2021-01-14_GENERAL DOCUMENTS - C1980004

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Case 120-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 110353 Desc Main Document Page 17 of 44 Case 1:20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 1103:53 Desc Main Document Page 18 of 44 the Class that was solicited to vote are not "material' or "adverse" and thus does not warrant re - solicitation. The Proponents intend to modify the Plan as follows: 1. Section 9.05 ofthe Plan, which previously read: "After the Bar Date, as applicable, a Claim may not be filed or amended without the authorization of the Bankruptcy Court and any such new or amended Claim Filed shall be deemed Disallowed and expunged without any further notice to or action, order, or approval of the Bankruptcy Court; provided that, even with such Bankruptcy Court authorization, a Claim may be amended by the Holder of such Claim solely to decrease, but not to increase, unless otherwise provided by the Bankruptcy Court, the amount, number or priority." is hereby deleted in its entirety and replaced with the following (changes denoted in bold and underline : "After the Bar Date, as applicable, a Claim may not be filed or amended without the authorization of the Bankruptcy Court and any such new or amended Claim Filed shall be deemed Disallowed and expunged without any further notice to or action, order, or approval of the Bankruptcy Court; provided that a Claim may be amended by the Holder of such Claim without authority from the Bankruptev Court solely to decrease, but not to increase, unless otherwise provided by the Bankruptcy Court, the amount, number or priority." 2. The definition of"Distribution Record Date," whichpreviously read: Distribution Record Date' means (i) the Confirmation Date as to the Holders of Allowed Administrative Claims entitled to Distributions pursuant to the Plan and (it) any such date established by the Liquidating Trustee as to Holders of Allowed Other Secured Claims, Allowed Other Priority Claims and Allowed General Unsecured Claims." is hereby deleted in its entirety and replaced with the following (changes denoted in bold and underline : "`Distribution Record Date' means (i) the Administrative Claims Bar Date as to the Holders of Allowed Administrative Claims entitled to Distributions pursuant to the Plan and (ii) any such date established by the Liquidating Trustee as to Holders of Allowed Other Secured Claims, Allowed Other Priority Claims and Allowed General Unsecured Claims." 3. Section 5.03 of the Plan, which previously read: "The Liquidating Trust will be advised by the "Liquidating Trust Board," which shall initially consist of three voting members designated by the Creditors' Committee." is hereby deleted in its entirety and replaced with the following (changes denoted in bold and underline : "The Liquidating Trust will be advised by the "Liquidating Trust Board," which shall initially consist of five voting members designated by the Creditors' Committee." In addition to the Modifications to the Plan, the Proponents intend to include provisions in 17 Case 1:20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 1103:53 Desc Main Document Page 19 of 44 A. The Plan Complies with the Applicable Provisions of Title 11 (Section 1129(a)(1)) Section 1129(a)(1) ofthe Bankruptcy Code requires thata plan comply with the "applicable provisions" of the Bankruptcy Code, including those concerning the form and content of plans, such as Sections 1122 and 1123. See In re Trenton Ridge Investors, LLC, 461 B.R. 440, 463 (Banta. S.D. Ohio 2011); 11 U.S.C. § 1129(a)(1). The Legislative history of section 1129(a)(1) explains that this provision encompasses the requirements of sections 1122 and 1123 of the Bankruptcy Code, which govern classification of claims and interests and the contents ofthe plan, respectively. See S. Rep. No. 95-989, at 126 (1978), as reprinted in 1978 U.S.C.C.A.N. 5787, 5912; H.R. Rep. No. 95-595, at 412 (1977), as reprinted in 1978 U.S.C.C.A.N. 5963, 6368; see also In re S & W Enter., 37 B.R. 153, 158 (Bankr. N.D. ILL. 1984) (finding that section 1129(a)(1) is most directly aimed at requiring compliance with the Bankruptcy Code provisions regarding classification of claims or interests and plan contents). L Classification of Claims and Interests (Section 1122) Section 1122(a) of the Bankruptcy Code provides that the claims and interests within a given class must be "substantially similar." 11 U.S.C. § 1122(a). The Plan satisfies section 1122, which provides that "a plan may place a claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interests of such class." 11 U.S.C. § I122(a). The Plan's classification scheme easily satisfies the requirements of section 1122. As outlined above, Article II ofthe Plan separately classifies six Classes of Claims against and Equity Interests in the Debtors, as more fully described in the Plan and the Disclosure Statement. Each class differs from one other in a Legal or factual nature or based on other relevant criteria. Thus, the Confirmation Order that resolves the informal comments the Proponents received from certain parties in interest. IV. THE PLAN MEETS THE REQUIREMENTS FOR CONFIRMATION UNDER SECTION 1129 OF THE BANKRUPTCY CODE To confirm the Plan, the Court must find that both the Plan and the Proponents are in compliance with each of the requirements of section 1129(a) of the Bankruptcy Code. See Teamsters Nat?Freight Indus. Negotiating Comm. v. U.S. Track Co. (I re U.S. Track Co), 800 E2d 581, 583 (6th Co. 1986) (noting that section 1129 contains two means by which a reorganization plan can be confirmed, one of which is meeting all the requirements of section 1129(a)). Further, the Court may confum a chapter 11 plan Hall ofthe requirements of subsection 1129(a) are met with the exception of subsection (a)(8)—and the requirements of section 1129(b) of the Bankruptcy Code are satisfied. As set forth below, the Plan should be confirmed because the Proponents meet the requirements of sections 1129(a) and (b) ofthe BankruptcyCode. The Proponents bear the burden of establishing that all elements necessary for confirmation of the Plan under section 1129(a) ofthe Bankruptcy Code have been met by a preponderance of the evidence. See In re Pamplico Highway Der., 468 B.R. 783, 789 (Banta. D.S.C. 2012); In re Trenton Ridge Investors, LLC, 461 B.R. 440, 460 (Banta. S.D. Olio 2011). This Memorandum, the Young Declaration, and the Fairfield Declaration together with the comments of counsel at the Combined Hearing (if necessary), demonstrate, by more than a preponderance of the evidence, that the Plan complies with the requirements of sections 1129(a) and 1129(b) of the Bankruptcy Code, as applicable, with respect to all Classes of Claims and Equity Interests. Accordingly, the Plan should be confirmed. 191 Case 1:20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 1103:53 Desc Main Document Page 20 of 44 the Proponents propose a classification scheme under the Plan that fits well within section 1122's flexible standard. 2. Mandatory Contents of the Plan Section 1123(a) of the Bankruptcy Code identifies eight requirements for the contents of a chapter 11 plan.' As demonstrated below, the Plan complies with each such requirement • Section I123(a)(1). As discussed above, Article II of the Plan properly designates all Claims and Equity Interests that require classification, as required by section 1123(a)(1) of the Bankruptcy Code. Pursuant to section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, U.S. Trustee Fees, Priority Tax Claims, and Professional Fee Claims are not required to be designated into Classes. • Section 1123(a)(2). Section 1123(a)(2) of the Bankruptcy Code requires that a plan specify each Class of Claims or Equity Interests that is Unimpaired under the Plan. Here, Article II of the Plan indicates the one Class of Claim is Unimpaired under the Plan: Class 2 Secured Claims. • Section1123(a)(3). In accordance with 1123(a)(3) ofthe Bankruptcy Code, Article III of the Plan specifies the treatment of each Class of Claims and Equity Interests that is Impaired under the Plan, which are Class 1 (Other Priority Claims), Class 3 (DIP Claims), Class 4 (Prepeotion Lender Claims), Class 5 (General Unsecured Claims), and Class 6 (Equity Interest). • Section 1123(a)(4). In accordance with section 1123(a)(4) of the Bankruptcy Code, Article III of the Plan provides the same treatment for each Claim and Equity Interest in a given Class unless the holder of a Claim or Equity Interest agrees to a Less favorable treatment. • Section 1123(a)(5). In accordance with section 1123(a)(5) of the Bankruptcy Code, Article V and VI of the Plan provides adequate means for the Plan's implementation. Among other things, a Liquidating Trust will be established pursuant to the Plan for the benefit of the Liquidating Trust Beneficiaries and the Liquidation Trust Assets will be transferred to the Liquidating Trust as described in the Plan. Accordingly, the Plan satisfies the requirements set forth in section 1123(a)(5) ofthe Bankruptcy Code. • Section 1123(a)(6). Section 1123(a)(6) of the Bankruptcy Code requires that a plan "provide for the inclusion in the charter of the debtor, if the ' This Memorandum will not address section 1123( )(8) as it applies only in cases m which the debtor is an individual, and, therefore, it is not applicable in these chapter 11 cases. 19 20