2021-01-22_GENERAL DOCUMENTS - C2010088

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Case 1 20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 11.03 53 Desc Main Case 1 20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 11 03 53 Desc Main Document Page 13 of 44 Document Page 14 of 44 TOTAL BALLOTS COUNTED ACCEPT REJECT Class VOTING CLASS AMOUNT NUMBER AMOUNT NUMBER Rs� Class 1 $13,775 80 3 $2,762 36 1 Other Priority Claims 8330% 75.00 % 16.70 % 25.00 % Accept Class3 $1,365,50000 1 $000 0 Accept DIP Lender Claims 100.00% 100 00 % 0.00 % 0.00 % Class $18,118,58510 1 $000 0 Accept Prepetition Lender Clams 100.00% 100.00% 0 00% 0.00% Classy $14,078,18201 76 $197,91838 Il Accept General Unsecured Claims 98.61% 8736% 139% 12.64% (See Young Declaration, attached hereto as Exhibit A ) The Combined Hearing Order established January 5, 2021 at 4 00 p in (Eastern time) as the deadline for objections the adequacy of the Disclosure Statement or confirmation of the Plan IL THE DISCLOSURE STATEMENT AND SOLICITATION PROCEDURES SHOULD BE APPROVED UNDER SECTIONS 1125(B) AND 1125(A) OF THE BANKRUPTCY CODE As discussed above, on December 1, 2020, Solicitation Packages were distributed to all Holders of Claims entitled to vote on the Plan The Disclosure Statement provides extensive information regarding, among other things, the Plan, events preceding the commencement ofthese Chapter 11 Cases, claims against the Debtors' estates, estimated recoveries for creditors under the Plan, risk factors affecting the Plan, and federal tax law consequences of the Plan In addition, E creditors entitled to vote were provided with a clear description of the Debtors' liquidation, the liquidating trustee, risks my olved in the plan process, and all legal aspects of the Plan Pursuant to section 1125 of the Bankruptcy Code, the proponent of a chapter 11 plan must provide holders of impaired claims and interests entitled to vote on a plan with "adequate information" regarding the plan Section I I25(a)(1) of the Bankruptcy Code states, in relevant part [A]dequate information" means information of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records, including a discussion of the potential material Federal tax consequences ofthe plan to the debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims or interest in the case, that would enable such a hypothetical investor of the relevant class to make an informed judgment about the plan 11 U S C § 1125(a)(1) "Adequate information" has been interpreted as information that is "reasonably practicable" to permit an "informed judgment" by creditors and interest holders, if applicable, to vote on a chapter I I plan See Nestle Waters N Am Inc v Mauntam Glacier LLC (In re Mountain Glacier LLC), 877 F 3d 246, 248 (6th Cir 2017) The adequacy of information in a disclosure statement is determined on a case -by -case basis See In m A C Ili iDmms Cc , 25 B R 173, 176 (Bankr NO Ohio 1982) ("What constitutes adequate information under [section 1125(a)(1)] must be determined on a case -to -case basis under flexible standards "), see also H R Rep No 95-595, at 409 (1977) ("Precisely what constitutes adequate information many particular instance will develop on a case -by -case basis Courts will take a practical approach as to what is necessary under the circumstances of each case ") Further, in a liquidating case such as this one, the definition of "adequate information" accommodates the possibility that adequate information about a liquidation plan may be different than such information about a proposed restructuring of the business In re Michelson, 141 B R 715, 720, n 13 (Bankr E D Cal 1992) 14 Case 1,20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 11 03 53 Desc Main Case 1 20-bk-12043 Doc 573 Filed 01/13/21 Entered 01/13/21 11.03 53 Desc Main Document Page 15 of 44 Document Page 16 of 44 This Court has broad discretion to determine whether a disclosure statement contains III. MODIFICATIONS TO THE PLAN "adequate information" based on the facts of this case In re Cajun Elec Paiver Coop , 150 F 3d The Proponents intend to make certain nonmaterial and/or nonadverse modifications (the 503, 518 (5th Cir 1998) (citing the legislative history to § 1125 in holding that what constitutes "Modifications") to the Plan as further described in this section "adequate information" will be governed by the circumstances of each case) Despite Congress' Section I I27(a) of the Bankruptcy Code provides directive in l I U S C § 1125(b) that the Disclosure Statement is sufficient without a valuation of The proponent of a plan may modify such plan at any time before confirmation, but may not modify such plan so that such plan as modified assets, including litigation claims, the Joint Disclosure Statement contains a projected recov cry fails to meet the requirements of sections 1122 and 1123 of this title After the proponent of a plan files a modification of such plan with the court, the based on a low and high return on litigation claims In the case of a liquidating plan, this plan as modified becomes the plan information is more than adequate 11 U S C §1127(a) Section 1127(d) provides The Disclosure Statement contains more than "adequate information," as defined in § Any holder of a claim or interest that has accepted or rejected a plan is deemed to have accepted or rejected, as the case may 1125(a)(1) of the Bankruptcy Code The Disclosure Statement is a 65-page document that be, such plan as modified, unless, within the time fixed by the court, such holder changes such holder's previous acceptance discusses, among other things (a) the terms of the Plan, (b) voting instructions and information or rejection about the confirmation hearing, (c) the Debtors' businesses, assets and significant debt obligations, 11 U S C §1127(d) The Bankruptcy Rule designed to implement section 1127(d), in turn, (d) the events leading to the Debtors' Chapter 11 Cases, (e) events during the Debtors' Chapter I provides in relevant part Cases, (f) the Proponents' satisfaction of the standards for confirming a plan, including the "best In a chapter 11 case, after a plan has been accepted and before its confirmation, the proponent may file a modification of the plan If the court finds after hearing on interests of creditors" and "feasibility" tests, (g) certain risk factors to be considered, and (b) the notice to the trustee, any committee appointed under the Code, and any other entity designated by the court that the proposed modification does not adversely change federal income tax consequences attendant to confirmation and the distributions made under the the treatment of the claim of any creditor or the interest of any equity security holder who has not accepted in writing the modification, it shall be deemed accepted by Plan all creditors and equity security holders who have previously accepted the plan Moreover, the Proponents have complied with all other applicable provisions of the Fed R Banks. P 3019(a) None of the Modifications to the Plan constitutes an "adverse change," Bankruptcy Code, the Federal Rules of Bankruptcy Procedure including Bankruptcy Rules 3017 within the meaning of Bankruptcy Rule 3019, as to any of the affected Classes and 3018, and all applicable nonbanlauptcy laws, riles or regulations w ith respect to disclosure Section 1127 of the Bankruptcy Code gives a plan proponent the right to modify the plan and solicitation of acceptances of the Plan Having satisfied the requirements imposed by sections "at any time" before confirmation In this case, the Modifications are minor and do not require re- 1126(b) and I I29(a)(1) of the Bankruptcy Code governing prepetition disclosure and solicitation, solicitation or preclude immediate confirmation of the Plan On the basis of the foregoing and the Proponents submit that the Disclosure Statement and solicitation procedures should be related cases, the Court can and should conclude that the impact of the proposed Modifications on approved 15 16