Charge Enterprises, Inc (CRGE) Files Chapter 11

On March 7, 2024,Charge Enterprises, Inc (NASDAQ: CRGE) filed a voluntary petition for relief under Chapter 11 in the Bankruptcy Court. Charge continues to operate its business as a “debtor-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Company sought approval of a variety of “first day” motions containing customary relief intended to assure the Debtor’s ability to continue its ordinary course operations, and a hearing on the first-day motions was held on March 8, 2024.

Orders granting all of the requested “first day” relief were entered on March 11, 2024, and, as to the first order, March 12, 2024. Included among the approved orders were:

1.
an order approving debtor-in-possession financing and use of cash collateral on an interim basis (the “Interim DIP Order”) [Dkt. 59], described in more detail below;

2.
an order (a) scheduling a hearing to seek approval of the Debtor’s combined disclosure statement (the “Disclosure Statement”) and the Plan (the Plan, together with the Disclosure Statement, the “Combined DS & Plan”), (b) establishing an objection deadline for the Combined DS & Plan, (c) approving solicitation and notice procedures for the Combined DS & Plan, (d) approving notice and objection procedures for executory contracts, and (e) addressing the requirements regarding the filing of the Debtor’s statements of assets and liabilities and schedules of financial affairs (the “Solicitation Procedures Order”) [Dkt. 58], described in more detail below;

3.
an order establishing notification procedures and approving restrictions on certain transfers of, or worthless stock deductions with respect to, stock of the Debtor on an interim basis (the “Interim Stock Procedures Order”) [Dkt. 54], described in more detail below;

4.
an order authorizing the Debtor to pay certain claims of trade creditors [Dkt. 51];

5.
an order authorizing the Debtor to pay outstanding pre-petition employee obligations and continue employee benefit programs [Dkt. 53];

6.
an order allowing the Debtor to continue to use its existing bank accounts and cash management system [Dkt. 55];

7.
an order authorizing the Debtor to redact certain personally identifiable information and modifying certain notice requirements related to equity security holders [Dkt. 52] (the “Notice Procedures Order”); and

8.
an order approving Epiq Corporate Restructuring, LLC (“Epiq”) as the Claims and Noticing Agent, including maintaining the publicly-available website for the Bankruptcy Case available at: https://dm.epiq11.com/case/charge-enterprises/info [Dkt. 50]. The documents and other information available via website or elsewhere are not part of this Form 8-K and shall not be deemed incorporated herein.

DIP Financing

Pursuant to the Interim DIP Order (the “Interim DIP Order”), formally titled the Interim Order (A) Authorizing the Debtor to (I) Use Cash Collateral, (II) Obtain Senior Secured Superpriority Postpetition Financing and Granting Liens and Superpriority Administrative Claims, and (III) Provide Adequate Protection; (B) Scheduling a Final Hearing; and (C) Granting Related Relief, the Company and AI Amped I, LLC, an affiliate of Arena (the “DIP Lender”) have agreed to enter into a multiple-draw secured term loan credit facility in an maximum principal amount of up to $10.0 million (or such greater amount as approved by the DIP Lender in its sole discretion) subject to the terms and conditions set forth in a term sheet executed by the Debtor and the DIP Lender. Per the Interim DIP Order, and subject to entry of a final order approving the DIP Facility and the execution of definitive documentation, the Company anticipates it will have sufficient capital to continue operations through the conclusion of the Chapter 11 Case.

The foregoing summary of the Interim DIP Order and the DIP Term Sheet does not purport to be complete and is qualified in its entirety by reference to the Interim DIP Order, including the DIP Term Sheet as Exhibit 1 thereto, which is filed as Exhibit 10.1 to this Form 8-K and incorporated herein by reference.

Solicitation Procedures Order

Under the Solicitation Procedures Order, formally titled the Order (I) Scheduling a Combined Disclosure Statement Approval and Plan Confirmation Hearing, (II) Establishing a Plan and Disclosure Statement Objection Deadline and Related Procedures, (III) Approving Solicitation and Related Procedures, (IV) Approving the Notice Procedures, (V) Approving Notice and Objection Procedures for the Assumption Assignment, and Rejection of Executory Contracts and Unexpired Leases, and (VI) Extending the Time and, Upon Confirmation, Waiving the Requirements that Statements and Schedules be Filed and a Creditors’ Meeting be Convened, the Bankruptcy Court will hold a hearing on April 23, 2024 at 1:00 p.m. (prevailing Eastern Time) to consider, among other things, the adequacy and confirmation of the Combined DS & Plan. Any objections to the Combined DS & Plan must:

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be in writing;

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comply with the Bankruptcy Rules and the Local Rules;

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state the name and address of the objecting party and the amount and nature of the Claim or Interest beneficially owned by such entity (as each such term is defined by the Bankruptcy Code);

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state with particularity the legal and factual basis for such objections, and, if practicable, a proposed modification to the Combined D.S. and Plan that would resolve such objection; and

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be filed with the Bankruptcy Court with proof of service thereof and served so as to be actually received no later than 4:00 p.m. (prevailing Eastern Time) on April 12, 2024, by (i) proposed counsel to the Debtor, Faegre Drinker Biddle & Reath LLP, 222 Delaware Ave., Suite 1410, Wilmington, DE 19801, Attn: Patrick Jackson ([email protected]), Ian Bambrick ([email protected]) and Sarah Silveira ([email protected]); (ii) counsel to any official committee of unsecured creditors appointed in this Chapter 11 Case; (iii) the Office of the United States Trustee for the District of Delaware, J. Caleb Boggs Federal Building, 844 King Street, Suite 2207, Lockbox 35, Wilmington, DE 19801, Attn: Rosa Sierra-Fox, Esq. ([email protected]); and (iv) counsel to the DIP Lender, White & Case LLP, 1221 Avenue of the Americas, New York, New York 10020, Attn: Harrison Denman ([email protected]), Laura Garr ([email protected]), and Trudy Smith ([email protected]), and Richards, Layton & Finger, P.A., 920 N. King Street | Wilmington, DE 19801, Attn: Paul N. Heath ([email protected]) and Amanda R. Steele ([email protected]).

The foregoing summary of the Solicitation Procedures Order does not purport to be complete and is qualified in its entirety by reference to the Solicitation Procedures Order, which is furnished as Exhibit 99.1 to this Form 8-K.

Additional information is set forth in the Notice of (A) Commencement of Prepackaged Chapter 11 Bankruptcy Cases, (B) Combined Hearing on the Debtor’s Combined Disclosure Statement and Prepackaged Chapter 11 Plan of Reorganization, and Related Matters, (C) Assumption of Executory Contracts and Unexpired Leases and Cure Costs, (D) Objection Deadlines, and (E) Summary of the Plan of Reorganization (the “Combined Hearing Notice”). The Combined Hearing Notice is furnished as Exhibit 99.2 to this Form 8-K.

Interim Stock Procedures Order

Under the Interim Stock Procedures Order, formally titled the Interim Order (I) Establishing Notification Procedures and Approving Restrictions on Certain Transfers of Shares of, or Worthless Stock Deductions with Respect to, Stock of the Debtor and (II) Granting Related Relief, the Bankruptcy Court established procedures surrounding certain transfers of common stock of the Debtor and restricting the ability of certain shareholders to take worthless stock deductions on their income tax returns with respect to their shares in the Debtor. Under the Interim Stock Procedures Order, any purchase, sale, or other transfer of, or claim of worthlessness with respect to, the common stock of the Debtor in violation of the procedures set forth therein will be null and void. All registered holders of common stock of the Debtor have been served with a copy of the Combined Hearing Notice as required by the Interim Stock Procedures Order. For a full description of these procedures, a copy of the Interim Stock Procedures Order, as well as all other orders entered in the Chapter 11 Case including the Interim DIP Order and the Solicitation Procedures Order, is available free of charge on the Debtor’s restructuring website at https://dm.epiq11.com/ChargeEnterprises, via PACER on the Court’s website at https://ecf.deb.uscourts.gov for a fee, or may be obtained upon request of the Debtor’s proposed counsel by contacting Cathy Greer, paralegal, at 302-467-4216 or [email protected]). The documents and other information available via website or elsewhere are not part of this Form 8-K and shall not be deemed incorporated herein.

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