TPD Design House - Chapter 11 APA Summary

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

• Seller: TPD Design House, LLC (the "Debtor")
• Purchaser: Oslo Blue, LLC, a Delaware limited liability company whose sole member is Scott Tarte
• Disclosed connections between the Debtor and the Purchaser:
  • Mr. Tarte's daughter is an employee of the Debtor.
  • Mr. Tarte's son, Evan Tarte, has assisted in the creation of cash flow projections used to determine the Debtor's cash needs and the amount funded by the DIP loan facility.
  • Mr. Tarte has never been an owner, officer, manager, director, or related party of the Debtor.
  • Other than as disclosed, neither the Purchaser nor Mr. Tarte has any connections with the Debtor, and neither he nor any party in which he has an interest (including the Purchaser) is a creditor of the Debtor, although Mr. Tarte could become a creditor to the extent the Debtor is unable to complete the project for which it has been engaged and paid in full.
• The Purchaser also serves as the Debtor's post-petition (DIP) lender as authorized by the Bankruptcy Court.

Background

• Petition Date: March 16, 2026; Chapter 11 case pending in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania (Case No. 26-11073 (DJB)).
• The Debtor is a creative agency specializing in brand identities, website design and development, event design and production, experiential activations, and bespoke stationery and packaging.
• The Debtor scheduled approximately $13,700,000 in secured debt and approximately $27,700,000 in unsecured debt, the vast majority from private lenders.
• The Debtor's equity in its tangible assets is believed to be less than $100,000.
• The Leased Premises at 108 West Wayne Avenue, Wayne, PA 19087 consists of approximately 9,800 rentable square feet; the Debtor is approximately 5 years into the initial 10-year term with an option to extend for an additional 5 years (Lease dated May 5, 2021 with West Wayne Avenue Ventures, LLC).
• The Debtor's ongoing cash flow challenges and inability to fund an outright reorganization led to the decision to sell substantially all of its assets, after obtaining interim cash collateral approval and expedited post-petition DIP financing.
• The Debtor believes the value of its assets (and the consideration offered by the Purchaser) is insufficient to pay first-priority secured creditor Beacon in full, let alone any junior secured creditors.

Assets Being Sold

• Substantially all of the Debtor's assets, comprising the "Purchased Assets":
  • All tangible personal property;
  • All intellectual property;
  • Rights under certain identified executory contracts and unexpired leases, including the Lease Agreement for the Debtor's leased premises at 108 West Wayne Avenue, Wayne, PA;
  • Authorizations issued to, or required to be obtained or maintained by, the Debtor from any governmental body;
  • Customer deposits;
  • Avoidance actions under chapter 5 of the Bankruptcy Code against identified vendors or counterparties to assigned leases or contracts with whom the Purchaser continues to do business;
  • Rights under non-disclosure, confidentiality, or similar agreements relating to the Debtor's sale of its assets; and
  • All books and records.
• Schedule 1.1(c) of the APA has been redacted with respect to executory customer contracts to protect proprietary information and will be disclosed only to parties interested in entering into an Alternative Transaction (as defined in Section 5.2 of the APA) who have executed a Non-Disclosure Agreement, and to the Creditors' Committee, its members, and its professionals subject to confidentiality protections.

Purchase Price

• The consideration to be paid by the Purchaser consists of:
  • A cash payment of $700,000;
  • An additional $50,000 if closing does not occur by May 15, 2026;
  • A further additional $50,000 if closing does not occur by June 15, 2026; and
  • An amount of up to $315,000 to the extent the Debtor has or will collect its accounts receivable that existed as of the Petition Date.
• As additional consideration, the Purchaser reserves the right to waive the Debtor's obligation to repay all or any portion of the post-petition advances (with interest, if any) made by the Purchaser as the Debtor's DIP lender.
• The Debtor believes the consideration offered by the Purchaser is at or above market price for the Purchased Assets and exceeds the expected value of the assets, thereby reducing secured debt as aggressively as possible.

Employment Arrangements

• The Purchaser has required, as a condition precedent to the effectiveness of the APA, a mutually agreeable employment agreement with the Debtor's principal, Vanessa Kreckel; no such agreement has been reached as of the date of the Motion. Any such agreement, or its terms, will be disclosed to the Bankruptcy Court and parties entitled to notice.
• The Purchaser is expected to hire all 25 of the Debtor's existing employees, ensuring there are no unpaid post-petition wages or benefits.

Bidding Procedures

• The Debtor has not sought to implement formal bidding procedures, citing the exigencies of the sale process and its belief that third-party interest will be minimal because the Debtor operates a pure service business whose clients engage it on a project-by-project basis and are generally not under any forward-looking contract that commits them to future projects.
• Notwithstanding the absence of formal procedures, the sale remains subject to alternative competing bids, providing a mechanism to solicit higher and better offers.
• The Debtor will notify all parties in interest of the Motion, as well as any parties expected to have an interest in purchasing the Purchased Assets on terms better than those offered by the Purchaser.

Overbid

• Any interested party may submit an agreement in a form substantially similar to the APA, with changes redlined against the Purchaser's form, provided that the proposed purchase price is at least $50,000 greater than the consideration offered by the Purchaser.
• Because the Purchaser's consideration may include a waiver of any unpaid portion of its post-petition loan to the Debtor, any interested party should contact Debtor's counsel to confirm the total consideration being offered by the Purchaser for purposes of calculating the overbid amount.

Bid Protections

• Break-Up Fee: $24,500 as identified in the APA, payable to the Purchaser from the sale proceeds in the event of a successful overbid (the Motion separately references a break-up fee of $29,500.00 payable to the Purchaser from the sale proceeds upon a successful overbid).

Sale Free and Clear

• The Debtor seeks approval of the sale of the Purchased Assets free and clear of any and all liens, claims, encumbrances, and interests pursuant to section 363 of the Bankruptcy Code.
• The Debtor believes that, at a minimum, section 363(f)(5) is satisfied: Beacon Bank & Trust (formerly Berkshire Bank) ("Beacon"), believed to be owed at least $4,300,000.00 in the aggregate, holds a first and second priority security interest in the Purchased Assets, and a UCC sale by Beacon under PA UCC §§ 9-610, 9-615, and 9-617 would compel all junior secured creditors to accept money satisfaction of their respective interests.
• To the extent that all secured creditors with liens subordinate or inferior to Beacon's consent or are deemed to consent, section 363(f)(2) is also satisfied.

Successor Liability

• The Purchaser is not interested in purchasing the Purchased Assets without an order stating that the Purchaser is not liable under any theory of successor liability for claims or interests of the Debtor, including, without limitation, those that encumber or relate to the Purchased Assets.

Good Faith Purchaser

• The Debtor submits that the proposed sale constitutes a sale in good faith and for fair value within the meaning of section 363 of the Bankruptcy Code and should be afforded the benefits and protections of section 363(m).
• The terms and conditions of the sale were negotiated at arm's length, with each side represented by its own legal counsel, and the Debtor has fully disclosed all connections between the Debtor and the Purchaser and its principal.

Assumption and Assignment

• The Debtor seeks authorization to assume and assign to the Purchaser those executory contracts and unexpired leases designated by the Purchaser and set forth on Schedule 1.1(c) to the APA (the "Assigned Contracts/Leases"), including the Lease Agreement.
• The Purchaser shall assume and perform after closing all obligations and liabilities under the Assigned Contracts/Leases, including the obligation to pay any amounts needed to cure arrearages, and shall provide adequate assurance of future performance to counterparties as required by section 365 of the Bankruptcy Code.
• The Debtor will serve each counterparty (and potential counterparty) with notice identifying the relevant contract or lease and the applicable cure amount, will provide notice of the deadline set by the Bankruptcy Court for objecting to cure amounts or any other aspect of the proposed assumption and assignment, and will take all other actions reasonably requested by the Purchaser to facilitate negotiations with counterparties to satisfy section 365.
• The Purchaser may update Schedule 1.1(c) by written notice to the Debtor up to one business day prior to Closing, by either:
  • Adding executory contracts or unexpired leases as Assigned Contracts/Leases (which shall be assumed and assigned without any adjustment to the Purchase Price); or
  • Removing Assigned Contracts/Leases that the Purchaser no longer wishes to have assumed and assigned to it.
• Assumption and assignment of the Lease Agreement is expected to result in payment of substantial prepetition arrears to the landlord, with the Purchaser's loan also having funded post-petition rent and CAM payments of approximately $34,000 per month beginning in April 2026.

Notice Provisions

• The Debtor intends to provide notice of the Motion (with Exhibits) and the proposed order to: (i) the Office of the United States Trustee; (ii) counsel to the Creditors' Committee; (iii) all creditors of the Debtor; (iv) counsel for the Purchaser; (v) all entities known to have expressed an interest in an acquisition of the Debtor or any substantial portion of the Purchased Assets within the last 12 months; (vi) all federal, state, and local regulatory or taxing authorities or recording offices with a known interest in the requested relief; and (vii) all parties to executory contracts and unexpired leases with the Debtor (including counsel to the landlord).
• The Debtor submits that such notice is reasonable and appropriate under Bankruptcy Rule 2002(i) and satisfies the requirements of the business purpose test.

Post-Closing Arrangements

• The Debtor requests a waiver of the stay under Bankruptcy Rules 6004(b) and 6006(d) to allow closing within the 14-day period referenced in those rules, citing the potential harm of delay in the sale process and consummation of the sale.

Key Dates

• Targeted Closing Milestones (Purchase Price increases by $50,000 if not met):
  • May 15, 2026
  • June 15, 2026
• Sale Hearing: To be set by the Bankruptcy Court on the Motion.