2021-01-14_GENERAL DOCUMENTS - C1980004

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Case 120-bk-12043 Doc 573-2 Filed 01/13/21 Entered 01/13/21 110353 Desc Exhibit B - Declaration of Thomas Fairfield Page 4 of 17 Case 1:20-bk-12043 Doc 573-2 Filed 01/13/21 Entered 01/13/21 1103:53 Desc Exhibit B - Declaration of Thomas Fairfield Page 5 of 17 among other things, the Plan, events preceding the commencement of these Chapter 11 Cases, claims against the Debtors' estates, estimated recoveries for creditors under the Plan, risk factors affecting the Plan, and federal tax consequences of the Plan. Creditors entitled to vote were provided with a clear description of the Debtors' Liquidation, the Liquidating trustee, risks involved in the plan process, and all Legal aspects of the Plan. 7. I understand that section 1125 of the Bankruptcy Code requires that proponents of a chapter 11 plan provide holders of impaired claims and interests entitled to vote on a plan with "adequate information" regarding a plan. Based on my review of the Disclosure Statement and my discussions with the Proponents' Legal and financial advisors, I believe the Disclosure Statement contains adequate information and satisfies the requirements of the Bankruptcy Code and should be approved by this Court on a final basis. III. MODIFICATIONS TO THE PLAN S. Based on my discussions with the Plan Proponents' Legal counsel, I understand that the Bankruptcy Code generally allow a proponent of a plan to modify the plan at any point prior to confirmation if such modifications do not adversely change the treatment of a claim of a creditor or interest of an equity holder. 9. During the solicitation process of the Plan, I understand that the Plan Proponents received requests from various parties in interest to modify certain provisions of the Plan in Lieu of those parties filing an objection to the Plan (collectively, the "Modifications'). I have reviewed the requested Modifications and believe those Modifications are non -material and do not adversely change the treatment of any claims or equity interests under the Plan. Therefore, I believe this Court should approve the Modifications to the Plan. Case 1:20-bk-12043 Doc 573-2 Filed 01/13/21 Entered 01/13/21 1103:53 Desc Exhibit B - Declaration of Thomas Fairfield Page 6 of 17 13. I understand that section 1123(a) of the Bankruptcy Code sets forth various requirements regarding the appropriate contents of a plan. I believe that the Plan satisfies each of these requirements. 14. The Plan (a) designates the different Classes of Claims and Equity Interests; (b) specifies the Classes of Claims that are unimpaired under the Plan; and (c) specifies the treatment of each Class of Claims and Equity Interests that are impaired. In addition, the treatment of each Claim against or Equity Interest in the Debtors in each respective Class is the same as the treatment of each other Claim or Equity Interest unless the Holder of such Clain or Equity Interest has agreed to a Less favorable treatment for such Clain or Equity Interest. 15. I believe the Plan provides adequate means for its implementation as required by section 1123(a)(5), including without Limitation, (a) the establishment of the Liquidating Trust and the appointment of the Liquidating Trustee, (b) the transfer of the Liquidating Trust Assets to the Liquidating Trust, to be administered in accordance with the terms of the Plan and the Liquidating Trust Agreement for the benefit of Holders of Allowed Claims; and (c) procedures for making distributions to holders of Allowed Claims. I believe the proposed implementation steps have been carefully developed and designed to properly effect the Plan. 16. As noted above, the Plan provides for the transfer of Liquidating Trust Assets to the Liquidating Trust, to be Liquidated and distributed in accordance with the Plan and the Liquidating Trust Agreement. Therefore, the Plan does not expressly provide for the inclusion in the charter ofany Debtor provisions prohibiting the issuance ofnonvoting securities. Nonetheless, because the Plan does not provide for the issuance of any securities, the issuance of nonvoting securities is impossible. IV. SATISFACTION OF PLAN CONFIRMATION REQUIREMENTS 10. Based on my review of the Plan and related materials and my discussions with the Plan Proponents' Legal and financial advisors, I believe that the Plan satisfies all applicable provisions of the Bankruptcy Code and should be confirmed. A. Compliance with Section 1129(a)(1) of the Bankruptcy Code. 11. I understand that section 1122 of the Bankruptcy Code permits a plan to classify various claims and equity interests into different classes so Long as all claims and interests in a particular class are substantially similar. The Plan provides for the separate classification of Claims and Equity Interests in the Debtors based on differences in Legal nature and/or priority of such Claims and Equity Interests. The Plan designates the following Classes of Claims and Interests: (i) Class 1—Other Priority Claims (a) Class 2—Secured Claims (in) Class 3—DIP Lender Claims (tv) Class 4—Prepetition Lender Claims (v) Class 5- Generat Unsecured Claims (vi) Class 6—Equity Interests 12. I believe that valid business, factual, and Legal reasons exist for classifying the Claims and Equity Interests into separate Classes as provided in the Plan and that the Claims and Equity Interests within each particular Class are substantially similar. Furthermore, I believe the classification scheme created by the Plan is based on the similar nature of Claims or Equity Interests contained in each Class and not on an impermissible classification factor. 4 Case 120-bk-12043 Doc 573-2 Filed 01/13/21 Entered 01/13/21 110353 Desc Exhibit B - Declaration of Thomas Fairfield Page 7 of 17 17. On December 15, 2020, the Committee filed the Notice of Filing of Selection of Liquidating Trustee and Liquidating Trust Board Representatives and Filing ofForm Liquidating Trust Agreement (Docket No. 563) (the "Linuidatine Trust Notice"), and I believe the appointment of the Liquidating Trustee is consistent with the interests of creditors and with public policy. 18. Section 7.01 of the Plan deals with the rejection of Executory Contracts and Unexpired Leases, and provides that all Executory Contracts and Unexpired Leases, other than those previously rejected or referenced in the Plan, shall be deemed rejected on the Effective Date. 19. I understand that section 1123(b) of the Bankruptcy Code enumerates various discretionary provisions that may be included in a chapter 11 plan. I also understand that the Plan contains various provisions in accordance with the discretionary authority granted under section 1123(b) of the Bankruptcy Code. 20. The majority of the relief requested related to exculpation and releases has been previously approved by this Court. On November 2, 2020, the Court entered the Order Approving Settlement Agreement with Prepetition Secured Parties and DIP Secured Parties, Pursuant to Bankruptcy Rule 9019 (Doc. No. 483) (Docket No. 504) (the "Released Party Order") which approved a settlement agreement between the Debtors, the Committee and the Released Parties (the "Released Party Settlement'). In part, the Released Party Order approved the Released Party Settlement which contained a release of claims against the Released Parties. In exchange for such release, the Released Parties agreed to (t) the immediate payment of $400,000 to the Debtors estates, (u) the payment of $100,000 to the Debtors estates upon the Effective Date of a plan, provided that the confirmed plan contain a third party release and other provisions consistent with the Released Party Settlement, and (in) released all claims against the Debtors' estates, subject to 5 6