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

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Nusbaum Ins. Agency, Inc., 202 F.3d 223, 228 (4th Cir. 2000) (explaining that consensual third
party releases are permissible under the Bankruptcy Code); In re Specialty Equip. Cos., Inc., 3
E3d 1043, 1047 (7th Co. 1993) (same).
Indeed, courts in this circuit have held that "consensual releases are not a discharge in
bankruptcy and do not run afoul with the Bankruptcy Code." In re Dow Corning Corp., 255 B.R.
445,492 (ED. Mich. 2000), aff d, 280 E3d 648 (6th. Co. 2002); see also Nat'lHeritage Found,
Inc. v. Highbourne Found, 760 E3d 344, 347 (4th Co. 2014) (adopting the Dow Corning factors
in determining whether it is appropriate to approve non -debtor releases). Here, the Third -Party
Release only applies to those voting in favor ofthe Plan and, therefore, is fully consensual.
The Ballots distributed to the Voting Classes included clear and bolded language that (i)
directed parties to the pages of the Plan referring to the Third -Party Release and related definitions,
and (a) notified such parties that those sections may affect their Legal rights. That language
provided:
PLEASE BE ADVISED THAT THE PLAN CONTAINS CERTAIN
DISCHARGE, RELEASE, EXCULPATION, AND INJUNCTION
PROVISIONS. THESE PROVISIONS ARE FOUND IN ARTICLE XI OF
THE PLAN. YOU ARE ADVISED AND ENCOURAGED TO CAREFULLY
REVIEW AND CONSIDER THE PLAN, INCLUDING THE DISCHARGE,
RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS, AS YOUR
RIGHTS MAYBE AFFECTED
[See Form Ballot, ECF No. 533, p. 15 (emphasis in original)]. Further, the Ballots stated that the
Given the ample notice and the consideration given by the Released Parties in exchange
for the Third -Party Release and the fact that only those Holders of Claims who have voluntarily
elected to provide the Third -Party Release voting in favor ofthe Plan, the Third -Party Release is
appropriate and should be approved.
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concerned with the applicable activities of a plan proponent. See Collier on Bankruptcy ¶ 1129.03
(Alan N. Resnick & Henry J. Sommers eds., 16th ed.). The Legislative history to section 1129(a)(2)
reflects that this provision is intended to encompass the disclosure and solicitation requirements
under sections 1125 and 1126 of the Bankruptcy Code. H.R. Rep. No. 95-595, at 412 (1977); S.
Rep. No. 95-989, at 126 (1978) ("Paragraph (2) [of section 1129(a)] requires that the proponent of
the plan comply with the applicable provisions of chapter 11, such as section 1125 regarding
disclosure."); see also In re Toy & Sports Warehouse, Inc., 37 B.R. 141, 149 (Banta. S.D.N.Y.
1984) (requiring compliance with sections 1125 and 1126 to satisfy section 1129(a)(2)).
As discussed in section II of this Memorandum, the Proponents have complied with all
solicitation and disclosure requirements set forth in the Bankruptcy Code, the Bankruptcy Rules,
and the Combined Hearing Order governing notice, disclosure, and solicitation in connection with
the Plan and the Disclosure Statement. As evidenced by, among other things, the certificate of
service of the Combined Hearing Notice, the Proponents, with the help of Epub have complied
with all previous orders of the Bankruptcy Court regarding the solicitation of votes, including the
Tabulation Rules, and the Combined Hearing Order, as well as all the deadlines scheduled therein.
Accordingly, the requirements of section 1129(a)(2) of the Bankruptcy Code have been satisfied.
See In re Drexel Burnham Lambert Grp. Inc., 138 B.R. 723, 769 (Banta. S.D.N.Y. 1992) (section
1129(a)(2) satisfied where debtors complied with all provisions of Bankruptcy Code and
Bankruptcy Rules governing notice, disclosure and solicitation relating to the plan).
C. Good Faith (Section 1129(a)(3))
Section 1129(a)(3) ofthe Bankruptcy Code requires a plan to have been "proposed in good
faith and not by any means forbidden by Law." 11 U.S.C. § 1129(a)(3). Although the Bankruptcy
Code does not define "good faith" as that term is used in this section, courts have indicated that
the good faith requirement requires that "there is a reasonable likelihood that the plan will achieve
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(iii) The Debtors' Release of the Released Parties Is
Appropriate
The Debtor Release set forth in Section 11.05 of the Plan arises from an appropriate
exercise ofthe Debtors' authority under section 1123(b)(3) ofthe Bankruptcy Code to include in
the Plan "the settlement or adjustment of any claim or interest belonging to the debtor or to the
estate." 11 U.S.C. § 1123(b)(3)(A); see, e.g., In re Pac. Gas & Elec. Co., 304 B.R. 395 (Banta.
N.D. Cal. 2004) (court approved release and settlement of debtor's claims pursuant to section
1123(b)(3)).
In this case, the Debtor Release provided in section 11.05 ofthe Plan simply incorporates
releases that have previously been approved by the Court. The Court has previously approved
releases of the Released Parties as part of the DIP Order, the Sale Order, and the Released Party
Order. The Debtor Release simply incorporates such releases and grants no further releases. As
such, the Debtor Release is unequivocally appropriate.
4. The Plan Provides for the Settlement and Retention of Claims and
Interests
As permitted by section 1123(b)(3) of the Bankruptcy Code, Sections 5.01 and 6.04 of the
Plan provide that the Liquidation Trust Assets, including without Limitation, the Causes of Action,
shall be transferred to the Liquidation Trust on the Effective Date. Thereafter, the Liquidation
Trust (at the direction ofthe Liquidation Trustee) may use, acquire, and dispose of such property
as specifically provided in the Plan and the Liquidation Trust Agreement
B. The Proponents of the Plan Comply with the Applicable Provisions of Title
11 (Section 1129(a)(2))
Section 1129(a)(2) ofthe Bankruptcy Code requires that the"proponent ofthe plan empty
with the applicable provisions of this title." 11 U.S.C. § 1129(a)(2). Whereas section 1129(a)(1)
of the Bankruptcy Code focuses on the form and content of a plan itself, section 1129(a)(2) is
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a result consistent with the standards prescribed under the Code." In re Trenton Ridge Investors,
LLC, 461 B.R. 440, 466,471 (Bantu. S.D. Ohio 2011) (holding thatthe plan was feasible, practical,
and would enable the debtor with its only opportunity to pay debts); Crestar Bank v. Walker (In
re Walker), 165 B.R. 994, 1001 (Bantu. E.D. Va. 1994) (citations omitted). Courts generally view
the good faith requirement in Light of the totality of the circumstances surrounding the
establishment of the chapter 11 plan. Id..
The Proponents submit that the record in these Chapter 11 Cases (including the evidence
to be adduced at the Combined Hearing) establishes that the Proponents have proposed the Plan in
good faith, with the Legitimate purpose of maximizing stakeholder value, and not by any means
forbidden by law, in satisfaction of section 1129(a)(3) ofthe Bankruptcy Code. The Planprovides
for the establishment of the Liquidating Trust to be created for the benefit of holders of Allowed
Claims that are entitled to Plan Distributions, which the Proponents believe provides the greatest
chance of maximizing recoveries for holders of Allowed Claims. Additionally, the record of the
Chapter 11 Cases demonstrates that the Debtors and their directors, managers, officers, employees,
agents, affiliates, and professionals (acting in such capacity) have acted in "good faith" within the
meaning of section 1125(e) of the Bankruptcy Code. The treatment of the holders of Claims and
Equity Interests under the Plan is proposed in good faith and is fair and equitable. The Committee's
support of the Plan is further evidence of the good faith of the Debtors with respect to the Plan.
Finally, the Plan represents extensive arm's-Length negotiations among the Debtors and the
DIP Lender and Prepetition Lenders, as well as each group's Legal and financial advisors. As
previously mentioned, the Plan received 100% approval ofthe Class 3 DIP Claims and Class 4
Lender Claims. In Light of the foregoing, the Proponents submit that they acted in good faith in
proposing and pursuing confirmation of the Plan and that the Plan is not proposed by any means
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