HTML Document View

Full title: Declaration in Support Declaration of Daniel Strauss in Support of Confirmation of the Amended Prepackaged Chapter 11 Plan of Reorganization of Adara Enterprises Corp., and Approval of Disclosure Statement for the Prepackaged Chapter 11 Plan of Reorganization of Adara Enterprises Corp. (related document(s)15, 16, 42, 77, 100, 102) Filed by Adara Enterprises Corp.. (Gellert, Ronald) (Entered: 06/02/2021)

Document posted on Jun 1, 2021 in the bankruptcy, 18 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

If confirmed, the Plan will provide for (1) the reorganization of the Debtor by retiring, cancelling, extinguishing, and/or discharging the Debtor’s prepetition Other Equity Interests and issuing (i) 50% of the New Equity in the Reorganized Debtor to the Preferred Equity Interest Holder in exchange for the Preferred Equity Interests, (ii) issuing 50% of the New Equity to the Prepetition Secured Lender, in exchange for a portion of the Prepetition Secured Lender Claim; (2) the remittal of the Consideration to the Debtor on the Effective Date; and (3) the distribution of the Consideration to holders of Allowed Claims and Other Equity Interests in accordance with the priority scheme established by the Bankruptcy Code or as otherwise agreed.Under the Plan, each holder of a Priority Tax Claim against Debtor shall receive in full satisfaction, settlement, release and discharge of, and in exchange for, such Allowed Priority Tax Claim (i) Cash equal to the amount of such Allowed Priority Tax Claim on the Effective Date, or (ii) such other less favorable treatment to the holder of an Allowed Priority Tax Claim as to which the Debtor, the Plan Sponsor, and the holder of such Allowed Priority Tax Claim shall have agreed upon in writing.Under Class 2 – Other Secured Claims, each holder of an Allowed Other Secured Claim against the Debtor shall receive on or about the Effective Date, on account of and in full and complete settlement, release and discharge of, and in exchange for, such Allowed Other Secured Claim, at the option of the Plan Sponsor: (i) payment in full in Cash; (ii) the collateral securing its Allowed Other Secured Claim and payment of any interest required under section 506(b) of the Bankruptcy Code; (iii) reinstatement of such Allowed Other Secured Claim; or (iv) such other treatment rendering such Allowed Other Secured Claim unimpaired.Under Class 3 – Other Priority Claims, each holder of an Allowed Other Priority Claim against the Debtor shall receive on or about the Effective Date, on account of and in full and complete settlement, release and discharge of, and in exchange for, such Allowed Other Priority Claim, (i) Cash equal to the amount of such Allowed Other Priority Claim on the Effective Date; or (ii) such other treatment to the holder of an Allowed Other Priority Claim as to which the Debtor, the Plan Sponsor and the holder of such Allowed Other Priority Claim shall have agreed upon in writing.The Plan also includes (i) releases by the Debtor of certain parties in interest (the “Debtor Releases”), (ii) the release by certain holders of Claims and Equity Interests and other parties in interest of certain non-Debtor third parties (the “Third Party Releases”), (iii) an exculpation provision (the “Exculpation”) and (iv) injunction provisions prohibiting parties from, among other things, pursuing Claims and Equity Interests otherwise released under the Plan (the “Injunctions”).

List of Tables

Document Contents

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 ADARA ENTERPRISES CORP., Case No. 21-10736 (JKS) Debtor. 1 Re: D.I. 15, 16, 42, 77, 100 DECLARATION OF DANIEL STRAUSS IN SUPPORT OF CONFIRMATION OF THE AMENDED PREPACKAGED CHAPTER 11 PLAN OF REORGANIZATION FOR ADARA ENTERPRISES CORP. AND APPROVAL OF DISCLOSURE STATEMENT FOR THE PREPACKAGED CHAPTER 11 PLAN OF REORGANIZATION OF ADARA ENTERPRISES CORP. I, Daniel Strauss, hereby declare (this “Declaration”) under penalty of perjury that the following is true to the best of my knowledge, information and belief: 1. I am the President of Adara Enterprises Corp. (the “Debtor” or the “Company”, as applicable), a corporation organized under the laws of the State of Delaware and the debtor and debtor in possession in the above-captioned chapter 11 case (the “Chapter 11 Case”). In this capacity, I am familiar with the Debtor’s day-to-day operations, business, financial affairs, and books and records, and I am authorized to make this Declaration on behalf of the Debtor. 2. I submit this declaration in support of the Debtor’s Memorandum of Law in Support of an Order Confirming the Amended Prepackaged Chapter 11 Plan of Reorganization of Adara Enterprises Corp. and Approval of Disclosure Statement For the Prepackaged Chapter 11 Plan of Reorganization of Adara Enterprises Corp. (the “Confirmation Brief”),2 filed contemporaneously herewith, and in support of confirmation of the Amended Prepackaged 1 The last four digits of the Debtor’s federal tax identification number are 8502. The Debtor’s address is 411 E 57th Street Suite 1-A, New York, New York 10022. 2 All capitalized terms used but otherwise defined herein shall have the meaning ascribed to such term in the Confirmation Brief or in the Plan (as defined below).

1

Chapter 11 Plan of Reorganization of Adara Enterprises Corp., dated June 2, 2021 [D.I. 102] (as amended, supplemented, or modified, the “Plan”) and approval of the Disclosure Statement for the Prepackaged Chapter 11 Plan of Reorganization of Adara Enterprises Corp. [D.I. 16] (together with all exhibits and supplements, the “Disclosure Statement”). Except as otherwise indicated, all matters set forth in this Declaration are based upon my personal knowledge and belief at this time; my review of the relevant documents, including the Plan and Disclosure Statement; my experience and knowledge of the Debtor’s business and financial condition; information supplied to me by and discussions with other members of the Debtor’s management team, the Debtor’s employees and/or the Debtor’s external advisors. If called as a witness, I could and would competently testify to the facts set forth in this Declaration. I. PREPETITION RESTRUCTURING EFFORTS 3. As set forth in greater detail in the Declaration of Daniel Strauss in Support ofChapter 11 Petition and First Day Pleadings [D.I. 5] (the “First Day Declaration”), filed contemporaneously with the voluntary petition commencing this Chapter 11 Case, the Debtor obtained a short-term $11 million secured loan from ESW Holdings in July 2020, which was guaranteed by GlassBridge (the “ESW Loan”). Among other things, the ESW Loan enabled the Debtor to purchase certain quantitative trading software (the “Trading Software”) around which it intended to build its asset management business. Because the ESW Loan had a short-term maturity, the Debtor knew it would need to ramp up its quantitative trading business, centered around the Trading Software, quickly and that it would need to raise substantial third-party investments in a short period of time in order to be successful and to enable the Debtor to repay the ESW Loan. Ultimately, the Debtor was not able to raise any investment capital and the Debtor defaulted on payment of the ESW Loan in January 2021.

2

4. After defaulting on the ESW Loan, the Debtor elected to proceed with a prepackaged plan of reorganization consistent with the pre-negotiated terms set forth in Exhibit E to the Loan and Security Agreement (the “Agreed Restructuring Terms”) in lieu of permitting ESW Holdings to exercise its remedies as a secured creditor – a result that would have left the Debtor’s other stakeholders without any recovery. 5. GlassBridge is the owner of 100% of the Debtor’s common equity and the residual beneficiary of the consideration that ESW Holdings would provide if the Agreed Restructuring Terms were implemented. GlassBridge and the Debtor have overlapping employees, and certain members of their Boards of Directors also overlap. Because both the Debtor and GlassBridge anticipated that implementing the Agreed Restructuring Terms might result in a meaningful distribution to GlassBridge after payment of all other allowed claims against the Debtor, the Debtor’s prepetition Board of Directors determined to appoint an independent director to have sole authority to evaluate and approve all (i) restructuring transactions involving the Debtor; (ii) all transactions involving the Debtor, on the one hand, and GlassBridge, affiliates of GlassBridge, and/or Insiders (as defined in the Bankruptcy Code), on the other hand; and (iii) any transaction involving a conflict of interest with respect to GlassBridge, affiliates of GlassBridge or Insiders. Accordingly, on March 1, 2021, William Lenhart (the “Independent Director”) was appointed to the Debtor’s Board of Directors for that purpose. 6. Ultimately, extensive arm’s-length negotiations between the Debtor, GlassBridge and the ESW Parties resulted in entry into the Restructuring Support Agreement, dated April 21, 2021 (the “RSA”), and the Independent Director approved of the Debtor’s entry into the RSA. Among other things, the RSA allows the Debtor’s Restructuring to be implemented efficiently through the confirmation of a prepackaged plan of reorganization in a chapter 11 case, thereby

3

minimizing administrative costs and protecting the Debtor’s estate for the benefit of its stakeholders. Pursuant to the RSA, the ESW Parties and GlassBridge agreed to support and take all reasonable actions necessary to consummate the restructuring and fund the Debtor’s Chapter 11 Case. II. THE PLAN 7. The primary purpose of the Plan is to implement the Restructuring, consistent with the RSA. If confirmed, the Plan will provide for (1) the reorganization of the Debtor by retiring, cancelling, extinguishing, and/or discharging the Debtor’s prepetition Other Equity Interests and issuing (i) 50% of the New Equity in the Reorganized Debtor to the Preferred Equity Interest Holder in exchange for the Preferred Equity Interests, (ii) issuing 50% of the New Equity to the Prepetition Secured Lender, in exchange for a portion of the Prepetition Secured Lender Claim; (2) the remittal of the Consideration to the Debtor on the Effective Date; and (3) the distribution of the Consideration to holders of Allowed Claims and Other Equity Interests in accordance with the priority scheme established by the Bankruptcy Code or as otherwise agreed. A. Classification 8. The Plan provides for the separate classification of Claims and Interests in the Debtor based upon differences in the nature and/or priority of such Claims and Interests. In addition to the Administrative Claims, Priority Tax Claims, and Professional Fee Claims, which need not be classified under the Bankruptcy Code, the Plan designates six (6) Classes of Claims and Equity Interests in the Debtor: a. Class 1 – Prepetition Secured Lender Claims b. Class 2 – Other Secured Claims c. Class 3 – Other Priority Claims d. Class 4 – General Unsecured Claims e. Class 5 – Preferred Equity Interests f. Class 6 – Other Equity Interests

4

B. Treatment and Distributions Under the Plan 9. The Plan sets forth the treatment of each Class of Claims and Equity Interests in Article V and unclassified claims in Article IV. i. Distributions to Unclassified Claims: Administrative Claims, Priority Tax Claims, Accrued Professional Compensation and Statutory Fees 10. Based on my review of the Plan, the Plan provides for payment of Allowed Administrative Claims, Allowed Priority Tax Claims, and Allowed Professional Fee Claims. Specifically, Sections 4.1 and 4.2 of the Plan sets forth procedures for Court approval of any Administrative Claims and Professional Fee Claims through the Effective Date, and Section 4.5 provides for payment of all Ordinary Course Liabilities. Section 4.3 of the Plan provides that statutory fees under 28 U.S.C. § 1930(a)(6), plus interest due and payable under 31 U.S.C. § 3717 (if any) shall be paid in the ordinary course until the Court enters a final decree closing this Chapter 11 Case. 11. Under the Plan, each holder of a Priority Tax Claim against Debtor shall receive in full satisfaction, settlement, release and discharge of, and in exchange for, such Allowed Priority Tax Claim (i) Cash equal to the amount of such Allowed Priority Tax Claim on the Effective Date, or (ii) such other less favorable treatment to the holder of an Allowed Priority Tax Claim as to which the Debtor, the Plan Sponsor, and the holder of such Allowed Priority Tax Claim shall have agreed upon in writing. ii. Treatment of Unimpaired Classes 12. Classes 2, 3, and 4 under the Plan are deemed to be unimpaired and the holders of such Claims are not entitled to vote to accept or reject the Plan, as they are conclusively deemed to have accepted the Plan.

5

13. Under Class 2 – Other Secured Claims, each holder of an Allowed Other Secured Claim against the Debtor shall receive on or about the Effective Date, on account of and in full and complete settlement, release and discharge of, and in exchange for, such Allowed Other Secured Claim, at the option of the Plan Sponsor: (i) payment in full in Cash; (ii) the collateral securing its Allowed Other Secured Claim and payment of any interest required under section 506(b) of the Bankruptcy Code; (iii) reinstatement of such Allowed Other Secured Claim; or (iv) such other treatment rendering such Allowed Other Secured Claim unimpaired. 14. Under Class 3 – Other Priority Claims, each holder of an Allowed Other Priority Claim against the Debtor shall receive on or about the Effective Date, on account of and in full and complete settlement, release and discharge of, and in exchange for, such Allowed Other Priority Claim, (i) Cash equal to the amount of such Allowed Other Priority Claim on the Effective Date; or (ii) such other treatment to the holder of an Allowed Other Priority Claim as to which the Debtor, the Plan Sponsor and the holder of such Allowed Other Priority Claim shall have agreed upon in writing. 15. Under Class 4 – General Unsecured Claims, on or about the Effective Date, each holder of an Allowed General Unsecured Claim shall receive, on account of and in full and complete settlement, release and discharge of, and in exchange for its Allowed General Unsecured Claim, (i) payment in full in Cash, plus any interest necessary to cause such Allowed General Unsecured Claim to be unimpaired; or (ii) such other treatment to the holder of an Allowed General Unsecured Claim as to which the Debtor, the Plan Sponsor and the holder of such Allowed General Unsecured Claim shall have agreed upon in writing. iii. Treatment and Distributions to Impaired Classes 16. Classes 1, 5 and 6 are impaired and were entitled to vote on the Plan.

6

17. Under Class 1 – Prepetition Lender Secured Claim, on or as soon as reasonably practicable after the Effective Date, the holder of the Allowed Prepetition Secured Lender Claim shall receive (i) 50% of the New Equity in the Reorganized Debtor in full and complete discharge of, and in exchange for $2,000,000 of the Prepetition Secured Lender Claim, and (ii) the remainder of the Prepetition Secured Lender Claim shall be treated as a continuing obligation of the Reorganized Debtor upon the terms set forth in the Plan Supplement, and shall not be deemed extinguished, discharged, cancelled, released or otherwise satisfied under the Plan; provided that the GlassBridge Guaranty and the GlassBridge Pledge shall be terminated, and GlassBridge shall be discharged and released of all obligations thereunder, as of the Effective Date. 18. Under Class 5 – Preferred Equity Interests, on or as soon as reasonably practicable after the Effective Date, the Preferred Equity Interest Holder, on account of and in full and complete settlement, release and discharge of, and in exchange for, its Allowed Preferred Equity Interest, shall receive 50% of the New Equity in the Reorganized Debtor. On the Effective Date, all Preferred Equity Interests shall be deemed automatically cancelled, released, and extinguished without further action by the Debtor or the Reorganized Debtor, and any and all obligations of the Debtor and the Reorganized Debtor thereunder shall be discharged. The Allowed Preferred Equity Interest Holder shall not receive any portion of Remaining Cash. 19. Under Class 6 – Other Equity Interests, on or as soon as reasonably practicable after the Effective Date, the holder of Allowed Other Equity Interests will receive on account of its Other Equity Interests (i) all Remaining Cash and (ii) the IP Grant. On the Effective Date, all Other Equity Interests shall be deemed automatically cancelled, released, and extinguished without further action by the Debtor or the Reorganized Debtor, and any and all obligations of the Debtor and the Reorganized Debtor thereunder shall be discharged.

7

C. Solicitation 20. With the assistance of the Debtor’s advisors, the voting requirements for approval of a Plan under sections 1125 and 1126 of the Bankruptcy Code have been explained to me. The Debtor commenced solicitation before the commencement of the Chapter 11 Case and it is my understanding that the solicitation complied with applicable nonbankruptcy law. 21. The holder of the sole Claim in Class 1 and the holders of Equity Interests in Classes 5 and 6 unanimously voted to accept the Plan. D. Notice i. Notice to Known Creditors and Parties in Interest 22. On April 27, 2021, the Debtor caused copies of the Notice of Commencement of Case and Summary of Prepackaged Chapter 11 Plan and Notice of Hearing to Consider (A) Debtor’s Compliance With Disclosure Requirements and (B) Confirmation Of Plan [D.I. 43] (the “Combined Notice”) to be sent by the Debtor’s claims and noticing agent, Donlin Recano & Company, Inc. (“DRC”), to all known creditors and equity interest holders of record as of April 21, 2021 at 11:59 p.m. See Affidavit of Service [D.I. 47]. The Combined Notice gave each notice of (i) the bankruptcy filing, (ii) the filing of the Plan and Disclosure Statement and a summary of the Restructuring contemplated thereby, including releases, exculpation, and injunction provisions of the Plan, (iii) the date and time of the Combined Hearing, and (vi) the deadline to object to approval of the Disclosure Statement or confirmation of the Plan. In addition, copies of the Plan and the Disclosure Statement and all other pleadings and documents that have been filed in this Chapter 11 Case have been made available free of charge at DRC’s website: https://www.donlinrecano.com/Clients/aec/Index (the “Case Website”).

8

23. Prior to the Petition Date, the Debtor undertook an extensive effort to review business records and to consult with members of the Debtor’s legacy accounting staff to identify all potential parties that may have claims against the Debtor. In furtherance of the Debtor’s efforts to identify the universe of all holders of Class 4 General Unsecured Claim, on the Petition Date, the Debtor filed the Motion of the Debtor for Entry of an Order (I) Establishing Deadlines for Filing Proofs of Claim, Including Section 503(b)(9) Claims, (II) Approving the Form and Manner of Notice Thereof, and (III) Granting Related Relief [D.I. 7] (the “Bar Date Motion”), requesting that the Court, among other things, (i) set the bar dates for filing claims, including claims under section 503(b)(9) of the Bankruptcy Code, (ii) approve the forms of the Bar Date Notice and the Publication Notice and (iii) approve the form of proof of claim. 24. On May 3, 2021, the Court entered the Order (I) Establishing Deadlines for Filing Proofs of Claim, Including Section 503(b)(9) Claims, (II) Approving the Form and Manner of Notice Thereof, and (III) Granting Related Relief [D.I. 55] (the “Bar Date Order”), which set June 4, 2021 at 4:00 p.m. (PT) as the “General Bar Date” for all persons and entities, including holders of 503(b)(9) claims, and set October 19, 2021 at 4:00 p.m. (PT) as the “Governmental Bar Date” by which all Governmental Units must file proofs of claim. The Bar Date Order also required that the Debtor cause service of the Bar Date Notice to be made upon (a) all parties that requested notice in the Chapter 11 Case; (b) all persons or entities that have previously filed proofs of claim; (c) all known or suspected holders of Claims against the Debtor as of the Petition Date, including the parties listed on the Debtor’s Schedules; (d) all parties to Executory Contracts and Unexpired Leases; (e) all parties in litigation with the Debtor; and (f) all applicable Governmental Units. Such service was accomplished on May 4, 2021 as set forth in the Bar Date Notice Affidavit.

9

25. The Debtor requested entry of the Bar Date Order and the setting of the General Bar Date prior to the date for confirmation of the Plan to enable the Debtor to identify any general unsecured claims against it in advance of confirmation of the Plan. ii. Notice to Unknown Creditors and Parties in Interest 26. To provide constructive notice to the Debtor’s potential or unknown creditors, the Debtor directed publication of the Publication Notice in the May 7, 2021 national edition of USA Today. See USA Today Affidavit of Publication for Notice of Commencement of Chapter 11 Case, Deadline For Filing Proofs of Claim, Including 503(b)(9) Claims, and of Combined Hearing on Approval of Disclosure Statement and Confirmation of Prepackaged Chapter 11 Plan [D.I. 67]. III. SATISFACTION OF PLAN CONFIRMATION REQUIREMENTS 27. I understand from the Debtor’s legal advisors and believe, based upon my review of the Plan and related materials, that the Plan satisfies all applicable provisions of the Bankruptcy Code and should be confirmed. To the extent not addressed above, I have outlined my understanding of how the Plan qualifies for each applicable section of the Bankruptcy Code. A. Compliance with Section 1129(a)(1) of the Bankruptcy Code i. Compliance with Section 1122 of the Bankruptcy Code 28. I understand that section 1122 of the Bankruptcy Code permits a plan to classify various Claims and Equity Interests into different classes, so long as all the Claims and Equity Interests in a particular class are substantially similar. With the exception of the Administrative Claims and Priority Tax Claims, which I have been informed by the Debtor’s legal advisors need not be classified (as stated above), the Plan provides for the separate classification of Claims against and Equity Interests in the Debtor based upon differences in the legal nature and/or priority of such Claims and Equity Interests.

10

29. I believe that valid business, factual, and legal reasons exist for classifying the Claims and Equity Interests into separate classes under the Plan and that the Claims or Equity Interests in each particular Class are substantially similar. All of the Claims and Equity Interests in each particular class are substantially similar to the other Claims and Equity Interests in the same class and such classifications do not unfairly discriminate between holders of Claims and Equity Interests. The classification scheme created by the Debtor, in consultation with its advisors, is based upon the similar nature of Claims and Equity Interests contained in each class, including the bases of the Claims, the terms and conditions of the applicable documentation or laws giving rise to the Claim. Dissimilar Clams or Equity Interests have not been included in the same class. The Plan’s classification of Claims and Equity Interests does not prejudice the rights of such holders of Claims and Equity Interests and is consistent with the requirements of the Bankruptcy Code. ii. Compliance with Section 1123(a) of the Bankruptcy Code 30. The Plan designates the different classes of Claims and Equity Interests, specifies the classes of Claims that are unimpaired under the Plan, and specifies the treatment of each class of Claims and Equity Interests that is impaired. In addition, the treatment of each Claim against or Equity Interest in the Debtor in each respective class is the same as the treatment of every other Claim or Equity Interest in such Class, unless the holder of a particular Claim or Equity Interest has agreed to a less favorable treatment for such Claim or Equity Interest. 31. I believe that the Plan provides adequate means for its implementation, including, without limitation, (a) the continued corporate existence of the Debtor, (b) the means for reorganizing the Debtor, including cancellation of existing Equity Interests and issuance of New Equity; (c) the funding of the Consideration; (d) the creation of the Distribution Trust; and (e) the

11

transfer of the Distribution Trust Assets to the Distribution Trust. The Debtor will reject all of its Executory Contracts and Unexpired Leases, except for those listed on Exhibit K to the Plan Supplement (if any). 32. Thus, I believe that the proposed implementation steps have been carefully developed and designed to properly effect the Plan. I believe that the new director and officer proposed in the documents attached to the Plan Supplement is well qualified and his service will be in the best interests of the Reorganized Debtor and consistent with the interests of the Reorganized Debtor’s stakeholders and public policy. iii. Compliance With Section 1123(b) of the Bankruptcy Code 33. I have been advised by counsel that section 1123(b) of the Bankruptcy Code permits various discretionary provisions to be included in a plan. In particular, (a) the Plan impairs certain Equity Interests, (b) the Plan leaves Unimpaired certain other Claims, (c) the Plan provides for the preservation of all Causes of Action, except those that have been expressly released, and (d) the Plan governs the assumption and rejection of executory contracts and unexpired leases. 34. The Plan also includes (i) releases by the Debtor of certain parties in interest (the “Debtor Releases”), (ii) the release by certain holders of Claims and Equity Interests and other parties in interest of certain non-Debtor third parties (the “Third Party Releases”), (iii) an exculpation provision (the “Exculpation”) and (iv) injunction provisions prohibiting parties from, among other things, pursuing Claims and Equity Interests otherwise released under the Plan (the “Injunctions”). 35. I believe that each of the Released Parties played an important and active role in negotiating and formulating the Plan in good faith and has significantly contributed to the Plan

12

and the Chapter 11 Case and that the cooperation of each party is necessary to implement the provisions of the Plan. I believe that the Released Parties’ contributions and material concessions have allowed the Chapter 11 Case to move expeditiously towards confirmation. I further believe that without protection from liability in general and without the specific Debtor Releases, Third Party Releases, Exculpation and Injunctions set forth in the Plan, key constituents would have been unwilling to agree to the favorable terms identified in the RSA. 36. Furthermore, I have personal knowledge of the fact that the Plan is the result of extensive good faith, arm’s-length negotiations among the Debtor and the various Released Parties. Based on the Independent Director’s approval of the RSA, and my involvement in the Debtor’s Chapter 11 Case, and the Debtor’s overall restructuring, I believe that there is an identity of interest between the Debtor and the Released Parties arising out of the shared common goal of confirming and implementing the Plan, as contemplated in the RSA. 37. Moreover, the Plan’s Third Party Releases expressly provide that the release is granted only by Creditors and Equity Interest Holders who are unimpaired or voted to accept the Plan and did not opt-out of the Third Party Releases. I understand that no party has objected to the Third Party Releases, despite all potential holders of Claims and Equity Interests, both known and unknown, receiving conspicuous notice of the Third Party Releases in the Combined Notice and the Publication Notice. The Third Party Releases were a critical, negotiated term of the Plan. Without the Third Party Releases, I am informed that the Plan Sponsor would not have been willing to fund and support the Restructuring contemplated by the Plan. Among other things, the Released Parties’ significant contributions to the Chapter 11 Case have allowed the rights of holders of Class 2 (Other Secured Claims), Class 3 (Other Priority Claims), and Class 4 (General Unsecured Claims) to be left unimpaired, provided for a distribution to Class 6 (Other Equity Interests), and

13

facilitated the Debtor’s path to emergence from chapter 11. Without the Third Party Releases, the Debtor would not have been able to obtain the level of support necessary to effectuate the Restructuring Support Agreement and the Plan. Because of these contributions, and the fact that the Releasing Parties and holders of Claims and Equity Interests have consented to the Third Party Releases by not objecting to the Plan, the Third Party Releases should be approved. iv. Compliance with Section 1123(d) of the Bankruptcy Code 38. The Plan provides that, as of the Effective Date, all executory contracts will be rejected except those Executory Contracts and Unexpired Leases designated on Exhibit K to the Plan Supplement, if any. However, the Debtor does not intend to assume any Executory Contracts or Unexpired Leases. B. Compliance with Section 1129(a)(3) of the Bankruptcy Code 39. The Plan is the product of arm’s-length negotiations among the Debtor, the ESW Parties, and GlassBridge. I believe that the Plan allows holders of Unimpaired Claims and Equity Interests to realize the highest possible recovery under the circumstances. As such, I believe that the Plan was proposed with the legitimate and honest purpose of maximizing the value of the Debtor’s assets and maximizing recoveries to creditors. The Plan is the product of arm’s-length negotiations by and among the RSA Parties, and all parties, including the Debtor and its professionals, conducted those negotiations in good faith. C. Compliance with Section 1129(a)(4) of the Bankruptcy Code 40. The Plan provides that all payments made or to be made for services rendered and expenses incurred in connection with the Chapter 11 Case, including, without limitation, all Professional Fee Claims and Administrative Claims through the Effective Date, will be paid only after allowance of such Claims by the Bankruptcy Court.

14

D. Compliance with Section 1129(a)(5) of the Bankruptcy Code 41. The identity of the director and officer of the Reorganized Debtor has been fully disclosed in the Plan Supplement. Based on my discussions with the ESW Parties, I believe his appointment is consistent with the interests of holders of Claims against and Equity Interests in the Debtor and with public policy. 42. In addition, the identity of the Distribution Trustee has been disclosed in the Plan Supplement, and I believe that the appointment of the Distribution Trustee is consistent with the interests of Creditors and with public policy. The Distribution Trust is being established hold the Plan Consideration and to make distribution to holders of Allowed Claims and Other Equity Interests in accordance with the Plan and the Distribution Trust agreement. E. Compliance with Section 1129(a)(7) of the Bankruptcy Code 43. Confirmation of the Plan will provide each Creditor and Equity Interest holder with a recovery that is not less than it would receive in a liquidation of the Debtor under chapter 7 of the Bankruptcy Code. As further support, the Debtor prepared a liquidation analysis (“Liquidation Analysis”), which was attached as Exhibit B to the Disclosure Statement. Based on the Liquidation Analysis, I believe that holders of Claims in a chapter 7 liquidation of the Debtor would receive no recovery (other than the Prepetition Secured Lender, which would be entitled to recover on its collateral) whereas, under the Plan, such holders are expected to receive full payment. Likewise, under the Plan holders of Equity Interests will receive a substantial distribution, but would receive nothing in a chapter 7 liquidation. F. Compliance with Section 1129(a)(8) of the Bankruptcy Code 44. Here, Classes 1, 5 and 6 have voted to accept the Plan and Classes 2, 3, and 4 are unimpaired by the Plan and, therefore, I am advised, are deemed to accept it.

15

G. Compliance with Section 1129(a)(9) of the Bankruptcy Code 45. Article IV of the Plan provides for payment of Allowed Administrative Claims and Allowed Priority Tax Claims in the manner that I am told is required by Bankruptcy Code section 1129(a)(9). H. Compliance with Section 1129(a)(10) of the Bankruptcy Code 46. I understand that Bankruptcy Code section 1129(a)(10) requires that, if there is an impaired class of claims under the plan, at least one impaired class has accepted the plan, exclusive of insider votes. Here, each of the three classes that is impaired by the Plan has voted to accept it.3 I. Compliance with Section 1129(a)(11) of the Bankruptcy Code 47. With the assistance of the Debtor’s advisors, the “feasibility” requirement of Bankruptcy Code section 1129(a)(11) has been explained to me. I believe that the Plan Sponsor is committed to a successful reorganization of the Debtor. The Plan Sponsor is in the business of acquiring and strengthening software companies, including companies that own software similar to the Trading Software owned by the Debtor. Thus, I believe that the acquisition of the Reorganized Debtor fits within the Plan Sponsor’s strategic plan. To that end, on the Effective Date, the Plan Sponsor has committed to providing the entirety of the Consideration contemplated under the Plan. I am informed and believe that the Plan Sponsor has a proven track record of acquiring businesses with a focus on software and integrating them into its overall business model. I further understand the Plan Sponsor has the financial wherewithal to fund the Plan and operate the Reorganized Debtor. 3 Since Class 6 is comprised entirely of GlassBridge’s holdings of Other Equity Interests, its vote is an insider vote.

16

48. Through the Plan Sponsor’s portfolio of similar technology companies, the Reorganized Debtor will be better positioned to operate successfully moving forward. Accordingly, I am confident that the Reorganized Debtor will be feasible going forward, and will not require a further reorganization. 49. Further, no Distributions to Creditors or Equity Interest Holders are dependent on any metrics related to the Reorganized Debtor, such as the Reorganized Debtor’s profitability. The Debtor is confident that the Consideration will be sufficient to pay all holders of Claims in Classes 2-4 in full while also providing for a meaningful distribution to the holder of Class 6 Other Equity Interests. The Debtor has not had widespread operations since about 2016. In that time, it has not received request for payment from creditors or governmental units that have gone unpaid. The Debtor has also run tax lien searches in all or substantially all of the jurisdictions in which it previously operated and uncovered no tax liens. As of the date hereof, the only claims of governmental units that have been filed aggregate to just approximately $150. Based on the Debtor’s books and records, I anticipate that the total amount of all claims filed will be just a small fraction of the total amount of the Consideration. Accordingly, the Debtor, believes the Consideration will be more than adequate to satisfy all timely-filed Claims and to provide a meaningful distribution to the holder of the Other Equity Interests. As a result of all of the foregoing, I believe the Plan is feasible. J. Compliance with Bankruptcy Code Section 1129(a)(12) 50. I understand that the Plan provides that the Debtor will pay all fees required under 28 U.S.C. § 1930(a) as of the Effective Date. Further, I understand that the Plan also provides for payment of such fees after the Effective Date.

17

K. Compliance with Section 1129(d) of the Bankruptcy Code 51. The principal purpose of the Plan is not avoidance of taxes or avoidance of the requirements of Section 5 of the Securities Act of 1933. There has been no filing by any governmental agency asserting the contrary. Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the contents of the foregoing Declaration are true and correct to the best of my information and belief. Dated: June 2, 2021 Daniel Strauss

18