RiverStreet Communications of Virginia - Chapter 11 Bidding Procedures Summary

Bidding Procedures Summary

Stalking Horse Bid

• Purchase price consists of:
  • $92.5 million in cash; and
  • the assumption of the assumed liabilities, including all cure costs for assigned contracts.
• Buyer: OCM RiverStreet Holdings, LLC, an entity formed by Oaktree Capital Management, L.P. The parties signed the asset purchase agreement on Oct. 20, 2026, the day before the petition date. The motion states that Oaktree is not an insider. It also states that no officer, director or member of the debtors has any agreement with Oaktree regarding post-closing employment or equity participation.
• Deposit: $9.25 million, held in an interest-bearing trust account at U.S. Bank N.A. and credited to the price, with interest, at closing. It becomes nonrefundable only if the sellers terminate for Oaktree's uncured breach. On any other termination it is returned with interest.
• The stalking horse bid is deemed a qualified bid, and later amendments to the bid procedures cannot remove that status. If no other qualified bid arrives by the bid deadline, the auction is canceled, Oaktree becomes the successful bidder and the debtors must seek a sale order acceptable to it at the sale hearing.

Bid Protections

• Break-up fee: $2.775 million (3% of the cash purchase price)
• Expense reimbursement: up to $1.5 million of reasonable, documented out-of-pocket costs, including fees of counsel and other professional advisors
• Both protections are earned on any termination of the APA except:
  • termination by mutual consent;
  • termination because of a final legal restraint; or
  • termination by the sellers for Oaktree's uncured breach.
• They are paid in cash, without further court order, when an alternative transaction closes, including on the effective date of a Chapter 11 plan, whether or not the sellers receive any proceeds. Neither is payable on an outside-date termination if the regulatory approvals condition is still unsatisfied at that time.
• An alternative transaction is any transaction in which a person other than the sellers, Oaktree or their affiliates acquires all or substantially all of the acquired assets. It can take any form, including a merger, asset or equity sale, recapitalization or plan of reorganization.
• The proposed bid procedures order would treat both protections as allowed superpriority administrative expense claims against each estate under sections 105(a), 364(c)(1), 503(b) and 507(a)(2). They would rank ahead of all other administrative expenses, subject only to the DIP carve-out. Any unpaid amount must come out of alternative transaction proceeds before anything is paid on the DIP or prepetition facility obligations, notwithstanding the DIP orders.
• No other bidder is entitled to a break-up fee, expense reimbursement or similar payment, and bidders waive substantial contribution claims.

Overbid

• Initial overbid: the stalking horse purchase price plus the break-up fee, the maximum expense reimbursement and $500,000. This initial increment cannot be reduced without Oaktree's prior written consent.
• Minimum overbid increment: $250,000 after the first overbid. The debtors may raise or lower it during the auction in consultation with the consultation parties.
• When evaluating Oaktree's overbids, the debtors must account for the fact that the bid protections are not payable if Oaktree wins. Oaktree is deemed to have topped a competing bid if its overbid exceeds that bid by the minimum overbid increment less the break-up fee and expense reimbursement.
• Other bidders are disqualified if they skip a round; Oaktree need not bid in every round to stay eligible.

Bid Requirements

• To be a qualified bid, a bid must, among other requirements:
  • cover all or substantially all of the assets, and at least the acquired assets, and assume at least the APA's assumed liabilities, including all cure costs (the debtors may combine bids for non-overlapping material portions only if together they meet every requirement);
  • meet the initial overbid threshold, as valued by the debtors in consultation with the consultation parties;
  • include an executed APA based on Oaktree's, a redline, a marked proposed sale order and a schedule of contracts to be assumed, on terms substantially the same as or better than the APA and not conditioned on bid protections;
  • show committed financing that is not subject to internal approvals, syndication, diligence or credit committee sign-off, together with adequate assurance information;
  • carry no contingencies other than entry of the sale order and receipt of regulatory approvals, on terms no more burdensome than the APA;
  • identify all required regulatory approvals, including FCC section 214 and wireless license consents, Virginia State Corporation Commission and North Carolina Utilities Commission approvals, and eligible telecommunications carrier designations. The bid must also include evidence and a timeline for obtaining them, a commitment to file within the APA's deadlines and an agreement to bear all associated fees;
  • propose treatment of the debtors' grant programs (VATI, E-ACAM, CAF Phase II, RDOF and North Carolina's GREAT, CAB 2.0 and Stop Gap programs). The bidder must also commit to replace, on or before closing, the letters of credit and other credit support posted for the CAF Phase II and RDOF programs and to obtain the debtors' full release from those programs;
  • describe the bidder's plan for uninterrupted service, including carrier-of-last-resort obligations, and its treatment of employees and collective bargaining agreements;
  • disclose every participant and financial backer and include board authorization, good-faith and no-collusion statements, and an "as is, where is" acknowledgment; and
  • remain irrevocable until the earlier of closing with the successful or backup bidder and 90 days after the auction (or after the bid deadline, if no auction is held), commit the bidder to serve as backup bidder if selected, and commit to close promptly after the sale order and regulatory approvals and in any event by the APA's outside date.
• To get diligence access, a bidder must provide:
  • a confidentiality agreement;
  • its identity and financial backers;
  • preliminary evidence of financial capacity; and
  • a statement of its qualifications to hold the debtors' FCC licenses, section 214 authorizations, certificates of public convenience and necessity and ETC designations.
• The debtors may limit diligence given to competitors, including access to customer proprietary network information. Bidders may not contact customers, suppliers, employees or governmental entities without the debtors' consent, and diligence ends at the bid deadline.

Good Faith Deposit

• Deposit: 10% of the cash purchase price, wired to escrow before the bid deadline. A bidder must top it up within one business day of the debtors' request if its cash price rises, and the debtors may require any bidder that overbid at the auction to bring its deposit to 10% of the cash price of its final overbid within one business day after the auction. No deposit is required for the portion of a bid that is a permitted credit bid, but the bidder must post cash deposits for any portion that is not.
• Deposits are not estate property and are not subject to any liens, including postpetition financing liens, unless forfeited.
• Unsuccessful bidders' deposits are returned without interest within five business days after the auction. The backup bidder's deposit is held until the earlier of two business days after closing with the winner and the end of the backup period.
• The debtors may keep a defaulting successful or backup bidder's deposit as liquidated damages without giving up other remedies. Oaktree's deposit is governed solely by the APA and, once disbursed to the sellers, by the DIP orders.

Credit Bid

• Under the proposed order, the DIP agent, the DIP lenders and their designees may credit bid the DIP obligations. The prepetition agent and prepetition secured parties may credit bid the prepetition obligations, subject to challenge rights under the DIP order. Both are subject to section 363(k). Each is deemed a qualified bidder, may bid at any time including during the auction, and posts no deposit.
• The DIP and prepetition secured parties forgo any right to credit bid for collateral identified as purchased assets under the APA while the stalking horse bid and any other qualified bid remain viable, pending offers for that collateral. The motion describes this waiver more narrowly: as binding only the DIP agent and DIP secured parties, and only while the stalking horse bid or another successful bid is pending.
• Any other secured creditor must identify its collateral and may credit bid only up to its allowed secured claim, subject to challenge rights, DIP order limits and further court order. Every credit bid must include enough cash to pay the break-up fee and expense reimbursement in full.
• Oaktree may terminate the APA if any seller files, supports or obtains approval of a plan, sale or other restructuring inconsistent with the APA, including a credit bid, that is not withdrawn within five business days.

Key Dates

• Bid procedures objection deadline: Nov. 16, 2026, at 4 p.m. ET
• Bid procedures hearing: on or before Nov. 18, 2026, at 11 a.m. ET
• Sale notice service and publication: within three and five business days, respectively, after entry of the bid procedures order
• Cure notice and subscriber cure notice: filed and served no later than Nov. 25, 2026
• Cure objection deadline: 10 business days after service of the cure notice (or of any supplemental cure notice, for affected counterparties)
• Bid deadline: Dec. 10, 2026, at 4 p.m. ET
• Qualified bid designation and auction notice: Dec. 14, 2026
• Auction (if necessary): Dec. 15, 2026, at 10 a.m. ET, at Tavenner & Beran's Richmond, Va., offices or by videoconference
• Notice of successful and backup bidders: Dec. 16, 2026
• Sale objection and adequate assurance objection deadline: Dec. 18, 2026, at noon ET
• Sale hearing: no later than Dec. 21, 2026
• Post-auction objections: the proposed order sets a deadline 48 hours after the post-auction notice for objections to the identity of, or adequate assurance from, a winning or backup bidder other than Oaktree. Its assumption procedures instead set adequate assurance objections to such a bidder at 4 p.m. ET two business days after that notice, while the motion's summary of those procedures puts them at the sale objection deadline.
• The exhibits do not match the motion's calendar:
  • the bid procedures set the bid deadline at Dec. 15, 2026, at 4 p.m. ET, rather than Dec. 10;
  • the bid procedures set the auction at Dec. 18, 2026, at 10 a.m. ET, rather than Dec. 15; and
  • the proposed order leaves its dates blank and sets the sale objection deadline at 4 p.m. ET rather than noon.
• APA milestones: the sellers must use commercially reasonable efforts to obtain the bid procedures order within 30 days after the petition date, set the bid deadline within 50 days, start any auction within 55 days and schedule the sale hearing within 60 days.
• Outside date: one year after entry of the sale order, extendable by 60 days if regulatory approvals are the only unsatisfied closing condition

Background and Marketing Process

• Under the RiverStreet brand, the debtors provide fiber broadband, voice, wireless and security services to about 31,600 subscribers in predominantly rural Virginia and North Carolina, a mission dating to 1951. Subscribers include households, farms, small businesses, schools, and public-safety and healthcare users for whom the debtors' network is the only available connection.
• The company filed Chapter 11 on Oct. 21, 2026, in the Eastern District of Virginia to preserve the network's going-concern value and keep service uninterrupted.
• According to the motion, postpetition operations will not generate enough unrestricted cash to fund operations and case costs for an extended period, and the DIP facility is sized to bridge the debtors to a prompt sale. The proposed bid procedures order recites that continued DIP access and use of cash collateral depend on meeting sale-process milestones.
• Guggenheim Securities began a multi-track process in May 2026, seeking both bids for the assets and an exit term loan to fund a reorganization. The best sale bid would become the stalking horse only if it exceeded the value of the best exit financing bid.
• Guggenheim contacted 128 potential bidders, and 66 signed NDAs and conducted diligence. Seven submitted indications of interest: two term sheets for exit or replacement financing and five sale proposals.
• After multiple rounds of negotiations, Guggenheim presented two actionable stalking horse bids, and the debtors accepted Oaktree's final term sheet. The debtors say they then negotiated a materially higher purchase price than Oaktree first offered, plus other changes favorable to the estates. The bid procedures were developed in consultation with the secured lenders.

Parties Involved

• Sellers: Wilkes Telephone Membership Corp., RiverStreet Management Services, LLC and the additional debtor sellers on Schedule A to the APA, which Oaktree may revise until three business days before closing
• Buyer: OCM RiverStreet Holdings, LLC, which may designate affiliates to acquire specified assets or assume specified liabilities; the buyer and its designees are jointly and severally liable
• DIP agent and prepetition agent: CoBank, ACB. The motion states that the DIP and prepetition agents hold liens on substantially all of the assets, have consented to the sale and will consent to any successful bid that complies with the bid procedures.
• Consultation parties: counsel to CoBank and to any official committee; the motion states that no committee had been appointed. Oaktree is not a consultation party. Any consultation party that participates in, finances or is affiliated with a bid loses consultation and information rights on competing bids for as long as it is involved.
• Advisors: Guggenheim Securities (investment banker); Pachulski Stang Ziehl & Jones and Tavenner & Beran (debtors' counsel); Stuart Kaufman (chief restructuring officer); Milbank (Oaktree); Eversheds Sutherland (CoBank)

Assets Being Sold

• All of the sellers' assets other than excluded assets, including:
  • equity in designated acquired entities, which gives Oaktree indirect ownership of those entities' assets and liabilities;
  • accounts receivable other than intercompany receivables;
  • assigned contracts, including leased real estate;
  • inventory and furniture, fixtures and equipment;
  • owned real estate;
  • permits, including communications permits, to the extent transferable;
  • books and records, intellectual property, general intangibles and goodwill;
  • tax refunds; and
  • privileges relating to the acquired business.
• Claims and causes of action relating to the acquired assets, including Chapter 5 avoidance actions and state-law equivalents relating to those assets, plus insurance proceeds tied to the acquired assets or assumed liabilities.
• All build plan grant funds, with the right to draw on or be reimbursed from them after closing. These are funds held in trust, restricted, or advanced under the grant agreements whose projects Oaktree elects to include in its go-forward network construction plan. Funds held in trust transfer subject to any required governmental consent, which the sellers must use reasonable best efforts to obtain.

Excluded Assets

• Cash and cash equivalents in the sellers' accounts, other than build plan grant funds, including cash that a final order finds is held in trust for a non-seller
• Equity in the sellers and in non-designated subsidiaries, and the sellers' equity in Responsive Technology Partners, Inc.
• Claims against current or former affiliates of the debtors (other than the acquired entities and hired employees), and claims arising from any draw on a letter of credit issued for a grant program
• Benefit plans, collective bargaining agreements, excluded contracts, professional retainers and escrows, personnel files, deal-related privileged records, materials on other bidders, organizational documents, and all insurance policies, including D&O, fiduciary and tail coverage

Liabilities; Sale Free and Clear

• Assumed liabilities: post-closing liabilities under assigned contracts and relating to the acquired assets or the business; transfer taxes; obligations under assigned permits; and all cure costs
• Excluded liabilities: everything else, including:
  • borrowed-money debt, including intercompany debt;
  • accounts payable other than cure costs;
  • taxes other than transfer taxes;
  • pre-closing employee and benefit liabilities, including collective bargaining agreement, ERISA, WARN Act, workers' compensation and pension liabilities;
  • pre-closing investigations and litigation;
  • rejection damages claims;
  • pre-closing environmental liabilities; and
  • pre-closing indemnification claims of current and former officers, directors, employees, partners and members of the sellers.
• The assets are sold free and clear of all interests other than assumed liabilities and permitted liens, with those interests attaching to sale proceeds. Permitted liens are non-impairing real property encumbrances and the specified liens on a schedule, and no lien counts as permitted if the assets can be sold free of it. The sale order must find that Oaktree is not a successor, has not merged with the sellers and is not a continuation of their business, including with respect to collective bargaining agreements and benefit plans.

Executory Contracts

• Cure costs: Oaktree pays all cure costs for assigned contracts at or before closing.
• Oaktree may designate contracts as assigned or excluded until two business days before closing. For contracts with unresolved cure or assignment disputes, that deadline extends to the earlier of resolution to Oaktree's satisfaction and five business days after a final, nonappealable order. Undesignated contracts are excluded, and Oaktree has no cure liability for them.
• The debtors may not reject any contract related to the business until at least 10 days after closing. After closing, Oaktree may request assumption and assignment of additional contracts at its sole cost.
• Counterparties that do not object on time are deemed to consent and are barred from asserting further cure amounts or defaults. A dispute over the cure amount alone does not block assignment at closing if the counterparty has adequate assurance of prompt cure. Supplemental notices carry an objection window running to the later of the cure objection deadline and seven days after service, and an omitted contract goes to Oaktree only if Oaktree designates it.
• Anti-assignment provisions do not bar assignment, subject to the sale order. However, governmental entities keep their rights over permits, FCC licenses, communications permits and grant program authorizations that cannot be assigned without their consent.
• If a third-party or governmental consent needed to transfer an acquired asset is not obtained, closing still proceeds. For up to 180 days afterward (or the remaining contract term, if shorter) both sides must use commercially reasonable efforts to obtain it, and Oaktree may propose a pass-through arrangement that gives it the asset's economic benefits and burdens in the meantime; the sellers bear no liability for failing to obtain such consents.

Subscriber Contracts

• The debtors are party to about 3,800 subscriber contracts, and some subscribers hold several. The debtors take no position on whether these contracts are executory.
• The debtors propose special procedures for these contracts:
  • a plain-language subscriber cure notice;
  • leaving subscriber contracts off the public cure schedule and filing a separate schedule under seal if one must be filed, citing customer-confidentiality duties under 47 U.S.C. § 222; and
  • service by email where available and first-class mail otherwise.
• The debtors have an email address for over 99% of subscriber contracts, and about 60% of subscribers with contracts have opted to receive only email notices.
• The subscriber notice states that if a contract is transferred, the same rates, terms and conditions will continue under the buyer and service will not be affected by the sale.

Employees

• Oaktree decides, in its sole discretion, which employees receive offers and sets their terms by closing. It does not assume or agree to be bound by any collective bargaining agreement, and it does not adopt existing wage rates, benefits or policies.
• The sellers keep liabilities for employees who are not hired and all pre-closing employment, termination and separation liabilities, including WARN Act liability through closing.
• Until closing, the sellers need Oaktree's consent to hire, promote or terminate (other than for cause) anyone with annual base pay above $100,000, to increase or accelerate employee compensation or benefits beyond what law or a collective bargaining agreement requires, or to grant equity, severance, bonus, retention, transaction or change-of-control awards.

Regulatory Approvals, Grant Programs and Credit Support

• The debtors hold FCC domestic section 214 authorizations, wireless spectrum licenses, and certificates of public convenience and necessity from Virginia and North Carolina regulators, and each transfer requires regulatory consent. The parties must file FCC and state applications within 30 days after the agreement date or as soon as reasonably practicable and use reasonable best efforts to obtain approval. Oaktree pays all governmental fees.
• Closing depends on receipt of all regulatory approvals Oaktree identifies, without conditions that would have a material adverse effect on the business or that would require divestitures, holding assets separate or material operating restrictions.
• Oaktree must use commercially reasonable efforts, at its own cost, to replace the sellers' guarantees, letters of credit, bonds and similar credit support and obtain their full release, or to step in as primary obligor. Any credit support not replaced by closing stays in place while Oaktree continues its efforts, and Oaktree bears all costs.
• The proposed order makes no determination of the rights of the debtors, DHCD, the West Piedmont Planning District Commission, the North Carolina Department of Information Technology, USAC, the FCC or other governmental entities regarding:
  • any grant program;
  • related letters of credit; or
  • amounts asserted to be subject to repayment, recoupment, withholding or penalty.
  These issues are reserved for the sale hearing or later.

Auction, Successful Bidder and Backup Bidder

• An auction is held only if at least one qualified bid other than Oaktree's arrives. Bidding is open and recorded and starts from a baseline bid announced one business day in advance. Each bidder must confirm on the record that it has not colluded.
• When ranking bids, the debtors may consider:
  • cash available to the estates after paying the DIP and prepetition facility obligations;
  • net economic effect, including assumed liabilities, cure costs, and funding of a wind-down amount and a professional fee escrow;
  • requested changes to the APA;
  • certainty and timing of regulatory approvals;
  • continuity of service and carrier-of-last-resort and ETC obligations;
  • treatment of the grant programs and replacement of credit support;
  • treatment of employees; and
  • tax consequences.
• If Oaktree finishes second, it automatically becomes backup bidder. Its bid stays open until the earlier of 60 days after the auction and closing with another winner. Its backup bid, its deposit and the debtors' remedies against it are governed only by the APA.
• Other backup bids stay open until the earlier of 90 days after the auction and closing with the winner. If the winner defaults, the debtors may close with the backup bidder without further court order and keep their rights against the defaulting bidder. No further bidding is allowed at the sale hearing.

Closing Conditions and Sale Order

• Oaktree's obligation to close is conditioned on:
  • entry of the sale order and its becoming a final order, with no injunction or law barring closing (a condition for both sides);
  • a bid procedures order approving the bid protections remaining in effect;
  • receipt of the regulatory approvals;
  • no material adverse effect since signing;
  • accurate representations, with the fundamental representations on organization, authority and brokers true in all respects other than de minimis inaccuracies and all others measured against a material adverse effect standard;
  • the sellers' performance of their covenants in all material respects; and
  • a mutually acceptable management or transition services agreement, which is also a condition for the sellers, with the fees Oaktree pays under it limited to reasonable, documented pass-through costs.
• The sale order must be acceptable to Oaktree. It must include free-and-clear, section 363(m) good-faith, adequate assurance and reasonably-equivalent-value findings, and it must take effect immediately. It must also:
  • find that Oaktree has no successor or vicarious liability, including under antitrust, environmental, labor, de facto merger or substantial continuity theories; and
  • release the sellers and their related parties from the causes of action Oaktree acquires. Related parties are the sellers' past, present and future directors, officers, employees, incorporators, members, managers, advisors, counsel, partners and equityholders.

Termination and Remedies

• Either side may terminate if:
  • both agree;
  • a final legal restraint is not lifted within 15 business days;
  • closing has not occurred by the outside date;
  • the sellers close an alternative transaction; or
  • a case is dismissed or converted to Chapter 7, or a trustee or an examiner with expanded powers is appointed.
• Oaktree may also terminate if:
  • the motion is not filed within four business days after the petition date, the bid procedures order is not entered within 30 days or the sale order is not entered within 60 days (each extendable by up to 10 business days if the court is unavailable);
  • stay relief is granted as to a material portion of the acquired assets;
  • the sellers commit an uncured breach;
  • it is neither the winner nor the backup bidder, or it is the backup bidder and the sale does not close by its backup bid termination date;
  • the sellers withdraw the motion;
  • the bid procedures order or sale order is changed in a way adverse to Oaktree without its consent, or is voided, reversed, vacated or stayed for more than 14 days; or
  • prepetition or postpetition secured lenders begin exercising remedies against a material portion of the acquired assets.
• The sellers may terminate for Oaktree's breach if it would cause a closing condition to fail and Oaktree has not begun to cure it within 30 days after notice (or by three business days before the outside date). That termination makes the $9.25 million deposit nonrefundable and releases it to the sellers. On any other termination, Oaktree gets its deposit back with interest, and it collects the bid protections when an alternative transaction closes unless the termination was by mutual consent, for a final legal restraint, or at the outside date with the regulatory approvals condition unsatisfied.
• After termination, no party has further liability except under the provisions that survive termination. Both sides may seek specific performance without posting a bond, and neither is liable for consequential or punitive damages or for damages calculated as a multiple of revenue, profits or EBITDA. The proposed order modifies the automatic stay so Oaktree can exercise its APA termination rights and remedies.

Investment Banker Fee

• Under the proposed order, Guggenheim's sale transaction fee must be segregated and escrowed from sale proceeds, for Guggenheim's exclusive benefit, before any other use. The escrow is an express carve-out from the collateral of the prepetition and postpetition secured lenders.
• If the winning bid, including a credit bid, lacks enough cash to cover the fee, the shortfall comes from the debtors' available cash. If that is not enough, the successful bidder must escrow the unpaid portion from its own funds at closing.
• These obligations depend on court approval of Guggenheim's retention and fees under its engagement letter, effective April 9, 2026, as amended July 15, 2026.

Other Terms

• The bid procedures do not require the debtors' boards to act against their fiduciary duties. That carve-out does not limit Oaktree's APA rights, let the debtors avoid paying the bid protections or terminate the APA outside its terms, or permit changes to the initial overbid threshold without Oaktree's consent.
• Changes to the procedures remain subject to the DIP order milestones or the DIP agent's consent. The procedures require Oaktree's prior written consent for changes adverse to it, including any extension of the bid deadline, while the APA requires its consent to any modification of the procedures, the bid procedures order or the sale order, and the motion describes that APA consent right as running to both Oaktree and the DIP agent. Qualified bidders may not modify or withdraw bids except to improve them without the debtors' consent and, for the stalking horse bid, the DIP agent's consent.
• Until closing, the sellers must operate in the ordinary course. Without Oaktree's consent they may not:
  • commit to capital expenditures above $250,000 a month in aggregate;
  • settle matters above $250,000;
  • pay dividends or make distributions; or
  • let material licenses, permits or grant program authorizations lapse.
• After closing, the sellers must change their names and stop using "Wilkes Telephone" and "RiverStreet."
• Representations do not survive closing, and Oaktree acquires the assets "as is, where is."
• Oaktree pays all transfer taxes, and the APA is governed by New York law.