Climate finance company CTN Holdings Inc. and its affiliates have filed a motion seeking court approval to sell substantially all of their assets through an auction process with a $20 million stalking horse bid from Inherent Aspiration, LLC. The proposed sale, detailed in documents filed April 11 in Delaware bankruptcy court, would preserve the debtors' carbon credit business through a credit bid structured transaction.
The Delaware-based debtors, who filed for Chapter 11 protection on March 30, 2025, have asked the court to approve bidding procedures that would establish a May 15 auction date with a final sale hearing to follow within days. The proposed stalking horse bidder appears to be affiliated with the company's debtor-in-possession lender, Inherent Group, LP.
"The Debtors have filed the Chapter 11 Cases to facilitate a value maximizing sale of their assets under section 363 of the Bankruptcy Code," the company stated in its filing. "The Chapter 11 Cases and the contemplated sale process afford the Debtors an opportunity to preserve their carbon credit business while restructuring the debt encumbering the Debtors' going concern."
CTN Holdings and its subsidiaries operate as a climate finance company that sells carbon credits to enterprise clients sourced from its project developer network. The company partners with project developers by providing financial investment, project monitoring, technical assistance, and marketing services to carbon credit generators, which in turn yields high-quality carbon credits made available to customers through various products.
The stalking horse agreement would see Inherent Aspiration, LLC acquire substantially all of the debtors' assets through a credit bid of $20 million, which would be applied to outstanding obligations under the prepetition secured loan facility and/or the DIP credit facility. The purchaser would also assume certain liabilities and pay cure costs associated with assigned contracts.
To protect the stalking horse bidder's position, the debtors have proposed bid protections including a $600,000 break-up fee (3% of the credit bid) and up to $400,000 in expense reimbursement if another bidder ultimately prevails at auction. These protections, the debtors argue, are necessary to secure the floor bid and establish a baseline for the competitive process.
"The Stalking Horse Bid submitted by the Stalking Horse Bidder will serve the critical function of setting a 'floor' for further competitive bidding," the filing states. "Moreover, the terms of the Stalking Horse Bid are reasonable and were the product of good faith, arm's length negotiations among the Debtors and the Stalking Horse Bidder."
The proposed bidding procedures establish a May 13 deadline for competing bids, which must exceed the stalking horse bid by at least the sum of the $600,000 break-up fee, the expense reimbursement of up to $400,000, and a minimum bid increment of $250,000. Qualified bidders must also provide a 10% good faith deposit.
The sale process is operating under tight timeframes established in the company's DIP financing agreement, which requires the bankruptcy court to enter a bidding procedures order by April 30, hold the auction by May 15, approve the sale by May 21, and close the transaction by May 24, 2025.
The motion also sets forth procedures for the assumption and assignment of executory contracts and unexpired leases to the successful bidder. By May 2, the debtors will file a notice listing contracts that may be assumed and assigned, along with proposed cure amounts that would need to be paid to bring any defaulted agreements current.
Hilco Corporate Finance, LLC is serving as the debtors' investment banker to market the assets. "The process contemplated by the Bidding Procedures will leave no doubt that, at the conclusion of that process, the Debtors will have explored all available alternatives and identified the highest or otherwise best offer for their assets," the filing argues.
The case is being heard by Judge Thomas Horan in the U.S. Bankruptcy Court for the District of Delaware (Case No. 25-10603). The debtors are represented by Whiteford, Taylor & Preston LLC.
If approved, the proposal would allow alternative structures for closing the transaction. The successful bidder may elect to consummate the sale either through a standard section 363 sale or through a chapter 11 plan of reorganization/liquidation.
A hearing on the bidding procedures is expected to be scheduled in the coming days, with the court needing to rule by April 30 to meet the milestones in the DIP financing agreement. The debtors' motion argues that "the timeline provides the Debtors with the best chance of success, maximizes value, and is in the best interest of the Debtors and their estates."
The proposed sale includes certain avoidance actions related to assigned contracts, though other avoidance actions would be excluded from the transaction. The stalking horse bidder will not be required to make a good faith deposit since it is credit bidding, but other potential bidders must submit a deposit equal to 10% of their bid amount.
If the court approves the bidding procedures, the debtors will serve a sale notice to all potential interested parties and publish notice in The New York Times National Edition to reach any unknown parties who might be interested in bidding on the assets.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 46 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.