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<br />Nusbaum Ins 4genev, Inc , 202 F 3d 223, 228 (4th Cu 2000) (explaining that consensual thud
<br />party releases are permissible under the Bankruptcy Code), In re Specialty Equip Cos, Inc., 3
<br />F 3d 1043, 1047 (7th Cir 1993) (same)
<br />Indeed, courts in this circuit have held that "consensual releases are not a discharge in
<br />bankruptcy and do not inn afoul with the Bankruptcy Code " In re Dow Corning Corp, 255 B R
<br />445, 492 (E D Mich 2000), aff d, 280 F 3d 648 (6th Cu 2002), see also Nat'l Het page Found,
<br />Inc v Highbourne Found, 760 F 3d 344, 347 (4th Cir 2014) (adopting the Dow Corning factors
<br />in determining whether it is appropriate to approve non -debtor releases) Here, the Third -Party
<br />Release only applies to those voting in favor of the Plan and, therefore, is fully consensual
<br />The Ballots distributed to the Voting Classes included clear and bolded language that (i)
<br />directed parties to the pages of the Plan referring to the Tbird-Party Release and related definitions,
<br />and (it) notified such parties that those sections may affect their legal rights That language
<br />provided
<br />PLEASE BE ADVISED THAT THE PLAN CONTAINS CERTAIN
<br />DISCHARGE, RELEASE, EXCULPATION, AND INJUNCTION
<br />PROVISIONS. THESE PROVISIONS ARE FOUND IN ARTICLE XI OF
<br />THE PLAN. YOU ARE ADVISED AND ENCOURAGED TO CAREFULLY
<br />REVIEW AND CONSIDER THE PLAN, INCLUDING THE DISCHARGE,
<br />RELEASE, EXCULPATION, AND INJUNCTION PROVISIONS, AS YOUR
<br />RIGHTS MAY BE AFFECTED
<br />[See Form Ballot, ECF No 533, p 15 (emphasis in original)] Further, the Ballots stated that the
<br />Given the ample notice and the consideration given by the Released Parties in exchange
<br />for the Thud -Party Release and the fact that only those Holders of Claims who have voluntarily
<br />elected to provide the Thud -Party Release voting in favor of the Plan, the Thud -Party Release is
<br />appropriate and should be approved
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<br />concerned with the applicable activities of a plan proponent See Collier on Bankruptcy ¶ 1129 03
<br />(Alan N Resnick & Henry I Sommers eds , 16th ed ) The legislative history to section I I29(a)(2)
<br />reflects that this provision is intended to encompass the disclosure and solicitation requirements
<br />under sections 1125 and 1126 of the Bankruptcy Code H R Rep. No 95-595, at 412 (1977), S
<br />Rep No 95-989, at 126 (1978) ("Paragraph (2) [of section 1129(a)] requires that the proponent of
<br />the plan comply with the applicable provisions of chapter 11, such as section 1125 regarding
<br />disclosure "), see also In re Tov & Sports Warehouse, Inc, 37 B R 141, 149 (Bankr S D N Y
<br />1984) (requiring compliance with sections 1125 and 1126 to satisfy section 1129(a)(2))
<br />As discussed in section 11 of this Memorandum, the Proponents have complied with all
<br />solicitation and disclosure requirements set forth in the Bankruptcy Code, the Bankruptcy Rules,
<br />and the Combined Hearing Ordergoverning notice, disclosure, and solicitation in connection with
<br />the Plan and the Disclosure Statement As evidenced by, among other things, the certificate of
<br />service of the Combined Hearing Notice, the Proponents, with the help of Epiq, have complied
<br />with all previous orders of the Bankruptcy Court regarding the solicitation of votes, including the
<br />Tabulation Rules, and the Combined Hearing Order, as well as all the deadlines scheduled therein
<br />Accordingly, the requirements of section I I29(a)(2) of the Bankruptcy Code have been satisfied
<br />See In re Drexel Burnham Lanibet t Grp Inc . 138 B R 723, 769 (Bankr S D N Y 1992) (section
<br />1129(a)(2) satisfied where debtors complied with all provisions of Bankruptcy Code and
<br />Bankruptcy Rules governing notice, disclosure and solicitation relating to the plan)
<br />C. Good Faith (Section 1129(a)(3))
<br />Section 1129(a)(3) of the Bankruptcy Code requires a plan to have been "proposed in good
<br />faith and not by any means forbidden by law " 11 U S C § I I29(a)(3) Although the Bankruptcy
<br />Code does not define "good faith" m that term is used in this section, courts have indicated that
<br />the good faith requirement requires that "there is a reasonable likelihood that the plan will achiev e
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<br />(III) The Debtors' Release of the Released Parties Is
<br />Appropriate
<br />The Debtor Release set forth in Section 11 05 of the Plan arises from an appropriate
<br />exercise of the Debtors' authority under section 1123(b)(3) of the Bankruptcy Code to include in
<br />the Plan "the settlement or adjustment of any claim or interest belonging to the debtor or to the
<br />estate " 11 U S C § 1123(b)(3)(A), see, a g, In re Poe Gas & Elec Co, 304 B R 395 (Bankr
<br />N D Cal 2004) (court approved release and settlement of debtors claims pursuant to section
<br />1123(b)(3))
<br />In this case, the Debtor Release provided in section 11 05 of the Plan simply incorporates
<br />releases that have previously been approved by the Court The Court has previously approved
<br />releases of the Released Parties as part of the DIP Order, the Sale Order, and the Released Party
<br />Order The Debtor Release simply incorporates such releases and grants no further releases As
<br />such, the Debtor Release is unequivocally appropriate
<br />4. The Plan Provides for the Settlement and Retention of Claims and
<br />Interests
<br />As permitted by section 1123(b)(3) of the Bankruptcy Code, Sections 5 Ol and 6 04 of the
<br />Plan provide that the Liquidation Trust Assets, including without limitation, the Causes of Action,
<br />shall be transferred to the Liquidation Trust on the Effective Date. Thereafter, the Liquidation
<br />Trust (at the direction of the Liquidation Trustee) may use, acquire, and dispose of such property
<br />as specifically provided in the Plan and the Liquidation Trust Agreement
<br />B. The Proponents of the Plan Comply with the Applicable Provisions of Title
<br />I (Section 1129(a)(2))
<br />Section 1 129(a)(2) ofthe Bankruptcy Code requires that the "proponent of the plan comply
<br />with the applicable provisions of this title " I 1 U S C § 1129(a)(2) Whereas section 1129(a)(1)
<br />of the Bankruptcy Code focuses on the form and content of a plan itself, section 1129(a)(2) is
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<br />a result consistent with the standards prescribed under the Code " In re Trenton Ridge Investors,
<br />LLC, 461 B R 440, 466,471 (Banks S D Ohio 2011) (holding that the plan was feasible, practical,
<br />and would enable the debtor with its only opportunity to pay debts), Crestar Bank v Walker (In
<br />re Walker), 165 B R 994, 1001 (Bankr E D Va 1994) (citations omitted) Courts generally view
<br />the good faith requirement in light of the totality of the circumstances surrounding the
<br />establishment of the chapter 11 plan Id
<br />The Proponents submit that the record in these Chapter 11 Cases (including the evidence
<br />to be adduced at the Combined Hearing) establishes that the Proponents have proposed the Plan in
<br />good faith, with the legitimate purpose of maximizing stakeholder value, and not by any means
<br />forbidden bylaw, in satisfaction of section 1129(a)(3) of the Bankruptcy Code. The Plan provides
<br />for the establishment of the Liquidating Trust to be created for the benefit of holders of Allowed
<br />Claims that are entitled to Plan Distributions, which the Proponents believe provides the greatest
<br />chance of maximizing recoveries for holders of Allowed Claims Additionally, the record of the
<br />Chapter 11 Cases demonstrates that the Debtors and their directors, managers, officers, employees,
<br />agents, affiliates, and professionals (acting in such capacity) hair a acted in "good faith" within the
<br />meaning of section 1125(e) of the Bankruptcy Code The treatment of the holders of Claims and
<br />Equity Interests under the Plan is proposed in good faith and is fair and equitable The Committee's
<br />support of the Plan is further evidence of the good faith of the Debtors with respect to the Plan
<br />Finally, the Plan represents extensive arms -length negotiations among the Debtors and the
<br />DIP Lender and Prepention Lenders, as well as each group's legal and financial advisors As
<br />previously mentioned. the Plan received 100% approval of the Class 3 DIP Claims and Class 4
<br />Lender Claims In light of the foregoing, the Proponents submit that they acted in good faith in
<br />proposing and pursuing confirmation of the Plan and that the Plan is not proposed by any means
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