicable law permits. 2

32 Case Doc 12 Filed 06/10/13 Page 32 of Nothing in this order or the Motion shall be deemed to constitute postpetition assumption or adoption of any agreement under Bankruptcy Code section 365. Notwithstanding the relief granted herein and any actions taken hereunder, nothing herein shall create, nor is intended to create, any rights in favor of, or enhance the status of any claim held by, any person. 8. To the extent that there may be any inconsistency between the terms of the interim or final order approving the proposed debtor in possession financing, if and when entered, and this Order, the terms of the interim or final order approving the proposed debtor in possession financing, as applicable, shall govern. 9. The Court finds and determines that the requirements of Bankruptcy Rule 6003 are satisfied and that the relief requested is necessary to avoid immediate and irreparable harm. 10. Notwithstanding Bankruptcy Rule 6004(h), this order shall be effective and enforceable immediately upon entry hereof. 11. This Court shall retain jurisdiction with respect to all matters arising from or related to the implementation or interpretation of this order. Dated: Wilmington, Delaware, 2013 UNITED STATES BANKRUPTCY JUDGE WILSR01A - MSW 3