2021-01-14_GENERAL DOCUMENTS - C1980004

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Case 120-bk-12043 Doc 574-1 Filed 01/13/21 Entered 01/13/21 113801 Desc Exhibit 1 - Proposed Confirmation Order Page 43 of 69 Case 120-bk-12043 Doc 574-1 Filed 01/13/21 Entered 01/13/21 113801 Desc Exhibit 1 - Proposed Confirmation Order Page 44 of 69 any proof of claim or application for allowance of the Lender Settlement Contribution Amount, and the Lender Settlement Contribution Amount shall be an Allowed Claim. ARTICLE IV: ACCEPTANCE OR REJECTION OF THE PLAN Section 4.01 Impaired Classes of Claims and Equity Interests Entitled to Vote Only Holders of Allowed Claims in each Impaired Class of Claims receiving a Distribution under the Plan are entitled to vote as a Class to accept or reject the Plan. Accordingly, only the votes of Holders of Claims in Classes 1, 3, 4, and 5 shall be solicited with respect to the Plan. Section 4.02 Acceptance by an Impaired Class In accordance with section 1126(c) of the Bankruptcy Code, and except as provided in section 1126(e) ofthe Bankruptcy Code, an Impaired Class of Clahms shalthave accepted the Plan if the Plan is accepted by the Holders of at Least two-thirds (2/3) in dollar amount and more than one-half (1/2) in number ofthe Allowed Claims or Equity Interests in such Class that have timely and properly voted to accept or reject the Plan. Section 4.03 Presumed Acceptance by Unimpaired Class Holders of Class 2 Claims are Unimpaired under the Plan. Under Section 1126(f) of the Bankruptcy Code, Holders of Class 2 Claims are deemed to have accepted the Plan, and the votes of such Holders shall not be solicited. Section 4.04 Presumed Rejection by Impaired Classes Holders of Class 6 Equity Interests are Impaired under the Plan. Under section 1126(g) of the Bankruptcy Code, Holders of such Impaired Claims and Equity Interests are conclusively presumed to have rejected the Plan, and the votes of Holders of such Impaired Claims and Equity Interests shall not be solicited. Section 4.05 Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code To the extent that any Impaired Class rejects the Plan or is deemed to have rejected the Plan, the Plan Proponents reserve the right to request Confirmation of the Plan, as it may be modified from time to time, under section 1129(b) of the Bankruptcy Code. The Plan Proponents reserve the right to alter, amend, modify, revoke, or withdraw the Plan or any schedule or exhibit, including to amend or modify it to satisfy the requirements of section 1129(b) of the B ankruptcy Code, if necessary. Section 4.06 Elimination of Vacant Classes Any Class of Claims or Equity Interests that does not contain, as of the date of the commencement ofthe Confirmation Hearing, a Holder of an Allowed Claim or Equity Interest, or a Holder of a Claim temporarily allowed under Bankruptcy Rule 3018, shall be deemed deleted Case 1:20-bk-12043 Doc 574-1 Filed 01/13/21 Entered 01/13/21 1138:01 Desc Exhibit 1 - Proposed Confirmation Order Page 45 of 69 or retained Causes of Action are not Likely to yield sufficient additional proceeds to justify further pursuit, (c) all Distributions required to be made by the Liquidating Trustee under this Plan and the Liquidating Trust Agreement have been made; provide however in no event shall the Liquidating Trust be dissolved later than five (5) years from the Effective Date unless the Bankruptcy Court, upon motion within the six-month period prior to the fifth (5th) anniversary (or within the six-month period prior to the end of an extension period), determines that a fixed period extension (motto exceed two (2) years, together with any prior extensions) is necessary to facilitate or complete the recovery and liquidation of the Liquidating Trust Assets. The Liquidating Trust Board may not terminate the Liquidating Trustee for any reason without approval by the Bankruptcy Court The Liquidating Trust Board may bring a motion on proper notice to the Liquidating Trustee and its counsel for removal ofthe Liquidating Trustee for, among other reasons: (1) fraud, gross negligence, or willful misconduct in connection with the affairs ofthe Liquidating Trust, (2) for such physical or mental disability as substantially prevents the Liquidating Trustee from performing the duties of Liquidating Trustee in accordance with this Plan or the Liquidating Trust Agreement, or (3) for cause, which shall include a breach of fiduciary duty or an unresolved conflict of interest Section 5.05 Treatment of Liquidating Trust for Federal Income Tax Purposes; No Successor -in -Interest The Liquidating Trust is intended to qualify as a liquidating trust pursuant to Treasury Regulation Section 301.7701-4(d) and as a grantor trust pursuant to Treasury Regulation Section 1.671-4(a), with no objective to continue or engage in the conduct of a trade or business. In the event the Liquidating Trust shall fail or cease to qualify as a liquidating trust in accordance with Treasury Regulations Section 301.7701-4(d), the parties to the Liquidating Trust Agreement intend that the Liquidating Trustee take such action as it shall deem appropriate to have the Liquidating Trust classified as a partnership for federal tax purposes under Treasury Regulations Section 301.7701-3 (but not a publicly traded partnership under Code Section 7704), including, if necessary, creating or converting it into a Delaware Limited Liability partnership or Limited Liability company. For all United States federal income tax purposes, all parties (including, without limitation, the Debtors, the Liquidating Trustee, and the beneficiaries) shall treat the transfer of the Liquidating Trust Assets to the Liquidating Trust as (1) a transfer by each Debtor ofthe Liquidating Trust Assets (subject to any obligations relating to those assets) directly to the beneficiaries in full satisfaction of the beneficiaries' claims against the Debtors and, to the extent Liquidating Trust Assets are allocable to Disputed Claims, to the Distribution Reserve Account (as defined in the Liquidating Trust Agreement), followed by (2) the transfer by such beneficiaries to the Liquidating Trust ofthe Liquidating Trust Assets in exchange for such beneficiaries interest in the Liquidating Trust Assets. Accordingly, the Liquidating Trust beneficiaries shall be treated for United States federal income tax purposes as the grantors and owners of their respective share ofthe Liquidating Trust Assets. The foregoing treatment shall also apply, to the extent permitted by applicable law, for all state, provincial, territorial and Local income tax purposes The Liquidating Trust shall file returns for the Liquidating Trust, except with respect to the Disputed Claims Reserve, as a grantor trust pursuant to Treasury Regulation Section 1.671-4(a) from the Plan for all purposes, including for purposes of determining acceptance of the Plan by such Class under section 1129(a)(8) ofthe Bankruptcy Code. ARTICLE V: THE LIOUIDATING TRUST Section 5.01 Sources of Consideration for Plan Distributions Cash and the other Liquidating Trust Assets shall be used to fund the Distributions to Holders of Allowed Claims against the Debtors in accordance with the treatment of such Claims provided herein. Section 5.02 The Liquidating Trust On or prior to the Effective Date, the Debtors, on their own behalf and on their Estates' behalf and on behalf of the Holders of Claims that are to be satisfied with post -Effective Date Distributions from the Liquidating Trust Assets, will execute the Liquidating Trust Agreement and will take all other steps necessary to establish the Liquidating Trust pursuant to the Liquidating Trust Agreement. On the Effective Date, and in accordance with and pursuant to the terms of the Plan, the Debtors will transfer to the Liquidating Trust all of their rights, title, and interests in all of the Liquidating Trust Assets. The Liquidating Trust shall be established solely for the purpose of holding and administering the Liquidating Trust Assets in accordance with Treasury Regulation Section 301.7701-4(d), with no objective to continue or engage in the conduct of a trade or business. Accordingly, the Liquidating Trustee shall hold the Liquidating Trust Assets pursuant to the terms of this Plan and the Liquidating Trust Agreement by engaging in the following activities: (a) pursuing the Causes of Action retained by the Liquidating Trust; (b) making all required Distributions to the beneficiaries as provided for under the Liquidating Trust Agreement; and (c) taking other actions as maybe necessary to effectuate any ofthe foregoing. The Liquidating Trust will not hold itself out as an investment company and will not conduct a trade or business. At no time shall the Liquidating Trust control or operate the business of the Debtors or any assets of the Debtors other than the Liquidating Trust Assets. Section 5.03 Liquidating Trust Board The Liquidating Trust will be advised by the "Liquidating Trust Board," which shall initially consist of five voting members designated by the Creditors' Committee Section 5.04 Appointment and Termination of the Liquidating Trustee The appointment of the Liquidating Trustee shall be approved in the Confirmation Order, and such appointment shall be effective on the Effective Date. In accordance with the Liquidating Trust Agreement, the Liquidating Trust shall continue for a term terminating on the earlier to occur of (a) all of the Liquidating Trust Assets have been distributed pursuant to this Plan and the Liquidating Trust Agreement, (b) the Liquidating Trustee determines, in its sole discretion, that the administration of any remaining Liquidating Trust Assets Case 120-bk-12043 Doc 574-1 Filed 01/13/21 Entered 01/13/21 113801 Desc Exhibit 1 - Proposed Confirmation Order Page 46 of 69 and in accordance with this Section of the Plan. The Liquidating Trust's taxable income, gain, Loss, deduction or credit will be allocated to each holder in accordance with their relative beneficial interests in the Liquidating Trust. Subject to definitive guidance from the Internal Revenue Service or a court of competent jurisdiction to the contrary, the Liquidating Trustee may timely elect to (i) treat any portion of the Liquidating Trust allocable to Disputed Claims as a "disputed ownership fund" governed by Treasury Regulation section 1.468E-9 (and make any appropriate elections) and (a) to the extent permitted by applicable Law, report consistently with the foregoing for state and Local income tax purposes. If a "disputed ownership fund" election is made, all parties and the Liquidating Trustee shall report for United States federal, state, and Local income tax purposes consistently with the foregoing. As soon as possible after the Effective Date, the Liquidating Trust shall make a good faith valuation of assets of the Liquidating Trust, and such valuation shall be used consistently by all parties for all federal income tax purposes. The Liquidating Trust also shall file (or cause to be filed) any other statements, returns, or disclosures relating to the Liquidating Trust that are required by any Governmental Unit for taxing purposes. The Liquidating Trust shall file all income tax returns with respect to any income attributable to the Liquidating Trust Assets and shall pay any federal, state and Local income taxes attributable to the Liquidating Trust Assets, based on the items of income, deduction, credit or Loss allocable thereto. The Liquidating Trust may request an expedited determination of Taxes ofthe Debtors or of the Liquidating Trust, including the Distribution Reserve Account, under Bankruptcy Code section 505(b) for all returns filed for, or on behalf of, the Debtors and the Liquidating Trust for all taxable periods through the dissolution of the Liquidating Trust. The Liquidating Trustee shall be responsible for filing all federal, state, Local and foreign tax returns for the Debtors and the Liquidating Trust. The Liquidating Trust shall comply with all withholding and reporting requirements imposed by any federal, state, Local, or foreign taxing authority, and all Distributions made by the Liquidating Trust shall be subject to any such withholding and reporting requirements. Section 5.06 Responsibilities of Liquidating Trustee The responsibilities of the Liquidating Trustee, which shall be discharged in accordance with the terms of the Plan and the Liquidating Trust Agreement, shall include, but shall not be Limited to, the following: (a) Administering, Liquidating, and monetizing the Liquidating Trust Assets; (b) Objecting to and resolving Claims and Disputed Claims; (c) Investigating, pursuing, Litigating, settling, or abandoning any Causes of Action which constitute Liquidating Trust Assets;