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Full title: Declaration in Support Declaration of Daniel T. Motulsky in Support of Joint Motion of Debtors and Official Committees of Unsecured Creditors for Entry of an Order Approving the Stipulation with Mayr-Melnhof Holz Holding AG Filed by Klausner Lumber Two LLC. (Butz, Daniel) (Entered: 07/21/2021)

Document posted on Jul 20, 2021 in the bankruptcy, 5 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

LLC (“KL2” or the “Debtor”), the Official Committee of Unsecured Creditors of KL2 (the “KL2 Committee”), and Mayr-Melnhof Holz Holding AG (“MMH”).4 The terms of such settlement are forth in that certain Stipulation attached to the Motion as Exhibit 1 (the “Stipulation”).After MMH filed the KL1 Claim and the KL2 Claim, it was my understanding from discussions with counsel that professionals for KL1, the KL1 Committee, KL2, and the KL2 Committee discussed the various issues concerning the KL1 Claim and KL2 Claim and it was agreed that the KL1 Committee and KL2 Committee would lead negotiations with MMH regarding issues concerning the KL1 Claim and whether the Parties could achieve an amicable resolution of those issues with MMH. 8.I have been advised that both the KL1 Committee and the KL2 Committee, through their respective counsel, contacted MMH and raised issues that they and KL1 and KL2, respectively, had regarding the KL1 Claim and the KL2 Claim, including the alleged duplicative nature of these claims against KL1 and KL2 and the inclusion of certain advances made by MMH to KL2 which were included in the KL1 Claim and certain advances made by MMH to KL1 which were included in the KL2 Claim.I have been further advised that both the KL1 Committee and KL2 Committee also raised with MMH that the KL1 Claim and KL2 Claim, based on the underlying instruments giving rise to such claims, could be avoidable as constructively fraudulent transfers under sections 548 and 544 of the Bankruptcy Code., it is my understanding that the Parties’ negotiations regarding the KL1 Claim and the KL2 Claim resulted in the Stipulation which, among other things, provides for a consensual resolution of the issues that KL1, the KL1 Committee, KL2, and the KL2 Committee had with the KL1 Claim and the KL2 Claim without the time and expense of litigation.

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IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: Chapter 11 KLAUSNER LUMBER ONE LLC, Case No. 20-11033 (KBO) Debtor.1 In re: Chapter 11 KLAUSNER LUMBER TWO LLC, Case No. 20-11518 (KBO) Debtor.2 DECLARATION OF DANIEL T. MOTULSKY IN SUPPORT OF JOINT MOTION OF DEBTORS AND OFFICIAL COMMITTEES OF UNSECURED CREDITORS FOR ENTRY OF AN ORDER APPROVING THE STIPULATION WITH MAYR-MELNHOF HOLZ HOLDING AG I, Daniel T. Motulsky, being duly sworn, declare under penalty of perjury: 1. I submit this Declaration in support of the Joint Motion Of Debtors And Official Committees Of Unsecured Creditors For Entry Of An Order Approving The Stipulation With Mayr-Melnhof Holz Holding AG (the “Motion”)3 to which this Declaration is attached. 2. This Declaration is intended to provide factual support for the proposed settlement by and among Klausner Lumber One LLC (“KL1”), the Official Committee of 1 The last four digits of the federal EIN of Klausner Lumber One LLC is 9109, and its mailing address is Klausner Lumber One LLC, P.O. Box 878, Middleburg, VA 20118. 2 The last four digits of the federal EIN of Klausner Lumber Two LLC is 4897, and its mailing address is Klausner Lumber Two LLC, P.O. Box C, Redding Ridge, CT 06876. 3 Capitalized terms not specifically defined herein have the meanings ascribed to such terms in the Motion.

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Unsecured Creditors of KL1 (the “KL1 Committee”), Klausner Lumber Two LLC (“KL2” or the “Debtor”), the Official Committee of Unsecured Creditors of KL2 (the “KL2 Committee”), and Mayr-Melnhof Holz Holding AG (“MMH”).4 The terms of such settlement are forth in that certain Stipulation attached to the Motion as Exhibit 1 (the “Stipulation”). 3. Except as otherwise indicated, all facts set forth in this declaration are based upon my personal knowledge, information learned from my review of relevant documents, and information I have received from other members of the Debtor’s management team and the Debtor’s advisors. 4. I am over the age of 18 and authorized to submit this declaration (this “Declaration”) on behalf of Debtor. If called to testify, I could and would competently testify to the facts and opinions as set forth in this Declaration. Background and Credentials 5. On June 15, 2020, I was appointed as an independent director on the Board of Directors of the Debtor. I have over thirty years of experience at the highest levels of business and complex finance. 6. As an independent director, I am an impartial member of KL2’s Board of Directors. Prior to my appointment, I had no connections with the Debtor, the Debtor’s management, or KL1. The Debtor’s advisors keep me apprised of what is happening in this Bankruptcy Case by providing me with frequent updates about the progress of the Debtor’s efforts, including by way of updates held separately from the rest of the Board of Directors. 4 KL1, the KL1 Committee, KL2, the KL2 Committee, and MMH are referred to collectively as the “Parties”.

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The Debtor’s Settlement Efforts 7. After MMH filed the KL1 Claim and the KL2 Claim, it was my understanding from discussions with counsel that professionals for KL1, the KL1 Committee, KL2, and the KL2 Committee discussed the various issues concerning the KL1 Claim and KL2 Claim and it was agreed that the KL1 Committee and KL2 Committee would lead negotiations with MMH regarding issues concerning the KL1 Claim and whether the Parties could achieve an amicable resolution of those issues with MMH. 8. I have been advised that both the KL1 Committee and the KL2 Committee, through their respective counsel, contacted MMH and raised issues that they and KL1 and KL2, respectively, had regarding the KL1 Claim and the KL2 Claim, including the alleged duplicative nature of these claims against KL1 and KL2 and the inclusion of certain advances made by MMH to KL2 which were included in the KL1 Claim and certain advances made by MMH to KL1 which were included in the KL2 Claim. 9. I have been further advised that both the KL1 Committee and KL2 Committee also raised with MMH that the KL1 Claim and KL2 Claim, based on the underlying instruments giving rise to such claims, could be avoidable as constructively fraudulent transfers under sections 548 and 544 of the Bankruptcy Code. 10. Based upon my discussions with counsel, it is my understanding that the Parties’ negotiations regarding the KL1 Claim and the KL2 Claim resulted in the Stipulation which, among other things, provides for a consensual resolution of the issues that KL1, the KL1 Committee, KL2, and the KL2 Committee had with the KL1 Claim and the KL2 Claim without the time and expense of litigation.

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11. Prior to the date hereof, KL2’s professionals presented me with the terms of the Stipulation and advised me concerning the extent and scope of the Parties’ prior negotiations and the alternatives of not settling with MMH, including the costs and expenses to the estate associated with litigating with MMH, the time and delay associated with such litigation, and the risks that the KL2 Claim could be allowed in full absent the settlement embodied in the Stipulation. 12. After consideration of the Stipulation and the alternatives to settlement, I believe the terms of the Stipulation are fair and reasonable. 13. The Stipulation avoids the unnecessary delays, uncertainty, and expense associated with litigation or a piecemeal resolution of the KL2 Claim. 14. Moreover, the proposed Stipulation benefits KL2 by resolving one of the larger unsecured claims in the KL2 Chapter 11 Case and, as such, the KL2 Committee supports approval of the Stipulation. 15. I believe KL2 stands to benefit from the elimination of joint-and-several liability for KL1 and KL2, with the KL2 Claim being reduced by as much as approximately $2.4 million. Moreover, pursuant to the Stipulation, KL2 will benefit by having the KL1 Debtor Claim reduced by as much as approximately $2.1 million. 16. In sum, it is my professional opinion that entry into the Stipulation is a sound exercise of Debtor’s business judgment. [Remainder of Page Intentionally Left Blank; Signature Page Follows]

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I declare under penalty of perjury under the laws of the State of Delaware that the foregoing is true and correct. Executed this _______ day of July, 2021. /s/ _________________________ Daniel T. Motulsky

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