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Full title: Brief in Support of Confirmation of Debtors' Joint Plan of Liquidation (as Revied) Filed by GABRIELLE A. HAMM on behalf of GUMP'S BY MAIL, INC., GUMP'S CORP., GUMP'S HOLDINGS, LLC (HAMM, GABRIELLE) (Entered: 04/22/2021)

Document posted on Apr 21, 2021 in the bankruptcy, 20 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

The Plan provides for the holders of th20 Claims in Classes 3(a), 3(b), and 3(c) to participate pro rata as if Class 3 was a single Class. The Plan provides for the holders of th20 Claims in Classes 3(a), 3(b), and 3(c) to participate pro rata as if Class 3 was a single Class. 10 Section 1129(a)(7) requires that a plan be in the best interests of creditors and intere11 holders, and specifically, that each holder of an impaired claim has either accepted the plan, 12 “will receive or retain under the plan on account of such claim or interest property of a value, a13 of the effective date of the plan, that is not less than the amount that such holder would so receiv14 or retain if the debtor were liquidated under Chapter 7 of this title on such date.” 19 As demonstrated by the Liquidation Analysis attached to the Disclosure Statement, eac20 holder of an Allowed Claim or Equity Security under the Plan is receiving or retaining under th21 Plan property of a value, as of the Effective Date, that is not less than the value such holder woul22 receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code. 13 Section 1129(b) provides that if a proposed plan meets all the requirements in Sectio14 1129(a), except for class acceptance pursuant to Section 1129(a)(8), then the plan may still b15 confirmed “if the plan does not discriminate unfairly, and is fair and equitable, with respect to eac16 class of claims or interests that is impaired under, and has not accepted, the plan.”

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Document Contents

1 WILLIAM M. NOALL 2 Nevada Bar No. 3549 E-mail: wnoall@gtg.legal 3 GABRIELLE A. HAMM Nevada Bar No. 11588 4 E-mail: ghamm@gtg.legal 5 MARK M. WEISENMILLER Nevada Bar No. 12128 6 E-mail: mweisenmiller@gtg.legal 7251 Amigo St., Suite 210 7 Las Vegas, Nevada 89119 Telephone (725) 777-3000 8 Facsimile (725) 777-3112 9 Attorneys for Debtors 10 UNITED STATES BANKRUPTCY COURT 11 FOR THE DISTRICT OF NEVADA 12 In re: Case No.: BK-S-18-14683-mkn Chapter 11 13 GUMP’S HOLDINGS, LLC Jointly administered with: 14 Affects this Debtor. No. BK-S-18-14684-mkn (In re Gump’s Corp.) 15 No. BK-S-18-14685-mkn (In re Gump’s By Affects all Debtors. Mail, Inc.) 16 17 Affects Gump’s Corp. Confirmation Hearing: 18 Date: April 29, 2021 Affects Gump’s By Mail, Inc. Time: 1:30 p.m. 19 20 BRIEF IN SUPPORT OF CONFIRMATION OF DEBTORS’ JOINT PLAN OF LIQUIDATION (AS REVISED) 21 22 Gump’s Holdings, LLC (“Holdings”), Gump’s Corp. (“Retail”), and Gump’s By Mai23 Inc. (“Direct,” or collectively with Holdings and Retail, the “Debtors”), debtors and debtors-i24 possession in the above-captioned jointly administered Chapter1 11 cases (the “Chapter 125 Cases”), hereby submit their brief in support of confirmation of Debtors’ Joint Plan of Liquidatio26 1 All references to “Chapter” and “Section” herein shall be to title 11 of the U.S. Code (the “Bankruptcy Code”27 all references to a “Bankruptcy Rule” shall refer to the Federal Rules of Bankruptcy Procedure; and all references t“Local Rules” shall refer to the Local Rules of Bankruptcy Practice of the United States Bankruptcy Court, Distri28 of Nevada. Initially capitalized terms not defined herein will have the meanings ascribed to them in the Plan.

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1 2 modified, including exhibits and schedules annexed thereto or referenced therein, the “Plan”) an3 final approval of the adequacy of the Disclosure Statement Concerning the Debtors’ Joint Plan 4 Liquidation (as Revised) dated March 3, 2021 [ECF No. 586] (the “Disclosure Statement”).2 5 This Brief is based on the declaration of Tony Lopez in support of confirmation th6 “Confirmation Declaration”), the Plan and Disclosure Statement, the Order Pursuant to 1 7 U.S.C. § 105(d)(2)(B) and LR 3017(b): (I) Conditionally Approving Disclosure Stateme 8 Concerning the Debtors’ Joint Plan of Liquidation; (II) Prescribing Notice and Solicitatio 9 Procedures; and (III) Setting Combined Hearing on Final Approval of Disclosure Statement an10 Confirmation of the Plan [ECF No. 599] (the “Plan Procedures Order”), the notices pursuant t11 the Plan Procedures Order,3 the Supplement to Debtors’ Joint Plan of Liquidation (as Revised12 [ECF No. 618] (the “Plan Supplement”), the ballot summary that will be filed pursuant to Loc13 Rule 3018, the papers and pleadings filed in the Chapter 11 Cases, judicial notice of which i14 respectfully requested, the points and authorities set forth below, and the argument of counsel 15 the time of the Confirmation Hearing. 16 JURISDICTION AND VENUE 17 18 1. On August 3, 2018 (the “Petition Date”), each of the Debtors commenced 19 voluntary case under Chapter 11 of the Bankruptcy Code, commencing the Chapter 11 Cases. O20 August 10, 2018, the Bankruptcy Court entered orders jointly administering the Chapter 11 Case21 ECF No. 57. 22 2. The Court has core subject matter jurisdiction to determine confirmation of the Pla23 and final approval of the Disclosure Statement pursuant to 28 U.S.C. §§ 157(b)(2), includin24 (b)(2)(A) and (L), 1334, and Local Rule 1001(b)(1). Pursuant to Local Rule 9014.2, Debtor25 26 2 All ECF references are to the docket in the lead case of Gump’s Holdings, LLC, Case No. BK-S-18-14683-mk27 unless otherwise stated. 3 See Certificate of Service Regarding Service of Solicitation Packages With Respect to the Disclosure Stateme28 Concerning the Debtors’ Plan of Liquidation (as Revised) [ECF No. 605].

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1 2 the judge, absent consent of the parties, cannot enter final orders or judgments consistent wit 3 Article III of the United States Constitution. 4 3. Venue of Debtors’ Chapter 11 Cases in this District is proper pursuant to 28 U.S. 5 §§ 1408(1) and 1409(a). 6 4. Debtors continue to operate their businesses and manage their affairs as debtors-i7 possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code. No trustee or examine8 has been appointed in the Chapter 11 Cases. 9 5. On August 20, 2018, the United States Trustee appointed the Official Committe10 of Unsecured Creditors (the “Committee”). See ECF No. 81. The Committee consists of LS11 Communications, Buccellati Inc., Seiko Worldwide LLC, Barbara Heinrich Studio and Regenc12 International Business. 13 RELEVANT FACTS 14 15 A. Debtors’ Business and Summary of Circumstances Leading to Chapter 11. 16 6. On the Petition Date, Gump’s was comprised of two operating companies—Reta17 and Direct—both wholly owned by Holdings. Retail operated the flagship Gump’s departme18 store at 135 Post Street near Union Square in San Francisco, California, which also housed th19 Debtors’ corporate offices (the “Store”). Direct operated the Debtors’ distribution center (th20 “Distribution Center”) in Olive Branch, Mississippi, which fulfilled direct-to-consumer sale21 including catalogue and e-commerce sales, and delivered merchandise to the Retail store. Se22 Disclosure Statement, p. 15. 23 7. As of the Petition Date, Retail and Direct, as borrowers, and Holdings, as guaranto24 were parties to three (3) credit facilities. The first lien was held by Sterling Business Credit, LL25 (“Sterling”) pursuant to the Loan and Security Agreement (as amended and together with th26 ancillary documents, the “Prepetition Loan Agreement”) dated December 29, 2015 for 27 revolving credit facility of up to $15,000,000 (the “Sterling Loan”), secured by substantially a28 of the assets of Retail and Direct, including, but not limited to, inventory, accounts receivabl

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1 2 certain related intellectual property, and proceeds from any of the foregoing, and the property 3 Holdings. As of the Petition Date, the aggregate principal amount outstanding under the Prepetitio 4 Loan Agreement was asserted by Sterling to be $5,752,648.87. See id., p. 16. 5 8. The junior lien was held by Corporate Partners II Limited (“Corporate Partners6 pursuant to a Secured Promissory Note dated May 24, 2012, as amended, in the principal amou7 of $5,200,000 (the “Junior Note”), and the Secured Guaranty of Holdings, which lien wa8 subordinate to Sterling pursuant to the Intercreditor and Subordination Agreement dated as o 9 December 29, 2015. As of the Petition Date, the balance due on the Junior Note was approximatel10 $9,634,000. See id., pp. 16-17. 11 9. Finally, Retail and Direct, as borrowers, obtained an additional loan fro12 Methuselah Capital Partners, L.P., an affiliate of director John Chachas,4 in the principal amou13 of $250,000 pursuant to that certain Secured Promissory Note dated July 21, 2017 (th14 “Methuselah Note”). The Methuselah Note was subordinated to Sterling, but not to Corporat15 Partners. As of the Petition Date, the balance due on the Methuselah Note was approximatel16 $289,000.00. See id., p. 17. 17 10. Compounding high operating costs and a large debt load, the Debtors faced a18 increasingly challenging retail environment for a number of years in light of changes in th19 department store segment of the U.S. retail industry in response to market-disrupting competitiv20 retail formats, including the increased prominence of specialty retailers and online retailers, as we21 as the expansion of the internet and the pervasive role of mobile technology and social media i22 the retail consumer shopping experience. See id. 23 11. Despite implementing strategies to improve the companies’ performance, includin24 retention of a new management team and implementation of an aggressive marketing plan, th25 Debtors incurred losses and negative cash flows for several years, sustaining operations onl26 through the infusion of capital and loans by its majority equity holder, Corporate Partners. Whil27 28 4 Mr. Chachas resigned as a director of Holdings on August 3, 2018, but remains a member of Holdings.

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1 2 achieve positive cashflow. By January 28, 2017, Holdings had an accumulated members’ defic3 of approximately $58,428,974. See id., pp. 17-18. 4 12. On January 25, 2017, Sterling declared that certain Events of Default (as defined i5 the Prepetition-Loan Agreement) had occurred under the Prepetition Loan Agreement arising fro6 breach of certain financial covenants. Following a forbearance period and an unsuccessful attem7 to sell certain assets, including Debtors’ customer lists, inventory, and trademarks relating t8 “Style by Gump’s” and “Gump’s Style” as required by Sterling, Sterling declared a further defau9 on May 5, 2018. See id., p. 18. 10 13. As Debtors’ financial condition deteriorated rapidly in early 2018 and funding fro11 Corporate Partners became uncertain due to fund limitations, Debtors retained Lincoln Internationa12 LLC to pursue strategic alternatives, including one or more sales, a refinance of the Sterling Loa13 or a capital raise. Despite aggressive marketing, prospective lenders were hesitant to lend witho14 additional equity investment to provide needed liquidity and working capital in light of the Debtor15 negative cashflow and overburdened capital structure. See id., pp. 20-21. 16 14. In early July 2018, Debtors received separate proposals from Hilco Mercha17 Resources, LLC and Gordon Brothers Retail Partners, LLC for a liquidation of the Debtors’ asset18 and on or about July 13, 2018, Debtors received a joint proposal from Hilco and Gordon Brother19 for an orderly liquidation of the Debtors’ assets pursuant to a store closing sale. Over the next fe20 weeks, Debtors negotiated the terms of an agreement for the conduct of an orderly liquidation sal21 of Debtors’ merchandise and fixtures with a joint venture between Hilco Merchant Resources, LL22 and Gordon Brothers Retail Partners, LLC (the “Agent”), along with the terms of postpetitio23 financing from Sterling necessary to finance the Debtors’ liquidation process. See id., p. 21. 24 B. Material Events in the Chapter 11 Cases. 25 15. At the outset of the Chapter 11 Cases, Debtors sought and obtained interim and fin26 approval of a post-petition loan from Sterling in the amount of approximately $737,000 to provid27 Debtors with sufficient liquidate to fund a liquidation of the inventory and administrative expense28 of the Chapter 11 Cases. See ECF Nos. 60 and 148 (interim and final orders authorizing post-petitio

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1 2 Statement, pp. 19, 21. 3 16. On August 10, 2018 the Bankruptcy Court entered its Order: (A) Approving Agenc 4 Agreement, (B) Authorizing and Approving Store Closing Sale Free and Clear of all Liens, Claim5 and Encumbrances, (C) Granting Liens, and (D) Granting Related Relief [ECF No. 58] (the “GO 6 Approval Order”), approving, inter alia, that certain Agency Agreement dated on or about Augu7 5, 2018 (the “Agency Agreement”) for the conduct of a going out of business sale (“Sale”) b 8 Debtors and the Agent. See Disclosure Statement, p. 21. 9 17. The assets at the Distribution Center were sold or transferred to the Store by the en10 of October 2018, the lease was rejected, and the premises surrendered. See ECF No. 247 (ord11 authorizing rejection). The Sale of Store assets continued until December 29, 2018, and the premise12 was surrendered to the landlord shortly thereafter. See ECF No. 260 (order approving stipulatio13 regarding assumption or rejection deadline and rejection). 14 18. Thereafter, the Agent and Debtors prepared the Final Reconciliation (as defined i15 the Agency Agreement) reflecting the results of the Sale, which was the subject of the Fin16 Reconciliation and Settlement Agreement. On March 12, 2019, the Debtors and Agent filed the17 Joint Motion by Debtors and Liquidating Agent for Approval of Final Reconciliation and Settleme18 Agreement [ECF No. 302] (the “Reconciliation Motion”). See Disclosure Statement, pp. 21-22. 19 19. Disputes arose among the Debtors, Sterling, the Agent, and the Committee relatin20 to, inter alia, the Final Reconciliation and Settlement Agreement and the conduct of the Sale und21 the GOB Approval Order and Agency Agreement, along with the amount of Sterling’s clai22 Sterling’s objection and the Committee’s informal objection to the Reconciliation Motion wer23 resolved by the terms of the Order Approving Final Reconciliation & Settlement Agreement [EC24 No. 371], including the supplement to the Agency Agreement attached thereto as Exhibit 1 (th25 “Reconciliation Order”). See id. 26 20. Pursuant to the Reconciliation Order, the Agent paid to Sterling on behalf of Debtor27 the remaining proceeds of the Sale (as augmented pursuant to the Reconciliation Order) in the tot28 amount of $923,000 on or about March 29, 2019, and mutual releases were granted between Sterlin

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1 2 for further proceedings (“Contested Matters”). See id., p. 22. 3 21. Thereafter, the Debtors, the Committee, and Sterling reached a compromis4 regarding the Contested Matters, including the amount of the pre- and post-petition claims and lien5 of Sterling, which was approved on April 18, 2019 by the Order Approving Settlement Betwee 6 Sterling Business Credit, LLC and the Debtors and the Official Committee of Unsecured Creditor7 and Transfer of Claims [ECF No. 381] (“Sterling 9019 Order”). Under the Sterling 9019 Orde 8 Sterling retained the $923,000 paid to it by the Agent and transferred its outstanding secured claim9 to a special purpose entity created by Debtors, and releases were granted by Sterling to th10 Committee and Debtors, and by Debtors and the Committee to Sterling. See id., pp. 22-23. 11 22. An initial attempt to sell Debtors’ intellectual property and related assets (the “I12 Assets”) under terms dictated by Sterling proved unsuccessful. See id., pp. 23-24. However, durin13 the reconciliation process, Debtors received an offer for the IP Assets from GH Acquisitions, LL14 (“GH”), an affiliate of John Chachas. Debtors negotiated the sale and assignment of Debtors’ I15 Assets and certain related property and contracts to GH, along with releases, and on June 20, 20116 the Court entered an order authorizing the sale under Section 363(f) of the Bankruptcy Code. Se17 id., pp. 24-25; ECF No. 413 (order authorizing sale of IP Assets to GH). 18 C. The Plan and Disclosure Statement. 19 23. The Plan and Disclosure Statement were filed on March 5, 2021.5 20 24. The Plan seeks to maximize value for creditors by establishing a Liquidating Tru21 on the Effective Date to take possession of all property of the estates not distributed on or befor22 the Effective Date, reduce remaining non-cash assets to cash to the extent that doing so woul23 maximize the value of the estates, and prosecute any claim objections that it deems advisable. Se24 Plan, p. 1. The Liquidating Trust will make distributions to the holders of Allowed Administrativ25 Claims, Professional Fee Claims, and Priority Tax Claims on and after the Effective Date fro26 reserves in accordance with Section 1129(a)(9) and the priority scheme created by the Bankruptc27 28 5 The Plan replaces a prior plan filed on October 6, 2020.

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1 2 Fee Claims), §§ 1.1.62, 4.2 (Priority Claims), and Art. V (Means of Implementation), includin3 § 5.3.5 (establishment and maintenance of accounts), and § 5.3.12 (Distributions). 4 25. The Plan divides each of the Debtors’ creditors into four (4) classes, as follows:6
Table 1 on page 8. Back to List of Tables
None HOLDINGS
Secured Claims (Plan § 4.1)
Unimpaired, Deemed Accepted
Class 1(a)
Priority Unsecured Claims (Plan § 4.2)
Unimpaired, Deemed Accepted
Class 2(a)
General Unsecured Claims (Plan § 4.3)
Impaired, Voting
Class 3(a)
Intercompany Claims (Plan § 4.4)
Impaired, Deemed Rejected
Class 4(a)
1 2 Fee Claims), §§ 1.1.62, 4.2 (Priority Claims), and Art. V (Means of Implementation), includin3 § 5.3.5 (establishment and maintenance of accounts), and § 5.3.12 (Distributions). 4 25. The Plan divides each of the Debtors’ creditors into four (4) classes, as follows:6 1 2 Fee Claims), §§ 1.1.62, 4.2 (Priority Claims), and Art. V (Means of Implementation), includin3 § 5.3.5 (establishment and maintenance of accounts), and § 5.3.12 (Distributions). 4 25. The Plan divides each of the Debtors’ creditors into four (4) classes, as follows:6 5 HOLDINGS RETAIL DIRECT 6 Secured Claims (Plan § 4.1) Class 1(a) Class 1(b) Class 1(c) Unimpaired, Deemed Accepted 7 Priority Unsecured Claims (Plan § 4.2) Class 2(a) Class 2(b) Class 2(c) Unimpaired, Deemed Accepted 8 General Unsecured Claims (Plan § 4.3) Class 3(a) Class 3(b) Class 3(c) 9 Impaired, Voting 10 Intercompany Claims (Plan § 4.4) Class 4(a) Class 4(b) Class 4(c) Impaired, Deemed Rejected 11 12 26. The holders of Equity Securities are divided into four (4) classes, all of which ar13 impaired and will receive no distribution pursuant to § 4.5 of the Plan.7 14 HOLDINGS Class 5(a): Equity Securities in Holdings except Chachas 15 Class 5(b): Chachas Equity Securities in Holdings DIRECT Class 5(c): Holdings’ Equity Securities in Direct 16 RETAIL Class 5(d): Holdings’ Equity Securities in Retail 17 18 27. Thus, only the holders of Allowed General Unsecured Claims in Classes 3(a), 3(b19 and 3(c) were allowed to vote to accept or reject the Plan. The Plan provides for the holders of th20 Claims in Classes 3(a), 3(b), and 3(c) to participate pro rata as if Class 3 was a single Class. Se21 Plan § 4.3. 22 D. Plan Procedures Order and Plan Solicitation. 23 28. On March 9, 2021, the Court entered the Plan Procedures Order, conditionall24 approving the Disclosure Statement and approving procedures for confirmation of the Plan an25 final approval of the Disclosure Statement. See ECF No. 599. 26 27 6 See Plan, §§ 3, 4.1 (Secured Claims), 4.2 (Unsecured Priority Claims), 4.3 (General Unsecured Claims), and 4. (Intercompany Claims). 28 7 See Plan, §§ 3, 4.5.
Table 2 on page 8. Back to List of Tables
None HOLDINGS
Secured Claims (Plan § 4.1)
Unimpaired, Deemed Accepted
Class 1(a)
Priority Unsecured Claims (Plan § 4.2)
Unimpaired, Deemed Accepted
Class 2(a)
General Unsecured Claims (Plan § 4.3)
Impaired, Voting
Class 3(a)
Intercompany Claims (Plan § 4.4)
Impaired, Deemed Rejected
Class 4(a)
1 2 Fee Claims), §§ 1.1.62, 4.2 (Priority Claims), and Art. V (Means of Implementation), includin3 § 5.3.5 (establishment and maintenance of accounts), and § 5.3.12 (Distributions). 4 25. The Plan divides each of the Debtors’ creditors into four (4) classes, as follows:6 1 2 Fee Claims), §§ 1.1.62, 4.2 (Priority Claims), and Art. V (Means of Implementation), includin3 § 5.3.5 (establishment and maintenance of accounts), and § 5.3.12 (Distributions). 4 25. The Plan divides each of the Debtors’ creditors into four (4) classes, as follows:6 5 HOLDINGS RETAIL DIRECT 6 Secured Claims (Plan § 4.1) Class 1(a) Class 1(b) Class 1(c) Unimpaired, Deemed Accepted 7 Priority Unsecured Claims (Plan § 4.2) Class 2(a) Class 2(b) Class 2(c) Unimpaired, Deemed Accepted 8 General Unsecured Claims (Plan § 4.3) Class 3(a) Class 3(b) Class 3(c) 9 Impaired, Voting 10 Intercompany Claims (Plan § 4.4) Class 4(a) Class 4(b) Class 4(c) Impaired, Deemed Rejected 11 12 26. The holders of Equity Securities are divided into four (4) classes, all of which ar13 impaired and will receive no distribution pursuant to § 4.5 of the Plan.7 14 HOLDINGS Class 5(a): Equity Securities in Holdings except Chachas 15 Class 5(b): Chachas Equity Securities in Holdings DIRECT Class 5(c): Holdings’ Equity Securities in Direct 16 RETAIL Class 5(d): Holdings’ Equity Securities in Retail 17 18 27. Thus, only the holders of Allowed General Unsecured Claims in Classes 3(a), 3(b19 and 3(c) were allowed to vote to accept or reject the Plan. The Plan provides for the holders of th20 Claims in Classes 3(a), 3(b), and 3(c) to participate pro rata as if Class 3 was a single Class. Se21 Plan § 4.3. 22 D. Plan Procedures Order and Plan Solicitation. 23 28. On March 9, 2021, the Court entered the Plan Procedures Order, conditionall24 approving the Disclosure Statement and approving procedures for confirmation of the Plan an25 final approval of the Disclosure Statement. See ECF No. 599. 26 27 6 See Plan, §§ 3, 4.1 (Secured Claims), 4.2 (Unsecured Priority Claims), 4.3 (General Unsecured Claims), and 4. (Intercompany Claims). 28 7 See Plan, §§ 3, 4.5. 12 26. The holders of Equity Securities are divided into four (4) classes, all of which ar13 impaired and will receive no distribution pursuant to § 4.5 of the Plan.7
Table 3 on page 8. Back to List of Tables
Class 5(a): Equity Securities in Holdings except Chachas
Class 5(b): Chachas Equity Securities in Holdings
Class 5(c): Holdings’ Equity Securities in Direct
Class 5(d): Holdings’ Equity Securities in Retail
18 27. Thus, only the holders of Allowed General Unsecured Claims in Classes 3(a), 3(b19 and 3(c) were allowed to vote to accept or reject the Plan. The Plan provides for the holders of th20 Claims in Classes 3(a), 3(b), and 3(c) to participate pro rata as if Class 3 was a single Class. Se21 Plan § 4.3. 22 D. Plan Procedures Order and Plan Solicitation. 23 28. On March 9, 2021, the Court entered the Plan Procedures Order, conditionall24 approving the Disclosure Statement and approving procedures for confirmation of the Plan an25 final approval of the Disclosure Statement. See ECF No. 599. 26 27 6 See Plan, §§ 3, 4.1 (Secured Claims), 4.2 (Unsecured Priority Claims), 4.3 (General Unsecured Claims), and 4. (Intercompany Claims). 28 7 See Plan, §§ 3, 4.5.

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1 2 Statement together with the Plan and the exhibits to the Plan, and either a Ballot(s) or a Notice 3 Non-Voting Status, as applicable, were properly and timely served on all creditors, equity securit4 holders, and other parties entitled to notice pursuant to the Plan Procedures Order. See ECF N5 605. 6 30. In accordance with Bankruptcy Rules 3017, 3017.1, and 3018, such servic7 provided at least twenty eight (28) days’ notice of: (i) the April 15, 2021 deadline for creditors i8 voting classes to submit a vote to accept or reject the Plan; (ii) the April 15, 2021 deadline to obje9 to the Plan and/or final approval of the Disclosure Statement; and (iii) the April 29, 20210 Confirmation Hearing. See id. 11 LEGAL ANALYSIS 12 13 A. The Burden of Proof for Plan Confirmation Is a Preponderance of the Evidence. 14 A bankruptcy court may confirm a chapter 11 plan if the plan proponent proves by 15 preponderance of the evidence either: (1) that all applicable requirements of Section 1129(a) o16 the Bankruptcy Code have been met; or (2) if the only condition to confirmation that is not satisfie17 is Section 1129(a)(8), that the plan satisfies the cramdown standards under Section 1129(b); th18 is, that the plan does not discriminate unfairly against, and is fair and equitable with regard to, eac19 impaired class that has not accepted the plan. See Zachary v. Cal. Bank & Trust (In re Zachary20 811 F.3d 1191, 1194 (9th Cir. 2016); Liberty Nat’l Enters. v. Ambanc LaMesa Ltd. P’ship (In r21 Ambanc LaMesa Ltd. P’ship), 115 F.3d 650, 653 (9th Cir. 1997) (preponderance of the evidenc22 standard). 23 B. The Plan Complies with the Bankruptcy Code. 24 Section 1129(a)(1) of the Bankruptcy Code requires that a plan “[c]omply with th25 applicable provisions of [the Bankruptcy Code].” See 11 U.S.C. § 1129(a)(1). To determine pla26 compliance with Section 1129(a)(1), reference must be made to the requirements of Sections 11227 and 1123, which govern classification of claims and contents of plans, respectively. See In re G28 I Holdings, Inc., 420 B.R. 216 (D.N.J. 2009); In re Journal Register Co., 407 B.R. 520, 531-3

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1 2 843 F.2d 636, 648-49 (2d Cir. 1988)) (“applicable provisions” refers to provisions of Chapter 13 that concern the form and content of reorganization plans). 4 1. Classification of Claims Complies With Section 1122 and 1123(a)(1). 5 Under Section 1122(a), “a plan may place a claim or an interest in a particular class onl6 if such claim or interest is substantially similar to the other claims or interests of such class. 7 Section 1122(a) requires only that claims must be “substantially similar” to be placed into the sam8 class; thus, Section 1122(a) prohibits placing dissimilar claims together in the same class, but 9 does not prevent substantially similar claims from being placed into different classes. See Zant10 Inc. v. Delgado (In re Zante, Inc.), 467 B.R. 216, 218 (D. Nev. 2012); see also Wells Fargo Ban11 N.A. v. Loop 76, LLC (In re Loop 76, LLC), 465 B.R. 525, 536-37 (B.A.P. 9th Cir. 2012), aff’12 578 F. App’x 644 (9th Cir. 2014). 13 To determine whether claims are substantially similar, “bankruptcy court judges mu14 evaluate the nature of each claim, i.e., the kind, species, or character of each category of claims. 15 See In re Rexford Props., LLC, 558 B.R. 352, 361 (Bankr. C.D. Cal. 2016) (quoting Steelcase, In16 v. Johnston (In re Johnston), 21 F.3d 323, 327 (9th Cir. 1994)). 17 With the exception of Priority Tax Claims and Administrative and Professional Fee Claim18 the Plan designates four (4) Classes of Claims, divided into twelve (12) subclasses, and one (119 Class of Equity Securities, subdivided into four (4) subclasses. The classification schem20 separately classifies Claims and Equity Securities based on valid business, factual, and leg21 reasons, such as the relative priority of claims under Section 507(a) of the Bankruptcy Code an22 the nature of the claims. The classification scheme conforms to the requirements of the Bankruptc23 Code and separately classifies Claims and Equity Securities based on valid business, factual, an24 legal reasons, such as the relative priority of claims under Section 507(a) of the Bankruptcy Cod25 and the nature of the claims. For example, claims entitled to priority of distribution under Sectio26 507(a)(4) through (10) of the Bankruptcy Code (Priority Unsecured Claims) are classifie27 separately from General Unsecured Claims. 28

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1 2 are separately classified because Chachas was granted releases by the Debtors and their estates i3 connection with the GH purchase of the IP Assets. See ECF No. 413 at ¶¶ K, 17-18, 24 (approvin4 release of Chachas in connection with providing investment banking and advisory services t 5 Debtors and service as a member of the board of managers, or in his capacity as a holder of equit6 or debt). 7 Accordingly, the Plan’s classification scheme does not place any dissimilar claims withi8 the same class and complies with Section 1122 of the Bankruptcy Code. Further, as Article IV o9 the Plan designates twelve (12) sub-classes of claims and four (4) sub-classes of equity interest10 the Plan satisfies Section 1123(a)(1) of the Bankruptcy Code. 11 2. Unimpaired Classes Specified Under Section 1123(a)(2). Article IV of the Pla12 specifies that Secured Claims (Classes 1(a)-(c)) and (Priority Unsecured Claims (Classes 2(a)-(c13 are unimpaired under the Plan. Therefore, the Plan satisfies Section 1123(a)(2) of the Bankruptc14 Code. 15 3. Specified Treatment of Impaired Classes Under Section 1123(a)(3). Section16 4.3 through 4.5 of the Plan specify that the General Unsecured Claims (Classes 3(a)-(c)) an17 Intercompany Claims (Classes 4(a)-(c)), along with Equity Securities (Classes 5(a)-(d)), ar18 impaired, and sets forth the treatment of the Claims and Equity Securities in these Classe19 Accordingly, the Plan satisfies Section 1123(a)(3) of the Bankruptcy Code. 20 4. No Discriminatory Treatment Under Section 1123(a)(4). As reflected in th21 treatment of the Classes designated in Article IV of the Plan, the Plan provides the same treatme22 by the Debtors for each Claim or Equity Security in each respective Class unless, to the exte23 applicable, the holder of a Claim has agreed to less favorable treatment. Therefore, the Pla24 complies with the requirements of 11 U.S.C. § 1123(a)(4). 25 5. Adequate Means of Implementation of the Plan Under Section 1123(a)(5). Th26 Plan and the Liquidating Trust Agreement provide adequate means for the implementation of th27 Plan, including, without limitation, (i) the creation of the Liquidating Trust and vesting of certai28 assets therein; (ii) the appointment of the Liquidating Trustee; and (iii) the procedures for resolvin

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1 2 with the requirements of Section 1123(a)(5) of the Bankruptcy Code. 3 6. Prohibition on Issuance of Non-Voting Securities Under Section 1123(a)(6 4 The Plan is a liquidating plan that provides for the winddown of the Debtors, the disposition 5 Debtors’ remaining assets, and the distribution of the proceeds thereof to the holders of Liquidatin 6 Trust Beneficial Interests pursuant to the terms of the Plan. See, inter alia, Plan §§ 5.2, 5.1 7 Accordingly, Debtors will not issue any securities and 11 U.S.C. § 1123(a)(6) is not applicable. 8 7. Designation of Officers, Directors or Trustee Under Section 1123(a)(7 9 Section 5.1 of the Plan provides that upon the Effective Date, the Debtors’ boards of directors sha10 be relieved of their duties and deemed to have resigned. Section 5.3.4 of the Plan provides for th11 appointment of a Liquidating Trustee as a fiduciary for the Liquidating Trust’s beneficiaries (th12 Holdings of Allowed General Unsecured Claims), which is consistent with the interests of th13 holders of Allowed General Unsecured Claims and public policy. Accordingly, 11 U.S. 14 § 1123(a)(7) is satisfied. 15 C. 11 U.S.C. § 1129(a)(2): Proponent Compliance with the Bankruptcy Code. 16 Section 1129(a)(2) requires a plan proponent to comply with the applicable provisions 17 the Bankruptcy Code, which encompasses the disclosure and solicitation requirements unde18 Section 1125 of the Bankruptcy Code. See In re Art & Architecture Books of the 21st Centur19 No. 2:13-bk-14135-RK, 2016 WL 1118743, *7-*12 (Bankr. C.D. Cal. Mar. 18, 2016); In re Tran20 World Airlines, Inc., 185 B.R. 302, 313 (Bankr. E.D. Mo. 1995). The Disclosure Statement i21 adequate under Section 1125 and, therefore, the Plan satisfies Section 1129(a)(2). 22 Section 1125(b) of the Bankruptcy Code requires the transmission to creditors of a writte23 disclosure statement containing “adequate information.” 11 U.S.C. § 1125(b); see also 11 U.S. 24 § 1125(a)(1) (defining “adequate information” as information “of a kind, and in sufficient detail25 . . including a discussion of the potential material Federal tax consequences of the plan to th26 debtor, any successor to the debtor, and a hypothetical investor typical of the holders of claims 27 interests in the case, that would enable such a hypothetical investor of the relevant class to mak28 an informed judgment about the plan, . . . ”)

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1 2 sufficiency or the adequacy of disclosure statements, including: 3 (1) the events which led to the filing of a bankruptcy petition; (2) a description of the available assets and their value; (3) the anticipated future of the company; 4 (4) the source of information stated in the disclosure statement; (5) a disclaimer; (6) the present condition of the debtor while in Chapter 11; (7) the scheduled 5 claims; (8) the estimated return to creditors under a Chapter 7 liquidation; (9) the accounting method utilized to produce financial information and the name 6 of the accountants responsible for such information; (10) the future management of the debtor; (11) the Chapter 11 plan or a summary thereof; (12) 7 the estimated administrative expenses, including attorneys’ and accountants’ fees; (13) the collectibility of accounts receivable; (14) financial information, 8 data, valuations or projections relevant to the creditors’ decision to accept or 9 reject the Chapter 11 plan; (15) information relevant to the risks posed to creditors under the plan; (16) the actual or projected realizable value from 10 recovery of preferential or otherwise voidable transfers; (17) litigation likely to arise in a nonbankruptcy context; (18) tax attributes of the debtor; and (19) the 11 relationship of the debtor with affiliates. 12 In re Metrocraft Pub. Servs., Inc., 39 B.R. 567, 568 (Bankr. Ga. 1984); In re Scioto Valle13 Mortgage Co., 88 B.R. 168, 170-71 (Bankr. S.D. Ohio 1988) (using a similar list). 14 These factors are neither required nor comprehensive; rather, the determination 15 “adequate information for purposes of the disclosure statement is made on a case-by-case basi16 and is largely within the discretion of the bankruptcy court. See Computer Task Group, Inc. 17 Brothy (In re Brothy), 303 B.R. 177, 193 (B.A.P. 9th Cir. 2003). 18 The Disclosure Statement provides an overview of the Plan, a summary of the votin19 process, a detailed description of Debtors’ business and the events occurring during the Chapte20 11 Cases, a detailed description of the Plan, a discussion of risk factors associated with the Plan, 21 discussion of federal income consequences, a discussion of alternatives to the Plan and an analysi22 of a liquidation scenario. Accordingly, the Disclosure Statement is adequate under Section 11223 and, therefore, the Plan and Disclosure Statement satisfy Section 1129(a)(2). 24 D. 11 U.S.C. § 1129(a)(3): Good Faith and Not by Means Forbidden by Law. 25 Section 1129(a)(3) does not define “good faith,” and good faith should be determined base26 on the “totality of the circumstances” and on a “case-by-case basis, taking into account th27 particular features of each . . . plan.” See Platinum Cap., Inc. v. Sylmar Plaza, L.P. (In re Sylm28 Plaza, L.P.), 314 F.3d 1070, 1074, 1075 (9th Cir. 2002) (citations omitted). As a general rule,

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1 2 purposes” of the Bankruptcy Code and exhibits “fundamental fairness” in dealing with creditor 3 See Marshall v. Marshall (In re Marshall), 721 F.3d 1032, 1046 (9th Cir. 2013); Jorgensen v. Fe 4 Land Bank of Spokane (In re Jorgensen), 66 B.R. 104, 108-09 (B.A.P. 9th Cir. 1986). The totalit5 of the circumstances should be considered in determining good faith. See In re Stolrow’s Inc., 8 6 B.R. 167, 172 (B.A.P. 9th Cir. 1988). 7 The Plan provides for the payment in full of Allowed Administrative Expense Claim8 (including Professional Fee Claims), Priority Tax Claims, and Priority Unsecured Claims on 9 before the Effective Date or promptly after allowance in accordance with Section 1129(a)(9) 10 the Bankruptcy Code, unless the holder agrees to less favorable treatment. See Plan, inter ali11 §§ 2.1–2.4 and 4.2.1–4.2.3. The holders of Allowed General Unsecured Claims in Classes 3(a12 (b), and (c) will receive pro rata shares of the Liquidating Trust Beneficial Interests. A13 Liquidating Trust Property not reserved for payment of the Unclassified and Priority Unsecure14 Claims will be paid pro rata to the holders of Liquidating Trust Beneficial Interests until suc15 holders have received, in the aggregate, an amount equal to the Allowed amount of their Gener16 Unsecured Claims after the expenses of administration of the Liquidating Trust are paid. See Pla17 inter alia, § 5.3.12. 18 Accordingly, the Plan has been filed to achieve results consistent with the objectives an19 purposes of the Bankruptcy Code, including, among other things, “to maximize the value of th20 bankruptcy estate,” see Toibb v. Radloff, 501 U.S. 157, 163 (1991), and “to satisfy creditors21 claims,” United States v. Whiting Pools, Inc., 462 U.S. 198, 203 (1983). Therefore, the Pla22 satisfies 11 U.S.C. § 1129(a)(3). 23 E. 11 U.S.C. § 1129(a)(4): Payments for Services. 24 Consistent with Section 1129(a)(4), the Plan provides that all pre-Effective Date fees an25 expenses of professionals retained by the estates, as well as all other accrued fees and expenses 26 professionals through the Effective Date, remain subject to final review by the Court pursuant t27 Section 330. See Plan § 2.3. The provision in the Plan for the Court’s review and ultimat28 determination of the fees and expenses satisfies Section 1129(a)(4) of the Bankruptcy Code. Se

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1 2 of Section 1129(a)(4) were satisfied where the plan provided for payment of only “allowed3 administrative expenses). 4 F. 11 U.S.C. § 1129(a)(6): Disclosure of Directors and Officers. 5 Section 1129(a)(5) requires the proponent of the plan to disclose the identity of thos6 individuals who will serve as management of the reorganized debtor. See 11 U.S.C. § 1129(a)(5 7 The Plan does not provide for the reorganization of the Debtors, and Section 1129(a)(5) is n8 applicable. Accordingly, 11 U.S.C. § 1129(a)(5) is satisfied. 9 G. 11 U.S.C. § 1129(a)(7): Best Interests Test. 10 Section 1129(a)(7) requires that a plan be in the best interests of creditors and intere11 holders, and specifically, that each holder of an impaired claim has either accepted the plan, 12 “will receive or retain under the plan on account of such claim or interest property of a value, a13 of the effective date of the plan, that is not less than the amount that such holder would so receiv14 or retain if the debtor were liquidated under Chapter 7 of this title on such date.” 11 U.S. 15 § 1129(a)(7)(A)(i) and (ii). In order to satisfy subsection (a)(7), the Court must find that eac16 dissenting creditor will receive or retain value, as of the effective date of the plan, that is not les17 than the amount it would receive if the debtor were liquidated. See Drexel Burnham Lambe18 Group, Inc., 138 B.R. 723, 761 (Bankr. S.D.N.Y. 1992). 19 As demonstrated by the Liquidation Analysis attached to the Disclosure Statement, eac20 holder of an Allowed Claim or Equity Security under the Plan is receiving or retaining under th21 Plan property of a value, as of the Effective Date, that is not less than the value such holder woul22 receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code. Se23 Disclosure Statement, Exhibit 2. Therefore, the Plan satisfies Section 1129(a)(7). 24 H. 11 U.S.C. § 1129(a)(8): Acceptance or Rejection by Certain Classes. 25 Section 1129(a)(8) requires that each class of claims and interests either has accepted 26 plan or is not impaired under a plan. See 11 U.S.C. § 1129(a)(8). Whether a class of claims i27 impaired is governed by Section 1124; whether a class of claims has accepted a plan is determine28 by reference to Section 1126. See 11 U.S.C. §§ 1124 and 1126. Under Section 1126(c) of th

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1 2 plan constitute (i) at least two-thirds in dollar amount and (ii) more than one-half in number of th3 claims in that class that actually vote to accept or reject the plan. An unimpaired class, and eac4 holder of a claim or interest in such class, is conclusively presumed to have accepted the pla 5 Conversely, a class is conclusively deemed to have rejected a plan if the plan provides that th6 holders of claims or interests of such class do not receive or retain any property under the plan o7 account of such claims or interests. 8 Classes 1(a)-(c) (Secured Claims) and 2(a)-(c) (Priority Unsecured Claims) are unimpaire9 under the Plan. Accordingly, Classes 1 and 2 are conclusively presumed to have accepted the Pla10 without solicitation of acceptances or rejections pursuant to 11 U.S.C. § 1126(f). 11 Classes 3(a)-(c) (General Unsecured Claims) are impaired under the Plan. While a ball12 summary will be separately filed pursuant to Local Rule 3018, the preliminary tabulation of ballot13 from the holders of Class 3 Claims reflects the following totals that each of Classes 3(a), 3(b), an14 3(c) voted to accept the Plan under Section 1126(c): 15 # Voted % Votes Amount Amount % Class 3(a): Holdings Voted to Accept: 111 95.69% $743,877.33 91.59% 16 Voted to Reject: 5 4.31% $ 68,335.19 8.41% 17 Aggregate Voted: 116 $812,212.52 18 Class 3(b): Retail Voted to Accept: 138 97.18% $974,477.81 97.67% 19 Voted to Reject: 4 2.82% $ 23,198.00 2.33% 20 Aggregate Voted: 142 $997,675.81 21 Class 3(c): Direct Voted to Accept: 224 96.55% $3,122,311.00 98.84% 22 Voted to Reject: 8 3.45% $ 36,681.00 1.16% Aggregate Voted: 232 $3,158,992.00 23 24 Classes 4(a)-(c) (Intercompany Claims) and 5(a)-(d) (Equity Securities) will not neith25 receive nor retain any property under the Plan and are deemed to have rejected the Plan und26 Section 1126(g) of the Bankruptcy Code. As such, the requirements of Section 1129(a)(8) hav27 not been met, requiring the application of Section 1129(b)(2) of the Bankruptcy Code, which ha28 been satisfied with respect to Classes 4 and 5 as set forth below.

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1 2 In accordance with Sections 1129(a)(9)(A), (B), and (C) of the Bankruptcy Code, §§ 2. 3 and 2.3 of the Plan provide for the full payment of Allowed Administrative Expense an 4 Professional Fee Claims, § 2.4 provides for the full payment of Allowed Priority Tax Claims, an5 § 4.2 of the Plan provides for payment of all Allowed Priority Unsecured Claims. As such, th 6 Plan satisfies the requirements of 11 U.S.C. § 1129(a)(9). 7 J. 11 U.S.C. § 1129(a)(10) and 11 U.S.C. § 1129(b)(2): Cramdown. 8 Section 1129(a)(10) requires that “[i]f a class of claims is impaired under the plan, at lea9 one class of claims that is impaired under the plan has accepted the plan, determined witho10 including any acceptance of the plan by an insider.” 11 U.S.C. § 1129(a)(10). The holders 11 General Unsecured Claims for all three Debtors (Classes 3(a), (b), and (c)) have voted to acce12 the Plan. Therefore, 11 U.S.C. § 1129(a)(10) has been satisfied. 13 Section 1129(b) provides that if a proposed plan meets all the requirements in Sectio14 1129(a), except for class acceptance pursuant to Section 1129(a)(8), then the plan may still b15 confirmed “if the plan does not discriminate unfairly, and is fair and equitable, with respect to eac16 class of claims or interests that is impaired under, and has not accepted, the plan.” 11 U.S. 17 § 1129(b)(1). Holders of Intercompany Claims (Classes 4(a), (b), and (c)) and holders of Equit18 Securities are deemed impaired as they receive no distribution under the Plan. See Plan §§ 4. 19 4.5. Debtors seek “cramdown” of such Classes under Section 1129(b)(2)(B) and (C) as the Pla20 fairly and equitably treats such Classes. 21 With respect to Intercompany Claims in Classes 4(a) (Holdings), 4(b) (Retail), and 4(c22 (Direct), Debtors proposed the Plan jointly and none of the Debtors or their respective creditor23 have objected to the Plan on the basis of discriminatory or unfair treatment or on the basis that an24 senior class is receiving more than the full value of their Claims. 25 Furthermore, the Plan’s treatment of Intercompany Claims is not unfairly discriminator26 and is fair and equitable. While Debtors’ books and records reflected certain intercompan27 payables as of the Petition Date, Debtors determined these amounts reflected book entries mad28 on account of customer returns of inventory to, rather than on the basis of loans or transfers o

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1 2 management system in which all expenses were paid by Retail, regardless of the legal entity th3 may have incurred the expense, and Retail received all cash inflows. Finally, no holder of a Clai4 of Equity Interest junior to the holders of Intercompany Claims will receive or retain any propert5 on account of such Claim or Equity Security. Therefore, 11 U.S.C. § 1129(b)(2)(B) is satisfie6 and Classes 4(a), (b), and (c) may be crammed down. 7 With respect to Equity Securities in Classes 5(a), (b), (c), and (d), no holder of an Equit 8 Security has objected to the Plan, nor contended that any senior class is receiving more than th9 full value of its claim. No junior class will receive or retain property on account of such intere10 under the Plan. Therefore, 11 U.S.C. § 1129(b)(2)(C) is satisfied and Classes 5(a), (b), (c), an11 (d) may be crammed down. 12 K. 11 U.S.C. § 1129(a)(11): Feasibility. 13 Section 1129(a)(11) requires that a proposed plan be feasible. Specifically, Debtors mu14 establish that “[c]onfirmation of the plan is not likely to be followed by the liquidation, or the nee15 for further financial reorganization, of the debtor or any successor to the debtor under the pla16 unless such liquidation or reorganization is proposed in the plan.” 11 U.S.C. § 1129(a)(11). 17 “The purpose of section 1129(a)(11) is to prevent confirmation of visionary schemes whic18 promise creditors and equity security holders more under a proposed plan than the debtor ca19 possibly attain after confirmation.” See Pizza of Haw., Inc. v. Shakey’s, Inc. (In re Pizza of Haw20 Inc.), 761 F.2d 1374, 1382 (9th Cir. 1985). The threshold of proof required to satisfy the feasibilit21 requirement is relatively low. See In re Sagewood Manor Assocs. Ltd. P’ship, 223 B.R. 756, 7622 62 (Bankr. D. Nev. 1998); see also Computer Task Group, Inc., v. Brotby (In re Brotby), 303 B. 23 177, 191 (B.A.P. 9th Cir. 2003) (“The Code does not require the debtor to prove that success i24 inevitable [citation omitted], and a relatively low threshold of proof will satisfy § 1129(a)(11)….”25 The Plan meets the feasibility requirement because Debtors expect to have sufficient cas26 on hand to pay or reserve for Allowed Claims payable in full under 11 U.S.C. § 1129(a)(9). Th27 Plan and Liquidating Trust Agreement provide for pro rata distributions to the beneficiaries of th28 Liquidating Trust (the holders of Allowed Class 3 General Unsecured Claims) with litigatio

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1 2 the Debtors’ remaining assets and dissolution of the Debtors, Debtors are not likely to requir3 further financial reorganization or liquidation. Debtors therefore submit that the Plan is feasibl4 under Section 1129(a)(11). 5 L. 11 U.S.C. § 1129(a)(12): U.S. Trustee’s Fees Paid. 6 Section 1129(a)(12) requires that all fees payable under 28 U.S.C. § 1930, as determine7 by the Court at the Confirmation Hearing, be paid or provided for in the Plan. Section 1.1.1 of th 8 Plan provides for the payment of U.S. Trustee fees pursuant to 28 U.S.C. § 1930; however, Debtor9 and the Committee have agreed that fees payable to the U.S. Trustee under 28 U.S.C. § 1930 ar10 not subject to application or allowance and to include clarifying language in the order confirmin11 the Plan. Accordingly, Section 1129(a)(12) is satisfied. 12 M. 11 U.S.C. §§ 1129(a)(6) and (a)(13) – (a)(16): Miscellaneous Inapplicable Provisions13 Subsections (a)(6) (regulatory approval of rates), (a)(13) (retiree benefits), (a)(114 (domestic support obligations), (a)(15) (applicable to individuals), and (a)(16) (charitabl15 organizations) are inapplicable to the Debtors. 16 N. Non-Material Plan Modifications Are Permitted. 17 Section 1127(a) allows for plan modifications and Bankruptcy Rule 3019(a) establishes th18 procedural requirements for plan modifications prior to confirmation. See 11 U.S.C. § 1127(a19 Fed. R. Bankr. P. 3019(a). Only material modifications require a new disclosure statement an20 court approval. See In re Simplot, No. 06-00002, 2007 WL 2479664, at *11 (Bankr. D. Idah21 Aug. 28, 2007) (citing In re Downtown Inv. Club III, 89 B.R. 59, 65 (B.A.P. 9th Cir. 1988)). Th22 word “material” in this context has been described as “so affect[ing] a creditor or interest holde23 who accepted the plan that such entity, if it knew of the modification, would be likely to reconsid24 its acceptance.” See id. (quoting In re Am. Solar King Corp., 90 B.R. 808, 824 (Bankr. W.D. Te25 1988)). Debtors will be filing a modification to amend the post-confirmation injunction in § 9. 26 of the Plan to conform to Section 1141(d)(3) of the Bankruptcy Code and to correct typographic27 and clerical errors. Debtors submit that such modifications will not be material because they ar28 not of the type that would cause a creditor who voted to accept the plan to reconsider its acceptanc

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1 CONCLUSION 2 Debtors respectfully submit that the Plan satisfies all of the requirements of Sections 1123 and 1129 and therefore request that the Court enter orders approving the Disclosure Statement o4 a final basis and confirming the Plan. 5 DATED April 22, 2021. 6 GARMAN TURNER GORDON LLP 7 By: /s/ Gabrielle A. Hamm 8 WILLIAM M. NOALL, ESQ. 9 GABRIELLE A. HAMM, ESQ. MARK M. WEISENMILLER, ESQ. 10 7251 Amigo Street, Suite 210 Las Vegas, Nevada 89119 11 Counsel for Debtors 12 13 4817-2570-2118, v. 1 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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