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Full title: Memorandum of Law in Support of Confirmation of the Second Amended Joint Chapter 11 Plan for Klausner Lumber One LLC Proposed by the Debtor and the Official Committee of Unsecured Creditors Filed by Klausner Lumber One LLC. (Butz, Daniel) (Entered: 06/28/2021)

Document posted on Jun 27, 2021 in the bankruptcy, 46 pages and 0 tables.

Bankrupt11 Summary (Automatically Generated)

As discussed above, the Debtor has complied with the notice and solicitation requirements of Bankruptcy Code section 1125.Specifically, only holders of allowed claims and allowed interests in impaired classes of claims or interests that will receive or retain property under a plan on account of such claims or interests may vote to accept or reject such plan. Section 1129(a)(7) of the Bankruptcy Code requires that, with respect to each impaired class of claims or interests, each holder of a claim or interest of such class has either (a) accepted the plan or (b) will receive or retain under the plan property of a value, as of the effective date of the plan, that is not less than the amount that such holder would receive or retain if the Debtor liquidated under chapter 7 of the Bankruptcy Code.Unless the holder of a particular claim agrees to a different treatment with respect to such claim, section 1129(a)(9) of the Bankruptcy Code requires the plan to pay holders of claims entitled to priority under Bankruptcy Code section 507(a) in full in cash.Article II.B of the Plan satisfies section 1129(a)(9)(C) of the Bankruptcy Code because it provides that, except to the extent a Holder of an Allowed Priority Tax Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, each Holder of such Allowed Priority Tax Claim shall be treated in accordance with section 1129(a)(9)(C) of the Bankruptcy Code and, for the avoidance of doubt, Holders of Allowed Priority Tax Claims will receive interest on such Allowed Priority Tax Claims after the Effective Date in accordance with sections 511 and 1129(a)(9)(C) of the Bankruptcy Code.

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ) In re: ) Chapter 11 ) KLAUSNER LUMBER ONE LLC,1 ) Case No. 20-11033 (KBO) ) Debtor. ) ) MEMORANDUM OF LAW IN SUPPORT OF CONFIRMATION OF THE SECOND AMENDED JOINT CHAPTER 11 PLAN FOR KLAUSNER LUMBER ONE LLC PROPOSED BY THE DEBTOR AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS Thomas A. Draghi (admitted pro hac vice) Robert J. Dehney (No. 3578) Alison M. Ladd (admitted pro hac vice) Eric Schwartz (No. 3134) WESTERMAN BALL EDERER MILLER Daniel B. Butz (No. 4227) ZUCKER & SHARFSTEIN, LLP MORRIS, NICHOLS, ARSHT & 1201 RXR Plaza TUNNELL LLP Uniondale, New York 11556 1201 North Market Street, 16th Floor Telephone: (212) 622-9200 P.O. Box 1347 Facsimile: (212) 622-9212 Wilmington, Delaware 19899 Telephone: (302) 658-9200 Facsimile: (302) 658-3989 Attorneys for the Debtor and Debtor-in-Possession Richard J. Bernard (admitted pro hac vice) Eric J. Monzo (No. 5214) FAEGRE DRINKER BIDDLE & REATH LLP Brya M. Keilson (No. 4643) 1177 Avenue of the Americas, 41st Floor MORRIS JAMES LLP New York, New York 10036 500 Delaware Avenue, Suite 1500 Richard.Bernard@faegredrinker.com Wilmington, DE 19801 Telephone: (212) 248-3263 Telephone: (302) 888-6800 Facsimile: (302) 571-1750 Alissa M. Nann (admitted pro hac vice) FOLEY & LARDNER LLP 90 Park Avenue New York, New York 10016 Telephone: (212) 682-7474 Facsimile: (212) 687-2329 Attorneys for the Official Committee of Unsecured Creditors Dated: June 28, 2021 1 The last four digits of the Debtor’s federal EIN are 9109. The Debtor’s mailing address is Klausner Lumber One LLC, P.O. Box 878, Middleburg, VA 20118.

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TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ....................................................................................................................... iv PRELIMINARY STATEMENT................................................................................................................... 1 BACKGROUND .......................................................................................................................................... 2 I. GENERAL BACKGROUND .......................................................................................................... 2 II. EVENTS LEADING TO THE COMMENCEMENT OF THE CHAPTER 11 CASE ................... 2 A. The Debtor’s Business ........................................................................................................ 2 B. Events Leading to the Chapter 11 Filing ............................................................................ 3 C. The Debtor’ Officers and Directors .................................................................................... 4 D. The Debtor’s Prepetition Capital Structure ......................................................................... 4 III. THE DEBTOR COMMENCES THE CHAPTER 11 CASE AND COMPLETES THE SALE OF ITS ASSETS ................................................................................................................... 6 IV. THE PLAN ...................................................................................................................................... 7 V. SOLICITATION OF THE PLAN ................................................................................................... 8 A. Voting Classes .................................................................................................................... 9 B. Non-Voting Classes ............................................................................................................ 9 VI. THE PLAN SUPPLEMENT ............................................................................................................ 9 VII. PLAN OBJECTIONS ...................................................................................................................... 9 ARGUMENT .............................................................................................................................................. 10 I. THE PLAN SATISFIES THE REQUIREMENTS OF SECTION 1129 OF THE BANKRUPTCY CODE AND SHOULD BE CONFIRMED ....................................................... 10 A. Section 1129(a)(1): The Plan Complies with the Applicable Provisions of the Bankruptcy Code .............................................................................................................. 10 1. The Plan Complies with the Requirements of Section 1122 of the Bankruptcy Code ................................................................................................. 11 2. The Plan Complies with the Requirements of Section 1123(a) of the Bankruptcy Code ................................................................................................. 12 3. The Plan’s Permissive Provisions are Reasonable and Appropriate .................... 13

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4. The Plan’s Limited Releases Are Appropriate .................................................... 14 5. The Consensual Third-Party Releases Are Appropriate ...................................... 17 6. The Proposed Exculpation is Appropriate ........................................................... 19 7. The Injunction is Necessary to Enforce the Releases and Exculpation ............... 20 8. The Executory Contract Assumption, Assumption and Assignment and Rejection Provisions Are Appropriate ................................................................. 21 9. Section 1123(d) of the Bankruptcy Code: Curing Defaults ................................ 22 B. Section 1129(a)(2) of the Bankruptcy Code: The Debtor Has Complied with the Applicable Provisions of the Bankruptcy Code ................................................................ 23 1. Section 1129(a)(3) of the Bankruptcy Code: The Plan Was Proposed in Good Faith ........................................................................................................... 24 C. Section 1129(a)(4) of the Bankruptcy Code: The Plan Provides For Court Approval of Certain Administrative Payments ................................................................. 24 D. Section 1129(a)(5) of the Bankruptcy Code: The Plan Discloses the Identity of the Plan Administrator ...................................................................................................... 25 E. Section 1129(a)(6) of the Bankruptcy Code: The Plan Does Not Affect Any Change in Publicly Regulated Rates ................................................................................. 26 F. Section 1129(a)(7) of the Bankruptcy Code: The Plan is in the “Best Interests” of Creditors............................................................................................................................ 26 G. Section 1129(a)(8) of the Bankruptcy Code: Acceptance by Impaired Classes ............... 27 H. Section 1129(a)(9) of the Bankruptcy Code: The Plan Complies with Statutorily Mandated Treatment of Administrative Expense Claims and Priority Tax Claims .......... 28 I. Section 1129(a)(10) of the Bankruptcy Code: At Least One Class of Impaired, Non-Insider Claims Accepted the Plan ............................................................................. 30 J. Section 1129(a)(11) of the Bankruptcy Code: The Plan Is Feasible ................................ 30 K. Section 1129(a)(12) of the Bankruptcy Code: The Plan Provides for the Payment of All Statutory Fees .......................................................................................... 31 L. Bankruptcy Code Sections 1129(a)(14)-(16): Inapplicable to the Plan ........................... 31 M. Section 1129(b) of the Bankruptcy Code: The Plan Satisfies the “Cram Down” Requirements .................................................................................................................... 32 1. The Plan is Fair and Equitable with Respect to Class 8 ...................................... 32 2. The Plan Does Not Discriminate Unfairly with Respect to Class 8 .................... 33

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N. Section 1129(c) of the Bankruptcy Code: Only One Plan ............................................... 34 O. Section 1129(d) of the Bankruptcy Code: The Principal Purpose of the Plan is Not Avoidance of Taxes ................................................................................................... 34 II. THE PLAN SETTLEMENT IS FAIR AND EQUITABLE, MAXIMIZES AND EXPEDITES RETURNS TO CREDITORS, IS REASONABLE, AND SHOULD BE APPROVED AS PART OF THE PLAN ....................................................................................... 34 III. THE COURT SHOULD OVERRULE ANY REMAINING PLAN OBJECTIONS .................... 35 IV. THE MODIFIED AMENDED PLAN DOES NOT REQUIRE RESOLICITATION .................. 35 V. CAUSE EXISTS TO WAIVE STAY OF THE CONFIRMATION ORDER ............................... 36 CONCLUSION ........................................................................................................................................... 38

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TABLE OF AUTHORITIES Cases Page(s) Bank of Am. Nat’l Tr. & Sav. Ass’n v. 203 N. LaSalle St. P’ship, 526 U.S. 434 (1999) .................................................................................................................. 26 Gillman v. Cont’l Airlines (In re Cont’l, Airlines), 203 F.3d 203 (3d Cir. 2000) ...................................................................................... 19 In re 203 N. LaSalle St. Ltd. P’ship, 190 B.R. 567 (Bankr. N.D. Ill. 1995) ........................................................................................ 33 In re Aleris Int’l, Inc., No. 09-10478 (BLS), 2010 WL 3492664 (Bankr. D. Del. May 13, 2010) ......................... 33, 36 In re ANCRental Corp., Inc., 278 B.R. 714 (Bankr. D. Del. 2002) ......................................................................................... 21 In re Armstrong World Indus., Inc., 348 B.R. 111 (D. Del. 2006) ..................................................................................................... 10 In re Bowles, 48 B.R. 502 (Bankr. E.D. Va. 1985) ......................................................................................... 33 In re Caribbean Petroleum Corp., 512 B.R. 774 (Bankr. D. Del. 2014) ......................................................................................... 17 In re Coram Healthcare Corp., 315 B.R. 321 (Bankr. D. Del. 2004) ................................................................................... 16, 33 In re Drexel Burnham Lambert Grp., Inc., 138 B.R. 723 (Bankr. S.D.N.Y. 1992) ...................................................................................... 26 In re Electroglas, Inc., No. 09-12416 (PJW), 2010 WL 2821868 (Bankr. D. Del. May 26, 2010) ............................... 17 In re Fairfield Residential LLC, Case No. 09-14378, 2010 WL 2904990 (Bankr. D. Del. July 6, 2010) .................................... 25 In re Genesis Health Ventures, Inc., 266 B.R. 591 (Bankr. D. Del. 2001) ......................................................................................... 10 In re Hercules Offshore, Inc., 565 B.R. 732 (Bankr. D. Del. 2016) ......................................................................................... 17 In re Indianapolis Downs, LLC, 486 B.R. 286 (Bankr. D. Del. 2013) ................................................................................... 15, 18

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In re Lason, Inc., 300 B.R. 227 (Bankr. D. Del. 2003) ......................................................................................... 26 In re Lernout & Hauspie Speech Prods., N.V., 301 B.R. 651 (Bankr. D. Del. 2003) ......................................................................................... 33 In re Montreal Maine & Atl. Ry., Ltd., No. 13-10670, 2015 WL 7431192 (Bankr. D. Maine Oct. 9, 2015) ......................................... 17 In re PPI Enters. (U.S.), Inc., 228 B.R. 339 (Bankr. D. Del. 1998) ......................................................................................... 24 In re Premier Int’l Holdings, Inc., Case No 09-12019 (CSS), 2010 WL 2745964 (Bankr. D. Del. Apr. 29, 2010)........................ 21 In re PWS Holding Corp., 228 F.3d 224 (3d Cir. 2000) ...................................................................................................... 19 In re Quincy Med. Ctr., Inc., No. 11-16394-MSH, 2011 WL 5592907 (D. Mass. Nov. 16, 2011) ........................................ 17 In re Rusty Jones, Inc., 110 B.R. 362 (Bankr. N.D. Ill. 1990) ........................................................................................ 26 In re Sound Radio, Inc., 93 B.R. 849 (Bankr. D.N.J. 1988) ............................................................................................. 24 In re Spansion Inc., No. 09-10690 (KJC), 2010 WL 2905001 (Bankr. D. Del. Apr. 16, 2010) ............................... 21 In re Stallion Oilfield Servs. Ltd., Case No. 09-13562 (BLS), 2010 WL 5093096 (Bankr. D. Del. Jan. 20, 2010) ....................... 21 In re Toy & Sports Warehouse, Inc., 37 B.R. 141 (Bankr. S.D.N.Y. 1994) ........................................................................................ 26 In re Trans World Airlines, Inc., 261 B.R. 103 (Bankr. D. Del. 2001) ......................................................................................... 21 In re Tribune Co., 464 B.R.843 (Bankr. D. Del. 2012) .................................................................................... 11, 16 In re Wash. Mut., Inc., 442 B.R. 314 (Bankr. D. Del. 2011) ......................................................................................... 15 In re Zenith Elecs. Corp., 241 B.R. 92 (Bankr. D. Del. 1999) ............................................................................... 15, 16, 24

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Lubrizol Enters., Inc. v. Richmond Metal Finishers, Inc. (In re Richmond Metal Finishers, Inc.), 756 F.2d 1043 (4th Cir. 1985) ................................................................................................... 21 N.L.R.B. v. Bildisco & Bildisco (In re Bildisco), 682 F.2d 72 (3d Cir. 1982) ........................................................................................................ 21 Sharon Steel Corp. v. Nat’l Fuel Gas Distrib. Corp., 872 F.2d 36 (3d Cir. 1989) ........................................................................................................ 21 U.S. Nat’l Ass’n v. Wilmington Tr. Co. (In re Spansion Inc.), 426 B.R. 114 (Bankr. D. Del. 2010) ......................................................................................... 16 Upstream Energy Servs. v. Enron Corp. (In re Enron Corp.), 326 B.R. 497 (S.D.N.Y. 2005) .................................................................................................. 19 Statutes 11 U.S.C. § 1123 .................................................................................................................... passim 11 U.S.C. § 1126 .................................................................................................................... passim 11 U.S.C. § 1129 .................................................................................................................... passim 11 U.S.C. § 507(a) ........................................................................................................................ 28 11 U.S.C. § 365 ...................................................................................................................... 14, 22 11 U.S.C. § 1122 .......................................................................................................................... 35 11 U.S.C. § 1125 ................................................................................................................ 8, 23, 36 11 U.S.C. § 1127(a) ...................................................................................................................... 35 11 U.S.C. § 1127(c) ................................................................................................................ 35, 36 Section 1930 of title 28 of the United States Code ................................................................. 29, 31 Section 3717 of Title 31 of the United States Code ...................................................................... 29 Rules Fed. R. Bankr. P. 3020(e) ............................................................................................................. 36

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Klausner Lumber One LLC, as debtor and debtor-in-possession in the above-captioned chapter 11 case (“KL1” or the “Debtor”), hereby submits this memorandum of law (this “Memorandum”) in support of confirmation of the Second Amended Joint Chapter 11 Plan For Klausner Lumber One, LLC, Proposed by the Debtor and the Official Committee of Unsecured Creditors (as modified, amended, or supplemented from time to time, the “Plan”).1 In support of confirmation of the Plan, the Debtor respectfully represents as follows:2 PRELIMINARY STATEMENT The Debtor commenced this Chapter 11 Case to implement a sale process designed to maximize recoveries for its creditors, and at the same time, preserve the opportunity for the productive use of the assets to be sold and the employment of many individuals. During the course of the Chapter 11 Case, the Debtor engaged in extensive good-faith and arm’s-length negotiations with its key stakeholders, including the Creditors’ Committee, to exit bankruptcy as quickly and efficiently as possible after concluding a fantastically successful sale of substantially all of the Debtor’s assets. These efforts were productive. As is demonstrated in this brief and in the Freeman Declaration, and as will be established at the Confirmation Hearing, the Plan satisfies all of the requirements of section 1129 of the Bankruptcy Code and achieves the objectives of chapter 11. In addition, the Debtor has revised the Plan and/or proposed Finding of Fact, Conclusions of Law, and Order Confirming the Second Amended Joint Chapter 11 Plan for Klausner Lumber One LLC (the “Proposed Order”) filed concurrently herewith so as to address, and in its view resolve, any remaining objections to confirmation, 1 Capitalized terms used but not otherwise defined in this Memorandum are intended to have the meanings ascribed to such terms in the Plan. 2 The facts and circumstances supporting confirmation of the Plan are set forth more fully in, among other things, the Declaration of Michael Freeman in Support of Confirmation of the Second Amended Joint Chapter 11 Plan for Klausner Lumber One, LLC Proposed by the Debtor and the Official Committee of Unsecured Creditors (the “Freeman Declaration”) (or, in citation form, “M.F. Decl.”), filed concurrently herewith, and in a voting certification to be filed prior to the Confirmation Hearing (the “Voting Report”), each of which are incorporated herein.

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including those raised informally by the Office of the United States Trustee. Accordingly, the Debtor respectfully requests that the Court confirm the Plan. BACKGROUND I. General Background 1. On April 30, 2020 (the “Petition Date”), the Debtor filed a voluntary petition for relief in this Court under chapter 11 of the Bankruptcy Code. The Debtor continued to manage its properties as Debtor in possession in bankruptcy. On May 21, 2020, the Office of the U.S. Trustee appointed the Creditors’ Committee. No request for the appointment of a trustee or examiner has been made in the Debtor’s Chapter 11 Case. II. Events Leading to the Commencement of the Chapter 11 Case A. The Debtor’s Business 2. The Debtor was formed several years ago, along with sister entity Klausner Lumber Two LLC (“KL2”),3 to build two state-of-the-art sawmills: the Debtor in the aptly named town of Live Oak, in north-central Florida, an area known for its abundant timber and agricultural resources, and KL2 in eastern North Carolina, which had similar natural advantages for a large, modern timber mill. KL1 and KL2, along with certain affiliates that provided support to the core operations, were to be the new, United States operations of Austria’s Klausner family of companies. Prior to the Great Recession, such companies were collectively the sixth largest sawmill operation in the world. KL1 and KL2 were to be the first new sawmills built in the United States for some time. Using European technology that would result in efficiencies of operations and production, and far greater utilization / less waste of raw materials, the operations would, if successful, have a competitive advantage over traditional East Coast lumber mills. In addition, KL1 and KL2 would be located in rural, timber-rich areas with a 3 KL2, in and of itself, is a debtor in chapter 11 proceedings before the Court. See Case No. 20-11518.

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populace that would greatly benefit from new, large employers in the region. 3. In light of this, based on the Debtor’s books and records, more than $147 million was invested in KL1 to build it from the ground up and render it operational. Such funds were raised through shareholder and related-party loans and capital contributions, and an indirect investment – alleged to be as much as $49.5 million – by “EB-5” investors in the Debtor’s “lender,” an entity named Florida Sawmills L.P. (“Florida Sawmills”) that is an affiliate of KL1. In addition, certain Florida governmental agencies provided several million dollars in direct and indirect grants, support, and infrastructure (building out roads, water, power substations, etc.). This governmental support helped KL1 become operational and was provided with the hope and expectation that KL1 would create a substantial number of new jobs in an area that historically did not have large local employers. 4. Despite construction delays that resulted in cost overruns and a drain on liquidity, KL1 began production in March of 2015. Production increased to an annual production rate of more than 240 million board feet of lumber, however, production, sales, and distribution were not as successful as planned, resulting in KL1 accruing trade debt and needing additional funding. However, KL1’s efforts to raise new capital were not successful. B. Events Leading to the Chapter 11 Filing 5. The Debtor’s senior management, all of whom were European individuals experienced in sawmill operations and/or the financial aspects of KL1, spent 2019 and early 2020 considering liquidity, sale, and capital raising options. 6. In March of 2020, the impact on KL1 of the COVID-19 pandemic manifested itself. The pandemic rendered unfeasible any plans for a controlled liquidation or bankruptcy. KL1’s management team and skilled engineers and plant operators were concerned that travel restrictions would keep them from returning to Europe and leave them stranded in the United

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States. Then, on or about March 16, 2020, KL1’s management team and numerous engineers and operators returned to Europe. Having no ability to operate, no financing, and no liquidity, KL1’s operations were shuttered immediately. Insurance coverage lapsed, and there was no security personnel for the plant. 7. Also in March of 2020, Asgaard Capital LLC (“Asgaard”) was introduced to KL1’s senior managers in Europe. Asgaard assembled a team, including new bankruptcy counsel and an investment banker, for KL1 to consider. In April, Asgaard pursued pre- and post-petition financing, which was desperately needed to pay for insurance, security, utilities, and employees to care for the plant. 8. A bankruptcy stay was desperately needed. Shortly before the Petition Date, KL1’s newly-hired investment banker, Cypress Holdings LLC (“Cypress”), obtained interest from large, well-capitalized, competing sawmills in North America and two potential lenders who considered providing a modest, but sufficient, post-petition loan to fund a desperately needed and organized sale process. During the week of April 26, 2020, KL1 finalized a term sheet with a “new money,” wholly unaffiliated lender to provide post-petition financing. C. The Debtor’ Officers and Directors 9. As of the Petition Date, the Debtor’s Officers and Directors were (a) Leopold Stephan, the prepetition sole director of the Board of Directors, (b) Nat Wasserstein, the newly appointed Independent Director, who accepted his appointment on May 1, 2020, and (c) Michael Freeman, the CRO. These Directors and Officers have served the Debtor throughout the Chapter 11 Case. D. The Debtor’s Prepetition Capital Structure 10. The Debtor and Florida Sawmills entered into a Construction Loan Agreement dated November 26, 2012 (the “Loan Agreement”), pursuant to which Florida Sawmills agreed

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to lend to the Debtor up to $49.5 million (the “Loan”) for the acquisition of land and costs of constructing the sawmill. The Loan was to be secured by a note and mortgage and Florida Sawmills was permitted to take steps to perfect its interests in the collateral. 11. On September 13, 2013, Suwanee County (the “County”) and the Debtor entered into a County Lien Agreement, pursuant to which the Debtor granted the County a lien on the property to secure the Debtor’s obligations under a development agreement. This was a “permitted encumbrance” (up to $3.5 million) under the Loan Agreement. If the Debtor did not reach certain milestones with respect to construction of the sawmill, the County had a “right of reverter” to take back the real property. 12. The Debtor executed that certain Mortgage, Security Agreement and Assignment of Rents in favor of Florida Sawmills, dated November 26, 2012 (the “Mortgage”). The Mortgage, which was not recorded until August 26, 2014, granted Florida Sawmills a lien on the real property on which the sawmill was constructed. However, the Mortgage contained a “Limitation on Recovery” provision that specifically states that “the maximum amount of principal indebtedness secured by this Mortgage at any time” is $7 million, with a similar limitation on secured interest. On or about September 23, 2014, the Debtor executed a supplement to the Mortgage to add fixtures and equipment as additional collateral securing the Loan, which was recorded in the County records. On the same date, Florida Sawmills and the County executed and recorded an agreement by which the County agreed to subordinate its lien in the property to the Mortgage lien of Florida Sawmills. On December 8, 2014, Florida Sawmills recorded a UCC-1 financing statement (the “Financing Statement”) in the state of Delaware, asserting a lien against the Debtor’s personal property. The Financing Statement was not renewed and lapsed at the end of its five-year term on December 8, 2019.

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13. On or about June 1, 2016, the Loan Agreement was amended by the First Amendment to the Construction Loan Agreement (the “First Amendment”), which (a) increased the principal amount of the Loan from $49.5 million to $50 million and (b) extended the maturity date of the Loan4. In connection with the First Amendment, the Debtor executed an Amended and Restated Promissory Note, with an effective date of November 26, 2012, in the principal sum of $50,000,000. III. The Debtor Commences the Chapter 11 Case and Completes the Sale of its Assets 14. On April 30, 2020, the Debtor filed a voluntary petition under chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Case was assigned to Bankruptcy Judge Karen B. Owens. 15. On May 13 2020, the Debtor filed its Motion for Entry of (A) an Order (I) Scheduling a Hearing on the Approval of the Sale of All or Substantially All of the Debtor’s Assets Free and Clear of All Encumbrances, and the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, (II) Approving Certain Bidding Procedures and Assumption and Assignment Procedures, and the Form and Manner of Notice Thereof, (III) Authorizing the Debtor to Provide (But Not Approving) Certain Bid Protections for Any Stalking Horse Purchaser, and (IV) Granting Related Relief; and (B) an Order (I) Approving the Asset Purchase Agreement, (II) Authorizing the Sale of All or Substantially All of the Debtor’s Assets Free and Clear of all Encumbrances, (III) Authorizing the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases, and (IV) Granting Related Relief D.I. 52 (the “Bidding Procedures Motion”), which was granted by the Court by Order dated June 8, 2020 D.I. 140 (as amended by that Order Amending Certain Deadlines Set Forth in the Bidding 4 The Debtor also executed a Second Amended and Restated Promissory Note with an effective date of January 23, 2014, showing a maturity date of January 23, 2022.

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Procedures Order and Related Bidding Procedures and Assumption and Assignment Procedures D.I. 165, that Second Order Amending Certain Deadlines Set Forth in the Bidding Procedures Order and Related Bidding Procedures and Assumption and Assignment Procedures D.I. 193, and that Third Order Amending Certain Deadlines Set Forth in the Bidding Procedures Order and Related Bidding Procedures and Assumption and Assignment Procedures D.I. 246, together, the “Bidding Procedures Order”). 16. In order to enhance the value that the sawmill might realize through the sale process, the Debtor’s CRO, Michael Freeman, restored the plant to operational status. Then, pursuant to the Bidding Procedures Order, the Debtor conducted a fulsome marketing and sale process led by Cypress and the Debtor’s CRO. 17. These efforts culminated in a spirited Auction among three active bidders. Binder Beteiligungs AG, acting through its affiliate Timber One Acquisition Holdings LLC (“Binder”), was selected as the “Successful Bidder” for the Debtor’s assets. On August 31, 2020, the Court held a hearing on the sale portion of the Bidding Procedures Motion, approved the sale of substantially all of the Debtor’s assets to Binder for the cash purchase price of $61 million, plus certain assumed liabilities as set forth in Binder’s modified Asset Purchase Agreement. IV. The Plan 18. The Plan contemplates that, upon the Effective Date, a Post-Confirmation Estate will be created consisting of all assets of the Debtor, from which payment shall be made in connection with all remaining Allowed Administrative Expense Claims, Allowed Priority Tax Claims, Allowed Secured Claims, Allowed Priority Claims, and Allowed General Unsecured Claims, together with the actual and necessary costs and expenses to be incurred after the Effective Date. See M.F. Decl. ¶ 6. The Plan Administrator, appointed on the Effective Date, will be authorized to continue the liquidation of the Debtor’s estate, and shall have the powers

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and responsibilities of a disbursing agent and plan administrator as set forth in the Plan Administrator Agreement. See Plan Art. IV.D. The Plan Administrator will manage and administer the Post-Confirmation Estate in accordance with the Plan. See M.F. Decl. ¶ 7. 19. Generally, the Plan provides that holders of Claims and Interests will receive the following treatment (subject to reduction for fees, expenses, etc., as are detailed in the Plan):  All holders of Allowed Administrative Expense Claims, Allowed Professional Fee Claims, Allowed Priority Tax Claims, the Allowed FS Secured Claim, Allowed Affiliated Secured Claims, Allowed Other Secured Claims and Allowed Priority Claims will be paid in full in Cash;  Each Holder of a WARN Act Class Settlement Claim shall receive its WARN Act Pro Rata Share of the Net WARN Act Settlement Amount, and Holders of Non-WARN Act Class Settlement Claims shall receive, on account of their Allowed Priority Wage Claim, payment in full and on account of any Allowed General Unsecured Claim, a Pro Rata share of the Class 5 Distribution Amount.  The Holders of FS Deficiency/Unsecured Claims shall receive their Paro Rata share of the Class 4 Distribution Amount, subject to adjustment as set forth in the Plan;  The Holders of Allowed General Unsecured Claims shall receive their Pro Rata share of the Class 5 Distribution Amount, subject to adjustment as set forth in the Plan.  The Holders of Affiliate Unsecured Claims shall receive a Pro Rata share of the Class 6 Distribution Amount, subject to adjustment as set forth in the Plan;  The Holders of Subordinated Claims will receive a Pro Rata share of any Net Proceeds remaining after all Claims in senior classes are paid in full; and  Interests in the Debtor will be extinguished and shall receive no distribution. V. Solicitation of the Plan 20. On May 20, 2021, the Bankruptcy Court entered an order pursuant to section 1125 of the Bankruptcy Code approving the adequacy of the Disclosure Statement with respect to the Plan (the “Disclosure Statement Order”). The Disclosure Statement Order established procedures for solicitation of votes in favor of the Plan (the “Solicitation Procedures”). As required by section 1126 of the Bankruptcy Code, the Debtor solicited votes from the Holders of

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Claims in Impaired Classes receiving a recovery under the Plan, with all other Classes deemed to accept or reject the Plan, as applicable. A. Voting Classes 21. Classes 3A, 3B, 4, 5, 6, and 7 were entitled to vote. See M.F. Decl. ¶ 13, Plan Art. III.A. Each of these classes, except for Class 3B which is vacant, has voted to accept the Plan by the majorities set forth in the Voting Declaration. B. Non-Voting Classes 22. Non-voting Classes are comprised of Classes where Holders of Claims or Interests are: (a) Unimpaired under the Plan and are deemed to accept the Plan, or (b) fully Impaired under the Plan and are deemed to reject the Plan. 23. Holders of Claims in Classes 1A, 1B, 1C, and 2 are Unimpaired under the Plan and therefore are deemed to accept the Plan. See M.F. Decl. ¶ 13, Plan Art. III.A. 24. Holders of Interests in Class 8 will not receive any recovery under the Plan and therefore are deemed to reject the Plan. See M.F. Decl. ¶ 13, Plan Art. III.A. VI. The Plan Supplement 25. On June 17, 2021, the Debtor filed the Plan Supplement with the Court. The Plan Supplement included the following document: Plan Administrator Agreement. VII. Plan Objections 26. Only 1 (one) objection to confirmation of the Plan was filed with the Court by the United States on behalf of the Internal Revenue Service [D.I. 994] (the “Remaining Plan Objection”). As shown below, the Debtor believes it has cured all objections in the Remaining Plan Objection by revisions made to the Plan and/or Proposed Order. The Debtor respectfully requests that the Court overrule the Remaining Plan Objections in the event they are not settled or withdrawn by the time of the Confirmation Hearing. (The Debtor continues to negotiate with

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the only party to have filed an objection to the Plan to attempt to reach a consensual resolution.) * * * 27. The Debtor submits that the Plan is in the best interests of the Debtor’s estate and represents the best available option for its stakeholders. The Plan will bring closure to the Debtor’s asset sale efforts and permit the Debtor to maximize recoveries for the benefit of creditors. Accordingly, and for the reasons set forth herein, the Debtor respectfully requests that the Court confirm the Plan. ARGUMENT I. The Plan Satisfies the Requirements of Section 1129 of the Bankruptcy Code and Should Be Confirmed 28. To confirm the Plan, the Court must find that the Debtor has satisfied the applicable provisions of section 1129 of the Bankruptcy Code by a preponderance of the evidence.5 Through the record in this Chapter 11 Case, the Voting Report, the Freeman Declaration, and any other testimony and evidence that may be presented in support of Confirmation, the Debtor expects to demonstrate to the Court’s satisfaction that the Debtor has met its burden. A. Section 1129(a)(1): The Plan Complies with the Applicable Provisions of the Bankruptcy Code 29. Section 1129(a)(1) of the Bankruptcy Code requires that a chapter 11 plan “compl[y] with the applicable provisions of the [Bankruptcy Code].”6 A principal objective of section 1129(a)(1) of the Bankruptcy Code is to ensure compliance with requirements regarding the classification of claims and interests and contents of a plan of reorganization, as set forth in 5 See In re Armstrong World Indus., Inc., 348 B.R. 111, 120 (D. Del. 2006); In re Genesis Health Ventures, Inc., 266 B.R. 591, 616 n.23 (Bankr. D. Del. 2001). 6 11 U.S.C. § 1129(a)(1).

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sections 1122 and 1123 of the Bankruptcy Code.7 The Debtor respectfully submits that the Plan complies with sections 1122 and 1123 of the Bankruptcy Code in all respects. See M.F. Decl. ¶¶ 10-12. 1. The Plan Complies with the Requirements of Section 1122 of the Bankruptcy Code 30. Section 1122(a) of the Bankruptcy Code provides, in pertinent part, that “a plan may place a claim or interest in a particular class only if such claim or interest is substantially similar to the other claims or interests in such class.” Section 1122 of the Bankruptcy Code does not require that all substantially similar claims or interests must be grouped in the same class, but rather, that all claims or interests designated to a particular class be substantially similar to each other.8 31. The Plan complies with section 1122 of the Bankruptcy Code, as each Class of Claims or Interests contains substantially similar Claims or Interests, and each Class of Claims and Interests differs from each other Class for reasons that are appropriate as a matter of both law and fact. See M.F. Decl. ¶ 14. Plan Art. III. Specifically, the Plan designates eleven (11) Classes of Claims and Interests, as follows: (a) Class 1A - FS Secured Claims; (b) Class 1B – Affiliate Secured Claims; (c) Class 1C – Other Secured Claims; (d) Class 2 - Priority Claims; (e) Class 3A – WARN Act Class Settlement Claims; (f) Class 3B – Non-WARN Act Class Settlement Claims; (g) Class 4 – FS Deficiency/Unsecured Claim; (vh) Class 5 – General Unsecured Claims; (i) Class 6 – Affiliate Unsecured Claims; (j) Class 7 – Subordinated Claims; 7 See In re Nutritional Sourcing Corp., 398 B.R. 816, 824 (Bankr. D. Del. 2008) (suggesting Congress intended “applicable provisions” in this subsection to mean “provisions of Chapter 11, such as section 1122 and 1123”). 8 See In re Tribune Co., 476 B.R. 843, 854-55 (Bankr. D. Del. 2012). Plan proponents have “considerably broad discretion” to place similar claims or interests into different classes, provided that there is a rational basis for doing so. See John Hancock Mut. Life Ins. Co. v. Route 37 Bus. Park Assocs., 987 F.2d 154, 158-59 (3d Cir. 1993) (holding that as long as each class represents a voting interest that is ‘sufficiently distinct and weighty to merit a separate voice in the decision whether the proposed reorganization should proceed,’ the classification is proper).

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and (k) Class 8 – Interests. See M.F. Decl. 13, Plan Art. III.A. 32. In general, the Plan’s classification scheme follows the Debtor’s prepetition capital structure. For example, Claims are separately classified from Interests, and Secured Claims are separately classified from General Unsecured Claims. The subdivisions within Classes 1 and 3 represent negotiated Claims with agreement of treatment among the parties to those Classes, and each holder of a Claim or Interest within each Class receives either a negotiated and agreed upon treatment or the same treatment as other holders of Claims or Interests within the same Class. Thus, the Plan’s classification of Claims and Interests satisfies the requirements of section 1122 of the Bankruptcy Code and no objections have been filed asserting to the contrary. 2. The Plan Complies with the Requirements of Section 1123(a) of the Bankruptcy Code 33. The Plan meets the seven mandatory requirements of section 1123(a) of the Bankruptcy Code. The Plan satisfies the requirements of section 1123(a)(1), (2) and (3), respectively, by properly designating Classes of Claims and Interests, identifying each Unimpaired Class (Classes 1A, 1B, 1C and 2) and setting forth the treatment of each Impaired Class (Classes 3A, 3B, 4, 5, 6, 7, and 8) in Article III of the Plan. See M.F. Decl. ¶ 13, Plan Art. III.A. 34. The Plan also meets the requirement of section 1123(a)(4) of the Bankruptcy Code because the treatment of each Claim or Interest within a Class is the same as the treatment of each other Claim or Interest in that Class, unless the holder of a particular Claim or Interest has agreed to a less favorable treatment of such Claim or Interest. See M.F. Decl. ¶ 15, Plan Art. III.B. 35. The Plan and the Plan Administrator Agreement provide adequate and proper means for the Plan’s implementation, thus satisfying section 1123(a)(5) of the Bankruptcy Code.

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Plan Art. IV.D. The Plan and Plan Administrator Agreement provide for, among other things, the (a) establishment and governance of the Post-Confirmation Estate, (b) vesting of the Debtor’s assets in the Post-Confirmation Estate, (c) funding of the Post-Confirmation Estate, (d) establishment of a reserve for payment of Disputed Claims once they become Allowed, (e) preservation of Causes of Action, and (f) cancellation of interests. See M.F. Decl. ¶ 16. 36. The Plan also satisfies the requirements of section 1123(a)(6) of the Bankruptcy Code. The Plan does not contemplate the offering or issuance of any interests or other instruments that would constitute “securities” under applicable U.S. securities law. See M.F. Decl. ¶ 16, Plan Art. IV.D. 37. Finally, the Plan fulfills the requirements of section 1123(a)(7) of the Bankruptcy Code. The identity of the Plan Administrator and his compensation was disclosed in the Plan Administrator Agreement. Accordingly, the Plan satisfies each of the requirements of section 1123(a) of the Bankruptcy Code and no objections have been filed asserting to the contrary. 3. The Plan’s Permissive Provisions are Reasonable and Appropriate 38. Section 1123(b) of the Bankruptcy Code identifies various discretionary provisions that may, but are not required to, be included in a chapter 11 plan. Among other things, section 1123(b) of the Bankruptcy Code provides that a plan may (a) impair or leave unimpaired any class of claims or interests, (b) provide for the assumption or rejection of executory contracts and unexpired leases, (c) provide for the settlement or adjustment of any claim or interest belonging to the debtor or the estates, and (d) include any other appropriate provision not inconsistent with the applicable provisions of chapter 11.9 As set forth below, the Plan includes certain of these discretionary provisions. 9 11 U.S.C. § 1123(b)(1)-(3), (6).

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39. Consistent with section 1123(b) of the Bankruptcy Code: (a) the Plan impairs certain Classes of Claims and Interests (specifically, those in Classes 3A, 3B, 4, 5, 6, 7, and 8), see Plan Art. III.A; (b) the Plan leaves unimpaired other Classes of Claims (specifically, those in Classes 1A, 1B, 1C, and 2), see Plan Art. III.A; and (c) Article V of the Plan provides for the rejection of all Executory Contracts and Unexpired Leases under section 365 of the Bankruptcy Code, except for Executory Contracts and Unexpired Leases specifically designated as assumed on the Schedule of Assumed Executory Contracts and Unexpired Leases or those previously assumed or rejected by final order of the Court. See M.F. Decl. ¶¶ 18-26, Plan Art. V. In addition, the Plan provides for a general settlement of Claims and Interests and includes certain release, exculpation and injunction provisions. The Debtor respectfully submits that each of these provisions of the Plan is appropriate. 4. The Plan’s Limited Releases Are Appropriate 40. As set forth in Article IX.A of the Plan, the Plan constitutes a good-faith compromise of all Claims, Interests and controversies relating to the contractual, legal and subordination rights that a holder of a Claim may have with respect to any Allowed Claim, or any distribution to be made on account of such Allowed Claim. See M.F. Decl. ¶¶ 22-23. 41. As contemplated by section 1123(b)(3)(A) of the Bankruptcy Code, which permits a debtor to include settlements of a debtor’s claims as discretionary provisions in a plan of reorganization, Article IX.D of the Plan provides for releases by the Debtor (the “Debtor Releases”) of certain claims, rights and causes of actions that the Debtor may have against each of the Released Parties.10 See M.F. Decl. ¶ 44. The Debtor Releases are the product of extensive 10 “Released Party” means each of the following solely in their capacity as such: (a) the Debtor; (b) the DIP Lender; (c) the Creditors’ Committee and each of its members; (d) the Debtor’s Professionals; and (e) the Creditors’ Committee’s Professionals.

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negotiations with the Creditors’ Committee and other stakeholders. Importantly, the Debtor Releases do not release any obligations arising after the Effective Date.11 42. When considering a debtor’s proposed release of a non-debtor party, courts in this District consider the five factors set forth in In re Zenith Elecs. Corp., 241 B.R. 92, 110 (Bankr. D. Del. 1999) and In re Wash. Mut., Inc., 442 B.R. 314, 347 (Bankr. D. Del. 2011): i. whether there is an identity of interest between the debtor and the third party, such that a suit against the third party is, in essence, a suit against the debtor or will deplete assets of the estate; ii. the substantial contribution by the third party to the plan; iii. the essential nature of the release to the debtor’s plan; iv. whether there is an agreement by a substantial majority of creditors and interest holders to support the plan and the release; and v. the provision in the plan for payment of all or substantially all of the claims of the creditors and interest holders under the plan. No single “Zenith” factor is dispositive, nor is a plan proponent required to establish each factor for the release to be approved; rather, the factors are intended to provide guidance to the Court in determining the fairness of the proposed releases.12 43. The Released Parties, which the Debtor proposes to release under the Plan, have facilitated the negotiation and preparation of the Plan and Disclosure Statement and helped implement transactions contemplated by the Plan. See M.F. Decl. ¶¶ 44-48. The support of the Released Parties has been critical to the Debtor’s ability to formulate the transactions contemplated by the Plan, which will benefit of all stakeholders. This Court has held that affording releases to such parties – including certain lenders – who “were actively involved in 11 See Plan, Art. IX. 12 See In re Wash. Mut., Inc., 442 B.R. at 346; In re Indianapolis Downs, LLC, 486 B.R. 286, 304 (Bankr. D. Del. 2013) (approving the Debtor’ releases despite not meeting the third and fifth Zenith factors).

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negotiating the Plan[,] . . . is a valid exercise of the Debtor’ business judgment.”13 44. The Debtor submits that application of the Zenith factors supports the proposed Debtor Releases. First, an identity of interest exists among the Debtor and certain of the Released Parties since these parties “share the common goal” of completing a successful sale process, confirming the Plan and implementing the transactions contemplated thereunder.14 45. Second, each of the Released Parties has made substantial contributions to the Debtor’s efforts to monetize its assets and wind down its business and operations. See M.F. Decl. ¶¶ 44-48. The Released Parties participated in the negotiation and formulation of the Plan, which, as discussed above, will enable the Debtor to maximize the value of its assets for the benefit of all stakeholders.15 Of perhaps greater importance, these parties facilitated the Debtor’s disposition of its assets in a thoughtful, controlled and value-maximizing manner, and over an extended period. The DIP Lender provided invaluable support to the Debtor by providing critical financing, which the Debtor needed to preserve and protect its assets and contributed to the streamlined administration of the Chapter 11 Case. See M.F. Decl. ¶ 45. Specifically, the DIP Lender provided a limited but appropriate facility to the Debtor to enable the Debtor to procure insurance and security for the plant and complete an auction and sale process when the asset value providing credit support was far from clear, and in fact since the sawmill was not operating, was speculative. This, in the form of a “new money” facility from a 13 See U.S. Nat’l Ass’n v. Wilmington Tr. Co. (In re Spansion Inc.), 426 B.R. 114, 143 (Bankr. D. Del. 2010). 14 See In re Tribune Co., 464 B.R. at 187 (noting that an identity of interest between the Debtor and the settling parties where such parties “share[d] the common goal of confirming the DCL Plan and implementing the DCL Plan Settlement”); Zenith Elecs. Corp., 241 B.R. at 110 (concluding that the first factor – an identity of interest with the debtor – was satisfied where certain released parties who “were instrumental in formulating the Plan” shared an identity of interest with the debtor “in seeing that the Plan succeed and the company reorganize”). 15 See Spansion, 426 B.R. at 143 (approving release of officers, directors, and senior noteholders who were actively involved in negotiating and formulating the plan, as a valid exercise of Debtor’ business judgment); In re Coram Healthcare Corp., 315 B.R. 321, 334-35 (Bankr. D. Del. 2004) (approving release of noteholders where plan was overwhelmingly accepted by creditors, 68% of shareholders by number voted to accept the plan, and noteholders shared common goal of reorganization).

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lender that was a stranger to the Debtor – i.e., this was not a roll-up of an existing facility, this was a new facility from a lender that had no prepetition relationship with the Debtor. A targeted, limited release of the DIP Lender, along with the other Released Parties is, the Debtor respectfully submits, appropriate. 46. Third, the Debtor Releases are essential to the Plan. See M.F. Decl. ¶ 47. Without the agreement to provide the Debtor Releases, certain stakeholders likely would not have participated in the negotiations and compromises that led to the formulation and filing of the Plan, which will enable the complete monetization of the Debtor’s assets. The Debtor believes that the Debtor Releases are a critical element in the Released Parties’ support for the Plan. Significantly, several courts have approved similar release provisions in liquidating plans.16 47. Finally, the Plan and the Debtor Releases have received the support of the key stakeholders. There are no objections to the Debtor Releases. 48. Based on the foregoing, the Debtor respectfully submits that the Debtor Releases are appropriate and justified, in the best interests of creditors, are an integral part of the Plan, and satisfy the key factors considered by courts in evaluating releases granted by Debtors. Accordingly, the Debtor respectfully requests that the Court approve the Debtor Releases. 5. The Consensual Third-Party Releases Are Appropriate 49. Article IX.E of the Plan provides for a consensual release (the “Consensual Third- 16 See, e.g., In re Hercules Offshore, Inc., 565 B.R. 732, 755-764 (Bankr. D. Del. 2016) (debtor releases granted to lenders and various third parties were appropriate in a liquidation plan); In re Caribbean Petroleum Corp., 512 B.R. 774, 777 (Bankr. D. Del. 2014) (recognizing enforceability of non-debtor releases in confirmed liquidation plan); In re Electroglas, Inc., No. 09-12416 (PJW), 2010 WL 2821868, at * 7 (Bankr. D. Del. May 26, 2010) (confirming plan of liquidation including non-debtor release provisions); In re Quincy Med. Ctr., Inc., No. 11-16394-MSH, 2011 WL 5592907, at *5 (D. Mass. Nov. 16, 2011) (holding that modified third-party releases would be permissible in plan of liquidation); In re Montreal Maine & Atl. Ry., Ltd., No. 13-10670, 2015 WL 7431192, at *8-9 (Bankr. D. Maine Oct. 9, 2015) (confirming plan of liquidation that includes third-party releases).

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Party Releases”) of certain claims, rights and causes of action against the Released Parties by the Releasing Parties, which includes Creditor Releasing Parties,17 and Manager Releasees.18 See M.F. Decl. ¶¶ 44-45. Consensual third-party releases are permissible in this District.19 The Consensual Third-Party Releases are consensual with respect to each Holder of a Claim entitled to vote to accept or reject the Plan that affirmatively elected to “opt in” to being a Releasing Party or a Creditor Releasing Party by marking the box on its ballot designated for such purpose.20 See M.F. Decl. ¶¶ 23, 44-48, Plan Art. I.A.16. 50. The Consensual Third-Party Releases are a necessary and integral element of the Plan, and are fair, equitable, reasonable, and in the best interests of the Debtor, their estates, and all Holders of Claims and Interests. See M.F. Decl. ¶¶ 44-48. The granting of the Consensual 17 “Releasing Party” means, collectively, and in each case solely in its capacity as such: (a) the Debtor; (b) the Post-Confirmation Debtor and Plan Administrator; (c) the DIP Lender; (d) the Creditors’ Committee and each of its members; (e) each Creditor Releasing Party; and (f) any person or entity claiming by or through each of the foregoing Entities described in clauses (a) through (e) including such Entities’ and such such affiliates’ partners, subsidiaries, predecessors, current and former directors, managers, officers, equity holders (regardless of whether such interests are held directly or indirectly, but excluding Holders of Interests), members, officers, principals, employees, agents, managed accounts or funds, advisors, attorneys, accountants, investment bankers, consultants, representatives, management companies, fund advisors, and other professionals, together with their respective successors and assigns. “Creditor Releasing Party” means (a) each Holder of a Claim that submitted a ballot to accept or reject the Plan and affirmatively opted in to being a Releasing Party by marking the box on its ballot designated for such purpose; (b) pursuant to the Plan Settlement, each Holder of Affiliate Secured Claims, Affiliate Unsecured Claims, FS Secured Claims, and FS Deficiency/Unsecured Claims; and (c) each Holder of a Claim that is Unimpaired and presumed to accept the Plan and affirmatively opted in to being a Releasing Party by marking the box on its ballot designated for such purpose, in each case solely in such capacities 18 “Manager Releasee” means the Debtor’s current and former directors, officers and managers who served in such capacity on or after the Petition Date, including Nat Wasserstein of Lindenwood Associates LLC, the Debtor’s independent director who was retained after the Petition Date (but excluding the Debtor’s Chief Restructuring Officer, who is a Released Party and a Professional). For the avoidance of doubt, the term Manager Releasee shall not apply to the Debtor’s current and former directors (other than Nat Wasserstein of Lindenwood Associates LLC, the Debtor’s independent director), officers and managers for actions taken prior to the Petition Date. 19 See Indianapolis Downs, 486 B.R. at 305 (“Courts in this jurisdiction have consistently held that a plan may provide for a release of third party claims against a non-debtor upon consent of the party affected.”). 20 See Indianapolis Downs, LLC, 486 B.R. at 304-06 (citation omitted) (“the record reflects these parties were provided detailed instructions on how to opt out, and had the opportunity to do so by marking their ballots. Under these circumstances, the Third Party Releases may be properly characterized as consensual and will be approved.”); In re EV Energy Partners, L.P., Case No. 18-10814 (CSS) [Dkt. No. 252 at 214:6-215:1] (holding that third-party releases are consensual as to parties who must file an objection to opt out of such releases and fail to do so); In re Molycorp, Inc., Case No. 15-11357 (Bankr. D. Del.) (CSS) [Tr. Jan. 8, 2016 (Dkt. No. 1050) at 67:16-19] (holding that “you don’t need affirmative conduct to get a third-party release . . . [o]pt-out releases are fine”).

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Third-Party Releases is necessary for the support of the Released Parties, which is integral to the Plan. See M.F. Decl. ¶¶ 44-48. Moreover, the Consensual Third-Party Releases are: (a) in exchange for the good and valuable consideration provided by the Released Parties and Manager Releasees, which include only current and former directors, officers and managers who served in such capacity on or after the Petition Date; (b) in the best interests of the Debtor and all holders of Claims and Interests; (c) fair, equitable, and reasonable; and (d) given and made after due notice and opportunity for hearing. See M.F. Decl. ¶¶ 44-48. For these reasons, and those set forth above with respect to the Debtor Releases, the Third-Party Releases satisfy the Zenith factors and should be approved. 6. The Proposed Exculpation is Appropriate 51. Article IX.F of the Plan provides an exculpation of the Exculpated Parties21 with respect to postpetition activities and in connection with the Plan and Plan process, subject to an exclusion for fraud, willful misconduct, or gross negligence (the “Exculpation”). See M.F. Decl. ¶¶ 44-45, 48. Courts evaluate the appropriateness of exculpation provisions based on a number of factors, including whether the plan was proposed in good faith, whether liability is limited, and whether the exculpation provision was necessary for plan negotiations.22 52. The Exculpation in Article IX.F of the Plan is appropriate and vital under the 21 “Exculpated Parties” means, collectively, and in each case solely in its capacity as such: (a) the Debtor; (b) the Debtor’s current and former officers, directors and managers who served in such positions at any time on or after the Petition Date; (c) the Debtor’s Professionals; (d) the Creditors’ Committee and each of its members; (e) the Creditors’ Committee’s Professionals; and (f) with respect to each of the foregoing Entities and Persons, such Entities’ and Persons’ respective professionals, representatives, advisors, attorneys, financial advisors, chief restructuring officers, accountants, investment bankers, and consultants. For the avoidance of doubt, no Exculpated Party shall be exculpated for any act or omission that occurred prior to the Petition Date. 22 See, e.g., Upstream Energy Servs. v. Enron Corp. (In re Enron Corp.), 326 B.R. 497, 503 (S.D.N.Y. 2005) (evaluating the exculpation clause based on the manner in which the clause was made a part of the agreement, the necessity of the limited liability to the plan negotiations, and whether those who participated in proposing the plan did so in good faith). See also In re PWS Holding Corp., 228 F.3d 224, 247 (3d Cir. 2000) (citing Gillman v. Cont’l Airlines (In re Cont’l Airlines), 203 F.3d 203, 214 (3d Cir. 2000) (identifying “fairness, necessity to the reorganization, and specific factual findings to support these conclusions” as the “hallmarks of permissible non-consensual releases.”).

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circumstances of the Chapter 11 Case. See M.F. Decl. ¶¶ 44-45, 48. First, the Exculpated Parties played a critical role throughout the Chapter 11 Case, including in connection with DIP financing, through the sale process, and in negotiating and formulating the Disclosure Statement, the Plan and related documents in furtherance of the transactions contemplated by the Plan. See M.F. Decl. ¶¶ 44-45, 48. These negotiations were extensive and the resulting agreements were implemented in good faith and with a high degree of transparency. Second, the scope of the Exculpation is appropriately limited to the Exculpated Parties’ acts or omissions in connection with postpetition actions, and does not protect Exculpated Parties from fraud, willful misconduct, or gross negligence. Nor does it protect the Exculpated Parties from any acts or omission that occurred before the Petition Date or after the Effective Date. Third, the Exculpation is necessary and appropriate to protect the Exculpated Parties who have made substantial contributions to the Chapter 11 Case from future collateral attacks related to actions taken in good faith in connection with the Chapter 11 Case. Exculpation provisions similar to the Exculpation contained in the Plan are customarily approved by courts in this District, particularly where, as here, the provisions contain carve-outs for gross negligence, willful misconduct or similar behavior.23 Accordingly, the Debtor respectfully submits that the Exculpation provisions in the Plan should be approved. 7. The Injunction is Necessary to Enforce the Releases and Exculpation 53. The Debtor submits that the injunction provision in Article IX.G of the Plan (a) is necessary to preserve and enforce the Debtor Releases, the Consensual Third-Party Releases 23 See, e.g., In re Seventy Seven Finance Inc., Case No. 16-11409 (LSS) (Bankr. D. Del. July 14, 2016), Dkt. No. 192 (approving exculpation provision that included, among others, the Debtor’ directors and officers); In re Millennium Lab Holdings II, LLC, Case No. 15-12284 (LSS) (Bankr. D. Del. Dec. 14, 2015), Dkt. No. 195 (same); In re Unitek Glob. Servs., Inc., Case No. 14-12471 (KG) (Bankr. D. Del. Jan. 5, 2015), Dkt. No. 275 (same); In re Entegra Power Grp. LLC, Case No. 14-11859 (PJW) (Bankr. D. Del. Sept. 19, 2014), Dkt. No. 138 (same); In re S. Air Holdings, Inc., Case No. 12-12690 (CSS) (Bankr. D. Del. Mar. 18, 2013), Dkt. No. 673 (same).

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and the Exculpation, (b) is narrowly tailored to achieve that purpose and (c) complies with Bankruptcy Rule 3016. Moreover, the injunction provision contained in Article IX.G of the Plan is consistent with other injunctions approved by courts in this District.24 Accordingly, the Debtor respectfully submits that Article IX.G’s injunction should be approved. 8. The Executory Contract Assumption, Assumption and Assignment and Rejection Provisions Are Appropriate25 54. Courts routinely approve a debtor’s assumption, assumption and assignment, or rejection of executory contracts or unexpired leases where such decision is made in the exercise of such debtor’s sound business judgment and benefits its estate.26 The business judgment standard requires that the court approve the debtor’s business decision unless that judgment is the product of bad faith, whim or caprice.27 The Debtor’s decisions regarding the assumption, assumption and assignment, and rejection of executory contracts and unexpired leases are the result of the exercise of the Debtor’s sound business judgment. The Debtor has no ongoing business operations. Article V.A of the Plan made it possible for the Debtor to identify contracts for assumption, but the Debtor has not identified or sought to assume (pursuant to the Plan) any such contracts. See M.F. Decl. ¶¶ 20-21. As a result, and pursuant 24 See In re Premier Int’l Holdings, Inc., Case No 09-12019 (CSS), 2010 WL 2745964 at *10 (Bankr. D. Del. Apr. 29, 2010); In re Spansion Inc., No. 09-10690 (KJC), 2010 WL 2905001 at *16 (Bankr. D. Del. Apr. 16, 2010); In re Seventy Seven Finance Inc., No. 16-11409 (LSS) (Bankr. D. Del. July 14, 2016), Dkt. No. 192; In re Millennium Lab Holdings II, LLC, Case No. 15-12284 (LSS) (Bankr. D. Del. Dec. 14, 2015), Dkt. No. 195; In re UniTek Glob. Servs., Inc., Case No. 14-12471 (KG) (Bankr. D. Del. Jan. 5, 2015), Dkt. No. 275; In re Entegra Power Grp. LLC, Case No. 14- 11859 (PJW) (Bankr. D. Del. Sept. 19, 2014), Dkt. No. 138; In re Ablest Inc., Case No. 14-10717 (KJC) (Bankr. D. Del. May 8, 2014), Dkt. No. 238; In re Stallion Oilfield Servs. Ltd., Case No. 09-13562 (BLS), 2010 WL 5093096 at *22 (Bankr. D. Del. Jan. 20, 2010). 25 The Debtor does not believe there are any remaining Executory Contracts or Unexpired Leases the need to be assumed or rejected in the Chapter 11 Cases. Nevertheless, the Debtor includes the provisions dealing with Executory Contracts and Unexpired Leases in the Plan in an abundance of caution. 26 See, e.g., Sharon Steel Corp. v. Nat’l Fuel Gas Distrib. Corp., 872 F.2d 36, 39-40 (3d Cir. 1989); see also N.L.R.B. v. Bildisco & Bildisco (In re Bildisco), 682 F.2d 72, 79 (3d Cir. 1982), aff’d, 465 U.S. 513 (1984); In re ANCRental Corp., Inc., 278 B.R. 714, 723 (Bankr. D. Del. 2002). 27 See In re Trans World Airlines, Inc., 261 B.R. 103, 121 (Bankr. D. Del. 2001); see also Lubrizol Enters., Inc. v. Richmond Metal Finishers, Inc. (In re Richmond Metal Finishers, Inc.), 756 F.2d 1043, 1046-47 (4th Cir. 1985).

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to Article V.A, any remaining contracts of the Debtor are deemed rejected. The Plan provides an opportunity for the filing of claims arising out of the rejection of contracts in Article V.B. The Debtor respectfully requests that the rejection provisions set out in Article V of the Plan be approved. 9. Section 1123(d) of the Bankruptcy Code: Curing Defaults 55. Section 1123(d) of the Bankruptcy Code provides that “if it is proposed in a plan to cure a default the amount necessary to cure the default shall be determined in accordance with the underlying agreement and applicable non-bankruptcy law.”28 As is noted above, the Debtor is not seeking to assume any contracts pursuant to the Plan. Nonetheless, in accordance with sections 365 and 1123 of the Bankruptcy Code, Article V.C of the Plan provides for the satisfaction of any monetary defaults under each Executory Contract and Unexpired Lease that could have been assumed pursuant to the Plan by payment of a Cure Claim, as would have been reflected on the Cure Notice or as otherwise agreed or determined by a Final Order of the Bankruptcy Court, in Cash on the Effective Date or as soon as reasonably practicable thereafter, subject to the limitations described in the Plan or on such other terms as the parties to such Executory Contract or Unexpired Lease may otherwise agree.29 See M.F. Decl. ¶ 21. The foregoing provisions are discretionary and not necessary for confirmation under the Bankruptcy Code. Such provisions are appropriate and consistent with the applicable provisions of the Bankruptcy Code. Accordingly, they comply with section 1123(b)(6) of the Bankruptcy Code.30 28 See 11 U.S.C. § 1123(d). 29 Plan, Art. VI.C. 30 11 U.S.C. § 1123(b)(6) (a plan may “include any other appropriate provision not inconsistent with the applicable provisions of this title”).

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B. Section 1129(a)(2) of the Bankruptcy Code: The Debtor Has Complied with the Applicable Provisions of the Bankruptcy Code 56. The Debtor has satisfied section 1129(a)(2) of the Bankruptcy Code, which requires that the proponent of a plan of reorganization comply with the applicable provisions of the Bankruptcy Code – here, sections 1125 and 1126 of the Bankruptcy Code. As discussed above, the Debtor has complied with the notice and solicitation requirements of Bankruptcy Code section 1125. See M.F. Decl. ¶ 27. 57. Section 1126 of the Bankruptcy Code specifies the requirements for acceptance of a chapter 11 plan. Specifically, only holders of allowed claims and allowed interests in impaired classes of claims or interests that will receive or retain property under a plan on account of such claims or interests may vote to accept or reject such plan. Classes that are unimpaired under the plan are conclusively deemed to accept.31 Conversely, classes that are entitled to nothing under the plan are conclusively deemed to reject.32 58. As discussed above, the Debtor solicited acceptances or rejections of the Plan from the Holders of Allowed Claims in Classes 3A, 4, 5, 6, and 7, the only Impaired Classes entitled to vote under the Plan (except for Class 3B, which is vacant), in accordance with section 1126 of the Bankruptcy Code.33 See Plan Art. III.A. 59. As described above, Classes 3A, 4, 5, 6, and 7 voted to accept the Plan in amounts and numbers sufficient to satisfy section 1126(c) of the Bankruptcy Code. See M.F. Decl. ¶ 36. Class 3B – Non-WARN Act Class Settlement claims is vacant since no Warn Act Class Claimants opted out of the WARN Act Class Settlement. 31 11 U.S.C. § 1126(f). 32 11 U.S.C. § 1126(g). 33 Classes 1A, 1B, 1C and 2 are Unimpaired under, and conclusively presumed to accept, the Plan under section 1126(f) of the Bankruptcy Code.

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1. Section 1129(a)(3) of the Bankruptcy Code: The Plan Was Proposed in Good Faith 60. Section 1129(a)(3) of the Bankruptcy Code requires that a chapter 11 plan be “proposed in good faith and not by any means forbidden by law.”34 The good faith standard requires that the plan be “proposed with honesty, good intentions, and a basis for expecting that a reorganization can be effected with results consistent with the objectives and purposes of the Bankruptcy Code.”35 61. The Debtor has proposed the Plan in good faith, solely with the legitimate and proper purpose of maximizing stakeholder value. See M.F. Decl. ¶ 28. The Plan is the product of extensive arm’s-length negotiations among the Debtor, its creditors and other parties in interest, including the Creditors’ Committee and its counsel. Moreover, in negotiating the Plan, the Debtor (a) conducted itself honestly, with good intentions, and with a desire to maximize stakeholder recoveries and (b) has met its duties to stakeholders. As noted above, the Plan is supported by all impaired Classes of Claims that were entitled to vote. No party in interest is objecting on the basis that the Debtor did not propose the Plan in good faith. Accordingly, the Debtor respectfully submits that the Plan complies with section 1129(a)(3) of the Bankruptcy Code. C. Section 1129(a)(4) of the Bankruptcy Code: The Plan Provides For Court Approval of Certain Administrative Payments 62. Section 1129(a)(4) of the Bankruptcy Code requires that all payments of a debtor’s professional fees be subject to review and approval by the Court as to their 34 11 U.S.C. § 1129(a)(3). 35 Zenith, 241 B.R. at 107 (quoting In re Sound Radio, Inc., 93 B.R. 849, 853 (Bankr. D.N.J. 1988), aff’d in part, 103 B.R. 521 (D.N.J. 1989), aff’d, 908 F.2d 964 (3d Cir. 1990)); see also In re PPI Enters. (U.S.), Inc., 228 B.R. 339, 347 (Bankr. D. Del. 1998), subsequently aff’d, 324 F.3d 197 (3d Cir. 2003).

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reasonableness.36 Under the Plan, all payments made or to be made by the Debtor for services rendered or expenses incurred in connection with the Chapter 11 Case, including all Professional Fee Claims, have been approved by, or are subject to the approval of, the Court. See M.F. Decl. ¶ 29. Article II.C of the Plan provides that each Professional seeking allowance by the Court of a Professional Fee Claim shall file its final request for allowance of its Professional Fee Claim by no later than forty-five (45) days after the Effective Date for approval by the Court. Accordingly, the Debtor respectfully submits that the Plan complies with the requirements of section 1129(a)(4) of the Bankruptcy Code. D. Section 1129(a)(5) of the Bankruptcy Code: The Plan Discloses the Identity of the Plan Administrator 63. Section 1129(a)(5) of the Bankruptcy Code requires that a chapter 11 plan disclose the identity and affiliations of those individuals who will serve as directors, officers or voting trustees of the successor to the debtor under the plan (here, the Post-Confirmation Debtor and Post-Confirmation Estate), the identity of any insider to be employed or retained and the nature of the compensation to be paid to such insider. 64. The Plan satisfies each of the requirements of section 1129(a)(5) of the Bankruptcy Code. First, the Plan satisfies the requirements of section 1129(a)(5)(A)(i) of the Bankruptcy Code because the Plan Supplement provides the necessary disclosures regarding the identity of the Plan Administrator. See M.F. Decl. ¶ 6. Moreover, to the extent any insider is sought to be employed or retained by the Post-Confirmation Debtor, such individual and the nature of the compensation to be paid will be disclosed. 65. The Plan also satisfies the requirements of section 1129(a)(5)(A)(ii) of the Bankruptcy Code because the Plan Administrator was selected by the Creditor’s Committee, a 36 See 11 U.S.C. § 1129(a)(4); see also In re Fairfield Residential LLC, Case No. 09-14378, 2010 WL 2904990, at *9 (Bankr. D. Del. July 6, 2010).

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fiduciary to the constituency that will be the primary beneficiaries of the Post-Confirmation Estate.37 E. Section 1129(a)(6) of the Bankruptcy Code: The Plan Does Not Affect Any Change in Publicly Regulated Rates 66. Section 1129(a)(6) of the Bankruptcy Code permits confirmation only if any regulatory commission that has jurisdiction over the debtor after confirmation has approved any rate change provided for in the plan. The Plan does not provide for any rate changes, nor are any required, and does not implicate section 1129(a)(6) of the Bankruptcy Code. F. Section 1129(a)(7) of the Bankruptcy Code: The Plan is in the “Best Interests” of Creditors 67. Section 1129(a)(7) of the Bankruptcy Code requires that, with respect to each impaired class of claims or interests, each holder of a claim or interest of such class has either (a) accepted the plan or (b) will receive or retain under the plan property of a value, as of the effective date of the plan, that is not less than the amount that such holder would receive or retain if the Debtor liquidated under chapter 7 of the Bankruptcy Code. The best interests test applies to individual dissenting creditors rather than classes of claims.38 The best interests test is generally satisfied through a comparison of the estimated recoveries for a debtor’s stakeholders in a hypothetical liquidation under chapter 7 of the Bankruptcy Code against the estimated recoveries under the debtor’s chapter 11 plan.39 68. The best interests test does not apply to the holders of Claims in Classes 1A, 1B, 1C, and 2 as each is Unimpaired and are deemed to accept the Plan. See Plan Art. III.A. Under 37 See In re Drexel Burnham Lambert Grp., Inc., 138 B.R. 723, 760 (Bankr. S.D.N.Y. 1992); In re Rusty Jones, Inc., 110 B.R. 362, 375 (Bankr. N.D. Ill. 1990); In re Toy & Sports Warehouse, Inc., 37 B.R. 141, 149-50 (Bankr. S.D.N.Y. 1994). 38 See Bank of Am. Nat’l Tr. & Sav. Ass’n v. 203 N. LaSalle St. P’ship, 526 U.S. 434, 441 n.13 (1999). 39 See In re Lason, Inc., 300 B.R. 227, 232 (Bankr. D. Del. 2003) (“Section 1129(a)(7)(A) requires a determination whether a prompt chapter 7 liquidation would provide a better return to particular creditors or interest holders than a chapter 11 reorganization”) (citations and internal quotation marks omitted).

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the Plan the holders of such claims are receiving or retaining the maximum recovery to which they are entitled, and, as a result, could not receive greater recovery under chapter 7. Similarly, the best interests test does not apply to the Holders of Claims in Classes 3A, 4, 5, 6, and 7 who voted to accept the Plan (or Class 3B which is vacant). See generally, M.F. Decl. ¶¶ 31-35, Plan Art. III.A. 69. The test applies, however, as to Holders of Interests in Class 8, who receive no distribution and are deemed to have rejected the Plan. See Plan Art. III.A. The best interests analysis set forth in the Freeman Declaration, and other evidence related thereto in support of the Plan, shows that liquidation under chapter 7 of the Bankruptcy Code would result in smaller distributions to holders of Claims and Interests than those provided for in the Plan because of (a) additional administrative expenses required to be satisfied in chapter 7 prior to the payment of any chapter 11 administrative expenses or claims; and (b) the inability of a chapter 7 trustee to maximize returns to the Debtor’s estate to the same degree as provided by the Plan. See M.F. Decl. ¶¶ 31-35. The Plan therefore satisfies the best interests test of section 1129(a)(7) of the Bankruptcy Code. G. Section 1129(a)(8) of the Bankruptcy Code: Acceptance by Impaired Classes 70. Section 1129(a)(8) of the Bankruptcy Code requires that each class of claims or interests must either vote to accept a plan or be unimpaired under that plan. Pursuant to section 1126(c) of the Bankruptcy Code, a class of impaired claims accepts a plan if holders of at least two-thirds in dollar amount and more than one-half in number of the claims in that class vote to accept the plan. A class that is not impaired under a plan, and each holder of a claim or interest in such class, is conclusively presumed to have accepted the plan.40 40 11 U.S.C. § 1126(f).

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71. The Voting Report demonstrates that Classes 3A, 4, 5, 6, and 7 all voted to accept the Plan (and that Class 3B is vacant). Classes 1A, 1B, 1C, and 2 are each Unimpaired and are conclusively presumed to accept the Plan pursuant to section 1126(f) of the Bankruptcy Code. See M.F. Decl. ¶ 36, Plan Art. III.A. Class 8, however, is not retaining or receiving any property on account of their Claims and Interests and, as such, is deemed to reject the Plan pursuant to section 1126(g) of the Bankruptcy Code. See Plan Art. III.A. Nevertheless, as discussed below, even though Class 8 is deemed to have rejected the Plan it may still be confirmed because the Debtor has satisfied the requirements of section 1129(a)(10) of the Bankruptcy Code and the “cram down” requirements of section 1129(b) of the Bankruptcy Code with respect to Class 8. H. Section 1129(a)(9) of the Bankruptcy Code: The Plan Complies with Statutorily Mandated Treatment of Administrative Expense Claims and Priority Tax Claims 72. Unless the holder of a particular claim agrees to a different treatment with respect to such claim, section 1129(a)(9) of the Bankruptcy Code requires the plan to pay holders of claims entitled to priority under Bankruptcy Code section 507(a) in full in cash. 73. The treatment of Administrative Expense Claims, Professional Fee Claims, Priority Tax Claims, and statutory fees under the Plan satisfies the requirements of, and complies in all respects with, section 1129(a)(9) of the Bankruptcy Code. See M.F. Decl. ¶ 37. Article II of the Plan satisfies section 1129(a)(9)(A) of the Bankruptcy Code in that it provides that each Holder of an Allowed Administrative Expense Claim (other than an Administrative Expense Claim that is a Professional Fee Claim) as of the Effective Date, shall receive (A) Cash equal to the unpaid portion of such Allowed Administrative Expense Claim or (B) such less favorable treatment as to which such Holder hall has agreed, either (a) on the Effective Date, (b) if the Administrative Expense Claim is not Allowed as of the Effective Date, thirty (30) days after the date on which an order allowing such Administrative Expense Claim becomes a final order, or as

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soon thereafter as reasonably practicable, or (iii) if the Allowed Administrative Expense Claim is based on a liability incurred by the Debtor in the ordinary course of their business after the Petition Date, pursuant to terms and conditions of the particular transaction or agreement giving rise to such Allowed Administrative Expense Claim, without any further action by the Holders of such Allowed Administrative Expense Claim, and without any further notice to, or action, order, or approval of, the Bankruptcy Court.41 74. Article II.C of the Plan also satisfies section 1129(a)(9)(A) of the Bankruptcy Code because it provides that the Court shall determine the Allowed amounts of Professional Fee Claims after notice and a hearing and the Debtor or Post-Confirmation Estate, as applicable, shall pay Professional Fee Claims in Cash in the amount Allowed by the Court. 75. Article II.B of the Plan satisfies section 1129(a)(9)(C) of the Bankruptcy Code because it provides that, except to the extent a Holder of an Allowed Priority Tax Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for each Allowed Priority Tax Claim, each Holder of such Allowed Priority Tax Claim shall be treated in accordance with section 1129(a)(9)(C) of the Bankruptcy Code and, for the avoidance of doubt, Holders of Allowed Priority Tax Claims will receive interest on such Allowed Priority Tax Claims after the Effective Date in accordance with sections 511 and 1129(a)(9)(C) of the Bankruptcy Code. 76. Pursuant to Article II.D of the Plan, on or before the Effective Date, the Debtor shall pay all fees payable pursuant to section 1930 of title 28 of the United States Code and any interest thereon pursuant to section 3717 of Title 31 of the United States Code. 77. Based on the foregoing, the Debtor respectfully submits that the Plan complies 41 Plan, Art. II.A.

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with section 1129(a)(9) of the Bankruptcy Code. I. Section 1129(a)(10) of the Bankruptcy Code: At Least One Class of Impaired, Non-Insider Claims Accepted the Plan 78. Section 1129(a)(10) of the Bankruptcy Code provides that, to the extent there is an impaired class of claims, at least one impaired class of claims must accept the plan, “without including any acceptance of the plan by any insider,” as an alternative to the requirement under section 1129(a)(8) of the Bankruptcy Code that each class of claims or interests must either accept the plan or be unimpaired under the plan. 79. As the Voting Report will show, Class 3A, 4, 5, 6 and 7, all of which are Impaired, have voted to accept the Plan independent of any insider votes. The Plan therefore satisfies the requirements of section 1129(a)(10) of the Bankruptcy Code. J. Section 1129(a)(11) of the Bankruptcy Code: The Plan Is Feasible 80. Section 1129(a)(11) of the Bankruptcy Code requires that the Court find that a plan is feasible as a condition precedent to confirmation. Specifically, the Court must determine that “[c]onfirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor or any successor to the debtor under the plan, unless such liquidation or reorganization is provided for in the plan.” 81. Substantially all of the Debtor’s assets have been sold, the Debtor has no ongoing business operations, and the Plan provides for any remaining assets or claims of the Debtor to vest in the Post-Confirmation Estate, and the Plan Administrator will monetize any remaining assets. Following the monetization of the Debtor’s assets and wind-down of its business, no further reorganization of the Debtor or Post-Confirmation Debtor will be possible. See M.F. Decl. ¶ 38, Plan Art. V.D. 82. In addition, the Plan and Plan Administrator Agreement provide for the

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establishment of appropriate reserves to ensure that the Post-Confirmation Estate will be able to make distributions to Holders of Claims that are or become Allowed, as provided for in the Plan. 83. Based on the foregoing, the Debtor respectfully submits that the Plan satisfies the requirements of section 1129(a)(11) of the Bankruptcy Code. K. Section 1129(a)(12) of the Bankruptcy Code: The Plan Provides for the Payment of All Statutory Fees 84. Section 1129(a)(12) of the Bankruptcy Code requires the payment of all fees payable under 28 U.S.C. § 1930. As noted above, in accordance with Article II.D of the Plan, the Debtor will pay any such fees due and owing on the Effective Date or as soon thereafter as practicable. Article II.D further provides that, after the Effective Date, the Debtor, the Post-Confirmation Debtor, and the Plan Administrator shall be jointly and severally liable to pay any and all U.S. Trustee Fees when due and payable. The Debtor shall also file all reports due prior to the Effective Date when they become due in the form and manner prescribed by U.S. Trustee. After the Effective Date, the Debtor, the Post-Confirmation Debtor, or Plan Administrator as applicable shall file with the Bankruptcy Court any and all quarterly reports when they become due in the form and manner prescribed by U.S. Trustee. Each and every one of the Debtor, the Post-Confirmation Debtor, or the Plan Administrator shall remain obligated to pay U.S. Trustee Fees to the U.S. Trustee until the earliest of the Debtor’s case being closed, dismissed, or converted to a case under Chapter 7 of the Bankruptcy Code. Further, notwithstanding anything in the Plan to the contrary, the U.S. Trustee shall not be required to file any proof of claim for quarterly fees and any interest thereon. See M.F. Decl. ¶ 39. Thus, the Debtor respectfully submits that the Plan complies with section 1129(a)(12) of the Bankruptcy Code. L. Bankruptcy Code Sections 1129(a)(14)-(16): Inapplicable to the Plan 85. Sections 1129(a)(14) and (15) of the Bankruptcy Code apply only to debtors that

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are individuals and thus do not apply here. Section 1129(a)(16) of the Bankruptcy Code applies only to debtors that are nonprofit entities or trusts and thus does not apply here. M. Section 1129(b) of the Bankruptcy Code: The Plan Satisfies the “Cram Down” Requirements 86. Section 1129(b)(1) of the Bankruptcy Code provides that if a plan meets all applicable requirements of section 1129(a) of the Bankruptcy Code other than section 1129(a)(8) of the Bankruptcy Code, the court may confirm the plan so long as it does not discriminate unfairly and is fair and equitable with respect to each class of claims and interests that is impaired and has not accepted the plan. 87. The Plan satisfies the requirements of section 1129(b) of the Bankruptcy Code. As noted above, Classes 3A, 4, 5, 6, and 7 voted to accept the Plan (and Class 3B is vacant). Notwithstanding the fact that Class 8 is deemed to reject the Plan, the Plan is confirmable because it is fair and equitable and does not discriminate unfairly with respect to holders of Interests in Class 8. 1. The Plan is Fair and Equitable with Respect to Class 8 88. Section 1129(b)(2) of the Bankruptcy Code provides that a plan is fair and equitable with respect to a class of impaired unsecured claims or interests – here, Interests – if the plan provides that the holder of any claim or interest that is junior to the claims or interests of such class will not receive or retain any property under the plan on account of such junior claim or interest.42 89. The Plan does not provide any recovery for any Claims or Interests junior to the Interests in Class 8. See Plan Art. III.A. There is no Class of Claims or Interests junior to Class 8. Additionally, no holder of a Claim in a Class senior to Class 8 is receiving more than 100% 42 See 11 U.S.C. § 1129(b)(2)(B)(ii), (C)(ii).

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on account of its Claim. See Plan Art. III.A. Accordingly, the Plan is fair and equitable with respect to holders of Interests in Class 8. 2. The Plan Does Not Discriminate Unfairly with Respect to Class 8 90. Although the Bankruptcy Code does not provide a standard for determining when “unfair discrimination” exists, courts typically examine the facts and circumstances of the particular case in making this determination.43 In general, courts have held that a plan unfairly discriminates in violation of section 1129(b) of the Bankruptcy Code if it provides materially different treatment for creditors or interest holders with similar legal rights without compelling justifications for doing so.44 A threshold inquiry is assessing whether the dissenting class is equally situated to the class allegedly receiving more favorable treatment.45 91. Here, all Holders of Interests are in the same Class – Class 8 – and receive the same treatment. The Plan’s classification structure rests on a legally acceptable rationale. The Holders of Interests in Class 8 are substantially out-of-the money. Accordingly, the Plan does not discriminate unfairly with respect to Interests in Class 8, and the Plan satisfies the requirements of section 1129(b) of the Bankruptcy Code. 92. As set forth above, the Plan satisfies each requirement of section 1129(a) of the Bankruptcy Code, except for section 1129(a)(8) of the Bankruptcy Code. As to Class 8 – 43 See In re 203 N. LaSalle St. Ltd. P’ship, 190 B.R. 567, 585 (Bankr. N.D. Ill. 1995), aff’d sub nom. Bank of Am. v. 203 N. LaSalle St. P’ship, 195 B.R. 692 (N.D. Ill. 1996), aff’d, 126 F.3d 955 (7th Cir. 1997), rev’d on other grounds, 526 U.S. 434 (1999) (noting “the lack of any clear standard for determining the fairness of a discrimination in the treatment of classes under a chapter 11 plan,” and that “the limits of fairness in this context have not been established”); In re Bowles, 48 B.R. 502, 507 (Bankr. E.D. Va. 1985) (“[W]hether or not a particular plan does so [unfairly] discriminate is to be determined on a case-by-case basis.”). 44 See, e.g., In re Coram Healthcare Corp., 315 B.R. 321, 349 (Bankr. D. Del. 2004) (separate classification and treatment of claims is acceptable if the separate classification is justified because such claims are essential to the debtor’s reorganized business); In re Lernout & Hauspie Speech Prods., N.V., 301 B.R. 651, 661 (Bankr. D. Del. 2003), aff’d, 308 B.R. 672 (D. Del. 2004) (permitting different treatment of two classes of similarly situated creditors upon a determination that the Debtor showed a legitimate basis for such discrimination). 45 See In re Aleris Int’l, Inc., No. 09-10478 (BLS), 2010 WL 3492664, at *31 (Bankr. D. Del. May 13, 2010).

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Interests – the Plan is fair and equitable and does not discriminate unfairly. Thus, the Plan is fair and equitable and should be confirmed. N. Section 1129(c) of the Bankruptcy Code: Only One Plan 93. Only one Plan is before the Court, therefore, Bankruptcy Code section 1129(c) is satisfied. O. Section 1129(d) of the Bankruptcy Code: The Principal Purpose of the Plan is Not Avoidance of Taxes 94. Section 1129(d) of the Bankruptcy Code provides that “the court may not confirm a plan if the principal purpose of the plan is the avoidance of taxes or the avoidance of the application of section 5 of the Securities Act of 1933.” The Plan does not seek to avoid taxes or the application of section 5 of the Securities Act. Accordingly, section 1129(d) of the Bankruptcy Court is satisfied. II. The Plan Settlement is Fair and Equitable, Maximizes and Expedites Returns to Creditors, is Reasonable, and Should be Approved as Part of the Plan 95. Pursuant to sections 1123 and 1129 of the Bankruptcy Code, and Bankruptcy Rule 9019, the Plan incorporates the “Plan Settlement,” which is a compromise and global settlement among the Plan Settlement Parties of numerous debtor-creditor issues. Without the Plan Settlement, the structure of the Plan would have provided less benefit to creditors, and would have taken substantially more time. The Plan Settlement was designed to achieve an economic resolution of (a) Claims against the Debtor, (b) claims that may have been asserted against Florida Sawmills and the Affiliates and (c) an efficient resolution of the Chapter 11 Case. See Plan Art. V.A.2. The Plan Settlement effects, among other things, the allowance, compromise, treatment and satisfaction of all Claims asserted or which may be asserted by Florida Sawmills and the Affiliates in the Chapter 11 Case, which collectively were asserted to be in the amount of approximately $180 million. The Debtor respectfully submits that the Plan

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Settlement is in the best interest of the Debtor, its estate, its creditors, and other parties-in-interest and are fair, equitable, and within the range of reasonableness. Without the Plan Settlement, large-scale litigation on multiple fronts was an inevitability for the Debtor. The drain on funds now available to fund distributions, would have been substantial. The delay would have been substantial. And the uncertainty of dealing with multiple claims and litigations would have been substantial. The Plan Settlement eliminates all of these concerns, issues, hurdles and roadblocks, and does so efficiently and at appropriate values. See Plan Art. V.A.2. III. The Court Should Overrule Any Remaining Plan Objections 96. The Debtor believes that the only Remaining Plan Objection is addressed in the revised Plan and Proposed Order and should therefore be overruled to the extent not withdrawn. IV. The Modified Amended Plan Does Not Require Resolicitation 97. The Plan includes certain modifications that were made after it was solicited pursuant to the Disclosure Statement Order to resolve questions and concerns raised by the Office of the United States Trustee and to address the Remaining Plan Objection. The modifications made to the were primarily clarifying and procedural changes, and do not materially or adversely impact or affect the treatment of any creditor entitled to vote on the Plan. The modifications comply with the requirements of the Bankruptcy Code and do not require resolicitation of the Plan. 98. Section 1127(a) of the Bankruptcy Code provides that “[t]he proponent of a plan may modify such plan at any time before confirmation, but may not modify such plan so that such plan as modified fails to meet the requirements of sections 1122 and 1123 of this title[.]”46 As described above, the Plan complies with sections 1122 and 1123 of the Bankruptcy Code. 99. Section 1127(c) of the Bankruptcy Code provides that “[t]he proponent of a 46 11 U.S.C. § 1127(a).

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modification shall comply with section 1125 of this title with respect to the plan as modified.”47 Resolicitation under section 1125 of the Bankruptcy Code is not required here because none of the modifications “materially [or] adversely impact any creditor that voted for the Plan[.]”48 As set forth above, the post-solicitation modifications made to the Plan are primarily clarifying and procedural in nature, and do not adversely impact any creditors that voted for the Plan. Accordingly, the Debtor respectfully submits that resolicitation is unnecessary. V. Cause Exists to Waive Stay of the Confirmation Order 100. The Debtor respectfully requests that the Court direct that the Confirmation Order shall be effective immediately upon its entry, notwithstanding the 14-day stay imposed by operation of Bankruptcy Rule 3020(e), Bankruptcy Rule 7062 and any other applicable provision of the Bankruptcy Code or the Bankruptcy Rules to the contrary. Bankruptcy Rule 3020(e) provides that: “[a]n order confirming a plan is stayed until the expiration of 14 days after the entry of the order, unless the court orders otherwise.” As such, and as the Advisory Committee notes to Bankruptcy Rule 3020(e) state, “the court may, in its discretion, order that Rule 3020(e) is not applicable so that the plan may be implemented and distributions made immediately.”49 101. Under the circumstances, the Debtor respectfully requests that the Court exercise its discretion and order that Bankruptcy Rule 3020(e) is not applicable to permit the Debtor to consummate the Plan and commence its implementation without delay after the entry of the Confirmation Order. 102. Based on the foregoing, the requested waiver of the 14-day stay, and any other applicable provision of the Bankruptcy Code or the Bankruptcy Rules, is in the best interests of 47 11 U.S.C. § 1127(c). 48 See Aleris, 2010 WL 3492664, at *32 (citation omitted). 49 Fed. R. Bankr. P. 3020(e), Adv. Comm. Notes, 1999 Amend.

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the Debtor’ estates and creditors and will not prejudice any parties in interest.

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CONCLUSION For all the reasons set forth herein, in the Plan, Disclosure Statement, and in the Freeman Declaration, and in light of the valuable recovery contemplated for the Debtor’s creditors under the proposed Plan in this Chapter 11 Case, and the statutory confirmation requirements of section 1129 of the Bankruptcy Code having clearly been met, the Debtor respectfully requests that this Court approve confirm the Plan. Dated: June 28, 2021 Wilmington, Delaware MORRIS, NICHOLS, ARSHT & TUNNELL LLP /s/ Daniel B, Butz Robert J. Dehney (No. 3578) Eric D. Schwartz (No. 3134) Daniel B. Butz (Bar No. 4227) Nader A. Amer (Bar No. 6635) 1201 North Market Street, 16th Floor P.O. Box 1347 Wilmington, Delaware 19899-1347 Telephone: (302) 658-9200 Facsimile: (302) 658-3989 Email: dbutz@mnat.com namer@mnat.com WESTERMAN BALL EDERER MILLER ZUCKER & SHARFSTEIN, LLP Thomas A. Draghi (admitted pro hac vice) Alison M. Ladd (admitted pro hac vice) 1201 RXR Plaza Uniondale, NY 11556 Tel: 516-622-9200 tdraghi@westermanllp.com aladd@westermanllp.com Counsel for Debtor and Debtor in Possession [Continued on next page]

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FAEGRE DRINKER BIDDLE & REATH LLP /s/ Richard J. Bernard Richard J. Bernard 1177 Avenue of the Americas, 41st Floor New York, New York 10036 Richard.Bernard@faegredrinker.com Direct: (212) 248-3263 Co-Counsel to the Official Committee of Unsecured Creditors MORRIS JAMES LLP Eric J. Monzo (No. 5214) Brya M. Keilson (No. 4643) 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801 Tel: (302) 888-6800 Fax: (302) 571-1750 FOLEY & LARDNER LLP Alissa M. Nann (admitted pro hac vice) 90 Park Avenue New York, NY 10016 Tel: (212) 682-7474 Fax: (212) 687-2329 Co-Counsel to the Official Committee of Unsecured Creditors

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