Elite Equipment Leasing - Chapter 11 Bidding Procedures / APA Summary

Section 363 Sale Summary

Overview of Relief Sought

• The Debtors seek authorization, pursuant to Bankruptcy Code §§ 105(a) and 363(f), Federal Rules of Bankruptcy Procedure 2002, 6004, and 9014, and Local Bankruptcy Rule 6004-1, to market and sell certain Equipment outside the ordinary course of business, free and clear of liens, claims, and encumbrances, at a public auction, with valid liens attaching to the proceeds.
• The Auction and Sale are contemplated in the Debtors' Joint Revised Chapter 11 Plan of Reorganization dated April 17, 2026 [Dkt. No. 468, as modified at Dkt. No. 504-2] and related Disclosure Statement [Dkt. No. 469, as modified at Dkt. No. 504-1]. As described in the Plan, the Debtors are downsizing their operations and selling off a large amount of equipment to reduce expenses, pay off a substantial amount of secured debt, and increase profitability going forward, emerging as a smaller, more streamlined operation.
• The Sale Motion is filed concurrently with:
  • An application to employ Jeff Martin Auctioneers, Inc. ("JMA") as auctioneer to conduct the proposed Auction and sales; and
  • A motion to shorten the notice and objection periods for the Sale Motion and the JMA employment application to permit the Debtors to conduct the proposed auction and sales on June 16, 2026.

Parties Involved

• Sellers / Debtors: Elite Equipment Leasing, LLC; Reliable Crane Service, LLC; Reliable Construction Services, LLC; Reliable Phoenix, LLC; Champion Crane Holdings, LLC; and Champion Crane Rental, Inc., operating on an affiliated basis under the general trade name "Reliable Crane Service."
• Auctioneer: Jeff Martin Auctioneers, Inc. ("JMA"), a nationally recognized auctioneer specializing in cranes and heavy equipment, retained to conduct targeted marketing and a competitive auction process. Peter Gehres serves as JMA's Chief Operating Officer. The employment of JMA as auctioneer is specifically contemplated in the Disclosure Statement and Plan.

Background

• The Debtors own and operate cranes and related equipment for use in construction projects of various sizes across multiple states.
• As of the Petition Date, the Debtors employed approximately 194 full-time employees across their various locations, including their headquarters in Anaheim, California, and other work yards and offices in California, Nevada, Arizona, and Texas.
• Since 2017, Reliable Crane has been involved in some of the largest construction projects on the West Coast, including The Wilshire Grand Center (a 1,100-foot skyscraper in Downtown Los Angeles), SoFi Stadium (home to the Los Angeles Rams and Los Angeles Chargers NFL teams), and Metropolis in Downtown Los Angeles.
• The Company's clients have also included Southern California Edison; IQHQ, a premier life sciences real estate development company; and TSMC, a microchip manufacturer.

Relevant Post-Petition Events

• On April 17, 2026, the Debtors filed their Plan and Disclosure Statement [Dkt. Nos. 468 and 469].
• On May 14, 2026, the Debtors filed their Notice of Submission of Redlined Versions of Disclosure Statement and Plan [Dkt. No. 504].
• The Court approved the Disclosure Statement at a hearing on May 15, 2026, and set a Plan confirmation hearing for July 8, 2026.
• The Plan is the result of lengthy negotiations with the Official Committee of Unsecured Creditors, Commercial Credit Group ("CCG"), Commercial Funding Inc. ("CFI"), and other secured creditors. It contemplates that the Debtors will sell certain equipment (referred to in the Plan as the "Excluded Collateral"), employ JMA to market and sell the Equipment at auction, and use the sale proceeds to pay down allowed secured claims according to lien priority, thus reducing the Debtors' debt.

Assets Being Sold

• The Equipment being offered for sale is a subset of the equipment described in the Disclosure Statement and Plan as the "Excluded Collateral," identified in the chart attached to the Declaration of Peter Gehres as Exhibit 1.
• The Equipment comprises highly specialized items, consisting of over 150 lots of specialized cranes, heavy construction equipment, and vehicles that require significant logistical coordination, transportation planning, staging, storage costs, and ongoing auction preparation in advance of the scheduled June 16, 2026 Auction date.
• The Equipment represents only a subset of the Excluded Assets identified in the Disclosure Statement and Plan, for two reasons:
  • First, some Excluded Assets will not be included because the Debtors are still using certain items for ongoing work and will not be in a position to sell them on June 16, 2026; those items will be offered at a subsequent auction, which may take place following confirmation of the Plan.
  • Second, the Debtors are currently negotiating with a potential buyer regarding a possible private (i.e., non-auction) package sale of approximately 4–6 pieces of specific equipment, which the Debtors believe could be more advantageous to the estates than selling those items at the Auction. If that potential sale does not come to fruition, the Debtors may seek to sell those items at a subsequent auction.

Auction Format and Procedures

• All assets included in the Auction and Sale will be offered through a public auction scheduled to take place June 16, 2026, commencing at 9:00 a.m. PT.
• The Auction will be conducted both in person in Anaheim, California, and on multiple online bidding platforms. The Auction site has already gone live at https://www.jeffmartinauctioneers.com/auctions/1256/landing.

Reserve Prices

• Certain assets will have an agreed-upon established reserve price set by the Debtors in consultation with JMA.
• If the reserve price is not met for those items, the Debtors reserve the right to remove the asset from the Auction and offer it for sale at a subsequent auction or other sale process.

Credit Bids by Secured Parties

• Unless otherwise ordered by the Court, a secured creditor with an undisputed lien and allowed secured claim shall have the right to credit bid up to the amount of its allowed secured claim with respect to any piece of Equipment in which such secured creditor has a security interest, as provided by applicable non-bankruptcy law.
• The holder of a disputed secured claim or disputed lien shall not be entitled to credit bid at the Sale.

Sale Free and Clear of Liens

• The Debtors request that the Equipment be sold to the successful bidder free and clear of all liens, claims, interests, and encumbrances pursuant to Bankruptcy Code Section 363(f), with liens attaching to the proceeds of sale with the same validity, priority, and extent as the liens on the Equipment.
• Section 363(f) permits a sale free and clear if one of five conditions is satisfied: (1) applicable non-bankruptcy law permits such a sale; (2) the interest holder consents; (3) the interest is a lien and the sale price exceeds the aggregate value of all liens on the property; (4) the interest is in bona fide dispute; or (5) the interest holder could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of its interest. Because the provision is stated in the disjunctive, satisfaction of any one requirement suffices.
• The Debtors submit that one or more of these conditions will be satisfied, relying principally on Sections 363(f)(2) and (5):
  • Consent (363(f)(2)): The Debtors do not anticipate that any secured creditor will object, as all stand to benefit from the opportunity for a real auction and avoiding a foreclosure sale; absent objection, consent will be implied.
  • Money satisfaction / applicable non-bankruptcy law (363(f)(5) and (1)): State court foreclosure by any secured creditor would extinguish junior liens, forcing junior lienholders to accept value less than their secured claims — a result the Ninth Circuit recognized in In re Spanish Peaks, where § 363(f)(1) is satisfied so long as such a foreclosure sale would be legally permissible — and the secured creditors here hold liens that can be reduced to a specific monetary value, rather than non-monetary interests such as covenants or equitable servitudes.

Secured Creditors Holding Liens Against the Equipment

• The Debtors' analysis indicates that the following secured creditors hold liens against the Equipment as of the expected June 2026 Auction date:
  • Class 1A–1F (Blanket Security Interest) – Commercial Funding, Inc. ("CFI")
  • Class 2A–2F (Blanket) – Commercial Credit Group, Inc. ("CCG")
  • Class 3C (Champion Rental) – Celtic Bank
  • Class 6 (Elite) – 1st Source Bank
  • Class 11 (Elite) – De Lage Landen Financial Services, Inc.
  • Class 14 (Elite) – Gordon Brothers Commercial Equipment Finance, LLC
  • Class 22 (Elite) – Mitsubishi HC Capital America, Inc.
  • Class 27 (Champion Rental) – Flagstar Financial & Leasing, LLC (successor to Signature Financial, LLC)
  • Class 34 (Reliable Crane) – Mitsubishi HC Capital America, Inc.
  • Class 37 (Reliable Construction) – Midland States Bank
  • Class 40 (Reliable Crane) – Unifi Equipment Finance, Inc.
• Additional information regarding which creditors hold liens against specific pieces of Equipment is set forth in the chart attached to the Gehres Declaration.
• CCG is the Debtors' largest equipment lender. CFI and CCG are the Debtors' DIP finance lenders and also hold junior liens on all of the Debtors' equipment. CFI and CCG have informed the Debtors that they conferred directly with JMA and are comfortable with the timing of the Auction.

Right to Abandon Collateral

• Although not strictly at issue in the Motion, as set forth in the Plan, if the Reorganized Debtors, after consultation with JMA, determine that it is not practical or worthwhile to sell certain Equipment, they may abandon such equipment in place or return it to the holder of the undisputed senior lien on such Collateral by providing 7 days' written notice to all secured creditors asserting a lien on such equipment.
• Any such abandonment shall not absolve any secured creditor of its obligations with respect to disposition of the Collateral under applicable non-bankruptcy law.

Distribution of Sale Proceeds

• The Debtors seek authorization to distribute any net proceeds of sale (after payment of all costs of sale) to the holders of any allowed (undisputed) secured claims in accordance with their lien priority, without the need for further motion or Court order.
• As contemplated in the Plan, to the extent the proceeds of any Equipment are subject to disputed claims and/or disputed liens, such proceeds will be held in reserve by the Debtors or in a separate escrow account until the disputes are resolved by the Court.

Marketing Efforts

• Since the launch of the marketing campaign on May 19, 2026, JMA has undertaken extensive nationwide marketing efforts directed toward crane and heavy-equipment buyers, including articles or press releases in six industry publications, digital advertising, auction platforms, email campaigns, PR distribution, social media campaigns on the Meta platforms, and targeted outreach to over 3,200 crane and heavy haul contacts, and many thousands more interested in trucks and non-crane assets. A copy of the Auction Catalog is attached to the Gehres Declaration as Exhibit 2.
• In a little more than a week, the auction landing page has had over 8,220 views, with estimated traffic for the full launch of 50,000 views, and the digital tactics across advertising platforms have generated over 2.3 million impressions. As a result, JMA has already scheduled at least 60 appointments from potential buyers to inspect the Equipment on-site in Anaheim.
• JMA has incurred approximately $61,250 in marketing expenses and billing, as well as approximately $60,287 in costs for catalog creation, related travel and expenses, auction evaluation, and auction setup and production, for a total investment of over $120,000.
• Because JMA began marketing the Auction on or about May 19, 2026, potential buyers will have received approximately 4 weeks' notice of the Auction, which the Debtors and JMA believe is adequate and appropriate. The Debtors have conferred with CCG and CFI regarding the proposed timing, and both are comfortable with the timing of the Auction.
• The Debtors note that continuing the Auction date from June 16 to a later date would have multiple significant adverse effects: (1) it would require JMA (and possibly the Debtors) to incur substantial costs to re-notice the sale and conduct another expensive marketing blitz; (2) it would risk creating confusion among potential buyers, which could negatively impact sales; and (3) it could create distrust or bad feeling among potential buyers already planning to attend the June 16 auction.

Auctioneer Compensation

• As set forth in the JMA Employment Application, JMA will be compensated through a 5% commission on the hammer price of all lots successfully sold and collected.
• No commission will be charged if (a) certain select assets do not meet the agreed-upon reserve for the lender, or (b) the winning bid is a credit bid by a secured lender; in such cases, only a $300 per asset inspection fee applies.
• JMA will charge a buyer's premium of 10% per lot, not to exceed $3,500 per lot, regardless of the method of bidding (live, online, or absentee). This does not include any charges from online and third-party bidding platforms.
• Additional fees may be charged at the buyer's and seller's election pertaining to title or document transfer, insurance, and sales tax.

Good Faith Purchaser

• The Sale is proposed in good faith. Each item of Equipment will be sold at Auction, and the Debtors have made no agreement with any buyer who has a prior connection to the Debtors or is an "insider" as defined under 11 U.S.C. § 101(31).
• The Sale will be conducted through arm's-length transactions and is subject to an auction and overbid following extensive marketing efforts, assuring that the estates receive fair value.
• The Debtors request that the Court determine that the successful bidder(s) at the Auction may receive good faith protection upon closing / Court order, as defined under 11 U.S.C. § 363(m).

Purchase Price / Adequacy of Consideration

• Because the Equipment is being widely marketed and sold at public auction, the ultimate sale price represents adequate and fair consideration.
• The marketing efforts of the Debtors and JMA have exposed the Equipment to a large, yet targeted, market. Certain assets will have an agreed-upon reserve price, and the Debtors may decide to sell certain items by private sale if determined to be more beneficial to the estates.
• Since the Equipment will be sold after extensive marketing and in auction format, the Debtors submit that the final purchase price offered at the conclusion of the Auction will establish the fair market value for the Equipment.

Notice and Hearing

• The Debtors will give notice of the Motion and the proposed Auction, in accordance with Bankruptcy Rules 2002(a)(2), 6004(a) and (c), 9007, and 9014, and Local Bankruptcy Rules 6004-1 and 9013-1, to all known creditors and parties-in-interest by first class mail.
• Pursuant to the Court's Order shortening the objection period [Dkt. No. 525], any objection to the Motion must be filed in a written responsive pleading, together with a request for a hearing, no later than June 5, 2026.
• If an objection is filed, the responding party shall appear before the Court on June 9, 2026, at 3:00 p.m. in the 2nd Floor Courtroom, Federal Building, 400 N. Main, Butte, Montana, to prosecute the objection.
• If no objections are timely filed, the Court may grant the relief requested, as a failure to respond by any entity shall be deemed an admission that the relief requested should be granted.

Key Dates

• Plan and Disclosure Statement Filed: April 17, 2026 [Dkt. Nos. 468 and 469]
• Redlined Versions of Disclosure Statement and Plan Filed: May 14, 2026 [Dkt. No. 504]
• Disclosure Statement Approved: May 15, 2026
• Marketing Campaign Launch: May 19, 2026
• Objection Deadline (per shortened order): June 5, 2026
• Hearing (if objection filed): June 9, 2026, at 3:00 p.m.
• Auction Date: June 16, 2026, at 9:00 a.m. PT
• Plan Confirmation Hearing: July 8, 2026