2021-01-14_GENERAL DOCUMENTS - C1980004

• Permit No: C1980004
• IBM Index Class Name: General Documents
• Doc Date: 1/14/2021
• Doc Name Note: Case No. 20-12043 ‎(GRH)‎ Hopedale Mining LLC
• Doc Name: Bankruptcy Notice
• From: DRMS Website
• To: DRMS
• Permit Index Doc Type: General Correspondence
• Email Name: JDM
• Email Name: JRS
• Email Name: GRM
• Email Name: CMM
• Email Name: CAB
• Media Type: D
• Archive: No

Case 120-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 110353 Desc Main
Document Page 9 of 44
Case 1:20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 1103:53 Desc Main
Document Page 10 of 44
7—would reduce the recovery to unsecured creditors and delay the payment to creditors for many
The Plan represents the culmination of efforts by the Debtors, the Committee and their
respective professionals and advisors to achieve an outcome in these Chapter 11 Cases that
maximizes value for the Debtors' stakeholders.
The Debtors entered bankruptcy facing the major headwords in the U.S. coal industry and
at a time when the coal industry (and the economy in general) was reeling from the COVID-19
pandemic. Despite these headwinds, the Debtors were able to secure buyers for all of the Debtors'
mining assets. which resulted in preserving jobs for many of the Debtors' approximately 525
former employees, the assumption of the Debtors' reclamation obligations, and the transfer of the
Debtors' mining permits. This is the bestpossible outcome for the Debtors and their estates.
Further, Debtors' multiple sales transactions, combined with the Committee's efforts to
resolve claims against the Debtors' secured Lenders without costly and time consuming Litigation,
has allowed these cases to move to confirmation in an expedited manner which has preserved
estate resources for the benefit of all of the Debtors' creditors. The Proponents have focused on
bringing these bankruptcy cases to an expeditious conclusion in a manner that will provide
creditors with the maximum recovery available under the circumstances. The Plan does just that.
The primary purpose ofthese Chapter 11 Cases —liquidation of all of the Debtors' assets
for the benefit oftheir vendors, customers, employees, and creditors, made possible in this instance
by the use of a sales processes faithfully upheld. In this regard, evidence established by this
Memorandum and the declarations in connection therewith, demonstrate that the Plan presents the
best possible outcome under the circumstances; and in Light of the information set forth in the
Disclosure Statement and the Fairfield Declaration demonstrate that the Plan provides the greatest
recovery for all creditor constituencies. The only alternative onversion of these cases to chapter
9
Case 120-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 110353 Desc Main
Document Page 11 of 44
(Class 1 Priority Claims, Class 3 DIP Claims, Class 4 Prepetition Lender Claims, Class 5 General
Unsecured Claims, and Class 6 Equity Interest) and one class of Unimpaired Claims (Class 2
Secured Claims). Four Classes are entitled to vote to accept or reject the Plan. Two Classes
Class 2 and Class 6—are deemed to accept or reject the Plan, as applicable, without voting.
Specifically, the Plan provides for 100% payment to holders of Class 1 Priority Claims and
Class 2 Secured Claims. Additionally, the Class 3 DIP Claims and Class 4 Prepetition Lender
Claims are each to receive their negotiated distribution, as set forth in the Released Party
Settlement (as defined below). Class 5 General Unsecured Claims will receive their pro-rata share
of Liquidating Trust Assets after payment in full of all claims with a higher priority. Holders of
Class 6 Equity Interests will not be entitled to receive or retain any property on account of such
interests under the Plan.
The Proponents believe that the Plan has afforded, and will continue to afford, all creditors
the opportunity to realize the highest amounts possible for their claims.
C. The Solicitation Process
In connection with the Plan, on November 23, 2020, the Proponents filed the First
Amended Joint Disclosure Statement Pursuant to Section 1125 of the Bankruptcy Code with
Respect to the Joint Plan of Orderly Liquidation of Hopedale Mining LLC and its Affiliated
Debtors Under Chapter 11 of the Bankruptcy Code (Docket No. 530) (the "Disclosure
Statement") describing, among other things, the proposed Liquidation and its effects on holders of
Claims against and Equity Interests in the Debtors.
Also on November 23, 2020, the Court entered the Order (A) Scheduling Combined
Hearing on Approval of Disclosure Statement and Confirmation of Plan of Liquidation, (B)
Establishing Procedures for Solicitation and Tabulation of Votes on Plan and (C) Approving
Related Dates, Forms and Procedures Doc. 511 (Docket No. 533) (the "Combined Hearing
11
years.
This Memorandum is divided into four parts. The first part describes the background and
events Leading up to the commencement of these cases and the highlights of the Plan. lathe second
part, the Proponents request approval of the Disclosure Statement, the solicitation materials, and
the solicitation process pursuant to sections 1112(b) and 1129(a)(1) of the Bankruptcy Code. The
third part sets forth certain proposed nonmaterial and/or nonadverse modifications to the Plan. In
the final part, the Proponents present their "case in chief' that the Plan satisfies section 1129 of
the Bankruptcy Code. The Debtors submit that this Memorandum, together with the Young
Declaration, the Fairfield Declaration and any additional evidence to be adduced at the
Confirmation Hearing (if necessary), demonstrate that the Plan satisfies all of the requisite
elements of sections 1125(b) and 1129 of the Bankruptcy Code, and, therefore, the Plan should be
confirmed. Thus, the Proponents respectfully request that the Court enter the Confirmation Order.
I. BACKGROUND AND HIGHLIGHTS OF THE PLAN
A. Backeround and Events Leadine up to the Commencement of These Cases
The factual background regarding the Debtors, including their business operations, their
capital and debt structure, and the events Leading to the filing of these bankruptcy cases, is set forth
in detail in the Declaration of Richard A. Boone in Support of First Day Motions of Debtors and
Debtors -in -Possession (Docket No. 3).
B. HI¢4ilis4us of the Plan
As discussed in the Fairfield Declaration, the Proponents negotiated the Plan after the sale
of substantially all of the Debtors' assets. The primary objective of the Plan is the establishment
of a Liquidating trust to liquidate the Debtors' remaining assets and the administration of claims
against the Debtors' estates. Accordingly, under the Plan, there are five classes of Impaired Claims
10
Case 120-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 110353 Desc Main
Document Page 12 of 44
Order"), which u) scheduled a combined hearing on January 15, 2021 at 10:30 a.m. (Eastern time)
for the approval of the adequacy of the Disclosure Statement and confirmation of the Plan and (a)
established certain notice requirements in connection with the Confirmation Hearing.
Pursuant to the Combined Hearing Order, on December 1, 2020, the Debtors caused (a) a
cover Letter describing the contents of the Solicitation Package; (b) the Combined Hearing Notice;
(c) a USB flash drive copy of the Plan and Disclosure Statement; and (d) an appropriate form of
Ballot for holders of Claims in Classes entitled to vote, instructions regarding how to complete the
Ballot, and a prepaid Ballot return envelope (collectively, the "Solicitation Package") to be served
by regular U.S. Mail on u) holders of Claims in the Classes entitled to vote on the Plan, and (a)
the U.S. Trustee. See Affidavit of Service of Solicitation Materials (Docket No. 555).
The Combined Hearing Order established December 30, 2020 at 5:00 p.m. (Eastern time)
as the deadline for receiving ballots to accept or reject the Plan (the "Voting Deadline'). At the
expiration of the Voting Deadline, the Debtors' claims agent, Epiq Corporate Restructuring,
tabulated all ballots voting to acceptor reject the plan. The results of the voting are as follows:
12