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Case 1 20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/2111 03,53 Desc Main Case 1 20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/2111 03 53 Desc Main
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<br />(it) as soon as practicable after the date upon which such Administrative Claim becomes an
<br />Allowed Claim, or (tu) such other date as may be agreed upon between the Holder of such Allowed
<br />Administrative Claim and the Liquidating Trustee
<br />Additionally, holders of Allowed Priority Tax Claims will receive (a) payments (i) of a
<br />total value, as ofthe Effective Date ofthe Plan, (it) over a period ending not later than 5 years after
<br />the date of the order for relief under section 301, 302, or 303, and (in) in a manner not less
<br />favorable than the most favored noapnomy unsecured claim provided for by the Plan, (b) such
<br />other treatment in accordance with 1129(a)(9)(C) of the Bankruptcy Code, or (c) such other
<br />treatment as may be agreed between the Holder of such Allowed Priority Tax Claim and the
<br />Liquidating Trustee Thus, the Plan satisfies Section 1129(a)(9) of the Bankruptcy Code
<br />J. Acceptance of At Least One Impaired Class (Section 1129(e)(I0))
<br />Section 1129(a)(I0) of the Bankmptcy Code requires that at least one impaired class of
<br />claims must accept the plan, excluding the votes of insiders 11 U S C § 1129(a)(10) As per the
<br />Epiq Declaration, Classes 1, 3, 4 and 5 are Impaired under the Plan and have v oted to accept the
<br />Plan, without including any acceptance of the Plan by any insider Accordingly, the Plan satisfies
<br />the requirements of section 1129(a)(10) ofthe Bankruptcy Code
<br />K. Feasibility (Section 1129(a)(I1))
<br />Pursuant to section 1129(a)(11) of the Bankruptcy Code, a chapter 11 plan may be
<br />confirmed only if"[c]onfirmation of the plan is not likely to be followed by the liquidation, or the
<br />need for further financial reorganization, of the debtor or any successor to the debtor under the
<br />plan, unless such liquidation or reorganization is proposed m the plan" 11 U S C § 1129(a)(11)
<br />(emphasis in original) The Plan satisfies the requirements of section 1129(a)(11) because the Plan
<br />is a liquidating plan See, eg, In the Matter of 47th and Belleview Partners, 95 B R 117, 120
<br />(Baal¢. W D Mo 1988) (holding that feasibility, under the literal wording of section 1129(a)(11)
<br />of the Bankruptcy Code, does not have to be demonstrated when hquidation is proposed in the
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<br />because the principal purpose of the Plan is not the avoidance of taxes or the avoidance of the
<br />application of the Securities Act The principal purpose of the Plan is to effectuate the Debtors'
<br />liquidation Accordingly, the Plan satisfies the requirements of section 1129(d) of the Bankruptcy
<br />Code
<br />V. THE PLAN SATISFIES THE "CRAMDOWN" REQUIREMENTS
<br />Because Class 6 rejected the Plan pursuant to section 1126 ofthe Bankruptcy Code, the
<br />Proponents most meet the requirements of section 1129(b) of the Bankruptcy Code Section
<br />1129(b)(1) requires a plan to be fair and equitable and prohibits unfair discrimination Section
<br />1129(b)(2)(C) states that spin is far and equitable with respect to equity interests as long as "the
<br />holder of any interest that isjumor to the interests of such class will not receive or retam under the
<br />plan on account of suchjunior interest any property "
<br />Under the Plan, neither the holders of Class 6 Equity Interests nor anyone holding interests
<br />junior to them will receive or retain any property under the Plan Thus, the Plan is fair and equitable
<br />to the holders of Class 6 claims and should be confirmed under section I I29(b) of the Bankmptcy
<br />Code Further, the plan does not unfairly discriminate against Holders of Class 6 Equity Interests
<br />The Plan's treatment of Class 6 is proper because all similarly situated holders of Equity Interests
<br />will receive substantially similar treatment, and the Plan's classification scheme rests on a legally
<br />acceptable rationale Accordingly, the Plan does not discriminate unfairly in contravention of
<br />section I129(b)(1) In sum, the Debtors have met the requirements for cramdown of Class 6 and,
<br />accordingly, the Plan should be confirmed despite the deemed rejection of this class
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<br />plan), In re Pero Bros Farms, Inc , 90 B R 562, 563 (Bankr S D Fla 1988) (holding that the
<br />feasibility test does not apply to a liquidating plan)
<br />L. Payment of Certain Fees (Section 1129(a)(12))
<br />Section 1129(a)(12) of the Bankruptcy Code provides that a court may confirm a chapter
<br />11 plan only if"[a]ll fees payable under section 1930 of title 28, as determined by the coup at the
<br />hearing on confirmation of the plan, have been paid or the plan provides for the payment of all
<br />such fees on the effective date of the plan " 11 U S C § I I29(a)(12) Section 3 02(d) of the Plan
<br />provides for the payment of all US. Trustee Fees due as of the Effective Date Therefore, the Plan
<br />meets the requirements of section 1129(a)(12) ofthe Bankruptcy Code
<br />M. Continuation of Retiree Benefits (Section 1129(a)(13))
<br />Section 1129(a)(13) of the Bankruptcy Code requires that a chapter 11 plan provide for the
<br />continued payment of certain retiree benefits "for the duration of the period that the debtor has
<br />obligated itself to provide such benefits." 11 U S C § 1129(a)(13) The Debtors do not have any
<br />continuing retiree benefits within the meaning of Sections 1114 and 1129(a)(13) of the Bankruptcy
<br />Code, accordingly, the Proponents submit that section 1129(a)(13) of the Bankruptcy Code is not
<br />applicable to these Chapter 11 Cases
<br />N. Sections 1129(s)(14u16) of the Bankruptcy Code are Inapplicable
<br />None of the Debtors are (a) required to pay any domestic support obligations, (b)
<br />individuals, or (c) nonprofit corporations or trusts Accordingly, the Debtors submit that sections
<br />I I29(a)(14) through (16) of the Bankruptcy Code are not applicable
<br />O. The Plan Is Not an Attempt to Avoid Tax Obligations — I I U.S.C. 1129(d)
<br />Section 1129(d) ofthe Bankruptcy Code provides that a court may not confirm a plan if
<br />the principal purpose of the plan is to avoid taxes or the application of section 5 ofthe Securities
<br />Act of 1933 (the "Securities Act") 11 U S C § 1129(d) The Plan meets these requirements
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<br />VI. THE SUBSTANTIVE CONSOLIDATION ON WHICH THE PLAN IS BASED
<br />SHOULD BE APPROVED
<br />The Plan contemplates the substantive consolidation ofthe Debtors solely for the purposes
<br />of the Plan, that is, for voting, confirmation, and distribution purposes Section 2 02 of the Plan
<br />provides that
<br />The Plan provides for substantive consolidation of the Estates, for purposes of
<br />voting, confirmation, and making Distributions to the Holders of Claims under the
<br />Plan Voting on the Plan shall be counted on a consolidated basis On the Effective
<br />Date, and solely for purposes of voting, confirmation and making Distributions to
<br />the Holders of Claims under the Plan (a) all guarantees of any Debtor of the
<br />payment, performance or collection of another Debtor with respect to Claims
<br />against such Debtor shall be eliminated and cancelled, (b) any single obligation of
<br />multiple Debtors shall be treated as a single obligation in the consolidated Chapter
<br />11 Cases, and (c) all guarantees or other obligations by a Debtor with respect to
<br />Claims against one or more of the other Debtors shall be treated as a single
<br />obligation in the consolidated cases On the Effective Date, and in accordance with
<br />the terms of this Plan and the consolidation of the assets and liabilities of the
<br />Debtors, all General Unsecured Claims based upon guaranties of collection,
<br />payment or performance made by a Debtor as to the obligation of another Debtor
<br />shall be released and of no further force and effect Except as set forth in this
<br />Section, such substantive consolidation shall not affect (a) the legal and corporate
<br />structure of the Debtors, or (b) any obligations under any leases or contracts
<br />assumed through the Plan or otherwise after the Petition Date
<br />Notwithstanding the substantive consolidation of the Estates for the purposes set
<br />forth herein, each Debtor shall pay its respective U S Trustee Fee Claims on all
<br />disbursements for any open Chapter I Cases, including any Distributions or
<br />disbursements made as a result of this Plan, until the earlier of entry of a final decree
<br />in these Chapter 11 Cases, dismissal of these Chapter 1 I Cases, closure of these
<br />Chapter 11 Cases, or conversion of these Chapter 11 Cases to a case under chapter
<br />7 of the Bankruptcy Code
<br />The substantive consolidation ofthe Debtors is appropriate, ns set forth below
<br />A. Legal Standards for Substantive Consolidauion
<br />Substantive consolidation ofthe estates of multiple debtors in a bankruptcy case effectively
<br />combines the assets and liabilities ofthe multiple debtors for certain purposes under a plan The
<br />effect of consolidation is the pooling the assets of; and clams against, the consolidated debtors,
<br />satisfying liabilities from a common fund, and combining the creditors ofthe debtors for purposes
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