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Nicole L. Greenblatt, P.C. Whitney Fogelberg (pro hac vice pending)Susan D. Golden KIRKLAND & ELLIS LLPKIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLPKIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street601 Lexington Avenue Chicago, Illinois 60654New York, New York 10022 Telephone: (312) 862-2000Telephone: (212) 446-4800 Facsimile: (312) 862-2200Facsimile: (212) 446-4900

Proposed Counsel to the Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK

)In re: ) Chapter 11

)LAKELAND TOURS, LLC, et al.,1 ) Case No. 20-11647 (___)

)Debtors. ) (Joint Administration Requested)

)

DEBTORS’ MOTION FOR ENTRY OF INTERIM AND FINAL

ORDERS (I) AUTHORIZING THE PAYMENT OF CERTAIN PREPETITION TAXES AND FEES AND (II) GRANTING RELATED RELIEF

The above-captioned debtors and debtors in possession (collectively, the “Debtors”)

respectfully state as follows in support of this motion (this “Motion”):2

Relief Requested

1. The Debtors seek entry of interim and final orders, substantially in the forms

attached hereto as Exhibit A and Exhibit B (respectively, the “Interim Order” and “Final Order”),

(a) authorizing the Debtors to negotiate, remit, and pay (or use applicable credits or overpayments

1 A complete list of each of the Debtors in these chapter 11 cases may be obtained on the website of the Debtors’ proposed claims and noticing agent at https://cases.stretto.com/WorldStrides. The location of the Debtors’ service address in these chapter 11 cases is: 49 West 45th Street, New York, NY 10036.

2 A detailed description of the Debtors and their business, and the facts and circumstances supporting this Motion are set forth in the Declaration of Kellie Goldstein, Chief Financial Officer of Lakeland Tours, LLC d/b/a WorldStrides, (I) In Support of Chapter 11 Petitions and First Day Pleadings and (II) Pursuant to Local Bankruptcy Rule 1107-2 (the “First Day Declaration”), filed contemporaneously with the commencement of these chapter 11 cases and incorporated by reference herein.

20-11647 Doc 12 Filed 07/21/20 Entered 07/21/20 04:52:05 Main Document Pg 1 of 32

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to offset) certain accrued and outstanding prepetition obligations accrued in the ordinary course of

business on account of the Taxes and Fees (as defined herein), including those obligations

subsequently determined upon audit or otherwise to be owed for periods prior to the Petition Date;

(b) authorizing the Debtors to continue paying the Taxes and Fees accrued in the ordinary course

of business on a postpetition basis; and (c) granting related relief. In addition, the Debtors request

that the Bankruptcy Court schedule a final hearing to consider approval of this Motion on a final

basis.

Jurisdiction and Venue

2. The United States Bankruptcy Court for the Southern District of New York

(the “Bankruptcy Court”) has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334

and the Amended Standing Order of Reference from the United States District Court for the

Southern District of New York, dated January 31, 2012. The Debtors confirm their consent,

pursuant to rule 7008 of the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), to

the entry of a final order by the Bankruptcy Court in connection with this Motion to the extent that

it is later determined that the Bankruptcy Court, absent consent of the parties, cannot enter final

orders or judgments in connection herewith consistent with Article III of the United States

Constitution.

3. Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409.

4. The bases for the relief requested herein are sections 105(a), 363(b), 507(a)(8), and

541 of title 11 of the United States Code (the “Bankruptcy Code”), Bankruptcy Rules 6003 and

6004, and Rule 9013-1(a) of the Local Bankruptcy Rules for the Southern District of

New York (the “Local Rules”).


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Background

5. The Debtors, together with their non-Debtor affiliates, provide full-service

educational travel and experiential learning programs domestically and internationally for students

from K12 to graduate level. The Debtors are the United States’ largest accredited travel company,

providing organized educational travel and other experiential learning programs for more than

550,000 students in 2019. The Debtors generated approximately $650 million in net revenue in

fiscal year 2019, and employ approximately 1,500 people domestically and internationally. The

Debtors have historically enjoyed a stable position as the preeminent provider of educational

travel. However, the Debtors’ businesses have sustained significant losses as a result of the

worldwide shutdown of travel due to the COVID-19 pandemic, with additional constraints to

liquidity anticipated in August and September 2020 as the Debtors continue to provide customer

refunds. As of July 20, 2020, (the “Petition Date”), the Debtors have approximately $768 million

in funded debt obligations.

6. Prior to the Petition Date, the Debtors entered into a restructuring support

agreement (the “Restructuring Support Agreement”) with their key stakeholders, including

approximately 85% of the holders of the Debtors’ senior secured credit facility, their consenting

hedge provider J. Aron & Company, and their sponsors, Eurazeo North America and Primavera

Capital Management Ltd. (the “Sponsors”), and launched solicitation of a prepackaged plan of

reorganization (the “Plan”). The Debtors have commenced these chapter 11 cases to effectuate

the transactions contemplated in the Restructuring Support Agreement and the Plan to restructure

their funded debt, while ensuring that the financial restructuring will have a minimal impact on the

Debtors’ operations, their key business partners, and their customers.

7. On the Petition Date, each of the Debtors filed a voluntary petition for relief under

chapter 11 of the Bankruptcy Code. The Debtors are operating their businesses and managing


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their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the

Bankruptcy Code. Concurrently with the filing of this Motion, the Debtors have requested

procedural consolidation and joint administration of these chapter 11 cases pursuant to

Bankruptcy Rule 1015(b).

The Debtors’ Tax and Fee Obligations

I. Overview of the Debtors’ Tax and Fee Obligations.

8. In the ordinary course of business, the Debtors collect, incur, remit, withhold,

and/or pay income taxes, sales taxes, use taxes, franchise taxes, gross receipt taxes, withholding

taxes, payroll taxes, annual report and licensing fees, property taxes, and other taxes, fees, fines,

penalties, assessments and similar charges (collectively, the “Taxes and Fees”).3 The Debtors

remit and/or pay the Taxes and Fees to various federal, state, and local governments, including

taxing and licensing authorities on a monthly, quarterly, or annual basis depending on the nature

and incurrence of a particular Tax or Fee (collectively, the “Authorities”). A schedule identifying

the Authorities is attached hereto as Exhibit C.4 Taxes and Fees are remitted and paid by the

Debtors through checks and electronic transfers that are processed through their banks and other

financial institutions. From time to time, the Debtors also receive tax credits for overpayments or

refunds in respect of Taxes and Fees. The Debtors use these credits in the ordinary course of

business to offset against future Taxes and Fees or have such amounts refunded to the Debtors.

3 By this motion, the Debtors do not seek the authority to collect and remit state and federal employee-related withholding taxes. Such relief is instead requested in the Debtors’ Motion Seeking Entry of an Order (I) Authorizing, But Not Directing, the Debtors to (A) Pay Prepetition Employee Wages, Salaries, Other Compensation, and Reimbursable Employee Expenses and (B) Continue Employee Benefits Programs and (II) Granting Related Relief, filed contemporaneously herewith.

4 Although Exhibit C is intended to be comprehensive, the Debtors may have inadvertently omitted one or more Authorities. By this motion, the Debtors request relief applicable to all Authorities, regardless of whether such Authority is specifically identified on Exhibit C.


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9. The Debtors estimate that approximately $13,900.00 in Taxes and Fees relating to

the prepetition period (including so-called “straddle” periods)5 are or will become due and owing

to the Authorities after the Petition Date in the ordinary course, in connection with audits, or in

connection with resolutions or statutory “amnesty” provisions. The Debtors estimate that no

Taxes and Fees relating to the prepetition period are or will become due and owing to the

Authorities within the first 30 days of these chapter 11 cases.6 However, out of an abundance of

caution, the Debtors seek authority, but not direction, to pay any amounts that come due.7

10. The following table contains descriptions of the Taxes and Fees, as well as

the Debtors’ estimate of the amounts of the Taxes and Fees accrued as of the Petition Date:

Category Description

Approximate Amount Accrued as of Petition Date

Approximate Amount Due

within 30 days

Sales and Use Taxes

The Debtors collect and remit sales, use, and related taxes to the Authorities in various states (the “Sales and Use Taxes”).

$13,200.00 $0

5 Claims for so-called “straddle” Taxes and Fees may be entitled to administrative claim treatment pursuant to section 503(b)(1)(B) of the Bankruptcy Code. A recent Delaware bankruptcy court decision held that the portion of a “straddle” tax claim that is attributable to the prepetition portion of a “straddle” period is not entitled to administrative priority and, in fact, is not entitled to priority under section 507(a)(8)(A) of the Bankruptcy Code. See In re Affirmative Ins. Holdings, Inc., 607 B.R. 175, 188 (Bankr. D. Del. 2019). Because the Debtors could be subject to late payment penalties and interest in the event they do not pay such “straddle” Taxes and Fees and a court ultimately concludes that such taxes are entitled to administrative treatment, the Debtors are seeking the authority to pay such “straddle” Taxes and Fees as they become due under applicable law. The Debtors reserve their rights with respect to the proper characterization of such “straddle” Taxes and Fees and to seek reimbursement of any portion of a payment that was made that ultimately is not entitled to administrative or priority treatment.

6 Contemporaneously with the filing of this Motion, the Debtors have filed certain other “first day” motions seeking authority to satisfy certain prepetition claims. As used herein, “Taxes and Fees” does not include any of the obligations the Debtors seek to pay under a separate motion. Nothing contained herein is intended or should be construed as an admission as to the validity of any claim against the Debtors or a waiver of the Debtors’ rights to dispute any asserted claim.

7 This estimate does not include any potential prepetition tax liability that may later come due as the result (or conclusion) of any pending or future audits. For the avoidance of doubt, the Debtors seek authority, but not direction, to pay any amounts that later come due as the result (or conclusion) of any pending or future audits in connection with their Taxes and Fees to avoid material disruptions to the Debtors’ business operations.


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Category Description

Approximate Amount Accrued as of Petition Date

Approximate Amount Due

within 30 days

Property Taxes The Debtors remit property taxes directly to the Authorities relating to personal and real property that the Debtors use in the operation of their businesses, whether owned or leased (the “Property Taxes”).

$700.00 $0

Total $13,900.00 $0

II. Key Tax Considerations.

11. The Debtors believe that failing to pay the Taxes and Fees could materially disrupt

the Debtors’ business operations in several ways, including that: (a) the Authorities may initiate

audits, suspend operations, file liens, seek to lift the automatic stay, and pursue other remedies that

would harm the estate, which would unnecessarily divert the Debtors’ attention from the

reorganization process; (b) failing to pay Taxes and Fees could subject certain of the Debtors’

directors and officers to claims of personal liability, which would distract those key employees

from their duties related to the Debtors’ restructuring; (c) failing to pay certain of the Taxes and

Fees likely could cause the Debtors to lose their ability to conduct business in certain jurisdictions;

and (d) unpaid Taxes and Fees may result in penalties, the accrual of interest, or both, any of which

could negatively impact the Debtors’ businesses or the reorganization process.

12. In addition, the Debtors collect and hold certain outstanding tax liabilities in trust

for the benefit of the applicable Authorities, and these funds may not constitute property of

the Debtors’ estates.

Basis for Relief

I. Certain of the Taxes and Fees are Not Property of the Debtors’ Estates.

13. The Debtors have held in trust and, thus, collected or withheld certain of the Taxes

and Fees on behalf of the applicable Authorities and held such amounts in trust on behalf of the

applicable Authorities. See, e.g., I.R.C. § 7501 (stating that certain taxes and fees are held in


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trust). As such, these Taxes and Fees are not property of the Debtors’ estates under section 541 of

the Bankruptcy Code. See, e.g., 11 U.S.C. § 541(d); Begier v. IRS, 496 U.S. 53, 57-60 (1990)

(holding that any prepetition payment of trust fund taxes is not an avoidable preference because

the funds are not the debtor’s property); DeChiaro v. N.Y. State Tax Comm’n, 760 F.2d 432,

435-36 (2d Cir. 1985) (same). To the extent these “trust fund” taxes are collected, they are not

property of the Debtors’ estates under section 541(d) of the Bankruptcy Code. See, e.g.,

I.R.C. § 7501 (stating that certain taxes and fees are held in trust); In re Rodriguez, 50 B.R. 576,

580 (Bankr. E.D.N.Y. 1985); see also In re Am. Int’l Airways, Inc., 70 B.R. 102, 104–05 (Bankr.

E.D. Pa. 1987). Because the Debtors do not have an equitable interest in any of the “trust fund”

Taxes and Fees held on account of the Authorities, the Debtors should be permitted to pay those

funds to the Authorities as they become due in the ordinary course of business on a postpetition

basis.8

II. Payment of the Taxes and Fees as Provided Herein Is a Sound Exercise of the Debtors’ Business Judgment.

14. Courts in this jurisdiction generally acknowledge that it is appropriate to authorize

the payment of prepetition obligations where necessary to protect and preserve the estate,

including an operating business’s going-concern value. See In re Ionosphere Clubs, Inc., 98 B.R.

174, 175 (Bankr. S.D.N.Y. 1989) (affirming lower court order authorizing payment of prepetition

wages pursuant to section 363(b) of the Bankruptcy Code); Armstrong World Indus., Inc. v. James

A. Phillips, Inc. (In re James A. Phillips, Inc.), 29 B.R. 391, 398 (S.D.N.Y. 1983) (granting

authority to pay prepetition claims of suppliers); accord In re CoServ, L.L.C., 273 B.R. 487, 497

(Bankr. N.D. Tex. 2002). In doing so, these courts acknowledge that several legal theories rooted

8 For the avoidance of doubt, the Debtors hereby request authority to pay, in their sole discretion, the Taxes and Fees as provided herein regardless of whether such Taxes and Fees constitute trust fund obligations.


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in sections 105(a) and 363(b) of the Bankruptcy Code support the payment of prepetition claims

as provided herein.

15. Pursuant to section 363(b) of the Bankruptcy Code, courts may authorize payment

of prepetition obligations where a sound business purpose exists for doing so. See Ionosphere

Clubs, 98 B.R. at 175 (noting that section 363(b) of the Bankruptcy Code provides “broad

flexibility” to authorize a debtor to honor prepetition claims where supported by an appropriate

business justification); see also James A. Phillips, Inc., 29 B.R. at 397 (relying upon section 363

of the Bankruptcy Code as a basis to allow a contractor to pay the prepetition claims of suppliers

who were potential lien claimants). Indeed, courts have recognized that there are instances when

a debtor’s fiduciary duty can “only be fulfilled by the pre-plan satisfaction of a prepetition claim.”

CoServ, 273 B.R. at 497.

16. In addition, courts may authorize payment of prepetition claims in appropriate

circumstances based on section 105(a) of the Bankruptcy Code, which codifies the Bankruptcy

Court’s inherent equitable powers to “issue any order, process, or judgment that is necessary or

appropriate to carry out the provisions of this title.” Under section 105(a) of the Bankruptcy Code,

courts may authorize preplan payments of prepetition obligations when essential to the continued

operation of a debtor’s business. See In re C.A.F. Bindery, Inc., 199 B.R. 828, 835

(Bankr. S.D.N.Y. 1996); see also In re Fin. News Network Inc., 134 B.R. 732, 735–36

(Bankr. S.D.N.Y. 1991) (holding that the “doctrine of necessity” stands for the principle that a

bankruptcy court may allow preplan payments of prepetition obligations where such payments are

critical to the debtor’s reorganization). Specifically, the Bankruptcy Court may use its power

under section 105(a) of the Bankruptcy Code to authorize payment of prepetition obligations


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pursuant to the “necessity of payment” rule (also referred to as the “doctrine of necessity”).

Ionosphere Clubs, 98 B.R. at 176.

17. Several courts apply the doctrine of necessity where payment of a prepetition claim

(a) is “necessary for the successful reorganization of the debtor,” (b) falls within “the sound

business judgment of the debtor,” and (c) will not “prejudice other unsecured creditors.”

In re United Am. Inc., 327 B.R. 776, 782 (Bankr. E.D. Va. 2005); see also Ionosphere Clubs,

98 B.R. at 176. A bankruptcy court’s use of its equitable powers to “authorize the payment of

pre-petition debt when such payment is needed to facilitate the rehabilitation of the debtor is not a

novel concept.” See Ionosphere Clubs, Inc., 98 B.R. at 175. That is because the rehabilitation of

a debtor in reorganization cases remains “the paramount policy and goal of Chapter 11.” Id. at

175–76; see also In re Just For Feet, 242 B.R. 821, 826 (D. Del. 1999) (finding that payment of

prepetition claims to certain trade vendors was “essential to the survival of the debtor during the

chapter 11 reorganization”).

18. Implicit in the fiduciary duties of any debtor in possession is the obligation to

“protect and preserve the estate, including an operating business’s going concern value.”

See also CoServ, 273 B.R. at 497. Some courts note that there are instances in which a debtor can

fulfill this fiduciary duty “only . . . by the preplan satisfaction of a prepetition claim.” Id. The

court in CoServ specifically noted the pre-plan satisfaction of prepetition claims would be a valid

exercise of the debtor’s fiduciary duty when the payment “is the only means to effect a substantial

enhancement of the estate . . . .” Id. Consistent with a debtor’s fiduciary duties, courts have also

authorized payment of prepetition obligations under section 363(b) of the Bankruptcy Code where

a sound business purpose exists for doing so. See Ionosphere Clubs, 98 B.R. at 175.


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19. These standards are satisfied here. The Debtors’ ability to pay the Taxes and Fees

is critical to their continued and uninterrupted operations and maintaining the efficient and value-

maximizing administration of the Debtors’ estates. If certain Taxes and Fees remain unpaid,

certain Authorities may seek to impose penalties on, or recover such amounts directly from, the

Debtors’ directors, officers, and/or employees, thereby distracting them from the administration of

the Debtors’ chapter 11 cases. See, e.g., N.Y. Tax Law § 1133 (“[E]very person required to collect

any tax imposed by this article shall be personally liable for the tax imposed, collected or required

to be collected under this article.”); In re Am. Motor Club, Inc., 139 B.R. 578, 581–83 (Bankr.

E.D.N.Y. 1992) (stating “[i]f the employer fails to pay over the trust fund taxes, the IRS may

collect an equivalent amount directly from officers or employees of the employer who are

responsible for collecting the tax” and finding a director personally liable for unpaid taxes (citing

United States v. Energy Res. Co., 495 U.S. 545, 547 (1990))). Any collection action on account

of such penalties, and any ensuing liability, would distract the Debtors and their personnel to the

detriment of all parties in interest. The dedicated and active participation of the Debtors’ officers

and employees is integral to the Debtors’ continued operations and essential to the orderly

administration of these chapter 11 cases and maximizing the value of the Debtors’ estates for the

benefit of their stakeholders.

20. Furthermore, the Debtors’ inability to timely pay the Taxes and Fees may ultimately

result in increased tax liability for the Debtors if interest and penalties accrue on account of such

Taxes and Fees. Many of the Taxes and Fees may be entitled to priority claims, pursuant to

section 507(a)(8)(C) of the Bankruptcy Code, which must be paid in full in cash before any general

unsecured obligations may be satisfied. Thus, the Debtors’ failure to pay the prepetition Taxes

and Fees as they come due may ultimately increase the amount of priority claims held by the


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Authorities against the Debtors’ estates to the detriment of the Debtors’ general unsecured

creditors and other stakeholders. See 11 U.S.C. § 507(a)(8)(C), (G). Accordingly, the Bankruptcy

Court should grant the Debtors’ authority to pay, in their sole discretion, the prepetition Taxes and

Fees as provided herein.

21. Bankruptcy courts in this jurisdiction have often authorized payment of prepetition

taxes under section 363(b) of the Bankruptcy Code. See, e.g., In re Frontier Commc’ns. Corp.,

No. 20-22476 (RDD) (Bankr. S.D.N.Y. May 26, 2020) (authorizing debtors to pay prepetition

taxes); In re Deluxe Entm’t Servs. Grp. Inc., No. 19-23774 (RDD) (Bankr. S.D.N.Y. Oct. 25, 2019)

(same); In re Hollander Sleep Prods., LLC, No. 19-11608 (MEW) (Bankr. S.D.N.Y. July 2, 2019)

(same); In re Sungard Availability Servs. Capital, Inc., No. 19-22915 (RDD) (Bankr. S.D.N.Y.

May 2, 2019) (same); In re Windstream Holdings, Inc., No. 19-22312 (RDD) (Bankr. S.D.N.Y.

Feb. 28, 2019) (same).9

Processing of Checks and Electronic Fund Transfers Should Be Authorized

22. The Debtors expect to have sufficient funds to pay the amounts described in this

Motion in the ordinary course of business by virtue of expected cash flows from ongoing business

operations and anticipated access to debtor in possession financing. In addition, under the

Debtors’ existing cash management system, the Debtors can readily identify checks or wire

transfer requests as relating to an authorized payment in respect of the relief requested herein.

Accordingly, the Debtors believe there is minimal risk that checks or wire transfer requests that

the Bankruptcy Court has not authorized will be inadvertently made. Therefore, the Debtors

respectfully request that the Bankruptcy Court authorize and direct all applicable financial

9 Because of the voluminous nature of the orders cited herein, such orders have not been attached to this Motion. Copies of these orders are available upon request to the Debtors’ proposed counsel.


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institutions, when requested by the Debtors, to receive, process, honor, and pay any and all checks

or wire transfer requests in respect of the relief requested in this Motion.

The Requirements of Bankruptcy Rule 6003 Are Satisfied10

23. Bankruptcy Rule 6003 empowers a court to grant relief within the first 21 days after

the Petition Date “to the extent that relief is necessary to avoid immediate and irreparable harm.”

As set forth in this Motion, the Debtors believe an immediate and orderly transition into chapter 11

is critical to the viability of their operations and that any delay in granting the relief requested

could hinder the Debtors’ operations and cause irreparable harm. Furthermore, the failure to

receive the requested relief during the first 21 days of these chapter 11 cases would severely disrupt

the Debtors’ operations at this critical juncture and imperil the debtor’s restructuring. Accordingly,

the Debtors submit that it has satisfied the “immediate and irreparable harm” standard of

Bankruptcy Rule 6003 to support granting the relief requested herein.

Waiver of Bankruptcy Rules 6004(a) and 6004(h)

24. To successfully implement the foregoing, the Debtors request that the Bankruptcy

Court enter an order providing that notice of the relief requested herein satisfies Bankruptcy Rule

6004(a) and that the Debtors have established cause to exclude such relief from the 14-day stay

period under Bankruptcy Rule 6004(h).

Reservation of Rights

25. Nothing contained in this Motion or any actions taken pursuant to any order

granting the relief requested by this Motion is intended or should be construed as (a) an admission

10 As more fully detailed in the Combined Hearing Motion, the Debtors are requesting a Combined Hearing within 30 days of the Petition Date, and the Debtors anticipate a final hearing on the Motion to be held on the same day as the Combined Hearing. Accordingly, the Debtors request relief within the first 30 days rather than the first 21 days under Bankruptcy Rule 6003.


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as to the amount of, basis for, or validity of any particular claim against the Debtors, (b) a waiver

of the Debtors’ rights to dispute any particular claim on any grounds, (c) a promise or requirement

to pay any particular claim, (d) an implication or admission that any particular claim is of a type

specified or defined in this Motion or any order granting the relief requested by this Motion, (e) a

request or authorization to assume any agreement, contract, or lease pursuant to section 365 of the

Bankruptcy Code, (f) a waiver or limitation of the Debtors’ rights under the Bankruptcy Code or

any other applicable law, [(g) an admission as to the validity, priority enforceability, or perfection

of any lien on, security interest in, or other encumbrance on property of the Debtors’ estates], or

(h) a concession by the Debtors that any liens (contractual, common law, statutory, or otherwise)

satisfied pursuant to this Motion are valid, and the Debtors expressly reserve their rights to contest

the extent, validity, or perfection or seek avoidance of all such liens. If the Bankruptcy Court

grants the relief sought herein, any payment made pursuant to the Bankruptcy Court’s order is not

intended and should not be construed as an admission as to the validity of any particular claim or

a waiver of the Debtors’ rights to subsequently dispute such claim.

Motion Practice

26. This Motion includes citations to the applicable rules and statutory authorities upon

which the relief requested herein is predicated and a discussion of its application to this Motion.

Accordingly, the Debtors submit that this Motion satisfies Local Rule 9013-1(a).

Notice

1. The Debtors will provide notice of this Motion to: (a) the United States Trustee for

the Southern District of New York, Attn: Benjamin J. Higgins; (b) the holders of the 50 largest

unsecured claims against the Debtors (on a consolidated basis); (c) counsel to the administrative

agent under the Debtors’ prepetition credit agreement, Latham and Watkins, LLP, 885 Third

Avenue, New York, NY 10022, Attn: Adam J. Goldberg and Hugh Murtagh; (d) counsel to the


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Sponsors, Cravath, Swaine & Moore LLP, Worldwide Plaza, 825 Eighth Avenue, New York, NY

10019, Attn: Paul H. Zumbro and George E. Zobitz, and Simpson Thacher & Bartlett LLP, 425

Lexington Avenue, New York, NY 10017, Attn: Michael H. Torkin; (e) counsel to the ad hoc

group of Consenting Lenders, Gibson, Dunn & Crutcher LLP, 200 Park Avenue, New York, NY

10166, Attn: Scott J. Greenberg, Steven A. Domanowski and Jeremy Evans; (f) the United States

Attorney’s Office for the Southern District of New York; (g) the Internal Revenue Service; (h) the

United States Securities and Exchange Commission; (i) the office of the attorney general in the

states where the Debtors conduct their business operations; and (j) any party that has requested

notice pursuant to Bankruptcy Rule 2002. The Debtors submit that, in light of the nature of the

relief requested, no other or further notice need be given.

No Prior Request

2. No prior request for the relief sought in this Motion has been made to this or any

other court.

[Remainder of page intentionally left blank]


WHEREFORE, the Debtors respectfully request that the Bankruptcy Court enter the

Interim Order and Final Order granting the relief requested herein and such other relief as the

Bankruptcy Court deems appropriate under the circumstances.

Dated: July 21, 2020 /s/ Nicole L. GreenblattNew York, New York Nicole L. Greenblatt, P.C.

Susan D. GoldenKIRKLAND & ELLIS LLPKIRKLAND & ELLIS INTERNATIONAL LLP601 Lexington AvenueNew York, New York 10022Telephone: (212) 446-4800Facsimile: (212) 446-4900- and - Whitney Fogelberg (pro hac vice pending)KIRKLAND & ELLIS LLPKIRKLAND & ELLIS INTERNATIONAL LLP300 North LaSalle StreetChicago, Illinois 60654Telephone: (312) 862-2000Facsimile: (312) 862-2200

Proposed Counsel to the Debtors and Debtors in Possession


EXHIBIT A

Proposed Interim Order






)

INTERIM ORDER (I) AUTHORIZING THE PAYMENT OF CERTAIN PREPETITION TAXES AND FEES AND (II) GRANTING RELATED RELIEF

Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in possession

(collectively, the “Debtors”) for entry of an interim order (this “Interim Order”), (a) authorizing

the Debtors to negotiate, remit, and pay (or use tax credits or overpayments to offset) certain

accrued and outstanding prepetition obligations accrued in the ordinary course of business on

account of the Taxes and Fees (as defined herein); and (b) granting related relief, all as more fully

set forth in the Motion; and upon the First Day Declaration; and this Bankruptcy Court having

jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Amended Standing

Order of Reference from the United States District Court for the Southern District of New York,

dated January 31, 2012; and this Bankruptcy Court having found that venue of this proceeding and

the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409; and this Bankruptcy

Court having found that the Debtors’ notice of the Motion and opportunity for a hearing on the

Motion were appropriate under the circumstances and no other notice need be provided; and this

Bankruptcy Court having reviewed the Motion and having heard the statements in support of the


2 Capitalized terms used but not defined herein have the meanings given to such terms in the Motion.


2

relief requested therein at a hearing before this Bankruptcy Court (the “Hearing”); and this

Bankruptcy Court having determined that the legal and factual bases set forth in the Motion and at

the Hearing establish just cause for the relief granted herein; and upon all of the proceedings had

before this Bankruptcy Court; and after due deliberation and sufficient cause appearing therefor,

it is HEREBY ORDERED THAT:

1. The Motion is granted on an interim basis as set forth herein.

2. The final hearing (the “Final Hearing”) on the Motion shall be held on _________,

2020, at__:__ _.m., prevailing Eastern Time. Any objections or responses to entry of a final order

on the Motion shall be filed, with an e-mail copy to the Bankruptcy Court’s chambers, on or before

4:00 p.m., prevailing Eastern Time, on _________, 2020, in a manner consistent with the Case

Management Procedures. In the event no objections to entry of the Final Order on the Motion are

timely received, this Bankruptcy Court may enter such Final Order without need for the Final

Hearing.

3. The Debtors are authorized in their sole discretion to: (a) negotiate, pay or remit

(or use applicable credits or overpayments to offset) the obligations that arose or accrued in the

ordinary course of business on account of the Taxes and Fees prior to the Petition Date and that

will become due and owing (including, for the avoidance of doubt, as a result of the resolution of

any Audit) prior to entry of the Final Order and (b) negotiate, pay or remit Taxes and Fees that

arise or accrue in the ordinary course of business on a postpetition basis (including, for the

avoidance of doubt, as a result of the resolution of any Audit); provided, that in the event the

Debtors make a payment with respect to any Taxes and Fees for the prepetition portion of any

“straddle” amount and this Bankruptcy Court subsequently determines such amount was not

entitled to priority or administrative treatment under section 507(a)(8) or 503(b)(1)(B) of the


3

Bankruptcy Code, the Debtors may (but shall not be required to) seek an order from the Bankruptcy

Court requiring a return of such amounts and the payment of such amount shall, upon order of the

Bankruptcy Court, be refunded to the Debtors. Notwithstanding the relief granted herein or any

actions taken hereunder, nothing contained in this Interim Order shall create any rights in favor of,

or enhance the status of any claim held by, any of the Authorities.

4. To the extent that the Debtors have overpaid any Tax or Fee, the Debtors are

authorized to seek a refund or credit.

5. Nothing in this Interim Order authorizes the Debtors to accelerate any payments

not otherwise due prior to the date of the Final Hearing, and the Debtors are only authorized under

this Interim Order to pay amounts that are due and owing prior to the date of the Final Hearing.

6. The Debtors are authorized to pay any amounts that later come due as the result (or

conclusion) of any pending or future audits in connection with their Taxes and Fees in the ordinary

course of business.

7. Notwithstanding the relief granted in this Interim Order and any actions taken

pursuant to such relief, nothing in this Interim Order shall be deemed: (a) an admission as to the

amount of, basis for, or validity of any particular claim against the Debtors; (b) a waiver of the

Debtors’ rights to dispute any particular claim on any grounds; (c) a promise or requirement to pay

any particular claim; (d) an implication or admission that any particular claim is of a type specified

or defined in this Interim Order or the Motion; (e) a request or authorization to assume any

agreement, contract, or lease pursuant to section 365 of the Bankruptcy Code; (f) a waiver or

limitation of the Debtors’ rights under the Bankruptcy Code or any other applicable law; or (g) a

concession by the Debtors that any liens (contractual, common law, statutory, or otherwise)

satisfied pursuant to the Motion are valid, and the Debtors expressly reserve their rights to contest


4

the extent, validity, or perfection or seek avoidance of all such liens. Any payment made pursuant

to this Interim Order is not intended and should not be construed as an admission as to the validity

of any particular claim or a waiver of the Debtors’ rights to subsequently dispute such claim.

8. The banks and financial institutions on which checks were drawn or electronic

payment requests made in payment of the prepetition obligations approved herein are authorized

to receive, process, honor, and pay all such checks and electronic payment requests when presented

for payment, and all such banks and financial institutions are authorized to rely on the Debtors’

designation of any particular check or electronic payment request as approved by this Interim

Order without any duty of further inquiry and without liability for following the Debtors’

instructions.

9. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in connection

with any Taxes and Fees.

10. The contents of the Motion satisfy the requirements of Bankruptcy Rule 6003(b).

11. Notice of the Motion as provided therein shall be deemed good and sufficient notice

of such Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are satisfied

by such notice.

12. Notwithstanding anything to the contrary, the terms and conditions of this Interim

Order are immediately effective and enforceable upon its entry.

13. The Debtors are authorized to take all actions necessary to effectuate the relief

granted in this Interim Order in accordance with the Motion.

14. This Bankruptcy Court retains exclusive jurisdiction with respect to all matters


5

arising from or related to the implementation, interpretation, and enforcement of this Interim

Order.

15. Notwithstanding anything contained in the Motion or this Interim Order, any

payment made, and any authorization of the Debtors contained herein shall be subject to the terms

and conditions contained in any interim or final orders entered by this Bankruptcy Court

authorizing the Debtors to obtain debtor-in-possession financing and/or authorizing the use of cash

collateral (each such order, a “DIP Order”). To the extent there is any inconsistency between the

terms of the DIP Order and any action taken or proposed to be taken hereunder, the terms of the

DIP Order shall control.

New York, New YorkDated: ____________, 2020

THE HONORABLE JUDGE [●]UNITED STATES BANKRUPTCY JUDGE


EXHIBIT B

Proposed Final Order






)

FINAL ORDER (I) AUTHORIZING THE PAYMENT OF CERTAIN PREPETITION TAXES AND FEES AND (II) GRANTING RELATED RELIEF

Upon the motion (the “Motion”)2 of the above-captioned debtors and debtors in possession

(collectively, the “Debtors”) for entry of a final order (this “Final Order”), (a) authorizing the

Debtors to negotiate, remit, and pay certain accrued and outstanding prepetition obligations

accrued in the ordinary course of business on account of the Taxes and Fees; and (b) granting

related relief, all as more fully set forth in the Motion; and upon the First Day Declaration; and

this Bankruptcy Court having jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334

and the Amended Standing Order of Reference from the United States District Court for the

Southern District of New York, dated January 31, 2012; and this Bankruptcy Court having found

that venue of this proceeding and the Motion in this district is proper pursuant to 28 U.S.C. §§ 1408

and 1409; and this Bankruptcy Court having found that the Debtors’ notice of the Motion and

opportunity for a hearing on the Motion were appropriate under the circumstances and no other

notice need be provided; and this Bankruptcy Court having reviewed the Motion and having heard

the statements in support of the relief requested therein at a hearing before this Bankruptcy Court


2 Capitalized terms used but not defined herein have the meanings given to such terms in the Motion.


2

(the “Hearing”); and this Court having determined that the legal and factual bases set forth in the

Motion and at the Hearing establish just cause for the relief granted herein; and upon all of the

proceedings had before this Bankruptcy Court; and after due deliberation and sufficient cause

appearing therefor, it is HEREBY ORDERED THAT:

1. The Motion is granted on a final basis as set forth herein.

2. The Debtors are authorized in their sole discretion to: (a) negotiate, pay or remit

(or use applicable credits or overpayments to offset) the obligations that arose or accrued in the

ordinary course of business on account of the Taxes and Fees prior to the Petition Date and that

will become due and owing in the ordinary course of business during the pendency of these chapter

11 cases at such time when the Taxes and Fees are payable (including, for the avoidance of doubt,

as a result of the resolution of any Audit) and (b) negotiate, pay or remit Taxes and Fees that arise

or accrue in the ordinary course of business on a postpetition basis (including, for the avoidance

of doubt, as a result of the resolution of any Audit); provided, that in the event the Debtors make

a payment with respect to any Taxes and Fees for the prepetition portion of any “straddle” amount

and this Bankruptcy Court subsequently determines such amount was not entitled to priority or

administrative treatment under section 507(a)(8) or 503(b)(1)(B) of the Bankruptcy Code, the

Debtors may (but shall not be required to) seek an order from the Bankruptcy Court requiring a

return of such amounts and the payment of such amount shall, upon order of the Bankruptcy Court,

be refunded to the Debtors. Notwithstanding the relief granted herein or any actions taken

hereunder, nothing contained in this Final Order shall create any rights in favor of, or enhance the

status of any claim held by, any of the Authorities.

3. To the extent that the Debtors have overpaid any Tax or Fee, the Debtors are

authorized to seek a refund or credit.


3

4. The Debtors are authorized to pay any amounts that later come due as the result (or

conclusion) of any pending or future audits in connection with their Taxes and Fees in the ordinary

course of business.

5. Notwithstanding the relief granted in this Final Order and any actions taken

pursuant to such relief, nothing in this Final Order shall be deemed: (a) an admission as to

the validity, priority, or amount of, or the basis for any particular claim against a Debtor entity;

(b) a waiver of the Debtors’ or any other party in interest’s right to dispute any particular claim on

any grounds; (c) a promise or requirement to pay any particular claim; (d) an implication or

admission that any particular claim is of a type specified or defined in this Final Order or the

Motion; (e) a request or authorization to assume any agreement, contract, or lease pursuant to

section 365 of the Bankruptcy Code; (f) a waiver or limitation of the Debtors’ or any other party

in interest’s rights under the Bankruptcy Code or any other applicable law; or (g) a concession by

the Debtors or any other party in interest that any liens (contractual, common law, statutory, or

otherwise) satisfied pursuant to this Final Order are valid and the Debtors and all other parties in

interest expressly reserve their rights to contest the extent, validity, or perfection or to seek

avoidance of all such liens. Any payment made pursuant to this Final Order should not be

construed as an admission as to the validity, priority, or amount of any particular claim or a waiver

of the Debtors’ or any other party in interest’s rights to subsequently dispute such claim.

6. The banks and financial institutions on which checks were drawn or

electronic payment requests made in payment of the prepetition obligations approved herein

are authorized to receive, process, honor, and pay all such checks and electronic payment requests

when presented for payment, and all such banks and financial institutions are authorized to rely on

the Debtors’ designation of any particular check or electronic payment request as approved by this


4

Final Order without any duty of further inquiry and without liability for following the Debtors’

instructions.

7. The Debtors are authorized to issue postpetition checks, or to effect postpetition

fund transfer requests, in replacement of any checks or fund transfer requests that are dishonored

as a consequence of these chapter 11 cases with respect to prepetition amounts owed in connection

with any Taxes and Fees.

8. Notice of the Motion as provided therein shall be deemed good and sufficient notice

of such Motion and the requirements of Bankruptcy Rule 6004(a) and the Local Rules are satisfied

by such notice.

9. Notwithstanding anything to the contrary, the terms and conditions of

this Final Order are immediately effective and enforceable upon its entry.

10. The Debtors are authorized to take all actions necessary to effectuate the relief

granted in this Final Order in accordance with the Motion.

11. This Bankruptcy Court retains exclusive jurisdiction with respect to all matters

arising from or related to the implementation, interpretation, and enforcement of this Final Order.

12. Notwithstanding anything contained in the Motion or this Final Order, any payment

made, and any authorization of the Debtors contained herein shall be subject to the terms and

conditions contained in any interim or final orders entered by this Bankruptcy Court authorizing

the Debtors to obtain debtor-in-possession financing and/or authorizing the use of cash collateral

(each such order, a “DIP Order”), the documentation in respect of any such debtor-in-possession

financing or use of cash collateral, and any budget in connection with any such debtor-in-

possession financing and/or use of cash collateral. To the extent there is any inconsistency

between the terms of the DIP Order and any action taken or proposed to be taken hereunder, the


5

terms of the DIP Order shall control. For the avoidance of doubt, the Debtors are not authorized to

make any payments pursuant to this Final Order to, or on behalf of, a non-debtor affiliate except

as permitted by the Budget (as defined in the DIP Order).

New York, New YorkDated: ____________, 2020

THE HONORABLE JUDGE [●]UNITED STATES BANKRUPTCY JUDGE


EXHIBIT C

List of Authorities


List of Authorities

Authority Address Type

Adams County, Colorado 4430 S. Adams County Parkway, 2nd Floor, Ste. C2100 Brighton, CO 80601

Property Taxes

AFIP Hipólito Yrigoyen 2251Buenos Aires

Income Taxes & Sales and Use Taxes

Agencia Estatal de Administración Tributaria Calle Alcalá 9Madrid, Spain


Alabama Alabama Department of Revenue, Business Privilege Tax Section, P.O. Box 327320Montgomery, AL 36132-7320

Income Taxes

Arizona Arizona Department of Revenue, P.O. Box 29085Phoenix, AZ 85038-9085

Income Taxes

Arlington County 2100 Clarendon Boulevard, Suite 200Arlington, VA 22201

Property Taxes & Regulatory and Other Taxes

Australian Tax Office (ATO) G.P.O. Box 9990Sydney NEW 2001


California Franchise Tax Board, P.O. Box 942857 Sacramento, CA 94257

Income Taxes

Canada Revenue Agency 55 Bay St NHamilton, ON L8R 3L4, Canada


Chilean Revenue Department Melgarejo 667, Valparaíso Income Taxes & Sales and Use Taxes

City of Alexandria Virginia City of Alexandria Business License, P.O. Box 34850Alexandria, VA 22334


City of Boston DOR, P.O. Box 7000 Boston, MA 02204


City of Charlottesville City of Charlottesville, P.O. Box 2854 Charlottesville, VA 22902


Colorado Colorado Department of Revenue Denver, CO 80261-0008

Income Taxes

Connecticut Department of Revenue Services State of Connecticut, P.O. Box 2976 Hartford, CT 06104-2976

Income Taxes

County of El Dorado 360 Fair LanePlacerville, CA 95667


County of Fairfax Department of Tax Administration, P.O. Box 10201Fairfax, VA 22035


County of Henrico Department of Finance, P.O. Box 90775 Henrico, VA 23273


Delaware P.O. Box 830Wilmington, DE 19899

Income Taxes

Direccion General de Impuestos Internos (DGII) Av México #48Santo Domingo 10204, Dominican Republic



2


Directión de Impuestos y Aduanas Nacionales (DIAN)

Cra. 5Bogotá, Colombia


Directorate General of Public Finance 139 Rue de Bercy, 75574Paris, France


District of Columbia Office of Tax and Revenue, P.O. Box 96166 Washington, DC 20090-6166

Income Taxes

Douglas County Douglas County Government, 100 Third StreetCastle Rock, Colorado 80104

Property Taxes

Florida 2450 Shumard Oak Blvd.Tallahassee, FL 32311

Income Taxes

General Tax Directorate Bd Idriss II, BP, 3-42 Meknes Income Taxes & Sales and Use Taxes

Georgia Georgia Department of Revenue, P.O. Box 740239Atlanta, GA 30374-0239

Income Taxes

Harris County P.O. Box 922007Houston, TX 77292

Property Taxes

HM Revenue & Customs 73 Yorkshire St, Salford M3 5EG, United Kingdom


Idaho Idaho State Tax Commission, P.O. Box 83784Boise, ID 83707-3784

Income Taxes

Illinois 101 W Jefferson St.Springfield, IL 62702

Income Taxes

Indiana Indiana Department of Revenue, 100 N Senate Ave.Indianapolis, IN 46204

Income Taxes

Inland Revenue Department 12-22 Hawkestone St.Thorndon Wellington 6140, New Zealand


Italian Agency of Revenue via Giorgione n. 10600147 Roma


James City VA Government Center, 101 B Mounts Bay Road, Building BWilliamsburg, VA 23185


Kansas Kansas DOR 1883 W 21st St.Wichita, KS 67203

Income Taxes

Louisiana DOR 617 N 3rd St.Baton Rouge, LA 70802

Income Taxes

Maryland Maryland State Department of Assessments, P.O. Box 17052Baltimore, MD 21297


Maryland Comptroller of Maryland, Revenue Administration Division, 110 Carroll StreetAnnapolis, MD 21411-0001

Income Taxes

Massachusetts 436 Dwight St. #401Springfield, MA 01103

Income Taxes

Mexico Revenue 2540 El Paseo Rd. #2Las Cruces, NM 88001


Michigan Michigan Department of Treasury, P.O. Box 30774Lansing, MI 48909

Income Taxes


3


Minister of Finance Nikis 5-7, 105 63Athens, Greece


Ministerio de Hacienda Av. 2, CatedralSan José, Costa Rica


Ministry of Finance Letenská 525/15, 118 10 Praha 1 - Malá Strana


Minnesota DOR 600 Robert St. N.St Paul, MN 55101

Income Taxes

Missouri DOR 301 W High St.Jefferson City, MO 65101

Income Taxes

Montana Montana Department of Revenue, P.O. Box 8021Helena, MT 59604-8021

Income Taxes

National Tax Agency 3-1-1 Kasumigaseki, Chiyoda-kuTokyo 100-8978, Japan


National Tax Service 58-8 Nakwon-dong, Jongno-guSeoul, South Korea


New Hampshire DOR 109 Pleasant St.Concord, NH 03301

Income Taxes

New Jersey 50 Barrack St.Trenton, NJ 08608

Income Taxes

New Mexico New Mexico Taxation & Revenue Dept., P.O. Box 25127Santa Fe, NM 87504-5127

Income Taxes

New York 66 John St., 2nd floorNew York, NY 10038

Income Taxes

North Carolina NC Department of Revenue, P.O. Box 25000Raleigh, NC 27640-0520

Income Taxes

NYC Department of Finance 59 Maiden Lane, 19th FloorNew York, NY 10038

Property Taxes

Oklahoma Oklahoma Tax Commission Income Tax, P.O. Box 26890Oklahoma City, OK 73126-0890

Income Taxes

Oregon Oregon Department of Revenue, P.O. Box 14780Salem, OR 97309-0469

Income Taxes

Pennsylvania Walnut St.Harrisburg, PA 17128

Income Taxes

Quincy Massachusetts City Hall, 1305 Hancock Street Quincy, MA 02169

Property Tax

Receita Federal do Brazil (RFB) Brasília, Distrito FederalBrazil


Rhode Island State of Rhode Island, Division of Taxation - Dept. #88, P.O. Box 9702Providence, RI 02940-9702

Income Taxes

Salt Lake City Assessor 2001 S State Street N2-600, P.O. Box 147421Salt Lake City, UT 84114

Property Taxes

San Diego San Diego County Assessor, 9225 Clairemont Mesa Blvd.San Diego, CA 92123

Property Taxes


4


South African Reserve Revenue (SARS) Private Bag X923, PRETORIA, 0001 Income Taxes & Sales and Use Taxes

South Carolina SC Department of Revenue, P.O. Box 100153Columbia, SC 29202

Income Taxes

State Administration of Taxation 72 China National Highway 104, Lingcheng District, Dezhou, Shandong, China


Staunton Virginia Commissioner of Revenue, P.O. Box 4 Staunton, VA 24402


SUNAT (Superintendencia Nacional de Aduanas y de Administración Tributaria)

Jr. Junín N° 319 Centro de Lima, -01 Perú Income Taxes & Sales and Use Taxes

Tennessee 7175 Strawberry Plains Pike #300, Knoxville, TN 37914

Income Taxes

Thailand Revenue Department 90 Phahon Yothin 7 Alley, แขวง พญาไท Phaya Thai, Bangkok 10400, Thailand


Travis County Travis Central Appraisal District, P.O. Box 141864Austin, TX 78714

Property Taxes

Utah Utah State Tax Commission, 210 North 1950 WestSalt Lake City, UT, 84134-0180

Income Taxes

Vermont 133 State St.Montpelier, VT 05602

Income Taxes

Virginia 1957 Westmoreland St.Richmond, VA 23230

Income Taxes

Washington State Washington State Department of Revenue, P.O. Box 47471Olympia, WA 98504

Sales and Use Taxes & Regulatory and Other Taxes

Wisconsin 2135 Rimrock Rd.Madison, WI 53708

Income Taxes
