Court File and Parties

Court File No.: CV-24-00729147 Date: 20241018 Superior Court of Justice – Ontario

Re: IN THE MATTER OF THE COMPANIES’ CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF ACCURIDE CANADA INC.

Applicant

Before: W.D. Black J.

Counsel: M. Wasserman, S. Irving, M. Calvaruso, A. Rintoul, Counsel for the Applicant C. Moore, Chief Restructuring Officer of the Applicant T. Ray, Proposed Monitor J. Ernst and M. Shakra, Counsel for the Proposed Monitor J. Linde and R Chadwick, Counsel to Ad Hoc Committee of Term Loan Lenders

Heard: October 18, 2024

Endorsement

[1] On October 10, 2024 I made an initial order under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended (the “CCAA”) granting the applicant Accuride Canada Inc. (the “Applicant”) a stay of proceedings for the permitted initial 10-day period and related relief, including appointing PricewaterhouseCoopers Inc. as the monitor in these proceedings, and granting various charges, including an Administration Charge, a Directors’ Charge and an Intercompany Charge (as defined in the initial order, and collectively the “Charges”).

[2] The Applicant now seeks an Amended and Restated Initial Order (the “ARIO”) to:

(a) Increase the maximum amounts secured by the Administration Charge, the Directors’ Charge, and the Intercompany Charge;

(b) Approve the Intercompany Supply Agreement (as defined in the Monitor’s First Report) between the Applicant and its parent Accuride Corporation (“Accuride Corp”); and,

(c) Extend the Stay of Proceedings until December 13, 2024.

[3] The Applicant says that this relief is necessary for the Applicant to continue its operations while it continues to consider its potential restructuring options during the CCAA Proceedings. The Monitor supports the requested relief, which it considers to be reasonable and necessary in the circumstances.

[4] As set out in particular in the First Report of the Monitor dated October 17, 2024, since the date of the Initial Order, the Applicant has continued to work closely with management and employees of the Accuride group of companies (the “Accuride Group”), with Alvarez & Marsal North America LLC (in its capacity as chief restructuring officer of the Accuride Group, the “CRO”), and Alvarez & Marsal Canada ULC (the “Financial Advisor”).

[5] Among other steps, since the filing date, the applicant, with assistance from the Financial Advisor, the CRO, the Monitor, and management of the Accuride Group, has:

(a) Held meetings with employees at its London, Ontario manufacturing plant to inform them of the CCAA proceedings and to answer questions;

(b) Held a meeting with representatives of the union for the hourly employees of its London plant;

(c) Communicated with various creditors and suppliers of the Applicant to provide information about the CCAA proceedings and to negotiate the continued supply of ongoing goods and services;

(d) Communicated directly with third-party customers, notably including General Motors of Canada Company (“GM”) and Isuzu Motors Ltd., regarding the CCAA proceedings;

(e) With the support of the Accuride Group and the CRO, Perella Weinberg Partners (“PW Partners”), the investment banker of the Accuride Group, continues to engage in a marketing process to identify interest in the Accuride Group (including the London plant);

(f) Implemented the relevant provisions of the Intercompany Supply Agreement, including price increases with Accuride Corp;

(g) Continued to manage its business and operations, including the ongoing manufacturing of Inventory expected to be sold during the Forecast Period (as defined and discussed in the First Report); and,

(h) Managed cash flows and made disbursements in accordance with the initial order, in consultation with the Monitor.

[6] The Monitor has also undertaken a number of steps, including:

(a) activating and updating its website;

(b) completing all initial statutory requirements in connection with these CCAA proceedings;

(c) attending the London plant to meet with employees and review the operations, inventory, and machinery;

(d) Communicating with certain of the Applicant’s creditors, employees, and customers to provide information about the CCAA proceedings and to address inquiries, and assisting in communications with Algoma Steel Inc. and GM;

(e) Obtaining updates from the Financial Advisor and PW Partners regarding the status of the marketing process;

(f) Together with the Financial Advisor, confirming ongoing operational support by the Accuride Group to the Applicant (including for treasury and accounting services, as outlined in the Intercompany Supply Agreement;

(g) Monitoring disbursements by the Applicant during the period since the initial order to ensure payments have been consistent with the Short-Term Cash Flow Forecast (as defined in the First Report);

(h) Working with the Applicant and the Financial Advisor to prepare the Cash Flow Forecast; and,

(i) Preparing the First Report.

[7] The Applicant seeks increases in the Administration Charge (from $950,000 to $1,450,000), and in the Directors’ Charge (from $610,000 to $940,000).

[8] The court has discretion to grant and increase these charges in an amount the court considers appropriate under ss. 11.51 and 11.52 of the CCAA. I am persuaded that the requested increases fairly reflect the amounts necessary to ensure that the beneficiaries of the Administration Charge have adequate security for their fees throughout these CCAA proceedings, and that the beneficiaries of the Directors’ Charge have appropriate protection therein. I rely in part on the Monitor’s support for the requested increases, and its view that they are reasonable and appropriated in the circumstances.

[9] I am also, on balance, prepared to increase the Intercompany Charge, securing certain loans provided by Accuride Corp pursuant to the Intercompany Loan Agreement, to an amount equal to the maximum amount of the Intercompany obligations at the relevant time, provided that the aggregate amount of outstanding intercompany obligations shall not exceed USD $10 million.

[10] Again, the court has discretion to grant and increase the Intercompany Charge pursuant to s. 11 of the CCAA. I am satisfied that the increase in the quantum of the Intercompany Charge fairly reflects the anticipated needs of the Applicant, which will require funding of up to USD $9.1 million for the period up to December 13, 2024 in order to fund the applicant’s operating costs, working capital requirements and professional costs associated with these CCAA proceedings. Again, I rely on the Monitor’s support for the requested increase, and its view that the requested increase is both reasonable and necessary in the circumstances having regard to the Applicant’s ongoing liquidity needs.

[11] As noted at the time of the initial order, in preparation for these CCAA proceedings, the Applicant and Accuride Corp entered into an intercompany supply agreement dated October 9, 2024 (the “Intercompany Supply Agreement”) formalizing the terms and conditions of the intercompany sale by the Applicant to Accuride Corp of blanks and certain key wheel products after the filing date.

[12] The Intercompany Supply Agreement confirms intercompany arrangements in respect of the continuing sale of blanks and key wheel products by the Applicant to Accuride Corp (the “Inventory”), amounts payable for same, as well as amounts payable to the Applicant by third party customers and the provision of raw materials needed for the manufacture of the Inventory.

[13] Again the Monitor supports the Intercompany Supply Agreement as reasonable and appropriate in the circumstances, and recommends its approval by the court. It points out that the Intercompany Supply Agreement reflects favourable pricing and payment terms, and that Accuride Corp. has already been authorized in its Chapter 11 proceedings to continue to perform under the Intercompany Supply Agreement.

[14] The Applicant requests, under s. 11.02 of the CCAA that the court grant an extension of the stay or proceedings, inasmuch as the Applicant has been acting and continues to act in good faith and with due diligence and on the basis that the current circumstances justify the order sought.

[15] I am prepared to extend the stay of proceedings until December 13, 2024 as requested. I accept that it is reasonable and appropriate to give the Applicant continued “breathing space” as it continues to consider and explore its restructuring options.

[16] More particularly, I am satisfied that:

(a) The Applicant has acted and continues to act in good faith and with due diligence;

(b) The proposed extension will provide the time necessary for the Applicant to assess the outcome of the marketing process, finalize negotiations with customers, and consider remaining options, including an orderly wind-down of its operations if necessary;

(c) Accuride Corp., as the Intercompany Lender, is supportive of the proposed extension;

(d) Creditors and customers of the Applicant will not be prejudiced by the proposed extension; and,

(e) The Monitor has confirmed its support for the relief requested.

[17] In all of the circumstances, I have signed, and attach, the ARIO sought by the Applicant.

W.D. BLACK J. RELEASED: October 18, 2024