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