Norcold - Chapter 11 Bidding Procedures / APA Summary

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

• Seller: Norcold LLC (Debtor)
• Purchaser: Dave Carter & Associates, Inc.
• Relationship: The Purchaser is an affiliate and "insider" of the Debtor, as well as the Debtor's post-petition DIP Lender.
  • The Court found that the marketing and auction process was conducted under arm's-length scrutiny and that the sale was negotiated in good faith and for fair value.

Assets Being Sold

• Acquired Assets: The sale contemplates the transfer of substantially all of the Debtor's assets, free and clear of liens, claims, and encumbrances (other than Assumed Liens). These assets generally include:
  • Inventory, equipment, and fixed assets;
  • Intellectual property, goodwill, and intangible property;
  • Real property (including leases and improvements) and transferable permits;
  • Accounts receivable and certain bank accounts/cash remaining after the deduction of Excluded Cash;
  • Assigned contracts and rights under transferable insurance policies;
  • Avoidance Actions under chapter 5 of the Bankruptcy Code and certain causes of action against affiliates, equityholders, and lenders;
  • Specific Claims/Credits:
    • Rights to Tax Refunds, specifically including the Employee Retention Credit (estimated at approximately $1.3 million);
    • The "Klein Settlement Amount" (estimated at $100,000); and
    • All "Excess Cash" remaining in the estate on the Excess Cash Payment Date.
• Excluded Assets: Assets retained by the Seller include, among others:
  • Cash sufficient to fund the Wind-Down Budget (Excluded Cash);
  • Benefit plans and related assets;
  • Excluded insurance policies and excluded causes of action; and
  • Corporate records related exclusively to excluded assets or liabilities.

Purchase Price

• The consideration for the Acquired Assets consists of:
  • Credit Bid: A credit bid pursuant to section 363(k) of the Bankruptcy Code on a dollar-for-dollar basis, equal to the full amount of the outstanding DIP Obligations as of the Closing (minimum of $13.0 million);
  • Assumption of Liabilities: The assumption of all Assumed Liabilities, including Cure Costs;
  • Excluded Cash: The Excluded Cash (cash sufficient to fund the Wind-Down Budget), which remains with the Seller's estate and is included as a component of the Bid Amount under the Sale Order; and
  • Additional Cash: Any additional cash consideration determined at the sole discretion of the Purchaser (defaulting to $0 if no notice is provided).

Assumed and Excluded Liabilities

• Assumed Liabilities: The Purchaser will assume specific obligations, including:
  • Liabilities arising from the ownership or operation of assets post-closing;
  • Cure Costs and liabilities under Assigned Contracts;
  • Accounts Payable (including Trade Payables);
  • Assumed Taxes (specifically certain Washington state excise taxes and customs duties); and
  • Warranty Claims (limited to claims by end-customers/distributors for units sold pre-petition, capped at the value of the refrigerator).
• Excluded Liabilities: The Purchaser will not assume liabilities related to:
  • Pre-petition debt documents (other than the DIP Obligations);
  • Employee benefit plans, WARN Act obligations, and post-closing COBRA liabilities;
  • Excluded causes of action; and
  • Costs associated with the administration of the Chapter 11 case (including Estimated Wind-Down Expenses).

Auction Results and Bid Process

• The Debtor subjected the Stalking Horse APA to an open, competitive auction process in accordance with the Bidding Procedures Order.
• No competing Qualified Bids were received by the Bid Deadline of January 15, 2026.
• Consequently, the Debtor designated the Stalking Horse APA as the Successful Bid and cancelled the Auction.

Post-Closing Covenants

• Name Change: Within 90 business days of closing, the Seller must discontinue the use of the name "Norcold" and amend its organizational documents to remove the name.
• Wind-Down and Excess Cash:
  • The Seller/Trustee will establish a reserve for post-closing wind-down expenses.
  • On the earlier of June 30, 2026, or 75 days after the Plan Effective Date (or such later date as the Buyer and Seller/Trustee may agree), any remaining "Excess Cash" must be paid to the Purchaser.
• Successor Liability: The Sale Order provides that the Purchaser is not a successor to the Debtor and is not liable for the Debtor's obligations under theories of successor liability, de facto merger, or substantial continuity.

Key Dates

• Bid Deadline: January 15, 2026, at 4:00 p.m. ET
• Sale Hearing: January 28, 2026
• Outside Date: February 12, 2026 (subject to extension by Buyer)
• Closing Deadline: No later than 120 days after the Petition Date