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Case 1 20-bk-12043 Doc 573-2 Filed Ol/13/21 Entered 01/13/21 1103 53 Desc Case 1 20-bk-12043 Doc 573-2 Filed Ol/13/21 Entered 01/13/2111.03 53 Desc
<br />Exhibit B - Declaration of Thomas Fairfield Page 8 of 17 Exhibit B - Declarabon of Thomas Fairfield Page 9 of 17
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<br />reemipment by the Released Parties of the settlement amounts paid to the Debtors' estates as part
<br />of a "sharing" arraagement with Holders of Allowed General Unsecured claims
<br />21 The Released Party Settlement provided that (i) the Plan Proponents shall pursue
<br />confirmation of a chapter 11 plan of liquidation, (it) all creditors voting in favor of the plan release
<br />the Released Parties under terms consistent with provisions of the Released Party Settlement (i e
<br />the Thud Party Release), (in) the Released Parties shall be exculpated from all post -petition actions
<br />under the Plan under the standard exculpation provision applicable to estate professions (t a the
<br />inclusion of the Released Parties in the definition of Exculpated Parties), and (iv) the Plan would
<br />be consistent with the terms of the Released Party Settlement (i c- the Debtor Release") The
<br />provisions of Article XI of the Plan do nothing more than toddy or effectuate the terms of the
<br />Released Party Order
<br />22 1 believe that the Third -Party Release is appropriate in the context of these Chapter
<br />11 Cases The Released Parties all provided significant value in the Debtors' estates by setting
<br />forth and agreeing to terms of a compromise that provided a viable path to plan confirmation for
<br />the Debtors In addition, the DIP Secured Parties provided vital DIP financing that enabled the
<br />Debtors to conduct an orderly sales process and dispose of all of the Debtors' mining assets In
<br />addition to providing the DIP financing, certain of the Released Panics entered into a stalking
<br />horse purchase agreement for the majority of the Debtors' assets, the terms ofwhich also permitted
<br />the Debtors to sell assets to competing bidders if higher bids were received The commitments
<br />made by the Released Panics established the framework for the going -concern sale and resulted
<br />in the sale of all of the Debtors' mining assets, including the sale of a significant portion of the
<br />Debtors' mining assets to certain of the Released Parties, as well as the sale of certain asset groups
<br />to several competing bidders submitting higher bids Moreover, the stalking horse sale transaction
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<br />Case 1 20-bk-12043 Doc 573-2 Filed 01/13/21 Entered 01/13/21 11 03 53 Desc
<br />Exhibit B -Declaration of Thomas Fairfield Page 10 of 17
<br />(Section I1 02) I have been advised that the injunction and exculpation provisions in the Plan are
<br />not inconsistent with the Bankruptcy Code and thus, requirements of section 1123(b) of the
<br />Bankruptcy Code are satisfied
<br />B. Compliance with Section 1129(a)(2) of the Bankruptcy Code.
<br />25 To the best of my knowledge and based on my discussions with the Debtors'
<br />counsel, I believe tbat the Debtors bave complied with the applicable provisions of the Bankruptcy
<br />Code, Bankruptcy Rules, and other applicable law in transmitting the Plan, the Disclosure
<br />Statement, the Ballots, and related documents and notices and in soliciting and tabulating the votes
<br />on the Plan
<br />C. Compliance with Section 1129(a)(3) of the Bankruptcy Code.
<br />26 The Plan is the product of = s length negotiations between the Debtors and the
<br />Committee I believe the Plan allows holders of Allowed Claims to realize the highest possible
<br />recovery under the circumstances from proceeds of liquidation of the Liquidating Trust Assets As
<br />such, 1 believe the Plan was proposed with the legitimate and honest purpose of effectuating the
<br />Released Party Settlement, maximizing the value of the Debtors' assets and maximizing
<br />distributions to creditors
<br />D. Compliance with Section 1129(a)(4) of the Bankruptcy Code.
<br />27 Based on my discussions with the Debtors' legal advisors, I believe the Plan
<br />complies with section l 129(a)(4) of the Bankruptcy Code, as all payments made or to be made for
<br />services rendered and expenses incurred in connection with these Chapter 11 Cases, including,
<br />without limitation, all Administrative Claims though the Effective Date, will be paid only after
<br />allowance of such Claims by the Bankruptcy Court
<br />included certain of the Released Parties leaving encumbered funds behind and waiving
<br />administrative claims for the benefit of the Debtors' estates and its creditors which set the Debtors
<br />on the path to emergence from Chapter 11 In light of the significant benefits obtained by the
<br />Debtors' estates obtained from the Released Parties' commitments and agreements, it is
<br />appropriate to extend the protections afforded by the exculpation provision to non -estate
<br />fiduciaries
<br />23 Article XI of the Plan contains provisions that provide for an exculpation provision
<br />in favor of the Exculpated Parties (Section 11 03), a release by the Releasing Parties of certain
<br />Claims against the Released Parties (Section 11 04) (the "Third -Party Release'), and the release
<br />of claims by the Debtors and their Estates against the Released Parties (Section 11 05) (the
<br />"Debtor Release') The term Released Parties means (i) the DIP Secured Parties, (it) the
<br />Prepetition Secured Parties, (in) Pledge Servicing Partners, LLC, (iv) ARC Financial Partners,
<br />LLC, (v) Appalachian Resource Company, LLC and (vp with respect to each of the foregoing
<br />parties in clauses (0 through (v), such party's respective current and former affiliates, and such
<br />party's and their current and former affiliates' current and former officers, managers, directors,
<br />equity holders (regardless of whether such interests are held directly or indirectly), predecessors,
<br />successors, and assigns, subsidiaries, principals, members, employees, agents, managed accounts
<br />or funds, management companies, fund advisors, advisory board members, financial advisors,
<br />partners, attorneys, accountants, investment bankers, consultants, representatives, and other
<br />professionals
<br />24 The Plan does not provide for a discharge of the Debtors (Section 11 01) and does
<br />not release any Causes of Action or Avoidance Actions unless previously provided by the Debtors
<br />under the DIP Order, the Sale Order, the Settlement Agreement or the Lender Settlement Order
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<br />Exhibit B -Declaration of Thomas Fairfield Page ll of 17
<br />E. Compliance with Section 1129(a)(5) of the Bankruptcy Code.
<br />28 The identity of the Liquidating Trustee, GlassRatner Advisory & Capital Group,
<br />LLC d/b/a B Riley Advisory Services bass been fully disclosed in the Liquidating Trust Notice,
<br />and I believe the appointment of the Liquidating Trustee is consistent with the interests of holders
<br />of Claims against and Equity Interests in the Debtors and with public polity
<br />F. Section 1129(a)(6) of the Bankruptcy Code Is Inapplicable.
<br />29 The Plan does not provide for the change of any rate that is within the junsdiction
<br />of any governmental regulatory commission after the occurrence of the Effective Date Therefore,
<br />I believe that the provisions of section 1129(a)(6) are inapplicable
<br />G. Compliance with Section 1129(a)(7) of the Bankruptcy Code.
<br />30 The Debtors have considered the impact that a chapter 7 liquidation would have on
<br />the ultimate proceeds available for distribution to creditors in these Chapter 11 Cases, including
<br />(i) the increased costs and expenses of a liquidation under chapter 7 arising from fees payable to a
<br />trustee in bankruptcy and professional advisors to such trustee, and (u) potential increases in claims
<br />which would be satisfied on a priority basis Moreover, to implement the Plan, the Liquidating
<br />Trustee will liquidate the remaining assets of the Debtors' Estates, including the potential pursuit
<br />of Causes of Action for the benefit of creditors, it is reasonable to assume that the Liquidating
<br />Trustee will recover at least as much as a chapter 7 umstee would In light of the foregoing, the
<br />Debtors have determined that confirmation of the Plan will provide each Holder of an Allowed
<br />Claim with a recovery that is not less than the amount that such Holder would receive pursuant to
<br />a liquidation of the Debtors under chapter 7 of the Bankruptcy Code
<br />31 The substantial benefits provided to general unsecured creditors under the Plan also
<br />would be lost if these Chapter 11 Cases were converted to chapter 7 Indeed, conversion of these
<br />Chapter I 1 Cases to chapter 7 would likely prolong these proceedings, delay distributions to
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