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<br />policy and section I I25(e) of the Bankruptcy Code, under which there is no habrhty for good faith
<br />actions in connection with plan solicitation or issuance of securities under the Plan See 11 U S C
<br />§ 1125(e) Because such provisions do not "affect the liability of [the exculpated] parties, but
<br />rather [state] the standard of liability under the [Bankruptcy] Code," they do not "come within the
<br />meaning of § 524(e) "Id at 245 "As a policy matter, exculpations are necessary to ensure that
<br />capable, skilled individuals are willing to assist in the morgan—tion efforts in chapter 11 cases "
<br />Alpho Natural Res , Inc, 556 B R at 261 38
<br />Article 11.03 of the Plan contains an exculpation provision, which is consistent with other
<br />chapter 11 cases regarding the identity of exculpated parties and the scope of the exculpation The
<br />Plan defines the "Exculpated Parties" as (i) the Debtors, (it) each of the Debtors' current officers
<br />and directors that served in such capacities between the Petition Date and the Effective Date, (in)
<br />the Committee and each of the Committee's members acting in their capacities as members
<br />thereof, (iv) the Professionals for the Debtors and the Committee, and (v) the Released Parties
<br />However, the exculpation does not extend to any holder of an Equity Interest or any other current
<br />or former officer, director, manager, or employee of the Debtors for conduct occurring prior to the
<br />Petition Date Further, the acts for which parties may be exculpated in the Plan are limited to post -
<br />petition acts Finally, the exculpation provision contains an exception for any exculpated party if
<br />such party is "determined in a Final Order to have constituted willful misconduct or gross
<br />negligence " Plan § 1103
<br />The United States Trustee (the ",UST") objected to the proposed exculpation provision in
<br />the Plan on the basis that such provision is "overly broad" in that it extends to the Released Parties,
<br />which are not estate fiduciaries (Docket No 569) (the "UST Objection'") While the UST submits
<br />that there is no basis for the extension of exculpation provisions beyond estate fiduciaries, such
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<br />by the UST in approving the inclusion of non -estate fiduciaries in exculpation provisions See In
<br />re Murrav Metallurgical Coal Holdings, LLC et al, Case No 20-10390 (JEH) (Docket No 798)
<br />(Bankr S D Ohio Nov 25, 2020) (approving an exculpation provisions of non -estate fiducianes
<br />including pre -petition lender and DIP lender in its entirety and holding " [t]be Exculpation
<br />appropriately affords protection to those parties who actively and constructively participated in
<br />and contributed to the Debtors' chapter 11 process consistent with this Court's orders, and it is
<br />appropriately tailored to protect the Exculpated Parties from inappropriate litigation"), In ie
<br />Murrav Energv Holdings Co, Case No 19-56885 (JEH) (Docket No 2135) (Bankr S D Ohio
<br />Aug 31, 2020) (same), In re Murrov Metallurgical Coal Holdings, LLC et al, Case No 20-10390
<br />(JEH) (Docket No 860) (Bankr S D Ohio Jan 11, 2021) (opinion of the Bankruptcy Court
<br />approving exculpation provisions noted above)
<br />Accordingly, exculpations of the kind requested under the Plan are standard in complex
<br />cases such as the Debtors The exculpations are appropriately limited in scope, applying only to
<br />acts and omissions occurring in connection with the commencement of the Chapter 11 Cases, the
<br />sale of the Debtors' assets, administration of the Debtors' estates, and the Plan process The
<br />Exculpauons also confer only a qualified immunity by excluding acts or omissions which are the
<br />result of gross negligence or willful misconduct
<br />Moreover, approving the exculpation of the Released Panics would be beneficial to the
<br />estates If this Court does not approve the exculpation of the Released Parties, the Debtors' estates
<br />will lose the additional $100,000 that the Lenders are required to pay to the estates under the
<br />Released Party Order See Released Party Order, Ex A (Settlement Agreement), at ¶¶ 1, 5 Losing
<br />access to these funds would harts the Debtors' unsecured creditors
<br />The Proponents also note that the beneficiaries of the exculpations have made significant
<br />contributions to the Debtors' liquidation, these contributions have allow ed for the formulation of
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<br />argument is contrary to the holdings of several courts - including those in the Southern District of
<br />Ohio -and the facts of this case
<br />Indeed, chapter 1 I plans extending properly tailored exculpations to non -estate fiduciaries
<br />- such as the Released Parties -are regularly confirmed in this and other jurisdictions See, e g,
<br />In to Firstenegv Solutions Corp, No 18-50757 (AMK) (Bardr ND Ohio Oct 16, 2019)
<br />(Docket No 3283) (confirming a plan providing exculpation to non -estate fiduciaries), In re
<br />Wanmk Co , No 08-10654 (JVA) (Bankr SD Ohio June 27, 2008) (Docket No 262) (same), In
<br />re Alpha Natural Resources. Inc, 556 BR 249, 260 (Bankr E D Va 2016) (approving of the
<br />plan's exculpation for non -estate fiduciaries, including lenders, and explaining that such provisions
<br />"are not unusual and are generally permissible" (internal quotations omitted)), In re Airadhgm
<br />Commumcauons, Inc, 519 F 3d 640, 655-57 (7"Cir 2008), In re M-ton Coal Companv, LLC,
<br />No 18-04177 (TOM) (Bankr ND Ala Apr 15, 2019) (Docket No 1324) (same), In re
<br />Westmoreland Coal Companv, No 15-35672 (DRJ) (Bankr S D Tex Mar 2, 2019) (Docket No
<br />1561) (same), In i e Westinghouse Elec Cc LLC, No 17-10751 (MEW) (Bandit S D N Y Mar
<br />28, 2018) (Docket No 2988) (same), In re Caesars Entertainment Operating Ca, No 15-01145
<br />(ABG) (Bankr N D Ill Jan 17, 2017) (Docket No 6334) (same)
<br />As such, it is not uncommon for courts to confirm plans that grant exculpation to key third
<br />parties, including a debtor's lenders (See, a g, reorganization plans and confinnatiop orders inIn
<br />re Fiberldark, Inc, Case No 04-10463 (Banly D Vt Dec 5, 2005), In re RCNCorp , Case No
<br />04-13638 (RDD) (Bankr S D N Y Dec 8 , 2004), In re Kmart Corp, Case No 02-02474 (Bankr
<br />N D III Apr 23, 2003), In re Sterling Chem Holdings, Inc, Case No 01-37805-H4-11 (Bankr
<br />S D Tex Nov 20, 2002))
<br />In addition to the litany of cases cited above where courts granted exculpation to third
<br />parties (including lenders), the Southern District of Ohio has rejected nearly identical objections
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<br />the Plan that resolves many complicated issues among the Debtors and other interested parties and
<br />which, in the Debtors'v iew, positioned the Debtors to seek confirmation of the Plan providing for
<br />the best possible recoveries for Claims against the Debtors Furthermore, the Released Parties
<br />received a broad release pursuant to the Court's approval of the Released Party Settlement The
<br />Debtors are also unaware of any valid causes of action against any of the beneficiaries of the
<br />exculpations Other than the argument that exculpation of non -estate fiduciaries is impermissible
<br />(which is not correct) the UST provides no reasoning as to why the exculpation in this matter is
<br />inappropriate In view of the foregoing, the exculpations are appropriate and in the best interests
<br />of the Debtors' estates, and the UST Objection should be overruled
<br />(it) The Third -Party Release of the Released Parties
<br />Is Appropriate
<br />Third party releases we commonly included in chapter I plans under section 1123(b)(6)
<br />of the Bankruptcy Code Here, the Thud -Party Release is limited in scope —that is, it only applies
<br />to the Released Parties, which means the DIP Secured Parties, the Prepetition Secured Parties,
<br />their affiliates which purchased the Debtors' assets as part of their credit bid, parties related to the
<br />lenders, and each of their respective directors, employees, and professionals The Third -Party
<br />Release releases claims held by non -debtor parties against the Released Parties, but creditors grant
<br />the release only to the extent that they affirmatively elected to vote in favor of the Plan
<br />It is well established that "a consensual third -party release is no different from any other
<br />contract or settlement" and that bankruptcy courts therefore "generally approve [such] provisions
<br />in a plan" 8 COLLIER ON BANKRUPTCY 11141 02[b] (16th ed 2020) A third -party release
<br />implemented through a debtor's chapter 11 plan is entirely appropriate where, as here, the third
<br />parties consent to such release Flake v Schrader -Bridgeport Inteinanonal, Inc, 538 Fed Affix
<br />604, 613 (6th Cir 2013) (upholding a consensual thud party release), Food Lion, Inc v SL
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